Case laws
Advocate M J
(Querist) 03 December 2014
This query is : Resolved
Good Afternoon sir
I am contesting the case for falsification of accounts under section 477-A before the Hon'ble court, i am searching the case law to support my case. hence i request the learned members to guide me with any case law for falsification of account.
thanks
Adv MJ
Nadeem Qureshi
(Expert) 03 December 2014
search through google,
judis.nic.in
nadeemqureshi1.wordpress.com
manupatra
kanoon.com
indiankanoon.com
advocatekhoj.com
Sailesh Kumar Shah
(Expert) 03 December 2014
JT 2013 (2) SC 229 : (2013) 1 SCR 398
--------------------------------------------------------------------------------
(SUPREME COURT OF INDIA)
Shyam Lal Verma —Appellant
Versus
Central Bureau of Investigation —Respondent
P. Sathasivam and J.S. Khehar, JJ.
Criminal Appeal No. 171 of 2013 (Arising out of Special Leave Petition (Crl.) No. 4378 of 2012); Decided on : 21-01-2013
Prevention of Corruption Act 1988 - Sections 3(1)(c) and 13(2) - Penal Code, 1860 - Sections 477- A - Probation of Offenders Act, 1958 - Section 4 - Misappropriation of money - Conviction - Release on probation - In cases where a specific provision prescribed a minimum sentence, provisions of Probation Act cannot be invoked - No valid ground to interfere with impugned order of High Court reversing order of Trial Court - Appeal dismissed. (Paras 8 to 10)
Counsel for Appearing Parties :
Fakhruddin, Sr. Adv., Raj Kishor Choudhary, Sheeba Fakhruddin Adil, Surya Kamal Mishra and Ashok Mathur, Advs., for the Appellant
Prakriti Purnima, T.A. Khan, B.V. Balram Das and Arvind Kumar Sharma, Advs., for the Respondent
--------------------------------------------------------------------------------
ORDER
1. Leave granted.
2. The Appellant is a retired employee of Post Office. The incident occurred in 1993-94. The allegation against him is that he misappropriated to the extent of Rs. 1,35,240/- (Rupees one lakh thirty five thousand and two hundred forty). The employees of various departments deposited their amount, but the Appellant did not remit the amount and failed to make entry in the ledger. He was charged under Section 477A Indian Penal Code read with Section 3(1)(c) and 13(2) of the Prevention of Corruption Act 1988.
3. After full fleged trial, the Trial Court convicted him under the above mentioned Sections. However, instead of awarding sentence, the Trial Court released the Appellant under the Probation of Offenders Act, 1958 on executing a personal bond in the sum of Rs. 50,000/- and furnishing two sureties each of the like amount for a period of one year. He was also directed to maintain peace and good behaviour during this period.
4. Aggrieved by the above decision of the Trial Court, the CBI filed an appeal before the High Court. Admittedly, the accused did not file any appeal challenging the order of conviction. By the impugned order, the High Court allowed the appeal of the CBI and sentenced him for a period of one year under Sections 477A Indian Penal Code and under Section 13(1)(c) read with Section 13(2) for a further period of one year. Both the sentences were directed to run concurrently.
5. Questioning the order of the High Court sentencing him, as stated above, the accused preferred the present appeal by way of special leave.
6. Heard learned senior counsel appearing on behalf of the Appellant and Learned Counsel appearing on behalf of the Respondent-CBI.
7. The only point for consideration in this appeal is, whether the Probation of Offenders Act is applicable to offences under the Prevention of Corruption Act? The Trial Court applied Probation of Offenders Act and sentenced him accordingly. This was reversed by the High Court and ultimately imposed substantive sentence of one year.
8. It is not in dispute that the issue raised in this appeal has been considered by this Court in State through S.P., New Delhi Vs. Ratan Lal Arora, AIR 2004 SC 2364 wherein in similar circumstances, this Court held that since Section 7 as well as Section 13 of the Prevention of Corruption Act provide for a minimum sentence of six months and one year respectively in addition to the maximum sentences as well as imposition of fine, in such circumstances claim for granting relief under the Probation of Offenders Act is not permissible. In other words, in cases where a specific provision prescribed a minimum sentence, the provisions of the Probation Act cannot be invoked. Similar view has been expressed inAIR 2007 SC 51 .
9. In view of the settled legal position, we find no valid ground to interfere with the impugned order of the High Court. Consequently, the appeal is dismissed.
10. In view of the dismissal of the appeal, the Appellant shall surrender and has to undergo remaining period of sentence. His bail bonds executed pursuant to our order dated 05.07.2012 shall stand cancelled.
Sailesh Kumar Shah
(Expert) 03 December 2014
AIR 2008 SC 3077 : (2008) 16 SCC 117 : JT 2008 (8) SC 109 : (2008) 9 SCALE 760 : (2008) CriLJ SC 3944
--------------------------------------------------------------------------------
(SUPREME COURT OF INDIA)
Pankaj Kumar
Appellant
Versus
State of Maharashtra and OTHERS
Respondent
(Before : C. K. Thakker And D. K. Jain, JJ.)
Criminal Appeal No. 1067 of 2008 (arising out of SLP (Cri.) No. 2843 of 2006), Decided on : 11-07-2008
Criminal Procedure Code, 1973—Section 482—Constitution of India, 1950—Art. 227—Quashing of proceedings—Powers of High Court—Exercise of—It should be exercised in appropriate cases, ex debito justitiae to do real and substantial justice—It should be exercised sparingly, with circumspection and in rarest of rare cases, after convincing that continuation of proceeding would amount to abuse of process of Court.
Criminal Procedure Code, 1973—Section 482—Constitution of India, 1950—Arts. 227, 21—Quashing of proceedings—Violation of right of speedy trial—Absence of explanation—FIR recorded after 6 years of commission of alleged offence involving certain financial irregularities—Charge-sheet submitted after 4 years—Nothing happened thereafter till 8 years when accused sought for quashment of proceedings from High Court—No explanation offered delay in investigation and commencement of trial—Delay not found attributable to accused—Accused could be said to have denied his valuable constitutional right to a speedy investigation and trial—Keeping in view nature of accusation and mental stress and strain suffered by accused, proceedings directed to be quashed—Though plea as to violation of speedy trial has been taken for first time before Supreme Court, remitting matter back to High Court would be unfair.
Constitution of India, 1950—Articles 227 and 21—Criminal Procedure Code, 1973—Section 482—Penal Code, 1860—Sections 120B, 409, 420, 465, 468, 471, 477 (A), 101 and 34—Prevention of Corruption Act, 1947—Sections 5(1)(c)(d) and 5(c).
Counsel for the Parties:
Ashok Godamgaonkar, K. Maruthi Rao, Ms. K. Radha and Praveen Agrawal, for Appellant
Ravindra Keshavrao Adsure, for Respondents.
Judgment
D. K. Jain, J—Leave granted.
2. This appeal arises from the final judgment and order dated 2nd/4th May, 2006 rendered by the High Court of Judicature at Bombay, Bench at Aurangabad, in Criminal Writ Petition No. 149 of 1999. By the impugned judgment, the learned Single Judge has dismissed the petition preferred by the appellant and his mother under Article 227 of the Constitution read with Section 482 of the Code of Criminal Procedure, 1973 (for short 'CrPC'), seeking quashing of the chargesheet and the consequential proceedings initiated against them in Special Case No.3 of 1991 pending in the court of Special Judge, Latur.
3. A few material facts, necessary for disposal of this appeal can be stated thus :
On 12th May, 1998, a First Information Report was lodged against one Sayyad Mohammad Sayyad Ibrahim and eight other persons, inter alia alleging that during the period from 1st October, 1980 to 22nd February, 1982, while working as District Dairy Development Officer, Government Milk Scheme, Bhanara, Sayyad Mohammad Sayyad Ibrahim had conspired with the appellant and his father and had committed misappropriation of huge amounts in the purchase of spare parts etc., for the plant. The case was referred to the Anti Corruption Bureau for investigation.
4. Investigations dragged on for over three years and ultimately on 22nd February, 1991, a chargesheet was filed in the court of Special Judge, Latur against twelve persons for offences punishable under Sections 120B, 409, 420, 465, 468, 471, 477 (A), 101 and 34 of the Indian Penal Code, 1860 (for short 'IPC') and Sections 5(1)(c)(d) along with Section 5(c) of the Prevention of Corruption Act, 1947. In addition thereto, Sections 13(1)(c)(d) read with Section 13 (2) of the Prevention of Corruption Act, 1988 have also been invoked against accused Nos. 1 to 9. The first nine accused were the employees of the Government Milk Plant and the remaining three being the appellant and his father and mother, arraigned as accused Nos. 11, 10 and 12 respectively.
5. As per the chargesheet, the case of the prosecution, in brief is that the said Sayyad Mohammad Sayyad Ibrahim (accused No. 1) and one Pashubhai Narsi Shah (accused No. 10), father of the appellant, were friends since 1976. Accused No. 10 had two concerns styled as India Trading Agency, Mumbai and Dairy Equipment Industries, Mumbai, in the name of his wife (accused No. 12). Accused No. 1, without calling for the quotations for purchase of spare parts for the Milk Plant, got prepared from accused Nos. 10 and 11, bills in small amounts of Rs.10,000/- each for purchase of spare parts valued at Rs.2,03,705; got the bills processed from the staff members (accused Nos. 2 to 9) of the said Milk Dairy Unit and made payments in cash and by way of demand drafts to the present appellant. The second accusation is that for two air compressors purchased from M/s. Ingersol Rand (India), Mumbai in the year 1978, spare parts of the total value of Rs.91,469/- were again purchased from the concerns of accused Nos. 10 and 11 despite the fact that quotation had been received from the original supplier. No inspection and verification of the spare parts supplied by the said concerns was carried out; bills were got processed by accused No.l from other staff members and payment was again made to accused No. 11 in cash and by demand drafts. The third accusation against all the accused is that an amount of Rs.64, 100/-was paid to one M/s. Pankaj Chemicals, Mumbai, managed by accused No. 10, the father of the appellant, for cleaning of the water softening plant supplied by M/s Ingersol Rand (India) Ltd., without actually doing any such work. The Special Judge took cognizance of the complaint and summoned all the accused.
6. Aggrieved, the appellant and his mother (A-12) filed the afore-stated writ petition. During the pendency of the writ petition, the mother of the appellant expired. Accused No. 10, namely, the father of the appellant had also expired earlier.
7. Rejecting the main plea of the appellant that being born on 18th September, 1963, the appellant was a minor at the time of transactions in question in the year 1981 and, therefore, he could not be proceeded against and that even otherwise the chargesheet did not disclose any offence against the appellant and his mother, by the impugned order, the High Court dismissed the petition. The High Court has come to the conclusion that the appellant has failed to produce any document showing his date of birth and that the chargesheet prima facie discloses commission of offences by the appellant. Aggrieved by the said decision, the appellant has preferred this appeal.
8. Learned counsel appearing on behalf of the appellant submitted that there was sufficient material on record to show that when the alleged acts of malfeasance took place, the appellant was a minor and had nothing to do with the affairs of the concerns, which had made supplies to the milk plant. He was neither the proprietor nor a partner in the said concerns/firms which were managed by his father, accused No. 10. In support of the proposition that the reckoning date for determining the age of an accused, who claims to be a child, is the date of occurrence and not the date when the offender is produced before the Court, reliance was placed on the decision of the Constitution Bench in Pratap Singh Vs. State of Jharkhand and Anr. (2005) 3 SCC 551 Referring us to certain portions of the chargesheet, learned counsel contended that except for the bald averment that the appellant had prepared bogus bills and had received the payment, no other incriminating material has been brought on record, to show that the appellant was looking after the affairs of the concerns/firms owned or managed by his father and mother, namely accused No. 10 and 12 (since deceased) and, therefore, the conclusion of the High Court that a prima facie case had been made out against the appellant is without any basis. Lastly, it was pleaded that the appellant has been deprived of his constitutional right to have a speedy investigation and trial, inasmuch as the FIR was registered on 12th May, 1987 for the offences allegedly committed sometime in the year 1981; chargesheet was filed on 22nd February, 1991 but till date not a single witness has been examined by the prosecution. In support, reliance was placed on a decision of this Court in Santosh De v. Archna Guha and Ors. AIR 1994 SC 1229, wherein a delay of eight years in commencing the trial was held to be violative of the right of the accused to a speedy trial and the High Court's decision quashing the criminal proceedings on that ground was affirmed.
9. Learned counsel for the State, on the other hand, submitted that in the light of clear averment in the chargesheet, implicating the appellant, the High Court was justified in dismissing the writ petition by applying the correct principles to be kept in view while exercising power under Article 227 of the Constitution or under Section 482 CrPC, recently reiterated by a three-Judge Bench of this Court in Som Mittal Vs. Government of Karnataka3. Regarding delay in trial, learned counsel submitted that the prosecution cannot be held responsible for delay at least from the year 1999, when the records had been summoned by the High Court. It was also submitted that even if the date of birth of the appellant is taken as 18th September, 1963, being more than 16 years of age in March, 1981, still he could not be treated as a juvenile under the 1986 Juvenile Justice Act. Learned counsel also placed reliance on the decisions in Pratap Singh (supra) and Jameel Vs. State of Maharashtra4. It was also urged that since offences, punishable under the Prevention of Corruption Act, 1988 have been committed by the appellant, in view of the observations of this Court in Satya Narayan Sharma Vs. State of Rajasthan5, this Court should be loath to interfere in the matter.
3 (2008) 3 SCC 574
4 (2007) 11 SCC 420
5 (2001) 8 SCC 607
10. The scope and ambit of powers of the High Court under Section 482, CrPC or Article 227 of the Constitution has been enunciated and reiterated by this Court in a series of decisions and several circumstances under which the High Court can exercise jurisdiction in quashing proceedings have been enumerated. Therefore, we consider it unnecessary to burden the judgment by making reference to all the decisions on the point. It would suffice to state that though the powers possessed by the High Courts under the said provisions are very wide but these should be exercised in appropriate cases, ex debito justitiae to do real and substantial justice for the administration of which alone the courts exist. The inherent powers do not confer an arbitrary jurisdiction on the High Court to act according to whim or caprice. The powers have to be exercised sparingly, with circumspection and in the rarest of rare cases, where the court is convinced, on the basis of material on record, that allowing the proceedings to continue would be an abuse of the process of the court or that the ends of justice require that the proceedings ought to be quashed. [See: Janata Dal Vs. H.S. Chowdhary and Ors. (1992) 4 SCC 305, Kurukshetra University and Anr. Vs. State of Haryana and Anr. (1977) 4 SCC 451 and State of Haryana and Ors. Vs. Bhajan Lal and Ors. (1992) 1 Suppl. SCC 335
11. Although in Bhajan Lal's case (supra), the court by way of illustration, formulated as many as seven categories of cases, wherein the extraordinary power under the aforestated provisions could be exercised by the High Court to prevent abuse of process of the court yet it was clarified that it was not possible to lay down precise and inflexible guidelines or any rigid formula or to give an exhaustive list of the circumstances in which such power could be exercised.
12. The purport of the expression “rarest of rare cases” has been explained very recently in Som Mittal (supra). Speaking for the three-Judge Bench, Hon'ble the Chief Justice has said thus :
“When the words 'rarest of rare cases' are used after the words 'sparingly and with circumspection' while describing the scope of Section 482, those words merely emphasize and reiterate what is intended to be conveyed by the words 'sparingly and with circumspection'. They mean that the power under Section 482 to quash proceedings should not be used mechanically or routinely, but with care and caution, only when a clear case for quashing is made out and failure to interfere would lead to a miscarriage of justice. The expression “rarest of rare cases” is not used in the sense in which it is used with reference to punishment for offences under Section 302 IPC, but to emphasize that the power under Section 482 Cr.P.C. to quash the FIR or criminal proceedings should be used sparingly and with circumspection.”
13. Bearing in mind the above legal position, we are of the opinion that, for the reasons stated hereafter, the ends of justice require that prosecution proceedings in the instant case be quashed.
14. Time and again this Court has emphasized the need for speedy investigations and trial as both are mandated by the letter and spirit of the provisions of the CrPC. (In particular, Sections 197, 173, 309, 437 (6) and 468 etc.) and the constitutional protection enshrined in Article 21 of the Constitution. Inspired by the broad sweep and content of Article 21 as interpreted by a seven-Judge Bench of this Court in Maneka Gandhi Vs. Union of India and Anr. (1978) 1 SCC 248, in Hussainara Khatoon and Ors. Vs. Home Secretary, State of Bihar (1980) 1 SCC 81, this Court had said that Article 21 confers a fundamental right on every person not to be deprived of his life or liberty except according to procedure established by law; that such procedure is not some semblance of a procedure but the procedure should be 'reasonable, fair and just'; and therefrom flows, without doubt, the right to speedy trial. It was also observed that no procedure which does not ensure a reasonably quick trial can be regarded as 'reasonable, fair or just' and it would fall foul of Article 21. The Court clarified that speedy trial means reasonably expeditious trial which is an integral and essential part of the fundamental right to life and liberty enshrined in Article 21.
15. The exposition of Article 21 in Hussainara Khatoon's case (supra) was exhaustively considered afresh by the Constitution Bench in Abdul Rehman Antulay and Ors. Vs. R.S. Nayak and Anr. (1992) 1 SCC 225. Referring to a number of decisions of this Court and the American precedents on the Sixth Amendment of their Constitution, making the right to a speedy and public trial a constitutional guarantee, the Court formulated as many as eleven propositions with a note of caution that these were not exhaustive and were meant only to serve as guidelines. For the sake of brevity, we do not propose to reproduce all the said propositions and it would suffice to note the gist thereof. These are: (i) fair, just and reasonable procedure implicit in Article 21 of the Constitution creates a right in the accused to be tried speedily; (ii) right to speedy trial flowing from Article 21 encompasses all the stages, namely the stage of investigation, inquiry, trial, appeal, revision and retrial; (iii) in every case where the speedy trial is alleged to have been infringed, the first question to be put and answered is - who is responsible for the delay?; (iv) while determining whether undue delay has occurred (resulting in violation of right to speedy trial) one must have regard to all the attendant circumstances, including nature of offence, number of accused and witnesses, the work-load of the court concerned, prevailing local conditions and so on - what is called, the systemic delays; (v) each and every delay does not necessarily prejudice the accused. Some delays may indeed work to his advantage. However, inordinately long delay may be taken as presumptive proof of prejudice. In this context, the fact of incarceration of accused will also be a relevant fact. The prosecution should not be allowed to become a persecution. But when does the prosecution become persecution, again depends upon the facts of a given case; (vi) ultimately, the court has to balance and weigh several relevant factors - 'balancing test' or 'balancing process' - and determine in each case whether the right to speedy trial has been denied; (vii) Ordinarily speaking, where the court comes to the conclusion that right to speedy trial of an accused has been infringed the charges or the conviction, as the case may be, shall be quashed. But this is not the only course open and having regard to the nature of offence and other circumstances when the court feels that quashing of proceedings cannot be in the interest of justice, it is open to the court to make appropriate orders, including fixing the period for completion of trial; (viii) it is neither advisable nor feasible to prescribe any outer time-limit for conclusion of all criminal proceedings. In every case of complaint of denial of right to Speedy trial, it is primarily for the prosecution to justify and explain the delay. At the same time, it is the duty of the court to weigh all the circumstances of a given case before pronouncing upon the complaint; (ix) an objection based on denial of right to speedy trial and for relief on that account, should first be addressed to the High Court. Even if the High Court entertains such a plea, ordinarily it should not stay the proceedings, except in a case of grave and exceptional nature. Such proceedings in High Court must, however, be disposed of on a priority basis.
16. Notwithstanding elaborate enunciation of Article 21 of the Constitution in Abdul Rehman Antulay (supra), and rejection of the fervent plea of proponents of right to speedy trial for laying down time-limits as bar beyond which a criminal trial shall not proceed pronouncements of this Court in “Common Cause” A Registered Society Vs. Union of India (UOI) and Ors.12, “Common Cause”, A Registered Society Vs. Union of India and Ors.13, Raj Deo Sharma Vs. State of Bihar14 and Raj Deo Sharma II Vs. State of Bihar15gave rise to some confusion on the question whether an outer time limit for conclusion of criminal proceedings could be prescribed whereafter the trial court would be obliged to terminate the proceedings and necessarily acquit or discharge the accused. The confusion on the issue was set at rest by a seven-Judge Bench of this court in P. Ramachandra Rao Vs. State of Karnataka16. Speaking for the majority, R.C. Lahoti, J. (as his Lordship then was) while affirming that the dictum in A.R. Antulay's case (supra) is correct and still holds the field and the propositions emerging from Article 21 of the Constitution and expounding the right to speedy trial laid down as guidelines in the said case adequately take care of right to speedy trial, it was held that guidelines laid down in the A.R. Antulay's case (supra) are not exhaustive but only illustrative. They are not intended to operate as hard and fast rules or to be applied like a strait-jacket formula. Their applicability would depend on the factsituation of each case as it is difficult to foresee all situations and no generalization can be made. It has also been held that it is neither advisable, nor feasible, nor judicially permissible to draw or prescribe an outer limit for conclusion of all criminal proceedings. Nonetheless, the criminal courts should exercise their available powers such as those under Sections 309, 311 and 258 of CrPC to effectuate the right to speedy trial. In appropriate cases, jurisdiction of the High Court under Section 482 CrPC and Articles 226 and 227 of the Constitution can be invoked seeking appropriate relief or suitable directions. The outer limits or power of limitation expounded in the aforenoted judgments were held to be not in consonance with the legislative intent.
12 (1996) 4 SCC 33
13 (1996) 6 SCC 775
14 (1998) 7 SCC 507
15 (1999) 7 SCC 604
16 (2002) 4 SCC 578
17. It is, therefore, well settled that the right to speedy trial in all criminal persecutions is an inalienable right under Article 21 of the Constitution. This right is applicable not only to the actual proceedings in court but also includes within its sweep the preceding police investigations as well. The right to speedy trial extends equally to all criminal persecutions and is not confined to any particular category of cases. In every case, where the right to speedy trial is alleged to have been infringed, the court has to perform the balancing act upon taking into consideration all the attendant circumstances, enumerated above, and determine in each case whether the right to speedy trial has been denied in a given case. Where the court comes to the conclusion that the right to speedy trial of an accused has been infringed, the charges or the conviction, as the case may be, may be quashed unless the court feels that having regard to the nature of offence and other relevant circumstances, quashing of proceedings may not be in the interest of justice. In such a situation, it is open to the court to make an appropriate order as it may deem just and equitable including fixation of time for conclusion of trial.
18. Tested on the touchstone of the broad principles, enumerated above, we are of the opinion that in the instant case, appellant's constitutional right recognised under Article 21 of the Constitution stands violated. It is common ground that the First Information Report was recorded on 12th May, 1987 for the offences allegedly committed in the year 1981, and after unwarranted prolonged investigations, involving aforestated three financial irregularities; the charge-sheet was submitted in Court on 22nd February, 1991. Nothing happened till April, 19 1999, when the appellant and his deceased mother filed criminal writ petition seeking quashing of proceedings before the trial court. Though, it is true that the plea with regard to inordinate delay in investigations and trial has been raised before us for the first time but we feel that at this distant point of time, it would be unfair to the appellant to remit the matter back to the High Court for examining the said plea of the appellant. Apart from the fact that it would further protract the already delayed trial, no fruitful purpose would be served as learned Counsel for the State very fairly stated before us that he had no explanation to offer for the delay in investigations and the reason why the trial did not commence for eight long years. Nothing, whatsoever, could be pointed out, far from being established, to show that the delay was in any way attributable to the appellant. Moreover, having regard to the nature of the accusations against the appellant, briefly referred to above, who was a young boy of about eighteen years of age in the year 1981, when the acts of omission and commission were allegedly committed by the concerns managed by his parents, who have since died, we feel that the extreme mental stress and strain of prolonged investigation by the Anti Corruption Bureau and the sword of damocles hanging perilously over his head for over fifteen years must have wrecked his entire career. Be that as it may, the prosecution has failed to show any exceptional circumstance, which could possibly be taken into consideration for condoning the prolongation of investigation and the trial. The lackadaisical manner of investigation spread over a period of four years in a case of this type and inordinate delay of over eight years (excluding the period when the record of the trial court was in the High Court), is manifestly clear. Thus, on facts in hand, we are convinced that the appellant has been denied his valuable constitutional right to a speedy investigation and trial and, therefore, criminal proceedings initiated against him in the year 1987 and pending in the court of Special Judge, Latur, deserve to be quashed on this short ground alone.
19. For the view we have taken, we deem it unnecessary to go into the merits of the accusations against the appellant as also the question of his age, at the time of commission of alleged offences.
20. Consequently, the appeal is allowed and the proceedings against the appellant in criminal case arising out of FIR No.78 of 1987 are hereby quashed.
Sailesh Kumar Shah
(Expert) 03 December 2014
(2013) 7 SCALE 722
--------------------------------------------------------------------------------
(SUPREME COURT OF INDIA)
B. Raghuvir Acharya —Appellant
Versus
Central Bureau of Investigation —Respondent
G.S. Singhvi and Sudhansu Jyoti Mukhopadhaya, JJ.
Criminal Appeal No. 1001 of 2001; Decided on : 01-07-2013
Evidence Act, 1872 - Section 45, 47 - Penal Code, 1860 (IPC) - Section 34, 120- B, 420, 409, 411, 477A - Prevention of Corruption Act, 1988 - Section 13(1)(d), 13(2) - Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 - Section 10 - Criminal Procedure Code, 1973 (CrPC) - Section 236, 313, 386 - Order of conviction - All the three accused were charged for the offences of criminal conspiracy, conspiracy to commit offences of cheating/criminal breach of trust; receiving stolen property and falsification of accounts Under Section 120- B, Section 420/409, Section 411, and Section 477- A of Indian Penal Code - The prosecution's failure to produce material before the Special Judge on which PW.5 claimed familiarity with the handwriting of accused No. 1 is fatal. It can safely be stated that the prosecution has failed to establish the premise of witness in order to allow the Special Court to appreciate the veracity of assertions made by PW.5 - PW.5 does not come within the ambit of Section 47 of the Indian Evidence Act to provide evidence regarding the handwriting of accused No. 1 - The finding of the Special Judge that the letter dated 9th March, 1992 was received by accused No. 1 is not based on evidence such finding cannot be upheld. In any case mere receiving of a letter cannot be a ground to hold that the endorsement at Ex. 17(i) was made by accused No. 1 - In view of the acquittal of accused Nos. 1 and 2, the order of conviction of accused No. 3 Under Section 477- A is set aside - Appeal dismissed.
Counsel for Appearing Parties :
Bansuri Swaraj, Subhranshu Padi and Praneet Ranjan, Advs., for the Appellant
Sidharth Luthra, ASG, Vaibhav Ghaggar, Devina Sehgal, Veera and Mohd. Faraz, Advs., for the Respondent
--------------------------------------------------------------------------------
JUDGMENT
Sudhansu Jyoti Mukhopadhaya, J.—These two appeals Under Section 10 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 (hereinafter referred to as the 'Act, 1992') are preferred by accused Nos. 1 and 3 against the judgment and order dated 6th September, 2001 passed by the Special Court in Special Case No. 8 of 1994 in [RC5(BSC)/93-Bom], convicting and sentencing them.
2. The case of the prosecution, briefly, is as follows:
In September, 1991, an investment of Rs. 65 crores came to be made by four subscribers, who applied for purchase of CANCIGO units floated by (Canbank Mutual Fund (hereinafter referred to as 'CMF'), a fund created by Canara Bank. The Andhra Bank and Andhra Bank Financial Services Limited ('ABFSL' for short) made an investment of Rs. 33 crores. Two other transactions were made by the Sahara India and Industrial Development Bank of India ('IDBI' for short) worth Rs. 32 crores.
3. During the said period, accused No. 1- B. Raghuvir Acharya was the Trustee and General Manager, accused No. 2- T. Ravi was the Fund Manager and accused No. 3- Hiten P. Dalal was the approved broker of CMF.
4. Further case of the prosecution is that accused No. 3 got Andhra Bank to subscribe for the CANCIGO units of Rs. 11 crores and got ABFSL to subscribe for the CANCIGO units of Rs. 22 crores. The above CANCIGO units worth Rs. 33 crores were purchased in the name of Andhra Bank and ABFSL though the consideration amount for purchase of such units was paid by accused No. 3. Accused No. 3 got the CANCIGO units purchased in the name of Andhra Bank and ABFSL so as to ensure that he could claim brokerage falsely from CMF. Further, the case of the prosecution is that although the consideration of Rs. 33 crores was paid by accused No. 3, the brokers stamp on the applications were affixed in order to induce CMF to pay brokerage to accused No. 3. The said accused No. 3 applied for brokerage as a broker in the said transaction of Rs. 33 crores when, in fact, he was not so appointed either by Andhra Bank or by ABFSL. The investment of Rs. 33 crores came from accused No. 3 for which he was not entitled to claim brokerage as he had not acted as a broker for the said transactions. Similarly, in September, 1991, accused No. 3 did not procure business from Sahara India and IDBI and, yet, he claimed and received the brokerage in conspiracy with accused No. 1 and accused No. 2. It was alleged that accused No. 3 never acted as broker in any of the aforesaid transactions but claimed and received the brokerage in conspiracy with the rest two accused.
5. All the three accused were charged for the offences of criminal conspiracy, conspiracy to commit offences of cheating/criminal breach of trust; receiving stolen property and falsification of accounts Under Section 120-B, Section 420/409, Section 411, and Section 477-A of Indian Penal Code. Accused No. 1 and accused No. 2 being public servants were also charged for the offences of criminal misconduct Under Section 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988. All together 12 charges were framed jointly and severally vide Ex. 3.
6. The prosecution had led evidence of 12 witnesses apart from a number of Exhibits in order to prove their case.
7. Learned Judge, Special Court, by the impugned judgment and order dated 6th September, 2001 held the accused No. 1 and accused No. 3 guilty and convicted and sentenced them as under:
8. During the trial the Special Court raised 30 points and determined most of them against accused No. 1 - B.R. Acharya and accused No. 3 - Hiten P. Dalal. The points raised against accused No. 2 - T. Ravi, Fund Manager in CMF were answered in his favour and he was acquitted.
9. As against accused No. 1, learned Special Court held that the prosecution proved beyond reasonable doubt that letter dated 9th March, 1992 of accused No. 3 claiming brokerage was received by accused No. 1; endorsement on the letter dated 9th March, 1992 is in the handwriting of accused No. 1 and that by the said endorsement accused No. 1 acting as the General Manager instructed accused No. 2 to pay brokerage of Rs. 32.50 lakhs to accused No. 3. There was criminal conspiracy between accused No. 1 and accused No. 3 to procure the brokerage which was not due and payable to accused No. 3. Accused No. 1 being the General Manager and Trustee of CMF dishonestly and fraudulently induced CMF to part with Rs. 32.50 lakhs by authorizing payment of brokerage in favour of accused No. 3 knowing fully well that accused No. 3 had not acted as a broker in the above said transactions. Accused No. 1 acted dishonestly and in breach of Exs. 84 and 85 being minutes of the Board Meetings prescribing the mode of payment of brokerage, and thereby committed offence of criminal breach of trust Under Section 409 of Indian Penal Code. There was a criminal conspiracy in the matter of disbursement of brokerage of Rs. 32.50 lakhs between accused No. 1 and accused No. 3 and thereby committed offence Under Section 120-B of Indian Penal Code read with Sections 409, 411 and 477-A of Indian Penal Code. Accused No. 1 thereby committed the offence of criminal misconduct Under Section 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988.
10. Learned Counsel for accused No. 1 submitted that main allegation against accused No. 1 is based on presumption that the endorsement on letter dated 9th March, 1992[Ext. 17(i) ] was in the handwriting of accused No. 1. Such finding has been given solely on the basis of the statement of PW-5 - Rajesh Pitamberdas Mathija. Learned Counsel pointed out that there exists inherent contradiction between the evidence of PW-4 and PW-5 and as PW-5 is not a competent witness Under Section 47 of the Indian Evidence Act to provide evidence regarding the handwriting of accused No. 1, no reliance can be made on the statement made by him. PW.5 was not familiar with the handwriting of accused No. 1 in the course of his business as he was neither from the same department (CANCIGO), nor he worked under accused No. 1. Moreover, PW.5 had neither seen accused No. 1 writing the endorsement nor was PW.5 recipient of any correspondence himself.
11. As against accused No. 3, apart from the allegation of conspiracy between accused No. 1 and him, learned Special Court further held that the prosecution has proved beyond reasonable doubt that accused No. 3 was not the broker in two transactions of Andhra Bank and ABFSL. It was also proved that accused No. 3 did not act as a broker in the transactions of IDBI and Sahara India as well. In spite of this, accused No. 3 made false representation by writing letter dated 9th March, 1992 under his own signatures claiming brokerage on the investments of Rs. 65 crores knowing that he had not acted as a broker and he was not entitled to brokerage. Accused No. 3 thereby induced CMF to part with payment of Rs. 32.50 lakhs and thereby he committed an offence punishable Under Section 411 of Indian Penal Code apart from offence Under Section 409 read with 120-B of Indian Penal Code and 477-A of Indian Penal Code.
12. Learned senior for accused No. 3 contended that accused No. 3 was entitled to brokerage under Rule 36 of the Scheme with respect to investment made by Andhra Bank and ABFSL. It was further contended that he was also entitled for brokerage for the investment made by IDBI and Sahara India as well. As per Rule 36 brokerage can be claimed for 'subscribing or procuring the investment in CANCIGO'. Accused No. 3 subscribed and procured the investment of Rs. 65 crores including Rs. 33 crores invested for Andhra Bank and ABFSL.
13. He further submitted that none of the witnesses (PW.4, 5 & 11) positively stated that accused No. 3 was not entitled to brokerage on the investment made by Andhra Bank and ABFSL. The Auditors have never raised any dispute as to payment of brokerage to accused No. 3. The Trustees and the Board have neither discussed nor have they repudiated the payment of brokerage made to accused No. 3. The Bank, which was allegedly put to wrongful loss never filed a complaint against accused No. 3. The Board never addressed any letter to accused No. 3 calling upon him to explain the payment of brokerage made to him. In fact, the unequivocal stand of PW.11 is that the CMF did not raise queries with regard to the payment of brokerage on Rs. 65 crores to accused No. 3 possibly because they may be aware accused No. 3 had procured business of Rs. 65 crores.
14. It was submitted that such methodology of investment in terms of other i.e. On behalf of accused No. 3 is well known in law. The fact that Andhra Bank /ABFSL had invested the said amounts on behalf of accused No. 3 and the same was in the nature of a constructive trust has been accepted by this Court in the case of Canbank Financial Services Ltd. Vs. The Custodian and Others, AIR 2004 SC 5123 . In the said case, this Court has held the said arrangement to be legal. In that view of the matter, the mere fact that Andhra Bank/ABFSL applied for CANCIGO units on behalf of accused No. 3 does not show any sort of deception. The CMF itself has found no illegality or deception in the application by Andhra Bank/ABFSL. It is clear from the fact that the CMF has not claimed refund of the brokerage claimed by accused No. 3 on the investment made by Andhra Bank/ABFSL.
15. It was also contended that none of the witnesses of the CANCIGO (PW.4, 5 and 11) have come out with a positive assertion that accused No. 3 made a fraudulent and/or dishonest representation to CANCIGO which was acted upon by the institution/CMF to its detriment which caused wrongful loss. There is no evidence as to who acted on the representation made by accused No. 3.
16. It was further contended that the applications of Andhra Bank and ABFSL were duly stamped and Ex. 19 clearly states that the applications were on behalf of accused No. 3. The Investigating Officer (hereinafter referred to as 'IO') has admitted, in his cross-examination that in the absence of written rule, circular or written instruction, payment of brokerage in good faith and in due course would not amount to an offence. On the other hand it was also admitted by the IO in his cross-examination that it was not the case of the prosecution that any sort of deception was practiced on the trustees and payment was made by them. The IO, therefore, submitted that "there was no question of deception of the Trustees. They have, in fact, authorized accused No. 1 and 2 to deal with the funds and pursuant to which Rs. 32.50 Lakhs came to be paid".
17. In so far as IDBI and Sahara's investments are concerned, it is contended on behalf of accused No. 3 that the accused No. 3 was entitled to brokerage because of the tripartite arrangement between CMF, Citibank and accused No. 3. The tripartite agreement entailed accused No. 3 and the Citi Bank for procuring investment for CANCIGO. CMF would lend 80% of the amount of subscription to Citi Bank @ 15% for one year and accused No. 3 would get brokerage on the investment so procured. PW.11 admits that the scheme was in a financial crunch and it was only because of accused No. 3 the money was infused in the financially starved scheme. The material on record also establishes that investment by IDBI and Sahara was at the instance of Citi Bank. The witnesses examined on behalf of IDBI and the Board note Ex. 84 clearly show that the said investment was brought about as a result of the efforts on part of Citi Bank. The money so infused in CANCIGO scheme was for the advantage of Citi Bank as 80% of it was available to it at a nominal rate of interest for a year.
18. The witness PW.11 in his cross-examination had admitted that CMF as a matter of fact lent 80% of the amount to Citi Bank for one year at the rate of 15% per year even when rate of interest was fluctuating between 20% to 50%. The amount given to Citi Bank over one year was 80% of entire amount i.e. 80% of Rs. 65 crores which included Rs. 33 crores by and on behalf of the Appellant.
19. According to the learned Counsel for accused No. 3, the said accused cannot be held guilty of cheating Under Section 420 Indian Penal Code. The prosecution case is that the letter Ex. 17 was placed before accused No. 1, who in turn made his purported endorsement and thereby committed the offence of cheating in conspiracy with accused No. 2 and accused No. 3. It was submitted that it was not the case of the prosecution that accused No. 1 or for that matter anyone else in the CANCIGO mutual fund was cheated by accused No. 3 by virtue of representation through Ex. 17.
20. It is further contended that the Institution, CMF, is a juristic entity, akin to a Company and it acts through its human agencies. Therefore, for fastening criminal liability onto a Company, the criminal intent of the human agencies of the Company is imperative. The logical consequence is that if a Company/Institution is a 'victim' of cheating then somebody acting for/on behalf of the institution must state how and/or in what manner the institution has been cheated/put to wrongful loss.
21. It was submitted that the transactions with regard to Andhra Bank /ABFSL were considered by a three Judge Bench of this Court in the case of S. Mohan Vs. Central Bureau of Investigation, 2008 (8) SCALE 66 wherein it was held that:
18. It is not disputed that CANCIGO units worth Rs. 33 crores were purchased by Andhra Bank or Andhra Bank Financial Services Limited by making use of the money owned by the Appellant Hiten P. Dalal. These two financial institutions impliedly agreed to lend their name and allowed the Appellant Hiten P. Dalal to purchase CANCIGO units in their name. It is also important to note that interest due on the CANCIGO units worth Rs. 33 crores received from CBMF by Andhra Bank and Andhra Bank Financial Services Ltd. Were credited to the account of the Appellant Hiten P. Dalal. Therefore, it is clear for all practical purposes that the CANCIGO units worth Rs. 33 crores were purchased by the Appellant Hiten P. Dalal and he transferred these units to CANFINA and CBMF did not raise any objection in respect of transfer of the CANCIGO units by the Appellant Hiten P. Dalal. If at all, it was for CBMF to raise any objection but they did not raise any objection to the transfer of the CANCIGO units.
xxx xxx xxx
xxx xxx xxx
21. So long as CANFINA has no grievance or complaint against the Appellant S. Mohan that he acted contrary to their directions and accepted the CANCIGO units and paid the money to the Appellant Hiten P. Dalal, no offence is made out against the Appellant S. Mohan either of criminal breach of trust or conspiracy. In fact, PW.1(Mr. Kini, Executive Vice-President) has admitted that CANFINA used to regularly deal in CANCIGO units, that neither the Adult nor RBI made any remarks regarding transactions relating to CANCIGO units and all the transactions relating to CANCIGO units were in the ordinary course of business. Neither Canara Bank nor CANFINA had initiated any disciplinary proceedings against him. They have also not disputed the genuineness of the CANCIGO units which were got encashed by the Appellant Hiten P. Dalal.
22. According to learned Senior Counsel for accused No. 3, the prosecution has failed to produce any evidence documentary or testimonial to make out a case of cheating against accused No. 3 with respect to the Institution/CMF. There is no material to convict accused No. 3 under any of the charges.
23. Mr. Sidharth Luthra, learned Additional Solicitor General, appearing on behalf of CBI submitted that accused No. 1 was aware of receipt of Rs. 65 crores into the funds of CANCIGO as stated by PW.11 and the payment of brokerage showing the payment of Rs. 32.50 lakhs to accused No. 3 under application dated 9th March, 1992, (Ex. 17) though accused No. 3 was not entitled to receive brokerage. In fact, accused No. 1 had personally forwarded the applications of Sahara India to PW.4, as stated by PW.4 and he was the only trustee who was personally looking into all affairs of the scheme and was aware of the source of funds, yet accused No. 1 by his omissions led brokerage of Rs. 32.50 lakhs be paid to accused No. 3 by accused No. 2. The handwriting of accused No. 1 [Ex. 17(i)] has been proved by PW.5.
24. It is further submitted that the parties accept about the fact that accused No. 3 claimed and received brokerage of Rs. 32.50 lakhs from CMF on account of CANCIGO scheme receiving an amount of Rs. 65 crores as investment (Exts. 61 and 62) and Section 313 Code of Criminal Procedure statement of accused No. 3 also indicates the same. The issue, however, is whether accused No. 3 was entitled to the brokerage amount of Rs. 32.50 lakhs and if not, then under what circumstances was the payment made to accused No. 3 by accused No. 1 and accused No. 2 on behalf of the bank. Referring to the impugned judgment passed by the learned Judge, Special Court, it was contended that the mere fact of acquittal of accused No. 2 will have no effect, in view of the decision of this Court in Devender Pal Singh Vs. State National Capital Territory of Delhi and Another, AIR 2002 SC 1661 and Brathi alias Sukhdev Singh Vs. State of Punjab, AIR 1991 SC 318 ; that the evidence against accused No. 2 can be re-looked afresh by the Appellate Court and for seeing the role of accused No. 1 and accused No. 3 and the acquittal of accused No. 2 would not prejudice the prosecution case.
25. It was further submitted that accused No. 3 though never acted as broker in the IDBI and Sahara India, he claimed brokerage from CMF vide letter dated 9th March, 1992 in respect of Andhra Bank, ABFSL, IDBI and Sahara India.
26. The prosecution has proved beyond reasonable doubt that accused No. 3 made false representation by writing letter dated 9th March, 1992, (Ex. 17) under his own signatures. He claimed brokerage for transactions for which he did not act as a broker. In spite of knowing that he was not entitled to brokerage to the said transactions, he induced CMF to part with payment of Rs. 32.50 lakhs.
27. According to the counsel for the CBI, accused No. 3 did not produce any witness in his defence to prove that he was in fact the broker who brought about the purported tripartite agreement with Citi Bank. No official of Citi Bank was named, nor examined in this regard, by accused No. 3.
28. Learned ASG on behalf of CBI submitted that assuming that this Court were to disagree with the Special Court and hold that evidence against accused No. 1 is lacking, this Court can convict accused No. 3 for the charge of conspiracy read with Section 409 Indian Penal Code with unknown persons or with accused No. 2 if so established from the available evidence. Alternatively, accused No. 3 can be convicted Under Section 420 Indian Penal Code for which a substantive charge has been framed against accused No. 1.
29. On hearing learned Counsel for the parties, several facts appear to be admitted on record. These facts are:
The Andhra Bank and ABFSL invested Rs. 33 cores and purchased CANCIGO units floated by CMF. Accused No. 3 accepted that the amount of Rs. 33 crores was subscribed by him to procure CANCIGO units in the name of Andhra Bank and ABFSL. Accused No. 3 was an approved broker for CMF. He claimed that he procured the investments of Rs. 65 crores including Rs. 33 crores of Andhra Bank and ABFSL and Rs. 32 crores invested by IDBI and Sahara India.
30. Accused No. 3 made a representation by writing letter dated 9th March, 1992 (Ex. 17) under his own signatures claiming brokerage on investment of Rs. 65 crores. On the basis of the said letter dated 9th March, 1992 (Ex. 17) and an endorsement made thereon [Ex. 17(i)] CMF had to part with payment of Rs. 32.50 lakhs which was received by accused No. 3.
31. Learned Judge, Special Court by the impugned judgment held that accused No. 1 being the General Manager and Trustee of CMF having dominion over the funds of CMF made false endorsement on the letter dated 9th March, 1992 authorising payment of brokerage favouring accused No. 3 by getting the Fund Manager signed on the worksheet (Ex. 16) containing details regarding brokerage which was made to his knowledge. On the basis of such endorsement made on the letter dated 9th March, 1992 [Ex. 17(i)] the Special Court held that accused No. 1 acted dishonestly and committed breach of Ex. 84 and Ex. 85. Thus it was held that accused No. 1 thereby committed offence of criminal breach of trust Under Section 409 Indian Penal Code. It was also held that accused No. 1 and 3 were involved in criminal conspiracy regarding disbursement of brokerage of Rs. 32.50 lakhs and thereby they committed offence Under Section 120-B Indian Penal Code read with Section 409, 411 and 477-A Indian Penal Code and accused No. 1 being a public servant committed the offence of criminal misconduct by dishonestly providing undue pecuniary advantage to accused No. 3 to which accused No. 3 was not entitled and thereby committed an offence Under Section 13(1)(d) of the Prevention of Corruption Act, 1988.
32. The main allegation against accused No. 1 is that he made endorsement on letter dated 9th March, 1992 [Ex. 17(i)] in his hand-writing. The prosecution relied on the evidence of PW.5 to prove the said allegation.
33. PW.5-Rajesh Pitamberdas Bhathija claimed to be conversant with the handwriting of accused No. 1 because of some purported/alleged correspondence. The witness contradicted himself whereby in an answer to a previous question he asserted that there was no correspondence with accused No. 1. The witness-PW.5 failed to specify as to with whom accused No. 1 was in correspondence with. The said witness employs an all encompassing generic term "we had entered into correspondence" which raised doubt. Importantly, no such specific correspondence or material has been placed by the prosecution in support of its bald allegation.
34. In Murari Lal Vs. State of Madhya Pradesh, AIR 1981 SC 363 this Court held that in scenarios where there is an absence of expert opinion, a second screening in the form of the court's Assessment is essential to ascertain the authorship of document.
12....There may be cases where both sides call experts and two voices of science are heard. There may be cases where neither side calls an expert, being ill able to afford him. In all such cases, it becomes the plain duty of the court to compare the writings and come to its own conclusion. The duty cannot be avoided by recourse to the statement that the court is no expert. Where there are expert opinions, they will aid the court. Where there is none, the court will have to seek guidance from some authoritative textbook and the court's own experience and knowledge. But discharge it must, its plain duty, with or without expert, with or without other evidence. We may mention that Shashi Kumar v. Subodh Kumar and Fakhruddin v. State of M.P. Were cases where the Court itself compared the writings.
35. In the present case what the prosecution ought to have produced is the alleged material on the basis whereof PW.5 claimed familiarity with the handwriting of the author. In absence thereof, the Special Court was precluded from having any independent Assessment.
36. Another question that arises is whether PW.5 was a competent witness Under Section 47 of the Indian Evidence Act to provide evidence regarding the handwriting of accused No. 1. Section 47 of the Indian Evidence Act reads:
Section 47 - Opinion as to handwriting, when relevant.- When the Court has to form an opinion as to the person by whom any document was written or signed, the opinion of any person acquainted with the handwriting of the person by whom it is supposed to be written or signed that it was or was not written or signed by that person, is a relevant fact.
Explanation.-A person is said to be acquainted with the handwriting of another person when he has seen that person write, or when he has received documents purporting to be written by that person in answer to documents written by himself or under his authority and addressed to that person, or when, in the ordinary course of business, documents purporting to be written by that person have been habitually submitted to him.
37. This Court in Murari Lal Vs. State of Madhya Pradesh, AIR 1981 SC 363 has held that the premise of the witness claiming familiarity with the handwriting of the author must be tested.
11. Both Under Section 45 and Section 47 the evidence is an opinion, in the former by a scientific comparison and in the latter on the basis of familiarity resulting from frequent observations and experience. In either case the Court must satisfy itself by such means as are open that the opinion may be acted upon. One such means open to the Court is to apply its own observation to the admitted or proved writings and to compare them with the disputed one, not to become an handwriting expert but to verify the premise of the expert in the one case and to appraise the value of opinion in the other case.
38. The prosecution's failure to produce material before the Special Judge on which PW.5 claimed familiarity with the handwriting of accused No. 1 is fatal. It can safely be stated that the prosecution has failed to establish the premise of witness in order to allow the Special Court to appreciate the veracity of assertions made by PW.5.
39. In AIR 1957 SC 857 this Court held as follows:
...It may be proof of the handwriting of the contents, or of the signature, by one of the modes provided in Sections 45 and 47 of the Indian Evidence Act. It may also be proved by internal evidence afforded by the contents of the document. This last mode of proof by the contents may be of considerable value where the disputed document purports to be a link in a chain of correspondence, some links in which are proved to the satisfaction of the Court. In such a situation the person who is the recipient of the document, be it either a letter or a telegram, would be in a reasonably good position both with reference to his prior knowledge of the writing or the signature of the alleged sender, limited though it may be, as also his knowledge of the subject, matter of the chain of correspondence, to speak to its authorship. In an appropriate case the court may also be in a position to judge whether the document constitutes a genuine link in the chain of correspondence and thus to determine its authorship.
40. The question for our consideration is whether there is any credibility in the evidence of PW.5. Admittedly, PW.5 was not posted in CANCIGO. He came from CANGILT for the purpose of auditing in April, 1992 i.e. After the payment of brokerage (paid on 10th March, 1992).Therefore, the question arises whether PW.5 was familiar with the handwriting of accused No. 1 in the course of his business as he was neither from CANCIGO nor was working under accused No. 1. PW.5 had neither stated that he had seen accused No. 1 writing the endorsement nor he himself was the recipient of any correspondence made by accused No. 1. Therefore, it is clear that PW.5 had no prior knowledge of the handwriting of accused No. 1 or the signatures of the author, and he was not a part of the chain of correspondence to speak of its authors. It can be safely stated that PW.5 does not come within the ambit of Section 47 of the Indian Evidence Act to provide evidence regarding the handwriting of accused No. 1.
41. The sole witness who could have claimed familiarity with the handwriting of accused No. 1 was Suchaita Vaidhya since there was a purported endorsement on the same letter by her as deposed by PW.5. She was a member of the secretarial staff and was a link in the chain of correspondence in order to qualify Under Section 47 of the Indian Evidence Act to depose as to the authorship of the endorsement. She was a crucial witness; however, for the reasons best known to prosecution they have chosen not to examine Suchaita Vaidya though she was cited as a witness.
42. PW.4- Rajesh Chandrakant Pawar, was transferred in June, 1991 from CANGROWTH to CANCIGO. He was aware of the scheme and worked under accused No. 2. In his deposition PW.4 stated that the endorsement [Ex. 17(i)] was in the handwriting Mr. Anil Narichania, AGM. For the reason best known to the prosecution, they have not cited Mr. Anil Narichania as one of the witnesses. Though PW.4, in his examination-in-chief specifically stated that the endorsement [Ex. 17(i)] was in the handwriting of Mr. Anil Narichania, he was not declared hostile. We find a blatant contradiction and discrepancy in the evidence of PW.5 who attributes the endorsement to accused No. 1 and, therefore, it will not be desirable to rely on his evidence.
43. Apart from the statement of PW.5, there is no material to prove the involvement of accused No. 1. As noted above, PW.5's evidence is beset with many unsatisfactory features which renders it clearly unreliable and in any case inadequate to establish the charges levelled against accused No. 1. On a close scrutiny of the entire material on record, we have no hesitation to hold that the learned Special Court was not correct in taking the view that the prosecution has successfully established the charges against accused No. 1 and wrongly held him guilty for the same.
44. The evidence on record shows that in September, 1991 CMF received, broadly, four applications for purchase CANCIGO units from Andhra Bank, ABFSL, IDBI and Sahara India to the tune of Rs. 65 crores. At that time accused No. 1 was the General Manager. He was also the Trustee and author of Ex. 84. He also took the decision as one of the Trustees in the meeting of the Board on 1st November, 1990 to pay brokerage. The evidence also shows that the applications were routed to PW.4 through the General Manager. PW.4 in his evidence deposed that the applications of Sahara India were routed through the General Manager but there is nothing on the record to show that letter dated 9th March, 1992 (Ex. 17) was received by accused No. 1. The finding of the Special Judge that the letter dated 9th March, 1992 was received by accused No. 1 is not based on evidence, therefore, such finding cannot be upheld. In any case mere receiving of a letter cannot be a ground to hold that the endorsement at Ex. 17(i) was made by accused No. 1.
45. Considering the aforesaid, we feel it expedient to record that the Special Court fell into a manifest error in coming to a conclusion with regard to accused No. 1, as reflected in the judgment under appeal, which cannot be sustained. The appeal (Criminal Appeal No. 1001 of 2001), therefore, succeeds and is allowed and the Appellant - B.R. Acharya is acquitted of all the charges, his bail bonds shall stand discharged.
46. It is the case of prosecution that for various acts done by accused No. 3, he used accused No. 1, the Trustee and General Manager of CMF to commit criminal breach of trust in respect of funds of CMF. In this context, it was submitted that under the general charge of criminal conspiracy, all those acts also constitute cheating and criminal breach of trust.
47. The evidence of PW.11 shows that accused No. 3 was the broker for CMF. He was also a member of the Stock Exchange. He had an account in Andhra Bank. In the case of Andhra Bank and ABFSL, Rs. 33, crores invested by them in CMF belonged to accused No. 3. This is also evidenced by the two cheques (Ex. 29 and Ex. 30). It was the accused No. 3 who induced Andhra Bank and ABFSL to apply for allotment of CANCIGO units as apparent from the applications (Ex. 19 and Ex. 15) which had been signed by the two officers-Dhankumar and Kalyanaraman, who were accused in some other matter. This position is not even disputed by accused No. 3. The reason is not known as to why accused No. 3 got Andhra Bank and ABFSL to apply. The IO has rightly pointed out in his evidence, repeatedly, that accused No. 3 was not concerned with the generation of funds in this case. Applications for allotment were made by Andhra Bank and ABFSL but no entry regarding the transactions were made in the books of Andhra Bank and ABFSL. Therefore, it is clear that accused No. 3, to whom Rs. 33 crores belongs got Andhra Bank and ABFSL to apply for the units but kept the said matter hidden by not recording the same. In September, 1991, accused No. 3 affixed the brokers stamp on the applications (Ex. 19 and Ex. 15). Knowing fully well that the investors were not Andhra Bank and ABFSL, he had got officers of Andhra Bank and ABFSL to sign the application forms. Both these officers are accused in other cases. By affixing the rubber stamp of the broker, accused No. 3 falsely represented to CMF that he had brought subscriptions from Andhra Bank and ABFSL as a broker and, accordingly, claimed brokerage. Even before September, 1991, he wrote a letter (Ex. 18) to Andhra Bank to the effect that units worth Rs. 11 crores would be given to Andhra Bank and ABFSL. They were offered as security for ready forward transaction with ABFSL as evident from the statement of PW.11. From the evidence of PW.11 it is clear that the entire record of CMF shows that pursuant to the applications (Ex. 19 and Ex. 15) made by Andhra Bank and ABFSL, accounts were opened in the names of Andhra Bank and ABFSL as subscribers. The names of Andhra Bank and ABFSL found place in the Investment Register [Ex. 38(i) and Ex. 39(i)] and also Investors Fund Ledger [Ex. A3(35)(2) and Ex. A3(37)(1)]. Thereby CMF had recognized only Andhra Bank and ABFSL as their investors and the units could be redeemed only by Andhra Bank and ABFSL. The brokers stamp was affixed on them by accused No. 3 only with a view to claim brokerage. Although he was aware that the total amount of Rs. 33 crores was invested by him. Even the half yearly interest which was paid on the investments of Rs. 33 crores on 8th January, 1992 by CMF was only in the names of the subscribers-Andhra Bank and ABFSL. The evidence further shows that after receiving the income distribution cheques, Andhra Bank and ABFSL transferred the amount to the account of accused No. 3 pursuant to his letter (Ex. 12). This was on 9th January, 1992 and, yet, accused No. 3 made an application vide Ex. 17 claiming brokerage from CMF as a broker and not as an investor. Accused No. 3 never objected to allotment of units in favour of Andhra Bank and ABFSL. In his statement Under Section 313 of the Code of Criminal Procedure stated that he was aware of CMF simultaneously deploying 80% of Rs. 65 crores at 15% per annum in Citi Bank. Yet, accused No. 3 concealed the true nature of the transactions of Rs. 33 crores in the names of Andhra Bank and ABFSL though it was known to him on 9th March, 1992 that the half yearly interest came to him not from CMF but from Andhra Bank and ABFSL. In view of the aforesaid evidence if learned Judge, Special Court held that on 9th March, 1992 accused No. 3 dishonestly claimed brokerage from CMF by putting brokers stamp and by disguising his investment of Rs. 33 crores on Ex. 19 and Ex. 15, no interference is called for against such finding.
48. In September, 1992, after the scam became public, the interest warrants were returned by Andhra Bank and ABFSL disclaiming their investments. With regard to the rest of two transactions of Sahara India and IDBI, the evidence on record shows firstly, that on applications of IDBI and Sahara India there is no brokers stamp. Despite there being no brokers stamp on these applications accused No. 3 had wrongfully and dishonestly claimed brokerage on 9th March, 1992.
49. It was the case of accused No. 3 that there was prior agreement between him, CMF and Citi Bank under which Citi Bank got the units purchased in the names of Sahara India and IDBI. What is relevant is allotment of units in favour of Andhra Bank, ABFSL, Sahara India or IDBI. It is to be noticed that the ownership of the units is with Andhra Bank, ABFSL, Sahara India or IDBI. It is evident from CANCIGO Certificates that at the expiry of one year, Sahara India and IDBI got CANCIGO units encashed and they have received the entire money in their accounts on the basis that they were the owners of the units. The evidence of PW.2, PW.6 and PW.7 on behalf of IDBI and Sahara India, shows that no broker was involved in the transactions involving purchase of CANCIGO units of Rs. 32 crores face value. The case of the prosecution is very simple that out of four applications for allotment of units, two contained rubber stamp and rest of two applications of Sahara India and IDBI did not bear rubber stamp. The case of the prosecution is that brokerage was dishonestly claimed by accused No. 3 with full knowledge that he has not acted as a broker.
50. In cross-examination, the defence examined PW.11 extensively in support of their case that brokerage was payable to accused No. 3 even if there was no brokers stamp affixed on the applications in cases where the officer paying the brokerage is satisfied that the business was procured by the broker. It was contended on behalf of accused No. 3 that brokerage was payable even on self investments. However, PW.11 in his cross-examination has deposed that even in cases where the brokers stamp does not find place on the applications for allotment of units, the broker was required to forward the applications for allotment under his covering letter to CMF. In this case, the defence has not produced any such covering letter in support of their case. Similarly, they have not produced any correspondence with CMF claiming brokerage on that basis. Therefore, it is clear that accused No. 3 was not the broker with regard to four investments in question.
51. PW.2, PW.6 and PW.7, employees of IDBI and Sahara India were extensively cross-examined by the defence and, yet, no case was made by the defence from any of the three witnesses regarding any correspondence between accused No. 3 and IDBI and Sahara India authorizing him to collect brokerage from CMF between September, 1991 and March, 1992. Therefore, the prosecution has proved that accused No. 3 is guilty of making a false representation to CMF with full knowledge and it was so made to deceive CMF to part with an amount of Rs. 32.50 lakhs.
52. On 9th March, 1992 accused No. 3 knew that Andhra Bank and ABFSL were not the actual investors. He also knew that brokerage was payable only if the business was procured for CMF as he was aware of the decision of Board. He was the approved broker of CMF and had bought the units in the names of Andhra Bank and ABFSL, which is admitted. He knew that that as the subscriber of units, he was not entitled to brokerage yet, he claimed brokerage as a broker vide Ex. 17. Therefore, it is clear that both the transactions of Andhra Bank and ABFSL got disguised. Their true nature was suppressed. Though no brokerage was payable on such transactions, Ex. 17 was written by accused No. 3 with dishonest intention. Without Ex. 17, accused No. 3 could not have succeeded in obtaining from CMF an amount of Rs. 32.50 lakhs.
53. Now the question arises as to what will be the effect of acquittal of co-accused Nos. 1 and 2 on the case of accused No. 3. According to the Appellant if co-accused No. 1 is acquitted and in view of acquittal of co-accused No. 2 no charge Under Sections 409, 411 and 477-A substantiate against accused No. 3 and he cannot be punished with the aid of Section 120-B Indian Penal Code.
54. Per contra, according to the learned Counsel for the CBI, even if this Court disagrees with the Special Court and holds that the that evidence against accused No. 1 is lacking, this Court can convict accused No. 3 for the charges of conspiracy read with Section 409 Indian Penal Code with unknown person or accused No. 2 if so established from the available evidence. Alternatively, accused No. 3 can be convicted Under Section 420 Indian Penal Code for which a substantive charge had been framed against him.
55. This Court in Devender Pal Singh (supra), held that acquittal of one accused does not raise doubt against conviction of another accused person. A plea that acquittal of the co-accused has rendered the prosecution version brittle has no substance. Acquittal of co-accused on the ground of non-corroboration has no application to the accused himself.
56. The question arises whether accused No. 3 can be convicted for the alternative charge Under Section 420 of the Indian Penal Code for which a substantive charge had been framed against him. In this connection we may refer to decision of this Court in Satyavir Singh Rathi Vs. State thr. C.B.I., AIR 2011 SC 1748 , wherein this Court held:
68. We find the situation herein to be quite different. We must notice that the charges had indeed been framed in the alternative and for cognate offences having similar ingredients as to the main allegation of murder. Section 386 Code of Criminal Procedure refers to the power of the appellate court and the provision insofar relevant for our purpose is Sub-clause (b)(ii) which empowers the appellate court to alter the finding while maintaining the sentence. It is significant that Section 120-B Indian Penal Code is an offence and positive evidence on this score has to be produced for a successful prosecution whereas Section 34 does not constitute an offence and is only a rule of evidence and inferences on the evidence can be drawn, as held by this Court in AIR 1952 SC 167 . We are, therefore, of the opinion that the question of deemed acquittal in such a case where the substantive charge remains the same and a charge Under Sections 302/120-B and an alternative charge Under Sections 302/34 Indian Penal Code had been framed, there was nothing remiss in the High Court in modifying the conviction to one Under Sections 302/307/34 Indian Penal Code. It is also self-evident that the accused were aware of all the circumstances against them. We must, therefore, reject Mr. Sharan's argument with regard to the deemed acquittal in the circumstances of the case.
57. In Sunil Kumar Paul v. State of West Bengal AIR 1965 SC 706, the accused was charged for the offence Under Section 409 Indian Penal Code. In the said case the Court held that the accused could have also been charged for the offence Under Section 420 Indian Penal Code and held:
(15). It is urged for the Appellant that the provisions of Section 236 Code of Criminal Procedure would apply only to those cases where there be no doubt about the facts which can be proved and a doubt arises as to which of the several offences had been committed on the proved facts. Sections 236 and 237 read:
236. If a single act or series of acts is of such a nature that it is doubtful which of several offences the facts which can be proved will constitute, the accused may be charged with having committed all or any of such offences, and any number of such charges may be tried at once; or he may be charged in the alternative with having committed some one of the said offences.
Illustrations
(a) A is accused of an act which may amount to theft, or receiving stolen property, or criminal breach of trust or cheating. He may be charged with theft, receiving stolen property, criminal breach of trust and cheating, or he may be charged with having committed theft, or receiving stolen property, or criminal breach of trust or cheating.
xxx
237. If, in the case mentioned in Section 236, the accused is charged with one offence, and it appears in evidence that he committed a different offence for which he might have been charged under the provisions of that section, he may be convicted of the offence which he is shown to have committed, although he was not charged with it.
Illustrations
A is charged with theft. It appears that he committed the offence of criminal breach of trust, or that of receiving stolen goods. He may be convicted of criminal breach of trust or of receiving stolen goods (as the case may be) though he was not charged with such offence.
The framing of a charge Under Section 236 is, in the nature of things, earlier than the stage when it can be said what facts have been proved, a stage which is reached when the court delivers its judgment. The power of the Court to frame various charges contemplated by Section 236 Code of Criminal Procedure therefore arises when it cannot be said with any definiteness, either by the prosecutor or by the Court, that such and such facts would be proved. The Court has at the time of framing the charges, therefore to consider what different offences could be made out on the basis of the allegations made by the prosecution in the complaint or in the charge submitted by the investigating agency or by the allegations made by the various prosecution witnesses examined prior to the framing of the charge. All such possible offences could be charged in view of the provisions of Section 236 Code of Criminal Procedure as it can be reasonably said that it was doubtful as to which of the offences the facts which could be ultimately proved would constitute. The facts which must have been alleged prior to the stage of the framing of the charge in the present case must have been what had been stated in the charge-sheet submitted by the Investigating Officer, 24-Parganas, which is printed at p. 3 of the appeal record. This charge-sheet narrates in the column meant for the name of offences and circumstances connected with it:
that on the 6th October 1956 Sunil Kumar Paul, a Public servant in the employment of the office the Sub-Divisional Health Officer, Barrackpore i.e., (clerk) dishonestly drew Rs. 1,763-6-0 excluding Postal Life Insurance deduction of Rs. 5-10-0 from the State Bank of India, Barrackpore Branch by submitting a false duplicate Estt. Pay Bill under head 39 for the month of September 1956 for the office of the said S.D.H.O., Barrackpore. The money drawn was not credited to the office of the Sub-Divisional Health Officer, Barrackpore.
It is practically on these facts that the conviction of the Appellant for an offence Under Section 420 Indian Penal Code Has been founded. It follows that the Special Court could therefore have framed a charge Under Section 420 Indian Penal Code At the relevant time if it had been of the opinion that it was doubtful whether these facts constitute an offence Under Section 409 Indian Penal Code As stated in the charge-sheet or an offence Under Section 420 Indian Penal Code
(16). When a charge Under Section 420 Indian Penal Code Could have been framed by the trial Court by virtue of Section 236 Code of Criminal Procedure that Court or the appellate Court can, in law, convict the Appellant of this offence instead of an offence Under Section 409 Indian Penal Code If it be of the view that the offence of cheating had been established. This would be in accordance with the provisions of Section 237 Code of Criminal Procedure.
(17) It is then urged for the Appellant that under the proviso to Section 4 of the Act, the Special Court can try any other offence only when the accused is specifically charge with that offence. The language of the proviso does not lead to such a conclusion. It provides for the trial of the accused for any other offence provided the accused could be charged with that offence at the same trial under the provisions of the Code of Criminal Procedure. The proviso does not say that the charge must be framed, though of course, if the trial Court itself tries the accused for a certain offence, it will ordinarily frame a charge. The proviso empowers a Court to try the accused for that offence and has nothing to do with the power of the trial court or of the appellate Court to record a conviction for any other offence when an accused is being tried with respect to an offence mentioned in the Schedule. The Court's power to take recourse to the provisions which empower it to record a conviction for an offence not actuality charged, depends on other provisions of the Code and the Act.
(24) The ingredients of two offences must be different from one another and it is therefore not necessary to consider whether the ingredients of the two offences are in any way related. The Court has to see, for the purpose of the proviso, whether the accused could be charged with any offence other than the one referred to in the allotment order, in view of the provisions of the Code. There is nothing in the proviso which could lead to the construction that any limitations other than those laid down by the provisions of the Code of Criminal Procedure were to affect the nature of the offence which could be tried by the Special Court.
(25.) We are therefore of opinion that the Special Court could try the Appellant for the offence Under Section 420 Indian Penal Code And that therefore the High Court was right in altering his conviction from that Under Section 409 to Section 420 Indian Penal Code
58. In this case the prosecution proved that the accused No. 3 deceived CMF by making a false representation dated 9th March, 1992 and dishonestly induced the official of CMF to deliver Rs. 32.50 lakhs in his favour and he dishonestly received the amount and thereby committed offence Under Section 420 Indian Penal Code. Accused No. 3 was originally charged for the offence of cheating, criminal breach of trust for receiving stolen property/falsification of accounts Under Section 120-B, Section 420/409 of the Indian Penal Code apart from Section 411 and Section 477-A of the Indian Penal Code. We, therefore, alter his conviction from that of Under Section 409 to Section 420 of the Indian Penal Code and convict him for the offence Under Section 420 of the Indian Penal Code and sentence him to undergo rigorous imprisonment for three years.
59. Further, as the prosecution successfully established the ingredients of theft for receiving stolen property from Canara Bank i.e. Rs. 32.50 lakhs against accused No. 3, we uphold the order of his conviction and sentenced passed by the Special Court Under Section 411 of the Indian Penal Code.
However, in view of the acquittal of accused Nos. 1 and 2, the order of conviction of accused No. 3 Under Section 477-A is set aside. The judgment dated 6th September, 2001 passed by the learned Special Judge is affirmed with modification as mentioned above. The appeal (Criminal Appeal No. 1226 of 2001) filed by the Appellant-Hiten P. Dalal is dismissed. The bail bonds of the Appellant - Hiten P. Dalal, if he is on bail, shall stand cancelled and he is directed to be taken into custody to serve out the remainder of the sentence.
T. Kalaiselvan, Advocate 
(Expert) 04 December 2014
