BR No.166 dated 24.4.1991 for Rs.7,62,45,000 Ex.41 with the intent to make MUL believe that UCO Bank, Hamam Street Branch Bombay was holding 51 lacs units of UTI of face value of Rs.5,10,00,000 with UCO Bank to be delivered to MUL A 3 is companyvicted under Section 468 of IPC for having forged valuable security being BR No.
10,39,50,000 Exs.
By judgment and order dated 27th/28th September, 1999, the learned Special Judge acquitted accused No.2 and companyvicted accused Nos.l, 3, 4 and 5 as under A l Pramod Kumar Pritam Lal Manocha, A 3 Vinayak Narayan Deosthali, A 4 Ram Narayan Popli and A 5 Harshad Shantilal Mehta are companyvicted being the parties to criminal companyspiracy alongwith Mr. Mohan D. Khandelwal PW23 between the period of April May, 1989 to May, 1991 in Bombay and Delhi, the object of which was to divert the surplus funds of MUL lying with its account in Canara Bank, Sansad Marg, New Delhi branch to the account of A 5 HSM with ANZ Grindlays Bank, Sansad Marg, New Delhi branch and thereby companymitting offences of criminal breach of trust fraudulently using forged documents, abuse of public offices, dishonest appropriation of the amount of Rs.38,97,20,000 punishable under Section 120 B r w Sections 409, 467, 468 and 471 of IPC and Section 13 lXc read with Section 13 2 of the P.C. Act, 1988.
A.5 1 is the receipt dated 24.1.1991 issued by Mr. Khandelwal an employee of A 5 on the letter pad of A 5.
30, 32, 34 and 36 aggregating to Rs.38,97,20,000 drawn by MUL on its bankers viz.
Criminal Appeal No.
MUL returned the loan amount on due date with agreed interest.
Only the Director Finance was having closed cabin in the said hall, which has transparent glasses.
In July, 1989, they got the office premises in Arunachala Building, Bara Khamba Road, New Delhi.
At that time, A 5 informed him that MUL was interested in borrowing the monies.
10,83,75,000, iii cheque number863237 dated 24.4.1991 for Rs.7,62,45,000, iv Cheque number863260 dated 2.5.1991 for Rs.
Neither DPE number the Ministries companycerned took any steps to ensure the companypliance of their guidelines.
His stand was that the transaction was between him and MUL on principal to principal basis.
38 dated 13th March, 1991, Ex.
A 5 1 Vol.23 page 6514 are referred to show that MUL was knowing about the transactions with A 5.
The Agenda Note and the Resolution clearly show that MUL was number dealing with A 5 on principal to principal basis.
It is his further say that he came across a person Anuj Kalia.
He had examined the transactions of high value inter banking clearance prior to February 1991.
Nothing was mentioned about the role of A 5 who was operating from behind the screen.
He did number know whether such transactions were ever undertaken by their head office.
The cheques and their proceeds were meant for the accused and it was the accused who was receiving it by a pay order in the name of Grindlays Bank.
The said department would verify and tally the particulars as appearing in the pay in slip and the related cheque.
Further, there is numberhing on record to show that UCO Bank either purchased or sold the units to MUL.
He used to do daily reconciliation with UCO Bank, Hamam Street Branch, Bombay in respect of the security position in the account of A S on telephone.
The transactions of 13th March, 18th March, 1991 and 24th April, 1991 are referred to in para 5.
The purpose was to enable him to have a set up in Delhi.
He companyld number recollect whether Mr. Bhatnagar at that time went on recording his statements.
The transactions were through UCO Bank.
Admittedly, the payment came to be made by and or from the account of accused No.5, Harshad.
In the investment of these funds guidelines and instructions were routinely flouted and numbernorms were observed.
These investments were being made in each case with the specific approval of a Sub Committee for investments companysisting of Shri R.C. Bhargava then CMD MUL and S. Natrajan, then Director Finance MUL.
For the allegation of forgery, it is to be stated that in the instant case, A 3 has been charged with forging the BRs Ex.
One Committee known as Jankiraman Committee was appointed by the Reserve Bank of India hereinafter referred to as the RBI under the chairmanship of one Shri R. Jankiraman, the then Deputy Governor of the RBI.
Issuing of cheques by Canara Bank in favour of Grindlays Bank was as suggested by the UCO Bank A 3 .
Bombays office of A 5 by its letter to Bank of America, Bombay requested remittance of the amount by means of 1TRO to its Delhi Branch for crediting into the account of MUL, Delhi.
He accepted that he was the author and signatory of the letter.
Then the amount was paid by pay order to UCO Bank, Hamam Street Branch, Bombay and the amount was credited to the account of A 5.
Even after inquiry by the CBI, in reply given to JPC, MUL has made its position clear that the funds were invested as a companymercial transaction for getting optimum yield.
He took a stand that though the letters produced by the prosecution to show that forgery had been companymitted, as they were typed outside the office, the same was done due to pressure of work.
Thanking you, Yours faithfully, For UCO Bank, Sd Manager From letters Exhibits 60 and 61, it is apparent that A3 has number stated that UCO Bank was selling units.
Some instances are given below In the case of Maruti Udyog Limited, it was found, that funds of MUL meant for purchase of units from UCO bank were credited into the individual accounts of HSM.
In the charge sheet submitted on 15.12.1994, similar allegations are reiterated.
ROUTING OF TRANSACTIONS 12.24 Many brokers e.g. HSM, HPD, ADN, Excel Co., NKA etc.
In fact A 3 had admitted that it was typed outside and he was responsible for the typing done outside.
10,83,75,000 Ex.32 and 863237 dated 24.4.1991 for Rs.7,62,45,000 favouring Grindlays Bank into the account of accused number5 HSM with Grindlays Bank, New Delhi instead of crediting the said Cheque into the account of Grindlays Bank, New Delhi ACCUSED NO.5 Harsh ad Shantilal Mehta A 5 is companyvicted under Section 403 of IPC for having dishonestly misappropriated four bankers cheques to wit Cheque No.645585 dated 13.3.1991 for Rs.l0,11,50,000, ii cheque number646402 dated 18.3.1991 for Rs.
MANAGER FINANCE Sd D F Sd CMD Ex.42 dated 02.5.1991.
Mr. B.C. Bhatnagar called him on both the occasions.
When the matter was brought to the numberice of both Houses of Parliament, a Joint Parliamentary Committee in short the JPC was appointed to enquire into the irregularities.
Additionally, A l took a stand that A 5, Harshad is broker of UCO Bank.
Further this was a companymercial practice adopted by many banks for transmitting the funds at the earliest.
There was numberother instance, except the cases involving A 5 and the other transactions to which reference shall be made subsequently, that the letter was typed outside.
Share market operations were undertaken in the name of Harshad S. Mehta which was his proprietary companycern, he being a member of Bombay Stock Exchange.
Thus Andhra Bank, UCO Bank, BOK, Bank of Madura and ABFSL carried transactions of the value of over Rs.77,000 crores for brokers and others during April, 1991 to May, 1992.
101 is a letter dated 25.2.1991 issued by the Delhi Office of A 5 to the Grindlays Bank, by which it was instructed to credit the proceeds of the pay order Exbt.
38 is the BR issued by the UCO Bank.
As the said units were sold by the broker clients to A 5 through UCO Bank, the units were required to be returned to A 5 and that would be clear from Exhibit 58.
During the period when the transactions companyered by Ex.28, took place there was a market practice followed by various banks to present bankers cheques through a Special Clearance settlement which is known as inter bank settlement.
In fact, the broker wanted that the facility of single point clearance whereby the activities of issuance and acceptance of bankers cheques in their account may be companyducted through the Securities Division of the SBI Main Branch Bombay instead of the Personal Banking Division in the same branch where he had the account.
1150 of 1999.
28 to the account of A 5.
He agreed that he did number check up the record and the procedure of inter banking clearance of the cheques of high value of the high networth customers of Bank of America, Hong Kong and Shenghai Banking Corp., Standard Chartered Bank or any other foreign bank.
59 , 13.3.1991 Ext.
There were three types of head office accounts with their branch i.e. Director Head Office DHO , Inter Branch Transaction and Block Account.
18.5 HSM was summoned by the Committee again on 30.6.1993.
It was number clear whether any criminal act was companymitted or any irregularity was companymitted.
Next witness from MUL PW3 Mr. Agharam Ramakrishnan Halasyam was the General Manager Finance since 1985 till the end of 1989 in 1991 he was promoted as Chief General Manager Finance and thereafter was promoted as Director Finance from 1st June, 1991.
Similar is the position in letters dated 22.2.1991 Ext.
The transactions in the securities between him and MUL were companyducted on principal to principal basis and the same were put through UCO Bank under routing facility extended to him by it and MUL in particular was very much aware of the said fact, namely that the transactions in question were directly between MUL and him and that the same were on principal to principal basis.
Ultimately, the application for grant of pardon was accepted by the same Magistrate.
He also told him that there were many P.S.U. Companies in Delhi these PSUs had large investable surplus funds with them and that such large funds of PSUs in Delhi companyld be invested in banks at Bombay.
He told him that the securities which MUL would offer were units of UTI, the bank lending the money would be UCO Bank, Hamam Street Branch, Bombay and that offer in that respect would companye from the said bank who would be showing it as an offeror.
39 dated 18th March, 1991 and Ex.
Neither DPE number the Ministries companycerned took any steps to ensure the companypliance of their guidelines.
After May 1991 he had number examined such kind of transactions of the bank.
His office was also a section of Corporate Finance, which was located in a big open hall and they all were sitting adjoining to each other.
In June, 1990 he was brought to Bombay Office as Divisional Manager in its Nariman Point Office and he worked at the said office till October, 1992.
DIVERSION OF FUNDS TO BROKERS 14.114 While most of the PSUs Organisations denied before the Committee about utilising the services of brokers, the Committee found that in some cases inquiries investigations by CBl internal auditors clearly established nexus between brokers, officers of PSUs banks resulting in syphoning of funds of PSUs to brokers.
On seeing the carbon companyy of credit voucher of UCO Bank, Hamam Street Branch dated 13.1.1991, he stated that the same is in the handwriting of Mr. V.N. Deosthali A 3 and also bears his signature under the caption of Asstt.
Reference was also made that issuance of BRs while putting through transaction with MUL was under routing facility by the UCO Bank.
Petition No.574 of 2002 on 16.1.2002 for companytinuing the said appeal.
t is reported that 22 PSUs had placed funds to the extent of over Rs.
In the investment of these funds guidelines and instructions were routinely flouted and numbernorms were observed.
iii iv 17.48 On 16th June, 1993 Shri Harshad Mehta held a press companyference in which he issued a companyy of an affidavit of 24th February, 1993 and briefed the press of the details of the 4 specific withdrawals of 2nd and 4th November, 1991 and its subsequent disbursement.
It only meant that the transactions were through UCO Bank.
11th FLOOR JEEVAN PRAKASH 25, KASTURBA GANDHI MARG NEW DELHI 110001 Dear Sirs, This has reference to your purchase of 75 lac Units for value dated today 14,4500.
Accused Nos.
The initials therein appear to be of A 4 but he was number sure about the same.
The basic allegation was that these transactions were made in active companynivance with the officials of banks, financial institutions and shareholders.
There is a financial involvement of Rs 33.63 crores.
He also wanted him to companyvey on his behalf money market trends, quotations etc.
Canara Bank, Sansad Marg Branch, New Delhi in favour of Grindlays Banks.
The said premises was purchased by one of the holding companypanies of Harshad S. Mehta.
Thus these transactions were in the nature of ready forward deals instead of genuine investment transactions which was in companytravention of RBI guidelines issued on 11.4.1988 which stated that sale and purchase of securities with the same party and for identical or similar amounts were companystrued as tacit arrangements which was in companytravention of the instructions prohibiting buy back arrangements with number bank clients.
Letter was issued by the Delhi Office of A 5 instructing Grindlays Bank for remittance of the amount by TT to its Bombay Branch which was done on the same day.
The CBI has undertaken numberinvestigation whatsoever to discover whether the BRs were backed up by securities belonging to A 5.
Pursuant to the orders from the headquarter of CBI, the papers were handed over by him to Dy.
He handed over the instruction letter and pay order to A 4 because A 4 was handling the said work and he was also instructed by Mr. Khandelwal to do so.
For the cheque issued by the Canara Bank in favour of Grindlays Bank, there is numberhing on record that monies were meant for Grindlays Bank.
PW25 Mr. B.C. Bhatnagar, SP CBI stated that he was transferred to BSFC Branch of CBI at the end of February 1994 as Dy.
He agreed that he neither saw number took into possession any such record dated 25.2.1991, 13.3.1991, 18.3.1991, 24.4.1991 and 2.5.1991 with regard to the presence of A 4 in the companycerned bank on these dates.
This was secured loan as MUL transferred and delivered 35 lac unite of UT1 to A 5.
The PSUs after the maturity of investments returned the BRs and got their moneys along with the yield which was agreed to at the time of placement of funds.
1, Pramod and accused No.2, Ambuj Jain was that they did number know the involvement of A 5.
On 1.6.1993, he was called in the CBI office which was then located in Loknayak Bhavan, Delhi.
Dear Sirs, This has reference to your purchase of 35 lac units for value dated 25th February, 1991 Rs.
It is only after they failed to obtain such a narration that the FIR in the instant case was filed on 15.4.1993.
to such PSUs.
Without holding the securities by way of BRs, UCO Bank would number issue BRs for and on behalf of A 5.
The Committee, however, obtained a companyy of the letter dated 19.8.91 from HSM.
Manager Finance and Shri Ambhuj Jain was functioning as Sr.
He was instructed by Mr. Khandelwal to go along with both these documents to the office of MUL and companylect the envelope companytaining units of UTI from that office.
1141 of 1999, A 4 Ram Narayan Popli has filed Criminal Appeal No.
This has to be companysidered in the background of the stand of A 5.
In a press companyference held on the same day he released a companyy of an affidavit dated 24th February, 1993 alleging that these were in companynection with payment of Rs.
Ashwin Mehta is the younger brother of A 5.
1097 of 1999 filed by A 4 Ram Narayan Popli is allowed and he is acquitted of all the offences alleged against him.
MUL also did number disclose if it had filed any case of recovery against ANZ Grindlays Bank, Sansad Marg Branch, New Delhi, for any loss.
During his visit to Bombay, he came to know the companypany as M s Growmore Research Assets Mangement Ltd., which was an umbrella companypany to give the companyporate identity and the office to be set up in Delhi.
He presumes that CBI officer recorded his statement on 10th of August, 1994, which was read over to him and he found the same having been companyrectly recorded.
During the companyrse of investigation, he had number visited any other bank except the Grindlays bank to ascertain the procedure of inter banking clearance.
14.21 The Committee numbere that the PSUs were the single largest source of surplus investible funds around Rs.36,000 crores between April 1990 and December 1992 only.
It is his further say that Ashwin Mehta was looking for a qualified person who companyld assist him in research activities in the share market and he called him to companye to Bombay to meet Harshad Mehta and accordingly he went to Bombay somewhere in December, 1988 when for the first time he met A 5 .
After companyfirming the position of the balance of the securities in a form of BRs held by UCO Bank in the account of A 5, he would pass on the same to the dealers of A 5.
Similarly, during the same period other public sector undertakings had invested their funds at much higher rates then the rate of interest on which MUL had made aforesaid four investments.
If in his statement recorded by CBI, he has number mentioned about the presence of accused number2 in the said meeting then it may be that he had number stated about the same.
60 is the letter dated 13.3.1991 which was signed by A 3 Deosthali.
Finally, an important companytention raised by the learned companynsel for the appellants that for the transaction number.l to 3 i.e. transactions dated 24.1.1991, 13.3.1991 and 18.3.1991, the Special Court would have numberjurisdiction as the prosecution has failed to prove the companyspiracy.
All the transactions are based upon the documents, which stand proved by the evidence of various witnesses of MUL, who signed the documents.
During his tenure in Hamam Street Branch in one or two cases BRs were issued.
The CMM assigned the matter to other Metropolitan Magistrate Mr. Yadav.
During 1990 and 1991, A 5 used to visit the said office at Delhi once in a few months or so.
Normally, appeal would have abated against him.
He joined R.B.I. in 1961 as a Junior Officer and retired in 1997.
He did number remember if the statement dated 15.6.1993 came to be recorded only because a day earlier i.e. on 14.6.1993 Harshad Mehta happened to companyvene a press companyference in which he leveled me allegations of having paid Rs.
18.3.1991 for a sum of Rs.
1991 addressed to MUL, companytaining signature of A 3, it is his say that it was number within the authority of A 3 to address such letters.
58 is the letter dated 23.1.1991 addressed by UCO Bank, Hamam Street Branch, Bombay to MUL and it was signed at two places by A 3 Deosthali.
Certain very suspicious circumstances surround this transaction, particularly, the role of A 3.
Against the acquittal order of A 2 Ambuj Sushil Kumar Jain, Central Bureau of Investigation has filed Criminal Appeal No.521 of 2000.
The witness stated that he had an occasion to companylect bank pay order from the office of MUL while working in the said companypany.
These were deposited as though he was the payee.
The entry appearing therein is companyrect and the same was prepared on the basis of credit advice received from the RBI.
of A 4 with the obvious purpose that such records would have falsified the case of the prosecution in relation to A 4.
1 crore to the P.M. on 4.11.1991.
The Committee submitted its report between May 1992 and April 1993.
Thanking you, Yours faithfully, For UCO Bank, Sd Manager Ex.
Thereafter, in 1990 he got membership of Delhi Stock Exchange.
While working in Hamam Street Branch, sometimes he came across few brokers including Harshad S. Mehta whom he met once in his office along with Mr. S.V. Ramnathan, the then Divisional Manager of the bank.
The PSUs after the maturity of investments returned the BRs and got their monies along with the yield which was agreed to at the time of placement of funds.
Certain important factual aspects need to be numbered relating to the transaction and the role played by A 5.
As these Bankers cheques were in the name of ANZ Grindlays Bank, they should have been credited into the account of the bank but Shri R.N. Popli in companynivance with his companyconspirators, credited the same into the account of Shri Harshad S. Mehta unauthorisedly.
Special Judge, New Delhi who was seized of the charge sheet in the PFC case.
The original was sent to Mr. Harshad S. Mehta and carbon companyy thereof was retained in their office.
Mr. Bhatnagar was also present at that time.
For these investments, Bankers cheques were obtained by SI Shri Pramod Kumar and Ambhuj Jain from the account of MUL in Canara Bank, Sansad Marg, New Delhi in the name of ANZ Grindlays Bank and the same were companylected by Shri Anuj Kalia who deposited the same into the account of Shri Harshad S. Mehta in ANZ Grindlays Bank, Sansad Marg, New Delhi.
Such illegal transactions were done with the aid and assistance and direct involvement of A 3 Deosthali and A 4 Popli .
59 was written by A 3.
There was an instruction from Grindlays Bank to credit the amount in the account of A 5 in respect of bankers cheques of UCO bank.
According to him, in 1991 MUL used to have surplus funds, which were invested in UTI and PSU bonds.
Cheques were being issued for the purpose of lending money by MUL to A3.
He had also checked the high value transactions of inter banking clearance pertaining to high network customers of the bank between February, 1991 to May, 1991.
The negotiations in respect of such transactions were companyducted by the clients directly with the companynter party.
On seeing the letter, Ex.73, dated 26.4.1991 of Harshad S. Mehta addressed to the Manager Grindlays Bank, he has stated that by that letter Harshad S. Mehta their account holder instructed them to issue a bankers cheque for a sum of Rs.7,63,54,650 favouring Canara bank for the benefit of MUL.
He came across transactions known as switch transactions, wherein security is received from one bank and delivered to the other bank.
Manager of MUL a government Company as provided under Section 6 l vii of the Companies Act A 2 Ambuj Sushilkumar Jain was also an employee Senior Executive of MUL, who joined MUL on 19.4.1989 A 3 Vinayak Narayan Deosthali was an employee Assistant Manager of UCO Bank at Hamam Street Branch, Mumbai A 4 Ram Narayan Popli was an employee Officer attached to the Remittance Clearance Section of ANZ Grindlays Bank, Delhi Branch and A 5 Harshad Shantilal Mehta was a financial broker operating in money market and securities.
ALLEGATIONS IN THE FIR AND CHARGE SHEET.
The negotiations in respect of such transactions were companyducted by the clients directly with the companynter party.
As soon as the amount was re paid by MUL, original owner of the UTI units was entitled to get it back and that was done by A 5.
Between 15.4.1993 to 15.6.1993 he had number interrogated Anuj Kalia.
On the same day, as authorized signatory of MUL, A l instructed Canara Bank, Delhi to issue a pay order favouring Grindlays Bank by debiting the amount to the account of MUL and accordingly Canara Bank issued its pay order for the amount directly to MUL.
As far as he remembered, it was on 10th of August 1994.
First report in point of time was submitted by the Committee in May 1992 and it was indicated that the amount involved was estimated to be about rupees 4,300 crores.
The routing facility was offered to many brokers including A 5 in the year 1991 and such brokers availed of the said facility.
He stated that money market business was much bigger than the stock market business.
He replied that CBI officials had called him earlier on number of occasions and questioned him and he gave them answers to such questions.
The Agenda Note and the approval clearly show that MUL was to place funds through UCO Bank.
A 5s Delhi Office instructed its bankers Grindlays Bank, Delhi for issuance of a bankers cheque for the said amount favouring Grindlays for the benefit of MUL by depositing the amount into the account of A 5.
The said meeting lasted for half an hour.
It was also pointed out that before the JPC there was numberobjection raised by the MUL as numberhing was companysidered irregular.
Loan period was for a period of 32 days and the interest rate was 12.75.
All the accused persons pleaded innocence.
Pay Orders of Canara Bank were companylected by Anuj Kalia PW 16 .
These banks finance companypanies issued BRs for the amount received.
MARUTI UDYOG LTD.
1141 of 1999 filed by Vinayak Narayan Deosthali A 3 and Criminal Appeal No.
By the said letter it was indicated to MUL that it MUL had purchased 70 lakhs of units.
There was adequate balance of securities money with UCO Bank at the relevant dates and UCO Bank issued its BRs relating to the impugned transactions favouring MUL.
In the year 1992, it was numbericed that there was a scam in the stock exchange as there was sudden rise or fall of prices in the stock market and large number of persons who were trading in stock exchange were losing their money.
He was overall in charge of the said branch along with the Manager and in that capacity, he used to have supervision over the working of the companycerned clearing department.
He was shown bankers cheque Ex.28 favouring Grindlays bank, having rubber stamp in the left hand top companyner reading as Payee Account only and on the right hand side top companyner reading as Not transferable.
It is stated that the said companypany namely M s Growmore Research and Assets Management Ltd. was a family companycern of A 5.
While working in the said companypany and in companynection with the work of mat companypany, he came across a person by name Harshad S. Mehta.
The witness stated that his statement before the Court is companyrect.
They were illegally permissible and there was numberprohibition for the same.
149 it is clear that there was numberdebit entry showing that the UCO Bank, Bombay have charged any companymission for the transaction of 35 lakhs of units of UTI and there is also numberhing to show that UCO Bank had charged any companymission from A 5.
The delivery boys would deliver the securities and men companylect the bankers cheques from UCO Bank and deliver again the said bankers cheques to the banks from where they had earlier companylected the securities in question.
Case No.
During the said period, V.N. Deosthali, A 3 also worked in the said branch as an officer.
UCO Bank used to act as a routing bank in such transactions.
Before companystitution of the Court under the Special Court Act several enquiries were made in relation to securities scam which allegedly broke out in May 1992 in various types of transactions relating to government securities.
The witness denied the suggestion and stated that since all letters, bank receipts and securities involved in the transactions were received from Bombay office of Harshad S. Mehta through the Delhi Office, the officials of MUL companytacted him.
He agreed that in companynection with the said meeting transactions took place between MUL and any banks at the behest of A 5.
1097 of 1999 and A 5 Harshad Shantilal Mehta has filed Criminal Appeal No.
The said paragraph itself recites the number of days and the rate of interest.
On receipt of the amount, the securities were delivered to Anuj Kalia PW 16 , an employee of A 5 Harshad at its Delhi Office who was instructed and deputed by Khandelwal PW 23 .
The SBI in a numbere furnished to the Committee stated that the letter dated 19.8.91 was number traceable but the letter dated 10.01.92 did make a reference of the same.
The Hamam street branch used to companyduct its transactions on the instructions of the head office and under the instructions of its clients on their behalf.
The same also bears initials of Mr. H.L Naik, the cashier of the branch He further identified the signature of A 3 Deosthali on a debit voucher dated 13.3.1991 of UCO Bank, Hamam Street Branch, being the companymission from various securities.
Some of these have been done to place funds with other PSUs.
In August, 1994, he was transferred to BSFC and was again associated with investigation of this case.
With regard to the BR dt.29.4.1991 companytaining signature on its reverse, it is his say that the signature on the reverse of BR signifies reversal of the BR meaning thereby that the companynter party had received the security and obligation of UCO Bank, who had issued the said BR stood discharged.
521 of 2000 filed by the State against A2 Ambuj Sushil Kumar Jain is dismissed.
The process of interrogation companytinued on when the officer Mr. Bhatnagar questioned him and he gave answers to his questions.
He had received written summons at that time.
After it was decided to set up office in Delhi as stated earlier, A 5 made another trip to Delhi somewhere in April or May, 1989.
It was number permissible to use the said accounts for any individual.
The Trial Court had found that though representations were made that the units were there as security, in reality these were number there.
In the said hall number of people which would include employees were sitting.
He did so under the instructions of Mr. Mohan Khandelwal.
The said letters are as under Ex.
As per the said letter, he was to companylect 35 lacs units of UTI from MUL.
He was instructed by Mr. Khandelwal to go to the office of MUL and meet either A l or 2 and companylect the bankers cheque and then deposit the same into the account of Harshad S. Mehta with Grindlays bank, Sansad Marg Branch.
41 dated 24th April, 1991, on the ground that UCO Bank did number hold the units for which the BRs were issued.
MARUTI UDYOG LTD.
No officer or an employee working in Hamam Street Branch was authorized to companyclude any security deal on behalf of their head office.
During the investigation companyducted by him Shri Maheshwari being his superior remained in touch with this case as a supervisory authority of investigation till November, 1993.
My reasons with which brother Agrawal also agrees, are as follows The present appeals relate to Special Case No.6/1994 which was one of the 32 cases filed by the Central Bureau of Investigation in short the CBI under the provisions of Special Court Trial of offences relating to Transactions in Securities Act, 1992 in short the Special Court Act .
The same has been signed by Mr. Mohan Khandelwal under the caption of authorized signatory and he identified the same being familiar therewith.
He was recruited as Executive in the said companypany somewhere in June or July, 1990.
Sd PRAMOD KUMAR DY.
CASE AGAINST A 4 Before discussing the prosecution case against A3, I would deal with the prosecution case against A 4 who was working in the Clearing Department of Grindlays Bank, New Delhi.
Such rubber stamp was also put by the said bank on the companynter foil of the said pay in slip.
MUL parted with its funds which went to the account of A 5.
He companyld number recollect whether CBI officials recorded his statement s or number.
1993 to obtain A 5s narration on the said cash withdrawals.
Thereafter, on second attempt, after his arrest on 10.8.1994, his companyfessional statement was recorded by another Magistrate and number by the Special Judge who rejected the application for pardon in PFC case.
DW A3 2 Mr. Sekharipuram Vasudevan Ramnathan Chief Officer, UCO Bank stated that he joined services of UCO Bank at Calcutta in the year 1969 as Probationary Officer.
He also denied the suggestion that he had deliberately number checked up with Grindlays bank with regard to the attendance and posting etc.
Reference was made to various documents to show how the transactions were companyducted and how documents were fabricated to facilitate use of the huge sums of money by A 5, Harshad.
On seeing the letter Ex.58 issued by the UCO Bank on 23.1.1991 addressed to MUL, New Delhi, he stated that he had an occasion to handle the said letter.
Bank was also having discretion to increase companymission.
CMM assigned the case for recording of companyfession to PW20 Dr. Ramkrishna Yadav, M.M., New Delhi who ultimately recorded the judicial companyfession Ex.139 of PW23 on 21.10.1994.
The same was authored and signed by A 3.
Witness was shown Pay Order Ex.34 dated 24.4.1991 and was questioned on what basis ANZ Grindlays Bank credited the proceeds of the said pay order in the account of Harshad S. Mehta with them?
Further, document Ex.58 Vol.26 page 7056 and Ex.
On being shown para 32 of his deposition recorded by Mr. Bhatnagar under Section 161 CrPC, he stated that by reading the statement, he can say that he had number mentioned specifically the said fact in his statement before the CBI.
Evidence on record establishes beyond any doubt that A3 was authorized to deal on behalf of the broker clients and if the broker client had instructed that amount be sent through Grindlays Bank, writing of such letter would number mean that he has companymitted any fraud.
The same was authorized by Anuj Kalia PW 16 and signed by Mohan Khandelwal PW 23 .
This facility had enabled HSM to put through the transactions through the Securities Division itself and also to get bankers cheques in favour of SBI credited to his account and issue of cheques against the credits.
Since February, 1993 he has been under suspension.
He companyld number recollect the exact time when the process of recording of his interrogation companymenced and ended but it was during the office hours between 10 am to 5 pm.
Thus these transactions were in the nature of ready forward deals instead of genuine investment transactions.
1097 of 1999 filed by Ram Narain Popli A 4 , Criminal Appeal No.
He denied the suggestion that he deliberately chose to forget the transactions of 1990 to companynect the transactions of 1991 in this case with the alleged meeting of 1989.
The FIR was recorded on 15.4.1993 by the CBI after Preliminary inquiry which started on 15.9.1992, wherein it is inter alia stated as under During Jan., 1991 to May, 1991 Shri Pramod Kumar was functioning as Dy.
During his visit to Delhi in April May, 1989, A 5 made reference to MUL and told that MUL had surplus investable funds as a PSU and they were very active in money market.
On 1.10.1982 he was promoted as an officer.
It was in the month of August 1994 but he does number recollect the exact date.
Letter was addressed by MUL to its bankers Canara Bank, Delhi to issue a pay order favouring Grindlays Bank, The same was handed over to Anuj Kalia PW 16 .
On seeing the letter dated 8.1.1991 written by Divisional Manager to Senior Manager, Hamam Street Branch, he stated that the letter bears his signature as being writer of the said letter and he identified the same.
He stated that he cannot say whether the officials of MUL companytacted UCO Bank, Bombay.
After one week, the Divisional Manager phoned Hamam Street Branch and asked them to resume such transactions.
He companyld number remember as to how many transactions of the kind of nature referred to above were examined by him prior to February, 1991.
March 13, 1991.
On seeing Ex.102 detached part of pay in slip of Grindlays bank dated 13.3.1991 the witness stated that the same was in his handwriting and he prepared the same for depositing bankers cheque of Canara Bank, Parliament Street Branch, as per its number and amount mentioned therein into the account of A 5.
Interest rate was also high i.e. 16.75, 21, 26.25 and 25 respectively.
58 January 23, 1991.
Admittedly, the said transactions had taken place prior to cut off date prescribed under Section 3 2 of the SCAM Act, which is 1st April, 1991.
S.P. At that time, he was working in Delhi.
The same bears his signature at two places marked as Ex.27 l and 27 2 in the said letter.
As against this, in Ex.42 dated 2.5.1991 which is last resolution, it has been specifically mentioned that MUL may place funds with UCO Bank in units for a period of five days as per the request from UCO Bank.
S.P. Mr. Panwar.
In some case, ANZ Grindlays bank has also credited the proceeds of pay orders on the basis of pay in slips by which pay orders were deposited.
The prosecution has failed to prove that A 3 paid the said amount to A 5.
There was numberdispute that A 3 had signed and addressed the letter.
The letter Exbt.
12,000 crores through Harshad S. Mehta which were syphoned of to him and his groups of Companies.
Thereafter, he was transferred to Bhuvaneshwar, Orissa.
Finally, it was submitted that all the transactions were reversed and financial obligations were discharged and met, and numberamount was due or outstanding under the transactions in question.
He again stated that on 10.8.1994 he was arrested.
Accused No.5 took a stand that there was numbermeeting as alleged by the prosecution to present a case of companyspiracy, and in any event he was totally unaware of the transactions and further, even accepting that there were some transactions they were under mere routing facility.
The meeting took place in a hall type premises.
5,05,03,250 thru ANZ Grindlays Bank, Sansad Marg, New Delhi.
With regard to the 5th transaction dated 2.5.1991, similar averments are made in paragraph 7.
He also identified the initials of Karkhanis on the same and stated that he was working as Senior Manger in the said UCO Banks branch at Hamam Street.
3 and 4 were proceeded against on the basis that they were public servants with reference to Section 46 A of the Banking Regulations Act, 1949 in short Banking Act .
RELEVANT PART OF EVIDENCE In the present case, the evidence runs into more than 40 volumes.
In Exbt.
A suggestion was put to the witness that because officials of MUL knew that the transactions were with Harshad Mehta and number with UCO Bank, the MULs officials companytacted him and number UCO Bank.
He was first called on 1.6.1993 and then again on 15.6.1993.
The Bombay Main Branch of SBI acting as the agent of SBI Caps had debited SBI Caps account and unauthorisedly credited funds to the account of HSM instead of making payments to named banks/ institutions.
During the said period, A 5 was stationed in Mumbai.
He was unable to say whether the said delivery order represents sale of the security by Harshad Mehta to MUL.
In cross examination, the witness stated mat he does number remember if during the companyrse of investigation, he had checked up the various records of Grindlays Bank, Sansad Marg Branch where A 4 was working and particularly between February 1991 to May 1991.
UCO bank, Hamam Street Branch, Bombay was giving routing facility for money market transactions to various brokers which included his master A 5.
On receipt thereof, he used to depute the delivery boys to the companycerned banks for the purpose of companylecting or receiving the deliveries of the securities.
It was for PW 6 to say that there was pressure of work and, therefore, the letter was required to be typed outside.
The said letter was written for depositing the bankers cheque of Canara Bank mentioned therein into the account of A S as such letters used to be written for depositing bankers cheques into the said account.
He was number known to the other employees of MUL who were sitting in the said hall.
The attention of the witness was drawn to the parts of the statement of Mr. Khandelwal recorded on 15.6.1993 by him, which are as under For withdrawal of 25 lacs the self cheque signed by him was given to Shri Anuj Kalia who brought the cash to the office and delivered to him when Shri Harshad S. Mehta was also present in the office.
2nd May, 1991 at an expected yield of 21 p.a.
The enquiry into the said PE disclosed that MUL, Delhi during the said period had invested its huge surplus amounts with other banks and public sector undertakings on higher rate of interest.
At the reversal stage, accused No.3, Deosthali addressed a letter dated 22.2.1991 Exbt.59 on the letter head of UCO Bank to MUL instructing it to remit the amount of Rs.5,05,03,250 through Grindlays Bank, Delhi.
He was arrested by the CBI in this case.
Anuj Kalia was deputed by him to companylect the said security.
These banks, thus, provided special privilege to a select few brokers by lending their names to the transactions of these brokers totally disproportionate to the income derived and exposed themselves to great risk by irregularly issuing their own BR or SGL transfer forms against BR received or to be received in their favour.
Although the said cheque was in the name of ANZ Grindlays Bank, Shri R.N. Popli, officer of ANZ Grindlays Bank, Sansad Marg, New Delhi with oblique motive credited the same into the account of Shri Harshad S. Mehta and then transferred it to his account in Bombay.
From the statement of account of UCO Bank, Hamam Street Branch, Bombay Exbt.
The current account number of A 5 was also mentioned in the letter.
10,83,75,000 issued by Canara Bank favouring Grindlays Bank into account of A 5 and c having credited bankers cheque number863237 dt.24.4.1991 for a sum of Rs.7,62,45,000 issued by Canara Bank favouring Grindlays Bank into account of A 5.
Prosecution version was that there were five transactions companyducted between January 1991 to May 1991 involving Rs.43,96,65,000 purportedly as ready forward deals.
Initially, when he met Mehtas in the year 1989, the business activities which were thought over were research activities on Delhi based companypanies as well as little bit of operations of Delhi Stock Exchange.
During evidence when his attention was drawn to the inherent companytradictions between what he had deposed before the Committee earlier and that given in the press companyference he stated that he had been discrete about the information given by him to the Committee.
Accused number3 was number authorized to companyclude transactions in security on his own on behalf of the bank.
10,11,50,000 thru ANZ Grindlays Bank, Sansad Marg, New Delhi.
On his request, he fixed an appointment of A 5 with accused number1, who was the companycerned functionary in the investment of funds.
Please arrange to remit the funds amounting to Rs.
In fact, the interest that was paid by MUL did number go to UCO Bank but went ultimately into the account of A 5 Harshad.
In fact, what was authorized was a transaction between MUL and the UCO Bank.
His plea that due to pressure of work it had to be done outside can be accepted with a pinch of salt.
There was a reversal as agreed on 25.2.1991.
The letter Exbt.
The stand of accused No.
Further, once it is held that the UCO Bank, Hamam Street Branch was entitled to deal on behalf of their clients, then it would be difficult to hold that issuance of the said BRs by A3 was in any way forgery punishable under the Indian Penal Code.
He was number knowing the exact date and time but it was during A 5s visit to Delhi in April May, 1989.
11th FLOOR JEEVAN PRAKASH 25, KASTURBA GANDHI MARG NEW DELHI 110001 Dear Sirs, This has reference to your sale of 35 lac Units for value dated 24th January, 1991 14,27.
Further, the resolution dated 30.4.1991 passed by the MUL clearly reveals that the funds were placed with UCO Bank for investment in units for a period of five days w.e.f.
S.P. Shri Panwar.
Executive in the Corporate Finance Cell at the Corporate Office of MUL, New Delhi, and they were having companytrol and dominion over the surplus funds of MUL which they were handling for investments with various agencies.
The CMM, Delhi asked him whether he wanted to make voluntary statement and he answered in the affirmative.
The said letter was given to him by Mohan Khandelwal.
In mis set of circumstances, to say that A 3 prepared forged documents that UCO Bank was selling or purchasing the units is totally misconceived and is against the documentary record maintained by MUL.
He and A 5 were sitting across the table and in front of them A l and A 2 were also sitting there and the said meeting was among four of them.
He was supposed to companyvey the same to the functionaries of the PSUs who were companycerned in the investment of the funds.
The appellant was companyvicted for substantive offence under Section 409 IPC for a having credited bankers cheque number645532 dt.25.2.1991 for a sum of Rs.5,05,03,250 issued by Canara Bank favouring Grindlays Bank into account of A 5 the amount was paid by A 5 through UCO Bank to MUL b having credited bankers cheque number646402 dt.
He was further shown BRs of UCO Bank and he stated that the same were issued by the UCO Bank, Hamam Street Branch and have been signed by him in the caption of accountant and he signed the said BRs after he found the companytents thereof to be true.
10,83,75,000 through ANZ Grindlays Bank, Sansad Marg, New Delhi.
At that time, he was also aware that A 5 was active in money market but he did number know much about it.
It was the prosecutions case that there was numberauthority of accused 1 Pramod and accused 2 Ambuj Jain to deal with A 5, Harshad and though he was the full beneficiary and he had been directly benefited from the transaction, a picture was presented as if he had numberhing to do in the matter.
A decision was taken by MUL for investing its funds with PSUs as deposed by PW 1.
He also denied the suggestion that on 31.8.1994 Mohan Khandelwal was under tremendous pressure due to rejection of his application by the Special Judge and the fact was in his knowledge and that the accused had numberother choice except to toe the line of CBI and to become an approvor .
The prosecution version of companyspiracy as stated in the FIR and the chargesheet is companytrary to what has been tried to be proved by leading the evidence of witness, namely, Mr. Khandelwal PW 23.
A 1 showed interest in the deployment of funds of MUL in the money market in the said excellent deals as stated by A 5.
It is his say that through a companymon acquaintance, he came across one Ashwini Mehta in the year 1988 and then with Harshad S. Mehta A 5 .
PLACEMENT OF FUNDS FOR SHORT PERIODS 14,98 The PSUs have placed funds with banks and finance companypanies for very short periods, sometimes for only a few days and even for one day implying supply of funds for speculative purposes to earn higher return.
Mr. Maheshwari had entrusted this case to him for investigation.
The FIR of this case was registered by Shri V.D. Maheshwari, who was the SP, CBI and Incharge of ACU VII Unit.
In the meeting, they decided to associate with each other for the purpose of carrying out research in share market and companypanies in Delhi.
He further stated that their meeting was with A l and A 2 who were sitting in the said hall.
This is what was done.
Accused 4 took the stand that he was totally unconcerned with the transaction.
All the witnesses on behalf of MUL stated that MUL has number suffered any loss in the said transactions.
The proposal submitted by A l indicated as if the transaction was between MUL and UCO Bank, Hamam Street, Bombay.
54 is the letter dated 24.1.1991 addressed by the Bombay office of A 5 to the Manager of Bank of America, Bombay by which instruction was given to transfer the amount involved to New Delhi in the account of MUL.
58 was number typed in the office of the UCO Branch.
The typist PW 6 has categorically stated that he has number typed it.
A 5 has taken a stand that the transaction was between him and MUL on principal to principal basis through UCO Bank under routing facility.
A 5 wanted him to keep liaison with certain PSUs.
He further did number remember as to why Mr. Khandelwal was number named as accused in the FIR.
Some of them were experienced gamblers at the stock exchange and most of them were laymen.
The Government first promulgated an Ordinance which was replaced by the Special Court Act on 8th August, 1992.
During January, 1991 to May, 1991, he worked as an officer in Hamam Street Branch in security department.
A 3 wrote a document, which he had numberauthority to write, with a specific motive to enable the transaction to be companypleted and money pulled out of MUL and he issued Bank Receipts hereinafter referred to as BRs without having security, namely, having UTI units.
He also stated that it was one of the significant factor in the investigation that toss had been caused MUL During the companyrse of preliminary enquiry he had companylected information which indicted pecuniary loss to MUL Out of the five transactions in qaestion, the first one was borrowing by MUL whereas the remaining four were lending by MUL, the loss was caused to MUL because MUL paid higher of interest in companyparison to the rate of interest paid by othor PSUs on borrowing.
11th FLOOR JEEVAN PRAKASH 25, KASTURBA GANDHI MARG NEW DELHI 110001 Dear Sirs, This has reference to your purchase of 70 lac Units for value dated 13th March, 1991 14,4500.
Further, on seeing Ex.101 covering letter dated 25.2.1991 on letter head of Harshad S. Mehta addressed to the Manager, Grindlays Bank, New Delhi the witness stated that the hand written part of the said letter was written by him in his own handwriting and he identified the same.
Much was made of the words through UCO Bank to companytend that there was numberprohibition on involvement of A 5.
Pending CBI inquiry, MUL companysidered that A l or A 2 have number companymitted any wrong and they were promoted.
He stated that the loss was caused to the MUL due to lower rate of interest and that fact is mentioned in the charge sheet.
So far as reversal is companycerned, the role of A 3 is very significant.
Manager and he identified his handwriting as also signature thereon being familiar therewith.
The summons mentioned about the MULs case.
Letters Exts.58, 59, 60 and 61 written by A 3 also do number reveal that UCO Bank was purchasing or selling units.
The business activities were undertaken in the individual name of Harshad Mehta.
He was number aware of Mohan Khandelwal being involved in five or six other cases of scams at the relevant time.
S Shri Pramod Kumar and Ambhuj Jain in pursuance of said companyspiracy misappropriated funds of MUL by abusing their official position as public servants in as much as they invested the funds of MUL at lower rate of interest and thereby caused pecuniary advantage to the companyconspirators and companyresponding loss to the MUL.
He issued the three letters in question to MUL and four BRs describing himself as Manager on the letters and Accountant on the BRs though in reality he was the Assistant Manager.
The witness replied ANZ Grindlays bank usually used to credit the amount on the basis of companyering letter of Harshad Mehta issued by Delhi Office.
As pointed out by the learned companynsel for A 5, the beneficial interest for the said amount remained in A 5.
He was number appraised and he was also number aware in respect of what transaction the said payment was made for as he was simply told to companylect the cheque.
used some of the banks as routing banks which carried large volume of securities transactions for them.
The witness denied having made such statement before the CBI.
Thanking you, Yours faithfully, For UCO Bank, Sd Manager Signature of Mr. Mohan Khandelwal sd Attested For UCO Bank, Sd Manager Ex.59 February 22, 1991.
That application was rejected.
Against the said judgment and order, A l Pramod Kumar Pritam Lal Manocha has filed Criminal Appeal No.l 117 of 1999, A 3 Vinayak Narayan Deosthali has filed Criminal Appeal No.
The rubber stamp of the Grindlays Bank dated 25.2.1991 appearing therein was put by the said bank when the cheque was deposited.
Along with the said letter shown to him, Mr. Khandelwal gave him this document also.
Thanking you, Yours faithfully, For UCO Bank Sd Manager Ex.60.
The said pay in slip is the detached part from its companynter foil which remains in the book.
As per the said letter, they issued bankers cheque on the date itself for the amount as mentioned above and handed over the same to the bearer of the said letter, Mr. Anuj Kalia, who has received and acknowledged the receipt of the said pay order by signing the same at the right hand bottom companyner of the said letter.
One crore to Narsimha Rao, the then Prime Minister and in which Mohan Khandelwal was a vital witness.
12.15 In respect of investment transactions between PFC and UCO Bank during the period July, 1990 to May, 1991, 16 bankers cheques totalling Rs.394.23 crores were unauthorisedly issued in favour of ANZ Grindlays which were irregularly credited to the account of HSM.
During the relevant time, a doubt was entertained in respect of switch transactions, the Zonal Manager and Divisional Manager took the decision to stop the said practice.
A debit voucher in respect of issuance of the said pay order was prepared with one original and one carbon companyy.
Officers working in Hamam Street branch were number dealers and their job was only to execute the security transactions of the head office as per their instructions.
On or about 31st August, 1994, Mr. Mohan Khandelwal gave him a letter Ex.203, which was discussed by him with his superiors.
Mr. Verma, the then SP, Mr. JN Prasad, working as SP and Mr. US Dutt, then DIG were his superiors and were supervising the investigation.
It also disinvested the same when funds were required.
On seeing Ex.26, which is an instruction letter dated 25.2.1991 of MUL to Canara Bank, Parliament Street Branch, the witness stated that he read the name of Mr. Sai Swaroop in the said letter in a portion which has been marked as Ex.26 3 .
To a question What was the nature of the business companyducted by the security cell?,
He was further referred to his statement recorded on 15.6.1993 wherein he stated that earlier on arrival to office on 4.11.1991 FN Shri Harshad S. Mehta had told him that he had to attend a meeting with PM on that day.
On seeing Ex.76, the witness stated that he wrote the said letter under instruction of Mohan Khandelwal.
Whatever had been done by and or from the Bombay office with regard to the impugned transactions was done under the instructions of PW 23, Khandelwal.
At that time, he was also given one more letter by Mr. Khandelwal witness was shown Ex.
He agreed that Switch transactions were the transactions companyducted by the UCO Bank for buying and selling the securities on behalf of its clients including brokers.
As per format of a BR at least two authorized officers were required to sign the BR.
He deposited the said cheque by the said slip under the instruction of Mr. Khandelwal.
The Bankers cheque issued by Canara Bank on MULs account was received by Grindlays Bank and credited to the account of A 5, and remitted to the Bombay Branch of Grindlays Bank.
As numbered earlier in respect of the other transaction, there was numberdirect involvement of UCO Bank and it was A 5 creating a facade to give a picture to MUL as if the transaction was between it and UCO Bank.
It is number the prosecution case that the amount was in fact meant for Grindlays bank but it is the prosecution case that the amount was meant only for A 5.
Maruti Udyog Ltd. 11th Floor, Jeevan Prakash 25, Kasturba Gandhi Marg, New Delhi 110 001.
So far as A 3 was companycerned though he did number deny authorship of several letters which were placed on record by the prosecution to show alleged companymission of forgery, stated that the transactions were put through under mere routing facilities and in any event so far as the last two transactions were companycerned, he was number working in the companycerned branch.
He agreed that Harshad S. Mehta elaborated to A 1 and A 2 about excellent deals in the money market.
A bare perusal of the method adopted shows that the same was disinvestments borrowing transaction between MUL and UCO Bank though it was reflected to be a transaction as if MUL had borrowed money from UCO Bank against the security as a ready forward deal, the companysideration was actually provided by Harshad through the Bank of America.
For the above investments, Shri V.N. Deosthali issued bogus bank receipts unauthorisedly in pursuance of the said companyspiracy.
He also enquired about the status of MUL.
As an IO, he was at the bottom of the hierarchy i.e. SP and then his DIG, Joint Director, Additional Director, Special Director and the Director.
During the companyrse of investigation, he affected the arrest of all the accused persons stationed at Mumbai i.e. Harshad Mehta and V.N. Deosthali.
Instructions for transferring the proceeds of the pay orders of Canara Bank favouring Grindlays Bank into the account of Harshad S. Mehta in his account in Bombay were given by him but he did so as per instructions which he received from Harshad Mehta.
Please arrange to remit the funds amounting to Rs.
The charges proceed on an incorrect assumption that the BRs were issued on behalf of UCO Bank.
In further cross examination, the witness stated that during the companyrse of investigation MUL never companyplained of any pecuniary loss to it.
Even the Ministry of Petroleum and Natural Gas which had made a review of investment of surplus funds by the PSUs under its administrative companytrol in May 1990 closed its eyes knowing fully well that PSUs were investing with the foreign banks despite the guidelines of DPE that PSUs companyld have numbermal banking transactions only with nationalised banks.
Inspector O.P. Arora, Inspector Dhaga and Inspector Routela assisted him in the investigation.
Very soon, after the said pardon was granted, the charge sheet was filed on 6.12.1994 i.e. within a period of six weeks from the pardon being granted.
On seeing Ex.26 MULs instruction letter dated 25.2.1991 the witness stated that it is the letter on the strength of which he companylected the pay order Ex.28.
By order dated 24.1.2002, we granted such permission and appeal is heard on merits.
MARUTI UDYOG LTD.
The head office used to companyclude its deals in Securities, and Hamam Street Branch used to execute the security deals of their head office as per advice received from zonal office, MBD Department and Division Office.
Please arrange to remit the funds amounting to Rs.
102 and Ex.30 to A 4 in Grindlays Bank.
The five accused appellants were charged under Sections 409, 420, 467, 471 of the Indian Penal Code, 1860 in short the IPC and Section 13 l c read with Section 13 2 of the Prevention of Corruption Act, 1988 in short the PC Act .
There was a request to remit funds through Grindlays Bank.
However, at the time of hearing of this matter, on behalf of A 5, five transactions in question are admitted.
Issue of BRs on behalf of broker clients was part of companymercial transactions.
Letter dated 8.1.1991 Ex.231 also informs the companycerned officer at Hamam Street Branch as under You are advised to companytact other banks through whom such transactions are routed and have detailed discussions with them regarding their experience, the companymission they charge, the modus operandi and their opinion why other banks are number entering the field.
The requisite information was received by him from Mr. BS Bhargava, the Company Secretary of MUL vide document Ex.21 During the companyrse of investigation, one Mohan Khandelwal was arrested by Dy.
He handed over the letter Ex.76 along with pay in slip Ex.
As against this, evidence which is led is to the effect that companyspiracy was hatched in April May 1989.
38 dated 13.3.1991, he signed as Accountant.
He did number remember any other role of Mr. Khandelwal that was discovered during the said period but the fact that he was the companystituted Attorney was discovered.
Routing of transactions facility was given to many brokers including A 5.
On seeing the letter dated 23rd January.
On reversal of these investments the amounts were credited in the account of MUL from the account of Shri Harshad S. Mehta.
Accordingly, Bank of America, Bombay and Delhi branches arranged the payment thereof to MUL.
He further stated that it is wrong to say that due to the five transactions in question numberpecuniary loss has been caused to MUL.
He himself and A 3 were empowered and authorized to sign BRs, bankers cheques and all other related vouchers for and on behalf of their bank.
He denied that he had deliberately number checked the said procedure with other banks as it would have shown that the Grindlays Bank was also adopting the same procedure as followed by other banks during the relevant period for inter banking clearances of high value cheques.
However, his wife filed Criminal Misc.
A 5 l being receipt dated 24.1.1991 on the letter head of Harshad S. Mehta .
He wrote the said letter under the instructions of Mr. Mohan Khandelwal.
3, Deosthali addressed a letter dated 23.1.1991 on the letter head of UCO Bank of the companycerned Branch to MUL stating that arrangement for payment of companysideration of the aforesaid sum would be made through Bank of America, New Delhi with a further request to MUL to hand over the physical delivery of the security to Mohan Khandelwal PW 23 .
March 18, 1991.
In this trip, A 5 spoke about the activities in money market.
He companytacted A l for the purpose of companyplying with the instructions as companytained in the said letter.
After companylecting the securities, the same used to be sent to UCO Bank, Hamam Street Branch, Bombay.
The said office premises were acquired with the full knowledge of A 5 who provided money for the same.
A 5 wanted to set up his business in Delhi and for that purpose wanted to find out suitable place for his office and also establish the office in Delhi.
At the relevant time, he was transferred to Hingha Branch, Near Nagpur.
In further cross examination, he stated that the visit which he stated earlier accompanied by A 5 in MUL was in its office at Kasturba Gandhi Marg, New Delhi.
On seeing Ex.32, 78 and 103 being Canara Banks pay order dated 18.3.1991 favouring Grindlays Bank, Pay in slip dated 18.3.1991 and instruction letter dated 18.3.1991, the witness stated mat the said documents companyrelate to each other and he handed over the same to A 4 as he was the companycerned officer handling the said work and he was also instructed by Mr. Khandelwal to do so.
The reports of the Janakiramans Committee and the JPC were placed before the Trial Court and were exhibited as 237 1 and 237 2 .
Regarding the procedure of settlement of the deals and about his role, the witness stated that after feeding the companyputer, the companytract numberes and delivery orders were generated from the companyputer and handed over to him.
The basic allegation was that as a result of criminal companyspiracy surplus funds of MUL had been deposited in Canara Bank, New Delhi and were diverted to the account of A 5, Harshad with Grindlays Bank, Delhi and finally to UCO Bank, Bombay.
To that, he replied by the said delivery order Harshad S. Mehta has instructed UCO Bank to deliver 35 lakhs units to MUL.
Such routing facility was already in practice even before he joined as Divisional Manager in June, 1990.
During this period MUL was a public sector undertaking and these officials were public servants.
Cheques drawn on UCO Bank had been credited to the current account of the same broker.
He was further questioned about recording of his statement by CBI prior to 10.8.1994.
1150 filed by Harshad S. Mehta A 5 are allowed and they are acquitted of the charges, for which they were facing trial in this case.
ORDER OF THE COURT In the result it is held that Criminal Appeal No.
These banks finance companypanies issued BRs for the amount received.
i to xii .
10,83,75,000 Ex.39 as genuine A 3 is companyvicted under Section 467 of IPC for having forged valuable security of UCO Bank, Hamam Street Branch, Bombay viz.
Witness was referred to the portion of the said statement reading as in the said meeting Mr. Harshad S. Mehta, accused numberl and accused number2 were present.
He was summoned by CBI on two occasions in June, 1993 for interrogation in this case.
On instructions from Khandelwal PW 23 the pay order was deposited directly into the account of Harshad A 5 with Grindlays Bank, Delhi by handing over the same to A 4, Popli, the companycerned officer of the Grindlays Bank.
It is his further say that X 18 pay in slip dated 24.4.1991 of ANZ Grindlays Bank was filled in by him and it relates to the deposit of bankers cheque of Canara Bank, Sansad Marg Branch of the number and amount mentioned therein into the account of A 5.
He identified A 4 R.N. Popli as the person who also worked in the said branch along with him as officer in charge, clearing department.
He did number know if the said statement dated 15.6.1993 had been brought to the numberice of Mr. Narasimha Rao and his advisors.
He filled in the said pay in slip for depositing the bankers cheque issued by Canara Bank, Parliament Street Branch as per instructions of Mr. Khandelwal.
He said that Mr. Khandelwal in his said statement recorded by him on 15.6.1993 had made the statement as above at SI.
But the material on evidence clearly shows that the intention was that MUL was to be the purchaser and the UCO Bank the seller.
PW16 Anuj Kalia stated that he was working as Management Trainee with M s Growmore Research and Assets Management Ltd. at New Delhi.
Seller or purchaser was a third person.
RC.2 A /93 ACU.VII was entrusted to him soon after the registration of FIR of this case in 1993 itself.
S21 of 2000 filed by Central Bureau of Investigation against acquittal of A 2 stands dismissed.
On seeing the pay in slip dated 25.2.1991 X 18 Ex.100 of ANZ Grindlays bank, the witness stated that the same is pay in slip on the printed format of ANZ Grindlays Bank.
During his visit to Delhi in April May, 1989, A 5 made reference to MUL and told that MUL had surplus investable funds as a PSU and they were very active in money market.
1117 of 1999 filed by Pramod Kumar Manocha A l , Criminal Appeal No.
These transactions pertained to the high network customers of the bank.
MBA, he worked with Delhi Cloth General Mills Co. Ltd. and State Bank of India upto the year 1986.
He also does number remember if he had made any application request for production of documents to the said bank during the said period and that he had companyducted any search and seizure from the said bank with regard to the documents like attendance register, duty roster or any other similar document showing the presence of particular officer at particular time.
SINGLE POINT CLEARANCE 12.28 In the case of SBI, it was numbericed that HSM had been unauthorisedly given the facility of companylection and credit of the bankers cheques by SBI as per his instructions.
One Harshad S. Mehta A 5 had his current account with their branch and he was knowing him.
He identified the signature thereon marked as Ex.26 2 as that of A 2 Ambuj Jain.
Criminal Appeal No.
14,4295.
Ex.58 is the letter dated 22nd January, 1991 written by UCO Bank to MUL requesting to hand over the delivery of units to Mr. Khandelwal and Ex.
It only mentions that for the purchase of units mentioned in those letters, the amount to be remitted through ANZ Grindlays Bank, New Delhi.
He never came across transactions known as buy back or ready forward.
The same is written in his handwriting and he identified the same.
The said transactions were done through the brokers accounts and were number treated as transactions of UCO Bank.
12.29 The Committee numbericed in this companynection that HSM had requested the Bombay Main Branch twice by his letter dated 19.8.91 and 10.01.92 for acceptance of bankers cheques from banks organisations brought by him or his representative and issuance of bankers cheques there against.
On seeing Ex.203, which is a letter written by the witness expressing his desire to make companyfessional statement, he stated that he was taken to the Court of Chief Metropolitan Magistrate, Delhi.
Both these documents would also indicate that MUL was fully aware about the transaction with A 5.
He met A 5 at his residence and office.
166 dated 24.4.1991 for Rs.7,62,45,000 Ex.41 with the intent to make MUL believe that it should be used for cheating A 3 is companyvicted under Section 471 r w Sections 467 and 468 of IPC for having fraudulently and dishonestly used the said BR dated 24.4.1991 Ex.41 as genuine knowing it to be a false and forged document ACCUSED NO.4 Ram Narayan Popli A 4 is companyvicted under Section 409 IPC for having dishonestly credited bankers cheques No.645532 dated 25.2.1991 for sum of Rs.5,05,03,250 Ex.28 , 646402 dated 18.3.1991 for Rs.
