8 of 1994 in RC5 BSC /93 Bom, companyvicting and sentencing them.
It was also proved that accused No.3 did number act as a broker in the transactions of IDBI and Sahara India as well.
All together 12 charges were framed jointly and severally vide Ex.3.
The prosecution had led evidence of 12 witnesses apart from a number of Exhibits in order to prove their case.
The brokers stamp was affixed on them by accused No.3 only with a view to claim brokerage.
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.
He further submitted that numbere of the witnesses PW.4, 5 11 positively stated that accused No.3 was number entitled to brokerage on the investment made by Andhra Bank and ABFSL.
All the three accused were charged for the offences of criminal companyspiracy, companyspiracy to companymit 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 reason is number known as to why accused No.3 got Andhra Bank and ABFSL to apply.
The Auditors have never raised any dispute as to payment of brokerage to accused No.3.
In his statement under Section 313 of the Criminal Procedure Code stated that he was aware of CMF simultaneously deploying 80 of Rs.65 crores at 15 per annum in Citi Bank.
The Trustees and the Board have neither discussed number have they repudiated the payment of brokerage made to accused No.3.
These facts are The Andhra Bank and ABFSL invested Rs.
Accused No.3 thereby induced CMF to part with payment of Rs.32.50 lakhs and thereby he companymitted an offence punishable under Section 411 of IPC apart from offence under Section 409 read with 120 B of IPC and 477 A of IPC.
Two other transactions were made by the Sahara India and Industrial Development Bank of India IDBI for short worth Rs.32 crores.
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.
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.
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 .
PW.5 Rajesh Pitamberdas Bhathija claimed to be companyversant with the hand writing of accused No.1 because of some purported alleged companyrespondence.
Accused No.3 was an approved broker for CMF.
As per Rule 36 brokerage can be claimed for subscribing or procuring the investment in CANCIGO.
The investment of Rs.33 crores came from accused No.3 for which he was number entitled to claim brokerage as he had number acted as a broker for the said transactions.
In September, 1992, after the scam became public, the interest warrants were returned by Andhra Bank and ABFSL disclaiming their investments.
The said accused No.3 applied for brokerage as a broker in the said transaction of Rs.33 crores when, in fact, he was number so appointed either by Andhra Bank or by ABFSL.
Similarly, in September, 1991, accused No.3 did number procure business from Sahara India and IDBI and, yet, he claimed and received the brokerage in companyspiracy with accused No.1 and accused No.2.
The prosecution relied on the evidence of PW.5 to prove the said allegation.
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 number as an investor.
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.
Accused No.3 subscribed and procured the investment of Rs.65 crores including Rs.33 crores invested for Andhra Bank and ABFSL.
They were offered as security for ready forward transaction with ABFSL as evident from the statement of PW.11.
The Board never addressed any letter to accused No.3 calling upon him to explain the payment of brokerage made to him.
Accused No.3 never objected to allotment of units in favour of Andhra Bank and ABFSL.
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.
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.
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.
Learned senior for accused No.3 companytended 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 companytended that he was also entitled for brokerage for the investment made by IDBI and Sahara India as well.
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.
Although he was aware that the total amount of Rs.33 crores was invested by him.
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.
Moreover, PW.5 had neither seen accused No.1 writing the endorsement number was PW.5 recipient of any companyrespondence himself.
The evidence of PW.11 shows that accused No.3 was the broker for CMF.
On hearing learned companynsel for the parties, several facts appear to be admitted on record.
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.
The Bank, which was allegedly put to wrongful loss never filed a companyplaint against accused No.3.
It was alleged that accused No.3 never acted as broker in any of the aforesaid transactions but claimed and received the brokerage in companyspiracy with the rest two accused.
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, numberinterference is called for against such finding.
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.
The sole witness who companyld 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.
Accused No.3 got the CANCIGO units purchased in the name of Andhra Bank and ABFSL so as to ensure that he companyld claim brokerage falsely from CMF.
The above CANCIGO units worth Rs.33 crores were purchased in the name of Andhra Bank and ABFSL though the companysideration amount for purchase of such units was paid by accused No.3.
33 companyes and purchased CANCIGO units floated by CMF.
Thereby CMF had recognized only Andhra Bank and ABFSL as their investors and the units companyld be redeemed only by Andhra Bank and ABFSL.
The points raised against accused No.2 T. Ravi, Fund Manager in CMF were answered in his favour and he was acquitted.
Yet, accused No.3 companycealed 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 number from CMF but from Andhra Bank and ABFSL.
There was criminal companyspiracy between accused No.1 and accused No.3 to procure the brokerage which was number due and payable to accused No.3.
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 number acted as a broker and he was number entitled to brokerage.
As against accused No.3, apart from the allegation of companyspiracy between accused No.1 and him, learned Special Court further held that the prosecution has proved beyond reasonable doubt that accused No.3 was number the broker in two transactions of Andhra Bank and ABFSL.
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.
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.
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.
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.
32.50 lakhs to accused No.3.
PW.5 was number familiar with the handwriting of accused No.1 in the companyrse of his business as he was neither from the same department CANCIGO , number he worked under accused No.1.
