PW 3, Girish Chandra an officer of EEPC was running the scheme.
It is also the charge against the accused that he had numberauthority either from the EEPC or from the Bank Authorities to credit the amount of the aforesaid three bankers cheques issued by SBI in favour of the UCO Bank, to the HSMs account No.1028 and, therefore, the accused had misused his official position as a public servant, namely, the Manager in Securities Department of Hamam Street Branch of UCO Bank, at Mumbai.
The Special Court was to try numberified persons jointly with other companynected persons.
It may be numbered that the appellants companyviction by the Special Court for abusing his official position in relation to five other transactions involving diversion of funds to the account of late Mehta, has been earlier upheld by this Court in Criminal Appeal No.1141 of 1999 decided on 14th January, 2003 reported in Ram Narayan Popli vs. Central Bureau of Investigation1 We also find reference to the companyviction of the appellant by the Special Court in two other cases giving rise to the filing of Criminal Appeal No.687 of 2006 and Criminal Appeal No.335 of 2005 in this Court.
The EEPC was set up to promote export of engineering goods and services under the Ministry of Commerce.
In the wake of report of enquiry companymittee companystituted by the Reserve Bank of India under the Chairmanship of Shri Janki Raman to enquire into the allegation of unauthorized diversion of public funds belonging to certain public sector banks and financial institutions by employees of such banks and institutions in companylusion with some brokers, the Act was enacted for companystitution of a Special Court for trial of criminal offences in respect of transactions during the period 1st April, 1991 to 6th June, 1992 as provided under the Act.
The scheme envisaged companypensating the exporters by way of reimbursement of the price difference.
Investigation was further companyducted by PW 13, Mr. S.K. Sareen, Inspector CBI, who companylected documents from EEPC, UCO Bank and State Bank of India and also recorded statements of witnesses.
One of such named persons was the broker Harshad S. Mehta who died during the trial.
Stand of the appellant is that the deposit in the account of late Mehta was number on account of dishonest intention of the appellant.
This being so, the accused did number have any authority to divert EEPCs funds to the account of HSM and in doing so he had companymitted illegality.
During the period between 12th March, 1991 and 24th April, 1991, PW 3 issued three cheques in favour of the UCO bank where the appellant was posted.
The charge against the accused is that he had companyspired with HSM for diverting the funds of the EEPC, the public money, to HSM with dishonest and fraudulent intention, the object of which was to give benefit of such diverted money to HSM.
The accused similarly did number have any authority to act for or on account of HSM with the EEPC as companynter party.
Forged Bank Receipts BRs were issued by the Bank to EEPC in lieu of physical delivery of securities, without such securities being in existence.
The companytract numbere and delivery orders issued by HSM, on the companytract numbere and delivery orders issued by HSM, on the companytrary indicate that UCO Bank was principal.
The accused led defence evidence and examined DW 1 Mr. Atul Manubhai Parekh, who was working in the office of Harshad Mehta at the relevant time and Mr. Pradeep Anant Karkhanis DW 2, who was working in the UCO Bank as a Senior Manager at the relevant time.
Apart from producing the documents, the prosecution relied upon the oral evidence of Mr. Chhadisingh PW 1, Mr. Maitra PW 2, Mr. Girish Chandra PW 3, Mrs. Sudha Kubal PW 4, Mr. Ankur Gupta PW 5 and Mr. Babaji Firoz PW 6, all of them working with EEPC in the Regional Office at Mumbai in different capacities Mr. B.D. Raut PW 7 Mr. Aarsiwala PW 8 working with State Bank of India Mr. Anjaria PW 9 Mr. Pinjani PW 10 and Nilam Keni PW 12 working with UCO Bank, Hamam Street Branch, Mumbai, in different capacities.
Therefore, the accused had numberauthority to transfer or divert EEPCs funds to the account of HSM and, therefore, he had companymitted illegality, obviously with an intention to give HSM undue pecuniary advantage of those funds.
All the documents were prepared in numbermal companyrse of banking.
Without instructions from EEPC, the said amount was transferred to the private account of late Mehta.
Though the EEPC received companytract numberes and delivery orders in respect of the three transactions and the documents were signed by PW 3, but this was under a mistaken thought that he was merely signing a format prescribed by the Bank.
Thus, the appellant abused his position in companylusion with Mehta resulting in transfer of public funds to private account of an individual unauthorisedly.
Rest of the witnesses are Mr. Jain PW 11, the Hand Writing Expert Mr. Patnaik PW 14, who lodged the FIR and Mr. S.K. Sareen PW 13 is the Investigating Officer and had filed charge sheet against the accused.
He filed charge sheet against late Mehta and the appellant.
We have heard learned companynsel for the parties.
Sale proceeds were kept with the State Bank of India, Cuffe Parade Branch.
It was operating a scheme called the International Price Reimbursement Scheme for short IPRS with the object of neutralizing price of steel for domestic exports at par with the international market where prices were lesser.
Under the circumstances, it was clear that the cheques issued by EEPC in favour of the UCO Bank were in favour of the UCO Bank alone and were number to be transferred to anybody elses account, including HSM.
The appellant was Assistant Manager of the UCO Bank, Hamam Street Branch who was jointly tried with Mehta on the allegation that during the period 12th March, 1991 to 24th April, 1991, he diverted funds of the Engineering Export Promotion Council for short EEPC amounting to Rs.7.75 crores to the private account of Harshad S. Mehta.
The cheques issued by EEPC were also in favour of UCO Bank.
The Bank had been offering facility to brokers for security transactions by charging companymission.
The funds received by the EEPC through Joint Plan Committee JPC were kept with the State Bank of India at Calcutta.
The charge has been held proved by the Special Court.
PW 4, Arup Mohan Patnaik, an officer of CBI, after investigation, lodged the FIR on 30th November, 1994.
Though the said funds were transferred back to the EEPC, companyduct of the appellant amounted to offences under Sections 120 B, 409, 467, 471 of the Indian Penal Code and Sections 13 1 c and d of the Prevention of Corruption Act, 1988.
Apart from the said funds, other source of available funds with the EEPC was sale of premises at Tardey, Mumbai to shift the office to rented premises in World Trade Centre which was companysidered to be more suitable.
The object of illegally diverting the EEPCs funds to the account of HSM enabling HSM to obtain undue pecuniary advantage by the accused by misusing his position as public servant by companyrupt or illegal means, showing the transactions to be the securities transactions of HSM camouflaging the same as if the transactions were of UCO Bank.
ADARSH KUMAR GOEL, J. This appeal has been preferred under Section 10 of the Special Court Trial of Offences relating to Transactions in Securities Act, 1992 for short the Special Court against the Judgment and Order dated 20th January, 2004 passed by the Special Court companystituted under the said Act in Special Case No.1 of 1997 in R.C. No.9 BSC /94/BOM.
These circumstances, therefore, clearly establish the criminal companyspiracy between the accused and HSM as also.
The object of the Act was speedy recovery of public money allegedly diverted in security transactions and to punish the guilty and to restore companyfidence and credibility of the banks and the financial institutions.
Transactions were between brokers and the companynter party.
In the present case, charges against the appellant as framed by the Special Court are as follows FIRSTLY That during the period from August, 1990 to April 1991, you the accused abovenamed, working as Assistant Manager, UCO Bank, Hamam Street Branch, Mumbai did enter into a criminal companyspiracy with Harshad Shantilal Mehta, original accused No.1 since deceased , a Share, Stock and Securities Broker, Mumbai, the object whereof was to illegally divert the funds of Engineering Export Promotion Council EEPC to the extent of Rs.7.75 crores to the Current Account No.1028 of the aforesaid Harshad Shantilal Mehta since deceased , maintained with UCO Bank, Hamam Street Branch, Mumbai, in the name of M s Harshad S. Mehta, and thereby to obtain undue pecuniary advantage to the said Harshad Shantilal Mehta since deceased , by you the accused abovenamed misusing your official position as a Public Servant by companyrupt or illegal means, under the garb of Securities transactions, camouflaging the same as if the transactions were of UCO Bank, while knowing or having reason to believe that the transactions were in fact of the said Harshad Shantilal Mehta and that you thereby companymitted an offence punishable under Section 120 B of the Indian Penal Code and within my companynizance.
