Vinayak Narayan Deosthali Vs. Central Bureau of Investigation & Ors.
Email(From the Judgment Order dated 27/28.9.99 of the Special Court, (Trial of Offences relating to Transactions in Securities) Act, 1992, Mumbai in S.C. No. 6 of 1994)
(From the Judgment Order dated 27/28.9.99 of the Special Court, (Trial of Offences relating to Transactions in Securities) Act, 1992, Mumbai in S.C. No. 6 of 1994)
Indian Penal Code, 1860
Sections 120B read with sections 420, 409, 467 and 471 – Prevention of Corruption Act, 1988 – Section 13 – Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 – Securities scam – Criminal prosecution for cheating, criminal breach of trust, forgery, abuse of public offices and dishonest misappropriation of public funds – Stock broker of Mumbai (Harshad Mehta) along with two employees of Maruti Udyog Ltd. and two bank officials (one of a nationalised bank and the other of a foreign bank) charged with criminal conspiracy for siphoning the funds of the public sector company Maruti Udyog Ltd. – Series of transactions entered into under the pretence of drawing Maruti funds for purchasing securities from UCO Bank but diverted to the accounts of accused Harshad Mehta – Accused Maruti employees misrepresenting to Maruti and withdrawing the funds and accused Bank employees forging documents to secure the release of monies from Maruti – Harshad Mehta becoming the prime beneficiary of the money – Receipt and payment of the amounts was for a fixed period – Interest rate was fixed and was received or paid as agreed – For some transactions Maruti giving UTI units as security and for the rest UCO Bank issuing Bank Receipts – Transactions squared on fixed date – Commission and brokerage received and credited by UCO Bank for which there were credit entries in the accounts – No audit objection either at Maruti or at UCO Bank – No suggestion that any of the accused gained by such transactions except that accused Harshad Mehta got the loan – Transaction part of the larger scam in which the CBI had filed 32 cases under the 1992 Act – Special court acquitting A2 (senior executive of Maruti ) of the charges and convicting AI (dy. manager of Maruti) for criminal conspiracy and wrongfully allowing funds of Maruti to be gained by Harshad Mehta; A3 (assistant manager of UCO Bank) for offence under the 1988 Act and for criminal conspiracy and other offences under IPC and for abusing his position as public servant and allowing funds of Maruti to be wrongfully gained by Harshad Mehta; A4 (officer of ANZ Grindlays Bank) for having dishonestly credited bankers’ cheques into the account of Harshad Mehta instead of crediting the amounts into the accounts of Grindleys Bank; and A5 (Harshad Mehta) for offences under section 403, IPC for having dishonestly misappropriating four bankers cheques drawn by Maruti to its bankers – Convicted persons filing appeal against their convictions and CBI filing appeal against the acquittal of A2 – Harshad Mehta expiring in the meantime but on the application made by the wife of the deceased appeal proceedings continued against the deceased – Whether the charge of criminal conspiracy stood established – Whether the conviction of the four accused justified – Whether special court justified in acquitting A2. Held acquittal of A2 was justified and called for no interference and therefore the appeal filed by the CBI dismissed. A4 acquitted of all the offences alleged against him and accordingly appeal preferred by him allowed. Conviction of A1, A3 and A5 justified and therefore the order of conviction passed by Special court against them confirmed. However sentence of A1 and A3 reduced to the period of imprisonment already undergone.
