DHYAN INVESTMENTS AND TRADING COMPANY LIMITEDversusCENTRAL BUREAU OF INVESTIGATION

                                                                                             2 spial 12 of 2026-3.doc

                                                IN THE SPECIAL COURT
                                   (TRIAL OF OFFENCES RELATING TO TRANSACTIONS
                                               IN SECURITIES) ACT, 1992

                                           INTERIM APPLICATION (L) NO.12 OF 2026
                                                            IN
                                                SPECIAL CASE NO.2 OF 1998

                      Dhyan Investments and Trading Company Ltd.                         …      Applicant
                            and
                      Central Bureau of Investigation (CBI)                              …      Complainant
                            versus
                      M.K.Ashok Kumar and Ors.                                           …      Accused

                      Mr. A. Limosin, Addl. Legal Advisor for CBI and for Applicant in SPIA No.2 of
                      2026.
                      Mr. P.G.Sabnis, for Accused No.2 and for Applicant in in SPMACR No.1 of
                      2026.
                      Mr. Amit Desai, Sr. Advocate with Mr. Dinesh Purandare, Sr. Advocate with
                      Mr. Ravi Gandhi, Mr. Ritish Desai, Mr. Gopal K. Shenoy, Mr. M.A.Kamdar, Mr.
                      Rashmin Jain i/by Kagta and Co., for Accused No.3 and for Applicant in
                      SPIAL 12 of 2026.
                      Mr. Kedar Desai, Mr. Harshad Gada, Ms. V.J.Toprani, Mr. Aditya Raut i/by
                      Desai Desai Carrimjee and Mulla, for Accused No.4 and for Applicant in SPIA
                      No.5 of 2025.
                      Mr. D.V.Mirajkar with Mr. Vikas Kapile, Ms. Maitreyee Gadgil i/by Mirajkar and
                      Associates, for Accused No.5.
                      Mr. Rahul Moghe with Ms. Kalyani Rathod, Mr. anirudha Kolge, Mr. Anwesh
                      Madhukar, Mr. Akash Rukhaiyar and Ms. Jaya Rukhaiyar, for Accused No.6.
                      Mr. Sunil Kale for Accused No.7.
SWAROOP
SHARAD                Mr. Shrinivas Deshmukh i/by Mulla and Mulla and Craigie Blunt and Caroe,
PHADKE                for Canbank Financial Services Ltd. and Canara Bank.
Digitally signed by
SWAROOP
SHARAD PHADKE
                      Accused Nos.3, 4, 5,6 and 7 are present in Court.
Date: 2026.04.18
11:59:38 +0530

                                             CORAM:        N.J.JAMADAR, J.
                                                           JUDGE, SPECIAL COURT

                                             DATE :        27 MARCH 2026




                      SSP   (corrected order as per Speaking to Minutes of Order dated 10 April 2026).          1/7
                                                                       2 spial 12 of 2026-3.doc

ORAL ORDER:-

1.      This Interim Application is filed on behalf of accused No.3 seeking

permission to further cross-examine Mr. D.G.Vernekar (P.W.2), in view of the

answers elicited in the cross-examination of the said witness on behalf of

accused No.6.

2.      The substance of the application is that, during the course of the cross-

examination on behalf of the accused No.6, questions were put to P.W.2 with

regard to the transactions between Canfina and Indian Rayon. The answers

elicited in the cross-examination have the propensity to prejudice the defence

of accused No.3. Emphasis is laid on Question Nos.144 to 151 put to P.W.2.

The said line of cross-examination, thus, necessitated the accused No.3 to

further cross-examine P.W.2.

3.      The prayer is resisted on behalf of the complainant and accused No.6.

4.      I have heard the learned Counsel for the parties.

5.      Mr. Limosin, learned Counsel for the complainant would submit that, the

basis of the application that the accused No.3 was unaware that the aforesaid

transactions would be referred to in the cross-examination of P.W.2 is

untenable. In the light of the material on record, the accused No.3 cannot be

heard to urge that he was unaware of the transactions, in reference to which

the accused No.6 has cross-examined P.W.2. It is a different matter that the

accused No.3 chose not to cross-examine P.W.2 on those aspects. However,


SSP   (corrected order as per Speaking to Minutes of Order dated 10 April 2026).          2/7
                                                                       2 spial 12 of 2026-3.doc

that cannot be a ground to permit Accused No.3 to further cross-examine

P.W.2, after the rest of the accused have completed their cross-examination.

6.      Mr. Moghe, learned Counsel for Respondent No.6, supplemented the

submissions of Mr. Limosin. Inviting attention of the court to the documents

on record, it was submitted that, not only the accused No.3 was aware of

those transactions, but those transactions were sought to be brought on

record during the course of cross-examination of the very same witness in the

civil proceedings. It was further submitted that, in the context of the charge

framed against the accused No.3, in particular, the aspect of price of the

securities is not at all a fact in issue. Mr. Moghe would submit that, the

accused No.6 had not put questions to P.W.2 with a view to prove that the

transactions that entered into between Canfina and accused No.3 were not at

the market price.        Therefore, the prayer to allow accused No.3 to further

cross-examine P.W.2 cannot be sustained.

7.      Mr. Desai, learned Senior Advocate for accused No.3, took the Court

through the cross-examination of P.W.2, firstly; on behalf of accused No.3

and, thereafter, the tenor of the questions during the course of cross-

examination of P.W.2 on behalf of accused No.6. It was submitted that, an

effort was made to demonstrate that the transactions entered into by Canfina

with Accused No.3 were not according to the ruling market price, though

P.W.2 had already admitted the said fact. Thus, to bring the entire position as


SSP   (corrected order as per Speaking to Minutes of Order dated 10 April 2026).          3/7
                                                                        2 spial 12 of 2026-3.doc

regards the transactions in proximity to the transactions dated 13 and 15 May

1992, which constitute the gravamen of indictment against the accused,

further cross-examination of P.W.2 on behalf of accused No.3 is necessary,

lest accused No.3 would suffer grave prejudice. Reliance was placed on the

judgment of the Supreme Court in the case of C.T.Muniappan V/s. State of

Madras1 and a judgment of the Gujarat High Court in the case of Mer Veja

Atiya Modhwadiya V/s. State of Gujarat2.

8.       I have perused the cross-examination P.W.2 on behalf of accused

Nos.3 and 6. The transactions with which accused No.3 is concerned were

entered into on 15 May 1992. The transactions with which accused No.6 is

concerned were of 13 May 1992. In the cross-examination on behalf of the

accused No.3, it was elicited that the transactions between Canfina and

accused No.3 dated 15 May 1992, were at the then ruling market price

(Q.No.90). The said position was sought to be controverted on behalf of

Accused No.6, by putting questions, to PW No.2; especially Question

Nos.136 and 137. An endeavour was made to show that the transactions

which Canfina had entered into in proximity with the questioned transactions

dated 13 May 1992 and 15 May 1992, were not at the market price.

9.       The situation which thus emerges is that, it could be urged that the

weight of the admissions elicited in the cross-examination of PW No.2, on

1     AIR 1961 SC 175
2     Manu/GJ/0503/2009

SSP    (corrected order as per Speaking to Minutes of Order dated 10 April 2026).          4/7
                                                                       2 spial 12 of 2026-3.doc

behalf of Accused No.3 has been diluted by the admissions elicited in the

cross-examination of accused No.6. There is, thus, a possibility of prejudice

being caused to accused No.3.

10.     A situation of the present nature is governed by the judgment of the

Supreme Court in the case of C.T.Muniappan (supra), wherein the Supreme

Court enunciated that the provisions contained in Sections 137 and 138 of the

Indian Evidence Act, do not constitute a bar to the accused from exercising

right of cross-examination afresh if and when the prosecution witness makes

a further statement of facts prejudicial to him, especially in the cross-

examination on behalf of co-accused. The relevant observations read as

under:

        “6.     The only question of law raised before the High Court was that
        evidence of the witnesses brought out in cross-examination on behalf of
        Kumaraswami could not in law be relied upon as against the appellant
        as the appellant had no opportunity to cross-examine these witnesses
        again. The High court rejected this contention. Before us it has been
        urged that the view taken by the High Court in this matter was wrong. It
        is argued that Sections 137 and 138 of the Indian Evidence Act do not
        contemplate any such further cross-examination of a prosecution
        witness. There can be no doubt that each accused is entitled in law to
        test the evidence given against him by a prosecution witness by cross-
        examination. Section 137 does not say that such cross-examination has
        to be limited only to what has been stated by the prosecution witness in
        examination-in-chief. Indeed Section 138 mentions categorically that
        “the cross-examination need not be confined to the facts to which the


SSP   (corrected order as per Speaking to Minutes of Order dated 10 April 2026).          5/7
                                                                       2 spial 12 of 2026-3.doc

        witness testified on his examination-in-chief” nor is there anything to
        justify the conclusion that once the right of cross-examination has been
        exercised after charge it cannot be exercised again. While it is true that
        Section 137 and Section 138 do not in words speak of a further round of
        cross-examination there is neither in these sections nor anywhere else
        in the Evidence Act anything to bar the accused from exercising his right
        of cross-examination afresh if and when the prosecution witness makes
        a further statement of facts prejudicial to him. (emphasis supplied)


11.     In any event, in the case at hand, the evidence of P.W.2 is yet to be

completed, in the sense that an application for re-examination of P.W.2 by the

prosecution warrants adjudication. Thus, to advance the cause of substantive

justice and to rule out the possibility of prejudice to the accused No.3,

permission to further cross-examine PW No.2 on behalf of accused No.3,

deserves to be granted. However, the cross-examination would be confined to

the transactions with Standard Chartered and Indian Rayon in proximity to the

transactions dated 13 May 1992 and 15 May 1992.

12.     Hence, the following order :

                                              ORDER

        (i)     The Interim Application stands allowed.

        (ii)    Accused No.3 is permitted to further cross-examine P.W.2.

        (iii)   However, further cross-examination of P.W.2 shall be confined to

the transactions with Standard Chartered and Indian Rayon in proximity to the

transactions dated 13 May 1992 and 15 May 1992.

SSP   (corrected order as per Speaking to Minutes of Order dated 10 April 2026).          6/7
                                                                       2 spial 12 of 2026-3.doc

        (iv)   Interim Application stands disposed.



                                                           ( N.J.JAMADAR, J. )




SSP   (corrected order as per Speaking to Minutes of Order dated 10 April 2026).          7/7