VINAYAK NARAYAN DEOSTHALIversusCENTRAL BUREAU OF INVESTIGATION

                        [2015] 1 S.C.R. 84


A                VINAYAK NARAYAN DEOSTHALI
                                  v.
             CENTRAL BUREAU OF INVESTIGATION
               (Criminal Appeal No. 335 of 2005)
                        JANUARY 12, 2015
B
          [SUDHANSU JYOTI MUKHOPADHAYA AND
                   N.V. RAMANA, JJ.]

        Penal Code, 1860 - ss.4091120-B, 403, 477-A/109 -
c Prevention of Corruption Act, 1988 - s.13(2) rlw s.13(1)(d) -
  Security scam - Prosecution of the appellant-accused (a
  Bank employee) for hatching criminal conspiracy with the
  infamous share-broker (Accused No. 3-Harshad Mehta) with
  the object of cheating the Bank and effecting illegal gain to
0 accused No. 3 - Conviction by Special Court - On appeal,
  held: The appellant-accused was part of the conspiracy in
  facilitating trading of SGL (Subsidiary General1-edger)
  securities to the benefit of accused No. 3 by abusing his
  official position and by violating provisions· of banking laws -
E The prosecution successfully proved the offences, beyond
  reasonable doubt through voluminous documentary
  evidence.
        Dismissing the appeal, the Court
       HELD: 1. The procedure of .-Oa€11ing with
F SGL(Subsidiary General Ledger) accounts as explained
  by PW1 and PW2 has not been followed in the case of
  securities in question. The material on record
  unequivocally establishes that the wrong entry in the
  account of UCO Bank SGL Account No. 065 effected to
G the advantage of Harshad Mehta (Accused No. 3) had not
  occurred as a result of an inadvertent error, but a planned
  misdeed done with mala fide intention. The appellant-
  accused, who is well acquainted with the banking
  activities and SGL transactions, created false documents
H                              84
    VINAYAK NARAYAN DEOSTHALI v. CENTRAL               85
           BUREAU OF INVESTIGATION
and acted contrary to the provisions and committed           A
illegal acts which are writ large on the face of record.
Thus, the appellant was part of the conspiracy in
facilitating trading of SGL securities to the benefit of
accused No. 3 and in the process, abused his official
position and violated provisions of banking laws. The        8
facts and circumstances of the case clearly show the
participation of the appellant in the criminal acts and
misuse of his official position. The prosecution has
successfully proved the nexus between the accused. The
ingredients of the offences for which the accused is         C
charged has also been established beyond all reasonable
doubt by the prosecution by adducing voluminous
documentary evidence as well as oral evidence. [para 29
and 30] [98-E-H; 99-B-D]
     2. The Telex messages dated 23.3.1991 (Ext. 287) and    D
6.4.1991 (Ext. 466) reveal that UCO Bank Head Office
explicitly instructed for its own Account (032). The
communication dated 13th April, 1991 (Ext. 300) sent by
the accused Nos. 1 & 2 cannot be treated as a simple
mistake considering the consequential events. The            E
preparation of the said communication and also the entry
relating to the Securities in question has been written by
the accused No.1-appellant himself. The entry indicates
to transfer the securities into the UCO Bank's Account
No. 065 (Brokers' Account) together with two other           F
entries relating to other securities which were actually
meant for transfer into the UCO Bank's Account No. 065.
Therefore, it cannot be said that it was merely a clerical
mistake that the Account No. 032 was struck off and
Account No. 065 was retained by accused No.2. The
inclusion of securities in question in the said              G
communication by the appellant in his own handwriting,
establishes the fact that the appellant had willfully and
with ulterior motive prepared the communication. [para
27] [97 -C-G]
                                                             H
    86       SUPREME COURT REPORTS                [2015] 1 S.C.R.


A       3. The transfer of an amount of Rs.2.00 crores from
    account No.065 to account No.032, without there being
    any transaction clearly shows that to get away with
    enquiries of the Head Office, the accused has chosen to
    transfer the money without there being any transaction
8   and exhibits the conduct of the accused. Almost all the
    documents pertaining to switch transaction are signed by
    him. [para 28] [97-G-H; 98-A-B]

        CRIMINAL APP ELLATE JURISDICTION : Criminal Appeal
    No. 335 of 2005.
c
        From the Judgment and Order dated 03.12.2004 of the
    Special Court (Trial of offences relating to transaction in
    securities) at Bombay in Special Case No. 3 of 1995.

         Dhiraj Mirajkar, Kamini Jaiswal for the Appellant.
D
        Vibha Datta Makhija, T. A. Khan, Chetan Chawla, Disha
    Vaish, B. V. Balramdas, Arvind Kumar Sharma for the
    Respondent.

E        The Judgment of the Court was delivered by

        N.V. RAMANA, J. 1. This appeal is directed against the
  judgment dated 3rd December, 2004 of the Special Court (Trial
  of offences relating to transactions in Securities) at Bombay in
  Special Case No. 3 of 1995 whereby the Special Judge
F convicted and sentenced the appellant for the offences under
  Sections 409/120B, 403, 477-A/109, IPC and Section 13(2)
  read with Section 13(1 )(d) of the Prevention of Corruption Act.
  1988.

G      2. The prosecution story, briefly stated, is that during the
  year 1991, the appellant (accused No.1) while he was working
  as Assistant Manager in the Securities Department of UCO
  Bank, Hamam Street Branch, Mumbai in connivance with a
  colleague of the Bank (accused No. 2) hatched a criminal
H conspiracy with the infamous share & stock broker of Bombay
    VINAYAK NARAYAN DEOSTHALI v. CENTRAL                      87
   BUREAU OF INVESTIGATION [N.V. RAMANA, J.]
of those times, Harshad S. Mehta (accused No. 3) with the           A
object of cheating the UCO Bank by causing wrongful loss to
the Bank and effecting illegal gain to the accused No. 3
(Harshad Mehta). It is alleged that for achieving the object of
conspiracy, the appellant despite being a public servant,
committed criminal breach of trust and misappropriated the          B
funds of Bank by manipulating the accounts to facilitate unlawful
gains to Harshad S. Mehta (accused No. 3).

     3. The background of the case as unfolded by the
prosecution is that at the relevant time, UCO Bank had two
Subsidiary General Ledger (SGL) accounts with the RBI. The          C
SGL is a type of Securities Account floated by the Central
Government. For making transactions in these Securities,
Banks and financial institutions have to open the SGL account
with the Public Debt Office of the Reserve Bank of India. UCO
Bank has two such SGL accounts with the Reserve Bank of             D
India. Out of the two SGL accounts owned by the UCO Bank,
one account with the number 032 was meant for the Bank's
Head Office's own transactions and the other SGL account No.
065 was maintained for the transactions done by constituents/
brokers. When the Bank itself purchased/sold a Government           E
Security, the respective entry was to be made in account No.
032 and if the Security was purchased/sold by a broker client
of the UCO Bank, the entry was to be made in SGL account
No. 065. As far as the entry in the books of RBI was concerned,
it was made in a particular account according to the                F
instructions given by UCO Bank for every transaction, as both
the accounts stood in the name of UCO Bank.

     4. On 22nd March, 1991 UCO Bank sold Securities
namely, Government of India 11.5% 2009, worth Rs.20 crores          G
to Indian Bank (Ext. 250) from its SGL account No. 032 i.e.
UCO Bank's own account. On the same day, UCO Bank
purchased Securities namely, Government of India 11.5%
2006, worth Rs.20 crores from Indian Bank (Ext. 425).

     5. On 5th April, 1991 UCO Bank re-purchased the earlier        H
    88       SUPREME COURT REPORTS                 [2015] 1 S.C.R.


A   sold GOI 11.5% 2009 Securities from Indian Bank and sold GOI
    11.5% 2006 Securities purchased earlier to Indian Bank. In
    other words, UCO Bank reversed the earlier transactions. With
    the effect of repurchase of Securities by the UCO Bank, RBI
    should have made the entry crediting the worth of those
B   securities in SGL Account No. 032 of the UCO Bank.

         6. Whereas, due to a communication dated 13th April,
    1991 (Ext. 300) signed by the appellant accused in his position
    as Assistant Accountant and the co-accused (not a party in the
C   present appeal) requesting the RBI to make entry in SGl
    Account No. DV SL 065, the SGL Account No. 065 which was
    meant for the broker clients of the UCO Bank and which had
    no balance on that date, showed the balance of Securities worth
    Rs.20 crores. At that point of time, the transactions of all other
    brokers stood squared off except in respect of accused No. 3
D   (Harshad Mehta). Taking this wrong entry to his advantage,
    accused No. 3-Harshad S. Mehta, being the broker/client of
    the UCO Bank, sold GOI Securities 11.5% 2009, worth Rs.15
    crores (Ext. 413), which actually did not belong to him, and
    thereby wrongfully gained and the UCO Bank suffered the loss.
E   It was none other but the appellant-accused No. 1, who
    passed the Debit & Credit vouchers pertaining to the
    transaction (Exts. 295, 296 & 297). When these misdeeds
    came to light, the accused took steps and made efforts to cover
    up the transactions.
F
          7. When the Securities Scam broke out in the year 1992,
    a special cell was established by the CBI to deal with the cases
    arising out of the scam. Accordingly, an FIR was registered on
    30th December, 1993 against the accused invoking Sections
G   120B read with Section 409, 420, 468, 471, 477-A, IPC and
    Section 13(2) read with Sec;tion 13(1)(d) of the P.C. Act, 1988
    and the case was committed to the Special Court. The
    appellant was arrested on 12th May, 1997. The Special Judge,
    after taking overall view of the matter, held the appellant guilty
    of the offences and sentenced him to undergo rigorous
H
    VINAYAK NARAYAN DEOSTHALI v. CENTRAL .                     89
   BUREAU OF INVESTIGATION [N.V. RAMANA, J.]
imprisonment for a period of one year and to pay an amount            A
of Rs.25,000/- towards fine, in default thereof, to further undergo
imprisonment for a period of three months. The special judge,
however, let the accused appellant to be on bail for a period
of 12 weeks to enable him to approach the appellate Court.
                                                                      B
     8. Aggrieved by the judgment of the Special Judge, the
appellant filed this appeal under Section 10 of the Special
Court (Trial of Offences Relating to Transaction in Securities)
Act, 1992. That is how this appeal is before us.

    9. Though there are three accused in this case, we are            c
concerned with accused No. 1-appellant herein only. The other
two accused namely Makrand Vasant Shidhaye (accused No.
2) and Harshad S. Mehta (accused No. 3) are not parties in
the present appeal. However, it is pertinent to mention that
Makrand Vasant Shidhaye (accused No. 2) had also preferred            D
an appeal before this Court against judgment of the Special
Judge being Criminal Appeal No. 336 of 2005 which was listed
before this Court on 11th November, 2014 when the following
order was passed:
                                                                      E
     Criminal Appeal No. 336 of 2005

    This appeal is listed against the common impugned
    judgment along with Criminal Appeal No. 335/2005.

     The learned counsel appearing on behalf of the appellant         F
     is not present.

     It is informed at Bar by the learned counsel for the appellant
     in Criminal Appeal No. 335/2005 that Makrand Vasant
     Shidhaye-appellant in Criminal Appeal No. 336/2005 died          G
     during the pendency of the appeal. In view of such fact
     brought to our notice, the appeal stands abated and
     disposed of.

     So far as accused No. 3 (Harshad S. Mehta) is
                                                                      H
    90       SUPREME COURT REPORTS                [2015] 1 S.C.R.


A   concerned, he had died on 31st December, 2001 during the
    pendency of trial.

         10. On 21st February, 2005 while admitting the appeal,
    this Court granted interim relief to the appellant by suspending
    sentence of imprisonment during pendency of the appeal
8
    before this Court.

         11. Learned counsel for the appellant-accused submitted
   that the learned Special Judge failed to appreciate the
   evidence correctly and erred in holding the accused guilty of
C the offences. The SGL information concerning the securities
   re-purchased by the UCO Bank on 5th April, 1991was received
   on 12th April, 1991. Since there used to be a number of
   transactions by the clients/brokers and the re-purchased SGL
   information was received after a gap of about one week, a
o clerical and bona fide mistake was committed by the
   appellant-accused in getting the securities credited into the
   SGL account No. 065 instead of account No. 032 of the UCO
   Bank. There was no participation by the accused in any
   conspiracy to benefit accused No. 3, Harshad Mehta. It was
E purely a clerical error that occurred in a casual way without any
   bad intention. In a normal way, the accused signed the covering
   note dated 13th April, 1991 also signed by accused No. 2
   enabling the RBI to credit the securities into SGL account No.
   065. The accused-appellant had no ma/a fide or dishonest
F intention to commit any fraud or cause loss to the UCO Bank
   or to cheat it. The mistake happened mechanically without the
   conscious involvement of the appellant. It is also evident from
   the record that accused No. 2 himself admitted in his statement
   under Section 313, Cr.P.C. that it was he who struck off
   account No. 032 and wrote account No. 065 in the covering
G note (Ext. 300). Thus, the appellant cannot be charged with a
 . severe punishment for a reasonable clerical mistake.

        12. Learned counsel also submitted that the appellant was
    not concerned with the routine work of the Hamam Street
H   Branch of UCO Bank. He was specially entrusted the duties
     VINAYAK NARAYAN DEOSTHALI v. CENTRAL                       91
    BUREAU OF INVESTIGATION [N.V. RAMANA, J.]
 of redemption and reconciliation of securities. While                A
 discharging those duties, when the appellant noticed the
 mistake, he immediately facilitated transfer of Rs. 2 crores on
 15th July, 1991 from the account No. 065 to account No. 032
 to set righUhe record. Learned Special J.udge, has failed to
 appreciate the fact in a true spirit that the SGL transfer forms     B
 (Ext. 235 and Ext. 240) concerning the securities sold by
 Harshad Mehta to the tune of Rs.15 crores from SGL account
 No. 065, were not signed by the appellant and the appellant
 has no role in that transaction. This fact itself clearly
 establishes that the appellant was not part of any conspiracy        C
 with accused No. 3 (Harshad Mehta). But the Special Judge
 took a different and wrong view and erred by holding that the
 appellant transferred securities worth Rs. 2 crores lying in the
 account No. 065 to account No. 032 to cover up the
 transaction. There was no evidence on record to establish a
 link between the accused-appellant and the accused No. 3
                                                                      0
 (Harshad Mehta) forming a conspiracy between them and the
 prosecution has utterly failed to prove this aspect and therefore,
 the appellant is entitled for benefit of doubt.

        13. Further contention of the learned counsel is that the     E
   appellant was only an Assistant Manager of the Bank a11d
   scrupulously implementing the decisions taken by his
   superiors. The appellant had only performed his duties
   obediently for which he cannot be made a scapegoat as if the
   appellant was solely responsible for the transactions. The         F
   important factor, ignored by the learned Special Judge while
   convicting the appellant, is that the appellant had not earned
   any pecuniary gains for himself. The learned trial Judge under
   a misconception went on believing the prosecution case. Only
   for the simple reason of irregularity or negligence in             G
. _d!s~~g_guties, the appellant was given harsh punishment
   of sentence·by the learned Special Judge even though factually
   no loss was caused to the UCO Bank. The view taken by the
   learned .Special Judge that the acts of the appellant have
   exposed the UCO Bank to a grave financial loss is absolutely       H
    92       SUPREME COURT REPORTS               [2015) 1 S.C.R.


A   subtle and not based on the evidence. The prosecution has
    also admitted that no loss was caused to the UCO Bank. By
    any stretch of imagination, the acts of the appellant cannot be
    construed to label against him 'criminal misconduct' within the
    ambit of Prevention of Corruption Act, 1988.
B
          14. Disputing the quantum of sentence also, learned
    counsel for the appellant submitted that the learned Special
    Judge while sentencing the appellant ignored the element of
    proportionality in imposing the punishment. Learned Special
    Judge has miserably failed to appreciate the facts in their
C   proper perspective and committed a grave error in convicting
    the appellant and hence the impugned judgment calls for
    interference by this Court.

          15. On the other hand, learned Senior Counsel appearing
D   for the C.B.I., while supporting the judgment of the learned
    Special Judge, submitted that the learned Special Judge
    passed the impugned judgment after undertaking a thorough
    trial procedure. He came to the conclusion only after having
    satisfied that the guilt of the accused has been proved beyond
E   reasonable doubt. Hence the Trial Court committed no error in
    sentencing the accused.

       16. She contended that the accused cannot plead
  innocence as he played an active role in the conspiracy in
  benefitting accused No. 3 (Harshad Mehta). In the process, he
F took the benefit of being an employee· of the UCO Bank, fully
  acquainted with the SGL transactions, and committed the
  offence misusing his official position. The transfer of 11.5%
  CGL 2009 securities for a value for Rs.20 crores into the SGL
  account No. 065 in the Public Debt Office of RBI effected only
G with the maligned intention of the accused-appellant in
  pursuance of his illegal object of providing wrongf'°I gain to
  accused No. 3 (Harshad Mehta). The conspiracy hatched by
  the accused deprived UCO Bank of the interest that would have
  accrued on the face value of securities amounting to Rs.20
H crores. The illegal object and the role played by_ the -accused
    VINAYAK b!ARAYAN DEOSTHALI v. CENTRAL                       93
   BUREAU OF INVESTIGATION [N.V. RAMANA, J.]

with full knowledge and intention are established by a series         A
of transactions which formed a continuous chain and link of
circumstances leading to the culpability of the accused.

     17. Learned counsel has drawn our attention to a Telex
message dated 23rd March, 1991 (Ext. 287) sent by the UCO             B
Bank from its Head Office to Zonal Office instructing for effecting
the switch transaction in favour of UCO Bank Head Office
Account (SGL Account No. 032). In spite of those clear
instructions, the accused-appellant with a view to benefit the
accused No. 3, effected the transfer of Securities into the UCO       C
Bank Constituents/Brokers Account (Account No. 065). It is also
evident from the record that at the relevant time, all brokers'
transactions were squared off except that of accused No. 3
(Harshad Mehta) who sold those wrongfully transferred
securities for his own benefit, causing loss to the UCO Bank.
                                                                      D
      18. In pursuance of achievement of illegal.object to cause
wrongful gain to accused No. 3, the appellant, being a public
servant, abused his position to a great extent. When the UCO
Bank Head Office was not informed about the development of
the switch transaction with reference to their Telex message          E
dated 23rd March, 1991 (Ext. 287), which transaction was
admittedly being carried by the accused, the Head Office
issued another Telex message dated 6th April, 1991 (Ext. 466)
inquiring about the transaction. Despite this second Telex
message from the Head Office, the accused did not respond             F
to inform the Head Office immediately and it is only on 11th
April, 1991 the accused sent a Telex message (Ext. 288) to the
Head Office informing execution of the transaction, that too
concealing the truth. Another link exhibiting the wrong intentions
of the accused is that the Bank Receipt (Ext. 299) dated 5th          G
April, 1991 issued by Indian Bank was dischargeci by the
appellant on 12th April, 1991 in favour of the UCO Bar ii< Head
Office by signing on the reverse of it.

     19. Learned senior counsel further contended that it was
only when the accused came to know that inquiries were being          H
    94       SUPREME COURT REPORTS              [2015] 1 S.C.R.


A carried out by the UCO Bank Head Office for the loss occurred
  to it due to non-credit of the interest on the securities in
  question, the accused in connivance with each other in a
  planned manner tried to cover up the transactions and credited
  UCO Bank Head Office account through four transactions.
B These transactions are:

               (a) 15th July. 1991 Transferred GOI securities
               11.5% 2009 worth Rs. 2 crores from UCO Bank's
               SGL A/C No. BYSL 065 (Brokers' account) to SGL
               A/C No. 032 (UCO Bank's own account) (Ext. 245)
c
               (b) 21st October. 1991 Transferred GOI securities
               11.5% 2009 worth Rs.17 crores from the accused
               No. 3's account of State Bank of India to his State
               Bank of Saurashtra (Ext. 277) account.
D
               (c) 21st October. 1991 Again transferred GOI
               securities 11.5% 2009 worth Rs.17 crores from
               accused 3's State Bank of Saurashtra account to
               UCO Bank's Account No. 065 (Ext. 272).
E              (d) 25th October. 1991 Finally these GOI securities
               11.5% 2009 have been transferred from UCO
               Bank's Account No. 065 to its Account No. 032
               (Ext. 282).

F       20. To further assert her argument that the accused in the
  process of effecting those cover up transactions indulged in
  illegal acts, learned senior counsel explained that even though
  there was no instruction from the UCO Bank Head Office, the
  accused-appellant directed the Reserve Bank to transfer
G securities worth Rs.2 crores from Account No. 065 to Account
  No. 032 (cover up transaction 'a' above) blatantly misusing his
  position as a public servant.. To prove the chain of conspiracy,
  learned senior counsel took us through Ext. 277 which shows
  that Securities worth Rs.17 crores were transferred from State
H Bank of India from the account belonging to accused No. 3
   VINAYAK NARAYAN DEOSTHALI v. CENTRAL                      95
  BUREAU OF INVESTIGATION [N.V. RAMANA, J.]
(Harshad Mehta) on 21st October, 1991 to State Bank of             A
Saurashtra (another account belonging to Harshad Mehta) and
on the same day they were again transferred from State Bank
of Saurashtra to UCO Bank SGL Account No. 065 (Ext. 272)
and then to UCO Bank SGL Account No. 032 on 25th October,
1991 (Ext. 282) without any instructions from the UCO Bank         B
Head Office. In this way, the accused, in connivance with each
other tried to cover up the UCO Bank Head Office Account.

     21. Highlighting the crucial link of the conspiracy among
the accused in misusing the funds of UCO Bank to the tune of
Rs.20 crores, learned senior counsel submitted that on 1st July,   C
1991 accused No. 3 wrote a letter to the UCO Bank (Ext. 413)
requesting to issue GOI 11.5% 2009 Securities worth Rs.15
crores to State Bank of Saurashtra and State Bank of
Hyderabad, though these Securities in fact did not belong to
him. Accordingly, Securities worth Rs.5 crores (Ext. 235) were     D
transferred to the State Bank of Hyderabad from UCO Bank
SGL Account No. 065, without any instruction from the UCO
Bank. The Banker's cheque dated 1st July, 1991 (Ext. 678)
received from State Bank of Hyderabad against those
securities, in favour of UCO Bank for an amount of                 E
Rs.5,07, 195,62.22 (including interest) was credited in the
account of accused No. 3 (Harshad Mehta). Similarly, on the
same day i.e. 1st July, 1991 Securities worth Rs.10 crores (Ext.
240) were transferred to the State Bank of Saurashtra from
UCO Bank's SGL Account No. 065, without any instruction from       F
UCO Bank.

     22. The learned senior counsel finally submitted that the
offences with which the appellant was charged have been
proved beyond reasonable doubt and the Trial Court had not         G
committed any error in convicting the accused. She, therefore,
prayed that the impugned judgment does not deserve to be
interfered with.

     23. Heard the counsel on either side at length and gone
through the voluminous record placed before us. The issue that     H
    96       SUPREME COURT REPORTS                 [2015] 1 S.C.R.


A falls for consideration is whether the learned Judge of the
  Special Court was right in convicting the accused for the
  offences he is charged with and whether the prosecution proved
  the guilt of the accused beyond reasonable doubt?

B      24. Basing on the argument of both the parties, it appears
  that it is the specific defence of the accused that absolutely
  there is no motive or intention on his part in the alleged
  transactions and if at all anything is done, it is purely a clerical
  bona fide mistake. Absolutely, he has no ma/a fide intention
  to commit any fraud or crime. Having noticed the irregularities
C that have taken place, he has taken steps to transfer an amount
  of Rs.2.00 crores to the account No.032 from the account
  No.065. He is not involved in any conspiracy or benefited by
  the transactions and the learned Judge has failed to appreciate
  the evidence in its proper perspective and misguided himself
D in convicting the accused. Whereas, on behalf of the CBI,
  arguments were advanced supporting the judgment of the
  Special Court.

       25. The CBI has adduced voluminous evidence to establish
E the guilt of the accused. The whole issue revolves around the
  fact whether the accused has got a role to play in the switch
  transactions account and whether he was discharging the
  duties as a prudent man and is it a bona fide mistake as he
  claims it to be.
F      26. It appears from the record and on a thorough
  examination of the events that took place between April 1991
  and October 1991, we understand that on 22nd March, 1991
  on which date UCO Bank's 11.5% 2009 securities with face
  value of Rs. 20 crores were sold to Indian Bank, UCO Bank
G has purchased similar value of securities from Indian Bank viz.,
  11.5% 2006 GOI Securities for its SGL Account No. 032. On
  5th April, 1991 both the above transactions were reversed.
  Resultantly, UCO Bank's Account No. 032 should have got back
  the aforementioned securities, but the same was wrongfully
H transferred into UCO Bank's SGL Account No. 065. being
   VINAYAK NARAYAN DEOSTHALI v. CENTRAL                         97
  BUREAU OF INVESTIGATION [N.V. RAMANA, J.]
operated by the Brokers. At that point of time, all brokers'          A
transactions who were operating UCO Bank Account No. 065
got squared off except that of accused No.3. Taking this to his
advantage, out of the secufities lying in the UCO Bank's
Account No. 062, Securities worth Rs.15 crore, have been sold
by the accused No. 3, though not belonging to him actually, to        B
the State Bank of Saurashtra and State Bank of Hyderabad and
the banker's cheque issued in discharge of those securities in
favour of UCO Bank for an amount of Rs.5,07,195,62.22
(including interest) was credited in the account of accused No.
3 (Harshad Mehta).                                                    c
      27. The Telex messages dated 23.3.1991 (Ext. 287) and
6.4.1991 (Ext. 466) reveal that UCO Bank Head Office explicitly
instructad for switch transaction for its own Account (032). The
communication dated 13th April, 1991 (Ext. 300) sent by the
accused Nos. 1 & 2 cannot be treated as a simple mistake              0
considering the consequential events. We have given our
anxious and thorough perusal to the said communication (Ext.
300) and found that the preparation of communication and also
the entry relating to the Securities in question has been written
by the accused No.1-appellant herein himself. The entry               E
indicates to transfer the securities into the UCO Bank's Account
No. 065 (Brokers' Account) together with two other entries
relating to other securities which were actually meant for transfer
into the UCO Bank's Account No. 065. We, therefore, cannot
accept the plea of appellant that it was merely a clerical mistake    F
that the Account No. 032 was struck off and Account No. 065
was retained by accused No.2. The inclusion of securities in
question in the said communication by the appellant in his own
handwriting, establishes the fact that the appellant had willfully
and with ulterior motive prepared the communication.                  G
      28. It was claimed by the accused that he has transferred
an amount of Rs.2.00 crores from account No.065 to account
No.032, without there being any transaction which clearly shows
that to get away with enquiries of the Head Office, the accused
                                                                      H
    98        SUPREME COURT REPORTS                  [2015] 1 S.C.R.


A has chosen to transfer the money without there being any
  transaction and exhibits the conduct of the accused. All the
  documents relating to switch transaction between the UCO
  Bank and Indian Bank were signed by the accused, being the
  responsible officer knowing pretty well that these securities are
B purchased by the Head Office of UCO Bank, which at any
  stretch of imagination cannot be termed as a mistake or
  oversight, and above all, the debit and credit vouchers for
  transaction in question were passed by the accused. On 12-4-
  1991, bank receipt of Indian Bank dt. 5-4-1991 (Ex.299) was
c discharged and A 1 signed on the reverse of bank receipt.
  Almost all the documents pertaining to switch transaction are
  signed by him.

       29. We have also perused the depositions of prosecution
  witnesses. PW1-S. Nagrajan, the person who was working
D in RBl's Public Debt Office at the relevant time, in his deposition
  explained how the SGL accounts are maintained. PW2-
  Harsukhlal Chhotalal Parekh, the erstwhile Manager of UCO
  Bank's Hamam ·street Branch asserted that when the
  transactions are taken place over SGL accounts, necessary
E instructions are received. by the Securities Department of the
  Hamam Street Branch from concerned Broker. Admittedly, the
  procedure of dealing with SGL accounts as explained by PW1
  and PW2 has not been followed in the case of securities in
  question. The material on record unequivocally establishes that
F the wrong entry in the account of UCO Bank SGL Account No.
  065 effected to the advantage of Harshad Mehta (Accused No.
  3) was not occurred as a result of an inadvertent error, but a
  planned misdeed done with mala fide intention.

G         30. Considering the whole scenario of the case, there is
    no doubt in our minds that the accused, who is well acquainted
    with the banking activities and SGL transactions, created false
    documents and acted contrary to the provisions and committed
    illegal acts which are writ large on the face of record. It has been
    clearly recorded by the trial Court that accused No.1 has already
H
    VINAYAK NARAYAN DEOSTHALI v. CENTRAL                          99
   BUREAU OF INVESTIGATION [N.V. RAMANA, J.]
been convicted in two cases and two more cases are pending.             A
In one case, he has undergone imprisonment for a period of
one year and in another case, imprisonment for a period of 9
months, which shows the conduct of the accused, though that
is not the basis for our conclusion. We are, therefore, of the
considered view that the appellant was part of the conspiracy           B
in facilitating trading of SGI., securities to the benefit of accused
No. 3 (Harshad Mehta) and in the process, abused his official
position and violated provisions of banking laws. The facts and
circumstances of the case clearly show the participation of the
appellant in the criminal acts and misuse of his official position.     c
In our opinion, the prosecution has successfully proved the
nexus between the accused. The ingredients of the offences
for which the accused is charged has also been established
beyond all reasonable doubt by the prosecution by adducing
voluminous documentary evidence as well as oral evidence.
                                                                        D
     31. For the foregoing reasons, we do not find any merit in
the appeal calling for our interference with the impugned
judgment passed by the learned Special Judge. Consequently,
the appeal fails and is dismissed accordingly. By this Court's
order dated 21st February, 2005 the substantive sentence of             E
imprisonment remained suspended during the pendency of
appeal. The said order is hereby recalled. The appellant may
be taken into custody forthwith to serve the period of
imprisonment.
                                                                        F
Kalpana K. Tripathy                                 Appeal dismissed