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REPORTABLE

IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 335 OF 2005

VINAYAK NARAYAN DEOSTHALI  … APPELLANT

VERSUS

CENTRAL BUREAU OF INVESTIGATION … RESPONDENT

JUDGMENT

N.V. RAMANA, J.

This  appeal  is  directed  against  the  judgment  dated  3 rd  

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 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.

2. The  prosecution  story,  briefly  stated,  is  that  during  the  year  

1991,  the  appellant  (accused  No.1)  while  he  was  working  as

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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  conspiracy  with  the  

infamous share & stock broker of Bombay of those times, Harshad S.  

Mehta (accused No. 3) with the 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 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 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 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

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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  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 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 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 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

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crediting the worth of those 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 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 (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. 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.

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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  30 th December,  

1993 against the accused invoking Sections 120B read with Section  

409, 420, 468, 471, 477-A, IPC and Section 13(2) read with Section  

13(1)(d) of the P.C. Act,  1988 and the case was committed to the  

Special Court. The appellant was arrested on 12 th 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 imprisonment for a period of one year and to pay an amount  

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.  

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 concerned  

with accused No. 1—appellant herein only. The other two accused

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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  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 11 th November, 2014  

when the following order was passed:

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  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 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 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 before this Court.

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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  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  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 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  13 th 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 mala fide or  

dishonest 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

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Section 313, Cr.P.C. that it was he who struck off account No. 032  

and wrote account No. 065 in the covering 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 Branch of UCO  

Bank.  He  was  specially  entrusted  the  duties  of  redemption  and  

reconciliation of securities. While 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 right the record. Learned Special Judge, has failed to  

appreciate the fact in a true spirit that the SGL transfer forms (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 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

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transaction.  There  was  no  evidence  on  record  to  establish  a  link  

between the accused—appellant  and the accused No.  3 (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 appellant  

was  only  an  Assistant  Manager  of  the  Bank  and  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  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 discharging duties, 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 subtle and not based on the evidence. The prosecution

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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.

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  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 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 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

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(Harshad Mehta).  In  the process,  he 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 with the maligned intention of the accused—appellant in  

pursuance of his illegal object of providing wrongful 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 crores. The illegal object  

and the role played by the accused with full knowledge and intention  

are established by a series 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 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

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transfer  of  Securities  into  the  UCO  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.  

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 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 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 April, 1991 issued by Indian Bank

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was discharged by the appellant on 12th April, 1991 in favour of the  

UCO Bank 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 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. These transactions are:

(a)15  th   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)

(b)21  st   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.

(c)21  st   October, 1991   Again transferred GOI securities 11.5%  

2009 worth Rs.17 crores from accused 3’s  State  Bank of

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Saurashtra account to UCO Bank’s Account No. 065 (Ext.  

272).

(d)25  th   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).

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 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 Bank of India from the account belonging to accused No. 3  

(Harshad Mehta) on 21st October, 1991 to State Bank of 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

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instructions  from  the  UCO  Bank  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,  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 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 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 UCO Bank.

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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 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  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?

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 mala fide intention to commit any fraud or crime.  Having  

noticed the irregularities 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

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evidence  in  its  proper  perspective  and  misguided  himself  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  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.  

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 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  

transferred into UCO Bank’s SGL Account No. 065, being operated  

by the Brokers. At  that point of time, all  brokers’ transactions who  

were operating UCO Bank Account No. 065 got squared off except

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that  of  accused  No.3.  Taking  this  to  his  advantage,  out  of  the  

securities 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 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).

27. The Telex messages dated 23.3.1991 (Ext. 287) and 6.4.1991  

(Ext. 466) reveal that UCO Bank Head Office explicitly instructed 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  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 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

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transfer into the UCO Bank’s Account No. 065. We, therefore, cannot  

accept the plea of appellant 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  communication  by  the  appellant  in  his  own  handwriting,  

establishes the fact that the appellant had willfully and with ulterior  

motive prepared the communication.  

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 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 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 discharged and A1 signed

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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 in RBI’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  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 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.

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

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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 been convicted in two cases  

and two more cases are pending.  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 in facilitating trading of SGL 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. 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.

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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 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.

 ….…………………………………………...J.                               (SUDHANSU JYOTI MUKHOPADHAYA)

…………….....………………………………J. (N.V. RAMANA)  

NEW DELHI JANUARY 12,  2015