VINAYAK NARAYAN DEOSTHALI Vs. CENTRAL BUREAU OF INVESTIGATION

JUDGEMENT

(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 convicted and sentenced the Appellant for the offences Under Sections 409/120B, 403, 477-A/109, Indian Penal Code 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 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 and 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 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.