S MOHAN Vs. CENTRAL BUREAU OF INVESTIGATION

JUDGEMENT

(1.) These two statutory appeals under Section 10 of the Special Court (Trial of Offences relating to Transactions in Securities) Act, 1992 (for short the said Act) are filed by Accused Nos. 3 and 4 in Special Case No. 7/1994, being aggrieved by the Judgment and Order dated 6th/7th/13th/14th Au gust, 1998 convicting and sentencing them.

(2.) These two appellants were tried along with two other accused persons by the Special Court (Trial of Offences Relating to Transactions in Securities) at Bombay and by Judgment dated 14th August, 1998, these appellants were found guilty of various offences. The appellant in Criminal Appeal No. 906 of 1998 (third accused - S. Mohan) was found guilty of offence punishable under Section 409 IPC and was sentenced to undergo rigorous imprisonment for seven years and a fine of Rs. 1 lakh, and with default, sentence for a period of one and a half years. He was also found guilty of the offences punishable under Sections 13(l)(c) and 13(1) (d) read with Section 13(2) of the Prevention of Corruption Act and for this offence he was sentenced to undergo rigorous imprisonment for a period of five years and a fine of Rs. 50,000, in default of payment of fine, sentence for a period of one year. He was also found guilty of the offence punishable under Section 411 read with Section 120B IPC and sentenced to undergo two years RI and a fine of Rs. 50,000/- and in default sentence for six months. The appellant in Criminal Appeal No. 910 of 1998 (fourth accused- Hiten P. Dalal) was found guilty of offences punishable under Section 409 read with Section 120B IPC and sentenced to undergo seven years rigorous imprisonment and a fine of Rupees 1 lakh and with default, sentence for a period of one and half years. He was also found guilty of an offence punishable under Section 411 IPC and was sentenced to undergo imprisonment for a period of two years and a fine of Rs. 50,000/-, and in default, sentence for a period of six months. The sen tences were to run concurrently. The special court acquitted accused 1 and 2.

(3.) In the year 1992, certain irregularities were detected in various security trans actions that had taken place between certain financial institutions. The Reserve Bank of India constituted a Committee known as "Janakiraman Committee" to look into the real nature of these transactions and to find out if any fraud or financial irregu larities had taken place in these transactions. It appears that in the course of the enquiry by the "Janakiraman Committee", it was found that large scale irregularities and malpractices were noticed in transactions both in the Government and other securities, indulged in by some brokers in collusion with the employees of various banks and financial institutions. It was noticed that these irregularities and malprac tices had led to the diversion of funds from banks and financial institutions to the individual accounts of certain brokers. The Central Bureau of Investigation(CBI) made enquiries generally regarding all security transactions and it seems that the CBI after investigation of the case filed a report against four accused before the Special Court alleging that these accused were responsible for causing loss of Rs. 33 crores to Canara Bank and various other allegations were also made against these accused. Accused No. 1 was the Executive Vice President and Chief Dealer, Ac cused No. 2 was the Asst. Vice President and Accused No. 3 was the Asstt. Vice President and Dealer, of Canbank Financial Services Ltd. at the relevant point of time. Accused No. 4 was a Share and Securities Broker.