Supreme Court of India
B. RAGHUVIR ACHARYAversusCENTRAL BUREAU OF INVESTIGATION
- Citation
- 2013 INSC 380
- Decided
- 1 July 2013
- Disposal
- Disposed off
Holding
Acharya's conviction is unsustainable due to lack of admissible handwriting evidence, leading to his acquittal; Dalal is convicted under Section 420 IPC (replacing Section 409) and Section 411, with the conviction under Section 477‑A set aside.
Summary
The case involved a Rs 65 crore investment in CANCIGO units of Canbank Mutual Fund (CMF) by four subscribers, where B. Raghuvir Acharya (Trustee/General Manager) and Hiten P. Dalal (approved broker) were alleged to have obtained a false brokerage of Rs 32.5 lakhs. The Special Court convicted Acharya and Dalal, but acquitted the fund manager. On appeal, the Supreme Court held that the sole handwriting testimony (PW‑5) against Acharya was not admissible under Section 47 of the Evidence Act, and there was no other material linking him to the crime, leading to his acquittal. For Dalal, the Court affirmed the conviction for cheating under Section 420 IPC (altering the earlier conviction under Section 409) and upheld the conviction for receiving stolen property under Section 411, while setting aside the conviction under Section 477‑A due to the acquittal of co‑accused. The appeal of Acharya was allowed, and Dalal's appeal was dismissed with modification of his conviction.
Issues considered
- Whether PW‑5's opinion on the handwriting of Acharya is admissible under Section 47 of the Evidence Act.
- Whether the prosecution established Acharya's participation in the alleged fraud.
- Whether the acquittal of co‑accused bars conviction of Dalal under conspiracy (Section 120‑B) and related offences.
- Whether Dalal can be convicted under Section 420 IPC in place of Section 409 IPC.
- Whether conviction under Section 477‑A stands after co‑accused are acquitted.
- Whether the Special Court had jurisdiction to try the offences under the Securities Act.
Legislation cited
- Code of Criminal Procedure, 1973s. 236, s. 237
- Indian Evidence Act, 1872s. 47
- Indian Penal Code, 1860s. 120-B, s. 409, s. 411, s. 420, s. 477-A
- Prevention of Corruption Act, 1988s. 13(1)(d), s. 13(2)
- Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992
Subjects
handwriting evidenceSection 47 Evidence Actcheatingfalse representationbrokerage fraudcriminal conspiracySection 120-B IPCSection 420 IPCSpecial Courtsecurities scam
Judgment
[2013) 7 S.C.R. 132
A B. RAGHUVIR ACHARYA
v.
CENTRAL BUREAU OF INVESTIGATION
(Criminal Appeal No. 1001 of 2001 etc.)
JULY 1, 2013.
B
[G.S. SINGHVI AND SUDHANSU JYOTI
MUKHOPADHAYA, JJ.]
PENAL CODE, 1860:
c ss. 120-B, 4201409, 411, 477-A /PC and ss.13(1)(d) read
with s. 13(2) of Prevention of Corruption Act - Brokerage
claimed illegally and dishonestly - Units of CANC/GO floated
by CMF, purchased in the names of Andhra Bank, and
ABFSL and payment made by broker - Further, false claim
0
of brokerage on the investment made by Sahara India and
IDBI - Held: So far as the Trustee and General Manager of
CMF is concerned, there is no material of his involvement in
the crime - He is acquitted of all the charges - As regards the
broker, he disguised his investment and dishonestly claimed
E brokerage from CMF - He was not engaged as a broker in
the transactions - Prosecution has proved that the broker is
guilty of making a false representation to CMF to deceive it
to part with the stated amount - Acquittal of co-accused on the
ground of non-corroboration has no application to the accused
F himself - Judgment of Special Court affirmed with
modification.
ss. 4201409, 411and477-A -Accused originally charged
with offences ulss 120-B, 4201409, 411 and 477-A - His
G conviction u/s 409 converted to that uls 420 /PC - His
conviction u/s 411 upheld - However, in view of acquittal of
two other accused, his conviction uls 477-A set aside --
Special Court (Trial of Offences Relating to Transactions in
Securities) Act, 1992- Scam.
H 132
B. RAGHUVIR ACHARYA v. CENTRAL BUREAU OF 133
INVESTIGATION
EVIDENCE ACT, 1872: A
s.47 - Evidence as to hand writing - Held: The witness who
claimed to be conversant with the handwriting of accused
because of alleged correspondence, deposed that he had
neither seen the accused writing the endorsement nor he 8
himself was recipient of any correspondence from the accused
- He had no prior knowledge of the handwriting of the accused
or signature of the author - He was, thus, not a competent
witness to depose regarding handwriting of accused.
The appellants in Crl. A. No. 1001 of 2001 (A-1) and C
Crl. A. No. 1226 of 2001 (A-3) alongwith A-2 were
prosecuted for committing offences punishable u/ss 120·
B, 420/409, 411 and 477-A IPC. A-1 and A-2 being public
servants were also charged with offences u/s 13(1)(d) read
with s.13(2} of the Prevention of Corruption Act, 1988. The D
prosecution case was that in September, 1991, an
investment of Rs.65 crores came to be made by four
subscribers, who applied for purchase of CANCIGO units
floated by Canbank Mutual Fund ('CMF'), a fund created
by Canara Bank. The Andhra Bank and Andhra Bank E
Financial Services Limited ('ABFSL') were said to have
made an investment of Rs. 33 crores. Two other
transactions were made by the Sahara India and
Industrial Development Bank of India ('IDBI') worth Rs.32
crores. During the said period, A-1 was the Trustee and F
General Manager, A-2 was the Fund Manager and A-3 was
the approved broker of CMF. A-3 got CANCIGO units of
Rs.11 crores and Rs.22 crores purchased in the name of
Andhra Bank and ABFSL, respectively. Although the
consideration of Rs.33 crores was paid by A-3, the G
brokers stamp on the applications were affixed in order
to induce CMF to pay brokerage to him, though he was
not so appointed either by Andhra Bank or by ABFSL.
Similarly, though A-3 did not procure business from
Sahara India and IDBI, yet, he claimed and received the
H
134 SUPREME COURT REPORTS [2013) 7 S.C.R.
A brokerage in conspiracy with A-1 and A-2. The Special
Court held A-1 and A-3 guilty and convicted and
sentenced them of the offences charged. A-2 was
acquitted of all the charges. Aggrieved, A-1 and A-3 filed
the appeals.
8
It was contended for A-1 that the case against him
was based on the statement of PW-5 and on the
presumption that the endorsement on the letter dated
9.3.1992 of A-3 claiming brokerage (Ext. 17(i)), was in his
handwriting. It was submitted that PW-5 was not a
C competent witness u/s 47 of the Evidence Act, 1872 to
provide evidence regarding the handwriting of A-1. For
A-3, it was contended that he was entitled to brokerage.
Disposing of the appeals, the Court
D
HELD: 1.1 PW.5, who claimed to be conversant with
the hand-writing of A-1 because of some purported/
alleged correspondence, neither stated that he had seen
A-1 writing the endorsement nor was he himself the
E recipient of any correspondence made by A-1. Therefore,
it is clear that PW.5 had no prior knowledge of the
handwriting of A-1 or the signatures of the author, and
he was not a part of the chain of correspondence to
speak of its authors and, as such, PW.5 was not a
competent witness u/s 47 of the Evidence Act to provide
F evidence regarding the handwriting of A-1. Further, the
prosecution did not produce the alleged material on the
basis whereof PW.5 claimed familiarity with the
handwriting of the author, and, as such, the Special Court
was precluded from having any independent assessment.
G [para 33, 35, 36 and 40] [150-C; 151-8-C; 153-8-D]
Murari Lal v. State of Madhya Pradesh 1980 (2) SCR
249 = (1980) 1 ·SCC 704; Fakhruddin v. State of M.P., AIR
1967 SC 1326; and Mobarik Ali Ahmed v. State of Bombay.,
H (1958) SCR 328 - referred to.
B. RAGHUVIR ACHARYA v. CENTRAL BUREAU OF 135
INVESTIGATION
1.2 Besides, there is a blatant contradiction and A
discrepancy in the evidence of PW-4, who stated that the
endorsement [Ex.17(i)] was in the handwriting, AGM, and
PW.5, who attributes the endorsement to A-1 and,
therefore, it will not be desirable to rely on the evidence
of PW-5. Apart from the statement of PW.5, there is no B
material to prove the involvement of A-1. On a close
scrutiny of the entire material on record, this Court holds
that the Special Court was not correct in taking the view
that the prosecution has successfully established the
charges against A-1 and wrongly held him guilty for the c
same. He is acquitted of all the charges. [para 42-43 and
45] [153-F-G, H; 154-A-C; 155-A]
2.1 The appellant in Crl. A. No. 1226 of 2001 (A-3)
accepted that the amount of Rs.33 crores was subscribed
by him to procure CANCIGO units in the name of Andhra D
Bank and ABFSL. The 10 has stated in his evidence that
A-3 was not concerned with the generation of funds in
this case. Applications for allotment were made by
Andhra Bank and ABFSL but no entry regarding the
transactions were made in the books of Andhra Bank E
and ABFSL. Further, in September, 1992, after the scam
became public, the interest warrants were returned by
Andhra Bank and ABFSL disclaiming their investments.
In view of the evidence, the finding of the Special Court
that on 9.3.1992 A-3 dishonestly claimed brokerage from F
CMF by putting broker's stamp and by disguising his
investment of Rs.33 crores on Ext.19 and Ext.15, does not
call for any interference. [para 47 and 48] [155-C-D, E-F;
156-G-H; 157-B]
2.2 With regard to the rest of two transactions of G
Sahara India and IDBI,· the evidence on record shows
firstly, that on the applications of IDBI and Sahara India
there is no broker's stamp, and A-3 had wrongfully and
dishonestly claimed brokerage on 9.3.1992. The evidence
of the employees of IDBI and Sahara India, namely, PW.2, H
136 SUPREME COURT REPORTS [2013] 7 S.C.R.
A PW.6 and PW.7, shows that no broker was involved in the
transactions involving purchase of CANCIGO units of Rs.
32 crores face value, nor was A-3 authorised by IDBI and
Sahara India to collect brokerage from CMF between
September, 1991 and March, 1992. [para 48, 49 and 51]
B [157-B-C, E-F; 158-D]
2.3 Therefore, it is clear that A-3 was not the broker
with regard to four investments in question. The
prosecution has proved that A-3 is guilty of making a
C false representation to CMF with full knowledge and it
was so made to deceive CMF to part with an amount of
Rs.32.50 lakhs. [para 50-51] [158-B, D-E]
3.1 This Court, in Devender Pal Singh, has held that
acquittal of one accused does not raise doubt against
D conviction of another accused. Acquittal of the co-
accused on the ground of non-corroboration has no
application to the accused himself. [para ~5] [159-D-E]
Devender Pal Singh v. State of NCT of Delhi and Anr.
=
E 2002 (2) SCR 767 (2002) 5 SCC 234 - referred to.
3.2 In the instant case, the prosecution proved that
A-3 deceived CMF by making a false representation dated
9.3.1992 and dishonestly induced the official of CMF to
deliver Rs.32.50 lakhs in his favour and he dishonestly
F received the amount and thereby committed offence u/s
420 IPC. Accused No.3 was originally charged for the
offence of cheating, criminal breach of trust for receiving
stolen property/falsification of accounts u/s 120-B, s. 420/ ·
409, IPC apart from s. 411 and s.477-A IPC. This Court,
G therefore, alters his conviction from that of u/s 409 to
s.420 IPC and convicts him of offence u/s 420 IPC. He is
sentenced to undergo rigorous imprisonment for three
years. Further, as the prosecution successfully
established the ingredients of dishonestly receiving
H stolen property from Canara Bank i.e. Rs.32.50 lakhs
B. RAGHUVIR ACHARYA v. CENTRAL BUREAU OF 137
INVESTIGATION
against A-3, this Court upholds the order of his A
conviction and sentence passed by the Special Court ul
s 411, IPC. However, in view of the acquittal of A-1 and
A-2, the order of conviction of A-3 uls 477-A is set aside.
The judgment of the Special Judge is affirmed with
modification. [para 58-59] [164-B-F] B
Satyavir Singh Rathi v. State through CBI 2011 (6) SCR
=
138 (2011) 6 SCC 1; Sunil Kumar Paul vs. State of West
=
Bengal, 1964 SCR 70 AIR 1965 SC 706 - referred to.
S. Mohan v. Central Bureau of Investigation 2008 (9) C
=
. SCR 46 (2008) 7 SCC 1; and Brathi alias Sukhdev Singh
=
v. State of Punjab, 1990 (2) Suppl. SCR 503 (1991) 1 SCC
519 - cited.
Case Law Reference:
D
2008 (9) SCR 46 cited para 21
2002 (2) SCR 767 cited para 24
1990 (2) Suppl. SCR 503 referred to para 24
E
1980 (2) SCR 249 referred to para 34
AIR 1967 SC 1326 referred to para 37
(1958) SCR 328 referred to para 39
2011 (6) SCR 138 referred to para 56 F
1964 SCR 70 referred to para 57
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
No. 1001 of 2001.
G
From the Judgment and Order dated 06.09.2001 of the
Special Court Constituted under the Special Court (Trial of
Offences Relating to Transactions in Securities) Act, 1992 at
Bombay in Special Case No. 8 of 1994.
H
138 SUPREME COURT REPORTS [2013] 7 S.C.R.
A WITH
Crl. A. No. 1226 of 2001.
Bansuri Swaraj, Subhranshu Padi, Praneet Ranjan for the
Appellant.
B Sidharth Luthra, ASG, Vaibhav Ghaggar, Devina Sehgal,
Veera, Mohd. Faraz for the Respondent.
The Judgment of the Court was delivered by
SUDHANSU JYOTI MUKHOPADHAYA, J. 1. These two
C appeals under Section 10 of the Special Court (Trial of
Offences Relating to Transactions in Securities) Act, 1992
(hereinafter referred to as the 'Act, 1992') are preferred by
accused Nos.1 and 3 against the judgment and order dated
6th September, 2001 passed by the Special Court in Special
D Case No. 8 of 1994 in [RCS(BSC)/93-Bom], convicting and
sentencing them.
2. The case of the prosecution, briefly, is as follows:
In September, 1991, an investment of Rs.65 crores came
to be made by four subscribers, who applied for purchase of
E CAN.GIGO units floated by (Canbank Mutual Fund (hereinafter
referred to as 'CMF'), a fund created by Canara Bank. The
Andhra Bank and Andhra Bank Financial Services Limited
('ABFSL' for short) made an investment of Rs. 33 crores. Two
other transactions were made by the Sahara India and Industrial
F Development Bank of India ('IDBI' for short) worth Rs.32 crores.
3. During the said period, accused No.1-B.Raghuvir
Acharya was the Trustee and General Manager, accused No.2-
T .Ravi was the Fund Manager and accused No.3- Hiten P.
Dalal was the approved broker of CMF.
G
4. Further case of the prosecution is that accused No.3 got
Andhra Bank to subscribe for the CANCIGO units of Rs.11
crores and got ABFSL to subscribe for the CANCIGO units of
Rs.22 crores. The above CANCIGO units worth Rs.33 crores
H were purchased in the name of Andhra Bank and ABFSL
B. RAGHUVIR ACHARYA v. CENTRAL BUREAU OF 139
INVESTIGATION [SUDHANSU JYOTI MUKHOPADHAYA, J.]
though the consideration amount for purchase of such units was A·
paid by accused No.3. Accused No.3 got the CANCIGO units
purchased in the name of Andhra Bank and ABFSL so as to
ensure that he could claim brokerage falsely from CMF. Further,
the case of the prosecution is that although the consideration
of Rs.33 crores was paid by accused No.3, the brokers stamp B
on the applications were affixed in order to induce CMF to pay
brokerage to accused No.3. The said accused No.3 applied
for brokerage as a broker in the said transaction of Rs.33
crores when, in fact, he was not so appointed either by Andhra
Bank or by ABFSL. The investment of Rs.33 crores came from c
accused No.3 for which he was not entitled to claim brokerage
as he had not acted as a broker for the said transactions.
Similarly, in September, 1991, accused No.3 did not procure
business from Sahara India and IDBI and, yet, he claimed and
received the brokerage in conspiracy with accused No.1 and
0
accused No.2. It was alleged that accused No.3 never acted
as broker in any of the aforesaid transactions but claimed and
received the brokerage in conspiracy with the rest two accused.
5. All the three accused were charged for the offences of
criminal conspiracy, conspiracy to commit offences of cheating/ E
criminal breach of trust; receiving stolen property and
falsification of accounts under Section 120-B, Section 420/409,
Section 411, and Section 477-A of Indian Penal Code.
Accused No.1 and accused No.2 being public servants were
also charged for the offences of criminal misconduct under F
Section 13(1)(d) read with Section 13(2) of the Prevention of
Corruption Act, 1988. All together 12 charges were framed
jointly and severally vide Ex.3.
6. The prosecution had led evidence of 12 witnesses apart
from a number of Exhibits in order to prove their case. G
7. Learned Judge, Special Court, by the impugned
judgment and order dated 6th September, 2001 held the
accused No.1 and accused No.3 guilty and convicted and
sentenced them as under: H
140 SUPREME COURT REPORTS [2013) 7 S.C.R.
A Name of the Offences for which Sentenced
accused/appellant convicted awarded
Accused No.1 - B. Convicted for offence Rigorous imprison-
Raghuvir Acharya of criminal breach of ment for three years
B trust under Section and fine of ·Rs.
409 IPC 20,0001-, in default
rigorous imprison-
ment for a further
period of 6 months.
c Convicted for offence Rigorous imprison-
under Section 477-A ment for three years
IPC for falsification of and find of Rs.
accounts of CMF in 20,0001-, in default
respect of amount of rigorous imprison-
D Rs.32.50 lakhs paid ment for a further
to accused No.3. period of six months.
Convicted for offence Rigorous imprison-
of criminal miscon- ment for three years
duct under Section and fine of Rs.
E 13(1)(d) r/w Section 40,000/-, in default
13(2) of the rigorous imprison-
Prevention of ment for a further
Corruption Act. period of six months.
F Accused No.3 - Convicted for offence Rigorous imprison-
Hiten P. Dalal of criminal consp- ment for three years
iracy under Section and fine of Rs.
409 IPC. 20,0001-, in default
rigorous imprison-
ment for a further
G
period of 6 months.
Convicted for offence Rigorous imprison-
under Section 477-A ment for three years
IPC. and fine of Rs.
H
B. RAGHUVIR ACHARYA v. CENTRAL BUREAU OF 141
INVESTIGATION [SUDHANSU JYOTI MUKHOPADHAYA, J.)
20,000/-, in default A
rigorous imprison-
ment for a further
period of 6 months.
·~ Convicted for offence Rigorous imprison-
of criminal breach of ment for a period of 3 B
trust under Section years and fine of Rs.
411 IPC and for being 50,000/-, in default
in possession of rigorous imprison-
stolen property. ment for a further
period of six months. c
8. During the trial the Special Court raised 30 points and
determined most of them against accused No.1 - B. R. Acharya
and accused No.3 - Hiten P. Dalal. The points raised against
accused No.2 - T. Ravi, Fund Manager in CMF were answered
in his favour and he was acquitted.
0
9. As against accused No.1, learned Special Court held
that the prosecution proved beyond reasonable doubt that letter
dated 9th March, 1992 of accused No.3 claiming brokerage
was received by accused No.1; endorsement on the letter dated E
9th March, .1992 is in the handwriting of accused No.1 and that
by the said endorsement accused No.1 acting as the General
Manager instructed accused No.2 to pay brokerage of Rs.
32.50 lakhs to accused No.3. There was criminal conspiracy
between accused No.1 and accused No.3 to procure the F
brokerage which was not due and payable to accused No.3.
Accused No.1 being the General Manager and Trustee of CMF
dishonestly and fraudulently induced CMF to part with Rs.32.50
lakhs by authorizing payment of brokerage in favour of accused
No.3 knowing fully well that accused No.3 had not acted as a G
broker in the above said transactions. Accused No.1 acted
dishonestly and in breach of Exs.84 and 85 being minutes of
the Board Meetings prescribing the mode of payment of
brokerage, and thereby committed offence of criminal breach
of trust under Section 409 of IPC. There was a criminal
H
142 SUPREME COURT REPORTS [2013) 7 S.C.R. ..
A conspiracy in the matter of disbursement of brokerage of
Rs.32.50 lakhs between accused No.1 and accused No.3 and
thereby committed offence under Section 120-B of IPC read
with Sections 409, 411 and 477-A of IPC. Accused No.1
thereby committed the offence of criminal misconduct under
B Section 13(1 )(d) read with Section 13(2) of the Prevention of
Corruption Act, 1988. ,
10. Learned counsel for accused No.1 submitted that main
allegation against accused No.1 is based on presumption that
the endorsement on letter dated 9th March, 1992[Ext.17(i)) was
C in the handwriting of accused No.1. Such finding has been
given solely on the basis of the statement of PW-5 - Rajesh
Pitamberdas Mathija. Learned counsel pointed out that there
exists inherent contradiction between the evidence of PW-4 and
PW-5 and as PW-5 is not a competent witness under Section
D 47 of the Indian Evidence Act to provide evidence regarding
the handwriting of accused No.1, no reliance can be made on
the statement made· by him. PW.5 was not familiar with the
handwriting of accused No.1 in the course of his business as
he was neither from the same department (CANCIGO), nor he
E worked under accused No.1. Moreover, PW.5 had neither seen
accused No.1 writing the endorsement nor was PW.5 recipient
of any correspondence himself.
11. As against accused No.3, apart from the allegation of
F conspiracy between accused No.1 and him, learned Special
Court further held that the prosecution has proved beyond
reasonable doubt that accused No.3 was not the broker in two
transactions of Andhra Bank and ABFSL. It was also proved
that accused No.3 did not act as a broker in the transactions
of IDBI and Sahara India as well. In spite of this, accused No.3
G made false representation by writing letter dated 9th March,
1992 under his own signatures claiming brokerage on the
investments of Rs.65 crores knowing that he had not acted as
a broker and he was not entitled to brokerage. Accused No.3
thereby induced CMF to part with payment of Rs.32.50 lakhs
H and thereby he committed an offence punishable under Section
B. RAGHUVIR ACHARYA v. CENTRAL BUREAU OF 143
INVESTIGATION [SUDHANSU JYOTI MUKHOPADHAYA, J.)
411 of IPC apart from offence under Section 409 read with A
'· 120-B of IPC and 477-A of IPC.
12. Learned senior for accused No.3 contended that
accused No.3 was entitled to brokerage under Rule 36 of the
Scheme with respect to investment made by Andhra Bank and
ABFSL. It was further contended that he was also entitled for B
brokerage for the investment made by IDBI and Sahara India
as well. As per Rule 36 brokerage can be claimed for
'subscribing or procuring the investment in CANCIGO'. Accused
No.3 subscribed and procured the investment of Rs.65 crores .
including Rs.33 crores invested for Andhra Bank and ABFSL. C
13. He further submitted that none of the witnesses (PW.4,
5 & 11} positively stated that accused No.3 was not entitled to
brokerage on the investment made by Andhra Bank and
ABFSL. The Auditors have never raised any dispute as to o
payment of brokerage to accused No.3. The Trustees and the
Board have neither discussed nor have they repudiated the
payment of brokerage made to accused No.3. The Bank, which
was allegedly put to wrongful loss never filed a complaint against
accused No.3. The Board never addressed any letter to E
accused No.3 calling upon him to explain the payment of
brokerage made to him. In fact, the unequivocal stand of PW.11
is that the CMF did not raise queries with regard to the
payment of brokerage on Rs.65 crores to accused No.3
possibly because they may be aware accused No.3 had
procured business of Rs.65 crores. F
14. It was submitted that such methodology of investment
in terms of other i.e. on behalf of accused No.3 is well known
in law. The fact that Andhra Bank /ABFSL had invested the said
amounts on behalf of accused No.3 and the same was in the G
nature of a constructive trust has been accepted by this Court
in the case of Canbank Financial Services v. The Custodian
and Others, (2004} 8 sec 355. In the said case, this Court
has held the said arrangement to be legal. In that view of the
matter, the mere fact that Andhra Bank/ABFSL applied for H
144 SUPREME COURT REPORTS [2013) 7 S.C.R.
A CANCIGO units on behalf of accused No.3 does not show any
sort of deception. The CMF itself has found no illegality or
deception in the application by Andhra Bank/ABFSL. It is clear
from the fact that the CMF has not claimed refund of the
brokerage claimed by accused No.3 on the investment made
B by Andhra Bank /ABFSL.
15. It was also contended that none of the witnesses of the
CANCIGO (PW.4, 5 and 11) have come out with a positive
assertion that accused No.3 made a fraudulent and/or
· dishonest representation to CANCIGO which was acted upon
C by the institution/CMF to its detriment which caused wrongful
loss. There is no evidence ;;is to who acted on the
representation made by accused No.3.
16. It was further contended that the applications of Andhra
D Bank and ABFSL were duly stamped and Ex.19 clearly states
that the applications were on behalf of accused No.3. The
Investigating Officer (hereinafter referred to as '10') has .
admitted, in his corss-examination that i~ the absence of written
rule, circular or written instruction, payment of brokerage in
E good faith and in due course would not amount to an offence.
On the other hand it was also admitted by the 10 in his cross-
examination that it was not the case of the prosecution that any
sort of deception was practiced on the trustees and payment
was made by them. The 10, therefore, submitted that "there was
F no question of deception of the Trustees. They have, in fact,
authorized accused No.1 and 2 to deal with the funds and
pursuant t.o which Rs.32.50 Lakhs came to be paid".
17. In so far as IDBI and Sahara's investments are
concerned, it is contended on behalf of accused No.3 that the
G accused No.3 was entitled to brokerage because of the
tripartite arrangement between CMF, Citibank and accused
No.3. The tripartite agreement entailed accused No.3 and the
Citi Bank for procuring investment for CANCIGO. CMF would
lend 80% of the amount of subscription to Citi Bank@ 15%
H for one year and accused No.3 would get brokerage on the
B. RAGHUVIR ACHARYA v. CENTRAL BUREAU OF 145
INVESTIGATION [SUDHANSU JYOTI MUKHOPADHAYA, J.]
investment so procured. PW.11 admits that the scheme was A
in a financial crunch and it was only because of accused No.3
the money was infused in the financially starved scheme. The
material on record also establishes that investment by IDBI and
Sahara was at the instance of Citi Bank. The witnesses
examined on behalf of IDBI and the Board note Ex.84 clearly B
show that the said investment was brought about as a result of
the efforts on part of Citi Bank. The money so infused in
CANCIGO scheme was for the advantage of Citi Bank as 80%
of it was available to it at a nominal rate of interest for a year.
18. The witness PW.11 in his cross-examination had C
admitted that CMF as a matter of fact lent 80% of the amount
to Citi Bank for one year at the rate of 15% per year even when
rate of interest was fluctuating between 20% to 50%. The
amount given to Citi Bank over one year was 80% of entire
amount i.e 80% of Rs.65 crores which included Rs.33 crores D
by and on behalf of the appellant.
19. According to the learned counsel for accused No.3, the
said accused cannot be held guilty of cheating under Section
420 IPC. The prosecution case is that the letter Ex.17 was
placed before accused No.1, who in turn made his purported E
endorsement and thereby committed the offence. of cheating
in conspiracy with accused No.2 and accused No.3. It was
submitted that it was not the case of the prosecution that
accused No.1 or for that matter anyone else in the CANCIGO
mutual fund was cheated by accused No.3 by virtue of F
representation through Ex.17.
20. It is further contended that the Institution, CMF, is a
juristic entity, akin to a Company and it acts through its human
agencies. Therefore, for fastening criminal liability onto a G
Company, the criminal intent of the human agencies of the
Company is imperative. The logical consequence is that if a
Company/Institution is a 'victim' of cheating then somebody
acting for/on behalf of the institution must state how and/or in
what manner the institution has been cheated/put to wrongful
loss. H
146 SUPREME COURT REPORTS [2013] 7 S.C.R.
A 21. It was submitted that the transactions with regard to
Andhra Bank /ABFSL were considered by a three Judge Bench
of this Court in the case of S. Mohan v. Central Bureau of
Investigation, (2008) 7 SCC 1 wherein it was held that:
B "18. It is not disputed that CANCIGO units worth Rs.33
crores were purchased by Andhra Bank or Andhra Bank
Financial Services Limited by making use of the money
owned by the appellant Hiten P.Dalal. These two financial
institutions impliedly agreed to lend their name and
allowed the appellant Hiten P. Dalal to purchase
c CANCIGO units in their name. It is also important to note
that interest due on the CANCIGO units worth Rs.33 crores
received from CBMF by Andhra Bank and Andhra Bank
Financial Services Ltd. were credited to the account of the
appellant Hiten P. Dalal. Therefore, it is clear for all
D practical purposes that the CANCIGO units worth Rs.33
crores were purchased by the appellant Hiten P. Dalal and
he transferred these units to CANFINA and CBMF did not
raise any objection in respect of transfer of the CANCIGO
units by the appellant Hiten P. Dalal. If at all, it was for
E CBMF to raise any objection but they did not raise any
objection to the transfer of the CANCIGO units.
:xxx :xxx :xxx :xxx
F :xxx :xxx :xxx :xxx
21. So long as CANFINA has no grievance or complaint
against the appellant S. Mohan that he acted contrary to
their directions and accepted the CANCIGO units and paid
the money to the appellant Hiten P. Dalal, no offence is
G made out against the appellant S. Mohan either of criminal
breach of trust or conspiracy. In fact, PW.1 (Mr. Kini,
Executive Vice-President) has admitted that CANFINA
used to regularly deal in CANCIGO units, that neither the
Adult nor RBI made any remarks regarding transactions
H
B. RAGHUVIR ACHARYA v. CENTRAL BUREAU OF. 147 ·
INVESTIGATION [SUDHANSU JYOTI MUKHOPADHAYA, J.]
relating to CANCIGO units and all the transactions relating A
to CANCIGO units were in the ordinary course of
business. Neither Canara Bank nor CANFINA had
initiated any disciplinary proceedings against him. They
have also not disputed the genuineAess of the CANCIGO
units which,were got encashed by the appellant Hiten P. B
Dalal."
22. According to learned Senior Counsel for accused
No.3, the prosecution has failed to produce any evidence
documentary or testimonial to make out a case of cheating
against accused No.3 with respect to the Institution/CME There C
is no material to convict accused No.3 under any of the
charges.
23. Mr. Sidharth Luthra, learned Additional Solicitor
General, appearing on behalf of CBI submitted that accused
No.1 was aware of receipt of Rs.65 crores into the funds of 0
CANCIGO as stated by PW.11 and the payment of brokerage
showing the payment of Rs.32.50 lakhs to accused No.3 under
application dated 9th March, 1992, (Ex.17) though accused
No.3 was not entitled to receive brokerage. In fact, accused
No.1 had personally forwarded the applications of Sahara India E
to PW.4, as stated by PW.4 and he was the only trustee who
was personally looking into all affairs of the scheme and was
aware of the source of funds, yet accused No.1 by his
omissions led brokerage of Rs.32.50 lakhs be paid to accused
No.3 by l:tCCused No.2. The handwriting of accused No.1 F
[Ex.17(i)] has been proved by PW.5.
24. It is further submitted that the parties accept about the
fact that accused No.3 claimed and received brokerage of
Rs.32.50 lakhs from CMF on account of CANCIGO scheme
receiving an amount of Rs.65 crores as investment (Exts.61 G
and 62) and Section 313 Cr.P.C. statement of accused No.3
also indicates the same. The issue, however, is whether
accused No.3 was entitled to the brokerage amount of
Rs.32.50 lakhs and if not, then under what circumstances was
the payment made to accused No.3 by accused No.1 and H
148 SUPREME COURT REPORTS [2013] 7 S.C.R.
A accused No.2 on behalf of the bank. Referring to the impugned
judgment passed by the learned Judge, Special Court, it was
contended that the mere fact of acquittal of accused No.2 will
have no effect, in view of the decision of this Court in Devender
Pal Singh v. State of.NCT of Delhi and Anr., (2002) 5 SCC
B 234 and Brathi alias Sukhdev Singh v. State of Punjab, (1991)
1 sec 519; that the evidence against accused No.2 can be
relooked afresh by the Appellate Court and for seeing the role
of accused No.1 and accused No.3 and the acquittal of
accused No.2 would not prejudice the prosecution case.
C 25. It was further submitted that accused No.3 though never
acted as broker in the IDBI and Sahara India, he claimed
brokerage from CMF vide letter dated 9th March, 1992 in
respect of Andhra Bank, ABFSL, IDB! and Sahara India.
26. The prosecution has proved beyond reasonable doubt
D that accused No.3 made false representation by writing letter
dated 9th March, 1992, (Ex.17) under his own signatures. He
claimed brokerage for transactions for which he did not act as
a broker. In spite of knowing that he was not entitled to
brokerage to the said transactions, he induced CMF to part with
E payment of Rs.32.50 lakhs.
27. According to the counsel for the CBI, accused No.3
did not produce any witness in his defence to prove that he was
in fact the broker who brought about the purported tripartite
F agreement with Citi Bank. No official of Citi Bank was named,
nor examined in this regard, by accused No.3.
28. ~earned ASG on behalf of CBI submitted that1
assuming that this Court were to disagree with the Special Court
and hold that evidence against accused No.1 is lacking, this
G Court can convict accused No.3 for the charge of conspiracy
read with Section 409 IPC with unknown persons or with
accused No.2 if so established from the available evidence.
Alternatively, accused No.3 can be convicted under Section
420 IPC for which a substantive charge has been framed
H against accused No.1.
B. RAGHUVIR ACHARYA v, CENTRAL BUREAU OF 149
INVESTIGATION [SUDHANSU JYOTI MUKHOPADHAYA, J.]
29. On hearing learned counsel for the parties, several A
facts appear to be admitted on record. These facts are:
The Andhra Bank and ABFSL invested Rs. 33 cores and
purchased CANCIGO units floated by CMF. Accused No.3
accepted that the amount of Rs.33 crores was subscribed by B
him to procure CANCIGO units in the name of Andhra Bank
and ABFSL. Accused No.3 was an approved broker for CMF.
He claimed that he procured the investments of Rs.65 crores
including Rs.33 crores of Andhra Bank and ABFSL and Rs.32
crores invested by IDBI and Sahara India.
c
30. Accused No.3 made a representation by writing letter
dated 9th March, 1992 (Ex.17) under his own signatures
claiming brokerage on investment of Rs.65 crores. On the basis
of the said letter dated 9th March, 1992 (Ex.17) and an
endorsement made thereon "[Ex.17(i)] CMF had to part with o
payment of Rs.32.50 lakhs which was received by accused
No.3.
31. Learned Judge, Special Court by the impugned
judgment held that accused No.1 being the General Manager
and Trustee of CMF having dominion over the funds of CMF E
made false endorsem·ent on the letter dated 9th March, 1992
authorising payment of brokerage favouring accused No.3 by
getting the Fund Manager signed on the worksheet (Ex.16)
containing details regarding brokerage which was made to his
knowledge. On the basis of such endorsement made on the F
letter dated 9th March, 1992 [Ex.17(i)] the Special Court held
that accused No.1 acted dishonestly and committed breach of
Ex.84 and Ex.85. Thus it was held that accused No.1 thereby
committed offence of criminal breach of trust under Section 409
IPC. It was also held that accused No.1 and 3 were involved in G
criminal conspiracy regarding disbursement of brokerage of
Rs.32.50 lakhs and thereby they committed offence under
Section 120-8 IPC read with Section 409, 411and477-A IPC
and accused No.1 being a public servant committed the offence
of criminal misconduct by dishonestly providing undue H
150 SUPREME COURT REPORTS [2013] 7 S.C.R.
A pecuniary advantage to accused No.3 to which accused No.3
was not entitled and thereby committed an offence under
Section 13(1)(d) of the Prevention of Corruption Act, 1988.
32. The main allegation against accused No.1 is that he
made endorsement on letter dated 9th March, 1992 [Ex.17(i)]
8 in his hand-writing. The prosecution relied on the evidence of
PW.5 to prove the said allegation.
33. PW.5-Rajesh Pitamberdas Bhathija claimed to be
conversant with the hand-writing of accused No.1 because of
c some purported/alleged correspondence. The witness
contradicted himself whereby in an answer to a previous
question he asserted that there was no correspondence with
accused No.1. The witness-PW.5 failed to specify as to with
whom accused No.1 was in correspondence with. The said
0 witness employs an all encompassing generic term ''we had
entered into correspondence" which raised doubt. Importantly,
no such specific correspondence or material has been placed
by the prosecution in support of its bald allegation.
34. In Murari Lal v. State of Madhya Pradesh, (1980) 1
E SCC 704 this Court held that in scenarios where there is an
absence of expert opinion, a second screening in the form of
the court's assessment is essential to ascertain the authorship
of document.
"12 .... There may be cases where both sides call experts
F
and two voices of science are heard. There may be cases
where neither side calls an expert, being ill able to afford
him. In all such cases, it becomes the plain duty of the court
to compare the writings and come to its own conclusion.
The duty cannot be avoided by recourse to the statement
G that the court is no expert. Where there are expert opinions,
they will aid the court. Where there is none, the court will
have to seek guidance from some authoritative textbook
and the court's own experience and knowledge. But
discharge it must, its plain duty, with or without expert, with
H or without other evidence. We may mention that Shashi
8. RAGHUVIR ACHARYA v. CENTRAL BUREAU OF 151
INVESTIGATION [SUDHANSU JYOTI MUKHOPADHAYA, J.]
Kumar v. Subodh Kumar and Fakhruddin v. State of M.P. A
were cases where the Court itself compared the writings."
35. In the present case what the prosecution ought to have
produced is the alleged material on the basis whereof PW.5
claimed familiarity with the handwriting of the author. In absence
8
thereof, the Special Court was precluded from having any
independent assessment.
36. Another question that arises is whether PW.5 was a
competent witness under Section 47 of the Indian Evidence Act
to provide evidence regarding the handwriting of accused No.1. c
Section 47 of the Indian Evidence Act reads:
"Section 47 - Opinion as to handwriting, when relevant.-
When the Court has to form an opinion as to the person
by whom any document was written or signed, the opinion
of any person acquainted with the handwriting of the person D
by whom it is supposed to be written or signed that it was
or was not written or signed by that person, is a relevant
fact.
Explanation.-A person is said to be acquainted with the E
handwriting of another person when he has seen that
person write, or when he has received documents
purporting to be written by that person in answer to
documents written by himself or under his authority and
addressed to that person, or when, in the ordinary course F
of business, documents purporting to be written by that
person have been habitually submitted to him."
37. This Court in Fakhruddin v. State of M.P., AIR 1967
SC 1326 has held that the premise of the witness claiming
familiarity with the handwriting of the author must be tested. G
"11. Both under s.45 and s.4 7 the evidence is an opinion,
in the former by a scientific comparison and in the latter
on the basis of familiarity resulting from frequent
observations and experience. In either case the Court must
H
152 SUPREME COURT REPORTS [2013] 7 S.C.R.
A satisfy itself by such means as are open that the opinion
may be acted upon. One such means open to the Court
is to apply its own observation to the admitted or proved
writings and to compare them with the disputed one, not
to become an handwriting expert but to verify the premise
B of the expert in the one case and to appraise the value of
opinion in the other case."
38. The prosecution's failure to produce material before
the Special Judge on which PW.5 claimed familiarity with the
handwriting of accused No.1 is fatal. It can safely be stated that
C the prosecution has failed to establish the premise of witness
in order to allow the Special Court to appreciate the veracity
of assertions made by PW.5.
39. In Mobarik Ali Ahmed v. State of Bombay., (1958)
0 SCR 328 at page 342 this Court held as follows:
" .... It may be proof of the handwriting of the contents, or
of the signature, by one of the modes provided in ss.45
and 47 of the Indian Evidence Act. It may also be proved
by internal evidence afforded by the contents of the
E document. This last mode of proof by the contents may be
of considerable value where the disputed document
purports to be a link in a chain of correspondence, some
links in which are proved to the satisfaction of the Court.
In such a situation the person who is the recipient of the
F document, be it either a letter or a telegram, would be in
a reasonably good position both with reference to his prior ·
knowledge of the writing or the signature of the alleged
sender, limited though it may be, as also his knowledge
of the subject, matter of the chain of correspondence, to
G speak to its authorship. In an appropriate case the court
may also be in a position to judge whether the document
constitutes a genuine link in the chain of correspondence
and thus to determine its authorship."
40. The question for our consideration is whether there is
H any credibility in the evidence of PW.5. Admittedly, PW.5 was
8. RAGHUVIR ACHARYA v. CENTRAL BUREAU OF 153
INVESTIGATION [SUDHANSU JYOTI MUKHOPADHAYA, J.]
not posted in CANCIGO. He came from CANGILT for the A
purpose of auditing in April, 1992 i.e after the payment of
brokerage (paid on 10th March, 1992).Therefore, the question
arises whether PW.5 was familiar with the handwriting of
accused No.1 in the course of his business as he was neither
from CANCIGO nor was working under accused No.1. PW.5 B
had neither stated that he had seen accused No.1 writing the
endorsement nor he himself was the recipient of any
correspondence made by accused No.1. Therefore, it is clear
that PW.5 had no prior knowledge of the handwriting of
accused No.1 or the signatures of the author, and he was not c
a part of the chain of correspondence to speak of its authors.
It can be safely stated that PW.5 does not come within the ambit
of Section 47 of the Indian Evidence Act to provide evidence
regarding the handwriting of accused No.1.
41. The sole witness who could have claimed familiarity D
with the handwriting of accused No.1 was Suchaita Vaidhya
since there was a purported endorsement on the same letter
by her as deposed by PW.5. She was a member of the
secretarial staff and was a link in the chain of correspondence
in order to qualify under Section 47 of the Indian Evidence Act E
to depose as to the authorship of the endorsement. She was
a crucial witness; however, for the reasons best known to
prosecution they have chosen not to examine Suchaita Vaidya
though she was cited as a witness.
F
42. PW.4- Rajesh Chandrakant Pawar, was transferred in
June, 1991from CANGROWTH to CANCIGO. He was aware
of the scheme and worked under accused No.2. In his
deposition PW.4 stated that the endorsement [Ex.17(i)] was in
the handwriting Mr. Anil Narichania, AGM. For the reason best
known to the prosecution, they have not cited Mr. Anil G
Narichania as one of the witnesses. Though PW.4, in his
examination-in-chief specifically stated that the endorsement
[Ex.17(i)] was in the handwriting of Mr. Anil Narichania, he was
not declared hostile. We find a blatant contradiction and
discrepancy in the evidence of PW.5 who attributes the H
154 SUPREME COURT REPORTS [2013] 7 S.C.R.
A endorsement to accused No.1 and, therefore, it will not be
desirable to rely on his evidence.
43. Apart from the statement of PW.5, there is no material
to prove the involvement of accused No.1. As noted above,
PW.S's evidence is beset with many unsatisfactory features
B which renders it clearly unreliable and in any case inadequate
to establish the charges levelled against accused No.1. On a
close scrutiny of the entire material on record, we have no
hesitation to hold that the learned Special Court was not correct
in taking the view that the prosecution has successfully
C established the charges against accused No.1 and wrongly held
him guilty for the same.
44. The evidence on record shows that in September,
1991 CMF received, broadly, fO!Jr applications for purchase
D CANCIGO units from Andhra Bank, ABFSL, IDBI and Sahara
India to the tune of Rs.65 crores. At that time accused No.1
was the General Manager. He was also the Trustee and author
of Ex.84. He also took the decision as one of the Trustees in
the meeting of the Board on 1st November, 1990 to pay
E brokerage. The evidence also shows that the applications were
routed to PW.4 through the General Manager. PW.4 in his
evidence deposed that the applications of Sahara India were
routed through the General Manager but there is nothing on the
record to show that letter dated 9th March, 1992 (Ex.17) was
F received by accused No.1. The finding of the Special Judge
that the letter dated 9th March, 1992 was received by accused
No.1 is not based on evidence, therefore, such finding cannot
be upheld. In any case mere receiving of a letter cannot be a
ground to hold that the endorsement at Ex.17(i) was made by
accused No.1.
G
45. Considering the aforesaicl, we feel it expedient to
record that the Special Court fell into a manifest error in coming
to a conclusion with regard to accused No.1, as reflected in the
judgment under appeal, which cannot be sustained. The appeal
H (Criminal Appeal No.1001 of 2001), therefore, succeeds and
B. RAGHUVIR ACHARYA v. CENTRAL BUREAU OF 155
INVESTIGATION [SUDHANSU JYOTI MUKHOPADHAYA, J.]
is allowed and the appellant - B.R. Acharya is acquitted of all A
the charges, his bail bonds shall stand discharged.
46. It is the case of prosecution that for various acts done
by accused No.3, he used accused No.1, the Trustee and
General Manager of CMF to commit criminal breach of trust in
respect of funds of CMF. In this context, it was submitted that B
under the general charge of criminal conspiracy, all those acts
also constitute cheating and criminal breach of trust.
47. The evidence of PW.11 shows that accused No.3 was
the broker for CMF. He was also a member of the Stock c
Exchange. He had an account in Andhra Bank. In the case of
Andhra Bank and ABFSL, Rs.33, crores invested by them in
CMF belonged to accused No.3. This is also evidenced by the
two cheques (Ex.29 and Ex.30). It was the accused No.3 who
induced Andhra Bank and ABFSL to apply for allotment of
0
CANCIGO units as apparent from the applications (Ex.19 and
Ex.15) which had been signed by the two officers-Dhankumar
and Kalyanaraman, who were accused in some other matter.
This position is not even disputed by accused No.3. The reason
is not known as to why accused No.3 got Andhra Bank and
ABFSL to apply. The 10 has rightly pointed out in his evidence, E
repeatedly, that accused No.3 was not concerned with the
generation of funds in this case. Applications for allotment were
made by Andhra Bank and ABFSL but no entry regarding the
transactions were made in the books of Andhra Bank and
ABFSL. Therefore, it is clear that accused No.3, to whom Rs.33 F
crores belongs got Andhra Bank and ABFSL to apply for the
units but kept the said matter hidden by not recording the same.
In September, 1991, accused No.3.affixed the brokers stamp
on the applications (Ex.19 and Ex.15). Knowing fully well that
the investors were not Andhra Bank and ABFSL, he had got G
officers of Andhra Bank and ABFSL to sign the application
forms. Both these officers are accused in other cases. By
affixing the rubber stamp of the broker, accused No.3 falsely
represented to CMF that he had brought subscriptions from
Andhra Bank and ABFSL as a broker and, accordingly, claimed H
156 SUPREME COURT REPORTS [2013) 7 S.C.R.
.A brokerage. Even before September, 1991, he wrote a letter .
(Ex.18) to Andhra Bank to the effect that units worth Rs.11
crores would be given to Andhra Bank and ABFSL. They were
offered as security for ready forward transaction with ABFSL
as evident from the statement of PW.11. From the evidence of
B PW.11 it is clear that the entire record of CMF shows that
pursuant to the applications (Ex.19 and Ex.15) made by Andhra
Bank and ABFSL, accounts were opened in the names of
Andhra Bank and ABFSL as subscribers. The names of
Andhra Bank and ABFSL found place in the Investment
C Register [Ex.38(i) and Ex.39(i}] and also Investors Fund Ledger
[Ex.A3(35)(2) and Ex.A3(37)(1}]. Thereby CMF had recognized
only Andhra Bank and ABFSL as their investors and the units
could be redeemed only by Andhra Bank and ABFSL. The
brokers stamp was affixed on them by accused No.3 only with
a view to Claim brokerage. Although he was aware that the total
D amount of Rs.33 crores was invested by him. Even the half
yearly interest which was paid on the investments of Rs.33
crores on 8th January, 1992 by CMF was only in the names of
the subscribers- Andhra Bank and ABFSL. The evidence further
shows that after receiving the income distribution cheques,
E Andhra Bank and ABFSL transferred the amount to the account
of accused No.3 pursuant to his letter (Ex.12). This was on 9th
January, 1992 and, yet, accused No.3 made an application vide
Ex.17 claiming brokerage from CMF as a broker and not as
an investor.- Accused No.3 never objected to allotment of units
F in favour of Andhra Bank and ABFSL. In his statement under
Section 313 of the Criminal Procedure Code stated that he
was aware of CMF simultaneously deploying 80% of Rs.65
crores at 15% per annum in Citi Bank. Yet, accused No.3
concealed the true nature of the transactions of Rs.33 crores
G in the names of Andhra Bank and ABFSL though it was known
to him on 9th March, 1992 that the half yearly interest came to
him not from CMF but from Andhra Bank and ABFSL. In view
of the aforesaid evidence iflearned Judge, Special Court held
that on 9th March, 1992 accused No.3 dishonestly claimed
H brokerage from CMF by putting brokers stamp and by
B. RAGHUVIR ACHARYA v. CENTRAL BUREAU OF 157
INVESTIGATION [SUDHANSU JYOTI MUKHOPADHAYA, J.]
disguising his investment of Rs.33 crores on Ex.19 and Ex.15, A,,
no interference is called for against such finding.
48. In September, 1992, after the scam became public,
the interest warrants were returned by Andhra Bank and ABFSL
disclaiming their investments. With regard to the rest of two B
transactions of Sahara India and IDBI, the evidence on record
shows firstly, that on applications of IDBI and Sahara India there
is no brokers stamp. Despite there being no brokers stamp on
these applications accused No.3 had wrongfully and dishonestly
claimed brokerage on 9th March, 1992.
c
49. It was the case of accused No.3 that there was prior
agreement between him, CMF and Citi Bank under which Citi
Bank got the units purchased in the names of Sahara India and
IDBI. What is relevant is allotment of units in favour of Andhra
Bank, ABFSI,:, ·sahara India or IDBI. It is to be noticed that the o
ownership of the units is with Andhra Bank, ABFSL, Sahara
India or IDBI. It is evident from CANCIGO Certificates that at
the expiry of one year, Sahara India and IDBI got CANCIGO
units encashed and they have received the entire money in their
accounts on the basis that they were the owners of the units.
E
The evidence of PW.2, PW.6 and PW.7 on behalf of IDBI and
Sahara India, shows that no broker was involved in the
transactions involving purchase of CANCIGO units of Rs.32
crores face value. The case of the prosecution is very simple
that out of four applications for allotment of units, two contained
rubber stamp and rest of two applications of Sahara India and
F
IDBI did not bear rubber stamp. The case of the prosecution
is that brokerage was dishonestly claimed by accused No.3
with full knowledge that he has not acted as a broker.
50. In cross-examination, the defence examined PW.11 G
extensively in support of their case that brokerage was payable
to accused No.3 even if there was no brokers stamp affixed
on the applications in cases where the officer paying the
brokerage is satisfied that the business was procured by the
broker. It was contended on behalf of accused No.3 that H
158 SUPREME COURT REPORTS (2013) 7 S.C.R.
A brokerage was payable even on self investments. However,
PW.11 in his cross-examination has deposed that even in
cases where the brokers stamp does not find place on the
applications for allotment of units, the broker was required to
forward the applications for allotment under his covering letter
B to CMF. In this case, the defence has not produced any such
covering letter in support of their case. Similarly, they have not
produced any correspondence with CMF claiming brokerage
on that basis. Therefore, it is clear that accused No.3 was not
the broker with regard to four investments in question.
c 51. PW.2, PW.6 and PW. 7, employees of IDBI and Sahara
India were extensively cross-examined by the defence and, yet,
no case was made by the defence from any of the three
witnesses regarding any correspondence between accused
No.3 and IDBI and Sahara India authorizing him to collect
D brokerage from CMF between September, 1991 and March,
1992. Therefore, the prosecution has proved that accused No.3
is guilty of making a false representation to CMF with full
knowledge and it was so made to deceive CMF to part with
an amount of Rs.32.50 lakhs.
E
52. On 9th March, 1992 accused No.3 knew that Andhra
Bank and ABFSL were not the actual investors. He also knew
that brokerage was payable only if the business was procured
for CMF as he was aware of the decision of Board. He was
F the approved broker of CMF and had bought the units in the
names of Andhra Bank and ABFSL, which is admitted. He
knew that that as the subscriber of units, he was not entitled to
brokerage yet, he claimed brokerage as a broker vide Ex.17.
Therefore, it is clear that both the transactions of Andhra Bank
and ABFSL got disguised. Their true nature was suppressed.
G Though no brokerage was payable on such transactions, Ex.17
was written by accused No.3 with dishonest intention. Without
Ex.17, accused No.3 could not have succeeded in obtaining
from CMF an amount of Rs.32.50 lakhs.
H
B. RAGHUVIR ACHARYA v. CENTRAL BUREAU OF 159
INVESTIGATION [SUDHANSU JYOTI MUKHOPADHAYA, J.]
53. Now the question arises as to what will be the effect A
of acquittal of co-accused Nos.1 and 2 on the case of accused
No.3. According to the appellant if co-accused No.1 is
acquitted and in view of acquittal of co-accused No.2 no charge
under Sections 409, 411 and 477-A substantiate against
accused No.3 and he cannot be punished with the aid of 8
Section 120-8 IPC.
54. Per contra, according to the learned counsel for the
CBI, even if this Court disagrees with ttie Special Court and
holds that the that evidence against accused No.1 is lacking,
this Court can convict accused No.3 for the charges of C
conspiracy read with Section 409 IPC with unknown person or
accused No.2 if so established from the available evidence.
Alternatively, accused No.3 can be convicted under Section
420 IPC for which a substantive charge had been framed
against him. D
55. This Court in Devender Pal Singh (supra}, held that
acquittal of one accused does not raise doubt against
conviction of another accused person. A plea that acquittal of
the co-accused has rendered the prosecution version brittle has
no substance. Acquittal of co-accused on the ground of non- E
corroboration has no application to the accused himself.
56. The question arises whether accused No.3 can be
convicted for the alternative charge under Section 420 of the
IPC for which a substantive charge had been framed against F
him. In this connection we may refer to decision of this Court
in Satyavir Singh Rathi v. State through CBI, (2011} 6 SCC
1, wherein this Court held:
"68. We find the situation herein to be quite different. We
must notice that the charges had indeed been framed in G
the alternative and for cognate offences having similar
ingredients as to the main allegation of murder. Section
386 Cr.P.C. refers to the power of the appellate court and
the provision insofar relevant for our purpose is sub-clause
(b}(ii} which empowers the appellate court to alter the H
160 SUPREME COURT REPORTS [2013] .7 S.C.R.
A finding while maintaining the sentence. It is significant that
Section 120-B IPC is an offence and positive evidence on
this score has to be produced for a successful prosecution
whereas Section 34 does not constitute an offence and is
only a rule of evidence and inferences on the evidence can
B be drawn, as held by this Court in Lachhman Singh v.
State, AIR 1952 SC 167. We are, therefore, of the opinion
that the question of deemed acquittal insuch a case where
the substantive charge remains the same and a charge
under Sections 302/120-B and an alternative charge under
Sections 302/34 IPC had been framed, there was nothing
c remiss in the High Court in modifying the conviction to one
under Sections 302/307/34 IPC. It is also self-evident that
the accused were aware of all the circumstances against
them. We must, therefore, reject Mr. Sharan's argument
with regard to the deemed acquittal in the circumstances
D of the case."
57. In Sunil Kumar Paul vs. State of West Bengal, AIR
1965 SC 706, the accused was charged for the offence under
Section 409 IPC. In the said case the Court held that the
E accused could have also been charged for the offence under
Section 420 IPC and held:
"(15). It is urged for the appellant that the provisions of s.
236 Cr.P.C. would apply only to those cases where there
be no doubt about the facts which can be proved and a
F doubt arises as to which of the several offences had been
committed on the proved facts. Sections 236 and 237
read: ·
"236. If a single act or series of acts is of such a
nature that it is doubtful which of several offences the facts
G
which can be proved will constitute, the accused may be
charged with having committed all or any of such offences,
and any number of such charges may be tried at once; or
he may be charged in the alternative with having
committed some one of the said offences.
H
B. RAGHUVIR ACHARYA v. CENTRAL BUREAU OF 161
INVESTIGATION [SUDHANSU JYOTI MUKHOPADHAYA, J.]
Illustrations A
(a) A is accused of an act which may amount to theft,
or receiving stolen property, or criminal breach of trust or
cheating. He may be charged with theft, receiving stolen
property, criminal breach of trust and cheating, or he may 8
be charged with having committed theft, or receiving
stolen property, or criminal breach of trust or cheating.
xxxxxx
237. If, in the case mentioned in section 236, the accused C
is charged with one offence, and it appears in evidence
that he committed a different offence for which he might
have been charged under the provisions of that section,
he may be convicted of the offence which he is shown to
have committed, although he was not charged with it. o
Illustration
A is charged with theft. It appears that he committed
the offence of criminal breach of trust, or that of receiving
stolen goods. He may be convicted of criminal breach of E
trust or of receiving stolen goods (as the case may be)
though he was not charged with such offence."
The framing of a charge under s. 236 is, in the nature of
things, earlier than the stage when it can be said what facts
F
have been proved, a stage which is reached when the
court delivers its judgment. The power of the Court to frame
various charges contemplated bys. 236 Cr.P.C. therefore
arises when it cannot be said with any definiteness, either
by the prosecutor or by the Court, that such and such facts G
would be proved. The Court has at the time of framing the
charges, therefore to consider what different offences could
be made out on the basis of the allegations made by the
prosecution in the complaint or in the charge submitted by
the investigating agency or by the allegations made by the
H
162 SUPREME COURT REPORTS [2013] 7 S.C.R.
A various prosecution witnesses examined prior to the
framing of the charge. All such possible offences could be
charged in view of the provisions of s. 236 Cr.P.C. as it
can be reasonably said that it was doubtful as to which of
the offences the facts which could be ultimately proved
B would constitute. The facts which must have been alleged
prior to the stage of the framing of the charge in the present
case must have been what had been stated in the charge-
sheet submitted by the Investigating Officer, 24-Parganas,
which is printed at p. 3 of the appeal record. This charge-
c sheet narrates in the column meant for the name of
offences and circumstances connected with it :
"that on the 6th October 1956 Sunil Kumar Paul, a
Public servant in the employment of the office the Sub-
Divisional Health Officer, Barrackpore i.e., (clerk)
D dishonestly drew Rs. 1,763-6-0 excluding Postal Life
Insurance deduction of Rs. 5-10-0 from the State Bank of
India, Barrackpore Branch by submitting a false duplicate
Estt. Pay Bill under head 39 for the month of September
1956 for the office of the said S.D.H.O., Barrackpore. The
E money drawn was not credited to the office of the Sub-
Divisional Health Officer, Barrackpore."
It is practically on these facts. that the conviction of the
appellant for an offence under s. 420 l.P.C. has been
F founded. It follows that the Special Court could therefore
have framed a charge under s. 420 1.P.C. at the relevant
time if it had been of the opinion that it was doubtful
whether these facts constitute an offence under s. 409
l.P.C. as stated in the charge-sheet or an offence under
s. 420 l.P.C.
G
(16). When a charge under s. 420 l.P.C. could have
been framed by the trial Court by virtue of s. 236 Cr.P.C.
that Court or the appellate Court can, in law, convict the
appellant of this offence instead of an offence under s. 409
H l.P.C. if it be of the view that the offence of cheating had
B. RAGHUVIR ACHARYA v. CENTRAL BUREAU OF 163
INVESTIGATION [SUDHANSU JYOTI MUKHOPADHAYA, J.]
been established. This would be in accordance with the A
provisions of s. 237 Cr.P.C.
(17) It is then urged for the appellant that under the
proviso to s. 4 of the Act, the Special Court can try any
other offence only when the accused is specifically charge 8
with that offence. The language of the proviso does not
lead to such a conclusion. It provides for the trial of the
accused for any other offence provided the accused could
be charged with that offence at the same trial under the
provisions of the Code of Criminal Procedure. The proviso C
does not say that the charge must be framed, though of
course, if the trial Court itself tries the accused for a certain
offence, it will ordinarily frame a charge. The proviso
empowers a Court to try the accused for that offence and
has nothing to do with the power of the trial court or of the
appellate Court to record a conviction for any other offence D
when an accused is being tried with respect to an offence
mentioned in the Schedule. The Court's power to take
recourse to the provisions which empower .it to record a
conviction for an offence not actuality charged, depends
on other provisions of the Code and the Act. E
(24) The ingredients of two offences must be different from
one another and it is therefore not necessary to consider
whether the ingredients of the two offences are in any way
related. The Court has to see, for the purpose of the F
proviso, whether the accused could be charged with any
offence other than the one referred to in the allotment order,
in view ofthe provisions of the Code. There is nothing in
the proviso which could lead to the construction that any
limitations other than those laid down by the provisions of G
the Code of Criminal Procedure were to affect the nature
of the offence which could be tried by the Special Court.
(25.) We are therefore of opinion that the Special Court
could try the appellant for the offence under s. 420 l.P.C.
H
164 SUPREME COURT REPORTS [2013] 7 S.C.R.
A and that therefore the High Court was right in altering his
conviction from that under s. 409 to s. 420 l.P.C."
58. In this case the prosecution proved that the accused
No.3 deceived CMF by making a false representation dated
9th March, 1992 and dishonestly induced the official of CMF
8
to deliver Rs.32.50 lakhs in his favour and he dishonestly
received the amount and thereby committed offence under
Section 420 IPC. Accused No.3 was originally charged for the
offence of cheating, criminal breach of trust for receiving stolen
C property/falsification of accounts under Section 120-8, Section
420/409 of the IPC apart from Section 411 and Section 477-
A of the IPC. We, therefore, alter his conviction from that of
under Section 409 to Section 420 of the IPC and convict him
for the offence under Section 420 of the IPC and sentence him
to undergo rigorous imprisonment for three years.
D
59. Further, as the prosecution successfully established the
ingredients of theft for receiving stolen property from Canara
Bank i.e. Rs.32.50 lakhs against accused No.3, we uphold the
order of his conviction and sentenced passed by the Special
E Court under Section 411 of the IPC.
However, in view of the acquittal of accused Nos.1 and 2,
the order of conviction of accused No.3 under Section 477-A
is set aside. The judgment dated 6th September, 2001 passed
F by the learned Special Judge is affirmed with modification as
mentioned above. The appeal (Criminal Appeal No.1226 of
2001) filed by the appellant-Hiten P. Dalal is dismissed. The
bail bonds of the appellant - Hiten P. Dalal, if he is on bail, shall
stand cancelled and he is directed to be taken into custody to
serve out the remainder of the sentence.
G
R.P. Appeals disposed of.
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