1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO.288 OF 2006 S.K.Sheenappa Rai .. Appellant Versus The State of Maharashtra (Through C.B.I. Mumbai) .. Respondent WITH CRIMINAL APPEAL NO.291 OF 2006 Mr.M.Devadas Shetty .. Appellant Versus Central Bureau of Investigation B.S. & F.C. (Mumbai) .. Respondent WITH CRIMINAL APPEAL NO.428 OF 2006 Nandkumar Babulal Soni .. Appellant Versus The State of Maharashtra (Through C.B.I. Mumbai) .. Respondent 2 WITH CRIMINAL APPEAL NO.638 OF 2006 Central Bureau of Investigation .. Appellant Versus S.K.Sheenappa Rai & Ors. .. Respondents WITH CRIMINAL APPEAL NO.363 OF 2009 Hiralal Babulal Soni .. Appellant Versus S.K.Sheenappa Rai & Ors. .. Respondents APPEARANCES: Mr.Raja Thakare with Mr.Chimalkar for the appellant in Criminal Appeal No.638 of 2006 and for respondent-CBI in all other appeals. Smt.Manjula Rao for the appellant in Criminal Appeal No.288 of 2006. Mr.Prakash L. Shetty for the appellant in Criminal Appeal No. 291 of 2006. Smt.Manjula Rao i/by Mr.Anoop Pandey and Mrs.Pradnya Chavan for the appellant in Criminal Appeal No.428 of 2006. Mr.B.H.Vyas for the appellant in Criminal Appeal No.363 of 2007. Mr.Anoop Pandey for respondent no.3 in Criminal Appeal No.363 of 2007. Mr.Y.S.Shinde, A.P.P for the State in all Appeals. 3 CORAM : A.S. OKA, J. DATE ON WHICH JUDGMENT IS RESERVED : 3rd April 2009. DATE ON WHICH JUDGMENT IS PRONOUNCED : 16th July 2009. JUDGMENT: . These appeals can be disposed of by a common judgment as the challenge in these appeals is to the same judgment and order dated 06th, 07th, 08th and 09th March 2006 passed by the learned Special Judge (C.B.I.), Greater Bombay in Special Case No.36 of 2002. By the said impugned judgment and order the accused no.1 (S.K.Sheenappa Rai) and accused no.2 (Devdas Shetty) were convicted for the offences under section 120-B, section 467 read with section 120-B, section 409 read with section 120-B, section 471 read with section 120-B, section 477A read with section 120-B of the Indian Penal Code, section 403 read with section 120-B of the Indian Penal Code and section 13(1)(d) read with section 13(2) of the Prevention of Corruption Act, 1988. The accused no.1 was also held guilty of 4 the offence punishable under section 403 and section 465 read with section 120-B of the Indian Penal Code. The accused no.2 was also held guilty of the offence punishable under section 403 of the Indian Penal Code. The accused no.3 was held guilty of the offence punishable under section 120-B of the Indian Penal Code as well as section 411 and section 411 read with section 120-B of the Indian Penal Code. Various substantive sentences were imposed by the learned Special Judge. The muddemal articles consisting of 205 bars of gold were ordered to be returned to the accused no.3. 2] Criminal Appeal No.288 of 2006 is preferred by the accused no.1 for challenging the order of conviction and sentence. Appeal No.291 of 2006 has been preferred by the accused no.2 for challenging the conviction and sentence. Criminal Appeal No.428 of 2006 has been preferred by the accused no.3 for challenging the conviction and sentence. Criminal Appeal No.638 of 2006 has been preferred by the prosecution (the C.B.I.) for challenging that part of the impugned order by which the gold forming part of the muddemal was ordered to be returned to the accused no.3. Criminal 5 Appeal No.463 of 2009 has been preferred by one Harilal Babulal Soni (brother of the accused no.3) for challenging the order regarding return of gold forming part of muddemal to the accused no.3. FACTS OF THE CASE: 3] This is a case of fraud to the tune of Rs. 6,70,000,00/- played on Vijaya Bank at its Nasik branch. The allegation of the prosecution is of perpetration of fraud through fake telegraphic transfers and subsequent withdrawals of the amounts credited through fake telegraphic transfers. As in case of other banks, Vijaya Bank offers facility of remittance by telegraphic transfers. Whenever a customer of the bank wants to remit funds urgently from one place to another, he could approach a branch and deposit cash amount with the said branch with a request to the said branch to send the amount to a particular branch of the same bank for crediting the said amount to a particular account with the transferee branch. For effecting telegraphic transfers, it is not necessary that customer who intends to remit the amount should have an account with the remitting branch. The mode of effecting transfer is that the remitting branch is required to 6 prepare the advice of transfer in a particular code on the basis of code-books supplied to each branch. The instruction of transfer of funds is issued by the remitting branch by sending a telegram through Post and Telegraph Department to the concerned branch. After receiving the telegram, the concerned branch de-codes the message in the telegram and the amount transferred is credited in the account of the concerned account holder. After doing so, the receiving branch sends Bank Adjustment Requisition Form (BARF) to the remitting branch. A receipt of the BARF, the remitting branch by way of acknowledgment sends credit advice to the recipient bank. 4] The case of the prosecution is that on 30th January 1997 one person approached Nasik branch of the Vijaya Bank with an account opening form, a letter of introduction, specimen signature card and other documents required for opening of an account. He claimed to be a representative of a proprietary concern by the name M/s.Globe International. The name of the proprietor as disclosed in those documents is Surender Kantilal Jain. As the proprietor himself did not visit the Nasik branch alongwith the account opening form and other documents, the accused no.1 who was at the relevant time the Branch Manager 7 of the Nasik branch did not immediately open the account on the basis of the said documents on the same date. The letter of introduction was purportedly given by Mr.Surendra Bhandari, Assistant General Manager, Vijaya Bank, Fort branch, Mumbai. The accused no.1 allegedly made an effort to verify the truthfulness of the documents tendered by the representative of the M/s. Globe International by writing a letter to Mr.Surendra Bhandari. By writing a letter to the Fort branch the accused no.1 made a query about the variance in specimen signature and the number appearing on the specimen signature. According to the accused no.1, he received a letter from Mr.Surendra Bhandari who was at the relevant time the Assistant General Manager of Fort branch of Vijaya Bank at Mumbai confirming letter of introduction given by him to one Mr.Surender Jain, proprietor of M/s.Globe International. According to the prosecution case, the accused no.1 dispensed with the mandatory requirement of personal presence of the account holder. He did not verify the specimen signature on the rare side of the photograph affixed on the forms. The local address of M/s. Globe International was not mentioned on the forms and even the name of the person who was going to operate the account was not mentioned. Notwithstanding these irregularities, the accused no.1 permitted 8 opening of an account. The case of the prosecution is that the documents, namely, account opening form, letter of introduction, specimen signature card etc., were bogus. According to the prosecution case the proprietor Mr.Surender Jain and the firm M/s.Globe International were fictitious. The current account no. 940 was opened with the Nasik branch on 06th February 1997 by accepting demand draft of Rs.1,000/-. 5] The case of the prosecution is that till 25th April 1997, there was no transaction relating to the said account. On 25th April 1997 the Nasik branch received telegraphic transfer (hereinafter referred to as T.T) dated 23rd April 1997 by a telegram. The T.T was of Rs.10,00,000/- which was transmitted by Ansari Road branch of Vijaya Bank at Delhi. The said T.T was decoded by accused no.1 by using the code books and credit of Rs. 10,00,000/- was given in the account of M/s.Globe International with Nasik branch. The case of the prosecution is that from 25th April 1997 till 28th July 1997, total 11 T.Ts were received by Nasik branch of Vijaya Bank. All the said T.Ts were transmitted from Delhi issued by Ansari Road branch of Vijaya Bank at Delhi. The total amount covered by the said 11 T.Ts was Rs.2.70 crores. On 06th August 1997 Nasik branch received the T.T 9 dated 05th August 1997 in the sum of Rs.4 crores and the said amount was credited to account no.940 of M/s.Globe International with the Nasik branch on 06th August 1997. The details of the said T.Ts such as T.T number, central office transaction (COT) number read thus: SR.NO DATE OF T.T. DATE OF RECEIPT T.T.R. NO. COT NO. AMOUNT (IN LACS) 1 23.4.97 25.4.97 528/97 1/97 Rs.10 lacs 2 24.4.97 25.4.97 532/97 2/97 Rs.15 lacs 3 26.4.97 29.4.97 550/97 3/97 Rs.40 lacs 4 28.4.97 30.4.97 556/97 4/97 Rs.40 lacs 5 29.4.97 30.4.97 560/97 5/97 Rs.40 lacs 6 21.6.97 24.6.97 721/97 6/97 Rs.10 lacs 7 23.6.97 24.6.97 723/97 7/97 Rs.15 lacs 8 22.7.97 23.7.97 742/97 8/97 Rs.28 lacs 9 Not mentioned 24.7.97 Not mentioned Not mentioned Rs.22 lacs 10 24.7.97 25.7.97 747/97 10/97 Rs.25 lacs 11 26.7.97 28.7.97 755/97 11/97 Rs.25 lacs 12 05.08.97 06.08.97 768/97 12/97 Rs.400 lacs 10 6] The case of the prosecution is that the amount of Rs.6 crores 70 lacs was credited in said account no.940 through T.Ts remitted by Ansari Road branch of Vijaya Bank at Delhi. It appears that BARFs were allegedly sent in respect of all 12 T.Ts. Credit advices for all T.Ts except the last T.T were allegedly received by Nasik branch. The case of the prosecution is that simultaneously with the receipt of the amount by T.Ts, the amounts were being withdrawn from the account of M/s. Globe International. There were certain cash withdrawals made across the counter at Nasik branch to the tune of Rs.98 lacs. There were total 49 demand drafts issued by utilising the amount credited to the said current account No.940. The applications were made for issuing 30 demand drafts of huge amounts and demand drafts in the total sum of Rs.2,59,78,504/- were issued. The said demand drafts were honoured by Fort branch of Vijaya Bank and Tamil Nadu Mercentile Bank, Mandavi branch, Mumbai. The demand drafts were purchased in the names of M/s.Chenaji Narsinghji and M/s.V.B.Jewellers. On the basis of 19 other applications, 19 demand drafts in the total amount of Rs.1,61,44,000/- were issued by the Nasik branch in the names of M/s.Chenaji Narsinghji and M/s.V.P.Jewellers. A total amount of Rs.47,378/- was debited to the said account on account of bank charges for issuing drafts. 11 7] On 12th August 1997 it was learned that the Ansari Road branch of Vijaya Bank at Delhi had not issued the said T.Ts. On the very day the accused no.1 informed the Fort branch of Vijaya Bank about the fraud and the payment of 19 demand drafts of Rs. 1,61,44,000/- drawn on the said account no.940 was stopped by him. By cash and by demand drafts, a total sum of Rs. 3,57,78,504/- was withdrawn apart from bank charges referred to above out of the total amount of Rs.6 crores 70 lacs transferred by virtue of fake T.Ts . As stated earlier, the demand drafts worth Rs. 1,61,44,000/- were not encashed and a balance of Rs. 1,53,27,178/- remained in the said account no.940 with the Nasik branch of the Vijaya Bank. 8] One Mr.J.Shetty, Deputy General Manager of Zonal Office of Vijaya Bank lodged a complaint on 09th September 1997 initially against the accused nos.1 and 2 and some other officers of Vijaya Bank and unknown persons. Initially, investigation was carried out by Mr.Dinesh B. Joshi (P.W.No.44). He seized T.Ts, demand drafts, BARFs, cheques and registers from Vijaya Bank and recorded statements of some of the witnesses. He found that one Mukesh Shah or Mayur Desai or Ashok Agarwal or Surender Jain were 12 also involved in the offence. Shri Joshi filed charge-sheet against the accused nos.1 and 2. Thereafter, further investigation was carried out under section 173(8) of the Code of Criminal Procedure. During the course of the investigation C.B.I found that most of the demand drafts issued in favour of M/s. Chenaji Narsinghji against the purchase of gold bars and the delivery of the gold bars was given to accused no.3 or through him to Mayur Desai @ Mukesh Shah. According to the C.B.I, a link was found between absconding accused Mukesh Shah and accused no.3. The shop of the accused no.3 was searched on 01st June 2001 and during the search, 205 gold bars and other documents were seized. Mr.Sunil Singh (P.W.No.45) took over investigation and he recorded statements of other witnesses. He filed supplementary charge-sheet against accused nos.1, 2 and 3 and absconding accused no.4 (Mr.Mayur Shah @ Mukesh Shah @ M.P.Jain @ Mukesh Jain). However, accused no.4 could not be traced and therefore, his trial was separated. 9] The charge was framed against the accused nos.1, 2 and 3 to which they pleaded as not guilty. Broadly, the defence of the accused nos.1 and 2 is that they have been falsely implicated in the case. Their case is that while allowing opening of the account, 13 de-coding of T.T’s, issuing demand drafts they have strictly acted as per the standard banking procedures and they have not done any illegality. Their case is that a departmental inquiry was conducted against them by the concerned authority of Vijaya Bank and they have been exonerated in the departmental inquiry. Their case is that they have been made scapegoats by leaving the real culprits. The defence of the accused no.3 is that he has not communicated in any manner with M/s.Chenaji Narsinghji or with Mr.Mukesh Shah @ Mayur Desai. His case is that 205 gold bars seized by the C.B.I are his personal property and he has lawfully acquired the said gold bars. EVIDENCE OF THE PROSECUTION WITNESSES: 10] The prosecution examined total 46 witnesses. The accused no.3 examined one Ambalal Soni as a defence witness. The learned counsel appearing for the accused no.1 while arguing the appeal has divided the witnesses into following categories: I. The witnesses from Nasik branch of Vijaya Bank; II. The witnesses from Ansari Road branch of Vijaya Bank, New Delhi; 14 III. The witnesses from Fort branch of Vijaya Bank at Mumbai; IV. The witnesses dealing with opening of account of M/s.Globe International; V. The witnesses relating to accusation against accused no.3; VI.Three investigating officers; and VII.The defence witness of D.W.No.1. 11] As indicated earlier, the telegrams constituting T.Ts have originated from Delhi. The account opening form of M/s. Globe International and the demand draft in the sum of Rs.1,000/- accompanying therewith originated from Fort branch of Vijaya Bank at Mumbai. The account was opened with Nasik branch of the Vijaya Bank. The amounts forming part of the T.Ts were credited to the account of M/s.Globe International with the Nasik branch. The amounts were siphoned from the Nasik branch either by cash withdrawals or by issuing demand drafts. Apart from this there is another transaction forming part of the offence i.e the purchase/acquisition of gold bars by accused no.3 by utilizing the amount siphoned from the account of M/s.Globe International with the Nasik branch. 12] With a view to appreciate the evidence, it will be necessary 15 to firstly deal with the evidence of the witnesses pertaining to Nasik branch of the Vijaya Bank. P.W.No.2 Prakash G. Kshirsagar was working as the Assistant Manager at Nasik branch from 16th June 2000. He is mainly examined to explain the procedure of telegraphic transfer as he was looking after telegraphic transfers, mail transfers etc. He disclosed before the Court that the meaning of telegraphic transfer is that making a transfer by sending message by means of a telegram. He stated that telegraphic transfers are made only inter-branch. The remitter of the amount need not have account in the concerned bank but beneficiary should have an account with the concerned branch to whom transfer is sought to be made. He stated that a remitter has to give an application for telegraphic transfer to a branch. The process of making telegraphic transfer is initiated only on receipt of the amount for which telegraphic transfer is to be made. Not only that the said amount is to be paid to the concerned branch, but the remitter has to pay the amount of commission and postal charges. After accepting the amount and application, a coded message is prepared for telegraphic transfer giving different codes for sending and receiving branch, for the name of the payee and for T.T number. There are seven components of the coded message. The codes are also mentioned for the date, month and amount. The 16 code-books/code charts have been prepared by Head Office for the purposes of coding and de-coding of T.Ts. The code-book always remains with the two top-most officers of a branch who are the joint key-holders of the safe. In a branch where there is only one officer, then such book remains with the joint key-holders, namely, the officer and the concerned clerk holding joint keys of the safe. He stated that during the relevant year i.e 1997 there was one Manager and two officers at Nasik branch. He stated that a register was for T.T variable number and another register of T.T issued is maintained in every branch. He stated that central office transaction (COT) register is also maintained. He stated that in the telegraphic transfer telegram, the above mentioned seven codes are tallied. As and when the receiving branch receives such T.T, it is first ascertained whether it bears postal impression having a date. It has also seen from which place the T.T has come. It is ascertained whether the contents of T.T are complete. An entry is made in the inward register of such telegram. Thereafter de-coding is done by the officer entrusted with the work with the help of the code-book provided by the Head Office. The variable number of the T.T of the issuing branch is tallied with the T.T variable register which is maintained in the branch. Thereafter, the code is broken by taking issuing branch code and the receiving branch code, first 17 two alphabets of the payee’s name, date, month, T.T variable number and amount. After issuing branch code, Central Office Transaction (COT) number and date are verified and thereafter the code given by the issuing branch is tallied. If the code tallies, a remark is written on the telegram by the concerned officer “Code tallied” and the said remark is initialed by the said officer only after credit of the amount mentioned in the T.T is given in the account of the payee. After giving credit, a BARF is send to the branch which has dispatched the T.T and a debit entry is made to the account of the said branch and credit entries are made in the account of the beneficiary. For both these entries, different vouchers are prepared by the clerk and passed and signed by the concerned officer. In the case of T.Ts, at the time of dispatching the T.T, the sending bank also prepares the credit advice giving all the details as to the T.Ts and sends it to the receiving branch by post. The said credit advice reaches the receiving branch normally within a period of a week. If the credit advice is not received within reasonable time after receiving T.T, the concerned officer of the receiving branch has to ascertain the authenticity of the T.Ts by communicating with the sending branch either by telephone or a letter. The Head Office is kept apprised by sending as well as by the receiving branch as regards T.Ts by sending weekly statements. 18 13] After explaining the procedure, the said witness stated that he handed over five T.Ts to investigating officer Mr.Sushil Prasad Singh (P.W.No.45). He stated that during the year 1991 to 1993, he had an occasion to work with accused no.2 who was the branch manager of Koliwada branch at Hubli in Karnataka. He identified signatures of the accused no.2 on five telegrams. He quoted the contents of one such telegram. He stated that his statement was recorded by C.B.I on 05th June 2001. 14] As regards de-coding of T.Ts, in the cross-examination he stated that COT number is not necessary for de-coding a T.T and COT number is written in the register only after receiving credit advice from the sending branch. He stated that BARF account is debited to the sending branch while giving credit to the account of the beneficiary on the basis of T.T. A BARF is sent to the sending branch mentioning the particulars and COT number and date of the telegram. He stated that after the credit advice is received from remitting branch, the receiving branch cannot suspect the genuineness of the T.T. He admitted that he had not verified or inspected any registers or documents concerning T.Ts of the Nasik branch for the relevant period. During his cross-examination by the 19 counsel for accused no.2, he clarified that in the examination-in- chief he had erroneously told that date and month have separate codes. He clarified that for date and month there is only one code. While referring to the five T.Ts at Exhibit 38 on which he had identified the hand-writing of accused no.2, he stated that in de- coding the said five telegrams there was no irregularity done by the de-coding officer. He stated that in absence of in-charge of the branch, the senior most officer has an access to the code book. He stated that for giving credit of T.Ts amount to the beneficiary, it is not necessary to wait for credit advice. 15] P.W.No.3 is Mr.Edmond Pinto. He was posted as an Officer at Nasik branch since June 1996 and he continued with the said branch till 1998. He stated that he was an officer working in the said branch. He stated that at that time the accused no.1 was the Branch Manager and the accused no.2 was the Assistant Manager. He stated that at the relevant time Smt.Adelin Suwarnlatha (P.W.No.42) and Shri.B.Madayya Shetty (P.W.No.41) were two other officers at Nasik branch. Mr. Sunil Chavan, Mr.Ramdas Bagul (P.W.No.36), Mr.Devdas Alwa and Mrs.Jayashree Wagh (P.W.No.38) were the clerks. He stated that he was conversant with the signatures of the said officers and 20 clerks. As far as opening of the account is concerned, he stated that for opening a current account the party has to fill a prescribed account opening form containing the constitution of business. He stated that he has to fill in specimen signature card and liability certificate. Such a party has to be introduced by an account holder of the same bank having a current account. He stated that Branch Manager had authority to open the current account and in his absence, the Assistant Bank Manager has an authority to open such account. The said account can be introduced by any well- known person known to the bank and known to the Branch Manager. He stated that whenever the bank receives a current account opening form having introduction given by a Branch Manager of another bank, then, a letter is written to the said branch for verifying such introduction. Every branch is provided with a specimen signature book containing signatures of executives and authorised signatories of the bank. He stated that signatures are numbered. 16] The said witness was shown the account opening form dated 27th January 1997 of the current account No.940. He stated that on 30th January 1997 one person approached him and told him in Hindi that he wanted to open an current account. The said person 21 had in his possession such account opening form alongwith other set of papers. He stated that he was not aware of the name of that person and he may not be in a position to