JUDGMENT

1. Accused Nos. 1 and 2 (A1 & A2) are the General Manager and Fund Manager of Canara Bank Mutual Fund Mumbai (CBMF Mumbai) which is a wholly owned subsidiary company of Canara Bank, a nationalized bank. Accused Nos. 5,6 and 7 (A5, A6 & A7) are the Executive Vice President and Assistant Vice Presidents of one “Canbank Financial Services Ltd., Bangalore (Canfina, Bangalore), which is also a wholly owned subsidiary of Canara Bank. Accused Nos. 3 and 4 (A3 & A4)are independent brokers.

2. The essential prosecution case is of conspiracy between the accused to siphon off and misappropriate funds of CBMF, Mumbai and Canfina under their dominion, commit criminal breach of trust, and fabricate documents to camouflage their transaction by falsifying accounts, preparing false documents, committing forgery and using as genuine such forged documents by recording false transactions in the books of accounts of CBMF and Canfina. Consequently these charges are under Section 120B, r.w. Sections 409, 468, 471 and 477A of the IPC.

3. A1 has been charged not only with the above criminal conspiracy but separately for criminal breach of trust in dishonestly entering into the transaction for purchase of 2.1L shares for Rs.6.93 Crores against his authority to transact up to 25 lakhs and dishonestly disposing off a part of this property being 10000 out of 2.1 L shares purchased. A1 is also charged with falsifying the accounts of CBMF, Mumbai showing an ostensible call-money transaction which CBMF, Mumbai which A1 had no authority to enter into. A1 is also charged with dishonestly and fraudulently receiving and misappropriating 10000 shares of Hindalco. A2 is charged with abetting A1 in preparing false documents more specially a bank voucher, inter bank advice (IBA) and call-money deal slip. A3 and A4 are charged with aiding and abetting A1 and A2 in misappropriating the property of CBMF, Mumbai and aiding and abetting them in committing criminal breach of trust of the property of CBMF, Mumbai and for receiving stolen property from A1 and A2. Consequently these charges are under Section 409 and 411 respectively of the IPC. A1 and A2 are charged with preparing false documents which are false to their knowledge and using them as genuine. A5, A6 and A7 are charged with preparing false documents at their end in Canfina, Bangalore. Consequently these charges are under Sections 468, 471 and 477A of the IPC.

4. A case against A1, A2, A5, A6 and A7, who are public servants, is further of having received pecuniary advantage upon the aforesaid illegal means and acts of themselves. Consequently these charges are under Sections 13(1)(c ), 13(1)(d) r.w. Section 13(2) of the Prevention of Corruption Act, 1988.

5. The prosecution case can be summarised thus:

(a) A1, and A2 under instructions of A1, the General Manager of CBMF, Mumbai entered into a transaction of purchase of 2.1 L shares of Hindustan Aliminium Company Limited (Hindalco) from a broker's firm C. Meckertech Calcutta (CMac). They executed various documents for the transaction. They showed the transaction camouflaged as a call money transaction. A1 was authorized to enter into a transaction for purchase and sale of shares and securities on behalf of CBMF, Mumbai to the extent of Rs.25 lakhs. The transaction that he entered into was of a far larger value.

(b) CBMF, Mumbai could have entered into call-money transactions only for borrowing money under the Reserve Bank of India (RBI) guidelines. Consequently A1 and A2 do not have authority to enter into the call-money transactions also for lending purpose. The transaction shown to have been entered into by them for call-money is for lending purpose. The transaction is of 6.93 Crores. The amount is paid by cheque signed by A1. The documents in respect of the transaction are executed by A1 and A2.

(c) 2.1 L shares are delivered by CMac to the office of the coun