Bank officers committed criminal breach of trust and conspiracy by facilitating unauthorized transactions benefiting a broker, violating established banking practices.

1. These five appeals, arising out of a judgment and order dated 19/10/2004 passed by the Special Court constituted under the Special Court (Trial and Offences related to Securities) Act, 1992 (for short 'the Act'), were taken up for hearing together and are being disposed of by this common judgment.

2. BACKGROUND FACTS
Andhra Bank is a Scheduled Nationalised Bank. It has a branch at Mumbai known as the Fort Branch. Out of five appellants before us, Accused Nos. 1, 2, 4 and 5 were officers of the said Branch of the Andhra Bank. Accused No. 1 was the Manager of Funds, Accused Nos. 2 and 4 were Junior Management Officers of the Funds Department, and Accused No. 5 was the Assistant Manager, Debit Section. Accused No. 3, Hiten Dalal, was at all relevant times and still is a broker and, inter alia, deals in securities.

3. Accused Nos. 1, 2, 4 and 5, in their capacity as public servants, were working in the Fort Branch of Andhra Bank.

4. They were charged with abuse of their position and acting dishonestly and fraudulently, as a result whereof undue pecuniary advantage is said to have been procured by Accused No. 3 by way of crediting bankers' cheques without them having been presented or sent for clearance and, thus, cheating Andhra Bank and dishonestly permitting substantial withdrawals from his current account by the Accused No. 3. They are said to have prepared false documents and used them as genuine ones, with the intention to defraud and falsify entries in the books of accounts of the Bank. They are also charged with entering into the criminal conspiracy, as they, having been entrusted with the property of the Andhra Bank, prepared credit and debit vouchers in favour of Accused No. 3 authorizing credit of amounts of various cheques to the account of Accused No. 3 without having actually received any bankers' cheques.

5. Indisputably, the Reserve Bank of India appointed a Committee known as the Jankiraman Committee whence the alleged security scam came to light. It submitted a report, a portion of which was marked as Ext. 334 before the learned Special Judge wherein certain irregularities in the functions of Andhra Bank were pointed out, the relevant portion whereof reads as under:
'(6) It was observed on a scrutiny of the current account of H.P. Dalal that the branch has accommodated the broker by affording credit of some of the banker's cheques received from other banks to his account one working day prior to the day on which the instruments were sent for clearing, with a view to avoiding overdrawings in the account on these days. The funds so credited have been utilized by the broker either for purchase of securities or making some other payments. Instances noticed are given in the annexure. It will be seen therefrom that in the case of item No. (i) the branch had afforded the credit even before the actual date of the instrument.'  (Emphasis added)

6. It was also pointed out how Accused No. 3 had received financial benefit out of the said transactions.

7. FIRST INFORMATION REPORT
Relying on, or on the basis of, the Jankiraman Committee Report, a First Information Report was lodged by PW 25 Sitaram Premaram Paladia on or about 02/06/1993 (Ext. 333), initially against the accused Nos. 1, 2 and 3.

8. No further preliminary inquiry was conducted before lodging the said First Information Report. Ten instances of grant of credit to Accused No. 3 were detailed therein, in respect of the cheques received or those yet to be received from four banks, namely Bank of Karad, ANZ Grindlays Bank, Canara Bank and Standard Chartered Bank (hereinafter referred to as 'the drawer banks'), without presenting or sending them for clearance.

9. PW 26 Mr. Waydande while making investigation into the said offence, allegedly found involvement of Accused Nos. 4 and 5 as well, who had prepared debit and credit vouchers, and made entries in the transfer scroll, BCR Registers, Cheque Clearing and Receiving Registers, etc. They were thereafter made accused