LexS. MOHAN versus CENTRAL BUREAU OF INVESTIGATION
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[2008) 9 S.C.R. 46 A S. MOHAN v CENTRAL BUREAU OF INVESTIGATION (Criminal Appeal No. 906 of 1998) B MAY 16, 2008 [K.G. BALAKRISHNAN, CJI, R.V. RAVEENDRAN Af)ID J.M. PANCHAL, JJ.] ·"- Penal Code, 1860- ss.409, 411, 409 rlw 120B and 411 c rlw 120B - Criminal conspiracy, criminal breach of trust by public servant, banker, merchant or agent and dishonest re- ceipt of stolen property - Allegations of - Canara Bank Mu- tua/ Fund (CBMF), a Trust created by Canara Bank- Canbank Financial Services Limited (CANFINA), a subsidiary company D of Canara Bank - CBMF issued units known as "CANC/GO" ~ Accused nos, 1 to 3 were top officials in CANFINA -Accused --\ No. 4 was share broker - Accused nos. 1 to 3 allegedly en~ tered into a transaction with accused no. 4, to purchase GANG/GO Units of the face value of Rs. 33 crores standing in E the name of Andhra Bank and Andhra Bank Financial Ser- vices Ltd. though there was no letter of authority for such sale from either Andhra Bank or Andhra Bank Financial Services Ltd. - Allegation that the transactions were entered into· by accused nos.1 to 3 on behalf of CANFINA knowing fully well that CANCIGO Units were not transferable and accused no. 4 F was not competent to deal with them - Special Court acquit- }- ted the first two accused, but convicted accused nos.3 and 4- On appeal by accused nos.3 and 4, held: In facts and circum- stances of case, ingredient of criminal breach of trust not made out against accused no. 3 or 4 - Prosecution also could not G prove any conspiracy- GANG/GO Units worth Rs.33 crores were purchased by making use of money owned by accused no.4, they were not stolen property in his hands - Accused r no.3 was Asstt. Vice-President in CANFINA - It is hard to be- lieve that he on his own decided to accept GANG/GO Units H 46 S. MOHAN v. CENTRAL BUREAU OF 47 INVESTIGATION worth Rs.33 crores without any instructions from higher au- A thorities - Accused nos.3 and 4 accordingly acquitted of the ·1 offences charged - Prevention of Corruption Act, 1988 - ss. 13(1)(c) and 13(1)(d) rlw 13(2) - Special Court (Trial of Of- fences relating to Transactions in Securities) Act, 1992- s. 10. Canara Bank Mutual Fund (CBMF) is a Trust created B by the Canara Bank while Canbank Financial Services Limited (CANFINA) is a subsidiary company of Canara Bank. CBMF under a sch~me prepared by it, issued units known by the name "CANCIGO" in the shape of credit sheets which provided a fixed rate of interest. The scheme c was operated under the Rules framed by CBMF. Accused No. 1 was the Executive Vice President and Chief Dealer, accused No. 2 was the Asst. Vice President and accused No. 3 was the Asstt. Vice President and D Dealer, of CANFINA at the relevant point of time. Accused No. 4 was a Share and Securities Broker. According to the prosecution, accused Nos.1 to 3 entered into a transaction with accused no.4, to purchase the CANCIGO Units of the face value of Rs. 33 crores E standing in the name of Andhra Bank and Andhra Bank Financial Services Limited though there was no letter of authority or consent for such sale from either Andhra Bank or Andhra Bank Financial Services Limited. The prosecu~ 1 tion alleged that these transactions were entered into by F accused 1 to 3 on behalf of CANFINA knowing fully well that the CANCIGO Units were not transferable and ac- cused no.4 was not competent to deal with them. The prosecution alleged that by this method accused no.4 got his debt to the tune of Rs.25 crores due to CAN FINA wiped G out and got a sum of about Rs.8 crores from CANFINA, even though CANCIGO Units were not transferable and could not be transferred to the name of CANFINA. The Special Court (Trial of Offences Relating to Trans- actions in Securities) ·acquitted the first two accused, but H 48 SUPREME COURT REPORTS [2008] 9 S. C.R. A held accused no.3 guilty under s.409 IPC and si;.13(1)(c) and 13(1) (d) r/w s.13(2) of the Prevention of Corruption Act. He was also found guilty of the offence punishable under s.411 r/w s.120B IPC. Accused no.4 was convicted under s.409 r/w s.120B IPC and also under s.411 IPC. s Hence the present appeals by accused No. 3 and 4 under s.10 of the Special Court (Trial of Offences R!elating to Transactions in Securities) Act, 1992. c Allowing the appeals, the Court HELD:1.1. CANCIGO Units worth Rs.33 crores were purchased by Andhra Bank or Andhra Bank Financial Services Lim
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