Financial Frauds Judgment

8/11/2019 Financial Frauds Judgment

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Reportable

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 2048 OF 2014(Arising o! o" S.L.P. (Cr#.$ No. %4%1 o" 2011$

S!&!' o" M&&r&s!r& Trog C)I * A++'##&n!

,'rss

,i-r& An&n!r&i Dosi &n/ O!'rs *R's+on/'n!s

J U D G M E N T

Dipak Misra, J.

T' 'n!ri+o/ iss' !&! s!ri-ing# ''rg's

o&n/ing !' 3/ii onsi'n' !o +on/'r &n/ ogi!&!'

i! r'&son&5#' &r/6s!i- o" +r'ision "or onsi/'r&!ion o

"&r & s+'rior or! so#/ +ro''/ !o &ns' !' "&!

sor' in '7'ris' o" i!s in'r'n! 3ris/i!ion 5's!o'/ +on i!

n/'r S'!ion 482 o" !' Co/' o" Criin Pro'/r' or n/'r

Ar!i#' 22% o" !' Cons!i!!ion o" In/i& !o &s !' riin

+ro''/ing so#'# on !' gron/ !&! !' +&r!i's &9' 'n!'r'/

in!o & s'!!#''n! &n/ !'r'"or' !' on!in&n' o" !'


2/29

2

riin +ro''/ing o#/ 5' &n '7'ris' in "!i#i! or !'

s5s!&n!i &s' o" 3s!i' &rr&n!s s &s'n! !o

&-' !' +&r!i's "r'' "ro nn''ss&r #i!ig&!ion i! !'

&ss'/ o!!o o" no! #o&/ing !' ss!' i! n"ri!"#

+ros'!ion o" ors' i! 'r!&in ri/'rs on' o" i &s

r'g&r/s !' &s's +'r!&ining !o o'ri #i!ig&!ions

&++r'i&!ion o" +r'/oin&n! n&!r' o" i9i# +ro+'nsi! in9o#9'/

in !' #is or soi i+&! in !' 5&-/ro+ o" !' "&!s o" !'

&s'. T' +ri&r 's!ion !&! ' &9' +os'/ &s &

s5s!&n!i s++#''n!&r iss': i.'. so#/ !' or!s !o!#

r'&in o5#i9ios !o !' +ris o" "is +ri! &n/ o## 5rs

&si/' !' o/s o+'r&n/i &/roi!# &/o+!'/ &s #'g'/ 5

!' +ros'!ion on !' +&r! o" in/s!ri 'n!r'+r'n'rs or !'

5orro'rs on !' "on/&!ion !&! on' &s 5''n +&i/ 5&-

!o !' +5#i "in&ni ins!i!!ions. ;' !in- no! 's+'i#

r'g&r/ 5'ing &/ !o !' o5!&ining "&! &!ri7 in !' &s' &!

&n/.2. Pr's'n!# !o !' "&! '7+osi!ion. On !' 5&sis o" &

ri!!'n o+#&in! o" i'" 9igi#&n' o""i'r )&n- o" )&ro/& &

&s' &s r'gis!'r'/ &g&ins! !' r's+on/'n!s on %.1.200% &n/


3/29

3

&"!'r o+#'!ion o" in9's!ig&!ion & r'+or! &s "i#'/ 5'"or' !'

S+'i Cor! C)I &s's M5&i i! & +r&'r !o "or&r/

!' &rg's''! !o !' #'&rn'/ M&gis!r&!' o &s o+'!'n!

!o !&-' ogni


4/29

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'5'rs n&'# !' UTI )&n- &n/ !' F'/'r )&n-. T'

r''s!'/ !' s&i/ )&n- !o s&n!ion 1B o" !' !o! ;or-ing

C&+i! "&i#i! s&n!ion'/ 5 !' onsor!i o" )&n-s so

!&! !&! &on! o#/ 5' !r&ns"'rr'/ !o !' UTI 5&n-

&n/ F'/'r )&n- !o !&-' o9'r !' '7is!ing #i&5i#i!i's i! !'

s&i/ !o 5&n-s. I! &s r'9''/ /ring in9's!ig&!ion !&! !'

&on! o" !' o+&n i! !' onsor!i o" 5&n-s &s '##

&s !' "in&n' ins!i!!ions &s ig# irr'g#&r &n/ in !'

s&i/ on/i!ion !' &s'/ +'rsons &++ro&'/ !' )&n- "or

s&n!ion o" #o&n. In !' &++#i&!ion !o !' )&n- !' &s'/

+'rsons on''/ !' "&! r'#&!ing !o !' /'s o!s!&n/ing

&g&ins! !'. T'r'&"!'r 'n &s-'/ "or !' o!s!&n/ing

+osi!ion i! !' '7is!ing onsor!i '5'rs !' &s'/

+'rsons i##"## &n/ i! !' riin in!'n! !o is#'&/ !'

)&n- o" )&ro/& "rnis'/ rong s!&!''n!s &5o! !'

o!s!&n/ing +osi!ion 5 gi9ing onsi/'r&5# #'ss'r &on! &s

o!s!&n/ing !&n !' &!.4. As "r!'r #'g'/ !' &on! o" #o&n sog! &s

s&n!ion'/ on 24.01.200= 5 on' Mr. .. Agg&r 'n'r

M&n&g'r &n/ oni&!'/ !o !' 5r&n. As +'r !' !'rs


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&n/ on/i!ions o" !' s&i/ T'r Lo&n !' +ri&r s'ri! "or

!' s&' &s !' "irs! &rg' !o 5' r'&!'/ on !' "i7'/ &ss'!s

o" !' o+&n r&n-ing pari passu i! !' '7is!ing T'r

L'n/ing Ins!i!!ions. T' +ri&r &rg' "or !' &s r'/i!

&n/ or-ing &+i! /'&n/ #o&n &s !' +o!'&!ion o"

rr'n! &ss'!s s &s s!o-s s!o-s in !r&/' r& &!'ris

&n/ 5oo- /'5!s &n/ !&! &+&r! on' o" !' i+or!&n! !'rs

&n/ on/i!ions &s !&! !' CC ;CDL &n/ T'r Lo&n

&on!s 'r' !o 5' /ir'!# +&i/ !o !' o+&ns &on!

i! !' UTI )&n- &n/ F'/'r )&n- so &s !o !&-' o9'r !'

#i&5i#i!i's &s '## &s !' s'ri!i's or!g&g'/ i! !' !o

5&n-s. D's+i!' !' s&i/ si!&!ion !' )&n- on 2>.01.200=

in!i&!'/ !' s&n!ion !o ATCOM !' o+&n in 's!ion.

I! is "r!'r /'ons!r&5#' "ro !' &rg's''! !&! A61 &n/

A62 i! !' in!'n!ion !o 's&+' +'rson #i&5i#i!i's &/' A6=

&n/ on' Mr. Cir&g &n/i /ir'!ors in ATCOM &n/ go! #

!' #o&n /o'n!s in#/ing !' D'&n/ Proissor No!'

(DPN$ sign'/ 5 !' s&i/ +'rsons. T' !'rs &n/ on/i!ions

o" !' s&n!ion &s !&! !' 'n!ir' ;or-ing C&+i! o"

[email protected] #&-s (Rs.114.00 #&-s Rs.4%.00 #&-s$ &n/ !'


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T'r Lo&n o" Rs.=%0.00 #&-s 'r' !o 5' /ir'!# +&i/ !o !'

UTI )&n- &n/ F'/'r )&n-. Cons''n!# !' T'r Lo&n

&s r'#'&s'/ &n/ +&i/ &s +'r !' s&n!ion !'rs &n/

on/i!ions. As #'g'/ A61 in/'/ !' )&n- !o r'#'&s' !'

s&n!ion'/ ;or-ing C&+i! Fn/s !o !' Crr'n! Aon!

&n/ "ro !' s&i/ &on! on' &s /ison's!# /i9'r!'/ !o

is on &on!s i! S)I &n/ D'n& )&n- !o 5ring /on !'

o!s!&n/ing #i&5i#i!i's in !os' &on!s. As +'r !'

C&rg's''! Rs.114.00 #&-s o" C&s Cr'/i! (!' Fn/ )&s'/

+or!ion o" ;or-ing C&+i!$ &n/ Rs.4%.00 #&-s (!' D'&n/

)&s'/ +or!ion o" ;or-ing C&+i!$ 'r' r'#'&s'/ in!o !'

Crr'n! Aon! on [email protected]=.200=. Ts !' !o! "n/s

r'#'&s'/ in!o !' Crr'n! Aon! &s Rs.%0.00 #&-s o! o"

i A61 /ison's!# !r&ns"'rr'/ Rs.=2.00 #&-s !o S)I &n/

&5o! Rs.200.00 #&-s !o D'n& )&n- i &on!'/ !o

/i9'rsion o" on'rn'/ )&n-s "n/s /ison's!# &n/ &s'/

rong"# #oss !o !' s&i/ )&n-.. As is '9i/'n! "ro !' &rg's''! !' !r&ns"'r o" "n/s o"

CC &n/ DL !o !' rr'n! &on! &s i! & /ison's!

in!'n!ion !o "r!'r /i9'r! !' "n/s "ro !' rr'n! &on!


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&n/ "or !r&ns"'r o" !' s&i/ "n/s o" CC &n/ ;CDL. A61 s'/

!' '' #'&" &9&i#&5#' i! i "or !' Crr'n! Aon!

&n/ s5s!i!!'/ o! !' or/s GCrr'n! Aon! &n/

s5s!i!!'/ !' i! GC&s Cr'/i!. I! &s o' o! in !'

in9's!ig&!ion !&! in or/'r !o "r!'r /i9'r! !' "n/s "ro !'

Crr'n! Aon! A6= s'/ !o iss' GP& ors'#" ''s 5

o5!&ining )&n-'rs C'' "&9oring !'ir &on! i! S)I

&n/ D'n& )&n-. I! is so +'r'i9&5#' "ro !' &rg's''!

!&! !og !' &s'/ A61 &n/ A6= -n' !&! !' s&i/

;or-ing C&+i! &s s&n!ion'/ on# "or !' +r+os' o" !&-ing

o9'r !' #i&5i#i!i's o" UTI )&n- &n/ F'/'r )&n- '! !'

/ison's!# /i9'r!'/ !' "n/s !o S)I &n/ D'n& )&n-. T'

s&n!ion'/ on' &s #'g'/ &s no! s'/ "or !' +r+os' i!

&s &9&i#'/ o" &n/ !' s&n!ion !'rs &n/ on/i!ions 'r'

9io#&!'/ &s & ons''n' o" i !' )&n- o#/ no! g'! !'

&rg' in pari passui! !' o!'r onsor!i )&n-s. T'

s&i/ /i9'rsion o" "n/s 5 A61 &n/ A6= /'+ri9'/ !' )&n- o"

i!s s'ri! &n/ !' 'n!ir' #o&n 5'&' ns'r'/.%. T' in9's!ig&!ion "r!'r r'9''/ !&! A61 go! #'!!'r o"

r'/i!s ('r'in&"!'r r'"'rr'/ &s GLCs$ iss'/ "ro S)I &n/


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D'n& )&n- in "&9or o" "i!i!ios o+&ni's +ro++'/ 5 !'

&s'/ &n/ s'/ !' s&i/ LCs !o si+on !' "n/s "ro !'s'

)&n-s. T' LCs 5'n'"ii&r "irs "&9oring o !' A62 &n/

A6= &/ r''s!'/ !' LCs !o 5' iss'/ 'r' o+&ni's

'7is!ing on# on +&+'r i!o! &n o'ri &!i9i!. T'

s&i/ "i!i!ios o+&ni's go! !' LCs /ison!'/ 5 &!!&ing

!'ir 5ogs 5i##s &n/ +or!ion o" !'s' /ison! +ro''/s 'r'

s'/ "or +'rson 5'n'"i!s o" A61 &n/ & 'r!&in +or!ion &s

ro!'/ 5&- !o ATCOM. On !' /' /&!'s ATCOM /i/ no!

/is&rg' i!s #i&5i#i!i's i! S)I &n/ D'n& )&n-. In !'

&rg's''! !' +&r!i#&rs o" !' n&'s o" "i!i!ios

o+&ni's &9' 5''n gi9'n. T' s&i/ #is! o9'rs 10

o+&ni's. I! &s 5''n "r!'r 'n!ion'/ in !' &rg's''!

!&! !' Pro+ri'!ors?Dir'!ors o" !'s' "i!i!ios o+&ni's

&/ iss'/ "s' 5i##s n/'r !'ir sign&!r's &n/ /ison!'/

!'s' "s' 5i##s 5&-'/ 5 !' LCs i! !' /ison!ing

)&n-s &! !' ins!&n' o" on' &n&-r&n3&n J&in. So' o"

!'s' Pro+ri'!ors?Dir'!ors &r' !' '+#o''s &n/ /o's!i

s'r9&n!s o" s&i/ &n&-r&3&n J&in.@. A"!'r so s!&!ing !' &rg's''! +ro''/s &s "o##os


9/29

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GT&! in !o o" !'s' "i!i!ios o+&ni's9i


10/29

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/is+!'. On !&! 5&sis o!&- M&in/r& )&n- iss'/ & Gno

/' 'r!i"i&!' !o M?s A!o T'no#og Lii!'/ s!&!ing !&!

on r''i+! o" Rs.42 #&s !'r' &s no &on! o!s!&n/ing

&n/ +&&5#' 5 !' in r's+'! o" "&i#i! &/9&n'/ 5 )&n- o"

)&ro/&. T' s&i/ 5&n- so on"ir'/ !&! !' g&r&n!''s

iss'/ 5 ,i-r& Dosi s!oo/ /is&rg'/.>. A"!'r !' r''i+! o" s GNo /'s 'r!i"i&!' !'

r's+on/'n! +r'"'rr'/ & +'!i!ion n/'r S'!ion 482 o" !'

Cr.P.C. 5'&ring Criin A++#i&!ion No. 22=> o" 200> 5'"or'

!' Hig Cor! o" J/i&!r' &! )o5& &n/ !' #'&rn'/

Sing#' J/g' 9i/' or/'r /&!'/ 24.2.2010 &s'/ !' riin

+ro''/ings +'n/ing 5'"or' !' #'&rn'/ A//#. M'!ro+o#i!&n

M&gis!r&!'. T' #'&rn'/ Sing#' J/g' r'"'rr'/ !o on' o" i!s

'&r#i'r or/'rs &n/ &' !o o#/ &s "o##os6G)o! !' o""i's n/'r S'!ions 40% &n/ 420 &r'o+on/&5#' i! !' +'rission o" !' or!. Asr'&/ /isss'/ 'r'in&5o9' !' )&n- &sr'&/ gi9'n i!s No D' C'r!i"i&!' !o !' 5orro'ri.'. ATCOM. I! &n #'&r# 5' s''n !&! '9'n i" !'&!!'r is +'ri!!'/ !o go "or !ri no "ri!"#

+r+os' o#/ 5' s'r9'/ '7'+! 5r/'ning !'riin Cor!s i &r' r'&/ o9'r65r/'n'/.

10. To &rri9' &! !' s&' on#sion !' Hig Cor! r'#i'/ on

!' /'ision in Madan Mohan Abbot v. State of Punjab1&n/

1(2008) 4 SCC 582


11/29

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/is!ingis'/ !' +ronon''n! in A. Ravishanker Prasad

(s+r&$.11. ;' &9' '&r/ Ms. Pin- An&n/ #'&rn'/ AS &n/ Mr.

P.. D' #'&rn'/ ons'# "or !' C'n!r )r'& o"

In9's!ig&!ion &n/ Arn&5 Co/r &n/ Mr. An+& L

D&s "or !' r's+on/'n!s.12.In !' 5&-/ro+ o" &"or's&i/ "&!s !' s'in 's!ion

!&! &ris's is '!'r in !' o5!&ining "&! &!ri7 !' Hig

Cor! is 3s!i"i'/ in &sing !' riin +ro''/ing.

L'&rn'/ ons'# "or !' &++'##&n!s s5i!s !&! !' Hig

Cor! &s 'rron'os# o+in'/ !&! !' r'&ining o""'n's &r'

40% &n/ 420 o" IPC 'r'&s !' &rg's''! so in#/'/

o!'r o""'n's &g&ins! !' &s'/ +'rsons. I! is "r!'r

on!'n/'/ !&! !' &rg's''! &s no! "i#'/ &g&ins! !'

+5#i o""i'r &s !' #'g&!ion &g&ins! +5#i o""i'r o#/ no!

5' s5s!&n!i&!'/ /ring !' in9's!ig&!ion &n/ !' Hig Cor!

i!o! &++r'i&!ing !' gr&9i! o" !' o!'r o""'n's &s

&s'/ !' +ro''/ing i &-'s !' or/'r &5so#!'#

9#n'r&5#' in #&. L'&rn'/ ons'# "or !' r's+on/'n! o#/

on!'n/ !&! 'n GNo /' 'r!i"i&!' &s o5!&in'/ "ro !'

5&n- &n/ !' &!!'r &/ 5''n s'!!#'/ !' Hig Cor! &s


12/29

12

orr'!# &s'/ !' +ro''/ing &n/ 'n' i! /o's no!

&rr&n! &n in!'r"'r'n'.1=.A! !is 3n!r' ' &r' o5#ig&!'/ !o s!&!' !&! 'n !'

Hig Cor! /'i/'/ !' iss' &s '!'r & +ro''/ing

o#/ 5' &s'/ in '7'ris' o" in'r'n! 3ris/i!ion in

r's+'! o" !' non6o+on/&5#' o""'n's &n/ +rini+#' o"

#& in !&! r'g&r/ &s no! in & s!&!' o" 'r!&in!. T' s&i/

+osi!ion &s 5''n &/' #'&r 5 !is Cor! !&! Hig Cor!

&s !' 3ris/i!ion !o &s & riin +ro''/ing n/'r

S'!ion 482 o" !' Co/' in r's+'! o" non6o+on/&5#'

o""'n's 5&rring 'r!&in n&!r' o" ri's.14.To &++r'i&!' !' o+#'!' +i!r' in +ro+'r +'rs+'!i9'

' !in- i! s''# !o r'"'r !o !' r'#'9&n! /'isions in !'

"i'#/. In Rumi Dhar v. State of W.B.2i#' /'ing i! &n

or/'r /'#ining !o /is&rg' !' &s'/ n/'r S'!ion 2=> o"

!' Co/' 5 !' #'&rn'/ S+'i J/g' i &s 5''n

&""ir'/ 5 !' Hig Cor! & !o6J/g' )'n r'"'rr'/ !o !'

/'ision in Central Bureau of nvesti!ation v. Dun"ans

2(2009) 6 SCC 364


13/29

13

A!ro ndustries #td.$&n/ %ikhil Mer"hant v. C.B..&&'

!o o#/ &s "o##os6

14.I! is no & '##6s'!!#'/ +rini+#' o" #&!&! in & gi9'n &s' & i9i# +ro''/ing &n/ &riin +ro''/ing &n +ro''/si#!&n'os#. )&n- is 'n!i!#'/ !o r'o9'r!' &on! o" #o&n gi9'n !o !' /'5!or. I" inonn'!ion i! o5!&ining !' s&i/ #o&nriin o""'n's &9' 5''n oi!!'/ 5!' +'rsons &s'/ !'r'o" in#/ing !'o""i'rs o" !' )&n- riin +ro''/ings

o#/ so in/is+!&5# 5' &in!&in&5#'.

In !' s&i/ &s' !' Cor! !oo- no!' o" !' "&! !'

o+rois' 'n!'r'/ in!o 5'!''n !' Ori'n! )&n- o"

Co'r' &n/ !' &s'/ +'r!&ining !o r'+&'n! o" #o&n

o#/ no! "or !' "on/&!ion o" /is&rg' o" !' &s'/. T'

!o6J/g' )'n &++r'i&!'/ !' s!&n/ o" !' C.).I. 5'"or' !'

Hig Cor! !&! !' riin &s' &g&ins! !' &s'/ &/

s!&r!'/ no! on# "or o5!&ining #o&n 5! so on !' gron/ o"

riin ons+ir& i! !' )&n- o""i'rs &n/ &or/ing#

+'#/ !' or/'r +&ss'/ 5 !' Hig Cor!.

3(1996) 5 SCC 5914(2008) 9 SCC 677


14/29

14

1.In Central Bureau of nvesti!ation v. A. Ravishanker

Prasad and 'thers( !' Cor! &s /'ing i! !' "&!

si!&!ion 'r'in !' &s'/ +'rsons &/ oi!!'/

o""'n's s &s "org'r "&5ri&!ion o" /o'n!s &n/ s'/

!' s&i/ /o'n!s &s g'nin'. T'r' &s #'g&!ion !&!

!' &/ 'n!'r'/ in!o ons+ir& i! !' )&n- o""i'rs "or

&9&i#ing g' r'/i! "&i#i!i's. In ors' o" !' +'n/'n o" !'

riin +ro''/ings !' &s'/ +'rsons &/ s'!!#'/ !'

o!s!&n/ing /'s 5 +&ing & s o" r+''s 1@ ror's &n/

on !&! 5&sis +r'"'rr'/ &n &++#i&!ion n/'r S'!ion 482 o"

!' Co/' "or &sing o" !' riin +ro''/ing &n/ !' Hig

Cor! &s'/ !' +ro''/ings on !' 5&sis o" !' s'!!#''n!.

)' i! s!&!'/ !' !ri &/ +rogr'ss'/ in !' s&i/ &s' &n/ >2

i!n'ss's &/ r'&/ 5''n '7&in'/. T' 's!ion !&!

&ros' 5'"or' !is Cor! &s '!'r s & +ro''/ing so#/

&9' 5''n &s'/. T' Cor! /is!ingis'/ !' /'ision in

Dun"ans A!ro ndustries #td.)s &s' &n/ o+in'/ !&! !'

!'nor o" !' #&ng&g' i+#i'/ !'r'in in/i&!'s !&! &sing

5(2009) 6 SCC 351


15/29

15

o" !' o+#&in! /'+'n/s on !' "&!s o" '& &s'. T' Cor!

so /is!ingis'/ !' /'ision in %ikhil Mer"hant*s&s'.1%.A !r''6J/g' )'n in !' &s' o" +ian Sin!h v. State

of Punjab and Another, i#' &ns'ring !' r'"'r'n'

'!'r !' Hig Cor! &s !' 3ris/i!ion n/'r S'!ion

482 o" !' Co/' !o &s & +ro''/ing in r's+'! o"

non6o+on/&5#' o""'n's &"!'r r'"'rring !o n5'r o"

&!ori!i's r#'/ !&! S'!ion 482 o" !' Co/' &s i!s 9'r

#&ng&g' sgg's!s s&9's !' in'r'n! +o'r o" !' Hig Cor!

i i! &s 5 9ir!' o" i! 5'ing & s+'rior or! !o +r'9'n!

&5s' o" !' +ro'ss o" or! or o!'ris' !o s'r' !' 'n/s

o" 3s!i'. T' or/s Gno!ing in !is Co/' i '&ns

!&! !' +ro9ision is &n o9'rri/ing +ro9ision &n/ !' s&i/

or/s #'&9' no &nn'r o" /o5! !&! non' o" !' +ro9isions o"

!' Co/' #ii!s or r's!ri!s !' in'r'n! +o'r. T' )'n

+ro''/'/ !o s!&!' !&! !' gi/'#in' "or '7'ris' o" s

+o'r is +ro9i/'/ in S'!ion 482 i!s'#" i.'. !o +r'9'n! &5s' o"

!' +ro'ss o" &n or! or o!'ris' !o s'r' !' 'n/s o"

3s!i' &n/ in /i""'r'n! si!&!ions !' in'r'n! +o'r & 5'

'7'ris'/ in /i""'r'n! &s !o &i'9' i!s #!i&!' o53'!i9'.

6(2012) 10 SCC 303


16/29

16

For&!ion o" o+inion 5 !' Hig Cor! 5'"or' i! '7'ris's

in'r'n! +o'r n/'r S'!ion 482 on 'i!'r o" !' !in

o53'!i9's (i$ !o +r'9'n! &5s' o" !' +ro'ss o" &n or! or

(ii$ !o s'r' !' 'n/s o" 3s!i' is & sin' & non. T' Cor!

"r!'r &//'/ !&! i! is !' 3/ii o5#ig&!ion o" !' Hig

Cor! !o n/o & rong in ors' o" &/inis!r&!ion o" 3s!i'

or !o +r'9'n! on!in&!ion o" nn''ss&r 3/ii +ro'ss &n/

!' &7i '7 /'5i!o 3s!i!i&' is in5i#! in s '7'ris' "or !'

o#' i/'& is !o /o r' o+#'!' &n/ s5s!&n!i 3s!i' "or

i i! '7is!s.

A"!'r so s!&!ing !' !r''6J/g' )'n &//r'ss'/ !o !'

iss' +'r!&ining !o !' &sing o" & riin +ro''/ing on !'

gron/ o" s'!!#''n! 5'!''n &n o""'n/'r &n/ !' 9i!i &n/ in

!is on!'7! i! r#'/ !s6

61.In'r'n! +o'r is o" i/' +#'ni!/' i! nos!&!!or #ii!&!ion 5! i! &s !o 5' '7'ris'/ in&or/ i! !' gi/'#in' 'ngr&"!'/ in s

+o'r 9i


17/29

17

5' +r'sri5'/. Ho'9'r 5'"or' '7'ris' o" s+o'r !' Hig Cor! s! &9' /' r'g&r/ !o!' n&!r' &n/ gr&9i! o" !' ri'. H'inos&n/ s'rios o""'n's o" 'n! /'+r&9i! or

o""'n's #i-' r/'r r&+' /&oi! '!. &nno!5' "i!!ing# &s'/ '9'n !og !' 9i!i or9i!is "&i# &n/ !' o""'n/'r &9' s'!!#'/ !'/is+!'. S o""'n's &r' no! +ri9&!' in n&!r'&n/ &9' & s'rios i+&! on soi'!. Sii#&r#&n o+rois' 5'!''n !' 9i!i &n/ !'o""'n/'r in r'#&!ion !o !' o""'n's n/'r s+'is!&!!'s #i-' !' Pr'9'n!ion o" Corr+!ion A! or!' o""'n's oi!!'/ 5 +5#i s'r9&n!s i#'or-ing in !&! &+&i! '!.: &nno! +ro9i/' "or&n 5&sis "or &sing riin +ro''/ingsin9o#9ing s o""'n's. )! !' riin &s's&9ing o9'r'#ing# &n/ +r'/oin&!ing# i9i#"#&9or s!&n/ on & /i""'r'n! "oo!ing "or !'+r+os's o" &sing +&r!i#&r# !' o""'n's&rising "ro o'ri "in&ni 'r&n!i#'i9i# +&r!n'rsi+ or s #i-' !r&ns&!ions or!' o""'n's &rising o! o" &!rion r'#&!ing !o/or '!. or !' "&i# /is+!'s 'r' !'

rong is 5&si# +ri9&!' or +'rson in n&!r'&n/ !' +&r!i's &9' r'so#9'/ !'ir 'n!ir'/is+!'. In !is &!'gor o" &s's !' HigCor! & &s !' riin +ro''/ings i" ini!s 9i' 5'&s' o" !' o+rois' 5'!''n !'o""'n/'r &n/ !' 9i!i !' +ossi5i#i! o"on9i!ion is r'o!' &n/ 5#'&- &n/ on!in&!iono" !' riin &s' o#/ +! !' &s'/ !ogr'&! o++r'ssion &n/ +r'3/i' &n/ '7!r''

in3s!i' o#/ 5' &s'/ !o i 5 no!&sing !' riin &s' /'s+i!' "## &n/o+#'!' s'!!#''n! &n/ o+rois' i! !'9i!i.


18/29

18

[email protected]''n!# in %arinder Sin!h - 'rs. v. State of Punjab

- Anr. & !o6J/g' )'n +#&'/ r'#i&n' on +ian Sin!h*s

&s' (s+r&$ &n/ Dim/0 +ujral v. nion erritor0 throu!h

Administrator3 &n/ /is!ingis'/ !' /'ision in State of

Rajasthan v. Sambhu 4evat5,&n/ &' !o o#/ !&! in !'

"&!s o" !' s&i/ &s' !' +ro''/ings n/'r S'!ion =0@

/'s'r9'/ !o 5' &s'/. T' !o6J/g' )'n #&i/ /on

'r!&in gi/'#in's 5 i !' Hig Cor!s o#/ 5' gi/'/

in gi9ing &/'&!' !r'&!'n! !o !' s'!!#''n! 5'!''n !'

+&r!i's &n/ '7'rising i!s +o'r n/'r S'!ion 482 o" !' Co/'

i#' &'+!ing !' s'!!#''n! &n/ &sing !' +ro''/ings

or r'"sing !o &'+! !' s'!!#''n!. So' o" !' gi/'#in's

i &r' r'#'9&n! "or !' +r's'n! +r+os' &r' r'+ro/'/

5'#o 6

G(II$ ;'n !' +&r!i's &9' r'&'/ !'s'!!#''n! &n/ on !&! 5&sis +'!i!ion "or&sing !' riin +ro''/ings is "i#'/ !'gi/ing "&!or in s &s's o#/ 5' !o s'r'

(i$ 'n/s o" 3s!i' or(ii$ !o +r'9'n! &5s' o" !' +ro'ss o" &nCor!.

72014(4) SCALE 1958AIR 2012 SCW 533392013(14) SCALE 235


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19

;i#' '7'rising !' +o'r !' Hig Cor! is !o"or &n o+inion on 'i!'r o" !' &"or's&i/ !oo53'!i9's.

(III$ S & +o'r is no! 5' '7'ris'/ in !os'

+ros'!ions i in9o#9' 'inos &n/ s'rioso""'n's o" 'n! /'+r&9i! or o""'n's #i-'r/'r r&+' /&oi! '!. S o""'n's &r' no!+ri9&!' in n&!r' &n/ &9' & s'rios i+&! onsoi'!. Sii#&r# "or o""'n's #'g'/ !o &9'5''n oi!!'/ n/'r s+'i s!&!!' #i-' !'Pr'9'n!ion o" Corr+!ion A! or !' o""'n'soi!!'/ 5 P5#i S'r9&n!s i#' or-ing in!&! &+&i! &r' no! !o 5' &s'/ 'r'# on

!' 5&sis o" o+rois' 5'!''n !' 9i!i &n/!' o""'n/'r.

(I,$ On !' o!'r !os' riin &s's &9ingo9'r'#ing# &n/ +r'6/oin&n!# i9i#&r&!'r +&r!i#&r# !os' &rising o! o"o'ri !r&ns&!ions or &rising o! o"&!rioni r'#&!ionsi+ or "&i# /is+!'sso#/ 5' &s'/ 'n !' +&r!i's &9'r'so#9'/ !'ir 'n!ir' /is+!'s &ong !'s'#9's.

(,$ ;i#' '7'rising i!s +o'rs !' Hig Cor! is!o '7&in' &s !o '!'r !' +ossi5i#i! o"on9i!ion is r'o!' &n/ 5#'&- &n/ on!in&!iono" riin &s's o#/ +! !' &s'/ !o gr'&!o++r'ssion &n/ +r'3/i' &n/ '7!r'' in3s!i'o#/ 5' &s'/ !o i 5 no! &sing !'riin &s's.

18.A! !is s!&g' i! is &+! !o no!i' & !r''6J/g' )'n

/'ision in CB6 ACB6 Mumbai v. %arendra #al 7ain -


20/29

20

'rs.18 In !' s&i/ &s' /ring !' in9's!ig&!ion +'r!&ining !o

!' #+&5i#i! o" !' &s'/ in !' ri' !' on'rn'/

5&n- &/ ins!i!!'/ si!s "or r'o9'r o" !' &on! #&i'/

!o 5' /' "ro !' r's+on/'n!s &n/ s&i/ si!s 'r' /is+os'/

in !'rs o" !' ons'n! /'r''s. On !' 5&sis o" !' s&i/

ons'n! /'r''s &n &++#i&!ion "or /is&rg' &s "i#'/ i

&s r'3'!'/ 5 !' !ri or! 5! '9'n!# &s #o'/ 5

!' Hig Cor!. )' i! s!&!'/ &rg's 'r' "r&'/ n/'r

S'!ion 1206)?420 IPC 5 !' #'&rn'/ !ri J/g' &g&ins! !'

+ri9&!' +&r!i's. As "&r &s 5&n- o""iis &r' on'rn'/

&rg's 'r' "r&'/ n/'r /i""'r'n! +ro9isions o" !'

Pr'9'n!ion o" Corr+!ion o" A! 1>88. )'ing /iss&!is"i'/ i!

!' s&i/ or/'r !' C)I &/ +r'"'rr'/ &n &++' 5 o5!&ining

s+'i #'&9' &n/ in !&! on!'7! !' or! o5s'r9'/ !&! !'

&s'/ r's+on/'n! &/ 5''n &rg'/ n/'r S'!ion

1206)?420 IPC &n/ !' i9i# #i&5i#i! o" !' r's+on/'n! !o +&

!' &on! &/ r'&/ 5''n s'!!#'/ &n/ "r!'r !'r' &s no

gri'9&n' on !' +&r! o" !' 5&n-. T&-ing no!' o" !' "&! !&!

o""'n' n/'r S'!ion 420 o" IPC is o+on/&5#' &n/

102014 3 SCALE 137


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21

S'!ion 1206) is no! o+on/&5#' !' Cor! '9'n!#

o+in'/ !s6

G11. In !' +r's'n! &s' &9ing r'g&r/ !o !' "&!!&! !' #i&5i#i! !o &-' goo/ !' on'!&r #osss""'r'/ 5 !' 5&n- &/ 5''n !# s'!!#'/5'!''n !' +&r!i's &n/ !' &s'/ &/ &'+!'/!' #i&5i#i! in !is r'g&r/ !' Hig Cor! &/!og! i! "i! !o in9o-' i!s +o'r n/'r S'!ion 482Cr.P.C. ;' /o no! s'' o s '7'ris' o" +o'r&n 5' "!'/ or '#/ !o 5' 'rron'os. S'!ion 482o" !' Co/' in'r's in !' Hig Cor! !' +o'r !o&-' s or/'r &s & 5' onsi/'r'/ n''ss&r !oin!'r i& +r'9'n! !' &5s' o" !' +ro'ss o" #& or!o s'r9' !' 'n/s o" 3s!i'. ;i#' i! i## 5' o##nn''ss&r !o r'9'r! or r'"'r !o !' s'!!#'/ +osi!ionin #& i! r'g&r/ !o !' on!ors o" !' +o'r&9&i#&5#' n/'r S'!ion 482 CR.P.C. i! s! 5'r''5'r'/ !&! on!in&n' o" & riin+ro''/ing i is #i-'# !o 5'o' o++r'ssi9' or& +&r!&-' !' &r&!'r o" & #&' +ros'!ion

o#/ 5' goo/ gron/ !o in9o-' !' '7!r&or/in&r+o'r n/'r S'!ion 482 Cr.P.C.

1>. S#ig!# or' r''n!# in +o/akumar B. %air v. CB and

Anr.11!' Cor! r'"'rr'/ !o !' +&r&gr&+ %1 o" +ian Sin!h*s

Case6 /is!ingis'/ !' /'ision in %arendra #al 7ain

9su/ra: r'g&r/ 5'ing &/ !o !' "&! !&! !' &s'/ +'rsons

'r' "&ing &rg's n/'r S'!ion 1206) r? S'!ion 1=(2$

r? 1= (1$ (/$ o" !' 1>88 A! &n/ S'!ion 420?4@1 o" IPC &n/

112014 4 SCALE 659


22/29

22

&' !o o#/ !&! s5s!r&! o" !' &rg's &g&ins! !'

&s'/6&++'##&n! 'r' no! sii#&r !o !os' in %arendra #al

7ain (s+r&$ 'r'in !' &s'/ &s &rg'/ n/'r S'!ion

1206) r'&/ i! S'!ion 420 IPC on#. A"!'r so s!&!ing !'

Cor! o5s'r9'/ &s "o##os6

GT' o""'n's &r' 'r!&in# or' s'rios: !'&r' no! +ri9&!' in n&!r'. T' &rg' o"ons+ir& is !o oi! o""'n's n/'r !'Pr'9'n!ion o" Corr+!ion A!. T' &s'/&s so 5''n &rg'/ "or oission o" !'s5s!&n!i9' o""'n' n/'r S'!ion 4@1 IPC.Tog !' &on! /' &9' 5''n +&i/ !'s&' is n/'r & +ri9&!' s'!!#''n! 5'!''n!' +&r!i's n#i-' in %ikhil Mer"hant (s+r&$&n/ %arendra #al 7ain (s+r&$ 'r' !'o+rois' &s & +&r! o" !' /'r'' o" !'Cor!. T'r' is no &-no#'/g''n! on !'+&r! o" !' 5&n- o" !' '7on'r&!ion o" !'

riin #i&5i#i! o" !' &s'/6&++'##&n!n#i-' !' !'rs o" o+rois' /'r'' in !'&"or's&i/ !o &s's. In !' !o!i! o" !'"&!s s!&!'/ &5o9' i" !' Hig Cor! &s!&-'n !' 9i' !&! !' '7#sion s+'#! o! in+ian Sin!h (s+r&$ (+&r&%1$ &++#i's !o !'+r's'n! &s' &n/ on !&! 5&sis &/ o' !o!' on#sion !&! !' +o'r n/'r S'!ion482 CrPC so#/ no! 5' '7'ris'/ !o &s

!' riin &s' &g&ins! !' &s'/ '&nno! "in/ &n 3s!i"i&!ion !o in!'r"'r' i!!' s&i/ /'ision.


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23

20. T' +r's'n! o5!&ining "&! sor' &s !o 5' &++r'i&!'/

on !' &n9i# o" &"or's&i/ &!ori!i's. On & s!/i'/ sr!in o"

!' +rini+#'s s!&!'/ in +ain Sin!h (s+r&$ i! is #i+i/ !&!

!' !r''6J/g' )'n &s r#'/ !&! +ro''/ing in r's+'! o"

'inos &n/ s'rios o""'n's &n/ !' o""'n's n/'r

+r'9'n!ion o" orr+!ion A! &n/ # o!'r o""'n's oi!!'/

5 +5#i s'r9&n!s i#' or-ing in !&! &+&i! &r' no! !o 5'

&s'/. T&! &+&r! !' or! &s so '+&si


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24

/'ision in %arendra #al 7ain (s+r&$ &n/ o+in'/ !&! !'

&s'/ &/ so 5''n &rg'/ "or !' oission o" o""'n'

n/'r S'!ion 4@1 o" IPC &n/ on !&! 5&sis /'#in'/ !o

in!'r"'r' i! !' or/'r +&ss'/ 5 !' Hig Cor! i &/

r'"s'/ !o &s !' riin +ro''/ing.21. In !' &s' &! &n/ &s +'r !' &rg's''! !'

r's+on/'n!s &/ go! LCs iss'/ "ro !' 5&n- in "&9or o"

"i!i!ios o+&ni's +ro++'/ + 5 !' &n/ !' "i!i!ios

5'n'"ii&r o+&ni's &/ go! #'!!'rs o" r'/i!s /ison!'/ 5

&!!&ing !'ir 5ogs 5i##s. T' n&'s o" 10 "i!i!ios

o+&ni's &9' 5''n 'n!ion'/ in !' &rg's''!. Ts

#'g&!ion o" "org'r is 9'r !'r'. As is &ni"'s! "ro

!' i+gn'/ or/'r !' #'&rn'/ Sing#' J/g' &s no!

&/9'r!'/ !o !' s&'. I! is no! & si+#' &s' 'r' &n

&s'/ &s 5orro'/ on' "ro !' 5&n- &n/ /i9'r!'/ i!

so''r' '#s' &n/ !'r'&"!'r +&i/ !' &on!. I! /o's no!

"r'so & si!&!ion 'r' !'r' is /'ing 5'!''n & +ri9&!'

"in&ni ins!i!!ion &n/ &n &s'/ &n/ &"!'r ini!i&!ion o" !'

riin +ro''/ings ' +&s !' s &n/ g'!s !'

on!ro9'rs s'!!#'/. T' '7+os' o" "&!s !'##s & /i""'r'n! s!or.


25/29

25

As s5i!!'/ 5 !' #'&rn'/ Cons'# "or C)I !' &nn'r in

i !' #'!!'rs o" r'/i!s 'r' iss'/ &n/ !' "n/s 'r'

si+on'/ &s & "on/&!ion in riin #&. L'&rn'/ ons'#

o#/ s5i! !&! i! /o's no! /'+i! & &s' i &s

o9'r'#ing# &n/ +r'/oin&!ing# i9i# "#&9or. T'

in!rinsi &r&!'r is /i""'r'n!. E+&sis is #&i/ on !'

r'&!ion o" "i!i!ios o+&ni's.22. In !is on!'7! ' & s'"## r'"'r !o & !o6J/g'

)'n /'ision in Central Bureau of nvesti!ation v. 7a!jit

Sin!h12 'r'in !' or! 5'ing o9'/ 5 !' C)I &/

o9'r!rn'/ !' or/'r o" !' Hig Cor! &sing !' riin

+ro''/ing &n/ in !&! 5&-/ro+ &/ !&-'n no!' o" !' "&!

!&! &s'/ +'rsons &/ /ison's!# in/'/ /'#i9'r o" !'

+ro+'r! o" !' 5&n- &n/ &/ s'/ "org'/ /o'n!s &s

g'nin'. Pro''/ing "r!'r !' Cor! o+in'/ &s "o##os6GT' o""'n's 'n oi!!'/ in r'#&!ion i!5&n-ing &!i9i!i's in#/ing o""'n's n/'r S'!ions420?4@1 IPC &9' &r"# '""'! on !' +5#i &n/!r'&!'n !' '##65'ing o" !' soi'!. T's'

o""'n's "# n/'r !' &!'gor o" o""'n's in9o#9ingor !r+i!/' oi!!'/ 5 +5#i s'r9&n!s i#'or-ing in !&! &+&i!. Pri& "&i' on' & s!&!'!&! !' 5&n- is !' 9i!i in s &s's 5! in"&! !' soi'! in g'n'r in#/ing s!o'rs o"!' 5&n- is !' s""'r'r. In !' +r's'n! &s' !'r'

12(2013) 10 SCC 686


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&s n'i!'r &n #'g&!ion r'g&r/ing &n &5s' o"+ro'ss o" &n or! no! &n!ing on r'or/ !osgg's! !&! !' o""'n/'rs 'r' 'n!i!#'/ !o s'r'!' or/'r in !' 'n/s o" 3s!i'.

2=. ;' &r' in r's+'!"# &gr'''n! i! !' &"or's&i/ 9i'.

)' i! s!&!'/ !&! &9&i#ing o" on' "ro & n&!ioni


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o""'n's i !r&9'# "&r &'&/ o" +'rson or +ri9&!' rong.

I! &s !' +o!'n!ii! !o s'r in 'onoi risis. I!s

i+#i&!ions &9' i!s on s'riosn'ss "or i! r'&!'s &

on&9i! in !' so#'ni! !&! is '7+'!'/ in "in&ni

!r&ns&!ions. I! is no! s & &s' 'r' on' &n +& !'

&on! &n/ o5!&in & Gno /' 'r!i"i&!' &n/ 'n3o !' 5'n'"i!

o" &sing o" !' riin +ro''/ing on !' +os!&sis !&!

no!ing or' r'&ins !o 5' /on'. T' o##'!i9' in!'r's! o"

i !' Cor! is !' g&r/i&n &nno! 5' & si#'n! or & !'

s+'!&!or !o #o !' +ro''/ings !o 5' i!/r&n or "or !&!

&!!'r i'#/ !o !' ing'nos /'7!'ri! o" !' &s'/ +'rsons

!o in9o-' !' 3ris/i!ion n/'r Ar!i#' 22% o" !' Cons!i!!ion

or n/'r S'!ion 482 o" !' Co/' &n/ &s !' +ro''/ing.

I! is no! #'g# +'rissi5#'. T' Cor! is '7+'!'/ !o 5' on

g&r/ !o !'s' -in/s o" &/roi! o9's. T' Hig Cor! '

5# r'in/ so#/ &9' /'! i! !' &!!'r -''+ing in

in/ !&! in !'s' -in/ o" #i!ig&!ions !' &s'/ 'n

+'r'i9's & !in g#'& o" s'ss r'&/i# in9o-'s !' in'r'n!

3ris/i!ion "or &sing o" !' riin +ro''/ing. T'

or!s +rini+ /! &! !&! 3n!r' so#/ 5' !o s&n !'


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'n!ir' "&!s !o "in/ o! !' !rs! o" #'g&!ions &n/ !' r7 o"

!' s'!!#''n!. I! is !' '7+'ri'n' o" !' J/g' o's !o is

&i/ &n/ !' s&i/ '7+'ri'n' so#/ 5' s'/ i! &r' &!ion

irs+'!ion &n/ or&g'os +r/'n'. As ' "in/ in !'

&s' &! &n/ !' #'&rn'/ Sing#' J/g' &s no! !&-'n +&ins !o

sr!ini


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!o &// !&! or o5s'r9&!ions in !' +r's'n! &++' &r' so#'#

in !' on!'7! o" &/3/i&!ing !' 3s!i"i&5i#i! o" or/'r o"

&sing o" !' riin +ro''/ing &n/ i! o#/ no! &9' &n

5'&ring &! !' !i' o" !ri. An/ ' so #&ri".

************J. Di+&- Misr&

************J. ,i-r&&3i! S'n

N' D'#i:S'+!'5'r 1> 2014.

Financial Frauds Judgment

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