Shalini Phansalkar Joshi, J. - (1.) This Special Case is a fall out of the financial scam, that rocked the economy of the nation in the era of Harshad S. Mehta. This particular scam pertains to the securities transactions entered into between Andhra Bank Financial Services Limited and M/s. Fairgrowth Financial Services Limited during the period from July, 1991 to May, 1992. Accused Nos.5, 7 and 8 were, at the relevant time, working as Senior Officers in the Andhra Bank Financial Services Limited; whereas, Accused Nos.1, 2, 3, 6, 9 and 11 were their counter-parts in M/s. Fairgrowth Financial Services Limited, which itself is Accused No.4 in the case. Accused No.10 is the 'Share-Broker', who has assisted them in perpetuating this scam. The Prosecution has charged all these Accused-persons for the various offences punishable under Section 120-B of IPC, r/w. Sections 420, 467, 468, 471 and 477-A of IPC. Accused Nos.5, 7 and 8 are further prosecuted for the offences punishable r/w. Section 13(2), r/w. Section 13(1)(b), (c) and (d) of the Prevention of Corruption Act, 1988.
(2.) In order to better appreciate the Prosecution case and to be more precise, the positions, which Accused-persons were holding at the relevant time can be clarified as follows. As per the case of the Prosecution, at the relevant time, Ø Accused No.1-K. Dharampal (Since Deceased) has been functioning as 'Managing Director' of M/s. Fairgrowth Financial Services Limited at Mumbai since November, 1990. Ø Accused No.2-R. Laxminarayanan has been working as 'Executive Director' of M/s. Fairgrowth Financial Services Limited at Bangalore since August, 1990. Ø Accused No.3-S. Srinivasan has been working as 'Senior Vice President' of M/s. Fairgrowth Financial Services Limited at Mumbai from 4th March 1991. Ø Accused No.4-M/s. Fairgrowth Financial Services Limited, Bangalore, is a Company registered in July, 1990, under the Companies Act, 1956, with Registered Office at Bangalore and Mumbai among other places. Ø Accused No.5-Tharian Chacko was functioning as 'Senior Vice President' of M/s. Andhra Bank Financial Services Limited at Bangalore between the period from 18th July 1991 to 5th September 1992. Ø Accused No.6-Abraham Zachariah (Since Deceased) was working as 'Senior Programmer' of M/s. Fairgrowth Financial Services Limited at Bangalore from September, 1990 till March, 1993. Ø Accused No.7-Y. Sundara Babu was functioning as 'Managing Director' of M/s. Andhra Bank Financial Services Limited at Hyderabad from 14th June, 1991 to 6th November, 1992 and during the period from October, 1990 to June, 1991, he was entrusted with the work of formation of "Andhra Bank Financial Services Limited". Ø Accused No.8-R. Kalyana Raman has been functioning as 'Senior Vice President' of M/s. Andhra Bank Financial Services Limited at Mumbai since June, 1991. Ø Accused No.9-Gopal Shankar Iyer has been working as 'Assistant Vice President' of M/s. Fairgrowth Financial Services Limited at Mumbai since 17th June 1991. Ø Accused No.10-Pallav Sheth was a 'Member' of the Bombay Stock Exchange from September, 1991 and prior to that, he was a 'Sub-Broker' of Mr. Shrenik Jhaveri. Ø Lastly, Accused No.11-P. Chandrashekar has been working as 'Secretary' in M/s. Fairgrowth Financial Services Limited at Bangalore since September, 1990. Prosecution Case - As set out in the 'Charge-Sheet' :-
(3.) As per the case of the Prosecution, Accused No.4- M/s.Fairgrowth Financial Services Limited, (here-in-after referred to as "FGFSL/FFSL"), was a Company promoted by Late B. Ratnakar, former 'Chairman' of Canara Bank. This Company was incorporated in July, 1990 as a 'Public Limited Company'. It was engaged in 'Financial Services', which included Equipment Leasing, Hire Purchase, Consumer Durable Financing, Investment Management Services, Capital Market Operations and Corporate Advisory Services. Late B. Ratnakar had appointed Accused No.1-K. Dharampal (Since Deceased) and Accused No.2-R. Laxminarayanan, who were his former colleagues in Canara Bank and who were also his trusted lieutenants, as 'Managing Director' and 'Executive Director' of FGFSL, respectively, by offering them higher salary and other perks. Accused Nos.1 and 2 had, in turn, then appointed their own trusted men and former colleagues in Canara Bank Financial Services Ltd., (here-in-after referred to as "CANFINA"), namely, PW- 1 Ramaswami Ganesh, who has subsequently turned the 'Approver' as 'Group Executive', Bangalore; Accused No.3-S. Srinivasan as 'Senior Vice President', Bangalore, Accused No.9-Gopal Shankar Iyer as 'Assistant Vice President', Mumbai, Accused No.6-Abraham Zachariah (Since Deceased) as 'Senior Programmer', Bangalore, and Accused No.11-P. Chandrashekar as 'Secretary-II', Bangalore, in FGFSL Offices at various positions, as referred above.;