However, it acquitted former general manager and trustee of CBMF, BR Acharya, of all the charges for want of evidence against him.
A bench comprising justices GS Singhvi and SJ Mukhopadhaya, while dismissing Dalals appeal, altered his conviction from that of Section 409 (criminal breach of trust) to Section 420 (cheating) of IPC and sentenced him to rigorous imprisonment for three years. However, it set aside his conviction under Section 477-A (falsification of accounts).
Both Dalal and Acharya were sentenced in 2001 by the special court, set up to try offences related to the securities scam, to three-year rigorous imprisonment for various offences, including defrauding CBMF . However, the special court had acquitted co-accused and former funds manager of CBMF, T Ravi, for benefit of doubt.
Both Dalal and Acharya got three-year RI for four offences under the IPC, namely conspiracy (Section 120-B), criminal breach of trust (Section 409), falsification of accounts (Section 477-A) and dishonestly receiving stolen property (Section 411).
In addition, Acharya was sentenced to three-year RI under Section 13(1)(d) read with 13(2) of the Prevention of Corruption Act. The CBI argued that Dalal conspired with Acharya and Ravi in 1991-92 to obtain pecuniary advantage for himself by causing wrongful loss to CBMF.
On March 9, 1992, he wrote a letter to CBMF claiming brokerage on investment of R65 crore in Canbank Mutual Fund units (called Cancigo units) in September 1991 although he was not entitled to such commission.
Acharya sanctioned the commission by endorsing the letter and referred the matter to Ravi who prepared a cheque of R32.5 lakh and deposited in the account of Dalal in Andhra Bank in March 1992.
It was the case of the prosecution that Dalal had not acted as a broker in the investment of R65 crore in Cancigo and as such was not entitled to brokerage of R 33 crore. CBI submitted that R65 crore investment was made in the names of Andhra Bank, Andhra Bank Financial Services Ltd, IDBI and Sahara India.
CBI alleged that investments made in Andhra Bank and Andhra Bank Financial Services Ltd was in fact Dalals investment as the money was paid by debiting his own account.