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Are you asking if it's legal to convert and then give away books that are in the public domain? Yes, provided that you are located in a country where the book is actually considered to be in the public domain as copyright laws vary from country to country.
Or, are you asking if its OK to convert and give away an ebook that you've found posted for free elsewhere? Maybe, maybe not. Is the book in the public domain? Is there a Creative Commons License that explicitly gives permission for redistribution? Then sure.
But, just because a book is free or is not DRM restricted, doesn't mean that copyright is not still in effect. The copyright holder may be posting the free ebook to generate traffic (and sales for paid ebooks) to his/her website.
There's probably other scenarios, but these are what come to mind for me.
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