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2012 DIGILAW 453 (ORI)

Nalinikanta Muduli v. State of Orissa

2012-10-11

L.MOHAPATRA

body2012
JUDGMENT L. MOHAPATRA, J. : These two applications under Section 482 of the Code of Criminal Procedure arise out of the order 24.2.2009 passed by the learned Special Judge, Special Court, Bhubaneswar in T.R. No.9/52 of 08/04. The three petitioners in both the applications and two others were charge-sheeted for commission of offence under Section 13(1) (b) read with 13 (2) of the Prevention of Corruption Act and also under Section 120 (B), 109 and 201 of the I.P.C. Sri B.N. Muduli, petitioner in Criminal Misc. Case No.792 of 2009 is the husband of Smt. Sukanti Muduli (petitioner No.2) in Criminal Misc. Case No.1109 of 2009. Nalinikanta Muduli, petitioner No.1 in Criminal Misc. Case No.1109 of 2009 is their son. 2.The case of the prosecution is that during the check period 1.1.1970 to 20.4.2000, B.N. Muduli was a pubic servant having started his career as a Junior Engineer. It is alleged by the prosecution that the said B.N. Muduli committed criminal misconduct having accumulated assets to the tune of Rs.4,99,39,949/- in his name and in the names of his family members which is disproportionate to his known sources of income and had diverted a major part of such income in favour of his son N.K. Muduli to run some business concerns such as M/s. Zarina Marines Pvt. Ltd., M/s. Zarina Construction Pvt. Ltd. and M/s. Naba Prava Trust. It is further alleged by the prosecution that during the check period, the income of Sri B.N. Muduli was Rs.12,00,000/- and after deducting the expenditure he should be in possession of assets worth Rs.3,00,000/- but his assets were valued at Rs. 80,50,615.75 and accordingly assets to the tune of Rs.77,50,615.75 were found to be disproportionate to his known source of income. The disproportionate assets assessed at Rs.4,99,39,948.61 include the assets of his son N.K. Muduli. 3.B.N. Muduli and his wife Sukanti Muduli filed an application under Section 227 of the Code of Criminal Procedure praying to be discharged. 80,50,615.75 and accordingly assets to the tune of Rs.77,50,615.75 were found to be disproportionate to his known source of income. The disproportionate assets assessed at Rs.4,99,39,948.61 include the assets of his son N.K. Muduli. 3.B.N. Muduli and his wife Sukanti Muduli filed an application under Section 227 of the Code of Criminal Procedure praying to be discharged. Their case before the trial Court was that their son N.K. Muduli is a trustee of M/s. Naba Pravat Trust established under the Indian Trust Act and is also the Managing Director of M/s. Zarina Marines Pvt. Ltd. and M/s. Zarina Construction Pvt. Ltd. N.K. Muduli is an income tax assessee and therefore, his income from the two Companies as well as the Trust could not be added to the income of B.N. Muduli, his father, to arrive at a figure of Rs.4,99,39,948.61. The disproportionate assets in the hands of B.N. Muduli as assessed by the Vigilance Department is also not correct in view of the I.T. returns filed by B.N. Muduli for the period 1984-85 to 1999-2000 as well as the I.T. returns filed by his wife Sukanti Muduli for the period 1985-86 to 1999-2000. It was also contended that the valuation of assets made by the Vigilance Department has been exaggerated and actual valuation of the assets would be Rs.19,00,000/- instead of Rs.80,50,615.75 as assessed by the Department. N.K. Muduli also filed a similar application and his contention before the trial Court was that as Managing Director of two Companies and trustee of M/s. Naba Pravat Trust he was assessed to income tax independent of his parents. According to N.K. Muduli, the details of the accounts, assets, liabilities and investment etc. made by the two Companies were available with the Registrar of Companies and the income tax authorities but the same have been ignored by the Vigilance Department while calculating the so called disproportionate assets in the hands of his father B.N. Muduli. 4.The Department filed objection to the said petition and contended that at the stage of framing of charge, it is not necessary to examine and assessee in detail the materials placed on record by the prosecution or to consider the sufficiency of the materials to establish the offence alleged against the accused persons. The Court is only required to consider the materials placed before it and not the document or calculation furnished by the defence. The Court is only required to consider the materials placed before it and not the document or calculation furnished by the defence. The materials placed before the Court by the prosecution are sufficient to draw a conclusion that there is prima facie case available against all the three accused persons and accordingly the Court cannot be called upon to examine the materials in details before the case goes for trial. The Court accepted the contention of the learned counsel appearing for the Department and observed that at the stage of framing of charge, the trial Court is not required to examine and assess in details the material placed on record by the prosecution nor it is for the Court to consider the sufficiency of the materials to establish the offence alleged against the accused persons at the stage of framing of charge. The Court is only required to examine the materials with a view to satisfy that a prima facie case for commission of offence alleged has been made out against the accused persons. The Court further observed that N.K. Muduli was a special class and super class contractor and had executed different contract works under the Water Resources Department to the tune of crores. But it again observed that N.K. Muduli obtained special class and super class contractor license by using the official position of his father B.N. Muduli and the circumstances under which N.K. Muduli accumulated huge assets by executing contract work to the tune of crores of rupees within a short span of five years also prima facie established that his father B.N. Muduli has diverted his unaccounted for income to the construction companies run by his son N.K. Muduli as well as towards the investment made by his wife. Holding thus, the trial Court rejected both the petitions filed by the three petitioners. 5.The learned counsel appearing for the petitioners in both the cases fairly admitted that at the stage of framing of charge, the Court is only required to see existence of a prima facie case. He also fairly admitted that the Court is not required to go into the details of the evidence collected by the prosecution in course of investigation to find out as to whether there are materials available on record to prove the charge or not. He also fairly admitted that the Court is not required to go into the details of the evidence collected by the prosecution in course of investigation to find out as to whether there are materials available on record to prove the charge or not. However, it was contended by the learned counsel appearing for the petitioners that while calculating the disproportionate assets of B.N. Muduli, the income of his wife was not taken into account even though the income tax returns of his wife were available with the Investigating Officer. It was further contended that the trial Court accepted the materials available on record to the extent that N.K. Muduli, the son of the public servant had special class and super class contractor’s licence and executed works worth crores in five years time. In absence of any material whatsoever on record to show that any part of the income of his father B.N. Muduli had been diverted to the two companies run by N.K. Muduli, the income of N.K. Muduli from out of the two Companies and the trust could not be added to the income of his father B.N. Muduli. The learned counsel also placed reliance on an observation made by this Court in this regard in W.P.(C) No.719 of 2001 between the same parties and relating to the same case. 6.Shri Das, the learned counsel appearing for the Department submitted that after investigation, sufficient materials had been placed before the trial Court to show prima facie that the income of B.N. Muduli had been diverted to his son in order to run the two Companies in which his son N.K. Muduli was the Managing Director. At the time of framing of charge, the Court was only required to see existence of prima facie case but while dealing with the petition filed by the petitioners under Section 227 of the Code of Criminal Procedure, the trial Court has gone into details of the record and rejected the petitions. It was also contended by Shri Das, the learned counsel appearing for the Department that at the stage of framing of charge, a detailed discussion of evidence was not required and if the Court is satisfied that there are prima facie materials in support of the offence alleged, charge has to be framed. It was also contended by Shri Das, the learned counsel appearing for the Department that at the stage of framing of charge, a detailed discussion of evidence was not required and if the Court is satisfied that there are prima facie materials in support of the offence alleged, charge has to be framed. Proof of charge shall depend on the evidence adduced by the Department in course of trial and not at the stage of framing of charge. 7.There is no quarrel over the proposition of law that at the time of framing of charge, the Court is not required to enter into a detailed discussion of materials placed by the prosecution and if prima facie materials are placed in support of the offence alleged to have been committed, charge has to be framed for commission of those offences. Neither a detailed discussion of the materials placed before the Court by the prosecution is required to be proved nor the defence of an accused can be considered at the stage of framing of charge. In this connection, reference may be made to the decision of the Madhya Pradesh High Court in the case of Premananda Jha v. State of Madhya Pradesh, reported in ILR (2000) MP 888, Prakash Singh Badal and another v. State of Punjab and others, reported in (2007) Vol.1 Supreme Court Cases, Page 1 and several other decisions of the apex Court taken note of in the case of Prakash Singh Badal and another v. State of Punjab and others (supra). In the case of State of Orissa v. Debendra Nath Padhi, reported in (2005) 30 OCR (SC) 177, the apex Court also held that the accused has no right to produce any document at the stage of framing of charge having regard to clear mandate of Sections 227 and 228 in Chapter 18 and Sections 239 and 240 in Chapter 19 of the Code of Criminal Procedure. 8.Coming to the facts of the case, it is the case of the Department that the income of B.N. Muduli during the check period, i.e., from 1.1.1970 to 20.4.2000 was Rs.12 lakhs and expenditure was assessed at Rs. 9 lakhs. The assets in possession of B.N. Muduli and his wife was found to be Rs.80,50,615.75 and accordingly the disproportionate assets in the hands of B.N. Muduli and his wife was assessed at Rs.77,50,615.75. 9 lakhs. The assets in possession of B.N. Muduli and his wife was found to be Rs.80,50,615.75 and accordingly the disproportionate assets in the hands of B.N. Muduli and his wife was assessed at Rs.77,50,615.75. Undisputedly the income of the son of B.N. Muduli and his wife Sukanti Muduli was being assessed for the purpose of income tax independent of his parents income. Undisputedly also he was the Managing Director of two Companies and trustee of M/s. Naba Pravat Trust. From the impugned order itself, it appears that N.K. Muduli as Managing Director of the two Companies and as a special/super class contractor, had executed works worth crores of rupees within five years prior to the period during which investigation by the Department was taken up. The income of the two Companies and the Trust were available with Registrar of Companies in the returns filed by the Company as well with the Income Tax authorities. The prosecution allegation is that the unaccounted for income of B.N. Muduli had been diverted to the Companies run by his son N.K. Muduli. In the earlier writ application filed by one of the petitioners for release of his account, the Court examined the records and found that the allegation of the prosecution that the unaccounted for money of B.N. Muduli had been diverted to his son N.K. Muduli for investment in the two Companies run by him was not supported by any material. Though in course of hearing before the trial Court the learned counsel appearing for the petitioners relied upon the said observation, the Court did not accept the same on the ground that such an observation had been made when the matter was under investigation and charge-sheet was submitted in the case much after the said observation was made in the writ petition. I, therefore, called upon the learned counsel appearing for the Department to produce the materials which would indicate that the alleged unaccounted for money in the hands of B.N. Muduli had been diverted either to his son N.K. Muduli or to the two Companies or the Trust run by his son N.K. Muduli. Shri Das, the learned counsel has not been able to show any material to establish the link. However, it was contended by him that a presumption arises in this regard. Shri Das, the learned counsel has not been able to show any material to establish the link. However, it was contended by him that a presumption arises in this regard. Under Section 4(1) of the Prevention of Corruption Act, it has to be presumed that the amount, recovered from the accused was received by him as illegal gratification though such presumption is rebuttable. The accused may rebut such presumption by showing a mere preponderance of probability in his favour. Under Prevention of Corruption Act, a presumption of accepting gratification arises only when the persecution proves that whatever the accused received was ‘gratification’. To raise a presumption under the Act, the prosecution has to prove that the accused has received gratification other than legal remuneration and only then receipt of money is sufficient to raise the presumption. Once this fact is established by the prosecution by placing documents before the Court, the accused has to rebut this presumption. Therefore, what is necessary for the prosecution to prima facie establish is that money was received by the accused. Once this fact is established, then it becomes the burden of the accused to prove that the money received was not the illegal gratification. The learned counsel Shri Das appearing for the Department has produced a copy of the entire Case Diary. After carefully going through the entire Case Diary, I have not been able to find out any statement or document which would indicate that the alleged unaccounted for money in the hands of B.N.Muduli had been diverted to N.K. Muduli or the Companies/Trust run by him. In this connection, the learned counsel Shri Das placed reliance on the decision of the Madhya Pradesh High Court in the case of Permanand Jha v. State of Madhya Pradesh (supra) and it was submitted that only on the basis of the income tax returns filed by Shri N.K. Muduli, it cannot be held that N.K. Muduli had independent income of his own from the companies run by him and the source of such income to establish the companies and run the same have to be made known to the Court. In absence of any evidence with regard to the source of income on the basis of which these companies were formed and business transactions were made, the income tax returns cannot be accepted mechanically. In absence of any evidence with regard to the source of income on the basis of which these companies were formed and business transactions were made, the income tax returns cannot be accepted mechanically. There is also no dispute about the above contention of the learned counsel Shri Das appearing for the Department. The Court specifically asked the learned counsel for the Department to produce any material either statement of a witness or document to show that the alleged unaccounted for money in the hands of B.N. Muduli had been diverted to his son N.K. Muduli for forming the company and transacting the business in the name of the companies. Neither Shri Das could produce any statement or document nor could I find any material in support of the same from the Case Diary. The source of income of Shri N.K. Muduli could be more than one for forming the companies and transacting the business and it cannot be said or presumed that the only source of funding for formation of the companies and transacting the business was that of the money of his father B.N. Muduli. In absence of any material to support the allegation of the prosecution, the question arises as to whether the income of N.K. Muduli from the two Companies and the Trust can be added to the alleged disproportionate assets in the hands of his father B.N. Muduli. This aspect of the case though argued, was not taken into consideration by the trial Court while rejecting the petition. It is further found from the impugned order that the Income Tax returns filed by the wife of B.N. Muduli had also not been taken into account while calculating the alleged disproportionate assets in the hands of Sri B.N. Muduli though the returns of Smt. Sukanti Muduli, the wife of B.N. Muduli were available with the Investigating Officer. 9.It is true that at the time of framing of charge, the Court is not required to go into the details of the evidence placed by the prosecution and existence of prima facie case is enough to frame charge but at the same time the Court also cannot close its eyes and pass an order mechanically when the prosecution is not able to place materials before the Court either in support of a particular offence or against a particular accused. I am, therefore, of the view that the matter should be remitted back to the trial Court again for reconsideration. I accordingly set aside the impugned order, remit the matter back to the trial Court for reconsideration of the two petitions filed by three petitioners under Section 227 of the Code of Criminal Procedure. On examination of record if the trial Court finds that there is no material on record to establish that the alleged unaccounted for money of B.N. Muduli had been transferred or diverted to his son N.K. Muduli or the two Companies run by him, it may direct for further investigation in the matter. Similarly the Income Tax returns of Smt. Sukanti Muduli being available on record, the Court cannot also close its eyes and accept whatever the Department alleges. 10.The application is accordingly allowed and remitted back for reconsideration by the trial Court keeping the above observations in mind. Consequently the impugned order is set aside. Application allowed.