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Gujarat High Court · body

2014 DIGILAW 797 (GUJ)

M. L. Sharma v. State of Gujarat

2014-07-17

R.D.KOTHARI

body2014
JUDGMENT R.D. Kothari, J. 1. The applicant prays to quash an F.I.R. being No. RC3(A)/1998 G.N.R. filed by C.B.I. for the offence under Sec. 13(1)(c) read with Sec. 13(2) of Prevention of Corruption Act. Sole question raised herein, is based on the plea that continuation of criminal proceeding is bad and illegal when on same set of facts, case against the applicant was not found acceptable in departmental proceeding. Short facts are thus: It appears that the applicant joined Government services on 23-12-1968 as Assistant in the Department of company affairs. Then on 7-8-1990, the applicant was selected to the post of Joint Director (Legal) in the office of Regional Director, Bombay. Thereafter, the applicant was appointed as Registrar of Companies at Ahmedabad. He was on the said post from June, 1993 to February, 1996. On 9-1-1998, an F.I.R. was lodged against the applicant for the above-referred offence alleging that compare to his known source of income, he possessed disproportionate assets. Investigation was taken up by C.B.I. Gandhinagar. At the end of investigation, charge-sheet was filed on 23-6-2002. It appears that on the date of filing of charge-sheet, notice of initiation of departmental inquiry was issued by the Department. Accordingly, departmental inquiry was carried out which inter alia includes ground of applicant's possession of disproportionate assets compare to his known source of income. Report of Inquiry Officer is dated 6-8-2003. 2. Heard the learned Advocate for me parties. 3. Learned Advocate for the applicant Ms. Sangeeta Pahwa has pointed out that finding and report of Inquiry Officer on the charge of holding disproportionate assets, compare to his known source of income by the applicant, is in favour of the applicant. In view of such findings referred at, by the Inquiry Officer, it was submitted that continuation of criminal proceedings i.e. proceedings under Prevention of Corruption Act is uncalled for. It was submitted that for establishing case under Corruption Act, degree of proof required, is much higher than the degree of proof required in inquiry proceedings. That being so, when no case is found in inquiry proceedings, there is no point in asking the applicant to face trial. In support of his submission, learned Advocate for the applicant has drawn attention to P.S. Rajya v. State of Bihar, reported in : 1996 (9) SCC 1 . Relying on the same, it was urged that present petition should be dismissed. 4. Mr. In support of his submission, learned Advocate for the applicant has drawn attention to P.S. Rajya v. State of Bihar, reported in : 1996 (9) SCC 1 . Relying on the same, it was urged that present petition should be dismissed. 4. Mr. Y.N. Ravani, learned Advocate appearing for C.B.I. has vehemently opposed the present petition. It was submitted that in the Special A.C.B. case, pending against the applicant i.e. Special Case No. 7 of 2001, the applicant had applied for discharge and the said application came to be rejected. The applicant has not opted to challenge the said order before any higher forum. It was submitted that said order was allowed to become final. Then charge was framed by Special Court on 28-7-2009. That present petition is filed by the applicant belatedly in April, 2012 i.e. virtually after three years of framing of charge and for that reason, this Court should not entertain the present petition. It was submitted that on the ground of delay and conduct of applicant, present petition should be dismissed. Submission of learned Advocate for the applicant, based on finding of departmental inquiry, was replied by relying on judgment of this Court in the case of P.N. Motiwala v. State of Gujarat, in Misc. Criminal Application No. 4761 of 2011. It is decided on 8-8-2011. It was submitted that in view of this latest judgment of this Court, present petition should be dismissed. It was also submitted that powers of this Court under Sec. 482 of Cr.P.C. ought not to be exercised in view of bar provided in Sec. 19(3)(c) of the Prevention of Corruption Act. 5. Learned A.P.P. Ms. Shah for the State has supported the submission of learned Special P.P. Mr. Ravani. It was submitted that in the present case, not only the charge-sheet is filed but Court has already framed the charges, and therefore, this Court should not interfere. 6. P.N. Motiwala case, [Misc. Cri. Appli. No. 4761 of 2011] in some respect, comes very close to the present case. In that case, the applicant was Storekeeper, Grade-II at O.N.G.C. Bombay. Case against him was that during the period of his service, he has acquired assets disproportionate to his known source of income. For the period under consideration, his income was estimated as 12,60,000/- approximately. Against that for the said period, he had incurred the expenditure of Rs. 21 lacs approximately. Case against him was that during the period of his service, he has acquired assets disproportionate to his known source of income. For the period under consideration, his income was estimated as 12,60,000/- approximately. Against that for the said period, he had incurred the expenditure of Rs. 21 lacs approximately. Then, it was a case of acquiring assets worth of Rs. 3,70,000/-. Thus, it was alleged that the applicant has acquired assets and has incurred expenditure far in access of his known source of income. On behalf of applicant, reliance was placed on Radheshyam Kejriwal v. State of West Bengal, reported in, 2011 (2) SCALE 540. Relying on the same, the submission identical to the submission made herein by the applicant, was made in that case by learned Advocate for the parties. The Court did not agree with the submission of applicant and petition was dismissed. 7. At this stage, brief reference may be made to the relevant facts on record; as per the charge, the applicant was possessing disproportionate assets to the tune of Rs. 11,30,687-03 paise. The relevant period - check period, taken into consideration for this is - 1-1-1993 to 31-12-1996. Inquiry report is at Annexure 'C'. There were five charges against the applicant. Charge number - V is during the period i.e. 1993 to 1996, the applicant had acquired - ".....disproportionate assets through illegal means". The conclusion recorded by the Inquiry Officer in Para 7.5. In Para 7.5.8 held thus: "7.5.8. Summarizing the above discussion, after assessing the documentary and oral evidences for this Article of Charge from both me sides, it can be said that as the charges that the CO. had given a loan of Rs. 1 lac to Shri Akhilesh Chauhan and also the CO. had contributed and built the additional construction during 1993-1996 by spending approx. Rs. 9.67 lac could not be substantiated, it cannot be concluded that the CO. had acquired disproportionate assets as the same did not belong him.Accordingly, the charge that the CO. had acquired disproportionate assets worth Rs. 11.30 lac during the check period 1993-1996 is not substantiated." (Emphasis Original) 8. The Inquiry Officer has found that none of five charges proved against the applicant. 9. It was pointed out that at the time of hearing, me disciplinary authority was not agreeable with me report, conclusion and finding of me Inquiry Officer. had acquired disproportionate assets worth Rs. 11.30 lac during the check period 1993-1996 is not substantiated." (Emphasis Original) 8. The Inquiry Officer has found that none of five charges proved against the applicant. 9. It was pointed out that at the time of hearing, me disciplinary authority was not agreeable with me report, conclusion and finding of me Inquiry Officer. It was submitted that disciplinary authority sought opinion of U.P.S.C. U.P.S.C. said to have given advice to pass an order of compulsory retirement. Upon passing of the said order by the authority, the applicant challenges the same before Central Administrative Tribunal (C.A.T.) in O.A. No. 1738 of 2007. The said Tribunal was pleased to allow the O.A. and has set aside the order under challenge. 10. In P.S. Rajya case, 1996 (9) SCC 1 question arose before the Hon'ble Supreme Court was: "3. The short question that arises for our consideration in this appeal is whether the respondent is justified in pursuing the prosecution against the appellant under Sec. 5(2) read with Sec. 5(1)(e) of the Prevention of Corruption Act, 1947 notwithstanding the fact that on an identical charge the appellant was exonerated in the departmental proceedings............." 11. In that case, the appellant was appointed as Income Tax Inspector in 1961. Appellant's wife was a Teacher in Central School at Bokaro Steel City. Case against the appellant was holding assets to the extent of Rs. 3,57,439 - disproportionate assets to his known source of income. Taking of cognizance by the Court, was challenged by the appellant by filing petition under Sec. 482 of Cr.P.C. The Hon'ble High Court was pleased to dismiss the petition. In appeal before the Hon'ble Supreme Court against that order, while allowing the appeal, it was held thus: "17. At the outset, we may point out that the learned Counsel for the respondent could not but accept the position that the standard of proof required to establish the guilt in a criminal case is far higher than the standard of proof required to establish the guilt in the departmental proceedings. He also accepted that in the present case, the charge in the departmental proceedings and in the criminal proceedings is one and the same. He did not dispute the findings rendered in the departmental proceedings and the ultimate result of it. He also accepted that in the present case, the charge in the departmental proceedings and in the criminal proceedings is one and the same. He did not dispute the findings rendered in the departmental proceedings and the ultimate result of it. On these premises, if we proceed further then there is no difficulty in accepting the case of the appellant. For, if the charge which is identical could not be established in a departmental proceedings and in view of the admitted discrepancies in the reports submitted by the valuers one wonders what is there further to proceed against the appellant in criminal proceedings............" 12. Allowing the appeal, it concluded thus: "26. We cannot simply ignore the above extracts from the rejoinder, affidavit in the facts and the circumstances of the case. To put it mildly, we observe that we are not at all happy about the way in which the C.B.I. has conducted itself in this case. We are sure that the department will not give room for such observations in the future." 13. It appears that in P.N. Motiwala case, [Misc.Cri.A. No. 4761 of 2011] attention of this Court was not drawn to P.S. Rajya case, 1996 (9) SCC 1 ]. It was submitted that in Radheshyam Kejriwal case, 2011 (2) SCALE 540], P.S. Rajya case, 1996 (9) SCC 1 ] is considered. Before dealing with the case i.e. reference to P.S. Rajya case (supra), in later Radheshyam Kejriwal case, 2011 (2) SCALE 540], the ratio culled out by the majority from earlier decision on point, in Radheshyam Kejriwal case, 2011 (2) SCALE 540] may be referred to: "The ratio which can be culled out from these decisions can broadly be stated as follows: (i) Adjudication proceeding and criminal prosecution can be launched simultaneously; (ii) Decision in adjudication proceeding is not necessary before initiating criminal prosecution; (iii) Adjudication proceeding and criminal proceeding are independent in nature to each other; (iv) The finding against the person facing prosecution in the adjudication proceeding is not binding on the proceeding for criminal prosecution; (v) Adjudication proceeding by the Enforcement Directorate is not prosecution by a competent Court of law to attract the provisions of Art. 20(2) of the Constitution or Sec.300 of the Code of Criminal Procedure; (vi) The finding in the adjudication proceeding in favour of the person facing trial for identical violation will depend upon the nature of finding. If the exoneration in adjudication proceeding is on technical ground and not on merit, prosecution may continue; and (vii) In case of exoneration, however, on merits where allegation is found to be not sustainable at all, and person held innocent, criminal prosecution on the same set of facts and circumstances cannot be allowed to continue underlying principle being the higher standard of proof in criminal cases. In our opinion, therefore, the yardstick would be to judge as to whether allegation in the adjudication proceeding as well as proceeding for prosecution is identical and the exoneration of the person concerned in the adjudication proceeding is on merits. In case it is found on merit, that there is no contravention of the provisions of the Act in the adjudication proceeding, the trial of the person concerned shall be in abuse of the process of the Court." 13.1. It was submitted that present case governs by (vii) of the above ratio. 14. In Radheshyam Kejriwal case, 2011 (2) SCALE 540], notice was issued to appellant for violation of Foreign Exchange Regulation Act, 1973. It was a case of Authority that the appellant had in 1992 without necessary permission and without any claim of exemption has made payment of Rs. 24,75,000/- as consideration for US $ 75,000/-. That the said transaction was carried out through one nominee at Yugoslavia. Show-cause notice followed by proceeding before the Authority, called adjudication proceeding. Therein, order was passed in favour of the appellant. That order had become final. Then the Authority had filed a criminal complaint, "on the same allegation which was subject matter of adjudication proceeding". The appellant had filed an application to drop the proceedings before the trial Court. The same was rejected by the Magistrate. The appellant unsuccessfully pursued the remedy before the High Court. In further appeal before the Hon'ble Supreme Court, the Court was divided. Majority allowed the appeal and quashed the order of Magistrate and of High Court, meaning thereby, the application to drop the proceedings was allowed. Majority did not refer P.S. Rajya case, 1996 (9) SCC 1 ]. P. Sathasivam, J. (as His Lordship then was) in his dissenting judgment has referred P.S. Rajya case, 1996 (9) SCC 1 ], while referring the submission of learned Advocate for the parties and beside that the former judgment was not commented upon in dissenting judgment. 15. Majority did not refer P.S. Rajya case, 1996 (9) SCC 1 ]. P. Sathasivam, J. (as His Lordship then was) in his dissenting judgment has referred P.S. Rajya case, 1996 (9) SCC 1 ], while referring the submission of learned Advocate for the parties and beside that the former judgment was not commented upon in dissenting judgment. 15. This Court in P.N. Motiwala case, [Misc. Cri. Appli. No. 4761 of 2011], referring Radhyshyam Kejriwal case (supra) how cause, cited before it, has observed thus: "...........As observed by the Hon'ble Supreme Court in the decision relied upon by the learned Counsel appearing on behalf of the applicant in the case of Radheshyam Kejriwal, 2011 (2) SCALE 540], the Hon'ble Supreme Court has specifically observed and held that the findings and/or observations of the Inquiry Officer in a departmental inquiry and/or findings of the adjudicating officer are not binding to the Criminal Courts. It is also required to be noted that as such in the aforesaid decision and other decisions which have been considered by the Hon'ble Supreme Court in the said decision, the issue was exoneration in an adjudication proceedings either under me Income Tax Act and/or Customs Act and/or Foreign Exchange Act and with respect to penalty and in cases where adjudication proceedings as well as criminal proceedings were launched simultaneously." (Para 5.1) 16. It would appear that in P.N. Motiwala case, [Misc. Cri. Appli. No. 4761 of 2011], peculiar facts of the case had weighed with the Court. Initiation of criminal proceeding much prior in time compare to departmental proceedings plus granting of sanction for prosecution by me Sanctioning Authority had weighed with the Court. Further, on the point of applicant's assets disproportionate to his known source of income, the Inquiry Officer has held in favour of the applicant, and accordingly, said charge was held not proved, however, other charge in the inquiry was held as proved against the applicant and punishment of censure was passed. Then, it was found that C.B.I. has recorded statement of 56 witnesses during investigation and against mat, the Inquiry Officer has examined 37 witnesses. It was pointed out to the Court in that case that important and material witnesses were not examined before the inquiry proceedings. Further, this Court has also found that, ".......certain vital aspects have not been considered by the Inquiry Officer...........". It was pointed out to the Court in that case that important and material witnesses were not examined before the inquiry proceedings. Further, this Court has also found that, ".......certain vital aspects have not been considered by the Inquiry Officer...........". Besides that, as observed above, attention of this Court was not drawn to P.S. Rajya case, 1996 (9) SCC 1 ] in P.N. Motiwala case, [Misc. Cri. A. No. 4761 of 2011]. It may be stated that in the present case, inquiry report is fairly lengthy. It runs into 33 printed pages. Case of the department on charge-V i.e. charge in question is referred in over two pages, men discussion on charge-V, runs into three pages. 17. Learned Advocate Mr. Y.N. Ravani, has submitted that in me present case, sanctioning authority has granted sanction despite me report of inquiry officer that being so, this Court should not interfere at this stage. In view of P.S. Rajya case (supra), it is not possible to agree with the submission of learned Advocate. Further, holding and observations of Central Administrative Tribunal deserve to be referred and quoted. "29. Applicant in his representation against the disagreement took several places in defence. This disciplinary authority has stated in brief the contentions of the applicant on Articles of Charge. However, except referring to the U.P.S.C's. advice, no reasons have been recorded by me disciplinary authority as to the defence of the applicant and only on the basis of U.P.S.C's. advice and the disagreement note, the disciplinary authority held the applicant not only guilty of me charge but also imposed upon him an extreme penalty of compulsory retirement. 30. In our considered view, the applicant has been prejudiced and deprived of a reasonable opportunity, as his defence contentions have not at all been considered in legal parlance, which shows non-application of mind by the disciplinary authority. Even if the impugned order runs into 18 pages, yet in the context of consideration of the defence of the applicant and recording of reasons, it is a bald and non-speaking order. 37. Even if the impugned order runs into 18 pages, yet in the context of consideration of the defence of the applicant and recording of reasons, it is a bald and non-speaking order. 37. As regards charge V, though disproportionate assets have been accrued against the applicant, me only disproportionate asset is me alleged undisclosed investment in the construction of property and as we have already concluded that the respondents have miserably failed to establish this charge, any reference to this charge on account of disproportionate asset would also be pervert and this charge has been established on disagreement and merely on suspicion, surmises and conjectures. 40. From me above, we conclude that the charges levelled against the applicant have been established on disagreement by the disciplinary authority on no evidence, suspicion and surmises, as such no misconduct is found to have been committed by the applicant, for which he could either be held guilty or punished." 17.1. It would appear that though C.A.T. came upon heavily on Disciplinary Authority, the order of C.A.T. was not challenged by the Authority and it was allowed to be become final. 18. Commenting upon opinion of U.P.S.C., learned Advocate for the applicant has drawn attention to following part of its conclusion: "The Commission observe that disproportionate assets to me extent of undisclosed investments made in the construction of property (A-112, Pratap Nagar) stand proved. Since, as per the Will, the property rights vested completely in the Co., it was his duty, as required under the rules, to inform/seek permission of the competent authority for additions/constructions made. This, the CO. did not do. Hence, the Commission have held the charge as reasonably established against me C.O." 19. Say of the applicant is not only based on the report of departmental inquiry. Observations of C.A.T. is relevant. Observations of C.A.T. as referred above, are relevant and supports the say of the applicant. 20. Submission of learned Advocate Mr. Ravani that while applicant's discharge application is rejected, this Court should not interfere, may be considered. On perusal of discharge order, it would appear that passing of order by C.A.T., had led the applicant to file discharge application and the Special Court was of the view that at the time of framing charge, material produced by the defence is not required to be looked into. On perusal of discharge order, it would appear that passing of order by C.A.T., had led the applicant to file discharge application and the Special Court was of the view that at the time of framing charge, material produced by the defence is not required to be looked into. Holding so, the Special Court refused to look into the order of C.A.T. produced by the applicant, accordingly, discharge application was dismissed. 21. In the circumstances of the case, reliance placed on Sec. 19(3)(c) of Prevention of Corruption Act by learned Advocate Mr. Ravani is misplaced. It provides that Court shall not exercise revisional power in cases under Prevention of Corruption Act in relation to any interlocutory order. No such case herein. Exercise of powers under Sec. 482 of Cr.P.C. cannot be equated with exercise of revisional power. Further, P.S. Rajya case, 1996 (9) SCC 1 ], is also answer to this submission. In view of above discussion, present petition succeeds. F.I.R. registered as F.I.R. No. RC3(A)/98-GNR and also subsequent proceedings pursuant to the said F.I.R. is hereby quashed and set aside. Rule is made absolute.