Gujarat High Court
Ambati Janardhana Rao @ A.J.Rao vs Central Bureau Of Investigation & on 6 August, 2015
Author: J.B.Pardiwala
Bench: J.B.Pardiwala
R/SCR.A/1013/2014 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CRIMINAL APPLICATION (QUASHING) NO. 1013 of 2014
With
SPECIAL CRIMINAL APPLICATION NO. 816 of 2014
TO
SPECIAL CRIMINAL APPLICATION NO. 817 of 2014
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE J.B.PARDIWALA
==========================================================
1 Whether Reporters of Local Papers may be allowedYes
to see the judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the fair copy ofNo
the judgment ?
4 Whether this case involves a substantial question ofNo
law as to the interpretation of the Constitution of
India or any order made thereunder ?
==========================================================
AMBATI JANARDHANA RAO @ A.J.RAO....Applicant(s)
Versus
CENTRAL BUREAU OF INVESTIGATION & 1....Respondent(s)
==========================================================
Appearance:
MR NACHIKET A DAVE, ADVOCATE for the Applicant(s) No. 1
MS.DILBUR CONTRACTOR, ADVOCATE for the Applicant(s) No. 1
MR RC KODEKAR, ADVOCATE for the Respondent(s) No. 1
PUBLIC PROSECUTOR for the Respondent(s) No. 2
==========================================================
Page 1 of 37
HC-NIC Page 1 of 37 Created On Fri Aug 07 02:27:50 IST 2015
R/SCR.A/1013/2014 CAV JUDGMENT
CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA
Date : 06/08/2015
CAV JUDGMENT
1. Since the issues involved in all three applications referred to above are interlinked and they also arise from one common prosecution, those were analogously heard and are being disposed of by this common judgment and order.
2. The applicants before me are accused in the F.I.R. No. R.C.2(A)/2008/ACUVII/CBI, New Delhi) dated 30th December, 2008. The F.I.R. was registered by Shri Suresh Kumar, D.S.P., CBI, New Delhi considering the report of Shri Manoranjan Kumar, the then Deputy Chairman and Chief Vigilance Officer of the Kndla Port Trust, Gandhidham. The F.I.R. was lodged for the offence punishable under Sections 120(B), 420 of the Indian Penal Code and Sections 13(1)(D) read with 13(2) of the Prevention of Corruption Act, 1988.
3. On completion of the investigation charge sheet was filed in the Court of the learned Special Judge (CBI Cases), Ahmedabad (Rural), which culminated in the special CBI Case No.6/2011.
4. The case of the prosecution may be summarized Page 2 of 37 HC-NIC Page 2 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT as under:
5. The applicant of the Special Criminal Application No.1013 of 2014 namely Shri Ambatijanardhan Rao, the former Chairman, Kandla Port Trust and other employees of the Kandla Port Trust are alleged to have entered in a criminal conspiracy with the applicant of the Special Criminal Application No.816 of 2014 namely, Shri Naresh Jayantilal Kotak, partner of a partnership firm namely M/s. J.M. Baxi and Company and the applicant of the Special Criminal Application No.817 of 2014 namely, Shri Krishn Bhagwan Kotak, Managing partner of M/s. J.M. Baxi and Company in connection with the renewal of lease of a plot of land allotted to M/s. J.M.Baxi and Company in the year 1964 and its transfer to M/s. Tejmalbhai and Company sometime in the year, 2002 in gross violation of the Policy of the Ministry of Shipping, Government of India. The Chief Vigilance Officer of the Kandla Port Trust conducted a formal inquiry in the matter. A report of the same was prepared and forwarded to the Superintendent of Police, CBI, New Delhi. It is alleged that the plot Nos.3 & 4 BlockA, KPT were allotted on lease of 30 years in 1964 to M/s. J.M.Baxi & Co. for the purpose of "office cum business centre". Although the construction was to be completed within 24 months of Page 3 of 37 HC-NIC Page 3 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT allotment, the private company did not construct the approved office cum business centre upto 1989. It is further alleged that the private company constructed a "godown" in place of "office cum business centre" which was not the purpose for which the land was given on lease.
6. The salient features of policy/guidelines of the Department of Shipping are (I) the port land should ordinarily be leased out for the port related activities only and that to on the basis of the competitive bidding only, (ii) There should be no automatic renewal of the lease deed and (iii) The port trust should closely monitor the construction of any building on the land as per the building plans approved by the authority.
7. The lease expired in 1994 and the Board of KPT recommended to renew the lease on 30.08.97. In the board note purpose for lease was mentioned as "office cum business". This note was approved by the board, however, the purpose reflected in the draft letter addressed to the Central Government for approval, put up by the then Estate Manager, was changed by the then Secretary, KPT Shri A. Janardhan Rao 'for the purpose of godowns only'. This was sent for approval of the Central Government. The proposal sent to the Central Government for approval, Page 4 of 37 HC-NIC Page 4 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT thus, was found to be at variance with the note approved by the Board of Trustees. Further, the KPT Officials omitted to mention that the original purpose was being changed in the letter addressed to the Ministry dated 12.11.1997. The Ministry approved the renewal of lease as recommended by the Board of KPT. Finally, the lease was renewed on 17.04.2002 and in the lease document it was mentioned that "the lessee shall strictly use the plot, building, structure erected thereon only for the purpose for which the allotment is made i.e. "CONSTRUCTION OF STORAGE TANKS". It is alleged that at the time of the execution of lease deed the purpose approved by Central Government was again changed without any approval. The new purpose was altogether different from the original purpose, for which the land was allotted and also from the purpose recommended to the Ministry, Government of India and the purpose approved by the Government of India. The new lease was executed on 17.04.2002 at a lease rent of Rs.11 per square meter.
8. It has been alleged that in 2005, the competitive bidding was undertaken for the allotment of 23 plots for the construction of the liquid storage tanks for which 42 parties had applied. Those parties had to meet with certain technical conditions before consideration of Page 5 of 37 HC-NIC Page 5 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT their financial bid. During this bid process, the bids ranging between Rs.3,762/ per sq. mtr. to Rs.6,412/ per sq.mtr. were received.
9. It is further alleged that the plot Nos.3 & 4leased to M/s. JM Baxi & Co. were transferred to M/s Tejmal Bhai & Co. on imposition of transfer fee of Rs.3,77,430/ with the approval of the then Chairman, KPT. The transfer fee imposed has been alleged to be grossly under valued. Such transfer of lease was executed in favour of M/s Tejmal Bhai & Co. in 2006 for the purpose of the construction of storage tanks. Although, the companies who had come through open bidding had to meet with certain technical conditions, no such technical conditions were imposed on M/s Tejmal Bhai & Co. It is alleged that the land was transferred to M/s Tejmal Bhai & Co. on a much lesser rate than the minimum lease rent of 6% of the market value per year as specified by the Ministry. Taking the market value as the minimum bid received in 2005 i.e. Rs.3762/ per sq. mtr., it is alleged that huge monetary loss was caused to the KPT with the intention of causing wrongful gain to the private parties.
10. It is alleged that Sh. A. Janardhan Rao, the then Chairman, KPT, Sh. K.C. Vyas, Estate Manager, KPT, Deepak Jain, Dy. Secretary Page 6 of 37 HC-NIC Page 6 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT (Estate), KPT and Sh. Venkatesh, Traffic Manager, KPT in conspiracy with M/s JM Bakshi & Co. and M/s Tejmal Bhai & Co. concealed the facts and changed the purpose of allotment of land. They mislead the Ministry while recommending for renewal of the lease deed and transfer of land and awarded lease at rates much lower than what was prescribed by the guidelines framed by the Ministry.
11. The applicant of the Special Criminal Application No.1013 of 2014 filed a discharge application in the CBI Special Case No.6/12, Exhibit28 substantially on the ground that no case had been made out by the CBI against him for the purpose of framing the charge. A detailed reply Exhibit43 to such discharge application was filed by the CBI.
12. The learned Special Judge (CBI) Court No.4, vide order dated 17th January, 2014 rejected the discharge application. Being dissatisfied with the impugned order the applicant has come up with this application under Article 227 of the Constitution of India.
13. The applicants of the Special Criminal Application No.816 of 2014 and 817 of 2014 also filed a discharge application Exhibit60 before Page 7 of 37 HC-NIC Page 7 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT the Special Court and such discharge application Exhibit60 was ordered to be rejected by the learned Special Judge dated 17th January, 2014.
14. Being dissatisfied with the impugned order the applicants have come up with their respective applications challenging the impugned order under Article 227 of the Constitution.
15. Mr. Dhaval Dave, the learned senior advocate assisted by Ms.Dilbar Contractor, the learned advocate for the applicant of the Special Criminal Application No.1013 of 2014 vehemently submitted that the learned Special Judge committed a serious error in passing the impugned order. Mr. Dave submitted that the transfer was accorded in accordance with the due procedure of law. The lease deed itself provided for the transfer. The clause (XII) of the lease deed permits such transfer with the prior approval of the chairman. The applicant in his capacity as the then Chairman had accorded the permission for transfer.
16. Mr. Dave further submitted that on receipt of the application from M/s. J.M.Baxi for transfer, a proposal, was prepared by the then Divisional Accountant namely, Ms. Sunita Bajaj stating that an application for transfer had been received and Page 8 of 37 HC-NIC Page 8 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT in the proposal it was recommended that the chairman may accord his approval. Mr. Dave also pointed out that the Estate Manager in the note had further stated that all the relevant documents for the transfer were scrutinized minutely and the same were found to be in order. It was also stated in the note that there was no breach of any change of use. Mr. Dave submitted that, accordingly, his client was requested to accord his approval to such transfer for the remaining period of lease after recovering the transfer fees of Rs.3,77,430/ being six times the ground rent (with 5% escalation compoundable).
17. Mr. Dave submitted that his client as the Chairman of the Trust had inquired about the grounds for transfer and accordingly a note was prepared by the Estate Manager stating that the grounds for transfer as informed by M/s. J.M.Baxi were genuine and convincing. The traffic manager also expressed the same opinion. Nevertheless, the Trust had sought further information regarding the grounds for transfer from M/s. J.M.Baxi to which they had replied vide letter dated 12th July, 2006 that M/s. Tejmal were planning to use the plots for the construction of storage tanks as had been done by the adjacent plot holders. M/s. Tejmal had confirmed that they Page 9 of 37 HC-NIC Page 9 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT would put the storage tanks only after getting the plans for such construction approved by the Trust.
18. Mr. Dave submitted that once again it was recommended before his client to accord his approval for the transfer.
19. Mr. Dave, further submitted that the permission for the transfer was accorded in consonance with the terms of the lease deed and that to after following a transparent process wherein the responsible officers themselves after the scrutiny of the relevant documents had recommended the permission to transfer.
20. Mr. Dave submitted that his client had inquired about the grounds for the transfer and was informed that the plots would be used for the storage tanks and that to only after the grant of permission by the Trust. Mr. Dave pointed out that at the time of the transfer there were no storage tanks.
21. Mr. Dave submitted that the change of use of the plots could merely be termed as a breach of contract and the same is compoundable. The clause (3) of the contract itself provides that such breaches could be remedied within a month from Page 10 of 37 HC-NIC Page 10 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT the issue of notice from the Chairman.
22. Mr. Dave submitted that the transfer fee was collected by the Divisional Accountant and the Estate Manager. The transfer clause in the lease deed itself provides for the transfer fee to be recovered. The lease deed was originally of 1964 and thereafter renewed in the year 2002 i.e. before the policy was formulated and therefore the rights and obligations of the lessee and lessor would be governed by a specific contract.
23. Mr. Dave, lastly submitted that there is no case worth the name to frame any charge against his client and therefore the learned Special Judge should have allowed the discharge application.
24. Mr. Premal Nanavati, the learned counsel appearing with Mr. Khatana, for the other applicants submitted that the plots were initially leased vide the lease deed of 1964 wherein the purpose mentioned was "Office cum Business". The applicant being in the business of warehousing had the permission of the Trust to construct godowns. The clause (8) of the lease deed of 1964 provided for renewal and therefore the applicants had applied for renewal. Mr. Nanavati submitted that at the time of renewal of Page 11 of 37 HC-NIC Page 11 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT the lease deed it was specifically discussed in the meeting convened by the KPT that his clients were using the plots for the purpose of godowns and the same should be clarified in the renewed lease deed. Accordingly, the Resolution No.78 was passed resolving that the lease be renewed for the purpose of godowns. He submitted that the Ministry of surface Transport vide letter dated 31st March, 2000 had approved the renewal for godowns. The KPT vide their letter dated 27/29th November, 2000 had sent the format of the renewed lease deed. In the said letter of the KPT it has been specifically stated that the renewal was for the purpose of godowns only.
25. Mr. Nanavati submitted that the lease deed which was forwarded to his clients specified the purpose as "construction of storage tanks" Mr. Nanavati tried to explain that the same might have happened due to some inadvertence on the part of the KPT. The lease deed was signed by a constituted attorney of his clients and not by his clients themselves. As the format was sent by the Trust, the representative of his clients had signed the same blindly without realizing the change in the purpose. Mr. Nanavati laid much stress on the fact that his clients had not signed the deed and therefore no personal knowledge or any dishonest intention could be Page 12 of 37 HC-NIC Page 12 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT attributed to them.
26. Mr. Nanavati submitted that even in the transfer application dated 2nd January, 2006 his clients sought the transfer of plots with the godowns constructed on the same and that would necessarily indicate that no storage tanks were constructed by them and the plots were still used for the purpose of godowns.
27. Mr. Nanavati submitted that had there been any conspiracy to change the purpose then they would have constructed the storage tanks once the lease deed was renewed in 2002. Even as on today, there are no storage tanks in the said plots.
28. Mr. Nanavati submitted that the change of purpose at best could be termed as a breach of the convenent of contract and no mens rea could be attributed.
29. Mr. Nanavati submitted that the transfer was effected in accordance with the clause (XII) of the renewed lease deed which also specified the transfer fee that was to be recovered. The KPT collected the transfer fee accordingly and vide its communication dated 24th July, 2006 conveyed the approval for the transfer in lieu the consideration stated therein.
Page 13 of 37HC-NIC Page 13 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT
30. Mr. Nanavati submitted that there is no case worth the name to frame charge against his clients and put them to trial. It is therefore submitted that the discharge application be allowed and his clients may be discharged.
31. On the other hand all these applications have been vehemently opposed by Mr. R.C. Kodekar, the learned counsel appearing for the CBI. Mr. Kodekar submitted that no error not to speak of any error of law could be said to have been committed by the learned Special Judge in rejecting the discharge applications. Mr. Kodekar submitted that the case in hand is one of criminal conspiracy and large scale fraud. He submitted that at the time of deciding application for discharge the Court is required to consider the provisions of Sections 227 and 228 of the Criminal Procedure Code. Mr. Kodekar submitted that at this stage, the Court should not undertake an elaborate inquiry and record findings regarding the guilt or otherwise of the accused. If there is a strong suspicion about the involvement of the accused, it is not open to the Court to discharge him.
32. Mr. Kodekar submitted that the allegations against the former Chairman of the Trust are Page 14 of 37 HC-NIC Page 14 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT three fold:
(i) that he dishonestly accorded the approval for the transfer of the lease hold rights from M/s.
J.M.Baxi to M/s. Tejmalbhai and Co. in respect of the plots Nos. 3 and 4;
(ii) at the time of transfer he was supposed to study the lease deed in question and ensure the purpose for which the plots were allotted to M/s. J.M.Baxi;
(iii) He was obliged to recover the transfer fees as well as the ground rent keeping in mind the policy and guidelines dated 8th March, 2004 issued by the Ministry of Shipping.
33. Mr. Kodekar submitted that the manner in which the former Chairman acted casts a strong suspicion regarding his involvement in the alleged fraud.
34. In the same manner the allegations against the partners of M/s. J.M. Baxi are that at the time of renewal of lease deed, a draft proposal for renewal was sent to the Ministry of Surface Transport for its approval by KPT wherein it is mentioned that initially plots were alloted for "office cum business center" however in view of Page 15 of 37 HC-NIC Page 15 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT Resolution no.78 of the KPT Board the purpose of the land was changed to "godowns". The Govt. of India vide its letter dated 31/03/2000 accorded approval for godowns only. However in the lease deed which was executed between M/s. J.M. Baxi and KPT purpose was stated as "construction of storage tanks". Hence the officials of KPT and M/s. J.M.Baxi conspired to change the purpose of plots.
35. The KPT officials in conspiracy with M/s. J.M.Baxi charged a low transfer fee and not as per the 2004 land policy of the Govt., thereby causing huge monetary loss to the ex chequer. It is further alleged that the transfer of plots from M/s. J.M.Baxi to M/s. Tejmalbhai was a pre planned action for grabbing the plot nos. 3 and 4 without facing any NIT.
36. Mr. Kodekar submitted that there being no merit in any of the applications the same be rejected.
37. Having heard the learned counsel appearing for the parties and having gone through the materials on record the only question that falls for my consideration is whether the learned Special Judge committed any error in passing the impugned orders.
Page 16 of 37HC-NIC Page 16 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT
38. Before adverting to the rival submissions, I must look into the scope of Section 227 of the Code which provides for discharge.
39. Section 227 of the Code reads as under:
"227. Discharge - If, upon consideration of the record of the case and the documents submitted therewith, and after hearing the submissions of the accused and the prosecution in this behalf, the Judge considers that there is not sufficient ground for proceeding against the accused, he shall discharge the accused and record his reasons for so doing."
40. In State of Bihar Vs. Ramesh Singh, (1977) 4 SCC 39, while referring to section 227 of the Code, the Supreme Court observed:
"at that stage, the Court is not to see whether there is sufficient ground for conviction of the accused or whether the trial is sure to end in his conviction. Strong suspicion against the accused, if the matter remains in the region of the suspicion cannot take the place of proof of his guilt at the conclusion of the trial. But if at the initial stage, if there is a strong suspicion, which leads the Court to think that there is a ground for presuming that the accused has committed an offence then it is not open to the Court to say that there is no sufficient ground for proceeding against the accused."
The Supreme Court observed that: "If the evidence which the Prosecutor to adduced to prove the guilt of the accused, even if fully accepted before it is challenged in cross examination or rebutted by the defence evidence if any, cannot show that the accused committed the offence, then there will be no sufficient ground for proceeding with the trial."
The Supreme Court then went on to observe "If the scales as to the guilt or innocence of the Page 17 of 37 HC-NIC Page 17 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT accused are even at the conclusion of the trial, then on the theory of benefit of doubt the case must end in the acquittal of the accused; but if, on the other hand, the scales are even at the initial stage of making an order under section 227 or section 228, then in such a situation, ordinarily and generally the order will have to be made under section 228 and not under section 227."
41. In Union of India vs. Prafulla Kumar Samal, 1979 AIR (SC) 366 the Supreme Court reiterated the same principles but added that at the stage of Section 227 of the Code, the Court has the power to sift and weigh the evidence to find out whether there is any prima facie case against the accused but if two views are equally possible and the Judge is satisfied that the evidence gives rise to some suspicion but not grave suspicion against the accused, he will be fully within his right to discharge the accused. The Supreme Court further observed that the Judge should not act as a mouthpiece of the prosecution, but has to consider the broad probabilities of the case, the total effect of the evidence, any basic infirmities in the case and so on. The Supreme Court clarified that this however does not mean that the Judge should make a roving enquiry into the pros and cons of the matter and weigh the evidence as if he was conducting a trial.
42. In Superintendent & Remembrancer of Legal Affairs, West Bengal v. Anil Bhunja & Ors. AIR 1980 SC 52, the Supreme Court observed that the Page 18 of 37 HC-NIC Page 18 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT standard test, proof and judgment which is to be applied finally before finding the accused guilty or otherwise is not exactly to be applied at the stage of Section 227 or Section 228. At this stage, even a very strong suspicion founded upon materials before the Magistrate, which leads him to form a presumptive opinion as to the existence of the factual ingredients constituting the offence alleged, may justify the framing of charges against the accused in respect of the commission of that offence.
43. Same principles were reiterated by the Supreme Court in Niranjan Singh Karam Singh Punjabi v. Jiendra Bijja & Ors. AIR 1990 SC 1962.
44. In State of Maharashtra & Ors. v. Som Nath Thapa & Ors. (1996) 4 SCC 659, the Supreme Court observed that if there is a ground for presuming that the accused has committed the offence, it can be said that a prima facie case has been made out against the accused. Even if the court finds that the accused might have committed the offence, it can frame the charges. The Supreme Court clarified that at the stage of framing of charge, the probative value of the materials on record should not be gone into.
Page 19 of 37HC-NIC Page 19 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT
45. In State of Maharashtra v. Priya Sharan Maharaj & Ors. AIR 1997 SC 2041, the Supreme Court again reiterated that at the stage of framing of the charge, the court has to consider the material with a view to finding out if there is ground for presuming that the accused has committed the offence or that there is not sufficient ground for proceeding against him and not for the purpose of arriving at the conclusion that it is not likely to lead to a conviction.
46. In Dilawar Kurane's case (supra), the Supreme Court extensively quoted observations made by it in Prafulla Kumar Samal's case and reiterated the same principles.
47. It is also necessary to refer to the Supreme Court's judgment in the State of Karnataka v. L. Muniswamy & Ors. (1977) 2 SCC 699. In that case, some of the accused were discharged by the learned Session Judge under Section 227 of the Code. So far as the other accused were concerned, the learned Sessions Judge adjourned their case for framing charges against them. Two revision petitions were filed against this order. These petitions were allowed by the Karnataka High Court on the view that there was no sufficient Page 20 of 37 HC-NIC Page 20 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT ground for proceeding against them. It is clear from the first paragraph of the Supreme Court judgment that the High Court had, in exercise of its powers under Section 482 of the Code, quashed the proceedings initiated by the State of Karnataka. Being aggrieved by this judgment, the State of Karnataka approached the Supreme Court. The Supreme Court referred to Section 227 of the Code and observed that the High Court is entitled to go into the reasons given by the Sessions Judge in support of his order and to determine for itself whether the order of discharge is justified. The Supreme Court then referred to Section 482 of the Code and observed that in exercise of the wholesome power, the High Court is entitled to quash a proceeding if it comes to the conclusion that allowing the proceeding to continue would be an abuse of the process of the court or that the ends of justice require that the proceeding ought to be quashed. The Supreme Court further observed that this power is designed to achieve a salutary public purpose which is that a court proceeding ought not to be permitted to degenerate into a weapon of harassment or persecution. The following observation of the Supreme Court needs to be quoted.
"In a criminal case, the veiled object behind a lame Page 21 of 37 HC-NIC Page 21 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT prosecution, the very nature of the material on which the structure of the prosecution rests and the like would justify the High Court in quashing the proceeding in the interest of justice. The ends of justice are higher than the ends of mere law though justice has got to be administered according to laws made by the legislature. The compelling necessity for making these observations is that without a proper realisation of the object and purpose of the provision which seeks to save the inherent powers of the High Court to do justice between the State and its subjects, it would be impossible to appreciate the width and contours of that salient jurisdiction."
48. It is significant to note that when the attention of the Supreme Court was drawn to the judgment in R.P. Kapur v. The State of Punjab, AIR 1960 SC 866 to the effect that in its inherent jurisdiction, the High Court cannot embark upon an enquiry as to whether the evidence in the case is reliable or not, the Supreme Court reaffirmed this position and referring to the facts before it observed that in that case, there was no material on record on the basis of which any court could reasonably come to the conclusion that the accused were in any manner connected with the crime. Of course, in this case, the Supreme Court has also referred to Section 227 of the Code and observed that in exercise of this power, the court can determine the question whether the material on record if unrebutted is such on the basis of which a conviction can be reasonably possible. But, it must be remembered that primarily the Supreme Court was dealing with the High Court's power under Section 482 of the Page 22 of 37 HC-NIC Page 22 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT Code and that was a case where there was no material to reasonably connect the accused with the crime. Undoubtedly, the powers of the High Court under Section 482 of the Code are very wide and as observed by the Supreme Court, it has to consider the ends of justice and not the ends of mere law. In any case, what the Supreme Court has said in this judgment does not go counter to what it has said on this point in a line of judgments, which I have referred to hereinabove.
49.In the case of Rukmini Narvekar v. Vijaya Satardekar, 2009 AIR (SCW) 118, the Apex Court has observed thus at paragraph9:
"9. In my view, therefore, there is no scope for the accused to produce any evidence in support of the submissions made on his behalf at the stage of framing of charge and only such material as are indicated in Section 227, Code of Criminal Procedure can be taken into consideration by the learned magistrate at that stage. However, in a proceeding taken therefrom under Section 482, Code of Criminal Procedure the Court is free to consider material that may be produced on behalf of the accused to arrive at a decision whether the charge as framed could be maintained. Thus, in my view, appears to be the intention of the legislature in wording Sections 227 and 228 the way in which they have been worded and as explained in Debendra Nath Padhi's case by the large Bench to which the very same question had been referred.
Paragraph28 of the aforesaid decision is as under:
28. We have carefully perused the decision of this Court in the State of Orissa v. Debendra Nath Padhi.
Though the observations in paragraph 16 of the said decision seems to support the view canvassed by Shri Rohatgi, it may be also pointed out that in paragraph Page 23 of 37 HC-NIC Page 23 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT 29 of the same decision it has been observed that the width of the powers of the High Court can make such orders as may be necessary to prevent abuse of the process of the court or otherwise to secure the ends of justice within the parameters laid down in Bhajan Lal v. case. Thus we have to reconcile paragraphs 17 and 23 of the decision in State of Orissa v. Debendra Nath Padhi. We should also keep in mind that it is well settled that a judgment of the Court has not to be treated as a Euclid formula vide Dr. Rajbir Singh Dalai v. Chaudhari Devi Lai University Sirsa and Anr., 2008 8 JT 621. As observed by the Court in Bharat Petroleum Corporation Ltd. and Anr. v. N.R. Vairamani and Anr., 2004 AIR (SC) 4778, OBSERVATIONS OF Courts are neither to be read as Euclid's formula nor as provisions of the statute. Thus in our opinion while it is true that ordinarily defence materials cannot be looked into by the Court while framing of the charge in view of D.N. Padhi's case, there may be some very rare and exceptional cases where some defence material when shown to the trial court would convicingly demonstrate that the prosecution version is totally absurd or preposterous, and in such very rare eases the defence material can be looked into by the Court at the time of framing of the charges or taking cognizance.
Further, in paragraph29 of the said decision, the Apex Court has also laid down the circumstances under which (the defence can also produce some material i.e., where the material produced by the defence would convincingly establish that the whole prosecution version is totally absurd, preposterous or concocted."
50. In the case of State of Orissa v. Debendra Nath Padhi, 2005 SCC (Cri) 415, which is a decision of a three judges Becnh of the Apex Court, it has been held that, at the time of framing of the charge, the trial Court can consider only the material produced by the prosecution and there is no provision in the Code of Criminal Procedure granting the accused any right to file any material or document at that stage. The Apex Court went on to further observe Page 24 of 37 HC-NIC Page 24 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT that such a right is granted only at the stage of trial.
51. The principles laid down by the Supreme Court in the above cases need to be summarized. It is settled law that at the stage of Section 227 of the Code, the court has power to sift the materials collected by the prosecution to find out whether there is prima facie case against the accused or not. The court has to be satisfied that there is ground for presuming that the accused has committed the offence or that there is no sufficient ground for proceeding against him. The Court's enquiry must not be directed to find out whether the case will end in conviction. However, though roving enquiry is not permissible, the court can consider whether the material collected by the prosecution if accepted as it is without being subjected to cross examination gives rise to strong and grave suspicion for presuming that the accused has committed the offence and that unrebutted material will lead to a conviction. If at the stage of Section 227 or Section 228, the scales as to the guilt or innocence of the accused are even then the court must proceed to frame a charge. There is no question of giving benefit of doubt to the accused and discharge the accused at that stage because the scales are even. That can Page 25 of 37 HC-NIC Page 25 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT be done only at the conclusion of trial. If there is a strong suspicion which leads the court to think that there is a ground for presuming that the accused has committed an offence, then the court will proceed to frame the charge. But if two views are possible and the court is satisfied that the evidence gives rise to some suspicion but not grave suspicion against the accused, the court will be within its right to discharge the accused. Suspicion has to be strong and grave suspicion leading the court to presume that the accused has committed an offence. While basic infirmities and broad probabilities can be considered, the court cannot make a roving enquiry into the pros and cons of the matter and weigh the evidence as if it is conducting a trial. Probative value of the material cannot be gone into at that stage.
52. The learned Special Judge while rejecting the discharge application filed by the applicant of the Special Criminal Application No.1013 of 2014 observed in the impugned order as under: "10. It is an undisputed fact that renewal of lease deed was executed on 17.04.2002 but renewal of lease for the purpose of godown was recommended on 30.08.1997, for further period of 30 years and in this regard, proposal was forwarded to the Secretary, Ministry of Shipping, Government of India for approval of godown by KPT. During the said period, the present accused was Secretary Incharge. It is the Page 26 of 37 HC-NIC Page 26 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT say of the accused that he had no role to play since it was the Board Decision what was the role of accused in whole process as to whether he was suppose to check the entire renewal lease deed and as to whether it was his part to calculate the trnasfer fee etc., have not been mentioned by him which give rise to a strong suspicion in mind of Court as the matter involved in the case is huge monetary loss to KPT and for knowing the role of the accused in depth, in the whole process, trial is needed.
11. It is germane to note that investigation reveals that prior to August 2006, Kandla Port Trust, had allotted a plot no.16 ad measuring 7500 sq.mtr to M/s. Chandan Associates for purpose of construction of warehouse / godown for period of 30 years lease deed on 17.09.2002 which is located at South of National Highway, NR, West Gate No.1, New Kandla - Kutch and Partnership firm Chandan Associates consist of two partners Shri Praveen Chandra and Ashokkumar S.Chandan, respectively, who are also running another firm M/s.Tejmalbhai and Company, separately. After execution of Sale Deed, the said plot was transferred in the favour of M/s. J.M.Baxi and Co., a partnership firm, for consideration worth Rs.1,60,000,00/ and for that the approval was given given by the Chairman
- Accused No.1. So accused no.1 was aware of this fact and this market value. While on 19.01.2006, so far as this plot no.3 and 4, respectively, is concerned, M/s. J.M.Baxi and Company, had sought the permission to transfer the same to M/s. Tejmalbhai and Company for consideration of Rs.20,00,000/ only, which was accepted by accused no.1 and counted transfer fees on it, ignoring the market value and Government guidelines which reveal in investigation and in the statement of PW1 and Vigilance Officer - Mr. Manoranjankumar, respectively.
12. It also reveal from the investigation that plot no.10 and 11, of the Tejmalbhai and Company, is located nearby the plot no.3 and 4 and same was leased for the purpose of "Storage Tank" and Tejmalbhai and Company, wanted to purchase the plot no.3 and 4, for the purpose of developing his business as the same is attached to the storage Tank. So any how, they wanted to purchase the plot for the purpose of storage tank and hence, they obtained illegal and dishonest favour from Kandla Port Trust and other officials including the present accused no.1, who allowed them by ignoring the record and Government guidelines and thereby, caused wronglful loss to Kandla Port Trust.
21. If we consider section 10 of the Evidence Act Page 27 of 37 HC-NIC Page 27 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT (including omission), anything said or done by the conspirator in reference to common design is relevant fact and herein this case, from the investigating papers, following things have come before the Court for arriving at a conclusion:
1. First of all, it is the say of the present accused that he has no role to play in the renewal of lease since it was the Board Decision but as discussed above, as this accused has not taken consideration at the time of transfer that many illegality regarding the purpose of lease, has been committed by the office and ignored the rules and regulation of the Government, policy of the Government with regards to deciding the transfer fee and even not considered the different transaction of KPT between the accused etc., hence, it can be presumed that there was dishonest favour of the other accused and for knowing the actual role of the accused in the whole process, trial is required.
2. Secondly, there arise a strong suspicion in the mind of the Court as to why the renewal of the lease Deed was not verified as the same contained the storage of tanks instead of godown especially when the present accused was well acquainted with the contingency that the same will cause monetary loss to the KPT, in future and last but not the least,
3. Investigation reveals that, there was less transfer fee paid by the M/s. J.M. Baxi and apart from transfer fee, M/s. Tejmalbhai and CO. was also required to pay annual rent @ 6% of average market value i.e. Rs.300.27 per sq.mtr but in this case, KPT has charged annual rent of Rs.11 per sq.mtr which was less than the prescribed rate and thus, as per the investigation, the total loss to KPT towards transfer fee and annual rent is Rs.2,56,15,696/ and at the time of the transferring the plot, the present accused was chairman and due to the said transfer huge monetary loss has been caused to KPT and hence, again strong suspicion arise in the mind of Court as why being a Chairman, there was omission in the part of the his duty which caused monetary loss to KPT."
22. Now, for arriving at the conclusion of the acts, omissions and conduct of the accused, there is a requirement of full fledge trial and hence, in the light of the aforesaid reasons, this Court is of the considered opinion that the application preferred by the present accused deserves to be rejected and hence, the following order: : : Order : :
Page 28 of 37HC-NIC Page 28 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT The application filed by the present accused for discharge, is hereby rejected.
Pronounced in the open Court today on 17th January, 2014."
53. While rejecting the discharge application and the other applicants the learned Special Judge observed as under: "12. Analyzing the whole circumstances and evidences led by prosecution on record, it is found prima facie that there was intention to casue monetary loss to Kandla Port Trust and monetary gain to present applicants as well as Tejmalbhai and Company and also there was an intention of dishonest favour to M/s.
J.M.Baxi and Company. This Court can obviously presume that the officials of the Kandla Port Trust will not cooperate and help the present applicants as well as Tejmalbhai, in this illegal way, without any expectation of illegal gratification and pecuniary advantage. So far as conspiracy is concerned, direct evidence is seldom available but from the facts and circumstances Court can presume the same by fact. At this juncture, this Court would like to rely upon the case of State of Maharastra and others Vs. Somnath Thapa and others reported in 1996 SCC (Criminal) page 820 wherein is is observed that: "If there is ground for presuming that the accused has committed the offence, a Court can justifiably say that a prima facie case against him exists, and so, frame charge against him for committing that offence. In Black's Law Dictionary word "presume" has been defined to mean "to believe or accept upon probable evidence". Legal Dictionary has quoted in this context a certain judgment according to which "A presumption is a probable consequence drawn from the facts (either certain, or proved by direct testimony) as to the truth of a fact alleged. The aforesaid shows that if on the basis of materials on record, a Court could come to the conclusion that commission of the offence is a probable consequence, a case for framing of charge exists. To put it differently, it the Court were to think that the accused might have committed the offence, it can frame the charge, though for, conviction the conclusion is required to be that the accused has committed the offence. It is apparent at this stage of framing of charge, probative value of the materials on record cannot be Page 29 of 37 HC-NIC Page 29 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT gone into, the material brought on record by the prosecution has to be accepted as true at that stage."
13. So far as the condition of the agreement in transfer deed is concerned, as per the statement of PW1 and Mr. Manoranjankumar, respectively, it reveals that there existed two guidelines and at this juncture, without full fledge trial, it is not possible for the Court to say why such guidelines were not considered at the time of transfer and why it was not calculated especially, at this juncture, when it has not come on record as to why such guidelines are not applicable to the transfer through supported evidences and it is well settled principle of law that if any agreement is against the rules, regulations and policy of the Government then it cannot be said to be a legal one and for knowing the truth there is need of trial.
16. If we consider Section 10 of the Evidence Act, anything to common design is relevant fact and herein this case, from the investigating papers, following things have come before the Court for arriving at a conclusion:
1. Present applicants have remained silent for the period from 1994 to 2002.
2. Present applicants have applied for changing the purpose from officecumbusiness to godown in the year 1987 prior to renewal of lease deed in the year 2002
3. Present applicants have remained inactive to rectify the purpose of Storage of Tank in the renewed lease deed,
4. Present applicants have concealed the market value and last but not the least,
5. Present applicants have also purchased the plots from Tejmalbhai and Company at higher value than the market price and Government policy.
17. It reveal from the investigation that plot no.6 of Tejmalbhai and Co, is nearby the disputed plot no.3 and 4 and these two plots of Tejmalbhai has been leased for the the purpose of storage tank and this company i.e. Tejmalbhai and Company wanted to purchase this plot only for using the same for storage tank and it can be presumed that these applicants had dishonest intention to obtain illegal favour of the officials of KPT and any how change the Page 30 of 37 HC-NIC Page 30 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT purpose of plot to sell the same to Tejmalbhai so as to cause monetary loss to the Kandla Port Trust by showing lesser prise as discussed above in this case.
18. Now, for arriving at the conclusion of the acts, omissions and conduct of the accused, there is a requirement of full fledge trial and hence, in the light of the aforesaid reasons, this Court is of the considered opinion that the application preferred by the present accused deserves to be rejected and hence, the following order: : : ORDER : :
The application filed by the present accused for discharge, is hereby rejected.
Pronounced in the open Court today on 17th January, 2014."
54. It, therefore, appears that the trial Court did record reasons why the accused persons should not be discharged. The trial Court looked into the materials on record and found that the manner in which the lease deed was executed and the transfer of the lease hold rights were permitted creates strong suspicion against the accused. In fact the Court is required to assign reasons in case of discharge of the accused but in case of framing charge assigning reasons is not required.
The Court is only required to form an opinion that there is ground for presuming that the accused has committed the offence. The reason for not assigning reason for framing charge at this stage is only with a view that if any reason is assigned that may affect/prejudice the case of the accused at the stage of trial.
Page 31 of 37HC-NIC Page 31 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT
55. In the case of State of Bihar V. Ramesh Singh, AIR 1977 SC 2018 : (1977 Cri LJ 1606), the Apex Court while considering Sections 227 and 228 held as follows (para 4):
"Reading the two provisions together in juxtaposition, as they have got to be, it would be clear that at the beginning and the initial stage of the trial the truth, veracity and effect of the evidence which the prosecutor proposes to adduce are not to be meticulously judged. Nor is any weight to be attached to the probable defence of the accused. It is not obligatory for the Judge at that stage of the trial to considerin any detail and weigh in a sensitive balance whether the facts, if proved, would be incompatible with the innocence of the accused or not. The standard of test and judgment, which is to be finally, applied before recording a finding regarding the guilt or otherwise of the accused not exactly to be applied at the stage of deciding the matter under S. 227 or S. 228 of the Code. At that stage the Court is not to see whether there is sufficient ground for conviction of the accused or whether the trial is sure to end in his conviction."
56. In the case of Kanti Bhadra Shah v. State of West Bengal, reported in (2000) 1 SCC 722 : (2000 Cri LJ 746), where the Supreme Court considered the provisions of Sections 239, 240, 227 and 245 of the Code of Criminal Procedure, Sections 227, 239 and 245 authorise the Court to discharge the accused persons and to record reasons therefor. The moment discharge order is passed recording reasons is must but for framing charge the Court is required to form an opinion that there is ground for presuming that the accused has committed offence. In case of discharge of the accused the expression 'reason' has been inserted Page 32 of 37 HC-NIC Page 32 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT in Sections 227, 239 and 245 of the Code of Criminal Procedure, the expression 'opinion' has been useddeliberately and intentionally at the stage of framing charge because of the reason if reason is recorded in the case of framing charge it may prejudice the case of the accused in trial. At the stage of framing charge the Court does not conclude anything finally, it merely takes first step in the trial The Apex Court thus has held (para 10):
"It is pertinent to note that this section required a Magistrate to record his reasons for discharging the accused but there is no such requirement if he forms the opinion that there is ground for presuming the accused had committed the offence which he is competent to try. In such a situation he is only required to frame a charge in writing against the accused.
Even in cases instituted otherwise than on a police report the Magistrate is required to writ an order showing the reasons only if he is to discharge the accused. This is clear from Section 245. As per the first subsection of section 245, if a Magistrate, after taking all the evidence considers that no case against the accused has been made out which if unrebutted would warrant his conviction, he shall discharge the accused. As per subsection (2) the Magistrate is empowered to discharge the accused at any previous stage of the case if he considers the charge to be groundless. Under both subsections he is obliged to record his reasons for doing so. In this context it is pertinent to point out that even in a trial before a Court of Session, the Judge is required to record reasons only if he decides to discharge the accused (vide Section 227 of the Code). But if he is to frame the charge he may do so without recording his reasons for showing why he framed the charge."
57. I am, therefore, of the view that in case of refusing to discharge, if the Court gives cogent Page 33 of 37 HC-NIC Page 33 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT reasons in support of the refusal, that may affect the legal right of the accused even before giving him an opportunity to defend and accordingly to avoid the same the legislature has only insisted upon an opinion and no reasons.
58. In the present case the approval granted by the former Chairman of the Trust for the transfer of the lease hold rights in respect of the plots in question by itself would not constitute any offence. The omission or the negligence as alleged on the part of the accused in not going through the lease deed thoroughly and ensuring the purpose for which the plots were allotted to M/s. J.M.Baxi also by itself would not constitute any offence. At the same time the failure to recover the transfer fees as well as the ground rent keeping in mind the policy and guidelines issued by the Central Government would also by itself not constitute an offence.
59. It is the conglomeration of all the circumstances which creates strong suspicion regarding a well hatched conspiracy. The case of the CBI is that with the intention to cause wrongful gain to M/s. J.M.Baxi and M/s. Tejmalbhai and Co. and wrongful loss to the Trust, the former Chairman turned a blind eye towards everything. It is also the case of the Page 34 of 37 HC-NIC Page 34 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT CBI that the former Chairman did so in his capacity as the public servant to obtain for himself any valuable thing or pecuniary advantage. Thus, according to the case of the prosecution the former Chairman as a public servant is alleged to have committed an offence of criminal misconduct punishable under Section 13(1)(D) read with Section 13(2) of the Corruption Act, 1988.
60. Mostly, the conspiracies are proved by the circumstantial evidence, as the conspiracy is seldom an open affair. Usually both the existence of the conspiracy and its objects have to be inferred from the circumstances and the conduct of the accused.
61. I am of the view that there may not be any direct evidence on record to infer any criminal conspiracy but at the same time the CBI should be given one opportunity to prove its case in the course of the trial by leading cogent evidence in that regard.
62. Section 228 of the Code relates to framing of charges by the learned Sessions Judge after the case had been opened by the learned Public Prosecutor and after the submissions made on behalf of the accused have been heard. According Page 35 of 37 HC-NIC Page 35 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT to the said section if after having heard the prosecution and the defence the learned Judge is of the opinion that there is ground for presuming that the accused has committed an offence the Court shall frame in writing a charge against the accused. Therefore, according to Section 228 of the Code, at the time of framing of the charge it is not necessary for the prosecution to establish beyond all reasonable doubt that the accusation which they are bringing against the accused person is bound to be brought home against him. The stage prior to the framing of a charge is not expected to be a dress rehearsal of a trial for in other words, the details of all materials which the prosecution will produce or rely on during the stage of the trial, are not expected to be produced or referred to before the learned Judge at the time of the opening of the case for the prosecution.
63. In the aforesaid view of the matter I do not find any merit in any of the applications and they are accordingly rejected. Adinterim order, if any, stands vacated.
(J.B.PARDIWALA, J.) Page 36 of 37 HC-NIC Page 36 of 37 Created On Fri Aug 07 02:27:50 IST 2015 R/SCR.A/1013/2014 CAV JUDGMENT After the order is pronounced, the learned counsel appearing for the respective petitioners pray for extension of the interim order earlier granted by this Court.
Considering the fact that the interim order has continued for a long time, the same shall continue further for a period of six weeks from today.
(J.B.PARDIWALA, J.) Manoj Page 37 of 37 HC-NIC Page 37 of 37 Created On Fri Aug 07 02:27:50 IST 2015