Jammu & Kashmir High Court
State Of J&K And Ors. vs Vinod Koul on 13 March, 2003
Equivalent citations: 2003(2)JKJ320
JUDGMENT S.K. Gupta, J.
1. Through the currency of these Criminal Revisions, one filed by the State being Criminal Revision Petition No. 88/1999 and the other preferred by three petitioners/accused, namely Rakesh Kumar, Ashok Gupta and Tariq Feroz being Criminal Revision Petition No. 72/2001, in terms of Section 435, Cr.P.C, the State has sought setting aside of the order dated 24.8.1999 propounded by Special Judge, Anti-Corruption, Jammu, whereby respondents have been discharged of the offence punishable under Section 5(2), of the Prevention of Corruption Act, 2006 and Sections 467, 468, 420 and 120B, Ranbir Penal Code and the direction to the Special Judge, Anti-Corruption, Jammu to proceed with the trial of respondents for the commission of above referred offences, whereas the petitioners in their Revision Petition have assailed the order dated 24.8.1999 insofar as the Special Judge Anti-Corruption has held that there exists a prima facie case against the accused/petitioners and prayed for setting it aside.
2. Facts relevant for the disposal of these Revisions put tersely are that Shri C.K. Ramchandran, the then Director of Industries, received information on source that officers/officials of the District Industries Centre, Jammu in collusion with some industrialists mis-appropriated and mis-used the amount sanctioned by the Government for disbursement of CST claims. A team of officers was constituted to enquire into the matter. The team reported regarding the mis-use/mis-appropriation of the funds, which have been disbursed among non-functional SSI Units by the officers of the D.I.C., Jammu. On this report, the Director, Industries, filed a complaint with the Vigilance Commissioner on 18.4.1991 in stating that the Government in the Industries and Commerce Department had sanctioned the refund of Central Sales Tax paid by the industrialists on raw-material imported by them from outside the State. That out of the sanctioned amount of Rs. 3.27 crores, an amount of Rs. 3.14 crores was ear-marked for Jammu District. On scrutiny of some cases, it was found that there have been large-scale irregularities and suspected embezzlement of funds to the tune of lakhs of rupees. Some instances of the industrial units regarding the refund of CST were also cited in the complaint by the complainant. FIR No. 19/1992, however, stood registered with Police Station Vigilance Organization, Jammu and investigation ensued.
3. It is stated to have been disclosed during investigation that the procedure of Sales Tax is that 10% of the Sales Tax is charged on the cost of raw-material when purchased from supplier outside the State of Jammu & Kashmir or any part of India. The supplier, on the production of C-Form by the Unit Holder, would not charge 6% CST on the raw-material supplied. This Form is provided by the Sales Tax Authorities to the Unit Holder when the Unit is registered with them for Sales Tax. In order to encourage and promote the growth of Small Scale Industries, incentive was given by the Government to Unit Holders of such industries that amount of CST upto 4% paid by the Unit Holders to the supplier at the time of purchase of raw-material from outside the State of Jammu & Kashmir is to be refunded. This was, however, done after the Field Officers of the District Industries Centre would spot inspect and verify the arrival of the raw-material in the Unit and its consumption by issuing a Consumption Certificate in favour of the Unit Holders. This case, however, pertains only to three Small Scale Industrial Units, namely, M/s Jehlum Udhyog, M/s Shilpa Enterprises and M/s New Yesha Enterprises, standing in the ownership of respondents 9 and 10. Respondent Vinod Koul, the then General Manager, District Industries Centre, Jammu recommended the cases of the aforesaid Units to the District Development Commissioner for the accord of sanction and after obtaining sanction paid the amount to the aforesaid Units. It is further stated to have been disclosed during investigation that the Units were found non-functional. The raw material was neither found supplied nor ever reached the Units. That the suppliers were also found fictitious and the Transport Companies stated to have transported the raw-material were either non-existent or did not transport raw-material to the Units. The prosecution having found the respondents-accused, in conspiracy with each other, produced fake documents for claiming refund of CST to the Units and accused Nos. 1 to 8 conferred pecuniary advantage by abusing their official positions on accused 9 and 10 and occasioned loss to the State Exchequer. On the conclusion of investigation, charge-sheet was filed by the Vigilance Organization against the accused in the Court of Special Judge, Anti-Corruption, Jammu for offences under Sections 5(2) of the Prevention of Corruption Act, 2006 and Sections 467, 468, 420 and 120B, Ranbir Penal Code. The Trial Court after hearing the arguments and scanning the material assembled on record explicitly detailed in the report under Section 173, Cr.P.C, held that no prima facie case appears to have been made out against accused Vinod Koul to saddle him with criminal liability and frame a charge against him and against the other accused Nos. 2 to 10, the trial Court found the sanction for prosecution granted by the Sanctioning Authority to be without application of mind and, thus, invalid and no cognizance of alleged offence can be taken against them, and consequently discharge the accused and dismissed the challan, which became subject-matter of challenge in the Revision Petition by the State and another Revision Petition filed by three petitioners/accused assailing finding of Trial Court that there exists a prima facie case against other accused.
4. Considered the rival contentions of the parties and perused the order under revisions prepared by the Trial Court, meticulously.
5. It may be pointed out at the first flush that the object of Section 435, Cr.P.C and purpose behind conferred revisional powers upon the High Court is to invest with continuous supervisory jurisdiction to be exercised for correcting mis-carriage of justice and to meet ends of justice. In other words, when the high Court notices that there has been failure of justice or misuse of judicial mechanism, or procedure of the sentence or order is not correct, it is but the salutary duty of the High Court to prevent the abuse of mis-carriage of justice or to correct incorrectness/irregularities committed in inferred criminal notices juridically or illegality of sentence or order. Mr. J.P. Singh, learned counsel appearing for the petitioner, submitted at the outset that there was sufficient evidence against the accused, Vinod Koul, regarding the commission of offence and conspiracy hatched by them, but the Trial Court erroneously discharged the accused without taking into consideration that a prima facie case had been made out against other co-accused. It is further stated that some connecting link or some general evidence pertaining to the conspiracy would be sufficient for framing a charge. It appears from the record in terms of the guidelines issued by the Government that the powers stand delegated to different Field Agencies. The field staff under the General Manager had been assigned Jobs as per the rules to verify the genuineness of the CST refund claims. The arrival and the utilization of the raw-material imported from outside the State or any part of the country had to be verified by the Manager, Raw Material with the assistance of his Industrial Promotion Officers and had to satisfy himself that the Units were functional and raw material has been consumed. It, therefore, follows that the verification and satisfaction as to the import of raw-material and its consumption is the duty of Industrial Promotion Officers and the Manager, Raw-Material. It was also the duty of the Development Section to scrutinize the documents attached with the refund claim and determine their genuineness. It is only after this exercise is done, the individual claim would reach the General Manager who, after being satisfied about the report of the Manager, Raw-Material, would compile and forward the same to the District Development Commissioner for according sanction to the refund of CST to the Unit Holder. Sukhnandan Singh, Parveen Singh Alhuwalia and J.P. Gupta accused were in the Raw-Material Section at the relevant time. The arrival of the material for the 'industrial units was verified -by the accused and the Unit Holders were allowed to consume for manufacturing the products. Certificate of Consumption of the raw-material was issued by Sukhnandan Singh accused (absconding). It is further disclosed from the record of the prosecution that accused Tariq Feroz and Avtar Singh processed the fictitious CST refund claims of accused Nos. 9 and 10, which came to be recommended by accused Rakesh Kumar and Ashok Kumar respectively. They never pointed out the assessed capacity of each Industrial Unit, which was necessitated by the annual requirement of the raw-material.
6. The Trial Court also found from record that these Officers of the Raw-Material Section and the Development Section did not properly scrutinize and verify from the documents the assessed capacity of the Units and the C-Form obtained by them. The CST refund claims by accused No. 9 and 10 in respect of the raw-material brought from outside the State were beyond the assessed capacity of each Unit. The Trial Court further found that the evidence gathered during investigation neither indicates nor suggests of any role attributed to and played by Vinod Koul in the case.
7. Under the guidelines of 1978, 'in para 4.2, the General Manager was only required to personally give certificate of utilization in case of imported material and further he had to countersign the certificate in cases where the costs involved in the indigenous raw-material exceed Rs. 50,000. It was, thus, the duty of the Manager, Raw-Material and his staff to hold the physical verification and record its Utilization Certificate for a claim of refund of CST to the Unit Holders. For facility of reference, Rule 4.2 of the guidelines 1978 found in Chapter-IV reads as under:
"4.2 The General Manager/Managers (R&M) are invested with powers to certify utilization of any raw material, whether indigenous or imported subject to the condition that General Manager will issue such certificate personally after spot verification in case of imported raw material of all types received against import licences/release orders. In cases where indigenous raw material involved costs more than Rs. 50,000 in one single consignment, the General Manager will countersign the certificate after satisfying himself fully well on all scores. In other cases, the utilization will be checked up on spot by Managers (Raw Material) and the subordinate staff and endorsed by the General Manager."
8. It is not the case of the prosecution that any material was imported by Industrial Units from outside India. It was, thus, not obligatory for the General Manager to verify on spot the arrival and the consumption of the raw-material. Accused Vinod Koul was required to countersign the certificate only in case of a single consignment of the indigenous raw-material exceeding Rs. 50,000 was imported from outside the State of Jammu & Kashmir by the Unit Holders. The duty of Vinod Koul as General Manager, DIC, Jammu, in such circumstances, was to recommend the case of the Unit Holders on the basis of the report of the concerned Industrial Promotion Officers and Manager, Raw-Material, to the District Development Commissioner. It is for the District Development Commissioner, Jammu to sanction the CST refund to the Unit Holders. It is, therefore, indisputably gatherable from the record that Vinod Koul, in discharge of his obligation as General Manager, District Industries Centre, Jammu, recommended the case of the Unit Holders for CST refund on the basis of report and recommendations of Industrial Promotion Officers and Manager, Raw-Material and, thus, prima facie, is not covered by any criminal liability.
9. It has been very strongly contended by Mr. J.P. Singh, learned counsel appearing for the petitioner that general evidence against Vinod Koul pertaining to conspiracy would be sufficient for framing a charge. His further contention is that framing of charge and to establish the charge of conspiracy cannot possibly be placed at par. Undoubtedly, to establish the charge of conspiracy, there is required cogent evidence of meeting of minds in the matter of Commission of an offence and in absence of which the charge cannot be sustained. But this is, however, not so, in the matter of framing a charge. In the instant case, it is clear that there is no evidence at all borne out from the record and the documents placed on file to establish prima facie participation of accused-respondent-1, Vinod Koul, in question in conspiracy or any evidence to indicate that he had entered into any agreement to do an unlawful act or committed an offence alongwith the other accused persons.
10. The rule of law is that where several persons are stated to have combined together for the same illegal purpose, any act done by one of the parties in pursuance of the original concerted plan with reference to the common object is, in contemplation of the law, an act of the whole. Each party is an agent of the others in the objects of conspiracy and doing anything in furtherance of the common design. Before Section 10 of the Evidence Act can be invoked, as a general rule, some prima facie evidence should be placed before the Court to enable it to form an opinion that there is reasonable ground to believe that two or more persons have conspired together and unless that condition is fulfilled, the acts and declarations of a conspirator against his fellow conspirators could not be admitted as evidence. Though strict proof of conspiracy is not necessary; what is required is that there should be reasonable grounds to believe that the person and the fellow persons, whose acts, statements or writings are sought to be given in evidence, have committed an offence. As a matter of fact there must be a prima facie evidence of the existence of a conspiracy elicited from the material gathered on record by the prosecution, which is believable and acceptable. The learned counsel appearing for the petitioner, however, could not point out any material/document on record from which a natural inference may be drawn in proof of conspiracy sufficient to provide connecting link or connecting factor with accused Nos. 2 to 10, so as to be a party to alleged criminal conspiracy, in the light of the plain and clear language of Section 120A of the Ranbir Penal Code. I do not find any substance in the contention raised by the learned petitioner's counsel to merit acceptance.
11. It is further argued by Mr. J.P. Singh that the sanction accorded to the prosecution of the accused was strictly in compliance with the provisions of Section 6 of the Prevention of Corruption Act, 2006 and there was no material on record that sanction order was bad, not in order or otherwise invalid. It was also submitted that where the order of sanction is found by the Trial Court to be invalid, finding on merit about the prosecution case ought not to have been made. It is pertinent to point out that where sanction order not ex-facie illegal or invalid, the proceedings cannot be held vitiated.
12. It is apt to point out that the burden of proving that the requisite sanction has been obtained rests on the prosecution and such burden includes proof that the sanctioning authority has given the sanction in reference to the facts on which the proposed prosecution was based and these facts appear on the face of the sanction. In other words, facts on which proposed prosecution is based must be shown to have been put before the sanctioning authority. It is no more necessary for the sanction under the Prevention of Corruption Act to be in any particular form for it to set out the facts in respect of which it is given. A sanction based on the facts set out in the sanction order, namely, misappropriation and misuse of the amount sanctioned by the Government for the disbursement of CST refund claims to the industrialists by the officers/officials in collusion and conspiracy with industrialists of Jammu on the basis of some fictitious documents prepared and processed in specifying their roles in facilitating the process and passing of the CST refund claims of the said Units with a view to confer undue pecuniary advantage, would be sufficient to validate the sanction for present prosecution. It is further evident that the facts placed before the sanctioning authority could only relate to the offences under Section 161, RPC and Section 5(2) of the Prevention of Corruption Act, 2006 read with Sections 467, 468, 420 and 120B, RPC. Therefore, the sanction in the present case, in view of the aforesaid facts and circumstances delineated explicitly, cannot be said to be invalid. The contentions of the petitioners' counsel on this count are devoid of any merit.
13. On a careful consideration of the rival contentions of the parties, the inescapable conclusion reached is that the Trial Court, as it has been mentioned earlier, was duty bound to discharge accused No. I once it found that there is absolutely no evidence against the accused and the rule position also did not suggest, in any way, that he could be deemed to have failed in the discharge of his duty or has omitted or done anything which he was under Rules bound to do. The Court, as such, has rightly discharged accused-respondent-1, Vinod Koul. As against the other accused, the Trial Court has fallen in error to hold that the sanction to prosecute the accused suffers from any infirmity or has any flaw. Having rightly reached the conclusion that the other accused had prime facie committed the offence, the Trial Court ought to have framed charges against them and proceeded with the trial. The revision motion of State, to this extent is allowed and the revision petition by three petitioners/accused is dismissed. The court below is directed to frame charges against the accused other than accused-respondent-1, Vinod Koul, and proceed with the trial to be concluded as early as possible.
14. The Revision Petitions are accordingly disposed of. Registry to return the record produced by the advocate appearing for the State-Petitioner and record of Trial Court be remitted forthwith.