Gujarat High Court
Bhavesh Jamnabhai Chawda & 5 vs State Of Gujarat & on 3 October, 2016
Author: S.G.Shah
Bench: S.G.Shah
R/CR.RA/594/2016 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
CRIMINAL REVISION APPLICATION (AGAINST ORDER PASSED BY
SUBORDINATE COURT) NO. 594 of 2016
With
CRIMINAL REVISION APPLICATION NO. 627 of 2016
With
CRIMINAL REVISION APPLICATION NO. 716 of 2016
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE S.G.SHAH
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of
the judgment ?
4 Whether this case involves a substantial question of
law as to the interpretation of the Constitution of
India or any order made thereunder ?
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BHAVESH JAMNABHAI CHAWDA & 5....Applicant(s)
Versus
STATE OF GUJARAT & 1....Respondent(s)
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Appearance:
MR VIKRAM CHAUDHARI, SENIOR ADVOCATE WITH MR HARDIK P
MODH, ADVOCATE for the Applicant(s) No. 1 - 6
MR RC KODEKAR for the Respondent No.2
MR KP RAWAL, APP for the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE S.G.SHAH
Date : 03/10/2016
COMMON CAV JUDGMENT
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1. Rule. Learned advocate Mr.R.C. Kodekar waives
service of notice of rule for respondent No.2 and
learned APP Mr.K.P. Rawal waives service of
notice of rule for respondent No.1 - State.
2. Heard learned Senior Counsel Mr. Vikram
Chaudhari with learned Advocate Mr. Hardik P
Modh for the petitioners and learned Standing
Counsel Mr. R.C. Kodekar for CBI and learned APP
Mr. K.P. Rawal for State. Perused the record.
3. These three petitions are though by different
petitioners, they are arising out of the same
FIR and having common and similar disputes
between the parties and therefore, they are heard
and decided together by common judgment. The
advocates have also addressed only one set of
arguments for all the three petitions and
practically adopted the arguments advanced in
first petition for remaining two petitions.
Therefore, the discussion is also recorded in one
set only to avoid duplication of work and
repetition of same facts separately in three
separate judgments.
4. It is also evident from records that
practically impugned order is also common in all
these three revision petitions, being order dated
20th January,2010, below an application for
discharging the petitioner accused from the
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charges leveled against them.
5. The sum and substance of the case against the
petitioners are to the effect that petitioners
being a public limited Company incorporated under
the Companies Act, 1956 namely Welspun Gujarat
Sthal Public Limited which name is changed to
Welspun Corporation Limited (hereinafter referred
to as the "Company") has filed an application for
exemption, pursuant to the notification dated
31st July, 2001 by the Central Government
offering exemption from the excise duty to
certain units under specific terms and
conditions. It is undisputed fact that said
factory has its units at Anjar in Kutch and that
the petitioners/persons had for the benefit of
the Company at large and may be as per internal
discussion and decision of the Company, while
applying for such exemption declared that their
units had started commercial production. They
have also disclosed the value of installed plant
and machinery by way of producing a certificate
issued by the Chartered Accountant and to prove
the commercial production and transactions. They
have also filed invoices alleged to have been
issued by them prior to 31st December, 2005.
6. However, when the Assistant Commissioner of
Central Excise had visited the unit of the
petitioner Company they found that the plant and
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machinery were not fully installed and the unit
was operated only for limited production and
that it was the only possible production at the
time of inspection i.e. 2nd January, 2006 and
thereby there is no possibility of any more
production and therefore the disclosure by the
petitioner Company through its officers being
petitioner/persons, herein was not only false but
fraudulent in as much as they want to declare
themselves eligible under the terms and
conditions of the notification dated 31st July,
2001, so as to get exemption from the payment of
excise duty. It is further contended that even
Chartered Accountants of the petitioner Company
had issued false certificate claiming that the
valuation of the plant and machinery installed is
of Rs. 45.46 crores and Rs. 83.69 crores; though
there was no such plant and machinery available
on the day of inspection. Therefore, it is
alleged that even Chartered Accountants had
issued such installation certificate without
physically verifying the plant and machinery.
Therefore, as submitted, it is found that several
documents are manipulated to get the exemption
from excise duty and hence investigation was
conducted, wherein it has been revealed that
several documents are forged and fabricated and
therefore the complaint was lodged against the
Company on 31st July, 2006. After investigation,
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CBI has submitted its report and filed a
complaint against several accused under sections
420, 467, 468, 471, 511, 120(b) of I.P.C. and
Section 13(2) read with Section 13(1)(1)(d) of
the Prevention of Corruption Act,1988. Amongst
such accused, there is the Company itself, its
Chairman, Managing Director and other officers so
also Chartered Accountants.
7. Considering the investigation by CBI, the
F.I.R and charge-sheet runs into pages,
disclosing several irregularities and illegal
activities alleged to have been committed by the
petitioner Company and petitioner/persons. There
are several communications from some of the
officers and Chartered Accountants disclosing the
compliance and certain terms and conditions of
the notification under reference. But, mainly it
was found that the contents of such communication
are not correct.
8. Amongst the accused, the Managing Director of
the Company namely B.K. Goenka had come forward
and discussed the dispute with the department of
Customs and Excise conveying that it was a
bonafide error or mistake on their part and
therefore he would like to settle the dispute
with the department. It cannot be ignored that
the basic ingredient of such settlement is the
fact that practically Company has never received
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any exemption from payment of tax, may be because
of the fact that the documents were not in order.
But, the fact remains that there was no financial
benefit to the Company and nor to any of its
office bearers or officers in any manner
whatsoever. It is also undisputed fact that
otherwise also the benefit if any is to be
received, it will go the Company and not to any
individual and that the benefit to the Company
would be ultimately to its shareholders and not
to any particular individual in terms of any fix
amount.
9. Pursuant to such attempt and exercise by B.K.
Goenka, the Managing Director of the petitioner
Company, the Customs and Excise Department had;
considering the bonafides of the petitioner
Company and its office bearers, so also officers;
agreed to settle the dispute and therefore now it
would not be necessary to recollect all the
minute details of the F.I.R and charge-sheet, or
the activities carried out by the petitioner for
getting some advantage, more particularly when
they have never received any advantage at all.
10. The petitioner has also produced at Annexure
P-11 on record, Order No. 01/CO/2008 dated 19th
December 2008 by the Chief Commissioner of
Central Excise whereby he entered into a
compromise and compounded the offence, if any,
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committed by the petitioner Company or its office
bearers. The perusal of such order,reveals that
the Department had, after recording the facts of
the case and verification by the reporting
authority while recording the findings makes it
clear that the applicant before it i.e. M/s
Welspun Corporation Ltd., Shri B K Goenka
Managing Director of M/s Welspun Corporation
Ltd. and Shri Mahesh Khemka Vice President of M/s
Welspun Corporation Ltd. have disclosed true
facts relating to the case and therefore the
Chief Commissioner grants them immunity from
prosecution under Section 9 of the Central Excise
Act, 1944. While granting such immunity, it has
been recorded that the basis on which the
Application for exemption was rejected is false
information furnished by the Company which
constitutes an offence under Section 9(1)(c) of
the Central Excise Act, 1944. Further, it was
emphasized that the Company had not availed any
benefit under the notification dated 31st July,
2001 and has removed the cost of payment of
duties by utilization of CENVAT Credit, thereby
there has been no loss of revenue to the
department by any act of the Company. Therefore,
it is certainly a clear position that when
department by which the proceeding has been
initiated has compounded the offence and that too
by imposing condition to pay the amount for such
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compounding and thereby when the Chief
Commissioner of Central Excise compounded the
offence subject to the payment of Rs. 50,000/- by
each of the applicant before it and that such
amount is deposited by the concerned petitioners;
there is no reason to proceed further in criminal
trial when the department is not going to come
and prove that the petitioner Company and persons
have obtained any illegal and undue advantage
from them. Though the legal position is well
settled on such issue and thereby though there is
no need to continue the trial any further when
CBI has filed a charge-sheet, initially the
Managing Director of the petitioner Company Shri
Balakrishna Gopiram Goenka (B.K.Goenka) has
challenged the proceeding in a quashing petition
being Special Criminal Application No. 2543/2012,
such petition was resisted by the State and CBI.
The copy of judgment in such petition, dated 10th
April,2015, is on record at Annexure P-20;
perusal of which makes it clear that the Co-
ordinate Bench has not only quashed and set aside
the FIR qua the petitioner before it namely B.K.
Goenka but has categorically observed that the
purpose of compounding of offence against the
payment of compounding amount is to prevent
litigation and encourage early settlement of
dispute as held by Hon'ble Supreme Court of India
in the case of Rajesh Kumar Sharma v. Union of
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India & Ors. Reported in (2007) 9 SCC 158, and
Hira Lal Hari Lal Bhagwati v. CBI, New Delhi ,
reported in (2003) 5 SCC 257, wherein Hon'ble
Supreme Court has held that the petitioner is
immune from any criminal proceedings pursuant to
the certificate issued under the scheme.
11. In light of the above background, I have
considered the arguments canvassed on behalf of
the learned advocates appearing for the parties.
I have also gone through the documents produced
on record. In the present case, the FIR came to
be registered against one B. C. Macwana, the then
Assistant Commissioner, Central Excise, Rajkot,
M/s. Welspun Gujarat Sthal Rohren Limited and
against unknown person for the offences
punishable under Sections 120B, 420, 467, 468,
471 and 511 of Indian Penal Code and under
Section 15 of the Prevention of Corruption Act,
1988. After the investigation, a charge-sheet
came to be filed against the officers of the
aforesaid Company including the present
petitioners. The Company passed a resolution in
its Board Meeting and decided to apply for
getting excise benefit as per Notification dated
31.07.2001 and therefore the Company submitted an
application on 24.12.2005. However, from the
record,it appears that before the registration of
the FIR, an application seeking withdrawal of the
benefit, which was sought under Notification
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dated 31.07.2001, was submitted by the Company
and, therefore, the Company has not received any
wrongful gain on the basis of its earlier
application dated 24.12.2005 and therefore, no
pecuniary loss is caused to the Department. Thus,
the ingredients of the alleged offence punishable
u/s. 420 of IPC are not attracted.
12. It is also clear from the record and more
particularly from the order dated 19.09.2008
passed by the Chief Commissioner, Central Excise
that when the Central Excise Department had
initiated the proceedings under Section 9 of the
Central Excise Act against the Company and it
officers with regard to the similar set of
allegations made in the impugned FIR, the
department compounded the offence and therefore
the allegations made in the proceedings initiated
under Central excise Act have come to an end.
Thus, when the Company and thereby its officers
including the petitioners have compounded the
offence, initiation of proceedings under the
provisions of IPC for the same allegations cannot
be permitted. There cannot be two different
prosecutions for the same incident and petitioner
cannot be prosecuted twice for the same offence
even in different proceedings
13. In the case of Rajesh Kumar Sharma v. Union
of India & Ors., reported in (2007) 9 SCC 158,
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The Hon'ble Supreme Court, in para 6, observed as
under:
"6. The guidelines for
compounding are contained in the
Circular No. 54/2005-Cus dated 30th
December, 2005.Central Government
had brought in to force the
Customs ( Compounding of Offences)
Rules 2005 (in- short the Custom
Rules') and Central Excise
(Compounding of Offences ) Rules
2005) (in short the 'Central
Excise Rules') with effect from
30th December, 2005. the purpose of
compounding the offences against
payment of compounding amount is
to prevent litigation and
encourage early settlement of
diputes. The cases where
compounding would be rejected are
also spelt out in the said
circular."
14. In the case of Hira Lal Hari Lal Bhagwati v.
CBI, New Delhi, reported in (2003) 5 SCC 257,
The Hon'ble Supreme Court, in paras 29 and 30,
observed as under:
"29.In our view, in the present
case, the alleged criminal
liability stands compounded on
a settlement with respect to
the civil issues and,
therefore, the First
Information Report was
erroneously issued and was
totally unwarranted. From the
aforesaid judgment, the
proposition that follows in the
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instant case is that the Kar
Vivad Samadhan Scheme, 1998
issued by the Government of
India was a voluntary scheme
whereby if the disputed demand
is settled by the Authority and
pending proceedings are
withdrawn by an importer shall
be dropped and the importer
shall be immuned from the penal
proceedings under any law in
force. We are therefore, of the
opinion that this judgment
squarely comes in the face of
any argument sought to be
propounded by the respondent
that the Kar Vivad Samadhan
Scheme, 1998 does not absolve
the appellants from criminal
liability under the Indian
Penal Codee. The learned Single
Judge of the High Court of
Delhi, in our opinion, has not
appreciated the fact that the
continuance of the proceedings
in the instant case would only
tantamount to driving the
present appellants to double
jeopardy when they had been
honorably exonerated by the
Collector of Customs by their
adjudication and further the
GCS of which one of the
appellants is the General
Secretary in which capacity he
is accused in the present case
was granted amnesty under the
Kar Vivad Samadhan Scheme,
1998. In our opinion, the
present case does not warrant
subjecting a citizen especially
senior citizens of the age of
92 & 70 years to fresh
investigation and prosecution
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on an incident or fact
situation giving rise to the
offence under both the Customs
Act and the Indian Penal Code
when the matter has already
been settled. Likewise, the
respondent herein has initiated
criminal proceedings against
Accused No. 2 & Accused No. 1,
inter alia , on the ground
alleging that the appellant in
conspiracy with the co-accused
named therein with each other
have cheated the Government of
India in terms of evasion of
Customs Duty and by concealment
of facts obtained CDEC in
respect of MRI and Lithotripsy
machines and by violating the
provisions of actual user
condition as per Import Export
Policy and Customs Notification
No. 279/83 dated 30.9.1983 and
Customs Notification No. 64/88
dated 1.3.1988 during the year
1987-90, despite acknowledging
the fact that Customs Duty has
been paid by the appellants to
the Customs Department and
settled and that commission of
offences under Section 120B
read with section 420 of the
Indian Penal Code are made out.
30.In our view, under the penal
law, there is no concept of
vicarious liability unless the
said statute covers the same
within its ambit. In the
instant case, the said law
which prevails in the field
I.e. the Customs Act,1962 the
appellants have been therein
under wholly discharged and the
GCS granted immunity from
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prosecution. It is well
established principle of law
that the matter which has been
adjudicated and settled need
not to be dragged into the
criminal courts unless and
until the act of the appellants
could have been described as
culpable. The true fact and
import of the Kar Vivad
Samadhan Scheme, 1998, in our
view, is that once the said
Scheme is availed of and all
the formalities complied with
including the payment of the
duty, the immunity granted
under the provisions of the
Customs Act,1962 also extends
to such offences that may prima
facie be made out on identical
allegations i.e. of evasion of
Customs Duty and violation of
any Notification issued under
the said Act."
15. In view of the aforesaid decisions, the
learned Senior Counsel is right in submitting
that in the present case once the offence is
compounded under the provisions of the Central
Excise Act and thereby the petitioner herein is
granted immunity from the prosecution, the
impugned FIR and the charge-sheet be quashed and
set aside qua the petitioners also.
16. In case of G.N.Verma v. State of Jharkhand &
Anr., reported in (2014) 4 SCC 282, the Hon'ble
Supreme Court, in para 18, 19, 20 and 25,
observed as under:
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"18. It is nobody's case that
G.N. Verma was appointed as an
agent of any mine. Also, the
complaint does not allege or
state anywhere that G.N. Verma
acted or purported to act on
behalf of the owner of the mine
or that he took part in the
management, control,
supervision or direction of any
mine. In fact his duties and
responsibilities have not been
described in the complaint. In
the absence of G.N.Verma's
duties having been spelt out in
the complaint, it is not
possible to say whether he was
merely an administrative head
of Karkata Colliery being its
Chief General Manager or was he
required to be involved in
technical issues relating to
the management, control,
supervision or direction of any
mine in Karkata Colliery. The
averment in the complaint is
bald and vague and is to the
effect that at the relevant
time G.N. Verma was the Chief
General Manager/deemed agent
and was exercising supervision,
management and control of the
mine and in that capacity was
bound to see that all mining
operations were conducted in
accordance with the Act, the
Rules, Regulations, Orders made
thereunder.
19. It has been laid down, in
the context of Sections 138 and
141 of the Negotiable
Instruments Act, 1881 in
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National Small Industries
Corpn. Ltd. v. Harmeet Singh
Paintal reported in (2010) 2
GLH 766 that Section 141 is a
penal provision creating a
vicarious liability. It was
held as follows: (SCC p. 336,
para 13)
"13. ... It is therefore, not
sufficient to make a bald
cursory statement in a
complaint that the Director
(arrayed as an accused) is in
charge of and responsible to
the Company for the conduct of
the business of the Company
without anything more as to the
role of the Director. But the
complaint should spell out as
to how and in what manner
Respondent 1 was in charge of
or was responsible to the
accused Company for the conduct
of its business. This is in
consonance with strict
interpretation of penal
statutes, especially, where
such statutes create vicarious
liability."
(emphasis in original)
It was then concluded:
(SCC p. 345, para 39)
"39. (I) The primary
responsibility is on the
complainant to make specific
averments as are required under
the law in the complaint so as
to make the accused vicariously
liable. For fastening the
criminal liability, there is no
presumption that every Director
knows about the transaction."
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20. Insofar as the criminal
complaint is concerned, it does
not contain any allegation
against G.N. Verma. The only
statement concerning him is that
he was the Chief General
Manager/deemed agent of the mine
and was exercising supervision,
management and control of the
mine and in that capacity was
bound to see that all mining
operations were conducted in
accordance with the Act, the
Rules, Regulations, Orders made
thereunder. In the face of such
a general statement, which does
not contain any allegation,
specific or otherwise, it is
difficult to hold that the Chief
Judicial Magistrate rightly took
cognizance of the complaint and
issued summons to G.N. Verma.
The law laid down by this Court
in Harmeet Singh Paintal (though
in another context) would be
squarely applicable.
Under the circumstances, we
are of the opinion that on the
facts of this case and given the
absence of any allegation in the
complaint filed against him no
case for proceeding against G.N.
Verma has been made out.
25. On the facts of this case,
we would need to unreasonably
stretch the law to include G.N.
Verma as a person vicariously
responsible for the lapse that
occurred in the mine resulting
in a fatal accident. We are of
the view that under these
circumstances, there is no basis
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for proceeding under Section 72B
of the Act against G.N. Verma."
17. In above view of the matter, I am in
agreement with the argument canvassed by the
learned Senior Counsel Shri Chaudhari for the
petitioner that since there is no specific
allegation in the FIR or in the charge-sheet
against the petitioner and merely because the
petitioners were employees of the Company, they
have been implicated in the offence, the
petitioner cannot be made vicariously liable for
the act and/or omission on the part of the
Company for the offence punishable under the
provisions of the IPC. Whereas Department has
already compounded the offence if any committed
by the Company.
18. The contention of the learned advocate Shri
Kodekar appearing for respondent No.2 - CBI is
that petitioners were members of the team of the
Company which had tried to execute the resolution
passed by the Company whereby it was decided
toapply for getting excise benefits as per the
Notification dated 31.07.2001 and therefore the
petitioners are involved in the aforesaid crime.
However, the said contention is misconceived in
view of the fact that merely because the
petitioners were members of the team of the
Company and Company had decided to give an
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application for getting the benefit of excise, it
cannot be said that petitioners were having any
intention to commit the alleged offence.
19. In fact no specific role is attributed to
each of the petitioner with regard to the alleged
offence. Further, the Company has also decided to
withdraw the application given for getting the
benefit as per the Notification dated 31.07.2001
and therefore the Company has given an
application for withdrawal on 17.07.2006 i.e.
before the registration of the FIR. Therefore, it
cannot be said that the petitioners have
committed the alleged offence. Moreover, it is
not the case of the CBI that petitioners have
wrongfully gained anything and/or any wrongful
loss is caused to the Department. The reliance
placed by learned advocate Shri Kodekar on the
statement of Shri Kuttan Mohanan Pillai is also
misconceived in view of the fact that the said
person is coaccused in the chargesheet which is
filed against the Company and its officers. In
the statement given by the said co-accused, no
specific allegations are made by the said
coaccused against the petitioner.
20. In view of the aforesaid discussion, when it
is prima facie proved that the petitioner has not
wrongfully gained anything and/or any wrongful
loss is caused to the Department and the Company
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and its officers including the petitioners have
been granted immunity, in the opinion of this
Court, there is no need to continue with the
criminal prosecution against the present
petitioners. Moreover, neither in the FIR nor in
the charge-sheet any specific allegations are
leveled against the petitioners that they have
forged any document. Even otherwise, looking to
the impugned FIR and from the papers of
chargesheet, the ingredients of the alleged
offence are prima facie not made out.
21. Thus, in view of the aforesaid discussion,
the impugned FIR being RC20(A)/2008 - GNR and all
proceedings initiated pursuant thereto are
nothing but a gross abuse of the process of the
Court and therefore in the interest of justice,
the same are required to be quashed and set
aside. Accordingly, FIR being RC20(A)/2008 - GNR
and the charge-sheet filed pursuant thereto are
hereby quashed and set aside qua the petitioner.
Rule is made absolute.
22. The petitioners are also relying on the
following cases which are confirming same
principles that prosecution and proceedings after
compounding dispute cannot be sustained
therefore, further prosecution of such judgment
has been avoided.
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(1) 1998 (108) E.L.T. 16 (S.C) G.L.
DIDWANIA V. INCOME TAX OFFICER;
(2) (2011) 2 SUPREME COURT CASES 703
KOLLA VEERA RAGHAV RAO
V.GORANTALA VENKATESHWARA RAO AND
ANOTHER;
(2) (2004) 2 SUPREME COURT CASES 731
K.C. BUILDERS AND ANOTHER v.
ASSISTANT COMMISSIONER OF INCOME
TAX;
(3) (2015) 4 SUPREME COURT CASES 609
SUNIL BHARTI MITTAL v.CENTRAL BUREAU
OF INVESTIGATION;
(4) (2013) 10 SUPREME COURT CASES 686
CENTRAL BUREAU OF INVESTIGATION v.
JAGJIT SINGH;
(5) (2013) 7 SUPREME COURT CASES 789
MOHIT alias SONU AND ANOTHER v.
STATE OF UTTAR PRADESH AND ANOTHER.
23. As against that learned Advocate Mr. Kodekar
for the CBI is relying on the decision reported
in (2013)10 SCC 686 Central Bureau of
Investigation v. Jagjit Singh wherein Hon'ble the
Supreme Court has held that settling the dispute
with the bank is no ground to quash criminal
proceedings against defaulter/loanee because such
offences are not related to banking activities
and it has harmful effect on public and it
threatens the whole society and therefore though
bank seems to be the victim society in general is
victimized and hence criminal complaint was
denied to be quashed only because payment is
made. Whereas in the present case, the fact
remains that in the present case, actually there
is no default in making any payment but it is
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only an attempt in getting any exemption from
taxation and that was also not materialized and
on the contrary the Managing Director of the
Company, the Company and its Vice President paid
Rs.50,000/- each i.e. a total of Rs.1,50,000 for
compounding offences thereby practically there
was benefit to the department and there was no
benefit to the accused.
24. Mr. Kodekar is also relying upon the decision
in (2013) 7 SUPREME COURT CASES 789 between MOHIT
alias SONU AND ANOTHER v. STATE OF UTTAR
PRADESH AND ANOTHER wherein Hon'ble Supreme Court
has considered the revisional powers of the Court
under Section 397(2) with reference to
interlocutory order and held that when there is
specific remedy provided by way of appeal or
revision, inherent powers under section 482
cannot and should not be resorted to. Therefore,
when the present petitions are not under Section
482 of the Code for quashing the complainant but
under Section 397 the Court has to verify the
irregularity and illegality if any in the
impugned order. Hence, this judgment would not
help the respondent.
25. In support of such conclusion, reference to
certain judgments of the Apex Court are
necessary, which are as under:-
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1. AIR 1997 SC 2041 between State of Maharashtra
Vs. Priya Sharan Maharaj - It is held that at the
stage of framing the charge, the Court has to
consider the material only with a view to find
out that whether there is ground for presuming
that accused has committed an offence or that
there is no sufficient ground for proceeding
against him and not to arrive at the conclusion
that whether it is not likely to lead to a
conviction or not.
2. AIR 2000 SC 665 = (2000)2 SCC 57 between
State of MP Vs. S.B. Johari - It was held that,
the Court at the stage of S.227 and S.228 is not
required to appreciate the evidence and arrive at
the conclusion that the materials produced are
sufficient or not for convicting the accused.
Only prima facie case is to be looked into. The
charge can be quashed if the evidence which the
prosecutor proposes to prove the guilt of the
accused, even if fully accepted, cannot show that
accused committed particular offence. Thus it is
settled law that at the stage of framing the
charge, the Court has to prima facie consider
whether there is sufficient ground for proceeding
against the accused. The Court is not required to
appreciate the evidence and arrive at the
conclusion that the materials produced are
sufficient or not for convicting the accused. If
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the Court is satisfied that a prima facie case is
made out for proceeding further then a charge has
to be framed. The charge can be quashed if the
evidence which the prosecutor proposes to adduce
to prove the guilt of the accused, even if fully
accepted before it is challenged by cross-
examination or rebutted by defence evidence, if
any, cannot show that accused committed the
particular offence. In such case there would be
no sufficient ground for proceeding with the
trial.
3. AIR 2005 SC 359: State of Orissa vs. Debendra
Nath Padhi - The Apex Court has held that, it is
seen from S.227 of the Code that in a case
triable before the Court of Session, if the Court
on consideration of the record of the case and
the documents submitted therewith and after
hearing the submission of the prosecution and the
accused if the Judge considers that there is no
sufficient ground for proceeding against the
accused, he shall discharge the accused after
recording reasons for doing so.
4. (1997)4 SCC 393 = 1997 AIR SCW 1833: State of
Maharashtra vs. Priya Sharan Maharaj - Referring
to the case of Niranjan Singh Karam Singh Punjabi
1990 AIR 1962, 1990 SCR (3) 633 held that at the
stage of Sections 227 and 228, the Court is
required to evaluate the material and documents
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on record with a view to find out if the facts
emerging there from taken at their face value
disclose the existence of all the ingredients
constituting the alleged offence. The Court may,
for this limited purpose, sift the evidence as it
cannot be expected even at that initial stage to
accept all that the prosecution states as gospel
truth and even if it is opposed to common sense
or the broad probabilities of the case.
Therefore, at the stage of framing of the charge,
the Court has to consider the material with a
view to find out that whether there is any 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
5. AIR 2007 SC 2149 = 2007 AIR SCW 3683 - Soma
Chakravarty v. State - It is held that before
framing a charge the court must apply its
judicial mind on the material placed on record
and must be satisfied that the commitment of
offence by the accused was possible.
6. AIR 2012 SC 1890 - General Officer Commanding
Vs.CBI - It is held that the cognizance has to be
taken of the offence and not of the offender and
that it is the duty of the investigating agency
to collect and to produce cogent evidence against
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the accused for framing charge and Court can
convict the accused only if such charges i.e.
evidence is proved on record without reasonable
doubt. Therefore, if there is no chance to prove
a commission of offence by the accused, charge
cannot be framed.
7. AIR 2009 SC (Suppl) 1744 - State of M.P.
Vs.Sheetla Sahai - It is held that if the Court
arrives at only opinion, there is no evidence
against the accused, the Court shall not put
accused to harassment by asking him to face a
trial.
26. Thus, the law on the subject is now well
settled, that while framing charge, the Court is
required to evaluate the material and documents
on record with a view to finding out if the facts
emerging therefrom taken at their face value
disclose the existence of all the ingredients
constituting the alleged offence. The Court may,
for this limited purpose, sift the evidence as it
cannot be expected even at that initial stage to
accept all that the prosecution states as gospel
truth even if it is opposed to common sense or
the broad probabilities of the case. Therefore,
at the stage of framing of the charge, the Court
has to consider the material with a view to find
out if there is ground for presuming that the
accused has committed the offence or that there
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is no sufficient ground for proceeding against
him and not for the purpose of arriving at the
conclusion that whether it is likely to lead to a
conviction or not.
27. However it cannot be ignored that what is to
be looked into is "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"; therefore it
cannot be said that even if in absence of
suspicion, presumptive opinion of the commission
of offence as alleged, charge must be framed.
Suffice to say that when enactment /statute
provides for discharging accused, basically
accused has a right to get discharge, which may
be subject to fulfillment of certain criteria,
that may be laid down either in the statute as
well as its interpretation by the Apex Court and
not otherwise. Therefore, there can be order of
discharge if there is no evidence with charge
sheet which gives rise to even a slight suspicion
to presume the commission of offence by the
accused. Needless to say that even if there is
suspicion regarding commission of offence, what
is required to frame discharge is suspicion of
commission of offence by the accused against whom
charge sheet is filed. Thus even if suspicion is
possible for commission of offence, and if there
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is no evidence to link such suspicion with the
accused, there cannot be a presumption against
the accused that he had committed the offence and
he may be entitled to get discharged from the
charges levied against him under the charge
sheet. Needless to say that the charges levied
against the person is to be considered and not
the story or history of incident which results
into the commission of offence. For more clarity,
commission of offence alone is not sufficient to
frame charge against any person, there must be
some suspicion that offence had been committed by
the said person and not by any other person. If
the suspicion is to the effect that though
offence has been committed, probably accused
might have not committed such offence but real
offender may be someone else, Court has to see
that truth comes out whereby the Investigating
Agency may not be permitted to put their hands
down merely by filing charge sheet against any
one including any innocent person. In such cases,
trial cannot be allowed to continue only upon
opinion of the investigating agency that accused
had committed the offence as alleged in charge
sheet. The Court has to arrive at independent
opinion, after considering the available prima
facie evidenced on record - which is in the form
of papers with the charge sheet, not only tabular
charge sheet but list of witnesses and their
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statement before the investigating agency (police
papers). It is the Court's duty to frame
independent opinion regarding not only commission
of crime but involvement or role of the accused
against whom charge sheet is filed and if there
is no possibility of even little suspicion
against the accused regarding commission of
offence by him, there is no bar to discharge such
person from the charges leveled against him. In
such cases, it would be open for the original
complainant and the investigating agency to keep
such person under suspicion but to investigate
further so as to find out real culprit, else
filing of charge against a person only on
suspicion but without sufficient evidence against
him would be a futile exercise and it will not
only increase unnecessary workload but crime in
the society also, since real culprits are able to
get secluded them from the trial.
28. If we peruse the impugned judgment, it
becomes clear that the special judge mainly
relied upon the facts discussed in the FIR and
charge-sheet, but failed to realize the legal
position in the case of compromise or compounding
of offence by the parties. There is no need to
proceed further in criminal proceedings. The
Trial Court has also failed to appreciate the
factual details that in fact the Company has
never been benefited by seeking exemption of tax
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and that now there is one final judgment in favor
of the Company and against the prosecuting
agency. But the determination of co-ordinate
bench which is recollected herein above is
certainly applicable to all the accused and it
cannot be said that it is applicable to only the
person who has preferred such petition.
Therefore, when the complainant is already
quashed against the Managing Director of the
Company and when the Company and its Vice
President has also compounded the offence with
department on payment of compounding charges, it
cannot be said that there is sufficient material
and ground to continue with the proceeding
against remaining accused who are practically not
concerned with the final benefit if any received
by the Company. When factually Company has never
received any financial benefit it cannot be
ignored that the present petitioner Company, and
officers of the Company have to follow the
instructions and directions of the Company
through its chairman and Managing Director and
when Chairman has been relieved from the charges
on compounding the offences so also the Company,
it cannot be said that its officers can
separately prosecuted. At the most department or
investigating agency may ask for penalty in the
form of compounding charges from all the accused.
29. It is undisputed fact that Central Excise Act
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and Rules provides for compounding the offences
so also section 320 of Cr.PC. It is also
undisputed fact that once main offence is
compounded then there is catana of judgments by
Supreme Court that when the department has
compounded the offences then there is no reason
to continue the criminal proceedings, more
particularly when offences are either in the form
of breach of rules or technical offences. In the
present case, though some documents are alleged
to be forged practically there is no forgery of
any documents. It is submitted by the petitioners
that, in fact an advance appreciation of work by
the Company as per project report happens as per
fixed schedule was disclosed. However for one
reason or another if such time schedule could not
be adhered to either during installation or
during production it may not amount to
committing offence of forgery, since there is no
means rea and practically there is no financial
benefit accrued by any of the petitioners.
30. In support of such conclusion, reference to
certain judgments of the Apex Court are
necessary, which are as under.
(1) AIR 1997 S.C. 2041: State of Maharashtra vs.
Priya Sharan Maharaj -
It is held that at the stage of framing the
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charge, the Court has to consider the material
with a view to find out if there is ground for
presuming that accused has committed an offence
or that there is no sufficient ground for
proceeding against him and not for the charges by
arriving at the conclusion that it is not likely
to lead to a conviction.
(2) AIR 2000 SC 665 = 2000 SCC(2) 57 : State of MP
vs. SB Johari -
It was held that, the Court at the stage of S.227
and S.228 is not required to appreciate the
evidence and arrive at the conclusion that the
materials produced are sufficient or not for
convicting the accused. Only prima facie case is
to be looked into. The charge can be quashed if
the evidence which the prosecutor proposes to
prove the guilt of the accused, even if fully
accepted, it cannot show that accused committed
that particular offence. Thus it is settled law
that at the stage of framing the charge, the
Court has to prima facie consider whether there
is sufficient ground for proceeding against the
accused. The Court is not required to appreciate
the evidence and arrive at the conclusion that
the materials produced are sufficient or not for
convicting the accused. If the Court is satisfied
that a prima facie case is made out for
proceeding further then a charge has to be
framed. The charge can be quashed if the evidence
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which the prosecutor proposes to adduce to prove
the guilt of the accused, even if fully accepted
before it is challenged by cross-examination or
rebutted by defence evidence, if any, cannot show
that accused committed the particular offence. In
such case there would be no sufficient ground for
proceeding with the trial.
(3) 2005 SC 359: State of Orissa vs. Debendra Nath
Padhi -
The Apex Court has held that, it is seen from
S.227 of the Code that in a case triable before
the Court of Session, if the Court on
consideration of the record of the case and the
documents submitted therewith and after hearing
the submission of the prosecution and the accused
if the Judge considers that there is no
sufficient ground for proceeding against the
accused, he shall discharge the accused after
recording reasons for doing so.
(4) (1997) 4 SCC 393 = 1997 AIR SCW 1833: State of
Maharashtra vs. Priya Sharan Maharaj -
Referring to the case of Niranjan Singh Karam
Singh Punjabi (supra) held that at the stage of
Sections 227 and 228, the Court is required to
evaluate the material and documents on record
with a view to find out if the facts emerging
there from taken at their face value disclose the
existence of all the ingredients constituting the
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alleged offence. The Court may, for this limited
purpose, sift the evidence as it cannot be
expected even at that initial stage to accept all
that the prosecution states as gospel truth and
even if it is opposed to common sense or the
broad probabilities of the case. Therefore, at
the stage of framing of the charge, the Court has
to consider the material with a view to find out
that whether there is any 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.
(5) AIR 2007 SC 2149 = 2007 AIR SCW 3683 - Soma
Chakravarty v. State -
It is held as under: Before framing a charge the
court must apply its judicial mind on the
material placed on record and must be satisfied
that the commitment of offence by the accused was
possible.
(6) AIR 2012 SC 1890 - General Officer Commanding
Vs.CBI
It is held as under: The cognizance has to be
taken of the offence and not of the offender and
that it is the duty of the investigating agency
to collect and to produce cogent evidence against
the accused for framing charge and Court can
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convict the accused only if such charges i.e.
evidence is proved on record without reasonable
doubt. Therefore, if there is no chance to prove
a commission of offence by the accused, charge
cannot be framed.
(7) AIR 2009 SC Supplimentary 1744 - State of
M.P. Vs.Sheetla Sahai
It is held as under: if the Court arrives at only
opinion, there is no evidence against the
accused, the Court shall not put accused to
harassment by asking him to face a trial.
31. In view of above facts and circumstances, the
revision applications are allowed. Thereby
impugned order dated 20.01.2010 charge-sheet to
proceed further against petitioners are hereby
quashed and set aside which results into
discharging the petitioners from the offences
registered against them pursuant to complaint no.
RC/20(A) /2008/GNR and charges leveled against
them in CBI Special case No. 3/2010.
3A. Amongst the accused at present we are
concerned with accused no. 3 as petitioner no. 2
in revision petition no. 594/2016 whereas accused
no.5 as petitioner no. 2 in Revision petition no.
627/2016 accused no. 8 as petitioner no. 2 in
Revision petition no. 627/2016 accused no. 9 as
petitioner no. 3 in Revision petition no.
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627/2016 whereas petitioner in revision petition
no. 716/2016 is accused no. 1. Complaint is
already quashed and accused no. 2 whereas it is
abated so far as accused no. 14.
3B. Learned advocate for the petitioner also
disclosed that petitioners in revision petition
no. 716/2016 have also preferred Special Criminal
Application under Section 482 but considered the
decision of Mohit (Supra). They have selected to
file separate revision.
3C. At present the petitioners have challenged
the order dated 20th January 2010 where by Special
Court has ordered to issue process and to
initiate criminal proceedings. However in view of
the development on factual side , quashing of FIR
and order dated 10th April,2015 in Special
Criminal Application No. 2543/2012 petitioners
are right to challenge such order and praying to
remove the proceedings against them.
32. Rule is made absolute
(S.G.SHAH, J.)
binoy
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
CRIMINAL REVISION APPLICATION (AGAINST ORDER PASSED BY
SUBORDINATE COURT) NO. 594 of 2016
[On note for speaking to minutes of order dated 03/10/2016 in
R/CR.RA/594/2016 ]
With
CRIMINAL REVISION APPLICATION NO. 627 of 2016
With
CRIMINAL REVISION APPLICATION NO. 716 of 2016
==========================================================
BHAVESH JAMNABHAI CHAWDA & 5....Applicant(s)
Versus
STATE OF GUJARAT & 1....Respondent(s)
==========================================================
Appearance:
MR HARDIK P MODH, ADVOCATE for the Applicant(s) No. 1 - 6
PUBLIC PROSECUTOR for the Respondent(s) No. 1
==========================================================
CORAM: HONOURABLE MR.JUSTICE S.G.SHAH
Date : 20/10/2016
ORAL ORDER
Perused the note. Heard learned advocate Mr. Hardik P. Modh for the petitioners. He has pointed out that in para 5 and 10 of the order dated 03.10.2016, the name of the company is wrongly stated as Welspun Corporation Limited, which is to be read as Welspun Corp. Limited.
Similarly, in the last line of para 6 "so far as Chartered Accountant", which is wrongly disclosed. Therefore, these words are also deleted.
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Similarly, in para 3(A) there is reference of some of the accused, the petition is allowed, so far as all the petitioners are concerned, and it would not make any difference in final decision.
Note for speaking to minutes if allowed to that extent and disposed of accordingly.
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