STATE TR.INSP.OF POLICE Vs. A.ARUN KUMAR & ANR.
PREVENTION OF CORRUPTION ACT, 1988
Section 13 - Criminal misconduct by a public servant
Section 420 - Cheating and dishonestly inducing delivery of property
Section 120 B - Punishment of criminal conspiracy
Section 467 - Forgery of valuable security, will, etc
Section 471 - Using as genuine a forged document
Supreme Court of India (Division Bench (DB)- Two Judge)
Appeal (Crl.), 2602 of 2014, Judgment Date: Dec 17, 2014
Reportable
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO.2602 OF 2014 @
SPECIAL LEAVE PETITION (CRL.) NO.3134 OF 2012
STATE TR. INSP. OF POLICE ..... APPELLANT
Versus
A. ARUN KUMAR & ANR. ....RESPONDENTS
J U D G M E N T
UDAY UMESH LALIT, J.
1. Leave granted. This appeal arises out of the judgment and order
dated 22.08.2011 passed by the High Court of Madras in Crl. R.C. No.106 of
2009 whereby it set aside the order of the Special Court dated 19.12.2008
dismissing the application for discharge preferred by the Respondents
herein.
2. On 08.02.2007 RC-1/E/2007-CBI/EOW/CHENNAI was registered under
sections 120B read with section 420, 467, 468, 471 IPC and 477-A IPC and
section 13 (2) read with section 13(1)(d) of The Prevention of Corruption
Act, 1988 (POC Act for short) and section 32 of the Customs Act, 1962 on
the allegations that accused nos. 1-3 named therein had entered into a
criminal conspiracy with accused no.4 who was Appraiser of Customs, Inland
Container Depot (ICD), Irugur, Coimbatore and with accused no.5, Inspector
of Customs, Inland Container Depot, Irugur, Coimbatore during 2004-2005 and
in pursuance of said conspiracy had filed false and fabricated documents to
claim duty draw back to the tune of Rs.2.14 crores (approximately) from
ICD, Irugur. It was alleged that said accused nos.1-3 had filed certain
Shipping Bills and that the export documents were assessed by accused no.4
i.e. respondent no.1 and after such assessment the goods were examined by
accused no.5 i.e. respondent No.2. After completion of the customs
formalities the goods were stuffed in containers which were sealed and
transported to Cochin for consignment to Dubai. It was alleged that
accused no.1 produced different sets of forged shipping bills by adding a
digit before the total quantity of shipment thereby inflating the value of
shipment and fraudulently claimed duty draw back. These forged shipping
bills were endorsed by the respondents. A chart was relied upon to show
how the total quantity and the present market value differed by addition of
a digit. The chart was as follows:
|Name of the |Total Qty. in|Total Qty. |Present |Present |
|Firm |Kg (Net |(Net Weight |Market Value |Market Value |
| |Weight as |as declared |declared in |declared in |
| |declared in |in GR Form |transference |GR Form |
| |transference |Shipping |Shipping Bill|Shipping Bill|
| |copy of |Bill) |(Indian |(Indian |
| |Shipping Bill|presented to |Rupee) |Rupee) |
| |(presented to|RBI for | | |
| |Cochin |matching for | | |
| |Customs) |foreign | | |
| | |Exchange | | |
| | |Realisation | | |
|[1] |[2] |[3] |[4] |[5] |
|M/s J.S. |79257 |479257 |17492880 |117492880 |
|Babu, Inc. | | | | |
|M/s Samy |27176 |187176 |4850990 |44850990 |
|Metal | | | | |
|Industries | | | | |
|M/s Ayyappan | 38836 |258836 |8586055 |63586055 |
|Industries | | | | |
|Total | | |30929925 |225929925 |
3. A regular case was registered on the allegations as aforesaid and
investigation was conducted by CBI which later filed charge sheet against
said five accused on 28.04.2008. The allegations against respondent nos. 1
& 2 were:
"......... A-4 Arun Kumar while preparing GR Forms is supposed to assess
the value in Indian rupees for the value mentioned in US dollars by the
Exporter. While preparing GR Forms, A-1 Manish Kumar Jain and A-2 R.V.
Shanmugam prepared two such documents one showing correct weight in kg and
value in US dollars and the other having inflated weight in kg and value in
US dollars. A-1 Manish Kumar Jain and A-2 R.V. Shanmugam have put two
before the weight inflating by 20,000 kgs and one before the value in US
dollars inflating it by 1 lakh dollars. But A-4 Arun Kumar while endorsing
it in the reverse of the form assessed and calculated the value of export
in rupees and wrote the same in his own handwriting under his signature.
But in the present market value mentioned in the GR Forms by the Exporter,
a digit five has been added before the value in rupees, thus inflating the
value by Rs.50 lakhs. This value, of course could not be the correct value
if calculate at the rate of Rs.43.55 per US dollar. This was deliberately
overlooked by A-4 Arun Kumar and he failed to prepare the GR Forms in
consultation with the Shipping Bills where there is a difference of Rs.50
lakhs in each and every GR Forms submitted by the Exporter. When such
malpractices by the Officers of ICD, Irugur came to the knowledge of the
Directorate General of Central Excise Intelligence, A-4 Arun Kumar with the
connivance of A-5 Santhosh Kumar, Sr. Tax Assistant (STA) destroyed all the
Shipping Bills and A-5 Santosh Kumar made corrections in the Shipping Bills
Register as instructed by A-4 Arun Kumar and Shri Bindusaran."
"..... In pursuance of the said criminal conspiracy A-1 Manish Kumar Jain
and A-2 R.V. Shanmugam prepared two sets of Shipping Bills and GR Forms and
exported some stainless steel utensils in the name of M/s Ayyappan
Industries, M/s Shri J.S. Babu Inc. and M/s Samy Metal Industries. In
furtherance of the criminal conspiracy, A-1 Manish Kumar Jain and A-3 N.
Rajan prepared the shipping bills. The documents were filed by A-1 Manish
Kumar Jain and A-2 R. V. Shanmugam at ICD, Irugur with the connivance of A-
4 Arun Kumar who allowed the export of less quantity and entered inflated
quantity in the Shipping Bills Register in conspiracy with A-5 Santhosh
Kumar, STA and also filed wrong GR Forms to RBI. But before the duty draw
back was allowed, the process was stopped by the intervention of the
Directorate General of Central Excise Intelligence and the accused persons
removed/destroyed the documents available with them and tried to replace
the documents with the actual export documents by reconstruction process.
While the actual exports was only worth Rs.3.22 crores, with eligible duty
draw back of Rs.35,000/- by forging the Shipping Bills, GR Forms and
Shipping Bills Register, the accused persons attempted to claim inflated
duty draw back of Rs.2.5 crores on inflated export of Rs.22.72 crores and
thereby attempted to cheat the Government of India."
4. The respondents preferred application under section 239 of Cr.P.C.
seeking discharge. The special court after having considered the matter,
came to the conclusion that a case for framing charges against the
respondents under section 468, 471 and 201 IPC and under section 15 of the
POC Act and under sections 132 and 136 of the Customs Act was made out.
The special court thus dismissed the application by its order dated
19.12.2008. The respondents being aggrieved preferred revision under
section 397 read with 401 of Cr.P.C. before the High Court. During the
pendency of said revision the special court framed following charges
against the accused:
|Charge No. |Accused |Offences under section/s |
|I |A-1 to A-5 |120-B r/w 511 IPC, 468, 471 and 201 |
| | |IPC/Section 15 of the prevention of |
| | |Corruption Act, 1988 and section 132 and|
| | |136 of the Custom Act. |
|II |A-1 to A-2 |468 IPC |
|III |A-1 to A-2 |468 r/w 471 IPC |
|IV |A-1 to A-3 |511 r/w 420 IPC |
|V |A-1 to A-2 |201 IPC |
|VI |A-4 to A-5 |201 IPC |
|VII |A-1 to A-3 |132 of the customs Act |
|VIII |A-4 to A-5 |136 of the customs Act |
|IX |A-4 to A-5 |15 of the Prevention of Corruption Act, |
| | |198 |
5. The High Court took the view that there was nothing on record to
justify framing of charges against the respondents. It was observed thus:
"..... It is to be stated that this Court is also constrained to state that
even for raising such suspicion much less very strong suspicion; the
prosecution has not produced a scrap of material either through statement
or through any other document to make out a prima facie case against the
petitioners for framing the charges."
As regards charges under Section 15 of the POC Act, the High Court observed
as under:
".... Section 15 of the Prevention of Corruption Act, 1988, punishment for
attempt, could be invoked only in the event of charge framed under clause
(c) of clause (d) of sub-section (1) of Section 13. As far as the case on
hand is concerned, the trial court has not charged the petitioners for the
offence under Section 13(1)(c) or (d)."
The High Court, thus accepted the submission that no case made out to frame
any charges against the respondents and allowing the Revision by its
judgment and order dated 22.08.2011, set aside the order dated 19.12.2008
of the Special Court.
6. The present appeal challenges the correctness of the view taken by
the High Court. By way of an additional affidavit, the appellant placed
on record, copies of relevant Shipping Bills and the corresponding Exchange
Control declaration forms. We have heard Ms. Vibha Dutt Makhija, learned
senior counsel appearing for the appellant who invited our attention to
documents on record to bring home the point about discrepancy in the total
quantity of shipment and the value of shipment in two sets of documents.
It was submitted that the High Court was not right and justified in
observing that there was no material on record at all. Mr. B.A. Khan and
Mr. Ratnakar Dash, learned senior counsel appearing for Respondent Nos.1
and 2, respectively supported the view taken by the High Court. It was
submitted by the learned counsel that there never existed two sets of
shipping bills, that none of the witnesses deposed against the respondents
that no duty draw back had been claimed at all and that the High Court was
right in concluding that there was no material against the respondents.
Relying on Ganga Kumar Srivastava v. State of Bihar[1]it was submitted that
no case for interference by this Court was made out.
7. We have gone through two sets of documents which were filed along
with an additional affidavit. By way of sample, Shipping Bill No.000810 is
for the quantity of 3568 Kgs with value at Rs.7,88,830 whereas the
corresponding Exchange Control Declaration (GR) mentions the quantity as
23568 Kgs i.e. to say digit "2" stands added and the value shown is
Rs.57,88,830 i.e. to say digit "5" stands added. In the process, the value
was inflated which would in turn increase the amount of duty drawback
multifold. The documents placed on record which are part of the charge-
sheet, certainly raise grave suspicion against the respondents.
8. The law on the point is succinctly stated by this Court in Sajjan
Kumar v. CBI[2] wherein after referring to Union of India v. Prafulla Kumar
Samal[3] and Dilawar Balu Kurane v. State of Maharashtra[4] this Court
observed in para 19 thus:
"It is clear that at the initial stage, if there is a strong suspicion
which leads the Court to think that there is 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
presumption of the guilt of the accused which is to be drawn at the initial
stage is only for the purpose of deciding prima facie whether the Court
should proceed with the trial or not. If the evidence which the prosecution
proposes to adduce 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."
This Court the went on to cull out principles as regards scope of
Sections 227 and 228 of the Code, which in our view broadly apply to
Sections 238 and 239 of the Code as well. It was observed thus in para 21:
"Exercise of jurisdiction under Sections 227 & 228 of Cr.P.C.
21. On consideration of the authorities about the scope of
Section 227 and 228 of the Code, the following principles emerge:
(i) The Judge while considering the question of framing the charges under
Section 227 of the Cr.P.C. has the undoubted power to sift and weigh the
evidence for the limited purpose of finding out whether or not a prima
facie case against the accused has been made out. The test to determine
prima facie case would depend upon the facts of each case.
(ii) Where the materials placed before the Court disclose grave suspicion
against the accused which has not been properly explained, the Court will
be fully justified in framing a charge and proceeding with the trial.
(iii) The Court cannot act merely as a Post Office or a mouthpiece of the
prosecution but has to consider the broad probabilities of the case, the
total effect of the evidence and the documents produced before the Court,
any basic infirmities etc. However, at this stage, there cannot be a roving
enquiry into the pros and cons of the matter and weigh the evidence as if
he was conducting a trial.
(iv) If on the basis of the material on record, the Court could form an
opinion that the accused might have committed offence, it can frame the
charge, though for conviction the conclusion is required to be proved
beyond reasonable doubt that the accused has committed the offence.
(v) At the time of framing of the charges, the probative value of the
material on record cannot be gone into but before framing a charge the
Court must apply its judicial mind on the material placed on record and
must be satisfied that the commission of offence by the accused was
possible.
(vi) 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 therefrom taken at their face value discloses the
existence of all the ingredients constituting the alleged offence. 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.
(vii) If two views are possible and one of them gives rise to suspicion
only, as distinguished from grave suspicion, the trial Judge will be
empowered to discharge the accused and at this stage, he is not to see
whether the trial will end in conviction or acquittal."
9. In our considered view, the material on record discloses grave
suspicion against the respondents and the Special Court was right in
framing charges against the respondents. We must also observe that the
High Court was not justified in stating that Section 15 of the POC Act
could not be invoked in the present case. Since the duty draw back was not
actually availed, the prosecution had rightly alleged that there was an
attempt to commit offence under the relevant clauses of Section 13(1) of
the POC Act. It is not the requirement of law that in order to charge an
accused under Section 15 of the POC Act he must also be charged either
under Section 13(1)(c) of 13(1)(d) of the POC Act. The assessment of the
High Court in that behalf is not correct.
10. In our view the instant case calls for interference by this Court.
We, therefore, set aside the judgment and order passed by the High Court
and restore the order of the Special Court. The respondents thus continue
to stand charged and must consequently face the trial. However, it must be
recorded that this Court has considered the matter only from the stand
point whether the respondents be discharged or not and we shall not be
taken to have expressed any opinion on merits. The matter shall and must
be dealt with purely on merits by the concerned court.
11. We allow this appeal in the aforesaid terms.
.............................J.
(Dipak Misra)
............................J.
(Uday Umesh Lalit)
New Delhi,
December 17, 2014
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[1] (2005) 6 SCC 211
[2] (2010) 9 SCC 368
[3] (1909) 3 SCC 4
[4] (2002) 2 SCC 135
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