IMPORTANT POINT
Pardon granted u/s 306 Cr.P.C. does not operate in respect of a transaction or act entirely unconnected with offence in respect of which pardon has been granted.

Headnote:Criminal Procedure Code, 1973-Section 306-Grand of pardon-Appellant-accused in Fodder Scam case was accused of misappropriation of funds and fraudulent withdrawals from State-Exchequer by issuing fake bills-He was granted pardon on condition to make full and complete disclosure-On basis of statement giving full disclosure Income Tax department sought prosecution of appellant for offences u/s 277 and 278 of Income Tax Act alleging that pardon was restricted only to offences under IPC-High Court dismissed appellant s petition u/s 482 Cr.P.C. on ground that terms of pardon were yet to be fulfilled-Appeal-Pardon would operate in respect of all offences pertaining to that transaction-Pardon would not operate in respect of a transaction or act entirely unconnected with offence in respect of which pardon was granted-Prosecution in respect of filing false return and false declaration was separate and pardon granted would not cover those offences-However appellant could not be compelled to make statement against himself-It was a fit case where Government should consider to not to prosecute appellant under Income Tax Act.
Held : In our view, the High Court was not correct in concluding that until evidence has been given by the Appellant the pardon could not operate. However, the fact remains that under Section 306 Cr.P.C. the pardon is granted in respect of the offence for which he had been charged as an accused. Of course, a pardon need not be only in respect of an offence under the Indian Penal Code. A person may be charged, in respect of the same transaction or act, under the Indian Penal Code and under some other Act, e.g. the Prevention of Corruption Act. The pardon would operate in respects of all offences pertaining to that transaction. However the pardon does not operate in respect of a transaction or act entirely unconnected with the offence in respect of which pardon has been granted. In this case, the pardon has been granted for the offence of misappropriation of funds. This offence has nothing to do with filing of false returns by the Appellant. The prosecution under Sections 277 and 278 is in respect of filing false return and making of false declaration. The pardon which has been granted would not cover those offences. However, it is clear that to get benefit of the pardon the Appellant has to make a full and frank disclosure regarding the offences of misappropriation. If he does not make a full and complete disclosure, the pardon may be cancelled. If he makes a full and complete disclosure he faces the prospect of being convicted in the prosecution under Sections 277 and 278 of the Income Tax Act. Article 20(2) of the Constitution of India enjoins that no person can be compelled to be a witness against himself. To continue with the prosecution would thus amount to forcing the Appellant to give evidence against himself or to risk pardon being cancelled as he cannot make a full and complete disclosure for fear of being convicted in the other case. Thus, even though the pardon may not extend to these offences, in our view, this is a fit case where the Government should consider not prosecuting the Appellant under these Sections. To insist on so prosecuting may result in valuable evidence being lost in the fodder scam cases. We, therefore, direct that the prosecution under Sections 277 and 278 of the Income Tax Act will stand stayed till trial of the cases in which pardon is granted is over. If the Appellant makes a full and complete disclosure, then, in our view, the prosecution under Sections 277 and 278 should not be allowed to proceed. We, therefore, grant to the Appellant liberty to apply for quashing that prosecution at that stage. (Paras 13 to 15)

JUDGMENT

S.N. Variava, J.-Leave granted.

2. This Appeal is against the Judgment of the High Court of Patna dated 21st March, 2002.

3. Briefly stated the facts are as follows :

The Appellant is an accused in a number of cases pertaining to the Fodder Scam in the Animal Husbandry Department of Bihar. He has, along with others, been accused of misappropriation of the funds of the Animal Husbandry Department and of fraudulent withdrawals from the State Exchequer by issuing fake bills for supplies never made to the Animal Husbandry Department. The Appellant has been, on 28th August, 1998, granted a pardon by the Special Judge, CBI, on the condition that he makes a full and complete disclosure.

4. On the basis of the statement made by the Appellant, the Deputy Commissioner of Income Tax, Central Circle-I, Patna, issued a show-cause-notice to the Appellant as to why prosecution should not be initiated against him, under Sections 277 and 278 of the Income Tax Act, for having filed false returns of income tax. The Appellant replied to the show-cause-notices, inter alia, stating that he has been granted a pardon under Section 306 of the Criminal Procedure Code and thus the show-cause-notice was not maintainable for an offence under Sections 277 and 278 of the Income Tax Act. This contention was not accepted by the Commissioner of Income Tax, who opined that the pardon was restricted only to offences under the Indian Penal Code. Accordingly, a Complaint Case No. 157(C)/2000 has been registered under Sections 277 and 278 of the Income Tax Act. The Court of Economic Offences, Patna, has taken cognizance and issued summons.

5. The Appellant filed a Petition under Section 482 of the Criminal Procedure Code for quashing this complaint. By the impugned Judgment that Petition has been dismissed, inter alia, on the ground that as yet the terms of the pardon have not been fulfilled. It is held that till full evidence is given by the Appellant and the trial of all cases is concluded he continues to be an accused and, therefore, cannot claim immunity from prosecution.

6. Mr. Lahoty, on behalf of the Appellant, submitted that the Appellant has been granted pardon under Section 306 of the Criminal Procedure Code. He submitted that under sub-section 2 of Section 306 the pardon is, amongst others, in respect of any offence punishable with imprisonment which may extend to seven years or more. He submitted that such a pardon would operate not just for offences under the Indian Penal Code but would also cover offences under other statutes. He submitted that for an offence under Sections 277 and 278 the sentence may extend to seven years. He submitted that by virtue of the pardon no prosecution could have been launched against the Appellant under these Sections.

7. Mr. Lahoty relied upon the case of Bipin Behari Sarkar vs. The State of West Bengal reported in [1959 SCR 1324], wherein it has been held as follows:

"Section 339(1) of the Code provides that "where a pardon has been tendered under s. 337 or s.338, and the Public Prosecutor certifies that in his opinion any person who has accepted such tender has, either by willfully concealing anything essential or by giving false evidence, not complied with the condition on which the tender was made, such person may be tried for the offence in respect of which the pardon was so tendered, or for any other offence of which he appears to have been guilty in connection with the same matter". The proviso to this sub-section prohibits the trial of such person jointly with any of the other accused and that such person shall be entitled to plead at such trial that he had complied with the condition upon which such tender was made. The provisions of this section clearly pre-suppose that the pardon which had been tendered to a person had been accepted by him and that thereafter that person had willfully concealed anything essential or had given false evidence and therefore had not complied with the condition on which the tender

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2004 Supreme(SC) 1089

IMPORTANT POINTPardon granted u/s 306 Cr.P.C. does not operate in respect of a transaction or act entirely unconnected with offence in respect of which pardon has been granted.

Cases Referred (4)

IMPORTANT POINT
Pardon granted u/s 306 Cr.P.C. does not operate in respect of a transaction or act entirely unconnected with offence in respect of which pardon has been granted.