Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2022 Supreme(SC) 911

SUPREME COURT OF INDIA
B.R. GAVAI, PAMIDIGHANTAM SRI NARASIMHA, JJ.
Kanchan Kumar – Appellant
Versus
The State of Bihar – Respondent
Criminal Appeal No. 1562 of 2022, SLP (Crl) No. 9601 of 2016
Decided On : 14-09-2022

Advocates appeared:
For the Petitioner(s): Mr. Sunil Kumar, Sr. Adv. Mr. Himanshu Shekhar, Adv. Mr. Parth Shekhar, Adv. Mr. Awanish Sinha, AOR
For the Respondent(s): Mr. Abhinav Mukerji, AOR

IMPORTANT POINT
Loan repayment cannot be separately counted as expenditure.

Headnote:
Prevention of Corruption Act, 1988 – Sections 13(l)(d) and 13(2) – Criminal Procedure Code, 1973 – Section 227 – Acquisition of disproportionate to Appellant’s known sources of income – Dismissal of application seeking discharge from case – Loan repayment cannot be separately counted as expenditure – Special Judge (Vigilance) and High Court failed to reconcile such a simple and straightforward inconsistency in prosecution’s evidence – Special Judge (Vigilance) as well as High Court did not consider this objection on the ground that a roving inquiry is not permissible stage of discharge – There is nothing to indicate, even prima facie, that articles found during search in year 2000 were acquired during check period – In absence of any material to link these articles as having been acquired during check period, it is impermissible to include their value in expenditure – There is no prima facie case made out by prosecution and Appellant was entitled to be discharged – Impugned Judgment and Order set aside and appellant discharged. (Paras 16.2, 16.3, 16.4, 17, 18 and 20)
Facts of the case:
Present appeal is against the concurrent dismissals by Trial and the High Court of the application for discharge filed by Appellant under Section 227 of the Code of Criminal Procedure, 1973. Short question arising for consideration is whether the Appellant is entitled to be discharged of proceedings initiated against him under the PC Act.
Findings of Court:
What we have undertaken is not a roving inquiry, but a simple and necessary inquiry for a proper adjudication of an application for discharge. Special Judge (Vigilance) was bound to conduct a similar inquiry for coming to a conclusion that a prima facie case is made out for the Appellant to stand trial. Unfortunately, High Court committed the same mistake as that of Special Judge (Vigilance).
Result : Criminal Appeal allowed.

JUDGMENT :

PAMIDIGHANTAM SRI NARASIMHA, J.

1. Leave granted.

2. This appeal is against the concurrent dismissals by the Trial¹ [Special Judge (Vigilance), Patna, in Special Case No. 9 of 2000 dated 28.03.2016] and the High Court² [High Court of Judicature at Patna, in Criminal Miscellaneous No. 23031 of 2016 dated 05.10.2016] of the application for discharge filed by the Appellant under Section 227 of the Code of Criminal Procedure, 1973³ [hereinafter referred to as the Cr.P.C.].

3. Facts leading to the filing of this Appeal: The Appellant joined the Bihar State Financial Corporation⁴ [hereinafter referred to as ‘the BSFC’] in the capacity of an Assistant General Manager on 19.07.1974. After a period of thirteen years, in 1987, a complaint came to be filed against the Appellant for having allegedly purchased three houses and two pieces of land in Bihar, which according to the complainant, was disproportionate to Appellant’s known sources of income. This complaint was inquired into, and after a detailed investigation, the allegations were found to be false. Except for a residential house in Patna, which the Appellant had purchased on 29.08.1988 for Rs. 2,26,500 with the help of a loan from the BSFC, no other assets could be traced to the ownership of the Appellant. However, despite finding no merit in the allegation, the investigation was kept pending.

4. In the meanwhile, life moved on and in 1996, the Appellant joined the Oil and Natural Gas Commission⁵ [hereinafter referred to as ‘the ONGC’] as Deputy General Manager on deputation, keeping his lien with the BSFC. Four years after joining ONGC, an FIR came to be registered against him on 21.02.2000, under Sections 13(l)(d) and 13(2) of the Prevention of Corruption Act, 1988⁶ [hereinafter referred to as the ‘PC Act’] on the same allegation that he possessed assets disproportionate to his known sources of income. These alleged assets were purportedly acquired during his tenure with the BSFC, and consequently, the check period in the FIR was considered from the date he joined BSFC, i.e. 19.07.1974 to the date of registration of the residential house purchased by him, i.e. 29.08.1988. The Appellant wrote a letter to the Director General of Police (Vigilance), Patna, on 18.04.2002, raising a grievance that the calculations in the FIR undervalued his income and overvalued his assets, thus depicting a false and inflated account of his expenditure.

5. Eventually a charge sheet came to be filed on 11.09.2007, i.e. about seven years after the registration of the FIR, and in fact, twenty years after the complaint on this very allegation was found to be false by the authorities. Be that as it may, the charge-sheet filed against the Appellant indicated that he earned a total income of Rs. 3,01,561 and incurred an expenditure of Rs. 5,24,386 during the check period. In view of this, the charge against the Appellant was of having amassed Rs. 2,22,825, disproportionate to his known sources of income. The charge sheet indicated two components of his income, being (i) savings of Rs. 1,13,081 (1/3rd of his salary) and (ii) home and car loan from BSFC worth Rs. 1,88,480. On the other hand, the charge sheet included six components of his expenditure, being (i) payment of Rs. 2,26,500 towards the construction of his house, (ii) general expenditure during the check period of Rs. 24,800, (iii) amount in bank deposit worth Rs. 55,000, (iv) loan repayment of Rs. 53,467, (v) LIC deposit worth Rs. 6,057 and (vi) estimated value of articles found during a search conducted on 21.02.2000, as being Rs. 1,58,562.

6. At the relevant stage, the Appellant applied for discharge under “Section 239” of the Cr.P.C. (which should have been under Section 227⁷ [though the Appellant stated that the application is under Section 239 of the Cr.P.C. as Special Judges appointed under the PC Act are deemed to be Court of Session, the discharge application should have been filed under Section 227 of the Cr.P.C. and not under Section