2001(4) Crimes 229 (SC)
SUPREME COURT OF INDIA
(From Bombay High Court)
S.P. Bharucha, Y.K. Sabharwal
and Brijesh Kumar, JJ.
Harshad S. Mehta & Ors. - Appellants
versus
The State of Maharashtra - Respondent
Criminal Appeal Nos. 319-320 of 1996
Decided on 6-9-2001
Counsel for the Parties :
For the Appearing Parties : Harish N. Salve, Solicitor General, Rakesh Dwivedi, Jaspal Singh, Ram Jethmalani, V.G. Pradhan, R.K. Jain, Senior Advocates, Harish Gulati, Ms. Geetanjali Mohan, Arun K. Singh, Rakesh Singh, Ms. Kamini Jaiswal, Mahesh Jethmalani, Ms. Shomila Bakshi, Rani Jethmalani, Ms. Gouri K. Das, Ms. Susila Ram, A.D. Chaugule, P.G. Sabnis, Ms. Gitanjali Malviya, Saurabh Avasthi, Pervez A. Siddiqui, Surender Chandra Gupta, A. Subba Rao, R.S. Mhamane, Tara Chandra Sharma, P. Parmeswaran, Ms. Lata Krishnamurthi, Ms. Sushma Suri, Ajay Bhalla, P.K. Goswami, P.K. Jain, S.V. Deshpande, Bishwajit Bhattacharya, Ranjan Mukherjee, Ms. Puja Khatkar, Advocates.

Very Important Point
Special Court under Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 has power to grant pardon to co-accused. The Apex Court rejects Harshad Mehta’s appeal against non-revocation of pardon granted by Special Court to co-accused Prabhu & Choudhary.

Headnote:Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 - Section 9(4) - Procedure and Powers of Special Court - Resi­duary powers consistent with principles of natural justice - Offences ­relating to securities scam against ­appellant and others - Trial before Special Court - On 21.6.93 two ­co-accused Prabhu and Chowdhury moved two separate applications under Sections 306, 307 Cr. P.C., 1973 for grant of pardon - Earlier their statements u/s 164 Cr. P.C. were ­recorded before Magistrate con­fessing their participation in offences and also participation of other ­accused, particularly of Sh. Harshad S. Mehta in commission of offences - Special Court granted conditional pardon which was accepted by Prabhu and Chowdhry - The appellants, other co-accused in the offences moved applications dated 8.1.96 for revocation of the pardon - Were dismissed - Appeal against to Supreme Court - Whether the pardon provision as contained in Sections 306 and 307 Cr. P.C. apply or not to the proceedings before the Special Court under the 1992 Act? (It does not apply) - Whether Section 9(4) of the Act attracts pardon provisions? (No) - Whether Section 9(2) or Section 13 of the Act exclude pardon provisions? (No) - Is it excluded by necessary implication? (No) - Result - Special Court has power to grant pardon - Appeals - Intervention applications dismissed - Case law discussed.­

       Held : The question for determination is whether the pardon provision as contained in Sections 306 and 307 of the Code apply or not to the proceedings before the Special Court under the Act. We were also told that in Criminal Appeal No. 1097 of 1999 (Ram Narain Poply v. Central Bureau of Investigation) one of the questions is as to the power of a Magistrate to grant pardon to a person accused of an offence that falls within the purview of the Act. Counsel were given the opportunity to address arguments on this question as well. (Para 11)

       Held further : Section 9(4) is in the nature of a general provision. It confers inherent powers on the Special Court to deal with any matter that may be brought before it providing that for dealing with such a matter the Special Court may adopt, its own procedure consistent with the principles of natural justice. Sections 3 and 4 of the Act show that variety of matters could come up before the Special Court for its consideration and for dealing with those matters, the Special Court was empowered to regulate its own procedure consistent with the principles of natural justice. The conferment of that inherent power does not include the power to grant pardon, which cannot be said to be a matter of procedure. (Para 13)

       Held also : Neither Section 9(2) nor Section 13 nor any other provision in the Act expressly exclude the applicability of Sections 306 and 307 to the proceedings before the Special Court. Whether it is so excluded by necessary implication is an aspect which needs serious consideration. (Para 16)

       Held then : We have no difficulty in accepting the contention that the Special Court, per se, is not a Magistrate falling in any of the categories of Magistrates as ­enumerated in Section 306(1) and also that it is not a court to which the commitment of a case is made. But, it does not necessarily follow therefrom that the power to tender pardon under Sections 306 and 307 has not been conferred on the Special Court. (Para 21)

       There cannot be any controversy that there is no express provision in the Act excluding therefrom the applicability of ­Sections 306 and 307 of the Code. Can it be said to be so, by necessary implication is what we have to determine. (Para 35)

       Held thereafter : The Code has been incorporated in the Act by application of the doctrine of legislation by incorporation. The power to grant pardon has not been denied expressly or by necessary implication. As earlier stated after decision in the case of A.R. Antulay, it was not necessary to make specific provision in the Act conferring power on the Special Court to grant pardon at trial or pre-trial stage. The Special Court is a court of original criminal jurisdiction and has all the powers of such a court under the Code including those of Sections 306 to 308 of the Code, the same not having been excluded specifically or otherwise. There is no provision in the Act which negates the power of the Special Court to grant pardon. The Special Court has power to grant pardon at any stage of the proceedings. The power under Section 307 cannot be denied merely because no commitment of the case is made to the Special Court. Learned Solicitor General, in our view, rightly contends that the other statutes are only an external aid to the interpretation and to rely upon the omission of a provision which is contained in another different enactment, it has to be shown that two acts are similar which is not the position here. The scheme of two acts is substantially different as has been earlier noticed by us. It is also evident from Fernandes’s case as well. As noticed, the provisions of Sections 6 and 7 of the Special Courts Act confer much wider power. Everything after institution of the prosecution is required to be done by the Special Court. There is nothing in those provisions or in Section 9 to warrant exclusion of Sections 306 to 308 of the Code from the purview of the Act. Reference may also be made to Section 4(2) of the Code which stipulates that the investigation, inquiry and trial of all offences under any other law than the Indian Penal Code shall also be dealt with according to the provisions of the Code but subject to any enactment for the time being in force regulating the manner or place of investigating, enquiring into, trying or otherwise dealing with such offences. (Paras 50, 51 & 52)

       In the present case, we are unable to find either any inconsistency or any provision which may indicate expressly or by necessary implication the exclusion of the provision of the Code empowering grant of pardon. The fact that there is no commitment to the Special Court only shows that section will apply to the extent applicable but that does not lead to exclusion of the power of the Special Court to grant pardon. Section 6 does away with the procedure of commitment of a case to the Sessions Court. It is the Special Court which is to take cognizance of the cases instituted before it or transferred to it. Another deviation is provided in Section 7 which stipulates that any prosecution of any offence relating to transactions in securities shall be instituted only in Special Court. Provisions of the Code not inconsistent with the Act shall apply to the proceedings before the Special Court (Section 9{2}). The power to tender pardon is not controlled by sub­sections (4) or (5) of Section 306. These sub-sections deal with the matters pertaining to post-pardon stage. These provisions only show that where there is no commitment, sub-section (5) of Section 306 will not apply. But this does not take away the power of pardon as provided in sub-section (1) of Section 306. It only means that these provisions will apply to the extent applicable. (Paras 54, 55 and 56)

       Held also : We are, therefore, unable to accept the contention that there was any implied repeal. It is also not possible to accept that it was intended by necessary implication that the Special Court under the Act shall not have the power to grant pardon. All powers of Sections 306 to 308 to the extent applicable and can be complied are available to the Special Court under the Act. The provision of the Act. and the Code can stand together. There is no inconsistency. The two statutory provisions can harmoniously operate without causing any confusion or resulting in absurd consequences and the scheme of Code can, without any difficulty, fit in the scheme of the Act. In the end, we may also note that jurisdiction to try a case is conferred on the Special Court not by committal but by the statute which has established that court. (Para 60)

       Held finally : Our conclusion, therefore, is that the Special Court established under the Act is a court of exclusive jurisdiction. Sections 6 and 7 confer on that court wide powers. It is a court of ­original criminal jurisdiction and has all the powers of such a court under the Code ­including those of Sections 306 to 308. (Para 61)

       Held consequently : For the fore­going reasons, we are of the opinion that the learned Special Court rightly rejected the application of the appellants for ­revocation of the order of pardon. The ­appeals are accordingly dismissed. The ­intervention applications are also dismissed. (Para 62)