Deputy Superintendent Of Police vs Ashoo Surendranath Tewari on 8 September, 2020


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Supreme Court of India

Deputy Superintendent Of Police vs Ashoo Surendranath Tewari on 8 September, 2020

Author: Rohinton Fali Nariman

Bench: Rohinton Fali Nariman, Navin Sinha, Hon’Ble Ms. Banerjee

                                                                     REPORTABLE

                                    IN THE SUPREME COURT OF INDIA

                                  CRIMINAL APPELLATE JURISDICTION

                                  CRIMINAL APPEAL NO. 575 OF 2020
                             (ARISING OUT OF SLP (CRL.) NO. 5422 OF 2015)


                         ASHOO SURENDRANATH TEWARI                APPELLANT(S)

                                                     VERSUS

                         THE DEPUTY SUPERINTENDENT OF
                         POLICE, EOW, CBI & ANR.                 RESPONDENT(S)




                                              JUDGMENT

R.F. Nariman, J.

1. Leave granted.

2. We have heard Mr. Subhash Jha, learned counsel appearing for the

appellant and Mr. Vikramjit Banerjee, learned ASG appearing on

behalf of the respondent.

3. This case arises out of an FIR that was registered on 09.12.2009 as

regards a MSME Receivable Finance Scheme operated by the

Small Industries Development Bank of India (SIDBI). It was found

that since some vendors were complaining of delay in getting their
Signature Not Verified

Digitally signed by R
Natarajan
Date: 2020.09.11
16:01:22 IST

payments, SIDBI, in consultation with Tata Motors Limited, advised
Reason:

the vendors of Tata Motors Limited to furnish RTGS details for

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remittance of funds. It was found that for making payments in

RTGS for various purchases made by Tata Motors Limited from one

Ranflex India Pvt. Ltd. (hereinafter referred to as “vendor”), 12

payments amounting to Rs.1,64,17,551/- (Rupees one crore sixty

four lakhs seventeen thousand five hundred fifty one only) were

made through RTGS by SIDBI in the vendor’s account with Federal

Bank, Thriupporur. Ultimately, SIDBI was informed by the vendor

that it has an account with Central Bank, Bangalore and not with

Federal Bank, Thriupporur. On account of this diversion of funds, an

FIR was lodged in which a number of accused persons were

arrested. We are concerned with the role of the appellant who is

Accused no. 9 in the aforesaid FIR.

4. A charge-sheet was then filed on 26.07.2011 in the Court of Special

Judge, CBI cases in which it was alleged that the appellant had

received an email on 25.05.2009 containing the RTGS details for

the account with Federal Bank, Thripporur, which he then forwarded

to Accused No.5 (Muthukumar) who is said to be the kingpin

involved in this crime and is since absconding. Apparently, based on

Muthukumar’s approval, the appellant then signed various cheques

which were forwarded to other accounts.

5. By an order dated 27.06.2012 passed by the learned Special Judge,

CBI (ACB), Pune, it was found that since no sanction was taken

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under the Prevention of Corruption Act, offences under that Act

cannot, therefore, be proceeded with against this accused and he

was discharged to that extent. So far as sanction under Section 197

of Cr.P.C is concerned, the Special Judge came to the conclusion

that there was no need for sanction in the facts of this case. Finding

that there was a prima facie case made out against the appellant,

the Special Judge refused to discharge the appellant from the

offences under the IPC.

6. By the impugned judgment dated 11.07.2014, the High Court

agreed with the learned Special Judge that there was no need for

sanction under Section 197 Cr.P.C. The High Court then considered

an Order of the Central Vigilance Commission (CVC) dated

22.12.2011 which went into the facts of the case in great detail and

concurred with the Competent Authority that on merits no sanction

ought to be accorded and no offence under the Penal Code was in

fact made out. Though this report was heavily relied upon before the

High Court, the High Court brushed it aside stating:

“25. The Central Vigilance Commission could not have
come to the aforementioned conclusion unless there
was evidence to do so. This submission of the learned
counsel is unfounded. The CVC had specifically
observed that Shri Karade has benefited from Shri
Muthukumar. The CVC ought not to have observed
that they are the victims of conspiracy specially when
the CVC has observed that Muthukumar had entered
into conspiracy with “various other people”. The
petitioners would fall into the category of various other

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people and therefore they ought to be tried for the
offence punishable under the Indian Penal Code
specially for the offence punishable under Section 420
of IPC.”

Since this report is of some importance, we need to set out extracts

insofar as the appellant is concerned:

“Sub: RC.13/E/2009 – Mumbai against Shri Ashoo
Tiwari, DGM and others, SIDBI.

2. Competent Authority of SIDBI, in his tentative view
did not consider it a fit case for sanction of prosecution
against the two officials namely S/Shri Ashoo Tiwari,
DGM and Shasheel Karade. In his contention the
Competent Authority have stated that it is a fact that
Shri Muthukumar did not dispatch payment advises to
RIPL immediately as a result vendors including RIPL
remained unaware about payments. Shri Muthukumar
resigned from services of SIDBI on 31.07.2009 before
the fraud could be detected and RIPL came to know of
fraud/non-receipt of payment in their account when
they received the payment advices dispatched as
arranged by Shri Ashoo Tiwari and Shri Shasheel
Karade. The Competent Authority is of the view had
Shri Tiwari and Shri Karade been involved/connived
with Shri Muthukumar, they would not themselves
have arranged dispatch of advises at the correct and
bonafide address of RIPL. Further, on learning about
payment to wrong RIPL, Shri Tiwari proactively got the
accounts of RIPL with Federal Bank frozen and thus
prevented and saved withdrawal of Rs. 34.00 lacks
laying in their account. This supports the case of his
non-involvement in the fraud.

3. It was brought out during the meeting that the email
in question was generated fraudulently by Shri
Muthukumar. Shri Ashoo Tiwari, on receipt of the
email had endorsed it to Shri Muthukumar for
verification as Shri Muthukumar was the designated
officer to do so. Shri Tiwari on his part has done the
due diligence through in the process he got duped by
Sh. Muthukumar.

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4. Having gone through the arguments put forth by the
CBI and the disciplinary authority in SIDBI during the
course of joint meeting, it transpired that the fraud has
been perpetrated by Shri Muthukumar who as the
officer of SIDBI at that time and entered into
conspiracy with various other people including his
relatives. Shri Tiwari and Shri Karade seem to have
fallen for this machinations by their acts of relying
upon the verification report submitted by Shri
Muthukumar. They seem to be victims of his fraud.

5. Shri Tiwari seems to have relied on a report of
verification of email verification provided by Shri
Muthukumar. He has been negligent to that extent
that he has not followed the stipulated conditions for
the payment but the mitigating factor is that the Bank
had directed to go for the RTGS on experimental
basis. In the earlier system, the cheques were getting
mishandled and misplaced and to expedite payment to
vendors on behalf of their customers, RTGS system
was being introduced and the entire process of RTGS
was under testing, as indicated by the competent
authority. Shri Tiwari on his part, seems to have made
efforts for carrying out due diligence and in the
process seems to have fallen victim to the fraud
played by Shri Muthukumar.

xxx xxx xx

7. It is apparent on the basis of fact that they have
merged during the meeting that in this case the entire
crime has been committed by Shri Muthukumar, who is
still absconding and is yet to be brought to book by
CBI. Therefore, in view of the above agreeing with the
competent authority, prima facie charges do not seem
established against Shri Ashoo Tiwari and Shri Karade
and as such sanction for prosecution of Shri Ashoo
Tiwari and Shri Shasheel Karade, Manager, SIDBI is
not called for and the commission would advise
accordingly and RDA would suffice against Shri Ashoo
Tiwari, DGM and Shri Shasheel karade, Manager,
SIDBI for their procedural and supervisory lapses
which have already been examined earlier by the
Commission and minor pp had already been advised.”

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A reading of this Report shows that, at the highest, the appellant may

be negligent without any criminal culpability. In fact, the positive

finding of the CVC that the appellant appears to be a victim of

Muthukumar’s plot is of some importance.

7. A number of judgments have held that the standard of proof in a

departmental proceeding, being based on preponderance of

probability is somewhat lower than the standard of proof in a criminal

proceeding where the case has to be proved beyond reasonable

doubt. In P.S. Rajya vs. State of Bihar, (1996) 9 SCC 1, the question

before the Court was posed as follows:-

“3. The short question that arises for our consideration in
this appeal is whether the respondent is justified in
pursuing the prosecution against the appellant under
Section 5(2) read with Section 5(1)(e) of the Prevention of
Corruption Act, 1947 notwithstanding the fact that on an
identical charge the appellant was exonerated in the
departmental proceedings in the light of a report
submitted by the Central Vigilance Commission and
concurred by the Union Public Service Commission.”

This Court then went on to state:

“17. At the outset we may point out that the learned
counsel for the respondent could not but accept the
position that the standard of proof required to establish
the guilt in a criminal case is far higher than the standard
of proof required to establish the guilt in the departmental
proceedings. He also accepted that in the present case,
the charge in the departmental proceedings and in the
criminal proceedings is one and the same. He did not
dispute the findings rendered in the departmental
proceedings and the ultimate result of it.”

This being the case, the Court then held:

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“23. Even though all these facts including the Report of
the Central Vigilance Commission were brought to the
notice of the High Court, unfortunately, the High Court
took a view that the issues raised had to be gone into in
the final proceedings and the Report of the Central
Vigilance Commission, exonerating the appellant of the
same charge in departmental proceedings would not
conclude the criminal case against the appellant. We have
already held that for the reasons given, on the peculiar
facts of this case, the criminal proceedings initiated
against the appellant cannot be pursued. Therefore, we
do not agree with the view taken by the High Court as
stated above. These are the reasons for our order dated
27-3-1996 for allowing the appeal and quashing the
impugned criminal proceedings and giving consequential
reliefs.”

In Radheshyam Kejriwal vs. State of West Bengal and Another,

(2011) 3 SCC 581, this Court held as follows:-

“26. We may observe that the standard of proof in a
criminal case is much higher than that of the adjudication
proceedings. The Enforcement Directorate has not been
able to prove its case in the adjudication proceedings and
the appellant has been exonerated on the same allegation.
The appellant is facing trial in the criminal case. Therefore,
in our opinion, the determination of facts in the adjudication
proceedings cannot be said to be irrelevant in the criminal
case. In B.N. Kashyap [AIR 1945 Lah 23] the Full Bench
had not considered the effect of a finding of fact in a civil
case over the criminal cases and that will be evident from
the following passage of the said judgment: (AIR p. 27)
“… I must, however, say that in answering the question,
I have only referred to civil cases where the actions are
in personam and not those where the proceedings or
actions are in rem. Whether a finding of fact arrived at in
such proceedings or actions would be relevant in
criminal cases, it is unnecessary for me to decide in this
case. When that question arises for determination, the
provisions of Section 41 of the Evidence Act, will have
to be carefully examined.”

xxx xxx xxx

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29. We do not have the slightest hesitation in accepting the
broad submission of Mr Malhotra that the finding in an
adjudication proceeding is not binding in the proceeding for
criminal prosecution. A person held liable to pay penalty in
adjudication proceedings cannot necessarily be held guilty
in a criminal trial. Adjudication proceedings are decided on
the basis of preponderance of evidence of a little higher
degree whereas in a criminal case the entire burden to
prove beyond all reasonable doubt lies on the prosecution.

xxx xxx xxx

31. It is trite that the standard of proof required in criminal
proceedings is higher than that required before the
adjudicating authority and in case the accused is
exonerated before the adjudicating authority whether his
prosecution on the same set of facts can be allowed or not
is the precise question which falls for determination in this
case.”

After referring to various judgments, this Court then culled out the

ratio of those decisions in paragraph 38 as follows:-

“38. The ratio which can be culled out from these decisions
can broadly be stated as follows:

(i) Adjudication proceedings and criminal prosecution can
be launched simultaneously;

(ii) Decision in adjudication proceedings is not necessary
before initiating criminal prosecution;

(iii) Adjudication proceedings and criminal proceedings are
independent in nature to each other;

(iv) The finding against the person facing prosecution in
the adjudication proceedings is not binding on the
proceeding for criminal prosecution;

(v) Adjudication proceedings by the Enforcement
Directorate is not prosecution by a competent court of law
to attract the provisions of Article 20(2) of the Constitution
or Section 300 of the Code of Criminal Procedure;

(vi) The finding in the adjudication proceedings in favour of

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the person facing trial for identical violation will depend
upon the nature of finding. If the exoneration in
adjudication proceedings is on technical ground and not on
merit, prosecution may continue; and

(vii) In case of exoneration, however, on merits where the
allegation is found to be not sustainable at all and the
person held innocent, criminal prosecution on the same set
of facts and circumstances cannot be allowed to continue,
the underlying principle being the higher standard of proof
in criminal cases.”

It finally concluded:

“39. In our opinion, therefore, the yardstick would be to
judge as to whether the allegation in the adjudication
proceedings as well as the proceeding for prosecution is
identical and the exoneration of the person concerned in
the adjudication proceedings is on merits. In case it is
found on merit that there is no contravention of the
provisions of the Act in the adjudication proceedings, the
trial of the person concerned shall be an abuse of the
process of the court.”

From our point of view, para 38(vii) is important and if the High Court

had bothered to apply this parameter, then on a reading of the CVC

report on the same facts, the appellant should have been

exonerated.

8. Applying the aforesaid judgments to the facts of this case, it is clear

that in view of the detailed CVC order dated 22.12.2011, the

chances of conviction in a criminal trial involving the same facts

appear to be bleak. We, therefore, set aside the judgment of the

High Court and that of the Special Judge and discharge the

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appellant from the offences under the Penal Code.

9. The appeal is disposed of accordingly.

…………………………………….. J.

(ROHINTON FALI NARIMAN)

…………………………………….. J.

(NAVIN SINHA)

…………………………………….. J.

(INDIRA BANERJEE)

New Delhi;

September 08, 2020.

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