M.E. Shivalingamurthy vs Central Bureau Of Investigation, … on 7 January, 2020


Supreme Court of India

M.E. Shivalingamurthy vs Central Bureau Of Investigation, … on 7 January, 2020

Author: K.M. Joseph

Bench: Sanjay Kishan Kaul, K.M. Joseph

                                                                REPORTABLE

                            IN THE SUPREME COURT OF INDIA
                           CRIMINAL APPELLATE JURISDICTION

                           CRIMINAL APPEAL NO. 957 OF 2017


         M.E. SHIVALINGAMURTHY                        ...   APPELLANT(S)

                                         VERSUS

         CENTRAL BUREAU OF INVESTIGATION,
         BENGALURU                                    ... RESPONDENT(S)



                                    J U D G M E N T

K.M. JOSEPH, J.

1. The appeal is directed against the Order of the High
Court setting aside the Order passed by the Magistrate

allowing the application filed by the appellant to

discharge him.

2. The charge-sheet came to be filed on the basis of a FIR
dated 01.10.2011. The appellant was Director of Mines and

Geology in the State of Karnataka at the relevant time.
Signature Not Verified

There was a partnership firm by the name M/s Associated
Digitally signed by
ANITA MALHOTRA
Date: 2020.01.07
17:53:29 IST
Reason:

1
Mineral Company (‘AMC’, for short). The offences are

alleged to revolve around the affairs of the said firm.

First accused is the husband of the second accused. They

became partners of the firm (AMC) in 2009. Appellant was

arrayed as the third accused. There was reference in the

charge-sheet to a conspiracy between the first accused and

the second accused. It is alleged, inter alia, that they

obtained an undated letter from one Shri K.M. Vishwanath,

the Ex-Partner, which is after his retirement with effect

from 01.08.2009 from the firm, which was addressed to the

appellant, seeking directions to the Deputy Director of

Mines and Geology, Hospet in Karnataka to issue the Mineral

Dispatch Permit (‘MDP’ for short) to the new partners, viz.,

the first accused and the second accused. It is further

averred that the investigation revealed that the appellant

marked the said letter to the Case Worker who put up the

note seeking orders for referring the matter for legal

opinion which was also approved and recommended by the

Additional Director and put up to the appellant for orders.

Appellant is alleged to have acted in pursuance to the

2
criminal conspiracy and abused his official position with

a dishonest and fraudulent intention to cheat the

Government of Karnataka and knowingly made a false note in

the file that he had discussed this matter with the Deputy

Director (Legal) and directed Deputy Director, Mines and

Geology, Hospet for issue of MDPs to the new partners, viz.,

the first accused and the second accused by violating Mines

and Minerals (Development and Regulation) Act, 1957

(hereinafter referred to as ‘the Act’, for short) and

Mineral Concession Rules, 1960 (hereinafter referred to as

‘the Rules’, for short). There are various allegations

regarding other accused. As far as appellant is concerned,

it is alleged further in the charge-sheet that the acts of

the accused, seven in number, including the third accused

(appellant), constitutes criminal offences punishable

under Sections 120B, 420, 379, 409, 447, 468, 471, 477A of

the Indian Penal Code, 1860 (hereinafter referred to as ‘the

IPC’, for short) and Sections 13(2) and 13(1)(c) and

13(1)(d) of the Prevention of Corruption Act, 1988. No

doubt, the origin of this investigation is to be traced to

3
an Order passed by this Court dated 29.03.2011 in Special

Leave Petition (Criminal) No. 7366-7367 of 2010 and

connected matters ordering investigation into the

illegalities into the matter of Mining Lease No. 2434 of

AMC. The allegations include the allegation that the

accused conspired to commit theft of Government property,

i.e., mineral ore. They allegedly trespassed into the

forest area and other areas of Bellary District: carried

out illegal mining and transported it. Though, second

accused (A2) to seventh accused(A7) filed applications

under Section 227 of the Code of Criminal Procedure, 1973

(hereinafter referred to as ‘Cr.PC’, for short) seeking

discharge, by Order dated 08.10.2015, the Trial Court

discharged the second accused and the appellant. It is this

Order which has been set aside by the High Court by the

impugned Order.

APPLICATION BY THE APPELLANT SEEKING DISCHARGE

3. It is, inter alia, stated as follows:

Appellant is known for his honesty and dignity as

a public servant. He earned his name as an excellent

4
and honest Officer in all the places where he was

posted. He was not issued a single article of charges

while discharging his duties. Though, he started as a

Member of the Karnataka State Civil Service, he

was promoted to the Cadre of Indian Administrative

Service (IAS) as he had an impeccable service record.

He was posted as Director of Mines in Geology, having

regard to his service record. By virtue of the

delegation under Section 26(2) of the Act, the

execution of the lease deed lies with the Director of

Mines and Geology. AMC was granted the Mining Lease by

the State way back in 1966. The firm was reconstituted

several times by inducting new partners and retiring

old partners. As and when there is the reconstitution

of the firm, the firm intimated to the Department of

Geology of the reconstitution and conducted the mining

operation in the name of AMC by the newly inducted

partners. Though, several reconstitutions have taken

place, no application has been filed under Rule 37 of

the Rules for transfer of the lease on the ground that

5
the assets, viz., the Mining Lease belongs to the firm

and not to any individual partners. Therefore, there

was no requirement of making an application under Rule

37 of the Rules seeking transfer of the Mining Lease.

Records produced by the official before the Court

reveal that the Department has understood that

reconstitution did not amount to transfer as the

partnership is the owner of the asset, viz., the Mining

Lease. On inducting first and second accused, the

reconstituted firm made application to Deputy Director

seeking MDP by intimating that two new partners were

inducted. The application was sent to the Director for

issuance of MDP. In addition to the application filed

to the Deputy Director seeking MDPs, Shri K.M.

Vishwanath, Ex-Partner, representing the firm, made

application to the Director, placing on record that

firm had been reconstituted by inducting the first and

the second accused and, accordingly, intimated under

Rule 62 of the Rules. It is stated further that after

receiving the application by the Department, the file

6
will have to be processed in the Mining Lease Section.

There is an elaborate procedure followed while

considering applications in Department of Mines and

Geology. The Section Officer initially examines the

file. A detailed note on the application is prepared.

The file, along with note sheet, is sent to the

Superintendent of the Mining Leases Section who is a

senior Officer who examines the note sheet and puts up

the same before the Additional Director. The

Additional Director, who is the senior-most

departmental Officer in the Department, examines the

entire file and puts up the file before the Director.

He passes an order considering the law applicable. If

it is within the jurisdiction, he disposes the

application. If an order from the State Government is

required, it is so referred with comments. The Director

signs the lease deed by virtue of delegation under

Section 26(2) of the Act.

7

4. Appellant found that the firm was constituted by Shri
Jali Mahadevappa an Shri Jali Mallikarjun in the year 1966

and the lease was obtained in the name of AMC as a firm

registered under the Partnership Act. The lease, as per the

records, is the asset of the firm. The firm, viz., AMC, was

reconstituted on 30.06.1983 by inducting Shri L. Lingaraju

as one of the partners on account of retirement of Shri J.

Mallikarjun. On 13.02.1984, the firm was reconstituted

again wherein Shri B. Ananda joined as a partner and Shri

J. Lingaraju retired. On 13.02.1982, Smt. B. Vasanthi

joined in place of Shri J. Vamadevappa who retired from the

firm. On 13.06.1986, Shri B. Vasudev entered the firm as

a partner and Smt. B. Vasanthi retired from the firm. By

Deed of Partnership dated 10.06.1990, Shri Mohammed Kasim

joined the firm and Shri B. Ananda retired from the firm.

Again, Smt. Asha Mohammad Haroon joined as partner in place

of Shri B. Vasudev who retired. Again, AMC was reconstituted

by inducting Shri K.M. Prabhu and Smt. Parvathamma. There

was further reconstitution by inducting Smt. Sujata Prabhu

and Shri K.M. Sujan, as partners. Lastly, on 01.09.2009,

8
the first accused and the second accused were inducted as

partners. From 1981, on several occasions, the firm was,

thus, reconstituted and the application under Rule 37 of

the Rules was not filed before the State Government.

Partners filed Form V before the Registrar of Firms

intimating reconstitution. Never was an application made

under Rule 37 as and when reconstitution was done on the

ground that the firm was the owner of the mining lease. Only

intimation under Rule 62 of the Rules was given. The Case

Worker-CW24 has suggested to take legal opinion which was

put up along with the note sheet. There was no note put up

suggesting the applicability of Rule 37 of the Rules. If

there was a suggestion about the applicability of such Rule,

the appellant would have taken appropriate decision. The

precedent available also was relied upon. The decision

taken was a bonafide decision. The suggestion to take legal

opinion was endorsed by the Additional Director which is

produced before the Court as Exhibit D-765, the note sheet.

During the course of the examination of the file, it was

brought to the notice of the appellant that Rule 37 was not

9
applicable. A communication was sent to the Deputy

Director, Hospet that the permits will have to be issued

to the AMC but not in the names of the partners. The

appellant further submitted that after receipt of the file,

he contacted the Deputy Director (Legal) telephonically who

informed that the reconstitution of the firm had taken place

by inducting new partners and permits may be issued in the

name of the Company and not in the name of the partners which

was denied by the said Deputy Director (Legal) at a later

stage. He sought support of Section 27 of the Act which

protected acts done in good faith under the Act. He pointed

out that during the investigation, he gave details of

various firms who have leases with the Government which have

not obtained permission under Rule 37. The procedure which

was consistently followed for obtaining MDPs by intimating

reconstitution under Rule 62 was brought to the notice. It

was contended that taking a bonafide administrative

decision on the understanding of Rule 37 and based on

previous precedents, should not be considered as cheating.

Reading of the charge-sheet and allegations, according to

10
the appellant, basically surrounded around Section 420 of

the IPC.

5. The statements of CW7, CW21, CW24, CW26, CW202 and
CW109 were enlisted by the prosecution in support of the

charge. The appellant pointed out the statements of the

witnesses and the documents produced clearly reveal there

is no material much less prima facie material to frame the

charges.

ORDER PASSED BY THE MAGISTRATE

6. The Court noted the submission of the appellant that
AMC had been reconstituted on a number of occasions. No

fault was found in accepting reconstitution. Only when the

first and second accused became partners in the year 2009,

the appellant was faulted. Reliance is seen placed on the

judgment of the judgment of the Division Bench of the High

Court in Sree Ramakrishna Mining Company v. Commissioner

of Income-Tax, Mysore1. Thereafter, reliance is placed on

decisions which were rendered under the Indian Stamp Act,

1 1966 SCC Online Kar 73 / ILR 1966 Mys. 1945

11
1899 for the proposition that an instrument evidencing the

distribution of assets of a firm, on dissolution or

retirement of a partner, would not amount to a conveyance.

The principles relating to discharge under Sections 227 and

228 were discussed, and finally, it was held as follows:

“41.In view of the above said citations,
it is evident that act of A-3 in directing his
subordinates to issue MOP to M/s. Associated
Mining Company belonging to accused Nos.1 and
2 does not amount to fastening criminal
liability of him. In the statement of CWs
7,21,24,26,109 and 202, absolutely there is
no material to show that A-3 has committed
criminal conspiracy to help accused Nos.1 and
2 in directing his officials to issue Mineral
Dispatch Permit and as such there is
considerable force in the argument of learned
Counsel for accused No.3 and I am unable to
accept the argument addressed by learned
Special Public Prosecutor. Hence, I answer
IA. No.30 deserves to be allowed. I answer.”

FINDINGS OF THE HIGH COURT

7. After noting the rival contentions, the court notes
that for punishing under Section 120B of the IPC, the

prosecution is required to prove the conspiracy. The

12
agreement, which is illegal, can be proved by necessary

implication. It is to be largely proved from the inference

of the illegal acts or omissions by the conspirators. The

incriminating evidence collected by the prosecution, it is

noted, is that the appellant recommended issuance of MDPs

in gross violation of the Act despite the office noting to

the effect that the matter required legal opinion. The stand

of the appellant that he had discussed the matter with the

Legal Department is seen negatived by CW21. As to his

contention that many a time AMC was reconstituted and he

had really discussed the matter with CW21 before directing

the issue of MDPs, was found to be a matter of defence which

could not be pressed at the threshold.

8. We notice the following findings:

“12. Applying the formulae of (some/mere
suspicion – grave suspicion: as
enunciated in Dilawar Balu Kurane’s
case (supra) and Union of India -vs-

Prafulla Kumar Samai and another
reported in AIR 1979 SC 366, to the
evidentiary material placed before
the court against respondent, then
also the needle tilts more towards
grove suspicion. The subject matter
involved in this case is the natural

13
resource of the country and the
alleged offence is said to have
caused loss to the State exchequer
substantially. The respondent is a
responsible officer of the State.

                 Consciously he passed the order in
                 violation    of   the    statutory
                 provisions.

13. The learned Trial Judge in the order
impugned has made an omnibus
observation that his action does
not fasten criminal liability on
him and the statement of the
witnesses does not show that he
committed criminal conspiracy.

Though there was no direct
evidence, the learned Trial Judge
has lost sight of incriminating
material appearing in the
circumstantial evidence placed by
the prosecution. Limited power
vested with the Trial Court to sift
and weigh the evidence is
transgressed by the learned Trial
Judge in the impugned order, hence
requires intervention in this
revision jurisdiction.”

9. Accordingly, the petition was allowed setting aside
the order of the Sessions Judge discharging the appellant.

10. We heard Shri Kapil Sibal, learned Senior Counsel
appearing for the appellant. We also heard learned Counsel

appearing for the respondent.

14

11. Shri Kapil Sibal, learned Senior Counsel for the
appellant, submits as follows:

The lease was originally in favour of AMC in

the year 1966. Thereafter, the firm was

reconstituted on a large number of occasions. The

procedure followed was intimation being given to

the Department under Rule 62 of the Rules about the

reconstitution. Rule 37 of the Rules was not

invoked. This is a case where the action of the

appellant was bonafide. Proceeding on the basis

that Rule 37 applies, he further submits, this is

not a case where the appellant could be prosecuted

for the criminal offences. The appellant acted on

the basis of the practice. He contacted the Deputy

Director (Legal).

12. There is also case of the appellant that he had directed
MDP to be issued in the name of the firm. He had also made

it clear that permit be also not issued to the partners.

There was no other material produced on record by the

15
prosecution. This is not a case where there is material to

establish any criminal conspiracy.

13. Per contra, the learned Counsel for the

respondent-Central Bureau of Investigation, Bengaluru,

supported the order. In particular, reliance is placed on

the specific stand of the Charge Witness-CW21 to the effect

that the appellant had not sought his legal opinion contrary

to the stand of the appellant.

LEGAL PRINCIPLES APPLICABLE IN REGARD TO AN APPLICATION
SEEKING DISCHARGE

14. This is an area covered by a large body of case law.
We refer to a recent judgment which has referred to the

earlier decisions, viz., P. Vijayan v. State of Kerala and

another2 and discern the following principles:

i. If two views are possible and one of them gives rise

to suspicion only as distinguished from grave

suspicion, the Trial Judge would be empowered to

discharge the accused.

2 (2010) 2 SCC 398

16
ii. The Trial Judge is not a mere Post Office to frame

the charge at the instance of the prosecution.

iii. The Judge has merely to sift the evidence in order

to find out whether or not there is sufficient ground

for proceeding. Evidence would consist of the

statements recorded by the Police or the documents

produced before the Court.

iv. If the evidence, which the Prosecutor proposes to

adduce to 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 offence, then, there will be no sufficient

ground for proceeding with the trial”.

v. It is open to the accused to explain away the materials

giving rise to the grave suspicion.

vi. The court has to consider the broad probabilities,

the total effect of the evidence and the documents

produced before the court, any basic infirmities

appearing in the case and so on. This, however, would

17
not entitle the court to make a roving inquiry into

the pros and cons.

vii. At the time of framing of the charges, the probative

value of the material on record cannot be gone into,

and the material brought on record by the

prosecution, has to be accepted as true.

viii. There must exist some materials for entertaining

the strong suspicion which can form the basis for

drawing up a charge and refusing to discharge the

accused.

15. The defence of the accused is not to be looked into at
the stage when the accused seeks to be discharged under

Section 227 of the Cr.PC (See State of J & K v. Sudershan

Chakkar and another3). The expression, “the record of the

case”, used in Section 227 of the Cr.PC, is to be understood

as the documents and the articles, if any, produced by the

prosecution. The Code does not give any right to the accused

to produce any document at the stage of framing of the

3 AIR 1995 SC 1954

18
charge. At the stage of framing of the charge, the

submission of the accused is to be confined to the material

produced by the Police (See State of Orissa v. Debendra Nath

Padhi4).

ANALYSIS OF THE CASE

16. Having set out the legal principles, as aforesaid, let
us consider the facts:

Undoubtedly, the appellant came to be

appointed as the Director of Mines and Geology of

the State of Karnataka by virtue of Notification

dated 09.06.2008. He continued in the said post

till 25.10.2010. Mining Lease No.625 was executed

on 02.03.1966 between the Governor and AMC, a

registered firm. The Managing Partner was one Shri

Jali Mahadevappa. The partners of the AMC, viz.,

Shri K.M. Parvatamma and Shri K.M. Vishwanath sent

a letter dated 26.12.2009. It reads as follows:

“To:

The Director
4 AIR 2005 SC 359

19
Mines & Geology Mineral
Khanija Bhavan
Race Course Road
Bangalore.

Sub: Change    in    Constitution    of
     Associated   Mining   Company   ML
     No.2434- Reg.

Sir,
     We undersigned are lease owner of

Associated Mining Company of Guru Iron
Ore Mines at Venkatagiri Village, Sandur
Taluk, Bellary Dist, bearing ML No.2434
(Old 625).

For better management we admitted
as Partners Mr. G. Janardhan Reddy and
Mrs. G. Lakshmi Aruna of 123/350
Veerabagouda Colony, Opp Kumaraswamy
Temple Club Road, Bellary on 31st July,
2009. Subsequently on 1st August, 2009
Smt. K.M. Parvatamma and Mr. K.M.

Vishwanath retired.

Mr. G. Janardhana Reddy and Mrs. G.

Lakshmi Aruna are sole Partners of the
Mine. The admission and Retirement deed
are enclosed herewith for your perusal.
This is for your kind information.

Kindly issue permission to
transport the ore from Mines to various
destinations.

Thanking you,

Yours sincerely,

sd/-

Smt. K. Parvatamma

sd/-

Mr.K.M. Vishwanath”

20

17. The role, which is attributed to the appellant, begins
essentially with this letter. It is the case of the

prosecution that having regard to Rule 37 of the Rules, it

was incumbent upon the appellant, before acting upon the

reconstitution of the firm, to obtain the previous sanction

of the State Government. The Charge Witnesse-CW24-

D. Hanumantha, undoubtedly, has given statement indicating

that the letter aforesaid was marked to him to process the

same. He further stated that he proposed that legal opinion

may be obtained. Finally, it was submitted to the Additional

Director. The Additional Director also recommended the

need to obtain legal opinion. The matter came up before the

appellant on 04.01.2010. On 04.01.2010, it appears that

appellant has ordered:

“… “spoken to Dy. Director (Legal), the
company remains the same, whereas the
partners might have been included or removed,
and this they are supposed to approach the law
board. In the present case, the partners are
not asking for MDP (Mineral Dispatch Permits)
in their names, but in the name of the
company. Permits may be issued only in the

21
name of the company viz., AMC where lease is
also sanctioned to the same company only. The
partners are changed, but you are not going
to issue MDPs to the partners. Hence inform
DD Hospet that MDPs may be issued only in the
name of the Company.”…”

18. The Additional Director has also spoken on similar
lines.

19. The case of the prosecution, which has appealed to the
High Court, is essentially based on the fact that on the

one hand, the appellant in his Order dated 04.01.2010

(Draft) which was finalised on 05.01.2010, spoke about

having obtained legal opinion by speaking to Deputy

Director (Legal), the Deputy Director (Legal) has taken the

stand that he has not given any such opinion. The statement

of the Deputy Director (Legal) has been produced by the

appellant along with Criminal Miscellaneous Petition No.

122009 of 2009. He has stated, inter alia, as follows:

“However, no opinion was sought from me in

this regard”. He has further stated that since the

contents of the letter dated 26.12.2009 disclosed

22
that the entire lease holding rights were

transferred in favour of the first and second

accused, it is contrary to Rule 37 of the Rules.

However, ignoring the provisions of Rule 37, the

direction was issued to Deputy Director to issue

the MDPs in the name of the Company. However, he

further states that AMC is a firm not a company.

He further stated that if there is no change in the

rights of the lessee, then, someone else gets

rights over the leasehold rights. The said act will

attract provisions of Rule 37 of the Rules. He has

also stated that though an application was filed

on 29.07.1994 in view of the fact that the Mining

Lease was due to expire on 01.03.1996, the lease

is renewed from the year 2000 to 2010 by the

Minister since the Forest Department gave

permission. He goes on to state that the lease

ought to have been renewed with effect from

02.03.1996 for a period of ten years.

23

20. It is necessary to notice Rule 37 of the Rules which
were made in 1960. Rule 37 reads as follows, inter alia:

“37. Transfer of lease :- (1) The lessee shall
not, without the previous consent in writing
of the State Government and in the case of
mining lease in respect of any mineral
specified in Part ‘A’ and Part ‘B’ of the
First Schedule to the Act, without
the previous approval of the Central
Government :-

(a) assign, sublet, mortgage, or in any
other manner, transfer the mining
lease, or any right, title or
interest therein, or

(b) enter into or make any bonafide
arrangement, contract, or
understanding whereby the lessee
will or may be directly or
indirectly financed to a
substantial extent by, or under
which the lessee’s operations or
undertakings will or may be
substantially controlled by, any
person or body of persons other than
the lessee:”
(Emphasis supplied)

21. The Trial Court has placed reliance on judgment of the
Division Bench of the Mysore High Court in Sree Ramakrishna

Mining Company (supra). In fact, the Court in the said case,

24
considered Rule 37 of the Mineral Concession Rules of 1949,

which read as follows:

“37. Transfer of lease:- The lessee may
with the previous sanction of the State
Government and subject to conditions
specified in the first proviso to rule 35 and
in rule 38, transfer his lease or any right,
title, or interest therein, to a person
holding a certificate of approval on payment
of a fee of Rs.100 to the State Government.”
(Emphasis supplied)

22. It is clear that the provision, as obtained prior to
1960, when the Rules were made, was different.

23. In the aforesaid case, the question came to be decided
in a Reference under Section 66 of the Income Tax Act, 1922.

One of the questions which fell for decision was the effect

of there being no previous sanction of the Government under

Rule 37 for the transfer of lease. We may notice that the

Court in Sree Ramakrishna Mining Company (supra), inter

alia, held as follows:

“The 37th Rule, as can be seen from its
language does not concern itself with the
formation of a partnership such as the one
before us, and, its principal purpose is to
provide for the transfer of a lease granted
under the provisions of the Rules. It is in

25
the nature of an enabling provision which
authorises a transfer by the lessee to a
person who has a certificate of approval,
and, directs that such transfer could be made
with the previous sanction of the Government
subject to the other conditions with which we
are not concerned. There is a distinction
between a statutory provision which contains
an express prohibition against the
performance of a certain act and one which
enables its performance subject to
prescribed conditions. While in the former
case, there will be no difficulty in coming
to the conclusion if nothing else could be
said about it that the absolute prohibition
against the performance of the act is what is
forbidden by law, the same could not be said
if the matter falls within the second
category. Now the 37th rule does not, in
express terms, forbid a transfer but
authorises a transfer with the previous
sanction of the Government and subject to
other conditions.”

24. The provisions of Rule 37, which would control destiny
of this case, is, as it was obtained in the year 2009. Also

could it not be contended that decisions rendered under the

Stamp Act may not be relevant to understood the scope of

Rule (37) of the Rules. No doubt, there is a case for the

appellant that on a number of reconstitutions took place

in regard to the firm-AMC, and on no occasion, was an issue

relating to infraction of Rule 37, raised. All that the

26
appellant did was, he acted in accordance with the practice

obtaining in the Department. There is the case for the

appellant that in this regard, Rule 37, as such, was not

pointedly invoked by either the Additional Director or the

SDA.

25. It is here that again it becomes necessary that we
remind ourselves of the contours of the jurisdiction under

Section 227 of the Cr.PC. The principle established is to

take the materials produced by the prosecution, both in the

form of oral statements and also documentary material, and

act upon it without it been subjected to questioning through

cross-examination and everything assumed in favour of the

prosecution, if a scenario emerges where no offence, as

alleged, is made out against the accused, it, undoubtedly,

would enure to the benefit of the accused warranting the

Trial Court to discharge the accused.

26. It is not open to the accused to rely on material by
way of defence and persuade the court to discharge him.

27. However, what is the meaning of the expression
“materials on the basis of which grave suspicion is aroused

27
in the mind of the court’s”, which is not explained away?

Can the accused explain away the material only with

reference to the materials produced by the prosecution? Can

the accused rely upon material which he chooses to produce

at the stage?

28. In view of the decisions of this Court that the accused
can only rely on the materials which are produced by the

prosecution, it must be understood that the grave

suspicion, if it is established on the materials, should

be explained away only in terms of the materials made

available by the prosecution. No doubt, the accused may

appeal to the broad probabilities to the case to persuade

the court to discharge him.

29. In this case, as already noticed, going by the
statements made by the subordinates working in the Office

of the appellant, on receipt of the letter from the

erstwhile partners of AMC dated 26.12.2009, two of his

subordinates, including the Additional Director, did

recommend that the matter requires a legal opinion. The

noting, which is undisputed in this case, made by the

28
appellant, would appear to suggest that he had spoken to

the Deputy Director (Legal). The prosecution case largely

depends upon the statement of the Deputy Director (Legal)

who takes a definite stand that no opinion was sought from

him. A matter, under Rule 37 of the Rules, therefore,

according to the prosecution case, which ought to have gone

to the State Government for prior sanction, came to be dealt

with by the appellant as Director of Mines. This led to the

issue of MDPs. It is, no doubt, true that there may not be

any other material to link the appellant with various other

acts and omissions which have been alleged against the first

accused in particular along with the fifth accused and other

accused. However, the fact remains, if the defence of the

appellant is not to be looked into, which included the

practice obtaining in the past whenever the firm was

reconstituted, and also the version of the appellant that

he did in fact speak with the Deputy Director (Legal) and

acted on his advice and further that this fact would be

established if the Deputy Director (Legal) was questioned

in his presence, they would appear to be matter which may

29
not be available to the appellant to press before the court

considering the application under Section 227 of the Cr.PC.

30. This being the outcome of our discussion, the
inevitable consequence is that we are not persuaded to hold

that the High Court was in error in the view it has taken.

Consequently, the appeal fails and it stands dismissed. We,

however, make it clear that the observations made by us are

for the purpose of deciding the application under Section

227 of the Cr.PC. and they are not to trammel the Court.

…………………………………………………J.

[SANJAY KISHAN KAUL]

…………………………………………………J.

[K.M. JOSEPH]
NEW DELHI;

JANUARY 07, 2020.

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