The Director of Income Tax-(Exemptions), vs. Vasavi Academy of Education

HIGH COURT OF ORISSA : CUTTACK CRLREV No.601 of 2016 --- In the matter of an application under section 401 of the Code of Criminal Procedure and from an order dated 18.07.2016 passed by the learned Special Judge, Special Court, Bhubaneswar in T.R. Case No.14/18 of 2015/2013. ---

Anjali Panda

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Petitioner Versus

State of Odisha (Vigilance)

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Opposite Party

For Petitioner : Mr.Soura Chandra Mohapatra and

S.J.Nanda

For Opp. Party : Mr.Sangram Das

Standing Counsel (Vigilance) --- PRESENT: THE HONOURABLE SHRI JUSTICE D.DASH --------------------------------------------------------------------------------- Date of Hearing :07.03.2019 Date of judgment :05.04.2019 ------------------------------------------------------------------------------- D.Dash,J The petitioner, by filing this revision, has prayed for examination of the legality and propriety of an order dated 18.8.2016 passed by the learned Special Judge, Special Court, Bhubaneswar in T.R. No.14/18 of 2015-2013 arising out of Koraput Vigilance P.S. Case No.1 of 2010.

By the said order, the petition filed by the petitioner for her discharge having been rejected, charge has been framed against her under section 109 of the Indian Penal Code (in short, „the IPC‟) for abetting the commission of offence under section 13(2) read with section 13(i)(e) of the Prevention of Corruption Act, 1988 (in short, „the PC Act‟) by the other accused, who is her husband. 2.

On the strength of search warrant issued by the Chief Judicial Magistrate, Jeypore in Vigilance Misc. Case No.133 of 2009, the

- 2 - residential house of Prasanta Kumar Panda, who was then working as Executive Engineer, Rural Works Division, Nuapada situated at Nilakanthanagar, Nayapalli, Bhubaneswar, his ancestral house at Sarankul in the district of Nayagarh and his official chamber as well as the residential house at Telipada Chhak at Nuapada taken on rent in his work place, were searched on 7.8.2009. The said search has led to institution of Koraput Vigilance P.S. Case No.1 of 2010 against the petitioner based on the written report of Mr.T.Jaga Rao Reddy, Inspector of Vigilance, Bhawanipatna on the allegation that said accused, being a public servant, is in possession of assets disproportionate to his known sources of income to the tune of Rs.39,11,339/-, taking into account his entire service period since 1983 till the date of search.

The petitioner is the wife of said accused Prasanta Kumar Panda, the then Executive Engineer, Rural Works Division, Nuapada. Their marriage had taken place on 5.7.1988. The petitioner‟s father is a retired Central Government servant. As per the prosecution case, the in- law‟s of accused Prasanta Kumar Panda had given some household articles and gold ornaments in the marriage. It is the allegation of the prosecution that the petitioner had purchased seven numbers of valuable homestead plots in different places in Bhubaneswar and has constructed one double storied building at Nilakanthanagar, Nayapalli, Bhubaneswar at a cost of Rs.20,90,709/-. She has purchased one ambassador car in the year 2002 at a cost of Rs.3,50,000/- and a scooty in the year 2006. It is stated that said accused Prasanta Kumar Panda besides having made investments in the shares and debentures in his name and in the name of his family members has hefty bank deposits and deposits under insurance policies, costly household articles. The prosecution has come up with the allegation that in the year 1996, though the property has been purchased in the name of the father-in- law of accused Prasanta Kumar Panda, namely, Prafulla Chandra Mishra, it has been acquired by accused Prasanta Kumar Panda and then has been shown to have been gifted to the petitioner in the year 1998

- 3 - saying that as the donee is the daughter of the donor, out of love and affection its being so gifted. It is next stated that since the lands acquired by accused Prasanta Kumar Panda and his wife, this petitioner, are meant for construction of house that had never been cultivated by them since purchase, the agricultural income from the said land as claimed by the accused in his income tax return (the income tax return of accused Prasanta Kumar Panda) is thus not acceptable. Another plot of land in Mouza-Shankarpur has been purchased in the name of the petitioner. She is said to be having a cash balance of Rs.4,000/-, bank balance of Rs.5,000/-, deposits in different insurance policies to the tune of Rs.63,366/-, a refrigerator valued at Rs.4,000/-, a television worth of Rs.10,000/- and gold ornaments to the value of Rs.75,000/-. This petitioner is an income tax assessee and the income tax returns submitted by her have been obtained. It is stated that she had disclosed her income, in the income tax returns, from her ambassador car used for taxi purpose. But that is not acceptable because of the meter reading not showing its run for considerable distance. Other income from business has not been accepted in the absence of any other related documents. The check period has been taken from 1.1.1995 to 7.8.2009. Finally, while submitting the charge-sheet, it has been stated that during the check period, the accused persons are in possession of disproportionate assets worth Rs.58,83,038/- which is 154.79% of the total income and next, it is said that accused Prasanta Kumar Panda has created almost all the disproportionate assets in the name of the present petitioner. So, this petitioner has instigated her husband, the principal accused by abetting the commission of offence of acquiring disproportionate assets by him. Accordingly, the charge-sheet has been submitted showing the petitioner as an accused with her husband for commission of offence under section 109 IPC read with section 13(2) read with section 13(i)(e) of the PC Act. 3.

Learned counsel for the petitioner submitted that this petitioner is the wife of a public servant and in the charge-sheet, the

- 4 - petitioner has been shown as an accused with her husband that she abetted her husband in acquiring disproportionate assets. It was submitted that the petitioner was an income tax assessee since 1998-99 and filing income tax returns as required under law. It had been submitted that the petitioner and her husband had in total taken loan of Rs.21,25,000/- for building the house and the valuation of the building as has been made in between 20.9.2010 to 22.9.2010 is Rs.20,85,970/- . Although the petitioner has availed a loan to the tune of Rs.9,40,000/- from LIC Housing Finance Limited, that has not been taken into account despite the positive statement of one Somanath Patnaik, who belongs to that Housing Finance in that regard. It was submitted that said statement having been recorded in course of investigation, the prosecution cannot wriggle out of the same without any such cogent and acceptable material or explanation to the overcome the same or to ignore. He further submitted that on many occasion, the house rent has been received by the petitioner through bank except from one, who is a business man and the ground floor of the house having been let out for student‟s mess, the rent was being received in cash. The charge-sheet, therefore, though reflects such online transfer, those have not been taken into account in the head of the income. He further submitted that the income of the petitioner by using her vehicle for commercial purpose has been ignored indicating that the petitioner, pursuant to the notice under section 160 Cr.P.C. has failed to reply, which is not at all a fact. He also submitted that though the petitioner has purchased the ambassador car in the year 2002 for Rs.4.2 lakh by availing a loan from M/s.Magma Leasing Finance Limited for commercial purpose by making down payment of Rs.1,32,410/-, the same has been shown to have been purchased by paying Rs.3,50,000/- as also the income generated therefrom has not been taken into account on flimsy ground which reference to the meter reading and drawing an interference therefrom as to its run when the car being old, the meter was mechanical giving problem frequently and remaining idle being not computerized as of

- 5 - these days. It was submitted that despite material on record that Rs.8,500/- was being paid as rent by the tenant directly to the account of the petitioner, that has been disallowed and similarly, the rent paid by others have been discarded. Without any basis, it is simply stated that the vehicle was purchased by paying Rs.3,50,000/- from out of the ill gotton money in the hands of the husband of the petitioner. It was contended that the father of the petitioner, who is a retired Central Government employee having gifted a part of the purchased land, i.e., Ac.0.96 decimals from out of Ac.0.139 decimals to the petitioner, it is not permissible to infer that the father of the petitioner was merely shown to be the purchaser of the same so as to say that for said reason, it has been gifted to the petitioner. According to him, all these are mere conjectures and surmises. It was submitted that the petitioner though was having five pieces of agricultural land, those had never been converted for any purpose other than agricultural use and though it has been taken to have been purchased during the check period from 1.1.1995 to 2009, yet in fact three out of those purchases were in the year 1991 and 1993. In view of all the above, he submitted that the petitioner ought to have been discharged and she ought not to have been arraigned in the case as to have abetted her husband in committing the offence of accumulating wealth and assets disproportionate to his known sources of income. In support of his submission, he has relied upon the following decisions: (I) A.R. Saravanan –V- State; 2003 Crl. Law Journal 1140; (II) (Smt.) Pratima Behera –V- State of Orissa (Vig.); (2017) 66 OCR 622; and (III) Bhabeswar Rana –V- State of Orissa (Vig); 2018 (II) OLR 550 4.

Per contra, Mr.Sangram Das, learned Standing Counsel (Vigilance) submitted that the allegation of the petitioner regarding non- consideration of her income as reflected in her income tax returns, in

- 6 - course of investigation, is not correct and rather misleading. It was his submission that the land having been purchased in the name of the father of the petitioner, the same has been gifted only after two years to the petitioner and building has been constructed. According to him, the prosecution case is that though some loan has been taken for the purpose of building that house, the income shown from that building is not acceptable and, therefore, the loan has rightly been considered to have been actually so taken by the husband of the petitioner merely in the name of the petitioner to be ultimately repaid by him. It was submitted that the impugned order framing charge against the petitioner is based on materials on record and the court below has committed no such illegality or impropriety in framing charge against the petitioner, which is thus not liable to be interfered with in exercise of the revisional jurisdiction. 5.

The position of law has been settled in case of P. Nallammal –V- State; (1999) 6 SCC 559, which has been followed in many other cases, which have come up later that the kith and kin of the public servant can be prosecuted along with public servant for the offence under section 109 of the IPC read with section 13(1)(e) of the PC Act. Analyzing the provision of clause-(b) of section 3 of the PC Act, it has been held that the provision encompasses the offences committed in conspiracy with others or by abetment of "any of the offences" punishable under the P.C. Act and the abettor or the conspirator can be delinked from the delinquent public servant for the purpose of trial of the offence. In clear terms, it has been held that a non- public servant, if has abetted any of the offence, which the public servant has committed, he/she can be made liable for being tried along with the public servant. Further caution has been given that merely because some of the disproportionate assets stand in the name of the non-public servant, without any element of abetment, they cannot be asked to face the trial with the public servant for the reason that they are related to the public servant. In view of the aforesaid position, the requirement

- 7 - remains to be shown with specific reference to the materials collected that the petitioner, who happens to be the wife of the public servant, has abetted the public servant in the acquisition of disproportionate assets so as to be prosecuted along with her husband, namely, Prasanta Kumar Panda in the case running for possession of disproportionate assets by him.

The petitioner was an income tax assessee since 1998-99 and has been filing her returns. So also her husband, accused Prasanta Kumar Panda, is filing the income tax returns. These aspects are not denied. 6.

It has been held in the case of DSP Chennai –V- K. Inbasgaran; (2006) 33 OCR 300 (SC) that : “16..... It is true that when there is joint possession between the wife and husband, or father and son and if some of the members of the family are involved in amassing illegal wealth, then unless there is categorical evidence to believe, that this can be read in the hands of the husband or as the case may be, it cannot be fastened on the husband or the head of the family. It is true that the prosecution in the present case has tried its best to lead the evidence to show that all these moneys belonged to the accused but when the wife has fully owned the entire money and the other wealth earned by her by showing in the income tax return and she has accepted the whole responsibilities, in that case, it is very difficult to hold the accused guilty of the charge........”

To counter the above, learned Standing Counsel (Vigilance) has relied upon the decision reported in the case of State of Tamil Nadu –V- N.Suresh Ranjan; (2014) 57 OCR (SC) 503. In the cited case, in the investigation, a conclusion had been arrived that the father and mother of the public servant had no independent income commensurate with the property and pecuniary resources found acquired in their name. This was the reason for the court to hold that the property in the name of income tax assessee itself, cannot be a ground to hold that it actually belongs to such an assessee.

Adverting to the case in hand, admittedly the petitioner and her husband had taken loans to the tune of Rs.21,25,000/-. Material has also been collected to show that further loan of Rs.9,40,000/- has been

- 8 - taken from LIC Housing Finance Limited. It appears that the income of the petitioner as have been shown in the income tax returns has been ignored on flimsy ground; firstly as no such relevant documents have been produced in support of the tenancy said to have been created from time to time as regards income from rent and by taking reading of the speedometer of the car, thus from that its run being taken towards the income by commercial user, the income as shown has been repelled. The income tax returns when are being filed from the year 1998-99, the case has been instituted in the year 2009. In the normal course, it cannot be presumed that the documents have been prepared and filed in anticipation that she would have to face the charge for disproportionate assets case in future with her husband. The land where house has been built has come to the hands of the petitioner in the year 1998 and that too her father having purchased the piece of land, a part of it has been gifted and it is not said that till initiation of the case, the rest area has come to the hands of the petitioner or any of her family members in any other way or mode or that it is also in occupation and enjoyment of the petitioner and her family members so as to draw an inference that the accused Prasanta Kumar Panda having purchased the land in the name of his father-in-law has got it restored to the hands of his wife, i.e. the petitioner. The ambassador car having been purchased in the year 2002 as against initiation of the case in the year 2009 is also by availing a loan from a private financier. When the petitioner has purchased three pieces of agricultural land which have not been converted for use for homestead purpose, those purchases are during pre check period; despite the representation of the petitioner to the effect that the purchases are old, those have simply been bypassed.

It has been the settled position of law that the court, at the time of framing charge, is required to see whether a prima facie case pertaining to commission of offence has been made out or not by examining the evidence for that limited purpose and for that the court has to consider the report of the prosecution documents of both sides,

- 9 - hear the arguments of the accused and prosecution in arriving at a conclusion as to whether the materials placed, on their face value furnish reasonable basis for forming the foundation of conclusion for commission of offence so as to place the accused for trial for those offences. It has been also held that the word “groundless” as appears in section 239 Cr.P.C. means that there is no ground for presuming that the accused is guilty. When there is no ground for presuming that the accused is guilty, there is no ground for presuming that the accused has committed an offence and the charge must be considered as groundless. [Ref:-A.R.Saravanan –V- State; 2003 Criminal Law Journal 1140, State of M.P. -V- Awadh Kishore Gupta; (2004) 1 SCC 691, State of Delhi –V- Gyan Devi; (2000) 8 SCC 239.]

In the case of Amit Kapoor –V- Ramesh Chander; (2012) 9 SCC 460 and several others, the Hon‟ble Apex Court, upon objective analysis of various judgment of the court, has culled out the principles to be considered for exercise of jurisdiction particularly with regard to framing of charge either in exercise of jurisdiction under section 397 or section 482 of the Cr.P.C, as the case may be.

In this case, the Investigating Officer has not come forward to say in clear terms that the petitioner had no independent source of income commensurate with the property and pecuniary resources found acquired in her name actually does not belong to her even though she is an income tax assessee and thus that is no ground to hold that those actually belong to the petitioner-income tax assessee. The Investigating Officer has also not gone to place any such material emanating, any such clinching circumstance, that the property purchased by the father of the petitioner and later on gifted in part by him to the petitioner are all paper transactions to give an eye wash that such property was acquired in the name of the father of the petitioner with the funds provided by the husband of the petitioner and the father of the petitioner had no such financial capacity at that point of time of purchase. It is also not said that the immovable property retained in

- 10 - part by the father of the petitioner is in actual possession of the petitioner or her husband so as to show that such property was purchased only in the name of the father of the petitioner and he was merely the name lender whereas the husband of the petitioner was the real owner as against his father-in-law, the apparent owner.

The initial burden rests on the prosecution to prima facie show that the accused has acquired property disproportionate to his/her known sources of income and then in so far as the present case is concerned to say that the petitioner has abetted the commission of offence of accumulation of assets disproportionate to the income of her accused-husband. The petitioner is an income tax assessee since 1998 and its continuing till now. The case against the husband of the petitioner was instituted in the year 2009. Normally, it is not inferable that the documents had been prepared long before in anticipation that after a decade, the petitioner would face charges, like the present. The returns, filed with the Income Tax Authorities, assessed and finalized on their face value support her case. The investigating agency has not considered the relevancy of those documents and has merely discarded to accept those income shown therein in different heads for non- submission of certain documents relating to tenancy, the income from house property and that of the car; when it is not said that the house property was in fact generating any income and the car was never used for commercial purpose. The Investigating Officer is required to act in a fair, impartial and reasonable manner in conducting the investigation without bias or prejudice. In view of all the aforesaid, in my considered view, there is no such clinching material to suggest that the petitioner abetted her husband or made any conspiracy or instigated in the alleged acquisition of disproportionate assets by her husband. 8.

For the aforesaid discussions and reasons, I am of the considered view that the order passed by the trial court in rejecting the petition filed by the petitioner under section 239 of the Code and framing charge under section 109 of the IPC read with section 13(1)(e)

- 11 - punishable under section 13(2) of the PC Act is not sustainable in law and thus, the same is hereby set aside.

It may, however, be mentioned that any such discussion or observation made hereinabove will have no influence or impact in the trial in respect of the other accused, namely, Prasanta Kumar Panda.

The CRLREV is accordingly disposed of.

...................... D.Dash,J.

Orissa High Court:Cuttack Dated the 5th April, 2019/B.Nayak,Secy