THE COMMISSIONER OF INCOME TAX vs. SRI M M ANANTHAMURTHY

1 ® IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 4th DAY OF OCTOBER, 2012 B E F O R E THE HON’BLE MR. JUSTICE A.N. VENUGOPALA GOWDA CRIMINAL REVISION PETITION NO.726/2012 BETWEEN: 1. Smt. Yeshodha S. Aged about 51 years, W/o. Sri R. Shankarappa. 2. Sri R. Shankarappa, Aged about 55 years, S/o.late Rangappa. Both are presently residing at No.25, MIG, K.H.B. Colony, 1st Stage, 1st Main, Basaveshwaranagar, Bangalore – 560 079. ... PETITIONERS (By Sri C.V. Nagesh, Sr. Adv. for M/s. C.V. Nagesh Associates, Advs.) AND: State by Central Bureau of Investigation, Ganga Road, Bellary Road,

2 Bangalore. ... RESPONDENT (By Sri C.H. Jadhav, Adv.) This Crl.R.P. is filed under S.397 r/w 401 Cr.P.C. praying to set aside the order dated 5.7.2012 passed by the XLVIII Addl. City Civil & Sessions Judge and Special Judge for CBI cases, (CCH.No.49), Bangalore city in Spl. C.C.No.92/2003 and etc. This Crl.R.P. having been reserved, the Court pronounced the following: O R D E R Alleging possession of assets disproportionate to the known sources of income, a case was registered by the respondent against petitioner No.2 (accused No.1) under S.13(1) (e) r/w S.13 (2) of Prevention of Corruption Act, 1988 (“the Act” for short). On completion of investigation, the prosecution filed charge sheet against accused No.1 for the said offences and against his wife, accused No.2, i.e., the 1st petitioner herein, for the offence under S.109 of IPC. After entering appearance, charge was framed on 16.9.2010 and the accused pleaded not guilty. However, on the same day, accused filed an application under S.227 Cr.P.C., which was dismissed as not maintainable.

3 Aggrieved, the accused filed Crl.R.P.No.1437/2010. Said petition was allowed and the impugned order therein was set aside and the Trial Court was directed to hear the application filed under S.227 Cr.P.C., filed by the accused and to decide the same in accordance with law. Application having been taken up for consideration, learned Trial Judge passed an order of dismissal on 5.7.2012. The said order has been assailed in this Criminal Revision Petition. 2. Sri C.V.Nagesh, learned Sr. counsel arguing for the petitioners at the outset stated that the revision petition in respect of petitioner No.2 (accused No.1) need not be considered and he would face the trial. Restricting the present petition to Smt. Yeshodha S. (accused No.2), Sri C.V. Nagesh contended as follows:

(a) The sale deed dated 7.12.2001 (D12) under which the 1st petitioner acquired an immovable property itself would make a mention of the consideration paid by her to Sri K.M.Durai Swamy Naidu (CW.10). During the course of investigation, the Investigation Officer (I.O.) has examined

4 CW.10, who has asserted that what has been paid by her towards sale consideration is one that is incorporated in the sale deed itself. However, some time later, the I.O. is said to have recorded the statement of CW.10, according to which, he has stated that he has been paid a certain sum far in excess of the one i.e., mentioned in the deed and placing reliance on the subsequent statement of CW.10 which would predict the statement made by him at the earliest point of time which also contradicts what has been stated in the registered document, the trial Judge has proceeded to order framing of charge which is nothing but improper sifting of materials brought on record of the case. (b) The income tax returns filed by the petitioner No.1 which was produced by the accused persons, consequent to their non-production by the I.O. along with the final report in the case, being unimpeachable and unquestionable documents, which indicate the source of acquisition of the properties owned and possessed by petitioner No.1 (accused No.2), the learned Trial Judge has erred in not adverting to the same and hence, there is an illegality committed. (c) The 1st petitioner, as is evident from the materials brought on record of the case, had her own source of income for acquisition of properties which she has acquired

5 and her explanation was not sought by the I.O., which fact has not been noticed by the learned Trial Judge. (d) Materials relied upon by the accused i.e., the Income Tax returns of accused No.2 which are in the nature of public documents or the materials which are beyond suspicion or doubt can be looked into by this Court, from which it is clear that accusation against her cannot stand and it would be travesty of justice, if accused No.2 is relegated to trial and she is asked to prove her defence before the Trial Court. (e) The essential ingredients constituting the commission of offences which has been made penal under S.109 IPC by the 1st petitioner being lacking from the materials brought on record by the prosecution, no case of whatsoever nature has been made out against the 1st petitioner and hence, interference in the matter is warranted and accused No.2 is entitled to be discharged from the allegation levelled by the prosecution. 3. Sri C.H.Jadhav, learned counsel, on the other hand, contended that the Court at the stage of framing charges exercises a limited jurisdiction to find out, whether a prima facie case has been made out on the basis of the materials found during investigation and placed on record

6 by the prosecution and the Court at this stage cannot delve deep into the matter and hold a mini trial for the purpose of appreciation of evidence. Learned counsel submitted that it is impermissible for the Trial Court to consider the defence evidence of the accused person at this stage of the case and hence, the Trial Court is justified in not looking into the record produced by the accused, which allegedly makes out the case of the defence. Learned counsel made submissions in support of the view taken by the learned Trial Judge and sought dismissal of the revision petition. 4. Perused the record. 5. Petitioner No.2 (accused No.1) is a public servant. Petitioner No.1 (accused No.2) is his wife. According to the charge sheet, accused No.1 while working as a public servant in various capacities in BSNL during the period from 1.1.1996 to 4/5.10.2002, by corrupt or illegal means or otherwise by abusing official position, acquired immovable/movable properties valued at `23,71,854/- in

7 his name and in the name of his wife/accused No.2, which is disproportionate to the known source of income. Prosecution case is that the known source of income of accused No.1 for the said period was `11,80,650/-, out of which, deducting the expenses, the savings was only `3,48,790/-. In view of the household expenses being `96,850/- and the amount paid to the lessor S.R.Hanumantharayappa/CW.11 for taking house No.386, Kamakshipalya was `7,35,000/-. According to the prosecution case, accused No.2 being the wife of accused No.1, having no independent income has abetted accused No.1 for acquisition of House No.25, KHB, 1st Stage, Basaveshwaranagar, Bangalore, and thereby abetted accused No.1 to commit the offence alleged against him under S.13(1)(e) r/w 13(2) of the Act. The offence alleged against accused No.2 is one punishable under S.109 IPC. 6. Prosecution in order to establish its case has mainly relied upon the two statements of CW.10 K.M.Durai Swamy Naidu, i.e., dated 11.3.2003 and 24.3.2003,

8 statement of CW.2 Shivanarayanaiah, Sr. Sub-Registrar and statement of CW.11 S.R.Hanumantharayappa. 7. Statement of CW.10 dated 11.3.2003 discloses that sale consideration amount for sale of House No.25, KHB, 1st Stage, Basaveshwaranagar, Bangalore, was `9,60,000/-. However, his statement dated 24.3.2003 discloses that the sale consideration was `28,00,000/- and was paid in number of instalments in the year 2001 by accused No.1, but, the sale deed was registered in the name of wife of accused No.1. The statement discloses certain reasons as to why he gave the statement dated 11.3.2003 to the effect that sale consideration amount was `9,60,000/-. 8. Statement of CW.12 Shivanarayanaiah, shows that the accused himself paid stamp duty to the Government with the sale value of the house property No.25, KHB., 1st Stage, Basaveshwaranagar, Bangalore, at `17,08,000/-.

9 9. Statement of CW.11 S.R.Hanumantharayappa discloses that he leased House No.25, KHB., 1st Stage, Basaveshwaranagar, Bangalore to Smt.Yeshoda for a sum of `7,35,000/- on 7.4.2001 and Smt.Yeshoda paid an amount of `4,00,000/- through cheques from her bank account and the remaining amount was paid in cash. 10. The jurisdiction of the learned Sessions Judge while exercising the power under S.227 Cr.P.C. is limited. Charge can be framed on the basis of strong suspicion. Marshelling and appreciation of evidence is not the domain of the Court at that stage of the case. Trial Court at that stage of the case cannot prefer the first statement dated 11.3.2003, to that of the subsequent statement dated 24.3.2003 of CW.10. At the stage of framing the charge, Trial Court is not required to go into the details of investigation, but to only arrive at a prima facie finding on the material made available as to whether a charge can be sustained as recommended in the charge sheet. Holding of a mini trial at the time of framing of charge is not

10 permissible. In this context it is appropriate to refer to the ratio of decision in the case of State of Bihar Vs. Ramesh Singh, (1977) 4 SCC 39, wherein it has been held as follows: “4. ...... Reading the two provisions together in juxtaposition, as they have got to be, it would be clear that at the beginning and the initial stage of the trial the truth, veracity and effect of the evidence which the Prosecutor proposes to adduce are not to be meticulously judged. Nor is any weight to be attached to the probable defence of the accused. It is not obligatory for the Judge at that stage of the trial to consider in any detail and weigh in a sensitive balance whether the facts, if proved, would be incompatible with the innocence of the accused or not. The standard of test and judgment which is to be finally applied before recording a finding regarding the guilt or otherwise of the accused is not exactly to be applied at the stage of deciding the matter under Section 227 or Section 228 of the Code. At that stage the Court is not to see whether there is sufficient ground for conviction of the accused or whether the trial is sure to end in his conviction.” 11. No doubt the accused has produced the income tax returns to prove her income for purchase of immovable property from CW.10 and for obtaining on lease the house

11 from CW.11. Reliance placed by Sri Nagesh on the decisions in the cases of Rukmini Narvekar Vs. Vijaya Satardekar and others, AIR 2009 SC 1013 and Harshendra Kumar D Vs. Rebatilata Koley etc., AIR SCW 1199, to take into consideration income tax returns and other records produced by the accused in my opinion, is of no assistance to the accused, in view of the ratio of law by the Larger Bench of the Apex Court in the case of State of Orissa Vs. Debendra Nath Padhi, 2005 SCC (Crl) 415, wherein it has been held that the Trial Court at the stage of framing charge can consider only the material produced by the prosecution and that no provision in Cr.P.C. exists that the accused has any right to file any material or document at that stage and that right to file any material document to an accused is only at the stage of trial. The ratio of the said decision has been followed in the case of Hem Chand vs. State of Jharkhand, (2008) 5 SCC 113. 12. In S.M.S. Pharmaceuticals Ltd., Vs. Neeta Bhalla and Another, (2005) 8 SCC 89, which decision is by a

12 Larger Bench, the ratio of law laid down in the case of Deebendra Nath Padhi (supra), was reiterated by holding as follows: “7. As to what should be the averments in a complaint, assumes importance in view of the fact that, at the stage of issuance of process, the Magistrate will have before him only the complaint and the accompanying documents. A person who is sought to be made the accused has no right to produce any documents or evidence in defence at that stage. Even at the stage of framing of charge the accused has no such right and a Magistrate cannot be asked to look into the documents produced by an accused at that stage.” (Italicized by me for emphasis) 13. In the case of State of Madhya Pradesh Vs Virender Kumar Tripathi, (2009) 15 SCC 533, taking note of the contention that investigating agency had wrongly excluded the income of the wife of the accused though the same was properly disclosed as her income before the Department as well as in the income tax returns and certain other receipts were also not taken into account, the Apex Court has held as follows:

13 “13. So far as the exclusion of certain alleged income of relatives is concerned, it needs to be noted that these are matters of evidence and in such matters, the decision of this Court in State of Orissa Vs. Debendra Nath Padhi is relevant. The High Court’s judgment in this aspect does not suffer from any infirmity.” 14. In the case of Amit Kapoor Vs. Ramesh Chander and Another, Crl.A.No.1407/2012, decided by the Apex Court on 13.9.2012, while considering the question of law with regard to the extent and scope of the powers exercisable by the High Court under S.397 independently or read with S.482 of Cr.P.C., after surveying the earlier Judgments, while culling out some of the principles to be considered for proper exercise of jurisdiction, particularly, with regard to quashing of charge in exercise of jurisdiction under S.397 or S.482 of the Code or together, as the case may be; it has been observed as follows: “12. In exercise of its jurisdiction under Section 228 and/or under Section 482, the Court cannot take into consideration external materials given by an accused for reaching the conclusion that no offence was disclosed or that there was possibility of his acquittal. The Court has to

14 consider the record and documents annexed with by the prosecution. 13. Quashing of a charge is an exception to the rule of continuous prosecution. Where the offence is even broadly satisfied, the Court should be more inclined to permit continuation of prosecution rather than its quashing at that initial stage. The Court is not expected to marshal the records with a view to decide admissibility and reliability of the documents or records but is an opinion formed prima facie.” (Emphasis supplied by me) 15. In view of the well settled position of law noticed supra and having regard to the statements of CWs.10, 12 and 11 and also the documents produced along with the charge sheet, it cannot be said that there is no prima facie case for trial of the accused No.2. 16. With regard to the contention of Sri C.V.Nagesh that, petitioner No.1 (accused No.1) cannot be asked to face prosecution for the charge of abetment, there is no merit. Definition of ‘abetment’ appears in S.107 of IPC. In this context, it is relevant to notice the decision of the Apex Court in the case of P.Nallammal and Another Vs.

15 State represented by Inspector of Police, (1999) 6 SCC 559, wherein it has been observed as follows: “24. Shri Shanti Bhushan cited certain illustrations which, according to us, would amplify the cases of abetments fitting with each of the three clauses in Section 107 of the Penal Code vis-à-vis Section 13(1)(e) of the PC Act. The first illustration cited is this: If A, a close relative of the public servant tells him of how other public servants have become more wealthy by receiving bribes and A persuades, the public servant to do the same in order to become rich and the public servant acts accordingly. If it is a proved position there cannot be any doubt that A has abetted the offence by instigation. **** **** **** 25. Such illustrations are apt examples of how the offence under Section 13(1)(e) of the PC Act can be abetted by non-pubic servants. The only mode of prosecuting such offender is through the trial envisaged in the PC Act.” (Emphasis supplied by me) 17. The materials brought on record by the prosecution would prima facie indicate the ingredients of offences under S.13(1)(e) r/w 13 (2) of the Act and S.109 of IPC. The Trial Court having noticed the prosecution

16 record, has rightly found the existence of prima facie materials to frame the charge. The impugned order is not illegal and hence interference at this stage is not warranted. Consequently, the revision petition fails and is dismissed. The Trial Court shall proceed with the trial in accordance with law, uninfluenced in any way whatsoever from what has been noticed supra. Sd/- JUDGE Ksj/-