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PETITIONER: M.   G. AGARWAL

       Vs.

RESPONDENT: STATE OF MAHARASHTRA

DATE OF JUDGMENT: 24/04/1962

BENCH: GAJENDRAGADKAR, P.B. BENCH: GAJENDRAGADKAR, P.B. AIYYAR, T.L. VENKATARAMA SINHA, BHUVNESHWAR P.(CJ) WANCHOO, K.N. AYYANGAR, N. RAJAGOPALA

CITATION:  1963 AIR  200            1963 SCR  (2) 405  CITATOR INFO :  R          1966 SC1775  (4)  REI        1972 SC2020  (7)  R          1973 SC 264  (4)  R          1973 SC1204  (9)  RF         1976 SC1750  (3)  R          1984 SC1622  (156,161)

ACT: Appeal Against Acquittal-Presumption of innocence- Power  of High  Court-Conviction, when can be based on  circumstantial evidence-Code, of Criminal Procedure. 1898 (Act V Of  1898), s.  423 (1) (a), Indian Penal Code, 1860 (Act XLV of  1860), s.120B.

HEADNOTE: Appellant  Agarwal was an Income Tax Officer  and  appellant Kulkarni,  a  clerk under him.  They were put up  for  trial along with another clerk of the Department on several charge the  principal  charge being that they had  entered  into  a criminal  conspiracy  to  obtain  for  themselves  pecuniary advantage  in  the form of income-tax refund orders  in  the name of fictitious persons and had thereby fraudulently mis- appropriated a large amount of Government money.  The  trial judge  held  that the prosecution had  failed  to  establish criminal  conspiracy  and acquitted the  appellants  of  the charge  under s. 120B and the second appellant of all  other charges  under the Indian Penal ( ode but  while  acquitting the third person also under s. 120B,, convicted him of other offends  as  he  had pleaded  guilty.   The  State  appealed against this order of acquittal.  The High Court allowed the appeal  in part and convicted all the accused persons  under s. 120B of the Code and the second appellant also under  the other charges. Held,  that there was no doubt that the powers of  the  High Court under s. 423 (1) (a) of the Code of Criminal Procedure in dealing with an order of acquittal were as wide as  those under  s. 423 (1) (b) in respect of orders  of  conviction;’ but  in dealing with an appeal against acquittal that  Court had to bear in mind the fact that the initial presumption of

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innocence in favour of the accused person is strengthened by the order of acquittal; But however cautious or  circumspect the court might be, it was, nevertheless, free to arrive  at its  own  conclusions as to the guilt or  innocence  of  the accused   on   the  evidence  adduced  before  it   by   the prosecution;    Sheo Swarup v. King Emperor , 934) L. R. 61 I. A. 398 and Nur  Mohammad v. Emperor, A.I.R. 1945 P. C.  151.,  referred to. 406 Observations made on’ this point in certain decided cases of this  Court  were  not  intended to  lay  down  a  rigid  or inflexible  rule that should govern all such appeals and  it is  not necessary that the High Court must characterise  the findings  as perverse, before it can reverse a  judgment  of acquittal. Surajpal  Singh  v. The State, [1952] S.C.R. 193  and  Ajmer Singh v. State, of Punjab, [1953] S.C.R. 418, considered. Sanwat Singh v, State of Rajasthan, [1961] 3 S.C.R. 120  and Harbans Singh v. State of Punjab, [1962]_"Supp.  1 S. C.  R. 104 referred to. It  was  settled  law that a conviction  can  be  reasonably founded   on  circumstantial  evidence  if  it   is   wholly inconsistent   with  the  innocence  of  the   accused   and Consistent only with his guilt.  If the circumstances proved are  consistent either with innocence or guilt, the  accused person is entitled to the benefit of doubt.  But in applying this  principle a distinction must be made  between  primary facts’  which have to be proved in the ordinary way and  the inference  of  guilt  to  be  drawn  therefrom.   It  is  in connection  with the latter aspect of the problem  that  the doctrine of benefit of doubt can apply ;-and an inference of guilt  can  be  drawn only if the proved  facts  are  wholly inconsistent with innocence, and consistent only with guilt.

JUDGMENT: CIVIL  APPELLATE JURISDICTION: Criminal Appeals Nos. 176  of 1959 and 40 of 1960. Appeals  by special leave from the judgment and order  dated August  26, 1959, of the Bombay High Court, in Cr.   A.  No. 1638 of 1958. A.   S.  R.  Chari,  J.  B. Dadachanji,  O.  C.  Mathur  and Ravinder  Narain, for the appellant (in Cr.  A. No.  176  of 59). Erenny Parekh and K. R. Choudhri, for the appellant (in  Cr. A. No. 40 of 60). Jai  Gopal  Sethi,  R. L. Mehta and R. H.  Dhebar,  for  the respondents. 1962.  April 24.  The Judgment of the Court was delivered by GAJENDRAGADKAR, J.-A criminal conspirac. to which, according to the prosecution, M.G. Agarwal                             407 M.   K.  Kulkarni  and  N.  Laxminarayan,  hereafter  called accused  Nos. 1, 2 and 3 respectively, were parties  between December, 1954, and June 1955, at Bombay, has given rise  to the criminal proceedings from which the two present  appeals arise.  At the relevant time, the three accused persons were attached  to the office of the Income-tax Officer, Ward  No. A-III  in Greater Bombay.  Accused No. I was  designated  as the  First  Income-tax  Officer, and accused Nos.  2  and  3 worked  under  him  as second and  third  Assessment  Clerks respectively.   The  main charge against these  persons  was that  during  the relevant period, they had entered  into  a

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criminal  conspiracy by agreeing to do or cause to  be  done illegal  acts, by corrupt and illegal means and  by  abusing their  position as public servants to obtain for  themselves pecuniary advantage in the form of income-tax refund  orders and  this criminal object was achieved by issuing  the  said refund  orders  in the names of persons who either  did  not exist  or were not assessees entitled to such refunds.   The prosecution case was that after the said refund orders  were thus fraudulently issued, they were fraudulently cashed  and illegally  misappropriates.  The ten persons in whose  names these  refund  orders  were fraudulently  issued  were  G.M. Thomas,  P.N.  Swamy, K. S. Patel, S. R. Bhandarkar,  S.  P. Jani, D. M. Joshi, C. B. Kharkar, Ramnath Gupta, V. M. Desai and  K. V. Rao.  It appears that twenty-five bogus  vouchers were  issued  in  respect of these ten  fictitious  cases  ; eleven accounts were fraudulently opened in different  Banks in Bombay and misappropriation to-the extent of Es. 54,000/- has  thereby  been committed.  That, in. substance,  is  the main  charge  which was levelled against the  three  accused persons. Nine other subsidiary charges were also framed against them. Charges 2, 3 and 4 wore in respect of the income-tax  refund order issued on 408 the  7th January, 1955, in favour of Mr. G. M. Thomas.   The prosecution alleged that by their several acts in respect of the issuance of this refund order, the three accused persons had committed offences under sections 467 and 471 read with, s.  34 I.P.C., as well as section 5(2) of the Prevention  of Corruption  Act read with s. 5(1)(d) of the said Act and  a. 34 of ’the Indian Penal Code.  Similarly, charges 5, 6,  and 7 were framed under the same sections respectively in regard to the income-tax refund order issued in favour of Mr. G. M. Thomas on the 2nd April, 1955.  In regard to the  income-tax refund order issued in favour of Mr. S. R. Bhandarkar on 2nd April, 1955, charges, 8, 9 and 10 were framed under the said respective,  sections.   That is how the  case  against  the three,  accused persons under ten charges was tried  by  the Special Judge , Greater Bombay. It  would thus be seen that, in substance,  the  prosecution case  if; that in order to carry out the criminal object  of the  conspiracy, the three accused, persons adopted  a  very clever and ingenious modus operandi in defrauding the public treasury.   They"  decided to take adequate steps  to  issue income-tax  refund  orders  in  the  names  of  non-existing persons  and to misappropriate the amounts by encashing  the said  refund  certificates issued in pursuance of  the  said refund  orders.   In furtherance of the  conspiracy  and  in furtherance of the common intention of all the conspirators, steps  were  taken  to  forge the  signatures  of  the  said fictitious  persons  as  claimants  wherever  necessary,  to prepare  some of the supporting documents and to  deal  with the  cases  as though they were cases of  genuine  assessees submitting a return and making a claim for refund.  It is by adopting  this  clever device that all the  accused  persons have  succeeded in misappropriating such a large  amount  as Re. 54,000/-.                             409 It  appears  that when a return ’or  refund  application  is received  in  the  Income-tax  Office,  first  goes  to  the assessment  refund clerk who, in ue course, puts it  up  for orders  before the Incometax Officer.  In  ordinary  course, the  Income-tax  Officer  sends a notice  to  the  assessee, examines him and the accounts produced by him to see if  the return is correct.  That done, an assessment order is passed

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by the Income-tax Officer.  Thereafter, a form known as I.T. 30  form  is prepared.  This form contains  several  columns which,  when  filled in, give details about  the  income-tax payable  by  the assessee the tax paid by  him,  the  refund ordered by the income-tax Officer or the collection demanded by  aim.   After  this form is duly filled, it  is  sent  to another  clerk  for  preparing the refund  order.   At  that stage,  the  refund  order is prepared and  the  said  order together  with the demand and collection register  and  I.T. form 30 are sent back to the Income-tax Officer who examines the record and  signs the refund order and the I.T. form  30 and  himself  makes  or causes to be made an  entry  in  the demand  and  collection  register.  At this  time,  he  also cancels the refund certificates, such as dividend  warrants. The  Income-tax  Officer  also  receives  the  advice   memo prepared by the refund clerk and signs it.  The said memo is sent to the Reserve Bank and the refund order is sent to the assessee.  After the refund voucher is cashed by the Reserve Bank,  the  advice memo is received back in  the  Income-tax Office.  It is thereafter that an entry is made in the Daily Refund   Register.   The  prosecution  case  is   that   the conspirators purported to adopt all steps which they  deemed necessary  to  carry  out their  criminal  object  in  order formally  to  comply with the procedure  prescribed  by  the department in making refund orders. At  this  stage,  it  is  relevant  to  state  briefly  how, according to the prosecution, the fraud of the 410 conspirators   was   discovered.   In   April’   1955,   Mr. Sundararajan  who was then the Commissioner  of  Income-tax, Bombay City received a report that many irregularities  were being committed in respect of refund orders issued by  A-III Ward.   On receiving this report, he told Mr.  Gharpure  who was the Inspecting Assistant Commissioner of Income-tax,  A- Range, to carry out an inspection of the work of accused No. 1.  He,  however, cautioned Mr. Gharpure to  carry  out  his assignment  as if he was making an inspection in the  normal course  in order that no suspicion should arise in the  mind of  accused No. 1. Mr. Gharpure accordingly made  inspection and  submitted  his report on the 6th ,Tune,  1955.   It  is common ground that Mr. Gharpure was not able to discover any fraud. On the 10th June, 1955, Mr. Sundararajan asked Mr.  Gharpure to  produce  before him all the refund books kept  in  A-III Ward.   They  were  accordingly  produced  before  him.   On examining  these books, Mr. Sundararajan found certain  sus- picious  features.  He came across one counter-foil  of  the refund order in the Dame of G. M. Thomas and he noticed that the  relevant postal acknowledgment did not bear any  postal stamp  and  presented a clean and  fresh  appearance.   That appeared  to  Mr. Sundararajan to be  suspicious.   He  also found  that a number of refunds were made in  round  figures which  was very unusual.  The files showed that on the  back of  the  counter-foils the postal acknowledgments  were  not stuck  up  nor were advice notes stuck up.   His  suspicions having  been raised by these unusual features of the  files, Mr.  Sundararajan  conducted a further scrutiny of  the  six counter-foil  books  particularly to find  out  whether  the refund orders were in respect of round figures and he  found that  such  refund orders had been passed, in the  names  of Messrs  G. M. Thomas, K. S. Patel, P. N. Swamy, D. N.  Joshi and S, R. Bhandarkar.  411 After the refund orders were encashed they we’re sent to the Accountant-General’s Office by the Reserve Bank and so,  Mr.

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Sundararajan  thought that he could got them from  the  said office.  All this happened in the evening of the 10th  June, 1955. On   the  11th  June,  1955,  which  was  a  Saturday,   Mr. Sundararajan called for the income-tax files of some of  the persons  named above including G. M. Thomas and K. S.  Patel along with the files of twenty other regular assessees.  The files of the twenty regular assessees were submitted to  him but  not of the ten fictitious persons.  On enquiry  he  was told  that  those  files were not  available.   ’  The  non- production  of the said files confirmed his  suspicion  that something  irregular must have happened in respect of  them. That is why he sent for accused No. 1 at 2 p. m. but he  was not  in  his office.  He came at 3 p.  m.  Mr.  Sundararajan showed him the relevant counter-foils and examined him.  The statement  made  by accused No. I was duly recorded  by  Mr. Sundararajan.   As a result of the enquiry made by him,  Mr. Sundararajan  was satisfied that the three  accused  persons had fraudulently brought into existence several documents as a  result of which a large amount had been  misappropriated, and so, he requested the Central Board of Revenue to suspend accused No. 1. At  that stage, Mr. Sundararajan naturally wanted to  search the  office  of A-III Ward, but he could not carry  out  the search  since  he was told that the key of  the  A-III  Ward Office  had  been taken way by accused No. 3. He  then  left instructions with the police guard of his office that nobody should  be allowed to enter the room of A-III  Ward  without his  permission.   Next day, he attended his office  but  he found that no person in A-III Ward had gone to work.  Before he  left the office, he got the office of A-III Ward  sealed and 412 left word with the Inspector on duty that if any person came to work in that office thereafter, it should be reported  to him.   After  Mr. Sundararajan reached home, he  received  a telephone message that accused No. 3 had come to A-III  Ward Office  with  the  keys.   Mr.  Sundararajan  directed   the Inspector to take charge of the keys from accused No. 3  and ask him to attend office the next day. Next  day  was  a  Monday (13-6-1955).   On  that  day,  Mr. Sundararajan  accompanied by certain other officers went  to the  office of A-IlI Ward, opened the seal and the lock  and after going inside, attached six registers.  He also made  a search  for  the assessment records of the  ten  persons  in question  but  he did not find them.   He  then  transferred accused  No. 1 to an unimportant charge and  instructed  the Banks that no withdrawals should be allowed from any of  the eleven accounts, since the said accounts appeared to him  to be suspicious.  He then sent for accused No. 3 and  examined him.   He  also  sent  for accused No.  2  but  he  was  not available  since he had gone on leave.  He directed  one  of his inspectors to enquire whether the said ten persons  were real  persons  or were merely fictitious  Dames.   All  this happened on the 13th June, 1955. On the 14th June, 1955, Mr. Sundararajan went to A-III  Ward Office along with accused No. 3. He wanted to search for the missing  papers,  viz.,  the assessment record  of  the  ten persons in question.  Accused No. 3 waited for some time and then opened accused No. 2’s table and took out some  papers. A  list  of  these papers was made and they  were  taken  in charge.   This list has been signed by Mr. Sundararajan  and the  officers who accompanied him as well as by accused  No. 3.  Thereafter, accused Nos. 2 & 3 were suspended and  as  a result

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                           413 of  the investigation which followed, all the three  accused persons  were  put  up for their trial  before  the  learned Special  Judge  for Greater Bombay on  the  charges  already indicated. Before the learned trial Judge, accused No. 3 pleaded  guilt to all the charges framed against him, whereas accused  Nos. 1 and 2 denied that they had anything to do with the alleged commission of the offences charged. The  prosecution  sought to prove its case against  all  the three  persons by producing before the learned  trial  Judge the  relevant  documents including the files kept  in  A-III Ward  office,  and  it  examined  four  witnesses  from  the department for the purpose of showing the procedure that  is followed  in passing assessment orders and granting  refunds and with the object of showing that the conspiracy could not have  succeeded  without  the  active  assistance  and   co- operation   of   accused   No.  1.   These   witnesses   are Sundararajan, P. W. 1, Nagwekar, P. W. 2, Subramanian,  P.W. 5 and Downak, P. W. 21.  It also. examined Das Gupta, P.  W. 26, to prove the handwriting of the accused persons.  Eleven other  witnesses  were  examined to prove  the  identity  of accused  Nos. 2 and 3 in respect of the steps taken by  them to  open accounts in different banks in order to encash  the refund  vouchers  issued in pursuance of the  refund  orders passed by accused No. 1. The  learned trial Judge held that the evidence  accused  by the prosecution did not establish beyond a reasonable  doubt ’the existence of the criminal conspiracy between the  three accused.   He was not inclined to hold that the ten  alleged persons  were non-existent.  Even so, he proceeded  to  deal with  the case on the basis that the ten persons  were  non- assesses and yet the refund orders had been passed in  their favour.  According to the 414 learned  trial  Judge,  accused No. I  may  have  innocently signed the, relevant documents without looking to them in  a hurry to dispose of cases, placing confidence in his  staff; and  so, it would be difficult to hold that he was a  member of the conspiracy.  The utmost, said the learned Judge, that can be argued against him is that he was negligent.  That is how  he acquitted accused No. 1 of the principal  charge  of conspiracy  under section 120-B &.ad as a result, the  other charges  as  well. In regard to accused No. 2,  the  learned Judge  was likewise not satisfied that the evidence  adduced by  the prosecution to prove his signatures on the  relevant documents  established  the fact that he  had  signed  those documents and he was not impressed by the other evidence led before  him  to show that he assisted accused No. 3  in  the matter of encashing the refund vouchers.  On these findings, accused  No.  2  was acquitted of  all  the  charges  framed against him.  Since accused No. 3 had pleaded guilty to  the charges,  the learned Judge convicted him under sections  47 1,  of  the  I.  P.C. and s. 5  (2)  of  the  Prevention  of Corruption  Act  and  sentenced him to  different  terms  of imprisonment  which were ordered to run  concurrently.,  He, however,  acquitted  accused No. 3 so far as the  charge  of conspiracy  was concerned and he acquitted accused  Nos.   1 and 2 of all the offences. Against  the order of acquittal passed by the learned  Judge in favour of accused Nos. 1 and 2, the State of  Maharashtra preferred  an  appeal  in the Bombay High  Co-art  and  this appeal succeeded.  The High Court has found that the learned trial  Judge a misdirected himself by assuming that  accused No.  I  had  pleaded  that he  had  negligently  signed  the

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relevant  documents  and  passed the relevant  orders  in  a hurry, placing confidence in his staff.  The High Court  has pointed out that far from pleading negligence, accused No. 1 had definitely stated                             415 in  his  written  statement filed in the  trial  Court  that before he directed the issue of refund in the ten cases,  be had  examined the files containing the supporting  documents and  had satisfied himself that it was proper to  allow  the refund  in  each  one of those  cases.   This  position  was conceded  by the learned Advocate who appeared  for  accused No.  1 in the High Court.  The High Court then examined  the question  as  to  whether the ten  assessees  were  existing persons  or  were  fictitious  names and  it  came  to  the. conclusion that the ten names given for the eleven  accounts in  which refund orders were passed were  fictitious  names. The High Court then examined the circumstantial evidence  on which  the  prosecution relied in support and proof  of  its main charge of conspiracy between the three accused  persons and it came to the conclusion that the said charge had  been proved  against  all  the three  accused  persons  beyond  a reasonable  doubt.   That is how the  High  Court  partially allowed the appeal preferred by the State and convicted  all the three accused persons under section 120-B of the  Indian Penal Code.  It also convicted accused No. 2 of the offences under ss. 467, 471, I. P. C., and s. 5(2) of the  Prevention of Corruption Act.  In regard to the other offences charged, the  order  of acquittal was  confirmed.   Having  convicted accused Nos.  1 & 2 under section 120-B, the High Court  has sentenced  each one of them to suffer rigorous  imprisonment for 18 months for the said offence.  Accused No. 2 has  also been  directed  to suffer R.I. for 18 months in  respect  of each  of the offences under ss. 467, 471, I. P. C. and s.  5 (2)  of the Prevention of Corruption Act.   These  sentences are  ordered to run concurrently with the  sentence  ordered under s. 120-B.  It is against this order of conviction  and sentence  passed  by the High Court in appeal  that  accused Nos.   1  , 2 have come to this Court by  special  leave  by their appeals Nos. 176 of 1959 and 40 of 1960. 416 Since  the  impugned order of conviction  and  sentence  was passed against the appellants by the High Court in  exercise of  its powers under s. 423 of the Criminal  Procedure  Code while hearing ’an appeal against their acquittal, the  first question which calls for our decision relates to the  extent of  the  High Court’s powers in interfering with  orders  of acquittal  in appeal.  This question has been discussed  and considered  in several judicial decisions both by the  privy Council  and  this  Court.  In dealing  with  the  different aspects  of  the problem raised by the construction-  of  s. 423,  emphasis has sometimes shifted from one aspect to  the other  and that is likely to create a doubt. about the  true scope and effect of the relevant provisions contained in  s. 423.   Therefore,  we propose to deal with  that  point  and state the position very briefly. Section 423 (1) prescribes the powers of the appellate Court in disposing of appeals preferred before it and clauses  (a) and  (b)  deal with appeals against acquittals  and  appeals against  convictions respectively.  There is no  doubt  that the power conferred by clause (a) which deals with an appeal against  an  order  of acquittal is as  wide  as  the  power conferred  by clause (b) which deals with an appeal  against an order of conviction, and so, it is obvious that the  High Court’s powers in dealing with criminal appeals are  equally wide whether the appeal in question is one against acquittal

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or against conviction.  That is one aspect of the  question. The other aspect of the question centres round the  approach which the High Court adopts in dealing with appeals  against orders of acquittal.  In dealing with such appeals, the High Court ;naturally bears in mind the presumption of  innocence in favour of an accused person and cannot lose sight of  the fact that the said presumption is strengthened by the  order of acquittal passed in his favour by the trial Court and so, the fact that the accused person is                             417 entitled to the benefit of a reasonable doubt will always be present in the mind of the High Court when it deals with the merits of the case.  As an appellate Court the High Court is generally slow in disturbing the finding of fact recorded by the trial Court, particularly when the said finding is based on an appreciation of oral evidence because the trial  Court has the advantage of watching the demeanour of the witnesses who  have  given evidence.  Thus, though the powers  of  the High  Court in dealing with an appeal against acquittal  are as  wide  as those which it has in dealing  with  an  appeal against  conviction,  in-dealing with the  former  class  of appeals,   its  approach  is  governed  by  the   overriding consideration  flowing  from the presumption  of  innocence. Sometimes,  the width- of the power is emphasized, while  on other occasions, the necessity to adopt a cautious  approach in  dealing with appeals against acquittals  is  emphasised, and the emphasis is expressed in different words or  phrases used from time to time.  But the true legal position is that however  circumspect and cautious the approach of  the  High Court may be in dealing with appeals against acquittals,  it is  undoubtedly entitled to reach its own  conclusions  upon the  evidence adduced by the prosecution in respect  of  the guilt  or innocence of the accused. this position  has  been clarified  by the Privy Council in Sheo Swarup v. The,  King Emperor (1) and Nur Mohammad v. Emperor In some of the earlier decisions of this Court, however,  in emphasizing  the importance of adopting a cautious  approach in dealing with appeals against acquittals, it was  observed that the presumption of innocence is reinforced by the order of acquittal and so, "the findings of the trial Court  which had the advantage of seeing the witnesses and hearing  their evidence can be reversed only for (1) (1934) L.R. 61 1. A. 398. (2) A.I.R. 1945 P.C. 151, 418 very  substantial  and compelling  reasons":  vide  Surajpal Singh  v. The State (1).  Similarly in Ajmer Singh v.  State of Punjab (2), it was observed that the interference of  the High Court in an appeal against the order of acquittal would be  justified  only  if  there  are  "very  substantial  and compelling  reasons to do so.’) In some other decisions,  it has  been stated that an order of acquittal can be  reversed only  for  "good  and sufficiently cogent  reasons"  or  for "strong  reasons".   In  appreciating the  effect  of  these observations, it must be remembered that these  observations were  not  intended to lay down a rigid or  inflexible  rule which  should  govern  the decision of  the  High  Court  in appeals  against  acquittals.  They were not  intended,  and should  not  be  read  to have  intended-  to  introduce  an additional condition in clause (a) of section 423 (1) of the Code.   All that the said observations are intended  to  em- phasise  is that the approach of the High Court  in  dealing with  an  appeal  against acquittal  ought  to  be  cautious because as Lord Russell observed in the case of Shoo Swarup, the  presumption of innocence in favour of the  accused  "is

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not  certainly  weakened  by  the  fact  that  he  has  been acquitted  at his trial." Therefore, the test  suggested  by the  expression "substantial and compelling reasons"  should not  be  construed  as a formula which  has  to  be  rigidly applied  in  every case.  That is the effect of  the  recent decisions  of this Court, for instance, in Sanwat  Singh  v. State  of Rajasthan (2), and Harbans Singh v. The  State  of Punjab  (4);  and  so,  it  is  not  necessary  that  before reversing  a  judgment  of acquittal, the  High  Court  must necessarily  characterise the findings recorded  therein  as perverse.   Therefore,  the question which we  have  to  ask ourselves in the present appeals is whether on the  material produced by the prosecution, the High Court was justified in reaching the conclusion that the (1)  (1952) S.C.R. 193, 201.   (2) (1953) S.C.R 418 (3)  (1961) 3 S C. R. 120.    (4) (1962) Supp. I.S.C.R 104.                             419 prosecution  case  against the appellants  had  been  proved beyond a reason-able doubt, and that the contrary view taken by  the  trial  Court was,  erroneous.   In  answering  this question, we would, no doubt, consider the salient and broad features  of  the  evidence  in  order  to  appreciate   the grievance made by the appellants against the conclusions  of the  High Court.  But under Art. 136 we would ordinarily  be reluctant to interfere with the finding of fact recorded  by the  High  Court particularly where the  said  findings  are based on appreciation of oral evidence. There  is  another  point of law which  must  be  considered before  dealing  with  the  evidence  in  this  case.    The prosecution   case   against   accused  No.   1   rests   on circumstantial  evidence.   The main  charge  of  conspiracy under  section  120  B is sought to be  established  by  the alleged  conduct of the conspirators and so far  as  accused No.  1 is concerned, that rests on  circumstantial  evidence alone.    It  is  a  well  established  rule   in   criminal jurisprudence that circumstantial evidence can be reasonably made the basis of an accused person’s conviction if it is of such  a  character that it is wholly inconsistent  with  the innocence  of  the accused and is consistent only  with  his guilt.   If  the  circumstances  proved  in  the  case   are consistent either with the innocence of the accused or  with his  guilt, then the accused is entitled to the  benefit  of doubt.   There is no doubt or dispute about  this  position. But   in  applying  this  principle,  it  is  necessary   to distinguish  between  facts which may be called  primary  or basic  on  the one hand and inference of facts to  be  drawn from them on the other.  In regard to the proof of basic  or primary  facts  the Court has to judge the evidence  in  the ordinary way, and in the appreciation of evidence in respect of  the  proof of these basic or primary facts there  is  no scope for the application 420 of the doctrine of benefit of doubt. The Court considers the evidence  and  decides  whether  that  evidences  proves   a particular fact or not.  When it is held that a certain fact is  proved, the question arises whether that fact  leads  to the inference of guilt of the accused person or not, and  in dealing  with  this aspect of the problem, the  doctrine  of benefit  of doubt would apply and an inference of guilt  can be drawn only if the proved fact is wholly inconsistent with the innocence of the accused and is consistent only with his guilt.   It is in the light of this legal position that  the evidence in the present case has to be appreciated. The  Court then considered the evidence and the findings  of the High Court and dismissed the

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appeals. Appeals dismissed. 421