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CASE NO.: Appeal (crl.)  292 of 1997

PETITIONER: State of Madhya Pradesh.

RESPONDENT: Awadh Kishore Gupta and Ors.                     

DATE OF JUDGMENT: 18/11/2003

BENCH: DORAISWAMY RAJU & ARIJIT PASAYAT.

JUDGMENT: J U D G M E N T

ARIJIT PASAYAT, J

       The State of Madhya Pradesh questions legality of judgment  rendered by a learned Single Judge of the Madhya Pradesh High  Court, Gwalior Bench accepting the prayer made in terms of Section  482 of the Code of Criminal Procedure, 1973 (in short ’the Code’)  to quash the investigation and proceedings under Prevention of  Corruption Act, 1988 (in short the ’Act’) in a case (crime no.  116/94) registered by the Special Police Establishment, Lokayukt,  Gwalior.  Seven petitioners, who are the respondents herein, had  filed the petition to quash the investigation and the proceedings  on the ground that while investigating into the alleged  acquisition of disproportionate assets by present respondent no. 1  Awadh Kishore Gupta (petitioner no.1 before the High Court and  described as accused hereinafter), the income of the other  respondents were not taken note of.  Several documents were  annexed to the petition to contend that there was no undisclosed  income of and/or acquisition of assets disproportionate to the  known sources of income by the respondent No. 1 who at the  relevant time was working as Executive Engineer in the Public  Health Engineering Department of the Government of Madhya Pradesh.  Before the High Court his wife was the petitioner no. 2; and his  sons and daughter were petitioner nos. 3 to 6 respectively and  petitioner no.7 was his father. It was their basic stand that the  proceedings were continuing without grant of proper opportunity to  them to explain their income and there was non-compliance with the  requirements of the Act. The basic allegation against the accused  was that he had acquired property beyond his known source of  income thereby rendering him punishable under Section 13(1)(e) of  the Act.   

Stand of the appellant State who was respondent before the  High Court was that the matter was still under investigation and  the investigating agency was examining the articles seized and the  assets claimed by the accused and his relatives.  As the matter  was still under examination by the investigating agency, no case  for quashing the investigation/ further proceedings was made out.  The High Court came to hold that the documents annexed to the  petition, more particularly, the income-tax returns indicate that  all the properties shown in the returns were fully explained to  have been acquired from the known sources of income of the accused  and his relatives and nothing has been found to have been acquired  disproportionately to the income of accused. Properties acquired  by his relatives could not have been taken for constituting the  offence so far as accused is concerned. Reference was also made to  a Will executed by accused’s mother and it was concluded that

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there was nothing to show that the Will had taints of benami. It  was held that the onus to prove a transaction as benami is on the  person who asserts and has to be discharged by adducing legal  evidence of a definite character. It was also held that the  requirements of Section 13(1)(e) clearly stipulated that an  opportunity has to be given, and a government servant cannot be  said to have failed to satisfactorily account the pecuniary  resources and properties disproportionate to his known sources of  income in the absence of such opportunity. Accordingly it was held  that nothing substantial had been collected though considerable  time had elapsed to collect evidence to suggest that if  prosecuted, the public servant would be liable to be convicted as  there has been little progress in the investigation. With these  observations, the investigation and further proceedings in the  case registered were quashed.  Properties seized from the accused  were directed to be returned to him.   

Learned counsel for the appellant submitted that the whole  approach of the High Court was erroneous.  At the stage of  considering an application for quashing the investigation or  further proceedings, it is not permissible to proceed as if the  court was holding a trial and trying to sift evidence.  The  parameter for exercise of jurisdiction under Section 482 of the  Code is very limited. Without keeping in view the parameters and  relying on documents and materials which were yet to be tested,  the High Court has quashed the investigation and the proceedings.

       In response, learned counsel for the respondents submitted  that the investigation and further proceedings would have been an  exercise in futility.  When the materials considered by the High  Court are taken into account, nothing more remains to be done and  without first granting an opportunity to explain, the  investigating agency could not have alleged commission of offence  punishable under Section 13(1)(e) of the Act.  The judgment,  according to learned counsel, does not warrant interference.

       Section 13 deals with various situations when a public  servant can be said to have committed criminal misconduct.  Clause  (e) of sub-section (1) of the Section is pressed into service  against the accused.  The same is applicable when the public  servant or any person on his behalf, is in possession or has, at  any time during the period of his office, been in possession, for  which the public servant cannot satisfactorily account pecuniary  resources or property disproportionate to his known sources of  income.  Clause (e) of sub-section (1) of section 13 corresponds  to clause (e) of sub-section (1) of section 5 of the Prevention of  Corruption Act, 1947 (referred to as ’Old Act’). But there has  been drastical amendments.  Under the new clause, the earlier  concept of "known sources of income" has undergone a radical  change.  As per the explanation appended, the prosecution is  relieved of the burden of investigating into "source of income"  of an accused to a large extent, as it is stated in the  explanation that "known sources of income" mean income received  from any lawful source, the receipt of which has been intimated in  accordance with the provisions of any law, rules orders for the  time being applicable to a public servant.  The expression "known  sources of income" has reference to sources known to the  prosecution after thorough investigation of the case.  It is not,  and cannot be contended that "known sources of income" means  sources known to the accused.  The prosecution cannot, in the very  nature of things, be expected to know the affairs of an accused  person.  Those will be matters "specially within the knowledge"  of the accused, within the meaning of Section 106 of the Indian  Evidence Act, 1872 (in short the ’Evidence Act’).

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       The phrase "known sources of income" in section 13(1)(e)  {old section 5(1)(e)} has clearly the emphasis on the word  "income".  It would be primary to observe that qua the public  servant, the income would be what is attached to his office or  post, commonly known as remuneration or salary.  The term  "income" by itself, is elastic and has a wide connotation.   Whatever comes in or is received, is income.  But, however, wide  the import and connotation of the term "income", it is incapable  of being understood as meaning receipt having no nexus to one’s  labour, or expertise, or property, or investment, and having  further a source which may or may not yield a regular revenue.   These essential characteristics are vital in understanding the  term "income".  Therefore, it can be said that, though "income"  is receipt in the hand of its recipient, every receipt would not  partake into the character of income.  Qua the public servant,  whatever  return he gets of his service, will be the primary item  of his income.  Other incomes which can conceivably are income qua  the public servant, will be in the regular receipt from (a) his  property, or (b) his investment.  A receipt from windfall, or  gains of graft, crime, or immoral secretions by persons prima  facie would not be receipt from the "known sources of income" of  a public servant.

       The legislature has advisedly used the expression  "satisfactorily account".  The emphasis must be on the word  "satisfactorily" and the legislature has, thus, deliberately cast  a burden on the accused not only to offer a plausible explanation  as to how he came by his large wealth, but also to satisfy the  Court that his explanation was worthy of acceptance.

       Exercise of power under Section 482 of the Code in a case of  this nature is the exception and not the rule.  The section does  not confer any new powers on the High Court.  It only saves the  inherent power which the Court possessed before the enactment of  the Code.  It envisages three circumstances under which the  inherent jurisdiction may be exercised, namely, (i) to give effect  to an order under the Code, (ii) to prevent abuse of the process  of court, and (iii) to otherwise secure the ends of justice.  It  is neither possible nor desirable to lay down any inflexible rule  which would govern the exercise of inherent jurisdiction.  No  legislative enactment dealing with procedure can provide for all  cases that may possibly arise.  Courts, therefore, have inherent  powers apart from express provisions of law which are necessary  for proper discharge of functions and duties imposed upon them by  law.  That is the doctrine which finds expression in the Section  which merely recognizes and preserves inherent powers of the High  Courts.  All courts, whether civil or criminal possess, in the  absence of any express provision, as inherent in their  constitution, all such powers as are necessary to do the right and  to undo a wrong in course of administration of justice on the  principle quando lex aliquid alique concedit, conceditur et id  sine quo res ipsa esse non potest (when the law gives a person  anything it gives him that without which it cannot exist).  While  exercising powers under the Section, the Court does not function  as a court of appeal or revision. Inherent jurisdiction under the  Section though wide has to be exercised sparingly, carefully and  with caution and only when such exercise is justified by the tests  specifically laid down in the Section itself.  It is to be  exercised ex debito justitiae to do real and substantial justice  for the administration of which alone courts exist.  Authority of  the court exists for advancement of justice and if any attempt is  made to abuse that authority so as to produce injustice, the court  has power to prevent such abuse.  It would be an abuse of process  of the court to allow any action which would result in injustice  and prevent promotion of justice.  In exercises of the powers

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court would be justified to quash any proceeding if it finds that  initiation/continuance of it amounts to abuse of the process of  court or quashing of these proceedings would otherwise serve the  ends of justice.  When no offence is disclosed by the complaint,  the court may examine the question of fact.  When a complaint is  sought to be quashed, it is permissible to look into the materials  to assess what the complainant has alleged and whether any offence  is made out even if the allegations are accepted in toto.

       In R.P. Kapur v. State of Punjab (AIR 1960 SC 866), this  Court summarized some categories of cases where inherent power can  and should be exercised to quash the proceedings.

(i)     where it manifestly appears that there is a legal bar  against the institution or continuance e.g. want of  sanction;

(ii)    where the allegations in the first information report  or complaint taken at its face value and accepted in  their entirety do not constitute the offence alleged;

(iii)where the allegations constitute an offence, but there  is no legal evidence adduced or the evidence adduced  clearly or manifestly fails to prove the charge.

       In dealing with the last case, it is important to bear in  mind the distinction between a case where there is no legal  evidence or where there is evidence which is clearly inconsistent  with the accusations made, and a case where there is legal  evidence which, on appreciation, may or may not support the  accusations.  When exercising jurisdiction under Section 482 of  the Code, the High Court would not ordinarily embark upon an  enquiry whether the evidence in question is reliable or not or  whether on a reasonable appreciation of it accusation would not be  sustained.  That is the function of the trial Judge.  Judicial  process no doubt should not be an instrument of oppression, or,  needless harassment.  Court should be circumspect and judicious in  exercising discretion and should take all relevant facts and  circumstances into consideration before issuing process, lest it  would be an instrument in the hands of a private complainant to  unleash vendetta to harass any person needlessly.  At the same  time the Section is not an instrument handed over to an accused to  short-circuit a prosecution and bring about its sudden death.  The  scope of exercise of power under Section 482 of the Code and the  categories of cases where the High Court may exercise its power  under it relating to cognizable offences to prevent abuse of  process of any court or otherwise to secure the ends of justice  were set out in some detail by this Court in State of Haryana v.  Bhajan Lal (1992 Supp (1) SCC 335) A note of caution was, however,  added that the power should be exercised sparingly and that too in  rarest of rare cases.  The illustrative categories indicated by  this Court are as follows:  

"(1)    Where the allegations made in the first  information report or the complaint, even if they  are taken at their face value and accepted in  their entirety do not prima facie constitute any  offence or make out a case against the accused.

(2)     Where the allegations in the first information  report and other materials, if any, accompanying  the FIR do not disclose a cognizable offence,  justifying an investigation by police officers

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under Section 156(1) of the Code except under an  order of a Magistrate within the purview of  Section 155(2) of the Code. (3)     Where the uncontroverted allegations made in the  F.I.R. or complaint and the evidence collected in  support of the same do not disclose the commission  of any offence and make out a case against the  accused.  (4)  Where the allegations in the F.I.R. do not  constitute a cognizable offence but constitute  only a non-cognizable offence, no investigation is  permitted by a Police Officer without an order of  a Magistrate as contemplated under S. 155(2) of  the Code.  (5)  Where the allegations made in the FIR or complaint  are so absurd and inherently improbable on the  basis of which no prudent person can ever reach a  just conclusion that there is sufficient ground  for proceeding against the accused.  (6) Where there is an express legal bar engrafted in any  of the provisions of the Code or the concerned Act  (under which a criminal proceeding is instituted)  to the institution and continuance of the  proceedings and/or where there is a specific  provision in the Code or the concerned Act,  providing efficacious redress for the grievance of  the aggrieved party.  (7) Where a criminal proceeding is manifestly attended  with mala fide and/or where the proceeding is  maliciously instituted with an ulterior motive for  wreaking vengeance on the accused and with a view  to spite him due to private and personal grudge.  

As noted above, the powers possessed by the High Court under  Section 482 of the Code are very wide and the very plenitude of  the power requires great caution in its exercise. Court must be  careful to see that its decision in exercise of this power is  based on sound principles. The inherent power should not be  exercised to stifle a legitimate prosecution. High Court being the  highest Court of a State should normally refrain from giving a  prima facie decision in a case where the entire facts are  incomplete and hazy, more so when the evidence has not been  collected and produced before the Court and the issues involved,  whether factual or legal, are of magnitude and cannot be seen in  their true perspective without sufficient material. Of course, no  hard and fast rule can be laid down in regard to cases in which  the High Court will exercise its extraordinary jurisdiction of  quashing the proceeding at any stage. (See : The Janata Dal etc.  v. H.S. Chowdhary and others, etc. (AIR 1993 SC 892), Dr. Raghubir  Saran v. State of Bihar and another (AIR 1964 SC 1)). It would not  be proper for the High Court to analyse the case of the  complainant in the light of all probabilities in order to  determine whether a conviction would be sustainable and on such  premises, arrive at a conclusion that the proceedings are to be  quashed. It would be erroneous to assess the material before it  and conclude that the complaint cannot be proceeded with. In  proceeding instituted on complaint, exercise of the inherent  powers to quash the proceedings is called for only in a case where  the complaint does not disclose any offence or is frivolous,  vexatious or oppressive. If the allegations set out in the  complaint do not constitute the offence of which cognizance has  been taken by the Magistrate, it is open to the High Court to  quash the same in exercise of the inherent powers under Section  482 of the Code. It is not, however, necessary that there should  be meticulous analysis of the case before the trial to find out

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whether the case would end in conviction or acquittal. The  complaint has to be read as a whole. If it appears that on  consideration of the allegations in the light of the statement  made on oath of the complainant that the ingredients of the  offence or offences are disclosed and there is no material to show  that the complaint is mala fide, frivolous or vexatious, in that  event there would be no justification for interference by the High  Court. When an information is lodged at the police station and an  offence is registered, then the mala fides of the informant would  be of secondary importance. It is the material collected during  the investigation and evidence led in Court which decides the fate  of the accused person. The allegations of mala fides against the  informant are of no consequence and cannot by itself be the basis  for quashing the proceeding. (See : Mrs. Dhanalakshmi v. R.  Prasanna Kumar and others (AIR 1990 SC 494), State of Bihar and  another v. P. P. Sharma, I.A.S. and another (1992 Suppl (1) SCC  222), Rupan Deol Bajaj (Mrs.) and another v. Kanwar Pal Singh Gill  and another (1995 (6) SCC 194), State of Kerala and others v. O.C.  Kuttan and others (1999 (2) SCC 651), State of U.P. v. O. P.  Sharma (1996 (7) SCC 705),  Rashmi Kumar (Smt.) v. Mahesh Kumar  Bhada (1997 (2) SCC 397), Satvinder Kaur v. State (Govt. of NCT of  Delhi) and another (1999 (8) SCC 728), Rajesh Bajaj v. State NCT  of Delhi and others AIR 1999 SC 1216).          These aspects were also highlighted in State of Karnataka v.  M. Devendrappa and another (2002 (3) SCC 89).  

       It is to be noted that the investigation was not complete  and at that stage it was impermissible for the High Court to look  into materials, the acceptability of which is essentially a matter  for trial. While exercising jurisdiction under Section 482 of the  Code, it is not permissible for the Court to act as if it was a  trial Judge. Even when charge is framed at that stage, the Court  has to only prima facie be satisfied about existence of sufficient  ground for proceeding against the accused.  For that limited  purpose, the Court can evaluate material and documents on records  but it cannot appreciate evidence.  The Court is not required to  appreciate evidence to conclude whether the materials produced are  sufficient or not for convicting the accused.  In Chand Dhawan  (Smt.) v. Jawahar Lal and Ors. (1992 (3) SCC 317), it was observed  that when the materials relied upon by a party are required to be  proved, no inference can be drawn on the basis of those materials  to conclude the complaint to be unacceptable.  The Court should  not act on annexures to the petitions under Section 482 of the  Code, which cannot be termed as evidence without being tested and  proved.  When the factual position of the case at hand is  considered in the light of principles of law highlighted, the  inevitable conclusion is that the High Court was not justified in  quashing the investigation and proceedings in the connected case  (Crime No. 116/94) registered by the Special Police Establishment,  Lokayukt, Gwalior. We set aside the impugned judgment. The State  shall be at liberty to proceed in the matter further.

       By interfering with the impugned order, it shall not be  construed as if we have expressed any opinion on the merits of the  case.

       The appeal is allowed accordingly.

+ 5 3017 1997 5 2696-2697 2003