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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.  

There was a partnership firm by the name M/s Associated

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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

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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

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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

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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

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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

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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.  

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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,

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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

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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

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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

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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

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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

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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.

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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

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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

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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

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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

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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

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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”  

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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

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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

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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.   

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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,

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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

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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

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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

28  

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

29  

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

30  

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.