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PETITIONER: R.S. NAYAK

       Vs.

RESPONDENT: A.R. ANTULAY & ANR.

DATE OF JUDGMENT17/04/1986

BENCH: BHAGWATI, P.N. (CJ) BENCH: BHAGWATI, P.N. (CJ) MISRA RANGNATH

CITATION:  1986 AIR 2045            1986 SCR  (2) 621  1986 SCC  (2) 716        1986 SCALE  (1)745  CITATOR INFO :  RF         1988 SC1531  (143)  RF         1992 SC1701  (9)

ACT:      Criminal Procedure Code, 1973      Sections 245(1)  and 246  - Whether  a charge should be framed against  the accused  or not  - Test of ’prima facie’ case to be applied.      Sections 227, 239 and 245 - Comparison between.      Indian Penal Code, 1860      Sections 161  and 165  - Scope and difference between - Motive or reward for abuse of office - Relevancy of.      Sections  415   and  420   -  Ingredients  of  Cheating explained.      Sections 383 and 384 - "extortion" - Ingredients of.      Prevention of  Corruption Act, 1947, s. 4 - Presumption raised under  s. 4 is a presumption of law - It will have to be drawn  against an  accused once  acceptance of a valuable thing by him is proved.

HEADNOTE:      The respondent  was at the relevant time Chief Minister of  the   State  of  Maharashtra.  The  appellant  lodged  a complaint on  August 9, 1982 alleging commission of offences by the respondent punishable under ss. 161, 165, 384 and 420 read with  s. 120B,  Indian Penal  Ccie as also s. 5(2) read with s.  5(1)(d) of the Prevention of Corruption Act. It was alleged in  the complaint  that the respondent, as the Chief Minister of the State, had created seven Trusts, one of them being Indira  Gandhi Pratishthan  shown to  be a  Government Trust and  that  he  extended  favours  to  those  who  made donations to  the said trusts. In all the trusts, except the Indira Gandhi  Pratibha  Pratishthan,  the  respondent,  his wife,  close   relations  and  friends  were  associated  as trustees. 622      The complaint  was registered as Special Case No. 24/82 and was  transferred to  the High  Court of Bombay for trial under an  order of  this Court  dated Feb.  16, 1984. Fifty- seven witnesses  for prosecution  were examined  before  the Trial Judge  and  43  draft  charges  were  placed  for  his consideration. The  prosecution examined  specific witnesses

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with reference  to  the  allegations  supporting  the  draft charges and  documents were  also produced  to  support  the allegations. The  Trial Judge  framed 21 charges against the respondent and discharged him in respect of the remaining 22 charges relating  to the  offence of cheating, extortion and conspiracy.      The appellant, aggrieved by the order refusing to frame charges on  22 heads  by the  Trial Judge, filed the present Criminal Appeal by Special Leave.      Allowing the appeal in part, ^      HELD :  (By the  Court) 1.1 A prima facie case has been established by the prosecution in respect of the allegations for charges  under ss.  120B, 161  and 165  and 420, IPC, as also under  s. 5(1)  read with s. 5(2) of the Act. So far as the three  draft charges  relating to the offence punishable under s. 384, IPC are concerned, the learned Trial Judge was right in  holding that  the prosecution failed to make out a prima facie  case. Therefore,  except in regard to the three draft charges  under s.  384, IPC, charges in respect of the remaining 19 items shall be framed. The appeal is allowed to that extent. [696 D-F]      1.2 It  is still open to the Trial Judge to consider on the material  available,  if  anyone  has  to  be  proceeded against as  a co-conspirator  when the  charge of conspiracy punishable under  s. 120-B,  IPC is  framed. Under s. 319 of the Code  de novo trial would be necessary, but it is in the discretion of  the Trial  Court to  take a  decision  as  to whether keeping  all aspects in view any other person should be brought  in as  an accused  to be  tried for  any of  the offences involved  in the  case. This  is a  matter  in  the discretion of the trial court. [697 F-H] Per Ranganath Misra, J. (Bhagwati, C.J. Concurring)      2.1 The Code of Criminal Procedure contemplates 623 discharge of  the accused  by the Court of Sessions under s. 227 in  a case triable by it, cases instituted upon a police report are  covered by s. 239 and cases instituted otherwise than on  police report  are dealt  with in s. 245. The three sections contain  somewhat different provisions in regard to discharge of  the accused.  Under s. 227, the trial Judge is required to  discharge the  accused if  he  "considers  that there is  no sufficient  ground for  proceeding against  the accused." Obligation  to discharge  the accused under s. 239 arises when "the Magistrate considers the charge against the accused  to  be  groundless."  The  power  to  discharge  is exercisable under  s. 245(i)  when "the Magistrate considers for reasons to be recorded, that no case against the accused has been  made out  which, if  unrebutted, would warrant his conviction." [677 B-E]      2.2 Sections  227 and  239 provide  for discharge being ordered  before   the  recording   of   evidence   and   the consideration as  to whether  charge has to be framed or not is required  to be  made on  the basis  of the record of the case, including  documents and  oral hearing  of the accused and the prosecution or the police report, the documents sent along with  it and  examination of  the  accused  and  after affording an opportunity to the two parties to be heard. The stage for  discharge under  s. 245,  on the  other hand,  is reached only  after the  evidence referred  to in s. 244 has been taken.  Notwithstanding this difference in the position there is  no scope  for doubt  that the  stage at  which the Magistrate is  required to  consider the question of framing of charge  under s. 245(1) is a preliminary one and that the test of  "prima facie"  case has  to be applied. In spite of

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the difference  in the  language of  the three sections, the legal position  is that if the Trial Court is satisfied that a prima  facie case  is made  out, charge  has to be framed. Therefore, in order to decide whether the order of discharge should be  sustained or  set aside, the Supreme Court has to consider whether  on the  material on  record, a prima facie case has been made out on behalf of the prosecution. [677 E- G]      Mehant Abhey  Dass v.  S. Gurdial  Singh & Ors., A.I.R. 1971 S.C.  834; State  of Bihar  v. Ramesh  Singh, [1978]  1 S.C.R. 257;  Nirmaljit Singh  Hoon v. State of West Bengal & Anr., [1973]  2 S.C.R.  66; Chandra  Deo  Singh  v.  Prakash Chandra Bose,  [1964]  3  S.C.R.  629;  Union  of  India  v. Prafulla Kumar  Samal  &  Anr.,  [1979]  2  S.C.R.  229  and Superintendent and Remembrancer 624 of Legal  Affairs, West  Bengal v. Anil Kumar Bhunia & Ors., [1979] 4 S.C.C. 274, relied upon.      In the  instant case, the oral evidence is backed up by documentary evidence.  Some of  the relevant  documents have interpolations and the inquiry relating to interpolation has not become  final. It  is indeed  difficult at this stage to say that  the evidence as a whole is inadequate to establish the prima  facie case. The learned Trial Judge, extracted at great length  both the oral evidence as also the contents of documents but  there was  not much  of analysis  to  justify rejection of  the material.  The learned Trial Judge adopted two different  standards in  the matter of weighing the same evidence when  he agreed  to frame  21  charges  which  were inter-linked  and   interconnected  with  the  rest  of  the prosecution story  with reference to which the draft charges had been  given. If  the evidence  was accepted for half the number of  charges relating to similar offences, there could hardly  be  any  scope  to  reject  the  22  draft  charges. Similarly in  regard to  the charge  of conspiracy the facts were inter-connected  and there could be no justification to reject the  charge even if the other persons implicated were not before  the court.  The reasoning  given by  the learned Trial Judge  in support  of his order of discharge in regard to the draft charges relating to ss. 161 and 165, IPC and s. 5(2)  read  with  s.  5(1)  of  the  Act,  concerning  these transactions cannot,  therefore, be sustained. [683 D-H; 684 A-B]      3.1 Under s. 245(i) of the Code the requirement is that the evidence  must be  such  which  if  not  rebutted  would warrant conviction of the accused. Under the law of evidence the  concept   of  rebuttable   presumption  is  well-known. Rebuttable presumptions  of law  are a result of the general experience of  a connection  between certain facts or things one being  usually bound  to be  companion or  effect of the other. The  connection, however,  in this  class is  not  so intimate or  so uniform  as to  be conclusively  presumed to exist in  every case; yet, it is so done that the law itself without the  aid of  a jury  infers one  fact from the crude existence of  the other in the absence of opposing evidence. In this  mode, the law advances the nature and amount of the evidence which is sufficient to establish a prima facie case and throws  the burden of proof upon the other party; and if no opposing  evidence is offered, the jury are bound to find in favour of the presumption. A contrary verdict 625 might be  set aside  as being against evidence. The rules in this class  of presumptions  as  in  the  former  have  been adopted by  common consent from motives of public policy and for the  promotion of  the general  good; yet  not as in the

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former  (conclusive  proof)  class  forbidding  all  further evidence but  only dispensing  with it  till some  proof  is given on  the other  side to  rebut the  presumption raised. Thus, as  men do  not generally  violate the Penal Code, the law presumes  every man  to be  innocent; but  some  men  do transgress it;  and therefore, evidence is received to repel this presumption. [684 B-G]      3.2 The presumption raised under s. 4 of the Prevention of Corruption  Act is  a presumption of law which a court is bound to draw, once it is proved that the accused Government servant  received  or  obtained  a  valuable  thing  in  the circumstances mentioned in that section. [685 E]      In the  instant case,  the learned  Trial Judge  should have proceeded  to scan  the evidence  keeping in  view  the concept of  rebuttable presumption.  He also  failed to take note of s. 4 of the Act while dealing with the charges under ss. 161  and 165, IPC as also s. 5(1)(a) and (b) of the Act. It is  hoped that  while dealing  with the  case  after  the framing of  the charges,  the learned  Trial Judge will keep this legal position in mind and act accordingly. [685 F-G]      The State  of Madras  v. A.  Vaidyanatha  Iyer,  [1958] S.C.R. 580 and K. Satwant Singh v. State of Punjab, [1960] 2 S.C.R. 592, referred to.      4.1 The  main ingredients  of the  charge under s. 161, IPC are :      (i) that the accused was a public servant, (ii) that he must  be   shown  to  have  obtained  from  any  person  any gratification other  than legal remuneration; and (iii) that the gratification  should be as a motive or reward for doing or forbearing  to do  any official  act or  for  showing  or forbearing  to   show,  in  the  exercise  of  his  official function, favour  or disfavour to any person. [685 H; 686 A- C]      Ordinarily,  when   the  first   two  ingredients   are established by  evidence, a rebuttable presumption arises in respect of the third. [686 C] 626      4.2 For  an offence  under s.  165, IPC,  the essential ingredients are  : (i)  the accused  was a  public servant ; (ii) he accepted or obtained or agreed to accept or obtain a valuable thing  without consideration  or for  an inadequate consideration knowing it to be inadequate ; (iii) the person giving the thing must be a person concerned or interested in or related  to the  person concerned  in any  proceeding  or business  transacted  or  about  to  be  transacted  by  the government  servant   or  having  any  connection  with  the official of  himself or  of any public servant to whom he is subordinate; and  (iv) the  accused must have knowledge that the person giving the thing is so concerned or interested or related. [686 C-G]      4.3 Section  165 is  so worded  as to  cover  cases  of corruption which  do not  come within  ss. 161,  162 or 163. Indisputably the  field under  s. 165  is wider.  If  public servants are  allowed  to  accept  presents  when  they  are prohibited under a penalty from accepting bribes, they would easily circumvent  the prohibition by accepting the bribe in the  shape   of  a   present.  The  difference  between  the acceptance of  a bribe made punishable under s. 161 and 165, IPC is that under the former section the present is taken as a motive  or reward  for abuse  of office;  under the latter section  the   question  of   motive  or  reward  is  wholly immaterial and  the acceptance  of a  valuable thing without consideration or with inadequate consideration from a person who has  or is likely to have any business to be transacted, is forbidden  because though not taken as a motive or reward

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for showing  any official  favour, it is likely to influence the public  servant to  show official  favour to  the person giving such valuable thing. [686 G-H; 687 A-C]      4.4 The  provisions of ss. 161 and 165 IPC as also s. 5 of the Act are intended to keep the public servant free from corruption and thus ultimately ensure purity in public life. [687 C]      In the  instant case,  the evidence,  therefore, should have been judged keeping these aspects in view. [687 C]      5. The  main ingredients of the offence of extortion in s. 383,  IPC are  : (i)  the accused  must put any person in fear of  injury to that person or any other person; (ii) the putting of a person in such fear must be intentional ; (iii) the 627 accused must  thereby induce  the person  so put  in fear to deliver to  any person  any property,  valuable security  or anything signed  or sealed  which may  be converted  into  a valuable security;  and (iv)  such inducement  must be  done dishonestly. [690 E-H]      Before a  person can  be said to put any person to fear of any  injury to  that person,  it must  appear that he has held out  some threat to do or omit to do what he is legally bound to  do in future. If all that a man does is to promise to do  a thing  which he is not legally bound to do and says that if money is not paid to him he would not do that thing, such act  would not  amount to an offence of extortion. [691 A-B]      Habibul Razek  v. King  Emperor, A.I.R.  1924 All  197, relied upon.      In the  instant case,  there is  no evidence  at all to show that  the managements  of the  sugar co-operatives  had been put  in any fear and the contributions had been paid in response to threats. Merely because the respondent was Chief Minister at  the relevant  time and  the sugar co-operatives had some  of their  grievances pending  consideration before the Government  and pressure  was brought  about to make the donations  promising   consideration  of   such  grievances, possibly by  way of  recipro-city, there is no justification that the  ingredients of  the offence of extortion have been made out. The evidence led by the prosecution falls short of the requirements  of law in regard to the alleged offence of extortion. [691 C-D]      6.1 Cheating  is defined  in s.  415 of the IPC and the ingredients for  that offence  are :  (i)  there  should  be fraudulent or  dishonest inducement of a person by deceiving him; (ii)  the person  so induced  should  be  intentionally induced to  deliver any property to any person or to consent that any  person shall  retain any  property, or  (iii)  the person so  induced should  be intentionally induced to do or to omit  to do  anything which he would not do or omit if he were not  so deceived;  and (iv)  in cases  covered  by  the second part  of the  act or  omission should  be  one  which caused or  is likely  to cause  damage or harm to the person induced in body, mind, reputation or property. [695 C-F]      6.2 Section  415 actually  consists of  two parts, each part dealing with one way of cheating - 628           (i) Where,  by deception  practised upon  a person           the accused  dishonestly or  fraudulently  induced           that person  to deliver  property to any person or           to  consent  that  any  person  shall  retain  any           property;           (ii) Where,  by deception practised upon a person,           the accused  intentionally induces  that person to

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         do or omit to do anything which he would not do or           omit to  do, if  he were not so deceived and which           act or  omission causes  or  is  likely  to  cause           damage or  harm to  that  person  in  body,  mind,           reputation or property. [695 G-H; 696 A]      In the  instant case, the learned Trial Judge failed to analyse the  evidence which he had at great length extracted keeping the proper angle of approach in view. Therefore, his conclusion is  not made  on a  proper assessment  and is not sustainable.  The  evidence,  oral  and  documentary,  taken together does  justify the  framing  of  a  charge  for  the offence under  s. 420,  IPC.  However,  the  position  is  a presumptive one open to rebuttal by the respondent. A charge under s.  420, IPC,  should, therefore,  be  framed  by  the learned Trial Judge against the respondent. [696 B-D]      7.  There  must  be  an  assumption  that  whatever  is published in the Government owned paper correctly represents the  actual   state  of  affairs  relating  to  Governmental business until  the same  is successfully challenged and the real state  of affairs is shown to be different from what is stated in the Government publication. [693 B-C]      Harpal Singh  & Anr.  v.  State  of  Himachal  Pradesh, [1981] 1 S.C.C. 560, relied upon.      Per Bhagwati, C.J. (Ranganath Misra, J. concurring)      8.1 When  the court  is considering under s. 245 sub-s. (1) of  the Code  of Criminal Procedure whether any case has been made  out against  the accused  which,  if  unrebutted, would warrant  his conviction, it is difficult to understand as to how the court can brush aside the presumption under s. 4 of  the Prevention  of Corruption Act, 1947. Sub.s. (1) of s. 4  of that  Act provides  that where  in any  trial of an offence 629 punishable under  8. 161  or 165 of the Indian Penal Code or of A  an offence referred to in cl. (a) or cl. (b) of sub-s. (1) of  8. 5  of that  Act it  is proved that an accused has accepted or  obtained or has agreed to accept or admitted to obtain  for   himself  or   for  any   other   person,   any gratification  (other   than  legal   remuneration)  or  any valuable thing from any person, it shall be presumed, unless the contrary  is proved,  that he  accepted or  obtained  or agreed to  accept or  admitted to obtain, that gratification or that  valuable thing  as a  motive or  reward such  as is mentioned  in  s.  161  or  as  the  case  may  be,  without consideration or  for a  consideration which  he knows to be inadequate. When  the  Court  is  called  upon  to  consider whether a  charge should  be framed  or not  the question to which the  Court  has  to  address  itself  is  whether  the evidence led  on behalf  of the prosecution is such that, if unrebutted, it  would justify  the conviction of the accused and the  court has, therefore, to examine the evidence as it stands without  rebuttal and come to a conclusion whether on the basis  of such  evidence the  court  would  convict  the accused and where the offence charged against the accused is under s.  161 or  s. 165  or cl. (a) or clause (b) or sub-s. (1)  or   8.  5,   the  court  must  necessarily  apply  the presumption under  8. 4  while considering  whether  on  the basis of  the unrebutted  evidence which  is before  it  the court would  convict the  accused. Therefore,  even for  the purpose of  considering whether a charge should be framed or not the  presumption under  8. 4 must be taken into account. [632 A-G]      8.2 Sections  161 and  165 of the IPC have been enacted by the  Legislature with a view to eradicating corruption in public life.  The court  must  therefore  interpret  8.  165

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according to  its plain language without in any manner being anxious or astute to narrow down its interpretation. Section 165 must  be construed  in a  manner which would advance the remedy and  suppress the  mischief which  is intended  to be curbed. [634 D-E]      R.C. Jacob  v. Union  of India,  [1963] 3  S.C.R.  800, relied upon.      8.3 Section  165 is  wider than  8. 161  and an  act of corruption not falling within s. 161 may yet come within the wide terms of s. 165. What 8. 161 envisages is that any 630 gratification other than legal remuneration should have been accepted or  obtained or  agreed to be accepted or attempted to be  obtained by  the accused for himself or for any other person as  a motive  or reward for doing or forbearing to do any official  act or  for showing  or forbearing to show, in the exercise  of his  official function, favour or disfavour to any  person, or for rendering or attempting to render any service or  disservice to  any person, while s. 165 does not require taking  of gratification  as a  motive or reward for any specific  official action, favour or service but strikes at obtaining  by a  public servant  of  any  valuable  thing without consideration  or for a consideration which he knows to be  inadequate from any person whom he knows to have been or to  be or  likely to  be concerned  in any  proceeding or business transacted or about to be transacted by such public servant or having any connection with the official functions of  himself   or  of  any  public  servant  to  whom  he  is subordinate or  from whom  any person  whom he  knows to  be interested in or related to the person so concerned. Whereas under s. 161 it is necessary to establish that the taking of gratification must  be connected  with any specific official action, favour  or service  by way  of motive  or reward, no such connection  is necessary to be proved in order to bring home an  offence under  s. 165  and all that is necessary to establish is  that a  valuable thing is accepted or obtained or agreed  to be  accepted or  attempted to be obtained by a public servant from any person whom he knows to have been or to be  likely to  be concerned in any proceeding or business transacted or  about to be transacted by such public servant or having  any connection with the official function of such public servant  and such valuable thing has been accepted or obtained without  consideration or for a consideration which such public servant knows to be inadequate. [634 F-H; 635 A- E]      The reach of s. 165 is definitely wider than that of s. 161. Moreover,  it is  clear from illustration (c) to s. 165 that money  or currency  is regarded by the Legislature as a valuable thing and if it is accepted or obtained by a public servant   without    consideration   or    for    inadequate consideration in  the circumstances  set out in s. 165, such public servant  would be  guilty of  an offence  under  that section. [635 E-F]

JUDGMENT:      CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 658      of 1985. 631 From the  Judgment and Order dated 23/24/29/30th April, 1985 of the Bombay High Court in Special Case No. 24 of 1982.      Ram Jethmalani,  M.V.  Katarke,  Jai  Singhani,  Mahesh Jethmalani, K.N.  Ma Madhusoodhanan  Satish  Maneshinde  and Ms.Rani Jethmalani for the Appellants

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    L.N. Sinha, P.P. Rao, S.B. Bhasme, R.D. Ovalekar, D.R. Gadgil, Miteen  V. Pradhan,  Rajendra S. Desai, V.M. Kanade, Mahesh Rajedhyaksha, P.P. Singh, A.S. Bhasme, A.M Khanwilkar and M.N. Shroff for the Respondents.      The following Judgments of the Court were delivered C      BHAGWATI, C.J.  I agree  with the  judgment about to be delivered by  my learned brother Ranga Nath Misra, but there are some  two or  three charges  in regard to which I should like to  make more detailed observations since they have not been dealt fully by my learned brother and he has left it to me to  consider them  in some  detail. Since  the genesis of this appeal has been set out by my learned brother at length I do not propose to repeat what has been so ably said by him and I  will confine myself only to the facts relating to the charges which  are going to be dealt with by me But I may be permitted to  say a  few words in regard to two points which have been  discussed by  my learned  brother in his judgment since  they   are  of   some  importance   and  can  without impropriety bear further discussion.      The first  point arises  out of  a contention raised by the  learned  counsel  appearing  on  behalf  of  the  first respondent (hereinafter  referred to  as  the  ’respondent’) that the  presumption under  Section 4  of the Prevention of Corruption Act  1947 applies  only after  a charge is framed against an  accused and has no application at the stage when the court  is considering  the  question  whether  a  charge should be framed or not. It is said in geometry that a point has position  but no  magnitude, but  we are  constrained to observe that  this point  raised  on  behalf  of  the  first respondent has  not  only  no  magnitude  but  has  even  no position. It  is wholly  without substance  and indeed it is surprising that  it should  have been  raised by the learned counsel appearing on behalf of the first 632 respondent. When  the court is considering under Section 245 sub-section (1)  of the  Code of  Criminal Procedure whether any case  has been  made out  against the  accused which  if unrebutted would  warrant his conviction, it is difficult to understand  as   to  how  the  court  can  brush  aside  the presumption under  Section 4 of the Prevention of Corruption Act, 1947. Sub-section (1) of Section 4 of that Act provided that where  in any  trial of  an  offence  punishable  under Section 161 or Section 165 of the Indian Penal Code or of an offence referred  to in  clause (a)  or clause  (b) of  sub- section (1)  of Section  5 of  that Act it is proved that an accused has  accepted or obtained or has agreed to accept or admitted to  obtain for himself or for any other person, any gratification  (other   than  legal   remuneration)  or  any valuable thing from any person, it shall be presumed, unless the contrary  is proved,  that he  accepted or  obtained  or agreed to  accept or submitted to obtain, that gratification or that  valuable thing  as a  motive or  reward such  as is mentioned in  Section 161  or as  the case  may be,  without consideration or  for a  consideration which  he knows to be inadequate. When  the  court  is  called  upon  to  consider whether a  charge should  be framed  or not  the question to which the  court  has  to  address  itself  is  whether  the evidence led  on behalf  of the  prosecution is such that if unrebutted it  would justify  the conviction  of the accused and the  Court has, therefore, to examine the evidence as it stands without  rebuttal and come to a conclusion whether on the basis  of such  evidence the  court  would  convict  the accused and where the offence charged against the accused is under Section 161 or Section 165 or clause (a) or clause (b) of sub-section  (1) of  Section 5 the Court must necessarily

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apply the  presumption under  Section  4  while  considering whether on  the basis  of the  unrebutted evidence  which is before it  the court  would convict  the accused.  We do not therefore see  any substance  in the  contention  raised  on behalf of  the first  respondent  and  we  must  proceed  to dispose of  this appeal  on the  basis  that  even  for  the purpose of  considering whether a charge should be framed or not the  presumption under  Section 4  must  be  taken  into account.      The second  point on which considerable controversy was raised before  us related  to the scope and ambit of Section 165 of  the Indian  Penal Code.  I  agree  with  my  learned brother that it may not be desirable at this stage to define the precise 633 ambit and  coverage of  Section 165 because that is a matter which will  have to be considered by the Nigh Court in depth when the  case goes back before the High Court and the first respondent is  called upon  to face his trial on the charges framed against  him. But  it is  necessary to  indicate  the broad parameters  of Section  165 and to emphasize the basic distinction which  exists between  that Section  and Section 161. It  may be  pointed out  straight away  that these  two sections have been enacted by the Legislature with a view to eradicating corruption in public life. We may usefully quote here the following pertinent observations made by this Court in Re  Special Courts Bill which came by way of Presidential Reference and which is reported in 1979 (2) S.C.R. 476           "....As I  read it,  this measure is the embryonic           expression of  a necessitous  legislative project,           which, if  full-fledged, will  work  a  relentless           break-through  towards   catching,   through   the           compulsive   criminal    process,    the    higher           inhabitants of  Indian public and political decks,           who have  in practice,  remained ’untouchable’ and           ’unapproachable’ to  the rule  of law.  ’Operation           Clean  Up’  is  a  ’consummation  devoutly  to  be           wished’, although  naive optimism cannot obfuscate           the  obnoxious   experience  that   laws  made  in           terrorem against those who belong to the top power           bloc prove  in action  to  be  paper  tigers.  The           pathology of our public law, with its class slant,           is that  an unmincing ombudsman or sentinel on the           qui vive with power to act against those in power,           now or  before, and  offering legal  access to the           informed citizen  to complain  with immunity  does           not exist,  despite all  the  bruited  umbrage  of           political  performers   against  peculations   and           perversions by  higher echelons.  Law is  what law           says and  the moral  gap  between  word  and  deed           menaces people’s  faith in life and law. And then,           the tragedy - democracy becomes a casualty."           "The impact  of ’summit’ crimes in the Third World           setting  is   more  terrible  than  the  Watergate           syndrome  as  perceptive  social  scientists  have           unmasked.  Corruption  and  repression-cousins  in           such  situations-hijack  developmental  processes.           And, in 634           the long  run, lagging national progress means ebb           ing peop1e’s confidence in constitutional means to           social justice.  And so,  to track  down and  give           short shrift  to these  heavy-weight  criminaloids           who often  mislead  the  people  by  public  moral           weight lifting  and multipoint  manifestoes is  an

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         urgent legislative mission partially undertaken by           the Bill  under discussion.  To punish  such super           offenders in top positions, sealing off legalistic           escape routes and dilutory strategies and bringing           them  to   justice  with   high  speed  and  early           finality, is  a  desideratum  voiced  in  vain  by           Commissions and  Committees in  the past  and is a           dimension of  the dynamics of the Rule of Law.....           " The Court  must therefore interpret Section 165 according to its plain  language without  in any  manner being anxious or astute to  narrow down  its interpretation. Section 165 must be construed  in a manner which would advance the remedy and suppress the  mischief which  is intended to be curbed. This was the  canon of  construction which  was adopted  by  this Court in  interpreting Section 165 in R.C. Jacob v. Union of India, [1963]  3 S.C.R.  800. There  are a  few decisions of ancient vintage  which have dealt with the interpretation of Section 165  but since  we are  not finally  laying down the true scope  and ambit  of Section  165 we  do not propose to discuss these  decisions. Suffice  it to  point out  at  the present stage  that on  its plain terms Section 165 is wider than Section  161 and  that an act of corruption not falling within Section  161 may  yet come  within the  wide terms of Section  165.   What  Section  161  envisages  is  that  any gratification other than legal remuneration should have been accepted or  obtained or  agreed to be accepted or attempted to be  obtained by  the accused for himself or for any other person as  a motive  or reward for doing or forbearing to do any official  act or  for showing  or forbearing to show, in the exercise  of his  official function, favour or disfavour to any  person, or for rendering or attempting to render any service or  disservice to any person, while Section 165 does not require  taking of  gratification as  a motive or reward for any  specific official  action, favour  or  service  but strikes at  obtaining by  a public  servant of  any valuable thing without  consideration or for a consideration which he knows to be inadequate, from any person whom he knows 635 to have  been or  to be  or likely  to be  concerned in  any proceeding or  business transacted or about to be transacted by such  public servant  or having  any connection  with the official functions  of himself  or of  any public servant to whom he is subordinate or from whom any person whom he knows to be  interested in  or related to the person so concerned. Whereas under  Section 161 it is necessary to establish that the taking  of gratification  must  be  connected  with  any specific official action, favour or service by way of motive or reward,  no such  connection is necessary to be proved in order to  bring whom  an offence  under Section  165 and all that is  necessary to  establish is that a valuable thing is accepted or  obtained or  agreed to be accepted or attempted to be  obtained by  a public servant from any person whom he knows to  have been  or to  be likely to be concerned in any proceeding or  business transacted or about to be transacted by such  public servant  or having  any connection  with the official function  of such  public servant and such valuable thing has been accepted or obtained or agreed to be accepted or attempted  to be  obtained without consideration or for a consideration  which   such  public   servant  knows  to  be inadequate. The  reach of  Section 165  is definitely  wider than that  of  Section  161.  Moreover,  it  is  clear  from illustration (c)  to Section  165 that  money or currency is regarded by the Legislature as a valuable thing and if it is accepted  or   obtained  by   a   public   servant   without

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consideration  or   for  inadequate   consideration  in  the circumstances set  out in  Section 165,  such public servant would be guilty of an offence under that Section Having said this much  on the  interpretation  of  Section  165  we  now proceed to  examine the facts on the basis of which the High Court has  declined to  frame certain  charges  against  the first respondent.      We will  first deal with the 35th, 36th and 37th of the draft charges  which were  submitted by  the learned counsel for the  appellant before the High Court and on the basis of which the  High Court  was invited  by him  to frame charges against the  first respondent  These charges  related  to  a transaction in  which according  to the  appellant, a sum of Rs. 8 lakhs was paid by one Ramesh Merchant and his partners by way of contribution to Indira Gandhi Pratibha Pratishthan on 16th  April 1981  as a  motive for  the  granting  of  no objection certificate  by the  first respondent  for letting out of  certain premises  by M/s Nanubhai Jewellers of which Ramesh Merchant 636 and some  others were  partners to Indo-Suez Bank. The facts giving rise  to these  charges in  so far as relevant may be briefly stated as follows.      There was  a firm  called M/s  Nanubhai Jewellers which was in  possession of  certain ground floor premises situate at 113/  115, Mahatma Gandhi Road, Fort, Bombay as a tenant. There were  various changes in the constitution on this firm from time  to time  but we  are  not  concerned  with  these changes in  the present  appeal. What is material to note is that at  the relevant  time this  firm consisted  of  Mukesh Dadlani, Lal Chand Rohra, Ramesh Merchant his father and two other partners. The rent payable by this firm was originally Rs. 3000  per month but under a new agreement of lease dated 27th September  1979 the  rent was  raised to  Rs. 15000 per month in consideration of the landlords giving to the tenant power to  sub-let the  premises. It seems that since 1979-80 this firm  was incurring losses and was not in a position to make use  of the  premises for its own purposes and hence it decided to sub-let the entire premises barring about 500 sq. ft. to  Indo-Suez Bank at a monthly rent of Rs. 1,24,120 and an agreement  of lease was entered into between them on 12th December 1980. But it was not possible for this firm to sub- let the  premises to  Indo-Suez Bank  without a no objection certificate from  the Controller of Accommodation in view of the Bombay  Land Requisition  Act 1948. The partners of this firm therefore  made an  application to  the  Controller  of Accommodation on  13th January  1981 pointing  out that  the Indo Suez  Bank had  approached them with a request to allow them to  use the  premises for  the purpose of opening their branch office in Bombay and that it would be advantageous to the country  to make  it possible  for the Indo-Suez Bank to open a  branch  office  and  requesting  the  Controller  of Accommodation "to  grant the necessary permission........... to permit  the Bank to use the premises on sub-lease basis". Though this  application was  dated 13th  January  1981,  it appears from the endorsement made on the application that it was  received   in  the   office  of   the   Controller   of Accommodation on  11th February  1981.  Thereafter  on  19th February 1981  an officer  from the office of the Controller of Accommodation  visited the premises and certain documents relating to  the partnership  of M/s Nanubhai Jewellers were handed over  by Lal  Chand Rohra  and the  father of  Ramesh Merchant to such officer. They also handed over to 637 such officer  copies of the rent receipts for November, 1973

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and November,  1980 as also a Xerox copy of the registration certificate  of   the  firm   under  the  Bombay  Shops  and Establishments Act.  Ramesh Merchant  several times  went to the office  of  the  Controller  of  Accommodation  for  no- objection certificate  but he  was told that the application was under  process.  Now  the  record  shows  that  on  14th February, 1981  a noting  was made  in the  file  seeking  a direction whether  suppressed vacancy inquiry should be made to ascertain  whether the premises could be requisitioned as a suppressed vacancy or whether the no objection certificate should be  granted. Further  inquiry was  thereupon made for the purpose  of determining  whether there  was a suppressed vacancy in  respect of  the premises  and after such inquiry was completed  a further  noting was  made on 2nd March 1981 recommending that  in view  of the  facts set  out  in  that noting "it is for orders whether we may consider the request and grant"  the no  objection certificate in this case. Shri Rawat, who was an Accommodation Officer, made an endorsement on  the  foot  of  his  further  noting  pointing  out  that according to  the inquiry  made by the office no vacancy had actually occurred  at any time in the premises and there was accordingly no  suppressed vacancy  and moreover only a part of the  premises was  proposed to  be sub-let by the firm of M/s Nanubhai  Jewellers and  hence the premises could not be requisitioned as  a suppressed  vacancy and  consequently no objection certificate  might be granted. The file containing these  notings  thereafter  went  to  the  Additional  Chief Secretary who  also placed  his signature below that of Shri Rawat indicating  his agreement with the endorsement made by Shri Rawat.  The date  below the signature of the Additional Chief Secretary  is a little doubtful but we can safely take it to  be 2nd  March F 1981 since there is an endorsement at the bottom of the page showing that the file was received in the Secretariat  of the  Additional Chief  Secretary on 12th March  1981   and  obviously   it  must  have  gone  to  the Secretariat to  the  Chief  Minister  after  making  of  the endorsement by  the Additional  Chief Secretary. The page of the file  containing the  endorsement  of  Shri  Rawat  also contains in  red  ink  an  endorsement  made  by  the  first respondent and  this endorsement reads "in view of "lA", "B" may be  done" and below this endorsement is the signature of the first respondent and below that is the date which presently reads 16/3. We shall revert to this endorsement of the first  respondent a  little later  when we   examine the arguments urged on behalf of the parties. 638      Now according  to the  evidence of  Ramesh Merchant  he came to  know from the staff of the office of the Controller of Accommodation  in the first week of April, 1981 that file rebting to  their application  for no  objection certificate had been  forwarded to the first respondent. Ramesh Marchant knew the first respondent quite-well since he and his father had been  stitching clothes for the first respondent. Ramesh Merchant therefore,  after consulting  his partners, went to the residence  of the first respondent a day or two after he received the  above  information  that  the  file  had  been forwarded to the first respondent. Ramesh Merchant stated in his evidence  that he  told the  first respondent  about the application for permission made on behalf of the firm of M/s Nanubhai Jewellers  and requested  the first  respondent  to sanction grant  of no  objection certificate stating that he and his  father  were  partners  in  that  firm.  The  first respondent stated  that he knew that the file of the firm of M/s Nanubhai Jewellers had been forwarded to him and that Lf the premises  were to  be given  to a Bank there could be no

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objection to  grant of a no objection certificate. The first respondent,  however,  asked  Ramesh  Merchant  "to  make  a handsome donation to the Indira Gandhi Pratibha Pratishthan" and when  Ramesh Merchant  asked the  first respondent as to how much  he would like them to donate, the first respondent asked  Ramesh  Marchant  to  donate  Rs.  10  lakhs.  Ramesh Merchant thereupon  pointed out to the first respondent that there was  a registered  agreement between the Government of India and the Government of France whereunder the Government of France  had permitted the State Bank of India to open its Branch at Paris and the Government of India had consequently permitted Indo-  Suez Bank  to open its Branch at Bombay and he accordingly  requested the  first respondent  "to name  a reasonable  amount  for  donation".  The  first  respondent, according to  the evidence of Ramesh Merchant considered his request sympathetically and asked him to donate Rs. 8 lakhs. Ramesh Merchant  thereupon told the first respondent that he would consult  his other  partners and  let him know. Ramesh Merchant thereafter  contacted Lal  Chand  Pohra  and  other partners and  told them that he had met the first respondent in connection with the grant of no objection certificate and the first  respondent had  demanded Rs.  10 lakhs for the no objection certificate  but it was ultimately agreed that the firm of  M/s Nanubhai Jewellers would pay Rs; 8 lakhs by way of donation to a Government Trust namely Indira Gandhi 639 Pratibha Pratishthan.  Lal Chand  Rohra  and  other  parties agreed to  donate the amount of Rs. 8 lakhs to Indira Gandhi Pratibha Pratishthan  and a  cheque  for  Rs.  8  lakhs  was accordingly issued  by the  partners  of  the  firm  of  M/s Nanubhai Jewellers.  Ramesh Merchant took this cheque to the first respondent  at his residence on 16th April 1981 and on being informed  that a  cheque had  been brought  the  first respondent called  one of  his secretaries  and asked Ramesh Merchant to  hand-over the  cheque to  him. Ramesh  Merchant accordingly handed  over the  cheque for  Rs. 8 lakhs to the Secretary. Ramesh Merchant was at this stage in his evidence asked  the   following  question   by  the  learned  counsel appearing on behalf of the appellant.      What did  the accused  tell you  about the NOC ? and to this question  the following  answer  was  given  by  Ramesh Merchant :      "The accused  told me that the needful would be done in      the matter." Ramesh  Merchant  reiterated  in  cross-examination  by  the learned counsel appearing on behalf of the first respondent:      "After I handed over the cheque the accused stated that      he will do the needful in the matter." The no  objection certificate  was thereafter  issued by the office of  the Controller  of Accommodation  on  18th  April 1981. On these facts the learned counsel appearing on behalf of the  appellant submitted that offences under Section 161, 165 of  the Indian  Penal Code  and Section  5(2) read  with Section 5(1)  (d) of  the Prevention  of Corruption Act 1947 were clearly  made out on behalf of the prosecution so as to warrant the framing of charges for the said offences against the first respondent.      It  is  clear  from  the  cross-examination  of  Ramesh Merchant by  the learned  counsel on  behalf  of  the  first respondent that  the case  of the  first respondent was that Ramesh Merchant  had not  gone to visit the first respondent on either  at the  two occasions  depose to  by him  nor had Ramesh Merchant  offered the  cheque of  Rs. 8  lakhs to the Chief Minister  but that  the cheque of Rs. 8 lakhs was sent by the  father of Ramesh Merchant directly to the Secretary,

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Indira Gandhi Pratibha 640 Pratishthan along  with a  letter dated 16th April 1981. The learned counsel  for the first respondent contended that the donation of  Rs. 8  lakhs by the partners of the firm of M/s Nanubhai Jewellers to Indira Gandhi Pratibha Pratishthan had nothing to do with the grant of no objection certificate and that the  two were  totally distinct transactions not having any connection  with each  other. The  order of  grant of no objection certificate  to the firm of M/s Nanubhai Jewellers had  according   to  the   learned  counsel  for  the  first respondent already been made by the first respondent on 16th March 1981 and for this purpose he relied on the endorsement in red ink made by the first respondent in the file relating to the  grant of  no objection  certificate at the bottom of the page  containing the  endorsement  of  Shri  Rawat.  The argument of the learned counsel for the first respondent was that if  the order for grant of no objection certificate had already been made by the first respondent on 16th March 1981 there could  possibly be  no connection between the grant of no objection  certificate and  the donation  of Rs.  8 lakhs which came to be independently made on 16th April 1981. This argument is  prima facie specious and does not appeal to us. We do  not see any reason why for the purpose of considering whether  a   charge  should  be  framed  or  not  we  should disbelieve the  evidence of  Ramesh  Merchant  and  Lalchand Rohra. What  we have to consider is whether the evidence led on behalf  of the  complainant in regard to this transaction is such that if unrebutted that would warrant the conviction of the  first respondent.  We are clearly of the view that a prima facie  case  has  been  made  out  on  behalf  of  the prosecution and the evidence led before the court is such as to warrant  the conviction  of the  first respondent  unless satisfactorily rebutted.      The first question that we must consider is whether the endorsement  sanctioning   the   grant   of   no   objection certificate to  the firm  of M/s Nanubhai Jewellers was made by the first respondent on 16th March 1981 or it was made on 16th April  1981 but the figure "16/4" below the endorsement of the  first respondent was at some stage tempered with and altered to  "16/3" by  overwriting the  figure "3"  over the original figure  "4". This  is not  the stage to come to any definite finding  on this question because after the charges are framed,  evidence may  have to  be led  on behalf of the prosecution for  the purpose  of establishing overwriting of the figure "4" by the 641 figure "3"  and the  first  respondent  may  also  lead  the evidence to  show that  there  is  no  overwriting  and  the original figure always was "3". But while we are considering the prima  facie case  made out against the first respondent we cannot  help observing  that  it  does  appear  from  the original endorsement in red ink made by the first respondent at the  bottom of  the relevant page in the file (Ex. 815(D) that figure "3" has been thickly written over another figure which was  presumably "4".  The possibility  cannot be ruled out that  the original date below the endorsement was "16/4" and the figure "4" was overwritten by figure "3" with a view to showing  as if  the endorsement  was made  on 16th  March 1981. This possibility does seem to receive support from the circumstance that, as appearing from the stamped endorsement on the  last page  of the  file (Ex.  815(D), the  file  was received  back   in  the   office  of   the  Controller   of Accommodation on  18th April  1981. It is a little difficult to  understand  that,  if  the  first  respondent  made  his

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endorsement in red ink sanctioning the grant of no objection certificate on  16th March  1981, the  file should  not have gone back  to the  Controller of  Accommodation  until  18th April 1981. It is perhaps more probable that the endorsement in red  ink was  made by  the first respondent on 16th April 1981 and  immediately thereafter  the file was sent back and received in the office of the Controller of Accommodation on 18th April  1981. There is also one other endorsement at the bottom of  the page  (Ex. 815(D)  which says  "Secretary has seen  it"   and  it   bears  the   date  "18/4".  All  these circumstances  do  go  to  indicate  prima  facie  that  the endorsement in red ink sanctioning the grant of no objection certificate was  made by  the first respondent on 16th April 1981. And,  if that  be so, it lends considerable support to the oral testimony of Ramesh Merchant and Lal Chand Rohra.      Ramesh Merchant  clearly stated  in his  evidence  that when he  met the  first respondent at his residence "Varsha" on 11th or 12th April 1981 - perhaps the date was 14th April 1981 -  the first  respondent stated that since the premises were to  be sub-let  to Indo-Suez  Bank there  should be  no difficulty in granting no objection certificate but he asked Ramesh Merchant to make a handsome donation to Indira Gandhi Pratibha Pratishthan.  The context in which the demand for a handsome donation  was made  by the  first  respondent  left Ramesh Merchant  in no  doubt that a handsome donation would have to be given by 642 his firm  in  consideration  of  getting  the  no  objection certificate. When  asked as  to how  much he  would like the firm of  Nanubhai Jewellers  to donate, the first respondent asked Ramesh Merchant to donate Rs. 10 lakhs and when Ramesh Merchant pointed  out that  the  Government  of  India  have permitted the  Indo-Suez Bank  to open  its branch in Bombay and the  premises were  being sub-let  to Indo-Suez Bank and requested him  to name a reasonable figure for the donation, the  first  respondent  considered  the  request  of  Ramesh Merchant sympathetically  and asked  him  to  donate  Rs.  8 lakhs. The  circumstance that Ramesh Merchant had to request the first  respondent to  name a  reasonable amount  for the donation and  that  the  first  respondent  considered  this request reasonably,  does  go  to  show  that  pressure  was exercised on  Ramesh Merchant to make a handsome donation as consideration for  the grant of no objection certificate and the ultimate  figure  demanded  was  Rs.  8  lakhs.  If  the donation was  being made  voluntarily why should any request have been made by Ramesh Merchant to the first respondent to name a  reasonable amount and where could be the question of such a request being considered sympathetically by the first respondent.  Moreover,   when  Ramesh   Merchant   contacted Lalchand Rohra  and his  other parterns  after this  meeting with the  first respondent,  he clearly  told them  that the first respondent  had demanded  Rs.  10  lakhs  for  the  no objection certificate  but it was ultimately agreed that the firm of  M/s Nanubhai Jewellers would pay Rs. 8 lakhs by way of donation  to Indira  Gandhi Pratibha Pratisthan. There is no reason to disbelieve the evidence given by Lalchand Rohra to this  effect. Since  the rent  which  the  firm  of  M/s. Nanubhai Jewellers  was  to  get  from  Indo-Suez  Bank  was phenomenal and it was more than eight times the rent payable by it  to the  landlord, the  partners of  the firm  of M/s. Nanubhai  Jewellers   obviously  did  not  mind  paying  the donation of  Rs.  8  lakhs  for  getting  the  no  objection certificate. The  cheque for  Rs. 8  lakhs was  made out and according to the evidence of Ramesh Merchant, he went to the residence of  the first respondent "Varsha" on the same day,

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namely 16  April 1981  and handed  over the  cheque  to  the Secretary  as  directed  by  the  first  respondent.  It  is significant to  note that the Order sanctioning the grant of no objection certificate was made by the first respondent on the file  on 16th April 1981, i.e. on the same date on which the cheque  for Rs.  8 lakhs  was received  from the firm of M/s. Nanubhai Jewellers and the no objection 643 was issued  within two days after the receipt of the cheque. These are  tell-tale circumstances  which prima  facie go to show that  the grant  of no  objection certificate  and  the donation of  Rs. 8  lakhs were  closely related transactions and that one was in fact the consideration for the other. It may also  be noted  that the firm of M/s. Nanubhai Jewellers had been  incurring losses  for the last more than two years and if  that be  so, it  is difficult  to understand why the partners of  this firm  should have  voluntarily decided  to make a donation of Rs. 8 lakhs. What altruistic motive could have inspired  them to  have made  such a  handsome donation when they themselves were incurring losses. Prima Facie, the inference  to   be  drawn   from  these   circumstances   is irresistible and  unless the first respondent can rebut this evidence, it  is difficult  to reject  the contention of the prosecution that  a prima  facie  case  has  been  made  out against the first respondent in respect of this transaction. It is  undoubtedly true  that in  cross-examination  by  the learned counsel  for the  first respondent  Ramesh  Merchant stated that no objection certificate has been granted on the merits of the application and not as a favour to the firm of M/s Nanubhai  Jewellers but  this statement  cannot make any difference to the correct evaluation of the evidence because whatever be the view of Ramesh Merchant as to whether the no objection had  been granted  to him  on merits or not, it is the totality  of the evidence which has to be considered and even if  the firm of M/s Nanubhai Jewellers were entitled to obtain no  objection certificate  on merits, still the first respondent could bargain for a handsome donation as quid pro quo for  granting the  no objection  certificate  which  was entirely within his power to do so.      We are,  therefore, of the view that a prima facie case was made  out on behalf of the prosecution against the first respondent in  respect of  the transaction  of no  objection certificate and 35th, 36th and 37th charges should have been framed against the first respondent.      That takes  us to  draft charges 29, 30, and 31 arising out of  the donations  made by M/s Hira Nandani Builders and Hira Nandani  Construction Private  Limited to Indira Gandhi Pratibha Pratishthan.  It is  necessary to state briefly the facts relating  to this  transaction in  order to be able to decide whether  a prima  facie case  has been  made  out  on behalf of the 644 prosecution  against   the  respondent  in  regard  to  this transaction and evidence led on behalf of the prosecution is such that  if unrebutted  it would warrant the conviction of the respondent  on these  charges. These  draft charges  are sought to  be made good on the basis of the oral evidence of the sole  witness Hira  Nandani PW-28  and  the  documentary evidence produced  in the  course of his deposition. We will begin by first referring to the evidence of Hira Nandani and whilst we  consider that  evidence we  shall  refer  to  the various documents produced in the case.      Hira Nandani  was known to the respondent for more than 15 years  and in  fact the respondent was a family friend of Hira Nandani,  having been  a patient  of the father of Hira

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Nandani who is a leading Ear, Nose, and Throat specialist in Bombay. In  1974-75 Hira  Nandani entered  the  construction business and  started  a  limited  company  called  Baf-Hira Builders Private  Limited. We  are not  concerned with  this company in  the present  appeal. There  were also  two other concerns started  by Hira  Nandani in  1979 in course of the construction business  but these  are also  not relevant for our purpose  except that we may state the names of these two concerns, namely,  Hira Nandani Constructions and Hira Nagar Constructions. In  January,  1981  Hira  Nandani  started  a partership in  the name  of Hira  Nandani Enterprises. It is this firm  which figures  prominently in the history of this case. There  were also  four other partnership firms started by Hira  Nandani in  the same year and these were Hira Nagar Developers, Hira  Nandani Developers, Apex Constructions and Apex Builders.  There was  also a  private  limited  company floated  by  Hira  Nandani  in  the  name  of  Hira  Nandani Constructions Private  Limited. These  various  concerns  of Hira Nandani  undertook construction  contracts  which  were started sometime  in 1980  and 1981. One of the construction works undertaken  by Hira  Nandani was  in the  name of Hira Nandani  Enterprises   and  this   construction   work   was undertaken under  an agreement  with Udyogik  Shramik Kamgar Housing  Society.   It  appears   that  in  respect  of  the construction work undertaken by the various concerns of Hira Nandani there was a stalemate in or about April 1981 and the construction works  were held  up for  want of  cement.  The concerns of  Hira Nandani had received some small quantities of cement but the quantities received were wholly inadequate and no further quantities of cement 645 were available  because cement  was a  controlled  item  and unless allotment  of quota  of cement  was made by the State Government, it  was not  possible for  any builder to obtain cement. Now  the record  shows that  the entire control over allotment of  quota of cement was retained by the respondent with himself  in his  capacity  as  Chief  Minister  and  no allotment could  be made  without his  sanction or approval. Since the  concerns of  Hira Nandani  were starved of cement and they  could not  proceed  with  the  construction  works undertaken by  them without cement they made applications to the respondent  from time  to time for allotment of quota of cement. We have on record four applications dated 28th April 1981, one  being Ex.  355 and  355A  made  by  Hira  Nandani Construction Private  Limited, the  second being Ex. 356 and 356A addressed by Hira Nagar Developers, the third being Ex. 357 and  357A addressed  by Hira Nagar Constructions and the fourth being  Ex. 358  and  358A  addressed  by  Hira  Nagar Enterprises. All  these applications  were addressed  to the respondent  in   his  capacity   as  Chief   Minister.   The application of  Hira Nandani  Constructions Private  Limited Ex. 355  and 355A  pointed out  that until  the date  of the application the  company had  been allotted  only 30  metric tonns of  cement and  requested the  respondent to  allot at least 250  metric tonns of cement. Similarly the application of Hira  Nagar Developers  Ex. 356  and 356A complained that the firm  had not  received any  supply of cement at all and requested the respondents to allot at least 250 metric tonns of  cement.   So  also   the  application   of  Hira   Nagar Constructions Ex.  357 and  357A stated  that the  firm  had received until  the date  of the  application only 50 metric tonns of  cement and  requested the  respondent to  allot at least 250 metric tonns of cement. And lastly the application of Hira  Nandani Enterprises  Ex. 358  and 358A also pointed out that  no allotment  of cement  had been received by them

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and requested  the respondent that at least 100 metric tonns of cement  should be allotted to them. The record shows that pursuant to  the application  of Hira  Nandani  Construction Private Limited  Ex. 355  and 355A  allotment of  200 metric tonns was  made to the company but this allotment lapsed and the company  could not  obtain delivery  of any  quantity of cement under  this allotment. Subsequently, however, another order of  allotment was made on 23rd July 1981 Ex. 693 under which 100  metric tonns  of  cement  was  allotted  and  the company could  obtain delivery of 100 metric tonns of cement under this  order of  allotment. The allotment of 200 metric tonns of  cement was  also made  on the  application of Hira Nagar Developers Ex. 356 646 and 356A  but the  firm could obtain only 74 metric tonns of cement under  this  letter  of  allotment  and  the  balance lapsed. Thereafter  another order  of allotment  was made on 23rd July,  1981 granting 25 metric tonns of cement and this quantity of  cement  was  lifted  by  the  firm  Hira  Nagar Developers. Similarly  200 metric tonns of cement was lifted on the  application of  Hira Nagar  Construction Ex. 357 and 357A  but   this  allotment   also  lapsed  and  Hira  Nagar Construction could  not obtain  the delivery of any quantity out of  200 metric  tonns allotted  to them but in this case also a  subsequent order of allotment was made on 23rd July, 1981 alloting 50 metric tonns of cement and this quantity of 50 metric  tonns was  lifted by Hira Nagar Construction. The same position  obtained in  regard to  Messrs  Hira  Nandani Enterprises. In  the case  of this concern also allotment of 100 metric  tonns was  made on  the application  Ex. 358 and 358A but this allotment lapsed because it was made in such a manner that  this concern  could not  obtain delivery of any quantity  out   of  100   metric  tonns   allotted  to   it. Subsequently on  the same  date as  in the case of the other three concerns,  that is,  on 23rd  July, 1981  an order was made alloting  50 metric  tonns of  cement to  Hira  Nandani Enterprises and  delivery of  50 metric  tonns of cement was taken by this concern pursuant to the order of allotment. It will thus  be seen  that in the case of these four concerns, namely, Hira  Nandani  Construction  Private  Limited,  Hira Nagar Developers,  Hira Nagar  Construction and Hira Nandani Enterprises,  only  74  metric  tonns  of  cement  could  be obtained prior to 4th July, 1981 and it was admitted by Hira Nandani in  the course  of his  evidence that it was correct that till  15th June,  1981, that  he had  not received more than  400   metric  tonns   of  cement   against  the   four applications dated 28th April, 1981 Exs. 355 and 355A to 358 and  358A.   It  was  only  when  as  a  result  of  further representations  made  to  the  respondent,  new  orders  of allotment  were   issued  on   23rd  July,  1981  that  some quantities  of  cement  could  be  obtained  by  these  four concerns of Hira Nandani.      We have  already referred to the fact that Hira Nandani Enterprises  had  undertaken  construction  work  under  the agreement with  Udyogik Shramik  Kamgar Housing  Society. On account of  want of cement this construction work had almost come  to   a  stand-still   in  June,   1981.  Hira  Nandani Enterprises had also not been able to obtain any quantity of cement in 647 respect of the other construction work undertaken by them at Villa Parle (East) despite the application dated 28th April, 1981 made  by them  to the  respondent. The two applications were accordingly  made to the respondent on 24th June, 1981, one by Hira Nandani Enterprises, marked as Ex. 354, pointing

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out that  in respect of the construction work at Villa Parle (East) they  had till  then received only 50 metric tonns of cement and  requesting the  respondent to  allot  atleast  a further quantity of 50 metric tonns and the other by Udyogic Shramik Kamgar  Housing Society, marked as Ex. 353, pointing out that  the Society had till then received only 478 metric tonns of  cement and requesting the respondent to arrange to allot atleast another 250 metric tonns. It is not clear from the record  whether 50  metric tonns of cement stated in the application  of   Hira  Nandani  Enterprises  to  have  been received by them had in fact been received or that merely on the basis  of the  allotment made  and  the  price  paid,  a statement was  made that  50 metric tonns had been received. But it  is not  necessary for  the purpose  of  the  present appeal to  come to  a finding whether 50 metric tonns had in fact been  actually received  by  Hira  Nandani  Enterprises before the  application Ex.  354 was  made by  them.  It  is sufficient to  state that  both these  applications Exs. 353 and 354  were granted by the respondent and two permits were issued on  4th July, 1981, one for 50 metric tonns in favour of Hira  Nandani Enterprises  and the  other for  200 metric tonns in  favour of  Udyogic Shramik Kamgar Housing Society. Now it  is common ground between the parties that one metric tonn of  cement would  comprise 20  bags and 50 metric tonns would be  equivalent to  1000 bags  while 200  metric  tonns would be  equivalent to  4000 bags. The record shows that on 4th July,  1981 being the same date on which the two permits were issued  for  50  metric  tonns  and  200  metric  tonns respectively, two  donations  were  made  to  Indira  Gandhi Pratibha Pratishthan,  one  for  Rs.  30,000  made  by  Hira Nandani Constructions  Private Limited and the other for Rs. 1,20,000 made  by Hira  Nandani Builders both being concerns of Hira Nandani. The donations of Rs. 30,000 by Hira Nandani Construction Private  Limited was  made by means of a cheque dated 22nd  June, 1981  while the donation of Rs.1,20,000 by Hira Nandani  Builders was  made by a cheque dated 4th July, 1981. It was admitted by Hira Nandani that though the cheque for Rs.  30,000 dated  22nd June,  1981 was  given to Indira Gandhi Pratibha  Pratishthan alongwith  the cheque dated 4th July, 1981 for Rs. 1,20,000. On these facts 648 the prosecution  contended that by obtaining for the benefit of Indira  Gandhi Pratibha  Pratishthan the two donations of Rs. 30,000 and Rs. 1,20,000 in consideration of the grant of the two  permits in  favour of  Hira Nandani Enterprises and Udyogik Shramik  Kamgar Housing Society the first respondent had committed  offences under  sections 161  and 165  of the Indian Penal Code, sub-sections 1(d) and (2) of section 5 of the Prevention of Corruption Act, 1947.      We shall  presently proceed  to consider  whether these charges could  be said  to have been prima facie made out on behalf  of  the  prosecution.  But  at  this  stage,  it  is necessary to  refer to  two other  applications made by Hira Nandani Builders  and Apex  Builders, both being concerns of Hira Nandani.  It  seems  that  Hira  Nandani  Builders  has started a  new project  at Varsova  in May,  1981  and  they needed cement  for this project and they accordingly made an application dated  15th June,  1981 Ex.  648  and  648A  for allotment of  at least  500 metric  tonns  of  cement.  Apex Builders also made another application dated 23rd June, 1981 Ex. 649  and 649A for allotment of at least 250 metric tonns of cement  and though  this application  was in  the name of Apex Builders it was in respect of the same Varsova project. Now according to the evidence of V.T. Chari PW-41 who was at the  relevant   time  Secretary,  Food  and  Civil  Supplies

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Department, the  respondent mentioned  to him  on 24th  June 1981 that  one Pesi Tata would be giving to him i.e. to V.T. Chari on  25th June  1981 a  set of  applications for cement indicating the  quantity to  be sanctioned  and  that  these proposals had  his approval  and  therefore  the  Department should take  action on  these cases and thereafter report to the first  respondent for confirmation. On the next day i.e. 25th June  1981 Pesi  Tata saw V.T. Chari and handed over to him  three   sets  of  applications  each  with  a  covering statement showing the quantity asked for and the quantity to be sanctioned  and according  to these  statements the total quantity to  be sanctioned  came to  9700 metric tonns. V.T. Chari thereupon made a note in the file on the same day i.e. 25th June  1981 setting out the above facts and stating that "necessary action may be taken and thereafter the papers may be submitted  to C.M.  through Secy.  F &  C.S.D and  Min. F &CS." This  note made  by V.T. Chari in the file is Ex. 420. The endorsement  at the  foot of this note shows that it was addressed to  the  Deputy  Secretary  with  a  copy  to  the Minister, 649 Food and  Civil Supplies  for information.  It was  recorded there by  V.T. Chari  that he  had also  "submitted  a  note separately to  C.M. for  confirmation of  the  action  being taken by the Department". A note addressed to the respondent was accordingly made by V.T. Chari simultaneously and it was in the following terms :           "C.M. may  kindly recall  that he had mentioned to           me yesterday  (24th June 1981) that Shri P.D. Tata           will be  giving  to  me  to-day  applications  for           cement indicating  the quantity  to be sanctioned.           C.M. observed  that the cases had his approval and           the Deptt.  should take  necessary action  thereon           and report to C.M. for confirmation.           2. Shri P.D. Tata saw me to-day (25/6/81) and gave           me  3   sets  of   applications  with   statements           indicating  the   quantity  applied  for  and  the           quantity to  be sanctioned.  In all  there are  58           applications  and   the  total   quantity  to   be           sanctioned comes to 9,700 metric tonns.           3. A  copy of  the 3 statements is annexed to this           note.           4. Necessary  action is  being taken separately on           the  applications.   The  main   papers  will   be           submitted to C.M. after issue of allotment orders.           C.M. may  kindly see  for confirmation  of  action           being taken by the Deptt." This note  was submitted  to the respondent and it is marked Ex. 421.  It is  the evidence  of V.T.  Chari that  the file containing this  note was  returned to  him on the same day, that is,  25th June 1981 and when the file came back to him, this note  bore the signature of the respondent and the date in his  hand-writing and  V.T. Chari  thereupon noted on the reverse of  the note  "Please keep  with papers dealing with these  cases"   and  addressed   this  note  to  the  Deputy Secretary. Now  the note  Ex. 421 as exhibited contained the following endorsement made by the respondent :           "’A’ -  Is it  ? Where  is ’B’ ? Secy. to withdraw           action and  F &  CS Deptt.  to decide  on merit as           usual. I am indeed surprised at such notings." 650 just above  his signature  and date.  The evidence  of  V.T. Chari is  that this  endorsement which  has been  marked Ex. 421A was not there at the time when the file was received by V.T. Chari  from the respondent on 25th June 1981 and it was

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for the  first time in September 1982 when R.D. Pradhan, who was then  Chief Secretary,  called V.T.  Chari to his office and showed  him the note Ex. 421 along with another note Ex. 419A that  he saw  the above  endorsement of the respondent. The suggestion  therefore clearly  was that this endorsement was made  by the respondent some time between 25th June 1981 and September  1982, presumably  when a  writ  petition  was filed in  the High Court of Bombay challenging the allotment of quotas for cement. It is not necessary for the purpose of deciding the present appeal to come to a definite finding on the question  whether this  endorsement was  in fact made by the respondent  on 25th  June 1981  or it  was  subsequently interpolated by  him. But  we are  constrained to  make some observations  in  regard  to  this  endorsement,  since  the learned Judge  has adversely  commented  on  V.T.  Chari  in regard to  his role  in this  affair. We  do not  think  the learned Judge  was  justified  in  making  adverse  comments against V.T.  Chari. If  the respondent had not mentioned to V.T. Chari  that Pesi  Tata would  be giving  him a  set  of applications  for  cement  indicating  the  quantity  to  be sanctioned and  that these  proposals had  his approval  and therefore the  Department should  take action on these cases and  thereafter   report  to   the  first   respondent   for confirmation, it is extremely difficult to believe that V.T. Chari would have made the note Ex. 420 on the file. It would be foolhardy  on the  part  of  V.T.  Chari,  a  senior  and experienced I.A.S.  Officer, to  make a false endorsement on the file  attributing to  the Chief  Minister of  the  State something which  he never  said. The note made by V.T. Chari also proceeded  to state that Pesi Tata had given him 3 sets of applications  each with  a covering statement showing the quantity asked  for and  the quantity  to be  sanctioned and that necessary  action should  be taken  and thereafter  the papers should  be submitted  to the first respondent through Secretary, Food  and Civil Supplies Department and Minister, Food and  Civil Supplies.  If the  first respondent  had not given him  the instructions  set out in the note, would V.T. Chari, if  he were in his senses, ever direct the Department that the  papers should be submitted to the first respondent after taking necessary action. That would be the easiest way for him to secure his exposure. Then 651 again, if  no such instructions had been given to him by the first respondent, is it possible that he would have prepared the note Ex. 421 and submitted it to the first respondent on the same day. If V.T. Chari had decided to allot 9700 metric conns  of   cement  to  different  applicants  on  his  own, presumably with  a view  to obliging  these  applicants  for consideration or  even otherwise,  and to palm it off on the first respondent  by falsely attributing the authority to do so to the first respondent, it passes one’s comprehension as to why he should have on the same day submitted note Ex. 421 to the first respondent which would expose his deception and fraud and  provide  an  opportunity  to  the  respondent  to immediately contradict  and expose  him. V.T. Chari would in that event  be inviting  his own  ruination.  It  is  indeed difficult to attribute such irrationality and foolishness to a senior  I.A.S. Officer  like V.T.  Chari. Moreover,  it is interesting to  note that  if the  note Ex. 421 submitted by V.T. Chari  to the  respondent was  wrong and the respondent had not given to V.T. Chari the instructions set out in that note, would  the respondent  have rested content with merely making an endorsement at the foot of the note saying that he was surprised  at such  notings. The  first respondent would have been  shocked at  the statement  contained in  the note

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falsely involving the respondent and dishonestly attributing to him  authority which  he had  not given and he would have immediately called upon V.T. Chari to explain his conduct in making  the  note  and  taken  action  against  him  besides stopping the  allotments of  cement referred  to in  the the statements accompanying  the note.  But nothing of this sort was done  by the first respondent. It it also significant to note that on 1st July 1981 two allotments orders were issued and on  2nd July  1981 a  third  allotment  order  was  made allotting in  the aggregate  the precise  quantity  of  9700 metric tonns  referred  to  in  the  note  Ex.  421.  It  is unfortunate that  the statements  which accompanied the note Ex. 421  were not  available and  could not  be exhibited in evidence. The  case of the prosecution was that the original of Ex.  421 and  the three statements accompanying that note were abstracted  at some  stage by  the first  respondent or someone on  his behalf and that is the reason why Ex. 421 as produced and exhibited in court was not the original but the photostat copy  which had  been taken out in the secretariat before the original was lost. It is not necessary for 652 the  purpose   of  the   present  appeal   to  resolve  this controversy raised  on behalf of the prosecution and to come to a  definite finding  upon it. But even on the material on record, there is reason to believe that the three statements which accompanied  the note  Ex. 421  must have  formed  the basis of the three allotment orders dated 1st July, 1981 and 2nd July, 1981 part of Ex. 421, because like the statements, the allotment  orders were  also three  in  number  and  the aggregate quantity allotted under the three allotment orders was 9,700  metric tonns  which is  the same as the aggregate quantity  shown  in  the  three  statements.  Moreover,  the application dated  15th June,  1981 Ex. 648 and 648A made by Hira Nandani  Builders and  the application dated 23rd June, 1981 Ex.  649 and  649A made by Apex Builders figured in the first allotment order dated 1st July, 1981 and in respect of these two applications, it was stated in the allotment order that it had been decided to allot 300 metric tonns of cement to Hira  Nandani Builders  and 250 metric tonns of cement to Apex Builders.      Obviously, therefore these two applications formed part of the  applications which  were handed over by Pesi Tata to V.T. Chari,  as mentioned  in Exs.  420 and 421 and the fact when it  was put to Hira Nandani that these two applications were in  the possession  of Pesi Tata, Hira Nandani found it difficult to  deny it.  Furthermore the record shows that in respect of  these two  applications, letters of allotment of 300 metric  tonns of cement to Hira Nandani Builders and 250 metric tonns  of cement  to Apex Builders were issued on the same day, namely, 1st July, 1981 on which the first order of allotment, part  of Ex.  421 in  respect of  21  applicants, including Hira  Nandani Builders and Apex Builders, was made by the  Food and  Civil Supplies  Department. It  would thus appear prima  facie that  Hira  Nandani  Builders  and  Apex Builders obtained  300 metric  tonns and  250  metric  tonns respectively of  cement on  applications submitted  by  them through the intervention of Pesi Tata.      We may  now revert  to the  dontions of  Rs. 30,000 and Rs.1,20,000  made   by  Hira  Nandani  Construction  Prviate Limited and  Hira Nandani Builders respectively. The case of the prosecution  was that  these two  donations were made by the  two  concerns  of  Hira  Nandani  in  order  to  obtain allotment  of   cement  which   was  badly  needed  for  the construction works  undertaken by  the various  concerns  of Hira Nandani. This was

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653 disputed on  behalf of  the respondent  who  contended  that these  two   donations  had   been  made   by  Hira  Nandani Construction  Private  Limited  and  Hira  Nandani  Builders voluntarily and they had nothing to do with the allotment of cement to  the concerns  of  Hira  Nandani.  Now  there  are certain salient features in regard to this transaction which in our  opinion go  to  show  prima  facie  that  these  two donations were connected with the allotment of cement to the concerns of  Hira Nandani.  In the  first place, there is no reason why  any of  the concerns of Hira Nandani should have made  such   large  donations   to  Indira  Gandhi  Pratibha Pratishthan. It  was admitted  by Hira  Nandani that none of his concerns  had made any profit and in fact he conceded in evidence that  the donations made by his two concerns to the Indira Gandhi  Pratibha Pratishthan  "had no connection with the profits  of the  two concerns  or of  any of  his  other concerns." He  also admitted  in evidence  that Hira Nandani Construction Private Limited had made a donation of only Rs. 2,422 in  the calander  year 1980 and a donation of only Rs. 2, 251  in the calander year 1981 and so far as Hira Nandani Builders are  concerned, they  had not  made any donation at all and  apart from  this the  only donations  made by  Hira Nandani  Construction   Private  Limited  and  Hira  Nandani Builders were  the donations  of Rs. 30,000 and Rs. 1,20,000 to Indira  Gandhi  Pratibha  Pratishthan.  It  is  in  these circumstances prima facie difficult to understand as to what prompted Hira  Nandani Construction Private Limited and Hira Nandani Builders to make the donations of Rs. 30,000 and Rs. 1,20,000 respectively  to Indira Gandhi Pratibha Pratishthan when they  were not  making any  profits at all and they had not made  any substantial  donations to any other charities, despite large  and frequent  demands  on  the  Hira  Nandani family. Moreover it is not without significance that the two donations of Rs. 30,000 and Rs. 1,20,000 were handed over to Indira Gandhi  Pratibha Pratishthan on the same day, namely, 4th July,  1981 on  which the  permits were  issued  by  the authorities  alloting   50  metric  tonns  to  Hira  Nandani Enterprises and  200 metric  tonns to Udyogic Shramik Kamgar Housing Society.  When Hira  Nandani was  asked as to how it happened that  he paid the two cheques of Rs. 30,000 and Rs. 1,20,000 on  4th July,  1981 which  was also the date of the two permits,  the answer given by him was that it was purely coincidental. It  is true  that  sometimes  coincidences  do happen but a coincidence of this kind is sufficient to prima facie support the inference that the two 654 donations of Rs. 30,000 and Rs. 1,20,000 were connected with the grant of the two permits. It is interesting to note that prima facie  one other  correlation can  also  be  perceived between the  two donations  of Rs.  30,000 and  Rs. 1,20,000 made by  Hira Nandani  on behalf of his two concerns and the quota of cement allotted under the two permits. The donation of Rs.30,000  could be  said to  have been worked out at the rate of  Rs. 30  per bag  for the permit of 50 metric tonns, that is,  1000 bags  of cement  while the  donation  of  Rs. 1,20,000 could  be said  to have been arrived at by applying the same  rate of Rs. 30 per bag in respect of the permit of 200 metric  tonns, that  is, 4000  bags of cement. When Hira Nandani was  asked to explain how it was that for the permit of 50 metric tonns, that is, 1000 bags, he made a payment of Rs. 30,000  which worked  out to  Rs. 30 per bag and for the permit of  200 metric  tonns, that  is, 4,000  bags he  made payment of Rs. 1,20,000 which worked out to the same rate of Rs. 30  per bag,  the only  answer which  Hira Nandani could

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give was  that it  was a  coincidence. It  is indeed strange that coincidences  should take place in this transaction. It may also  be noted  and this  too is  not a  factor  without significance that  the cheque for Rs. 30,000 was made out on 22nd June,  1981 but  it was  retained by Hira Nandani until 4th July,  1981 and  it was  only on 4th July, 1981 when the two permits  were issued  alloting quota of cement that both the cheques  of Rs. 30,000 and Rs. 1,20,000 were handed over by Hira Nandani.      We,  therefore,   reach  the  conclusion  that  on  the evidence led on behalf of the prosecution a prima facie case must be held to have been made out against the respondent in respect of  the transaction  of the  donations of Rs. 30,000 and Rs.1,20,000 and 29th, 30th and 31st charges ought in the circumstances to have been framed against the respondent.      Then we  go on to consider 23rd, 24th, 25th, 41st, 42nd and 43rd  of the  draft charges relating to the transactions of the  National Centre for the Performing Arts (hereinafter referred to  as "NCPA").  NCPA was started sometime prior to 1968 as  a  Centre  for  promotion  and  engagement  of  the performing arts.  The Government of Maharashtra granted land to NCPA  from Block  III Backbay  Reclamation  area  in  two phases on  leasehold basis.  First, an  area  admeasuring  5 acres,  that   is,  20,200  sq.  metres  was  granted  under Government resolution 655 dated 10th  May 1968  and then  subsequently additional area admeasuring about  3 acres,  that is, 10219.4 sq. metres was granted under  Government resolution  dated 15th  May  1970. Both the  grants were  on the  same terms and conditions and the ground  rent payable  by NCPA  was  Re.1  per  annum  in respect of  each of these two areas of land. It was provided that NCPA will construct on the plot necessary buildings and structures  for  carrying  out  its  performances  including residential quarters  for essential  staff  working  in  the Centre and  for visiting  artists and  students provided the Centre  would   be  at   liberty  to  make  available  these facilities to outside parties at such compensation as it may deem fit  so long  as the income from the land and buildings was appropriated for the objects of the Centre and further a sum equal to 25% of the net annual profits of the Centre was credited to the Government of Maharashtra. The Government of Maharashtra   was    given   a   right   to   nominate   two representatives on  the Council  of the Centre. Thus, a plot of about 8 acres in the Backbay Reclamation area was granted to NCPA  for the  purpose of carrying on its activities. The Minister  of   Culture  and   the  Chief  Secretary  to  the Government of  Maharashtra were  both  nominated  ex-officio Member on the Council of NCPA.      Subsequently, with  a view  to enabling  it to meet its operating  expenses   NCPA  made   an  application   to  the Government of Maharashtra by its letter dated 4th March 1971 requesting the  Government for  permission to  utilise  upto one-fourth of  the area  granted to  it for  the purpose  of putting up  high grade  shops and  offices. This  request of NCPA was  granted by  the Government  of Maharashtra.  By  a Government  resolution   dated  31st   October   1972,   the Government granted permission to NCPA to use one-fourth area of the  land for  putting up high grade shops and offices on condition that  50% of  the net  income accruing  out of the commercial user  of  this  area  would  be  payable  to  the Government of  Maharashtra  subject  to  certain  conditions which are  not material  for  the  purpose  of  the  present appeal. But,  since it  would take  sometime for  high grade shops and  offices to  be put  up on  one-fourth area of the

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land, NCPA applied to the Government of India for a bridging loan of  Rs. 3  crores and  this loan  was sanctioned by the Government of  India in  February 1974  on the  security  of mortgage of  three-fourths of  the plot  and  the  buildings constructed thereon.  This necessitated  the sub-division of the 656 plot approximately  into one fourth and three fourth and the Government of  Mahrashtra accordingly  agreed to  grant  one lease in  respect of  23689.90 sq.  metres of  area on which auditoriums and schools of NCPA were to be built and another lease  in  respect  of  7892.59  sq.  metres  on  which  the commercial complex might be put up. NCPA thereafter drew the first instalment of loan of Rs. 80 lakhs from the Government of India  in March  1976 and  carried on construction of its building on three-fourth area of the plot.      The result was that NCPA could use three-fourth area of the plot  for carrying  out  its  own  purposes  subject  to payment of  25% of  the net  income of  the  Centre  to  the Government of  Maharashtra while one-fourth area of the plot could be developed by NCPA for the commercial complex with a view to  generating income. Now, at this time F.S.I. was 3.5 and applying  it to  the entire  plot of about 8 acres, NCPA was entitled  to build with a fairly large rentable area and on this  basis NCPA  prepared plans of a commercial building with rentable  area of  400,000 sq.  ft. But,  to the  great dismay  and  consternation  of  the  Directors  of  NCPA,  a Government  resolution   was  passed   an  23rd  March  1978 providing that  since two separate leases were given to NCPA in respect  of 7,892.59 sq. metres and 23,689.90 sq. metres, that is,  approximately 1/4  and 3/4  area of  the plot, the construction to  be carried  "on the  land  should  be  with reference to the F.S.I. permissible for each individual plot separately". The  consequence of  this Government resolution was that  on the  basis of F.S.I. of 3.5, NCPA could build a commercial building  having a  net  rentable  area  of  only 240,000 sq.  ft. instead  of 400,000 sq. ft. Moreover, prior to the  issue of this Government resolution, a  notification was issued  by the  Bombay  Municipal  Regional  Development Authority (hereinafter referred to as "BMRDA") on 19th June, 1977 reducing  the F.S.I.  from 3.5 to 1.33. On the basis of this new  F.S.I of  1.33,  the  net  rentable  area  of  the commercial building  which could be put up by NCPA was still further reduced  to 90,000  sq. ft.  instead of the required 400,000 sq. ft. These developments which took place in 1977- 1978 jeopardized the very existence of NCPA.      One J.J.  Bhabha was  at all  material  times  Managing trustee of NCPA and apart from him there were ten other 657 trustees including  J.R.D. Tata.  When NCPA  found itself in this difficult situation where it would be almost impossible for it  to carry out its activities, J.R.D. Tata addressed a letter dated  1st January  1979 to  the then  Chief Minister requesting him  to permit  NCPA to  construct  a  commercial building with  a rentable area of 400,000 sq.ft. This letter was followed by meetings with various officers in which J.J. Bhabha participated  alongwith one  Ajit Kerkar.  Now,  Ajit Kerkar was not in any way officially connected with NCPA. He was the  Managing Director of Indian Hotels Co. Ltd. as also Chairman of  the Board  of Directors of PIEM Hotels Ltd. and Taj Trade  and Transport  Co. Ltd. which are admittedly Tata concerns. Though  Ajit Kerkar  did  not  hold  any  official position in NCPA, he took an active part in the negotiations with the  various officers  of the Government of Maharashtra in 1979 for the purpose of obtaining relaxation of the BMRDA

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notification dated  19th June 1977 and Government resolution dated 23rd  March 1977  so as  to enable NCPA to construct a commercial building  of net  rentable area of 400,000 sq.ft. The fact  that Ajit Kerkar and J.J. Bhabha both participated in these  negotiations is  clearly established  by the  Note dated 20th July 1979 addressed by Ajit Kerkar to J.J. Bhabha (part of  Ex.  247)and  the  letter  dated  18th  July  1979 addressed by  J.J. Bhabha  to Minister,  Advani (part of Ex. 247). It  is obvious  that both  of them  acted in unison in carrying on  the negotiations  for the  purpose of  rescuing NCPA from  the precarious position in which it found itself. But, their efforts did not succeed.      When the  respondent came  to power  as Chief Minister, efforts were  renewed  on  behalf  of  NCPA  to  obtain  the necessary relaxation  which would  enable it  to  put  up  a commercial complex  which would  generate sufficient income. Ajit Kerkar  was obviously  on  very  good  terms  with  the respondent. He  was appointed  by the respondent as Chairman of a  High Power Steering Committee to deal with the problem of slums  and dilapidated  houses and he was given an office in Mantralaya.  He was  also appointed  a trustee  of Indira Gandhi Pratibha Pratishthan on 18th October 1980. He started negotiations with the Government of Maharashtra in February- March 1981  and put  forward a scheme under which the entire plot of  8 acres would be treated as covered by one lease so that the  net rentable  area available  to NCPA for building purposes would be 658 determinable by  applying to  the F.S.I. to the whole of the area of  the plot  instead of applying it separately to each of the two areas into which the plot was decided. The scheme provided that  the commercial  development of the plot would be confined  to one-fourth  of the  area of  the  plot,  the F.S.I. used  for such  development would  not exceed 450,000 sq.ft., that  is 1.33  for the  entire plot  and  shops  and office would  be restricted  to 50%  of this  area  and  the balance would  be used  for a  hotel and the construction on the remaining three-fourth area though in excess of 1.33 for the whole  plot, would  be exempted  from BMRDA Notification and would be "approximately 1.00 for the whole plot" so that the total  F.S.I. used  would be  approximately 2.33 and the income of the Government of Maharashtra would be "restricted to 50%  of the  net  income  from  the  commercial-cum-hotel development after  meeting all expenses of NCPA." The scheme also provided  for making  of  donations  to  Indira  Gandhi Pratibha Pratishthan.  The discussions  in this  regard were carried on  by Ajit  Kerkar with  Gavai  (Chief  Secretary), Prabhakar (Special  Secretary Finance)  Pradeep  (Secretary, Finance) and  Kapoor (Secretary,  Urban Development) as also with the  respondent. But,  these discussions  did not yield any positive  results until 24th March 1981 when Ajit Kerkar prepared a Note (Ex. 229) and handed it over to Gavai in his chamber on  the same  day. This  note  set  out  the  scheme proposed by  Ajit Kerkar  but it did not make any mention of the  donations   to  be   made  to  Indira  Gandhi  Pratibha Pratishthan. Some  reliance was  placed  on  behalf  of  the respondent on  the fact  that this  note did  not  make  any reference to  donations to be made to Indira Gandhi Pratibha Pratishthan and it was sought to be argued that there was in fact no  such talk  prior to the date of this note. But this argument is  futile because  Ajit Kerkar clearly admitted in his evidence  that in  February 1981  he had  discussed this scheme with  the respondent,  Gavai, Prabhakar,  Pradeep and Kapoor and  that he  had made it clear to the respondent and these officers  that the  donee of  the  scheme  was  Indira

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Gandhi Pratibha Pratishthan. There can therefore be no doubt that in  February 1981  the question of donations to be made to Indira  Gandhi Pratibha Pratishthan was discussed between Ajit Kerkar  on the  one hand  and the  respondent and other officers on  the other hand. Now as mentioned above the note Ex. 229  was handed  over by  Ajit Kerkar  to Gavai  on 24th March 1981 and following upon this note there was discussion between Ajit  Kerkar and  Gavai in the presence of Prabhakar on 659 25th March  1981 when  the scheme put-forward by Ajit Kerkar was discussed.  It was  agreed between Ajit Kerkar on behalf of NCPA and Gavai on behalf of the Government of Maharashtra that the  entire plot  of 8 acres would be covered under one lease on  condition that  the mortgage  in respect  of 3/4th area of  the plot is redeemed, the commercial development of the plot  would be  confined to  1/4th area  of the plot and full FSI  at the  rate of 1.33 in respect of the entire area of the  plot would  be available to NCPA and this would give almost 4,50,000 sq. ft. of floor space area for construction of buildings  including the  existing  construction  already made by  NCPA to  the extent  of 95,000  sq. ft.  Gavai  and Prabhakar intimated  to Ajit  Kerkar  that  it  may  not  be possible to  override BMRDA  Notification restricting FSI to 1.33, but  that floor  space area  available on the basis of 1.33 FSI in respect of the entire area of the plot should be sufficient for  NCPA for  construction. Gavai  and Prabhakar pointed out that on 1/4th area of the plot, NCPA could build a residential  hotel in  addition to  high-grade  shops  and offices for  which permission was already given. Ajit Kerkar agreed to this suggestion provided "not less than 50% of the area is  allotted to  be utilised  for hotel and the balance for the  purpose  of  shops  and  offices".  This  condition proposed by  Ajit Kerkar  was found  acceptable to Gavai and Prabhakar. It  was also  agreed that the condition providing for payment  of 25%  of the  net profit of the Centre to the Government of Maharashtra would remain unchanged and so also would the  provision that  50% of  the net  income from  the commercial complex  should be paid by NCPA to the Government of Maharashtra.      Now at  this  meeting  held  on  25th  March  1981  the question of  making  donations  to  Indira  Gandhi  Pratibha Pratishthan was also discussed as a part of the negotiations and Ajit Kerkar stated that the following donations would be made by NCPA either by itself or through others :           i) Initial donation of Rs. 1 crore within 6 months           of Government’s confirmation.           ii)  After   3  years   i.e.  on   completion  and           commissioning of  the commercial  complex - Rs. 25           lakhs per year. 660           iii)  After   8  years  i.e.  5  years  after  the           completion of  the commercial  complex  -  Rs.  50           lakhs per year. But he  requested that  these donations should be considered as deductible  expenses while  computing the  net income  so that 50%  of the  net income  payable to  the Government  of Maharashtra  should   be  arrived  at  after  deducting  the donations  from   the  net  income.  But  this  request  for deductibility of  the donations  in computation  of the  net income was not acceptable to Gavai and Prabhakar.      Immediately, after  the  aforesaid  discussion  between Ajit Kerkar  on the  one hand and Gavai and Prabhakar on the other, they  all went  to the respondent and informed him of the agreement  arrived at with NCPA. The respondent approved

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and confirmed  the agreement  but it  was made clear to Ajit Kerkar and  it was  agreed by him that the donations made to Indira Gandhi  Pratibha Pratishthan  would not be deductible as expenses  of NCPA while computing its net income. Thus it was clearly  agreed that  donations would  be made to Indira Gandhi Pratibha  Pratishthan by  NCPA by  itself or  through others but  that they  would not  be deductible in computing the net  income of  the  commercial  complex  of  NCPA.  The argument urged  on behalf  of  the  respondent  which  found favour with  the learned  Trial  Judge  was  that  when  the respondent declined  the request  of Ajit  Kerkar to  permit deductibility  of   the  donations  made  to  Indira  Gandhi Pratibha  Pratishthan   the  entire   scheme  foundered  and thereafter there  was no question of making any donations to Indira Gandhi  Pratibha Pratishthan.  This contention of the respondent appears  prima facie  to be unsustainable for the following reasons.      In the  first place there is a noting made by Prabhakar in the  Government file  relating to NCPA on 29th April 1981 part of Ex. 230 where it has been clearly recorded by him;           "It needs  to be recorded that in the meeting held           first by  C.S. with  Shri Ajit  Kerkar and  latter           when C.S.  and  Shri  Ajit  Kerkar  explained  the           agreement reached  to C.M. both on 25-3-81, it was           clearly stated and agreed that the payments to the           Indira Gandhi  Pratibha Pratishthan would be after           NCPA’s 661           net  income  was  computed  and  were  not  to  be           considered as  NCPA’s expenses while computing net           income." This noting made at a time when no controversy had arisen at all must  prima facie  be accepted as correct. Moreover, its correctness was  deposed to  by Prabhakar when he was in the witness box.  Ajit Kerkar  of course  disputed that any such agreement was  arrived at  between him  on the  one hand and Gavai Prabhakar  and the  respondent on  the other but prima facie we are inclined to accept the testimony of Ajit Kerkar to this  effect because we would prefer documentary evidence to oral  evidence in case of conflict between the two. It is a trite saying that witnesses may lie but documents do not.      Secondly, it  is significant to note that a donation of Rs. 1  crore was made by four Tata concerns to Nirmal Sethia Foundation which  was a  Foundation in which the respondent, his wife,  Nirmal Sethia,  his wife  and  Ajit  Kerkar  were trustees. This  donation of  Rs. 1 crore was made up of four cheques, one  dated 31st  July, 1981 for Rs. 30 lakhs issued by Indian Hotels Company Limited, the second also dated 31st July, 1981  for Rs.60  lakhs drawn  by Lake Palace Hotel and Motel Private Limited, the third dated 17th August, 1981 for Rs. 50  lakhs drawn  by Piem  Hotel Company  Limited and the fourth dated  1st September,  1981 for Rs. 10 lakhs drawn by Taj Trade and Transport Company Limited, all four being Tata concerns. It  is interesting to note that these four cheques making up  in the  aggregate a  donation of Rs. 1 crore were paid over  to Nirmal  Sethia Foundation within six months of the order  dated 6th  May, 1981  issued by the Government of Maharashtra granting  relaxation asked  for  by  NCPA,  thus apparently complying  with the  scheme put  forward by  Ajit Kerkar under  which the  initial donation of Rs. 1 crore was to be  made to  Indira Gandhi  Pratibha Pratishthan  but, as admitted by  Ajit Kerkar  himself in  paragraph  35  of  his evidence, "NCPA  did not  make the  proposed donation to the IGPP because  the Government  did not  agree to  exempt  the entire amount  as deductible  expense...... We  agree to pay

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the donations  to the  Nirmal Sethia  Foundation because the trust agreed  to exempt  the entire  amount under the Income Tax Act".  It is  thus obvious  that the  donation of  Rs. 1 crore which  was  to  be  made  to  Indira  Gandhi  Pratibha Pratishthan  within   six   months   of   the   Government’s confirmation 662 under the  agreement arrived  at on  25th  March,  1981  was diverted to Nirmal Sethia Foundation in which the respondent and his  wife were  trustees alongwith Nirmal Sethia and his wife and  Ajit Kerkar.  It is indeed difficult to understand as to  why these  four Tata  concerns should have decided to make donations  of an aggregate sum of Rs. 1 crore to Nirmal Sethia Foundation  which  was  a  newly  set  up  Foundation without any  charitable activity  to  its  credit.  It  also strains one’s  credulity to  believe that  it was a mere co- incidence that the donation made to Nirmal Sethia Foundation was of  Rs. 1  crore which  was the  identical figure of the donation  agreed  to  be  made  to  Indira  Gandhi  Pratibha Pratishthan. When  Ajit  Kerkar  was  asked  as  to  how  he happened to  fix the  figure of Rs. 1 crore for the donation made to Nirmal Sethia Foundation, his answer was : "I cannot say who  suggested the  figure of  Rs. 1 crore. There was no particular reason  why the  figure of  Rs. 1  crore had been arived at."  It is  also strange  that to make the figure of Rs. 1  crore a post-dated cheque for Rs. 10 lakhs was issued by Ta;  Trade and Transport Company Limited. This cheque was sent to Nirmal Sethia Foundation on 23rd August, 1981 and it was dated 1st September, 1981. It is difficult to understand why Taj  Trade and  Transport Company  Limited  should  have given a donation of Rs. 10 lakhs to Nirmal Sethia Foundation by a  post-dated cheque  when on the date of handing over of the cheque,  it did  not have  sufficient funds in the bank. The only answer which Ajit Kerkar could give in explanation, which is  rather strange  conduct, was  that Ta;  Trade  and Transport Company  Limited "expected  that sufficient  funds would be  deposited in  its account  by 1.9.1981".  There is another circumstance  which is  of a  baffling  character  - indeed  it   defies  any   rational  conduct   -  and   this circumstance is  that  the  four  cheques  representing  the aggregate donation  of Rs. 1 crore were handed over by these four Tata  concerns to  Nirmal Sethia  Foundation by  way of donation without any resolution being passed by the Borad of Directors in  that behalf  and strangely  enough these  four cheques paid by way of donation were credited as deposits in the books of Nirmal Sethia Foundation. When examined on this point, Ajit  Kerkar stated,  "Initially all the four amounts were to  be treated as deposits and were to be treated later as donations  after obtaining  the sanction  of the Board of Directors". This  is indeed  a strange  explanation which is prima facie  difficult to  believe. What would happen if the Board of Directors of any of these four Tata concerns 663 were to  refuse to  sanction  the  donation.  Nirmal  Sethia Foundation would  then have  to return  the  amount  of  the donation but  if this  amount was  already spent  by  Nirmal Sethia Foundation  for purchasing  land for  the purpose  of building a  hospital, how  would Nirmal Sethia Foundation be able to  return the  amount of  the donation and even if the amount of  the donation  were returned,  it would be without interest because  there  was  admittedly  no  provision  for payment of  interest and  a Tata concern making the donation would lose  interest on  the amount  of the donation for the period during  which the  amount remained with Nirmal Sethia Foundation. Prima  facie the entire episode relating to this

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donation of  Rs. 1 crore to Nirmal Sethia Foundation appears to be  bizarre. Obviously - and here again we are expressing our prima  facie view this donation of Rs. 1 crore to Nirmal Sethia Foundation  was co-related  to the  donation of Rs. 1 crore  agreed   to  be   made  to   Indira  Gandhi  Pratibha Pratishthan and  lends support  to the evidence of Prabhakar supported by  his noting  dated 29th April, 1981 part of Ex. 230. We  would not on this material be unjustified in taking the view  that it  was in pursuance of the agreement arrived at on  25th March, 1981 that the donation of Rs. 1 crore was made and  since income  tax exemption  was not  available in case of donation to Indira Gandhi Pratibha Pratishthan, this donation  of   Rs.  l   crore  was  made  to  Nirmal  Sethia Foundation.      It is  therefore clear that though Gavai, Prabhakar and the respondent  did not  agree to  the deductibility  of the donations to  be made  to Indira Gandhi Pratibha Pratishthan in computing  the net  income of  NCPA from  its  commercial complex, it  was definitely  agreed on 25th March, 1981 that donations, as  stated above, would be made by NCPA by itself or through  others to Indira Gandhi Pratibha Pratishthan. It appears that  since the  Government of  Maharashtra was  not agreeable to  override BMRDA notification restricting FSI to 1.33 as  also to  permit  the  donations  to  Indira  Gandhi Pratibha Pratishthan  to be deducted in computing the income of NCPA,  Ajit Kerkar informed J.J. Bhabha, as stated by him in paragraph  19 of  his deposition  that his scheme was not acceptable  to   the  Government   and  that  Bhabha  should therefore  move  in  the  matter.  J.J.  Bhabha  accordingly addressed a  letter dated  1st April, 1981 Ex. 216 to Gavai. mis letter  was collected  from J.J.  Bhabha’s office by Sen Gupta, Executive Assistant of Ajit 664      Kerkar in  order that  Ajit Kerkar  should be  able  to personally hand over to Gavai and pursue the matter with the Government. The  letter dated  1st April,  1981 Ex.  216 was accompanied by  a note  prepared by  J.J. Bhabha.  When Ajit Kerkar got  this  letter  dated  1st  April,  1981  Ex.  216 alongwith the  note, he dictated to Sen Gupta an endorsement to be  made at  the foot of the note and his endorsement was written out  by Sen  Gupta in his own handwriting as per the dictation of  Ajit Kerkar. This endorsement was written down by Sen  Gupta in  the morning  of 10th April, 1981 and it is marked ’B’ at the foot of Ex. 216. It is significant to note what this endorsement said :           "The  NCPA  by  itself  or  through  others,  will           arrange to  make the following donations to Indira           Pratibha  Pratishthan,   an  allied   organisation           involved  in   giving  similar   support  to   the           performing and non performing acts;           one time within six months of Govt.’s confirmation           Rs. 1  crore three  years after i.e. On completion           and commissioning  of the  commercial complex. RS.           25 lakhs  per year  eight years  after five  years           after the  completion of  the commercial  complex,           RS. 50  lacs per  year. The above donations may be           considered as  NCPA’s  expenses,  while  computing           NCPA’s net income." Ajit Kerkar  again  tried  to  persuade  the  Government  of Maharashtra that  the above  donations to  be made to Indira Gandhi Pratibha Pratishthan should be considered as expenses of NCPA  while computing  its net income. But obviously this effort also  did not  succeed. Indeed  it  would  have  been difficult for  the Government  of Maharashtra  to  agree  to allow the donations to Indira Gandhi Pratibha Pratishthan to

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be considered  as expenses  of NCPA  while computing  50 per cent of the net income of NCPA payable to the Government for two very  good reasons.  Firstly, it would be a fraud on the Government because  than 50  per cent  of the  donations  to Indira Gandhi  Pratibha Pratishthan  would be really paid by the Government  and secondly  it would  have to be expressly stated in  the official  documents that  the donations  were deductible in  computing the  net income  of NCPA  and  that would have  exposed the  real  nature  of  the  transaction, namely, that the donations 665 were paid  for getting a favour from the respondent. Neither Gavai and  Prabhakar nor  the respondent  therefore accepted this suggestion  of Ajit  Kerkar. But  the other part of the agreement reached  on 25th March, 1981 was placed before the Cabinet alongwith  the Cabinet  Note and  it was approved by the  Cabinet.   The  draft   of  the  Government  resolution embodying  this   agreement  was   submitted  by  the  Under Secretary  alongwith   his  note   which  was   approved  by Pengulkar, Deputy  Secretary. This  note which is dated 16th April, 1981  and which  is part  of Ex.  230 referred to the J.J. Bhabha’s  letter dated  1st April,  1981  Ex.  216  and apointed out that in that letter NCPA had undertaken that it would itself  or through others arrange to make donations to Indira Gandhi  Pratibha  Pratishthan,  as  set  out  in  the endorsement marked  ’B’ Ex.  216. It was stated in this note that  NCPA   had  requested  that  these  donations  may  be considered as  expenses of  NCPA  while  computing  its  net income. Obviously  reference was  made by  Pengulkar in this note to  the request  made by  NCPA in  the letter  of  J.J. Bhabha dated  1st April,  1981 Ex. 216 because Pengulkar was seeking instructions  of his  superiors in  regard  to  this request which  was rejected on 25th March, 1981 but restored on 10th April, 1981. It was when this note of Pengulkar came to Prabhakar  that he  recorded the  note dated  29th April, 1981 marked  ’B’ to  which we  have referred in some detail. The note  of Prabhakar  dated 29th  April, 1981  marked  ’B’ supported  by   the  oral   evidence  of  Prabhakar  clearly establishes that  NCPA had  agreed to make donations set out in the endorsement marked ’B’ in Ex.    216 to Indira Gandhi Pratibha  Pratishthan  and  that  it  was  agreed  that  the donations  so  made  would  not  be  treated  as  deductible expenses.      It   seems    that   Sen   Gupta   and   Shakur   Khan, representatives  of   NCPA  again  made  another  effort  to persuade Gavai  and Prabhakar  to agree that donations to be made to Indira Gandhi Pratibha Pratishthan should be allowed to be deducted as expenses before determining the net income of the  commercial complex  of NCPA.  But as appears clearly from the  note of  Gavai dated  30th April, 1981 part of Ex. 230, Gavai  and Prabhakar  clearly pointed  out to Sen Gupta and Shakur  Khan that NCPA would have to pay these donations after 50  per cent  of  the  net  income  was  paid  to  the Government and  that such  donations cannot  be  treated  as expenses. This  note of  Gavai also establishes beyond doubt that NCPA had agreed to pay donations 666 to Indira  Gandhi Pratibha Pratishthan and their request for treating the  donations as  deductible expenses  was  turned down by  the Government of Maharashtra. The draft Government resolution for giving effect to the Cabinet decision of 10th April, 1981  was approved  by the  Chief Secretary  and  the Government resolution  dated 6th May, 1981 was issued by the Government of Maharashtra directing that :      i) The entire plot of land admeasuring 30,419 sq. mtrs.

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should be  covered under  one single lease provided that the mortgage in  respect of  3/4th  of  the  plot  is  redeemed. National Centre  for the  Performing  Arts  will  also  have option to  extend the  existing mortgage with the Government of India to cover the entire property.      ii) The  National Centre  for the  Performing  Arts  be allowed to  utilise the  F.S.I. at the currently permissible rate of  1.33 over  the entire  plot. The  area  so  covered would, however  be inclusive  of the  existing  construction already made  by the  N.C.P.A. to the extent of about 95,000 sq.ft.      iii)  The  NCPA  be  permitted  to  build  a  hotel  of international standard  in the complex and offices and shops ancilary and  germane to such Hotel Establishment only. They may by  themselves or  through any other parties develop and operate the commercial complex.      iv) The  NCPA will be required to pay to Government 25% of the  net annual profits of the Centre and also 50% of the net income  from the  properties put  to commercial  use, in terms of  original Government Resolution. J.J. Bhabha had to admit in  his evidence  that by  reason of  this  Government resolution the  impediment in the way of NCPA was completely removed and  according to  the evidence  of  Prabhakar,  the benefit which  NCPA received  by reason  of this  Government resolution could  be estimated to be in the neighbourhood of several crores.      We must also refer to the donations aggregating to Rs. 26 lakhs  made by  Indian Hotels  Company  Limited  on  31st March, 1981.  These donations  were  made  to  three  trusts floated by the respondent namely Mahasle Taluka Pratishthan, Ambet Pratishthan and Shri Verdhan Matadarsangh Pratishthan. Rs. 6  lakhs were donated to Ambet Pratishthan, Rs. 10 lakhs to 667 Mahasala Taluka Pratishthan and Rs. 10 lakhs to Shri Verdhan Matadarsangh Pratishthan.  There was  also one  other  trust floated by  the respondent namely Raigarh Pratishthan. These four trusts  were drafted  by Sheroo Kanuga PW-16 and in all these four trusts the respondent, his wife and Sheroo Kanuga were the  only trustees and it was provided in each of these four trusts  that any  vacancy arising the office of trustee would be  filled up from the family of the respondent. It is the evidence  of Sheroo Kanuga that the drafts of these four trust deeds  were prepared  by him on the basis of the trust deed  of   Indira  Gandhi   Pratibha  Pratishthan   and  the respondent had  not examined  these  four  trust  deeds  but merely the  broad features were explained to the respondent. Now the  trust deeds  in respect  of these  four trusts were executed by  the trustees  on 20th  March 1981 and they were lodged with  the Charity Commissioner on 23rd March 1981. On the application  of Sheroo Kanuga compliance with Rule 7A of the Maharashtra  Public Trusts Rules was dispensed with even though it  was legally  not permissible  to  do  so.  Sheroo Kanuga  also   obtained  certificates  from  the  Income-tax Authorities exempting  donations made  to these four trusts. Sheroo Kanuga explained in his evidence that all this had to be rushed  through in  order to enable donations to be taken from the  potential donor  companies before 31st March 1981. He admitted  that Indian  Hotels  Company  Limited  was  the company which  was expected  to give  donations before  31st March 1981.  He went  on to say that the respondent had sent to him one Jadav who was a labour leader in the Taj Group of Companies in  Bombay and  he heard  from Jadav  that  Indian Hotels Company  Limited intended  to make  donations  before 31st March  1981. Indian  Hotels Company Limited accordingly

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by a  Resolution of  its Board of Directors dated 31st March 1981  approved   of  donation   of  Rs.  6  lakhs  to  Ambet Pratishthan, Rs.  10 lakhs to Mahasle Taluka Pratishthan and Rs. 10  lakhs to  Shri Verdhan  Matadarsangh Pratishthan and cheques were  paid to Sheroo Kanuga on behalf of these three trusts.      Now it  does appear  prima facie that these 3 donations aggregating Rs.  26 lakhs were paid by Indian Hotels Company Limited pursuant to some understanding reached in the course of negotiations  leading to  the agreement  dated 25th March 1981. We  fail to appreciate what possible reason could have prompted  Indian   Hotels  Company  Limited  to  make  these donations 668 aggregating to  a large  figure of Rs. 26 lakhs to the three trusts of  the respondent.  It is  significant to  note that these three  trusts along  with the  4th  trust  of  Raigarh Pratishthan were  executed  and  registered  and  income-tax exemption certificates  were obtained  in the course of just 10 days  before the  donations came  to be  made to  them by Indian Hotels Company Limited. The extra ordinary speed with which these  four trusts  were created  followed immediately after the  making of  donations  by  Indian  Hotels  Company Limited clearly  show prima facie of course, that there must have been  some understanding  between Ajit  Kerkar and  the respondent.      The only  explanation offered  by Ajit  Kerkar for  the making of these donations to the three trusts was that Jadav who was  a labour  leader in  the Taj Group of Companies was pressing him to do something for improving the conditions in the Konkan Region. Ajit Kerkar also relied on a letter dated 15th January  1981 said  to have  been addressed  to him  by Jadav. The case of Ajit Kerkar was that it was on account of the  pressure  exerted  by  Jadav  on  behalf  of  over  600 employees working in the Taj Group of Hotels who hailed from Konkan Region  that Indian Hotels Company Limited decided to make these  donations to the three trusts of the respondent. This story  put forward  by Ajit Kerkar prima facie does not appear to  be true.  If Jadav  was pressing on behalf of the employees of the Ta; Group of Hotels for doing something for the families  of the  employees in  the Konkan  Region it is difficult to see why no donations or contributions were made by Indian Hotels Company Limited to any other trusts such as Konkan  Unnati  Mitra  Mandal  prior  to  25th  March  1981. Moreover we  fail to appreciate why the employees in the Taj Group of Hotels should be so keen in securing development of the Konkan  Region instead of demanding improvement in their own living  conditions in  Bombay. Moreover,  the minutes of the meeting  of the  Board of  Directors  of  Indian  Hotels Company Limited  held on 31st March 1981 do not bear out the story put forward by Ajit Kerkar that it was at the instance of Jadav  that these  donations came  to be  made.  What  is stated in the minutes of the meeting is as follows :           "The Managing  Director reported to the Board that           over 600 employees working in Grades I to V in the           Taj Mahal and Taj Mahal Intercontinental Hotels, 669           Bombay, and who hail from the Konkan Region, had A           approached the  Managing  Director  to  contribute           amounts  to   certain  public   charitable  trusts           recently   established    for   the   purpose   of           undertaking programmes of rural development in the           rural areas  of the  Konkan Region.  The  Managing           Director further reported that the Trustees of the           Trusts were  very eminent public personalities and

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         the  trusts   had  been   issued  certificate   of           exemption of  tax under  Sec. 15CCA of the Income-           tax Act,  1961, pursuant to which donations to the           Trusts would be fully exempt from tax in the hands           of the donors. The names of the Trusts are under :           (i) Ambet Pratishthan           (ii) Shrivardhan Matadarsangh Pratishthan           (iii) Mhasale Taluk Pratishthan". It is  difficult to  understand as to how over 600 employees working in  the Ta;  Group of  Hotels suddenly  came to know must a little prior to 31st March 1981 that three trusts had been floated  by the  respondent when they were executed and registered only  a few  days before  that. How  is  it  that within 4  or 5  days over  600 employees of the Ta; Group of Hotels came  to know about the existence of these trusts and how  did  they  come  to  know  that  these  3  trusts  were established for  the purpose  of undertaking  programmes  of rural development in the rural areas of Konkan Region. It is also stated  in the minutes that Ajit Kerkar in his capacity as the Managing Director reported that the trustees of these 3 trusts  were very  eminent public personalities. We wonder whether the  respondent’s wife  and Sheroo  Kanuga could  be said to  be "very  eminent public personalities". It Is also strange that  though a  large sum  of Rs. 26 lakhs was being paid by way of donations, J.J. Bhabha did not even bother to inquire as  to who were the eminent public personalities who were trustees  of these  three trusts.  It  is  prima  facie difficult to  accept the explanation offered by Ajit Kerkar. We do  not think we would be unjustified, on the material on record, to take the prima facie view that these donations of Rs. 26 lakhs were also connected with the negotiations which took place on 25th March 1981 between Ajit Kerkar on the one hand and Gavai and the respondent on the other. 670      We must therefore hold that a prima facie case has been made out  on behalf  of the  prosecution for  framing  23rd, 24th, 25th,  41st, 42nd  and 43rd  draft charges against the respondent. The learned Trial Judge in our opinion fell into an error  in discharging  the respondent in respect of these charges.      Before we  close we  may make  it clear  that  we  have examined the  evidence on  record merely  for the purpose of deciding whether  the evidence  is of such a nature that, if unrebutted,  it   would  warrant   the  conviction   of  the respondent. It  will be open to the respondent to rebut this evidence and to make out his defence when the trial proceeds against him  on the  charges already  framed by  the learned Trial  Judge  and  the  additional  charges  which  we  have directed to be framed against him.      RANGANATH MISRA,  J. This  appeal by  special leave  is directed against  the order of a learned Single Judge of the Bombay High  Court dated  April 30,  1985, refusing to frame charges on  22 heads  while framing  charges under  21 other heads      This litigation  has had  a chequered  career. A  short account of  the events  relevant for  the disposal  of  this appeal may now be indicated.      The  appellant,   R.S.  Nayak,   filed  a  petition  of complaint on  September 11,  1981, in the Court of the Chief Metropolitan   Magistrate,   Esplanade,   Bombay,   alleging commission of  several offences  by the  respondent and some other persons.  The learned  Chief  Metropolitan  Magistrate declined to take cognizance of the offences punishable under sections 161  and  165,  I.P.C.  and  Section  5(2)  of  the Prevention of  Corruption Act (II of 1947) (’Act’ for short)

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without appropriate  sanction as  the respondent was, at the relevant time,  holding the  office of Chief Minister of the State of  Maharashtra. Several  legal proceedings were taken thereafter  in   regard  to   the  necessity   of  sanction. Ultimately, however,  the appellant lodged a fresh complaint on August  9, 1982,  alleging commission  of offences by the respondent punishable  under ss.  161, 165, 384 and 420 read with s. 120B, I.P.C. as also s. 5(2) read with s. 5(1)(d) of the Act. This complaint came to be registered as 671 Special Case No. 24/82 and was transferred to the High Court of Bombay  for trial  under an  order made by a Constitution Bench of  this Court  on February  16, 1984,  in R.S.  Nayak v.A.R. Antulay, [1984] 2 S.C.C. 183. This Court directed :           "Therefore, Special  Case No.  24/82  and  Special           Case No.  3/83 (a  similar complaint  filed by one           P.B. Samant against the respondent) pending in the           Court of  the Special  Judge, Greater Bombay, Shri           R.B.Sule, are  withdrawn and  transferred  to  the           High Court of Bombay with a request to the learned           Chief Justice  to assign  these  two  cases  to  a           sitting Judge of the High Court"      This Court in a separate judgment delivered on the same day in A.R. Antulay v. Ramdas Sriniwas Nayak & Anr.,[1984] 2 S.C.C.500, held :           "....  When  cognizance  is  taken  on  a  private           complaint or  to be  precise, otherwise  than on a           police report,  the Special  Judge has  to try the           case according  to the  procedure  prescribed  for           trial of  warrant cases  instituted otherwise than           on police  report by a Magistrate (sections 252 to           258 of  1898 Code  of Criminal  Procedure) Section           252 requires that when accused is brought before a           Court,  the   Court  shall  proceed  to  hear  the           complainant and  take all  such evidence as may be           produced in  support of  the prosecution.  Accused           has a  right to  cross-examine complainant and his           witnesses. If  upon considering  the  evidence  so           produced, the Court finds that no case against the           accused has  been made  out, which, if unrebutted,           would warrant  his  conviction,  the  Court  shall           discharge the  accused (section  253 ibid). If, on           the other hand, Court is of the opinion that there           is ground  for  presuming  that  the  accused  has           committed an offence, which the Court is competent           to try,  a  charge  shall  be  framed  in  writing           against the accused........ "                                          (emphasis supplied) 672      Pursuant to  these judgments  the case  was posted  for trial before  Khatri, J. of the Bombay High Court. The trial opened before  Khatri, J. on April 9, 1984, and 16 witnesses were examined before him by July 27, 1984. Then followed the dispute relating  to  fabrication  of  the  public  records, produced in  the Court. Khatri, J. ordered inspection of the files as  also an  inquiry into the allegations. By an order dated  April   23,  1984,  he  found  that  the  prosecution allegations against  the respondent  of tampering  with  the files by  removing and  interposing  certain  documents  and interpolating endorsements  on some other documents were not well-founded.  The   prosecution,  thereupon,   applied  for transfer of  the case  to some other Judge. That was refused but on  the request of Khatri, J. that he may be relieved of trying the  case, the learned Chief Justice nominated Mehta, J., another Judge of that court as the trial Judge. Fortyone

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more witnesses  were examined  before Mehta,  J.  and  after examination of  57 witnesses in all for the prosecution, the trial Judge  was invited to consider the framing of charges. Fortythree draft  charges were placed for his consideration. By the  impugned order  the learned  Trial Judge  framed  21 charges and  refused  to  frame  the  remaining  22  charges proposed by  the prosecution  and made an order of discharge in respect  of those  charges. It is this order of discharge relating to  22 charges which is assailed by the complainant in this appeal.      The respondent, a Barrister by profession, entered into politics and  was for some time Minister of Law in the State of Maharashtra  and following  the general election in 1980, came to  be the  Chief Minister  of that State up to January 20, 1982.  The appellant in his complaint petition named the respondent as  the 1st  accused and  mentioned "others known and unknown" as the remaining accused persons. He alleged in the petition  of complaint  that  between  August  1980  and September 1981  when respondent  was  functioning  as  Chief Minister, he  retained to himself the power to deal with the following matters :           (1) The allotment of cement quota and distribution           of cement;           (2) Supply  and sale  of industrial alcohol, issue           of licenses  for wholesalers and retailers dealing           in country liquor and Indian made foreign liquor; 673           (3) Control of co-operatives and in particular the           sugar co-operatives;           (4) Administration  of  urban  land  ceiling  law,           restriction of F.S.I. and exemptions therefrom and           in fact  he himself  exercised these powers of the           State.      During this  period seven  Trusts were  created by  the respondent as per the following particulars : Serial No.    Name of the Trust        Date of Registration 1. Indira Gandhi Pratibha Pratishthan(IGPP) 18.10.80 2. Nirmal Sethia Pratishthan (NSPP)          29.12.80 3. Konkan Unnati Mitra Mandal (KUMM)         17.03.81 4. Raigad Zila Pratishthan (RZP)             25.03.81 5. Srivardhan Matadhar Sangh Pratishthan     25.03.81    (SMSP) 6. Mhasale Taluka Pratishthan (MTP)          25.03.81 7. Ambet Pratishthan (AP)                    25.03.81      It is  the prosecution  case -  and there is no dispute that Srivardhan  located in  the District  of Raigad was the Assembly Constituency  of  the  respondent.  Konkan  is  the region in  which the  District of  Raigad  is  located.  The respondent belonged  to  village  Ambet  which  is  part  of Mhasale Taluka in Raigad District. The five Trusts appearing against items  3-7 above  were thus  intended to place ample funds at  the disposal  of the  respondent and provide means and  resources  for  his  political  aggrandisement.  Nirmal Sethia Pratishthan  was created  in the  name of a friend of the respondent.  In all these six Trusts the respondent, his wife,  close   relations  and  friends  were  associated  as Trustees. So  far  as  IGPP  is  concerned,  the  respondent represented that  the State  Cabinet had taken a decision on October 6, 1980, to create the same. On October 7, 1980, the respondent at a Press Conference made 674 a declaration  to this  effect and  in official publications also this  fact was  duly publicised.  It is the prosecution case that  the late  Smt.  Indira  Gandhi,  the  then  Prime Minister, had  never agreed to have her name associated with

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the Trust  which came  to be  registered  with  the  Charity Commissioner on  October 18,  1980.  Though  it  was  not  a Government Trust  and Smt. Gandhi had not agreed to her name being associated  with it,  the  respondent  personally  and through others  gave a  lot of  publicity representing as if these were  facts with  a view to inducing people to believe that IGPP was a Government Trust and the late Prime Minister had agreed  to associate  her name  with that  Trust.  These representations  were  made  with  a  view  to  creating  an appropriate impact  on the  mind of  the  people  at  large. According to the prosecution, as a fact, Mrs. Gandhi had not consented to associate her name with the Trust and that fact was disclosed  on the  floor of  the Lok  Sabha by  the then Defence Minister  on behalf  of the Prime Minister. It is on record that her name was deleted and the Trust later came to be known only as Pratibha Pratishthan.      As already  stated, 43 draft charges were placed before the learned  Trial Judge  on the basis of the evidence of 57 prosecution witnesses  and a  large volume  of documents. 43 draft charges  were divided  into six groups for convenience of consideration by the learned Trial Judge. These six heads with  reference   to  the   specific  allegations   and  the particulars of the draft charges are shown below: Serial No. Allegation   Offence alleged  Charge No. 1. Conspiracy            120B, IPC           1 2. With reference to    Sugar Co-operatives :    (a) Shetkari Sahakar  165,384,420,IPC     2-4    Sakhar Karkhana    (b) Warna                  -do-           5-7      (c) Panjara              -do-           38-40 675 3. (a) National Centre for    Performing Arts (NCPA)  161 & 165, IPC    23-25                            5(2) read with                           5(1) of the                           Prevention of                           Corruption Act.      (b) Indian Hotel Co      Ltd.                 161 & 165, IPC;    41-43                           5(2) read with                           5(1) of the                          Prevention of                          Corruption Act. 4. Nanubhai Jewellers    (F.S.I)               161 & 165, IPC;     33,35                          5(2) read with                          5(1), Prevention                          of Corruption Act. 5. Industrial Alcohol         -do-           32,34 6. Cement Allotments          -do-           8-22, 7.transactions                               26-31.      The  prosecution   examined  specific   witnesses  with reference to  the allegations  supporting the draft charges. Similarly, documents  were  also  produced  to  support  the allegations. The  learned Trial  Judge, who  was required in law to state the reasons if he discharged the accused, in an unusually long  order extracted the evidence of witnesses at length as  also the  contents of the documents and framed 21 charges while  discharging the  respondent in respect of the remaining 22.  The prosecution  filed an application on July 5, 1984,  Ext. 214-A,  disclosing the  names  of  the  other accused persons and those names were :           1. Mr. Ajit Kerkar, PW. 44;           2.  Mr.   P.G.  Gavai,   Chief  Secretary  to  the

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         Maharashtra Government  at the relevant time and a           Trustee of the IGPP; 676           3.  All   officers  of  the  State  Government  of           Maharashtra  who  participated  in  the  issue  of           various Government  orders knowing  that the  same           were being issued for a consideration;           4. Officers  of the  Sugar  Directorate  who  used           official pressure for collection of money from the           Sugar  Co-operatives  and  Joint  Stock  Companies           under instructions of the respondent;           5. Mr.  Pessi Tata,  since  dead,  who  negotiated           several  transactions   relating  to  alcohol  and           cement allocations ;           6. Mr. N.M. Tidke, Minister of Co-operation.      Admittedly, by  July 5,  1984, the  trial  had  already begun and  several witnesses for the prosecution had already been examined.      The learned  Trial Judge did not accept the prosecution case  regarding  the  offence  of  cheating  and  extortion. Similarly, the  charge of  conspiracy was  not accepted. The learned Trial  Judge framed  21 charges  in respect  of  six transactions  relating   to  cement   and  one  relating  to industrial alcohol  for offences  under ss. 161 and 165, IPC and s.  5(2) read  with s.  5(1)(d) of  the Act. For these 7 transactions, 21  charges in  all were framed, 3 charges for each transaction.      As  pointed  out  by  the  Constitution  Bench  in  the judgment to  which reference  has been  made,  the  relevant sections of  the Code  of  Criminal  Procedure  (’Code’  for short) for  the trial  of a  case of  this type are sections 244, 245 and 246. Section 245(1) provides :           "If upon  taking of the evidence referred to in s.           244, the  Magistrate considers,  for reasons to be           recovered, that  no case  against the  accused has           been made  out which, if unrebutted, would warrant           his conviction,  the  Magistrate  shall  discharge           him."      While section 246(1), on the other hand, requires : 677           "If when  such evidence  has been  taken or at any           previous stage  of the  case the  Magistrate is of           opinion that  there is  ground for  presuming that           the accused has committed an offence triable under           this Chapter which such Magistrate is competent to           try and  which in his opinion should be adequately           punished by  him, he  shall  frame  in  writing  a           charge against the accused."      The Code  contemplates discharge  of the accused by the Court of  Sessions under  s. 227  in a  case triable  by it; cases instituted  upon a police report are covered by s. 239 and cases  instituted otherwise  than on  police report  are dealt with  in s.  245. The three sections contain some what different provisions  in regard to discharge of the accused. Under s.  227, the  trial Judge is required to discharge the accused if he ’considers that there is not sufficient ground for proceeding against the accused.’ Obligation to discharge the  accused  under  s.  239  arises  when  "the  Magistrate considers the  charge against the accused to be groundless." The power  to discharge  is exercisable under s. 245(1) when "the Magistrate  considers, for reasons to be recorded, that no case  against the  accused has  been made  out which,  if unrebutted, would  warrant his  conviction..." It  is a fact that ss.  227 and  239 provide  for discharge  being ordered before the recording of evidence and the consideration as to

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whether charge  has to  be framed  or not  is required to be made on  the basis  of the  record of  the  case,  including documents  and   oral  hearing   of  the   accused  and  the prosecution or  the police  report, the documents sent along with it  and examination  of the accused and after affording an opportunity to the two parties to be heard. The stage for discharge under  s. 245,  on the other hand, is reached only after the  evidence referred  to in  s. 244  has been taken. Not-withstanding this difference in the position there is no scope for  doubt that  the stage  at which the Magistrate is required to consider the question of framing of charge under s. 245(1) is a preliminary one and the test of "prima facie" case has  to be  applied. In  spite of the difference in the language of  the three  sections, the legal position is that if the  trial Court  is satisfied that a prima facie case is made out, charge has to be framed. 678      In Mahant Abhey Dass v. S. Gurdial Singh & Ors., A.I.R. 1971 S.C.  834, this  Court in  case instituted on complaint applied the  prima facie  test. In  State of Bihar v. Ramesh Singh, [1978]  1 S.C.R.  257, this  Court again  pointed out that the  standard of  test and  judgment  which  is  to  be finally applied  before recording  a finding regarding guilt or otherwise  of the  accused, is  not to  be applied at the stage of  deciding the  matter under  s. 227. It was further observed :           "If the evidence which the prosecution 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 the           offence, then  there will  be no sufficient ground           for proceeding  with the trial. An exhaustive list           of circumstances  to indicate as to what will lead           to one conclusion or the other is neither possible           nor  advisable.   We  may   just  illustrate   the           difference of  the law by one more example. If the           scales of  pan as to the guilt or innocence of the           accused are  something like even at the conclusion           of the  trial, then,  on the  theory of benefit of           doubt the case is to end in his acquittal. But, if           on the  other hand,  it is so at the initial stage           of making an order under s. 227 or s. 228, then in           such a  situation ordinarily  and  generally,  the           order which will have to be made will be one under           s. 228  (charge to be framed) and not under s. 227           (of discharge)".      Untwalia, J.  who spoke  for the  Court in  that  case, quoted with  approval the  view expressed  by Shelat,  J. in Nirmaljit Singh  Hoon v. State of West Bengal & Anr., [1973] 2 S.C.R.  66, and  what had been said in yet another earlier decision of  the Court  in  Chandra  Deo  Singh  v.  Prakash Chandra Bose,  [1964] 3  S.C.R. 629. In the case of Union of India v.  Prafulla Kumar  Samal & Anr., [1979] 2 S.C.R. 229, (a decision  to which  the trial Court referred), this Court was dealing  with a  case involving  allegations relating to offences punishable under s. 5(2) read with s.5(1)(d) of the Act and  s. 120-B, IPC as here. Fazal Ali, J. indicated that the Court  has power  to sift and weigh the evidence for the limited purpose of finding out 679 whether or  not a  prima facie  case against the accused has been made  out. In  Superintendent and Remembrancer of Legal Affairs, West  Bengal v. Anil Kumar   Bhunia & Ors.,[1979] 4 S.C.C. 274, a three Judge Bench of this Court said:

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         "At this  stage, as  was pointed out by this Court           in State  of Bihar  v. Ramesh  Singh, (supra), the           truth, veracity  and the  effect of  the  evidence           which the  prosecution proposes  to adduce are not           to be  metieulously judged.  The standard of test,           proof and  judgment which is to be applied finally           before finding  the accused guilty or otherwise is           not exactly  to be  applied. At this stage, even a           very  strong   suspicion  founded  upon  materials           before the  Magistrate which  leads him  to form a           presumptive opinion  as to  the existence  of  the           factual  ingredients   constituting  the   offence           alleged may justify the framing of charge.. "      The language  of sub-s.  (1) of  s. 245 also places the matter beyond dispute by using the same test as suggested by Untwalia, J., in the case of Ramesh Singh, (supra).      The use  of the  words "if, upon taking of the evidence referred to in s. 244" in sub-s. (1) of s. 245 is suggestive of the  statutory intention that until "all such evidence as may be produced in support of the prosecution" is taken, the stage for  judicial consideration as to whether charge is to be framed  is not  reached. Now  it is  a fact  that several witnesses named  by  the  prosecution  still  remain  to  be examined in  the instant  case but  no  grievance  was  made before us  by the  appellant’s counsel  that the trial Judge had acted  wrongly in  taking up  the question of framing of charges prematurely.Obviously  this complaint  could not  be made since  after 57  witnesses had been examined it was the prosecution itself  which invited the learned Trial Judge to take up the matter of framing of charges.      Admittedly, the  witnesses examined for the prosecution have been  cross-examined and  in the case of some, at great length. There  is no  scope for doubt that the rebuttal case envisaged in  s. 245(1) of the Code is fairly clear from the cross-examination of prosecution witnesses as also from the 680 documents exhibited  before the  Court,  apart  from  direct evidence being  led by  the defence independently. Under the scheme of the Code there is no scope for the accused to lead defence evidence  until the  prosecution is  closed and  the examination of the accused under s. 313 of the Code is over. With the amendment of the Code of 1898 in 1955 and under the new Code  of 1973 the procedure relating to all varieties of criminal  trials,   excepting  warrant   cases  on   private complaints, has been simplified. The procedure in respect of trials according to warrant procedure in private complaints, however, continues  to be  cumbersome and time-taking and it is for  Parliament to  simplify the procedure for such cases keeping all aspects in view.      Lengthy arguments  were advanced both by Mr. Jethmalani for the  appellant and  Mr. P.P. Rao for the respondent with reference to  the evidence.  When an  attempt  was  made  by learned counsel  on both sides to present an analysis of the evidence  and  criticism  was  advanced  by  Mr.  Jethmalani against the reasons given by the trial Judge and support was indicated by  Mr. Rao  to such  reasons, we indicated to Mr. Rao that  if we  went into the matter at length even for the prima facie  purpose  and  indicated  conclusions  it  might embarrass the  respondent in, his defence even in respect of the charges  framed by  the trial  Court. In  view of  these observations made  in  course  of  the  hearing,  a  written statement on  behalf of the respondent was filed on November 5, 1985,  signed by  the respondent  and  his  counsel.  The relevant portion of the said statement reads thus :           "Since some  charges have  already been  framed by

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         learned Trial Judge with respect to offences under           ss. 161  and 165,  I.P.C. and s. 5(1)(d) read with           s. 5(2)  of the  Prevention of  Corruption Act and           the ingredients  of  the  offence  under  s.  165,           I.P.C. have  not been  specifically adverted to in           the main  judgment and  the respondent  has in any           event to  argue before  the trial  Court regarding           the scope  as  well  as  the  ingredients  of  the           offences under  ss.161 and  165, I.P.C.  On  which           there is  not much  of case  law and  it  involves           appreciation  of   the  scheme   of  the  relevant           provisions  of  the  I.P.C.  as  well  as  of  the           Prevention of Corruption Act, the respondent 681           is willing  to face  trial straightaway in respect           of A  not only the charges already framed but also           on the  draft charges  in so  far as they involved           the offences alleged under ss. 161 and 165, I.P.C.           and s. 5(1)(d) read with s. 5(2) of the Prevention           of Corruption  Act and  the charge  of  conspiracy           relating thereto......... "      When such a statement was filed, we pointed out to Mr. Rao that  while in  the trial  Court on  the basis of such a stand charges  could straightaway  be framed  in  regard  to those offences  named in  the statement in the appeal unless the order  3 of discharge made by the trial Court is vacated and the  reasons advanced  by the trial Judge are set aside, it would  not be  proper for  this Court  in exercise of its appellate jurisdiction  to direct that charges be framed. It was further pointed out that a direction to frame charges on the basis  of the  statement filed  has to be on the footing that the  prosecution evidence in support of the charges was such that unless rebutted, the respondent would liable to be convicted.  This   observation  made  by  us  was  merely  a restatement of  the legal  position and  was  not  meant  to prejudice the  respondent in  any manner.  But it  cannot be disputed that  in order  to  decide  whether  the  order  of discharge should  be sustained  or set  aside,  we  have  to consider whether  on the  material on  record, a prima facie case has been made out on behalf of the prosecution.      As hearing  proceeded, at one stage we were inclined to lay down  generally the  para-metres of the provisions of s. 165, I.P.C.  Mr. Rao  for the  respondent while  making  his submissions in  regard to  the actual  scope of  the offence covered by  s. 165,  I.P.C. pointed  out on  more  than  one occasion that  the respondent  might be  prejudiced  in  his defence if while laying down the parametres of that offence, we indicated  a straightjacket  formula. He  also  suggested that the  matter should be left to be argued and the learned Trial Judge  should be free to come to his conclusion in law with reference  to the facts of the case about the scope and ambit of  that provision  that if any party was aggrieved by the decision  it would  still be open to be corrected in the appellate forum. Taking these submissions into consideration and on  further deliberation,  we are inclined to accept the view that it may not be appropriate 682 at this stage to lay down the ambit and scope of the offence under s.  165, I.P.C.  at any  great  length.  It  would  be sufficient  in   our  view   to  generally   point  out  the distinction  between   sections  161  and  165,  I.P.C.  and simultaneously deal with the provisions of s. 5(1) read with s. 5(2) of the Act. But before  doing so,  we would  briefly refer to  the evidence  in support  of the charges which the respondent has  agreed to  be  framed  for  the  purpose  of

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showing that the learned Trial Judge had prima facie taken a wrong view  and it was a fit case where these charges should have also been framed.      The complainant  PW. 14  is a  member of  the  Bhartiya Janata Party.  He was  elected as a State legislator in 1978 and from 1980 onwards he was General Secretary of the Bombay City  unit   of  the   said  Party.  He  has  supported  the prosecution allegations  in general.  According to  him, the IGPP was  publicised as  a Government  Trust. A statement of the respondent  at the  Press  Conference  held  immediately after  the  Cabinet  decision  and  repetition  of  that  in contemporaneous  Government   publications  led   people  to believe that  IGPP was  a Government  Trust. The  Government publications have been exhibited. Though an attempt has been made while  cross-examining the  witness to  bring  out  the position  that   what  was   published  in   the  Government publications was  not known  to the respondent, that has yet to be  established.  PW.  1,  a  Cabinet  colleague  of  the respondent and  now a  sitting Member  of Parliament who has close association  with one of the major sugar co-operatives as also  Directors of  the other  sugar  co-operatives,  has spoken about  the demand  of contribution and the raising of contribution taking  a bag  of sugar  produced as  the unit. There is  considerable evidence  in regard  to allotment  of cement under instructions of the respondent. Contemporaneous record prepared  by responsible  public officers prima facie supports the  position  that  the  respondent  had  directed allotments to be made in a manner said to be not strictly in accordance with  the prevailing  procedure. The  persons  to whom allotments  of cement have been made have in many cases contributed large  sums of  money to  the  Trust  funds.  In regard to  the NCPA  there  is  contemporaneous  documentary evidence  as   also  oral  evidence  to  show  that  certain concessions were  extended by  Government and  payments  had been received  which have  gone into  the Trust funds. While the prosecution  has alleged that the payments of money were a 683 consideration for  the favour shown to NCPA, the defence has A come  out with  the version  that the  payments  made  and stipulated were  unconnected and  the  large  sum  of  money agreed to  be paid  was for the purpose of improving the lot of the  people of Konkan region. Similarly, in regard to the grant of  ’No  Objection  Certificate’  in  respect  of  the premises of  Nanubhai Jewellers,  there is evidence from the side of  the prosecution  to support its allegation that the power of  the State  was exercised for a consideration while there is  no denial regarding receipt of the payment but the link  is  denied  and  disputed.  Similarly,  in  regard  to industrial alcohol  at least  so far  as Kolhapur Sugars are concerned, there  is the  evidence of  PW. 50 and payment of Rs. 2,25,000  which has  gone into the funds of the KUMM has been alleged  and is claimed to have been proved. The record shows that the allotment of alcohol was restored.      The  oral  evidence  in  this  case  is  backed  up  by documentary evidence.  Some of  the relevant  documents have interpolations and the inquiry relating to interpolation has not become  final. It  is indeed  difficult at this stage to say that  the evidence as a whole is inadequate to establish the prima  facie case.  The learned  Trial Judge, as already pointed  out,  extracted  at  great  length  both  the  oral evidence as also the contents of documents but there was not much of  analysis to  justify rejection  of the material. It may  be   pointed  out   that  there  is  substance  in  Mr. Jethmalani’s submission that the learned Trial Judge adopted

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two different  standards in  the matter of weighing the same evidence, when  he agreed  to frame  21 charges  which  were inter-linked  and  inter-connected  with  the  rest  of  the prosecution story  with reference  to  which  the  22  draft charges had  been given.  In fact it is this position which, when properly  considered by his counsel, led the respondent to file  his statement suggesting that charges for the other offences excepting  under ss.  384 and 420, IPC, may also be framed. If  the evidence was accepted for half the number of charges relating  to similar offences, there could hardly be any scope  to reject  the 22  draft charges.  Similarly,  in regard  to   the  charge   of  conspiracy   the  facts  were interconnected and there could be no justification to reject the charge  even if  the other  persons implicated  were not before 684 the Court. The reasoning given by the learned trial Judge in support of  his order  of discharge  in regard  to the draft charges relating  to ss.  161 and  165, IPC and s. 5(2) read with s.  5(1) of  the  Act,  concerning  these  transactions cannot,  therefore,   be   sustained.   We   are,   in   the circumstances, inclined  to take the view that the statement filed by  the respondent  was justified  and  the  order  of discharge  made   by  the   learned  trial   Judge  is   not sustainable.      It is  appropriate at  this stage  to take  note of the fact that  under s.  245(1) of  the Code  the requirement is that the  evidence must  be such which if not rebutted would warrant conviction of the accused. Under the law of evidence the concept  of rebuttable  presumption  is  well-known.  As pointed  out   by  Taylor   in  his  Treatise  on  Evidence, "rebuttable presumptions  of law are a result of the general experience of  a connection  between certain facts or things one being usually bound to be the companion or affect of the other. The  connection, however,  in this  class is  not  so intimate or  so uniform  as to  be conclusively  presumed to exist in  every case; yet, it is so done that the law itself without the  aid of  a jury  infers one  fact from the crude existence of  the other in the absence of opposing evidence. In this  mode, the law advances the nature and amount of the evidence which is sufficient to establish a prima facie case and throws  the burden  of proof upon the other pary; and if no opposing  evidence is offered, the jury are bound to find in favour  of the  presumption. A  contrary verdict might be set aside as being against evidence. The rules in this class of presumptions as in the former have been adopted by common consent from  motives of public policy and for the promotion of the  general good;  yet, not as in the former (conclusive proof)  class  forbidding  all  further  evidence  but  only dispensing with  it till  some proof  is given  on the other side to  rebut the  presumption raised.  Thus, as men do not generally violate the Penal Code, the law presumes every man to  be   innocent;  but  some  men  do  transgress  it;  and therefore, evidence is received to repel this presumption."                                  (emphasis supplied by us).      The learned  trial Judge  should have proceeded to scan the evidence  keeping this  aspect of  the legal position in view 685 which he  has missed. There is another aspect which has also to be  noticed here.  One of  the  allegations  against  the respondent is the commission of offences punishable under s. 5(1) read  with s.  5(2) of  the Act.  Section 4 of that Act provides :           ’Where in any trial of an offence punishable under

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         s. 161 or section 165 of the Indian Penal Code, or           of an  offence referred to in clause (a) or clause           (b) of  sub-s. (1)  of s. 5 of this Act punishable           under sub-section  (2) thereof,  it is proved that           an accused person has accepted or obtained, or has           agreed to  accept  or  attempted  to  obtain,  for           himself or for any other person, any gratification           (other than  legal remuneration)  or any  valuable           thing from any person, it shall be presumed unless           the  contrary   is  proved  that  he  accepted  or           obtained or  agreed  to  accept  or  attempted  to           obtain, that gratification or that valuable thing,           as the  case may be, as a motive or reward such as           is mentioned  in the  said section 161, or, as the           case  may  be,  without  consideration  or  for  a           consideration which he knows to be inadequate."      The presumption  raised under  s. 4 is a presumption of law which  a Court  is bound to draw, once it is proved that the  accused  Government  servant  received  or  obtained  a valuable thing in the circumstances mentioned in the section (see The  State of  Madras v.  A. Vaidyanatha  Iyer,  [1958] S.C.R. 580  and K.  Satwant Singh  v. The  State of  Punjab, [1960] 2  S.C.R. 592). The learned Judge failed to take note of this  statutory provision  while dealing with the charges under ss. 161 and 165, IPC as also s. 5(1)(a) and (b) of the Act. We  do not  intend to  say anything more at this stage. But we  do hope  that while  dealing with the case after the framing of  the charges,  the learned  trial Judge will keep this legal position in mind and act accordingly.      In the  face of  the pronounced view of this Court that the Minister is a public servant, no attempt was made either before the  High Court  or before  us to  argue that  to the Chief Minister,  ss. 161  and 165  of the  Indian Penal Code would not apply. The main ingredients of the charge under s. 161, IPC, are : 686           (1) that the accused was a public servant;           (2) that  he must  be shown  to have obtained from           any person  any  gratification  other  than  legal           remuneration; and           (3) that  the gratification  should be as a motive           or reward  for  doing  or  forbearing  to  do  any           official act or for showing or forbearing to show,           in the  exercise of  his official function, favour           or disfavour to any person. Ordinarily, when  the first  two ingredients are established by evidence,  a rebuttable  presumption arises in respect of the third.  For the  offence under s. 165, IPC the essential ingredients are :           (i) the accused was a public servant;           (ii) he  accepted or  obtained or agreed to accept           or obtain  a valuable  thing without consideration           or for  an inadequate  consideration knowing it to           be inadequate;           (iii) the person giving the thing must be a person           concerned or  interested  in  or  related  to  the           person concerned  in any  proceeding  or  business           transacted  or  about  to  be  transacted  by  the           government servant  or having  any connection with           the official  of him self or of any public servant           to whom he is subordinate; and           (iv) the  accused must  have  knowledge  that  the           person  giving   the  thing  is  so  concerned  or           interested or related.      It has been pointed out by this Court in A. Vaidyanatha

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Iyer’s case  (Supra) that  s. 165  is so  worded as to cover cases of corruption which do not come within ss. 161, 162 or 163. Indisputably the field under s. 165 is wider. If public servants are  allowed  to  accept  presents  when  they  are prohibited under a penalty from accepting bribes, they would easily circumvent the prohibition by accepting the bribe in 687 the  shape   of  a   present.  The  difference  between  the acceptance of  a bribe made punishable under s. 161 and 165, IPC, is this : under the former section the present is taken as a  motive or reward for abuse of office, under the latter section  the   question  of   motive  or  reward  is  wholly immaterial and  the acceptance  of a  valuable thing without consideration or with inadequate consideration from a person who has  or is likely to have any business to be transacted, is forbidden  because though not taken as a motive or reward for showing  any official  favour, it is likely to influence the public  servant to  show official  favour to  the person giving such  valuable thing.  The provisions  of ss. 161 and 165, IPC  as also  s. 5  of the Act are intended to keep the public servant  free from  corruption  and  thus  ultimately ensure purity in public life. The  evidence   in  the  case, therefore, should  have been judged keeping these aspects in view.      We shall now proceed to consider the charge relating to extortion punishable  under s.  384, IPC.  The allegation in respect of  this alleged offence is to be found in paragraph 18 of the petition of complaint which reads thus :           "That on the facts mentioned above, the accused is           also guilty  of an  offence under  s. 384,  I.P.C.           When a  Chief Minister demands moneys from persons           officially transacting  business with  him or  who           are likely  to transact  business with  him in the           future, it  is implicit  in the  situation that  a           veiled threat  is conveyed  that  the  request  or           demand will  not be  attended to  and  there  will           either  be  denial  or  delay  in  the  matter  of           granting to them what they are entitled to or that           they will  be harassed  by a large number of pink-           pricks by  which bureaucracy  and  the  Government           make  anyone’s   life  miserable   if  the   Chief           Minister’s demands  are not  complied with. Moneys           are, therefore, obtained by extortion and payments           called donations  are the direct result of fear of           injury. The  accused has  thus been  guilty of the           offence under s. 384, I.P.C." The learned  Judge considered  framing of charge relating to extortion, in paragraphs 97-107 of his order. According to 688 him, the evidence of PW. 1 Shalinitai did not establish that the accused  or anybody  on his  behalf held  out any threat either  personally   to  her  or  to  the  Sangli  Karkhana. According to  the learned  counsel, the  learned Judge  fell into an error in confining his consideration of the issue by referring to  the deposition of PW. 1 alone. The evidence of PW.51, Gilda,  was equally relevant and germane to the issue of extortion  according to him and should have been referred to and  relied upon  while dealing with the consideration of the charge. Mr. Jethmalani next contended that the following features which  had been  established should  have  led  the learned Judge  to hold  that there was material for the view that a  case in  respect of  the charge had been made out by the prosecution.           (i) The  respondent had  decided to  raise Rs.  10           crores for  the IGPP  out of which a moiety was to

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         be raised  during the  crushing season  of 1980-81           and the remainder during the following season;           (ii) The  IGPP between  the date  of its formation           and 31.3.81  had been  able to secure a very small           amount compared  to the  target and  bulk of  that           small amount  had  come  from  the  Government  of           Maharashtra;           (iii) Considering  the  pomp  and  publicity  with           which IGPP  had been  brought into  existence, the           financial position  appeared to  be ridiculous for           want  of  sufficient  funds.  The  respondent  had           assured the  Board of  Trustees at  the meeting of           the 6th  May 1981  that the  sugar cooperatives at           his  instance   had  agreed  to  immediately  make           payment of their contribution;           (iv) The  statement of  the respondent  was  based           upon the  fact that  at the meeting on 25th April,           1981, of  the ministerial  committee held  in  his           Secretariat Chamber,  he  had  extracted  promises           from the  managements of  the sugar  co-operatives           for payment of contributions to IGPP in lieu of an           assurance to  them of  agreeing to  their  pending           demands with Government;           (v) After  obtaining the promise of donations, the           respondent adjourned  consideration of  the demand           of 689           the industry to the next meeting to be held on the           28th May  1981 and insisted upon compliance of the           promise of donations before their demands could be           acceded to;           (vi) The  entire official  machinery, particularly           of the  Sugar Directorate,  was utilised  to bring           about pressure  on the  Sugar Federation  and  its           component members  for  extracting  contributions.           Pressure was, therefore, brought about of Marathe,           P.W. 5,  through Lulla,  P.W.7, and  the  telegram           under Ext.     81 was  sent to  the members of the           Federation;           (vii) P.W.1,  Shalinitai,  rightly  described  the           conduct of  the respondent as one of pestering and           in answer  to such extortion to which she yielded,           she  advised  the  Sangli  Karkhana  to  make  the           payment in  the interest of the society. According           to Mr.  Jethmalani, the position came to this that           if  the  factory  had  not  paid,  the  legitimate           demands pending  consideration of Government would           have suffered a setback:           (viii) The  donations in the instant case were the           outcome of  pressure and  were  not  voluntary  in           character. The  fact that  the Penzarakan Karkhana           had issued a cheque of Rs. 2 Lakhs in spite of its           strained financial  circumstances and while it had           a bank  balance of  less than  Rs. 6,000  and  the           Sangli Karkhana  had to  arrange for  a  duplicate           cheque as  the original  cheque had  been left  at           Sangli and had not reached the respondent in time,           were indicative  of the  volume of  pressure  that           must have  been brought  about for  collecting the           donations;           (ix) Mr.  Jethmalani pointed  out that  it was the           respondent’s own  case that  if the management had           made payments  which were illegal, they themselves           abetted the  offence of  cheating. This suggestion           had  been   put  to   three  relevant  prosecution

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         witnesses. The  fact that  these witnesses closely           connected  with   the  sugar   co-operatives   had           committed even a 690           criminal offence  goes to  show that their act was           not at  all voluntary  and the  fiscal interest of           the  factories  must  have  been  their  sole  and           primary consideration for such conduct. On the  basis of  these  facts  and  circumstances,  learned counsel for  the appellant  argued that the three charges of extortion had  been prima  facie established and the learned trial Judge  was, therefore,  not justified  in refusing  to frame charges for the offence under s. 384, IPC.      Mr. Rao  for the  respondent relied upon the definition of ’extortion’  in s.  383 in  the  Indian  Penal  Code  and contended that  the ingredients  of the offence had not been prima facie established so as to justify framing of a charge for the said offence.           ’Extortion’ is thus defined in s. 383, I.P.C. :           "whoever intentionally  puts any person in fear of           any injury  to that  person J or to any other, and           thereby dishonestly  induces the  person so put in           fear to  deliver to  any person  any  property  or           valuable security,  or anything  signed or  sealed           which may  be converted  into a valuable security,           commits extortion." The main ingredients of the offence are :           (i) the  accused must  put any  person in  fear of           injury to that person or any other person;           (ii) the  putting of a person in such fear must be           intentional;           (ii1) the  accused must  thereby induce the person           so put  in fear  to  deliver  to  any  person  any           property, valuable  security or anything signed or           sealed which  may be  converted  into  a  valuable           security; and           (iv) such inducement must be done dishonestly. 691 Before a person can be said to put any person to fear of any injury to  that person,  it must appear that he has held out some threat  to do or omit to do what he is legally bound to do in  future. If  all that a man does is to promise to do a thing which  he is  not legally bound to do and says that if money is  not paid  to him  he would not do that thing, such act would  not amount  to an  offence of extortion. We agree with this  view which has been indicated in Habibul Razak v. King Emperor,  A.I.R. 1924  All 197. There is no evidence at all in  this case  that the  managements of  the  sugar  co- operatives had  been put  in any  fear and the contributions had been  paid in  response to  threats. Merely  because the respondent was  Chief Minister  at the relevant time and the sugar co-operatives  had some  of their  grievances  pending consideration before the Government and pressure was brought about to  make the donations promising consideration of such grievances, possibly  by way of reciprocity, we do not think the appellant  is  justified  in  his  contention  that  the ingredients of  the offence of extortion have been made out. The evidence  led by  the prosecution  falls  short  of  the requirements of  law in  regard to  the alleged  offence  of extortion. We  see, therefore, no justification in the claim of Mr. Jethmalani that a charge for the offence of extortion should have been framed.      The only  other allegation in respect of which there is an order  of discharge  is  relating  to  cheating.  In  the petition of complaint detailed factual allegations were made

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in paragraphs  19 to  30  in  regard  to  this  aspect.  The complaint alleged :           "That  in  the  specific  cases  of  contributions           received by the IGPP the accused is further guilty           of committing  an offence of cheating under s. 427           of the  Indian Penal  Code. The  accused  embarked           upon a  systematic campaign  to associate the name           of the Prime Minister of India, Mrs. Indira Gandhi           with this Trust in order that the contributions to           this Trust  would be easily forthcoming. This was,           in fact,  intended to  strengthen  the  impression           that not  only Mr.  Antulay’s Government  but also           Mrs. Indira  Gandhi was  actively involved  in his           operations. That  such an impression was sought to           be created  is further  borne out by the fact that           for 692           inaugurating the  said trust,  a function was held           at the Raj Bhavan, in Bombay on 11th October 1980.           The Prime  Minister especially  flew in to perform           the inauguration  ceremony. A picture of the Prime           Minister and  the accused  standing  by  her  side           while the  former is  signing documents  connected           with the  Trust appeared  in most  of the  leading           newspapers in  their  issues  dated  12th  October           1980."           The allegations in regard to this offence are two- fold: (i)  though IGPP  was not  a State  Government  Trust, publicity was  given by  the respondent  himself and through his agents  as also  through news  media owned  by the State Government and  the public press to the fact that IGPP was a Government trust;  and (ii)  though Mrs.  Gandhi  had  never agreed to  the Trust  being named  after her, the respondent associated  her   name  for   the  purpose  of  creating  an impression in  the mind of the people at large that the then Prime Minister,  Mrs. lndira  Gandhi had  associated herself with the  respondent’s trust.  The fact that Mrs. Gandhi had not consented was stated on the floor of the Parliament. The correct position  was always known to the respondent and yet he either  directly or  through others  misrepresented these two aspects  with a view to making people part with money by way of contribution to this Trust.           The evidence  in regard  to these  allegations  is both oral  and documentary.  The Cabinet  met on  October 6, 1980, and  it is  the prosecution  case that  the respondent gave out a Press Conference on the following day that on the 6th October the Cabinet had decided to create a Trust by the name of  IGPP. The news relating to the Press Conference was reported in  several newspapers,  a few among them being the Free Press  Journal, Sakal,  Lok Satta,  Nav Shakti  and the Indian Express.  The report  appearing  in  the  Free  Press Journal has  been marked  as Ext. 190. That was shown to PW. 10 Arya, the Secretary of the IGPP and on reading the Report he admitted  it to  be more  or less correct. A reference to the newspaper  publication shows  that  the  respondent  had announced that the creation of the Trust was the decision of the Government  of Maharashtra.  Exhibit 48  is the October- November 1980  issue  of  a  Government  publication  titled ’Maharastra Shasana Che Nirnay" (decisions of the Government of Maharashtra). Therein there is reference 693 to IGPP  and a  reading of  it prima  facie shows  that  the establishment of  IGPP was the decision of the Government of Maharashtra. PW.8  the Director-General  of Information  and Public Relations  of the  Government of  Maharashtra at  the

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relevant time has accepted this publication. It is true that he has taken the stand that there is no ministerial approval at the  pre-publication stage  of the contents. That may not at all  be material because there must be an assumption that whatever  is   published  in   the  Government  owned  paper correctly represents the actual state of affairs relating to Governmental  business   until  the   same  is  successfully challenged and  the real  state of  affairs is  shown to  be different from what is stated in the Government publication. mis position  would get  support from  the decision  of this Court  in   Harpal  Singh   &  Anr.  v.  State  of  Himachal Pradesh,[1981] 1 S.C.C. 560. The prosecution has also relied on the  Government of  Maharashtra publication  ’Lok Rajya’. The English  and Marathi  versions of  this publication  for October 1980 have been proved as Exts. 179-180 respectively. Similarly,  there   is  another  Government  of  Maharashtra publication known  as "Maharashtra Marches Ahead," Ext. 181, which is  a publication  of December  1980. These documents, according to  the prosecution,  give an impression that IGPP was a  Government created  Trust. The Trust Deed of the IGPP is Ext. 208 and it clearly shows that it is not a Government Trust nor  was  it  created  by  the  Government.  Even  the respondent was  not a  Trustee qua Chief Minister. As a fact IGPP was  registered as  a public  trust  with  the  charity commissioner.      PW.1, an  erstwhile Cabinet colleague of the respondent has deposed  that  on  the  11th  October,  1980,  when  she attended the  function at  the Raj  Bhavan to which we shall presently advert,  she came  to know  the  actual  state  of affairs, viz., though the respondent was trying to create an impression that  IGPP was  a Government  Trust, yet the same was not;  but on account of her being in the Cabinet she did not dispute  the position  anywhere  publicly.  The  Cabinet Resolution has  not yet seen the light of the day. PW. 1 was specifically questioned  as to  whether there  was a Cabinet decision in  respect of  creation of  IGPP as a Govt. Trust. She declined  to answer  the question by saying that she was bound by  the oath  of secrecy  and she  would not  be in  a position  to  disclose  that  information.  The  prosecution attempted to cause production of 694 the Cabinet decision but privilege was claimed and the claim has succeeded. Therefore, the document has not been produced before the  learned trial  Judge and  is not  a part  of the record. The propriety of the claim of privilege is subjudice before this  Court and we do not intend to say anything more about it.  The core  of the prosecution allegation in regard to this  part of  the matter  is with reference to the sugar co-operatives.  Several  witnesses  have  been  examined  to support this aspect of the prosecution case.      So far  as the  second aspect,  i.e.  relating  to  the association of the name of Mrs. Gandhi is concerned, Mr. Rao for the  respondent has  admitted  the  position  that  Mrs. Gandhi had  at no  stage given her consent to her name being associated with  the Pratibha Pratisthan. It is not disputed that  under   the  law,   without  appropriate  sanction  or authority, the  name of the Prime Minister was not available to be  associated. There  has been  a  denial  of  any  such consent having  been given  by the  then Defence Minister on the floor  of Lok Sabha. Respondent made a similar statement on the  floor of the Maharashtra Legislature on September 9, 1981,  wherein,   apart  from  endorsing  the  statement  in Parliament,  he   took  the  responsibility  on  himself  of assuming Mrs.  Gandhi’s consent. Yet, on 16th October, 1980, in Lok  Rajya -  a Maharashtra  Government publication  -  a

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picture of  the accused  standing by  the side  of the  late Prime Minister was reproduced with the following inscription below the photograph :           "Prime  Minister   Indira  Gandhi   affixing   her           signature on  the documents  giving her consent to           name  the   Maharashtra  Government’s   Trust  for           promoting talent  in literature  and fine  arts as           ’Indira Gandhi Pratibha Pratishthan’ at Raj Bhavan           on Saturday.  Watching keenly  is  Chief  Minister           A.R. Antulay."      The learned  trial Judge  devoted a substantial part of the impugned  order to  deal with  the charge  under s. 420, IPC. He  referred to  the statement  of PW  1 that  she  had actually  known   the  real  state  of  affairs  before  the contribution was  made to  the IGPP.  He ultimately took the view that  the material  placed on  record did not justify a charge under  8. 420  IPC being framed. We do not propose to refer to every item of evidence 695 on record  relating to  the allegation  of cheating.  We are afraid that  if we  follow that  procedure and  express  our opinion one  way or the other with reference to each item of evidence, either  party is  likely to be prejudiced when the matter goes  for trial notwithstanding our statement that we were doing  so only for the purpose of finding out whether a prima facie case had been made out. We would, therefore, not refer to the evidence any further.      Cheating is  defined in  8. 415  of  the  IPC  and  the ingredients for that offence are :           (i)  there   should  be  fraudulent  or  dishonest           inducement of a person by deceiving him;           (ii)  (a)   the  person   so  induced   should  be           intentionally induced  to deliver  any property to           any person  or to  consent that  any person  shall           retain any property, or           (b) the  person so induced should be intentionally           induced to  do or  to omit to do anything which he           would not  do or  omit if he were not so deceived;           and           (iii) in cases covered by the second part of (ii),           the act  or omission should be one which caused or           is likely  to cause  damage or  harm to the person           induced in body, mind, reputation or property.      (See Dilbagh Rai Jarry v. Union of India & Ors., [1974] 2 F S.C.R. 178.)      Section 415  actually consists  of two parts, each part dealing with one way of cheating -           1. Where, by deception practised upon a person the           accused dishonestly  or fraudulently  induces that           person to  deliver property  to any  person or  to           consent that  any person shall retain any property           ;           2. Where,  by deception,  practised upon a person,           the accused  intentionally induces  that person to           do 696           or omit  to do  anything which  he would not do or           omit to  do, if  he were not so deceived and which           act or  omission causes  or  is  likely  to  cause           damage or  harm to  that  person  in  body,  mind,           reputation or property.      The question is whether these ingredients are satisfied by the  prosecution evidence.  We must  point out  that  the learned trial  Judge failed to analyse the evidence which he had at  great length  extracted keeping  the proper angle of

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approach in view. Therefore, his conclusion is not made on a proper assessment and is not sustainable. We are inclined to agree with  Mr.  Jethmalani  that  the  evidence,  oral  and documentary, taken  together does  justify the  framing of a charge for  the offence  under s.420,  IPC. Here  again,  we would like  to reiterate  that the position is a presumptive one open  to rebuttal  by the respondent. We are, therefore, of the  view that  a charge  under s.  420, IPC,  should  be framed by the learned trial Judge against the respondent.      The net  result of the aforesaid discussion, therefore, is that  a prima  facie case  has been  established  by  the prosecution in  respect of the allegations for charges under ss.l20B, 161,  and 165  and 420,  IPC, as  also under s.5(1) read with  s.5(2) of  the Act.  So far  as the  three  draft charges relating  to the  offence punishable  under s.  384, IPC, are  concerned, we  agree with  the learned trial Judge that the  prosecution failed to make out a prima facie case. Therefore, except in regard to the three draft charges under s.384, IPC,  charges in  respect of  the remaining  19 items shall be framed. The appeal is allowed to that extent.      Lot of  argument has  been made  by Mr. Jethmalani that other persons  who have been named in the application of the complainant Ext.  214-A, should  also be  proceeded against, particularly  in   regard  to   the  charge   of  conspiracy punishable under  s.l20-B, IPC.  As we  have already pointed out, Pessi  Tata is  dead. One of the other persons shown in Ext. 214-A  is also  dead as  indicated  therein.  Excepting Tidke, the Minister of Co-operation, Gavai, PW. 13, and Ajit Kerkar, PW.  44, and  a few  other public  officers who have been specifically  named in Ext. 214-A, names of others were not disclosed  and a prayer was made that all other officers who were involved in the matter 697 may be  proceeded against.  It may  be that  some  of  these officers or  outsiders have  not behaved  in an  independent manner and  have failed  to act up to the expectation of the office they  held. But  that by itself may not be sufficient justification for  prosecuting them  criminally.  Again,  as pointed out  by the  learned trial  Court, if  that is to be done at  this  stage,  the  trial  which  has  already  been sufficiently protracted  would have  to be de novo and would required further  time to  be spent. It appears that some of these officers  like Gavai  have already  retired and are no more in  service. Almost  five long  years  have  intervened between the events and now. These are relevant aspects to be taken into  consideration. So far as Gavai is concerned, the learned trial  Judge has examined his conduct with reference to  the  matter  relating  to  NCPA  and  has  come  to  the conclusion one which may not be immediately rejected that he was anxious  to watch  the interests  of the Government and, therefore, did  not agree  with the  concessions proposed by the NCPA.  We are inclined, therefore, to take the view that so far  as Gavai is concerned, the trial Judge was justified in holding that he was not liable to be proceeded against as a co-conspirator.  While dealing  with this  aspect  of  the matter,  the   learned  Judge   indicated  that   superior’s direction was  a germane  consideration. We  agree with  Mr. Jethmalani’s submission  that the superior’s direction is no defence in  respect of  criminal acts,  as every  officer is bound to  act according  to  law  and  is  not  entitled  to protection of  a superior’s  direction as  a defence  in the matter of commission of a crime. It is relevant to point out that the  other persons  alleged against were not before the Court as  accused persons. There was, therefore, no question of discharging  them. An  application had  been made  to the

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trial Court  and it  is still  open to  the trial  Judge  to consider on  the matterial  available if  anyone has  to  be proceeded against  as a  co-conspirator when  the charge  of conspiracy punishable  under s.  120-B, IPC is framed. It is true that  under s.  319 of  the code de novo trial would be necessary. It  is in  the discretion  of the  trial Court to take a  decision as  to whether  keeping all aspects in view any other  person should  be brought  in as an accused to be tried for  any of  the offences  involved in the case. We do not express any definite view in this regard and we consider it sufficient  to indicate  that this  is a  matter  in  the discretion of the trial court. 698      There is  one other  aspect which  required to be dealt with. The learned trial Judge while dealing with Chari, PW. 41, in paragraph 653 observed.           "There appears  to be  no doubt  that Chari  is  a           disgruntled subordinate.  The manner  in which  he           came out  with the  suggestion of substituting his           note, Exhibit  421,  the  manner  in  which  Chari           volunteered his  answers, would  indicate that  he           had harboured  an animus against Gavai. mis aspect           of Chari’s  evidence, therefore, cannot be said to           be reliable evidence against Gavai." These  observations  against  Chari  appear  to  be  totally unwarranted and  the learned trial Judge should not have, on the facts before him, come to this conclusion and castigated the public  officer in  the manner referred to above. We are somewhat surprised that the learned trial Judge did not even refer to  the contents  of  the  document,  Ext.  421,  with reference to  which considerable  evidence had  been led. In this connection  the evidence  of PWs.  46, 47 and 49 should also have  been considered by the learned trial Judge. These observations must, therefore, be expunged. The learned trial Judge will  consider  the  entire  evidence  in  its  proper perspective when he finally disposes of the case.      We have  no intention  to make  anything final  at this stage except  that the  prosecution for the offence under 8. 384, IPC,  must fail. Any observation made by us in any part of our  Judgment is  confined to  the question as to whether charges should  be framed  and/or  the  order  of  discharge should be  upheld. Even  where we have said that a charge is to be  framed the  position is  that a  frime facie case has been made  out which  is open  to be  rebutted  by  the  1st respondent. The  learned trial  Judge is, therefore, free to come to  his own  conclusions on  the basis  of the evidence which is  already on  record and which may be led before him by the  parties when the trial proceeds after the framing of the charges  and he  will decide whether the charges against the 1st  respondent are  made out or not on the basis of the entire evidence.      At the  hearing Mr.  Jethmalani for  the appellant  had prayed that we should give a direction to the learned Chief 699 Justice to  nominate a Judge other than Mehta, J. to take up A the  further trial  of the  case and  this prayer has been opposed by  Mr. Rao  for the  respondent.  It  is  too  well settled that  litigants can  have no  say in  regard to  the choice of  the judge before whom their lis must be heard. We have no  doubt that Mehta, J. had dealt with the matter in a fair way  and there  is no  warrant on the facts of the case for shifting  the case from him to another learned Judge for trial. Recording  of the prosecution evidence is almost over and but  for a  few more  witnesses and some documents which might come,  the prosecution  has already  laid  its  entire

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cards before  the Court and Mehta, J. has, with reference to all this  material, taken  a view  which we  have  reversed. Though we  have no  doubt in  our mind  that Mehta, J. acted fairly and  impartially in  disposing of  the  case  in  the manner he  did, it cannot be said that there is no scope for apprehension in  the appellant’s mind that his complaint may not receive  adequate and  proper treatment  at the hands of the same learned Judge who has already expressed himself one way. In  these circumstances,  while reiterating our opinion that we  have no  doubt that  Mehta,  J.  acted  fairly  and impartially and without casting any reflection whatsoever on the learned Judge, we would, following the well known dictum that justice should not only be done but must also appear to be done, request the learned Chief Justice of the High Court to nominate another learned Judge to take up the matter from the stage  at which  Mehta, J.  made the  impugned order. We hope the  learned Chief  Justice will  take prompt  steps to nominate a  learned Judge to take up the trial and once such nomination is  made, the  learned trial  Judge will  proceed expeditiously to dispose of the case finally. M.L.A.                              Appeal allowed in part. 700