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PETITIONER: STATE OF MAHARASHTRA

       Vs.

RESPONDENT: DR. BUDHIKOTA SUBHARAO

DATE OF JUDGMENT16/03/1993

BENCH: SAHAI, R.M. (J) BENCH: SAHAI, R.M. (J) PANDIAN, S.R. (J)

CITATION:  1993 SCR  (2) 311        1993 SCC  (3) 339  JT 1993 (3)   379        1993 SCALE  (2)36

ACT: Criminal Procedure Code, 1973: Section  397--High  Court’s  jurisdiction--Proceedings  when vitiated by ‘fraud’ Indian    Evidence    Act    1872.     Section     44--Legal proceeding--When vitiated by ’fraud’ Indian   Contract  Act  1872.    Section   17--’Fraud’--What is--Effect on legal proceedings. Words and Phrases.  ’Fraud’--Meaning of.

HEADNOTE: The  respondent,  an ex Naval Officer and  Computer  Science graduate  was accused of leaking Atomic Energy  Secrets  and charged  for violating the provisions of the  Atomic  Energy Act,  1962 and the official Secrets Act.  1923.   Ultimately when  he was discharged for failure of the State  to  obtain the necessary sanction under Section 197 Cr.  P.C., and  the State  challenged  the correctness of the order  by  way  of revision,  the  respondent  filed  an  application  for  the declaration that the charge sheet be declared null and void. In  para  3  thereof it was stated  that  the  charges  were vitiated  by fraud as the Panchnama dated May 30,  1988  was fabricated  as it did not contain his signature and  it  was ante  dated.  It was further averred that for  three  months even  the  copies  of the remand application  filed  by  the police were denied to him, and that orders thereon were  not supplied to him, and that the complaint was in contra on wit the  statement  of witnesses.  The High Court  allowed  this application. In the State’s appeal to this Court on the question  whether the  High  Court was justified in allowing  the  application flied  by  the  respondent for declaring  that  the  charges framed  by the Additional Sessions Judge by his order  dated 24/27th July, 1990 were null and void as they were  obtained by fraud, practised by the state. 330 Allowing  the  appeal, setting aside the order of  the  High Court   dated  14th  October,  1991,  and   dismissing   the application  of the accused for declaring the order  of  the Additional Sessions Judge framing the charges against him as vitiated by fraud, this Court, HELD:1. The High Court by its order passed on 25/26th March,

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1991  in  Criminal  Writ  Petition  No.  966  of  1990   had specifically  held that the question of framing  charge  had become  final.  It could not be, therefore, re-opened.   The Division  Bench had clearly held that it was not open to  go behind  the  order passed by the Single  Judge  on  3.4.1990 directing that the charges being framed against the  accused not  only under Section 3 but under Section 5 as well.   Nor can any exception be taken to the finding of the Bench  that the said order could not be said to have been passed without jurisdiction in as much as the Single Judge had jurisdiction to  decide  the  revision application  preferred  under  the provisions of the Code. [332B-C] 2. The question of fraud raised by the accused was negatived by  the,  Division  Bench and it was held that  it  was  not capable  of being gone into as it did not form part  of  the substratum  of  the  case of the  prosecution  and  was  not germane  to  the question of deciding as to whether  he  was entitled to be discharged or not. [332D] 3. ’Fraud’ is false representation by one who is aware  that it was untrue with an intention to mislead the other who may act  upon  it to his prejudice and to the advantage  of  the representor.  It has been defined statutorily in Section  17 of the Contract Act as including certain acts committed with connivance  or  with  intent to  deceive  another.   In  Ad- ministrative Law it has been extended to failure to disclose all  relevant  and material facts which one has  a  positive duty to disclose. [332G-H] 4.  Even the most solemn proceedings stand vitiated if  they are   actuated  by  fraud.   Such  being  the   nature   and consequence of it the law requires not only strict  pleading of it but strict proof as well. [333B] 5. Facts which could be fished out from paragraphs  averring fraudulent submissions could not be said to be relevant  for alleging fraud. [334E] 6. Legal submissions cannot be equated to misrepresentation. The  pleadings in the instant case fall short of  the  legal requirements to estab- 331 lish  fraud.   Various sentences  extracted  from  different judgments   between  the  accussed  and  State  in   various proceedings  could not give rise to an inference  either  in law or fact that the State was guilty of fraud. [335H, 336A] In the instant case the averments in paragraphs 3 and 4 to 8 of  the application do not establish fraud.   No  foundation giving   rise   to  fraud  was  laid.    It   was   complete misapprehension under which the accused was labouring and it was  indeed  unfortunate that the Single Judge of  the  High Court not only entertained the respondent’s application  but adopted  a  course which amounted to reviewing  and  setting aside orders of his predecessor without sufficient  material and  accepting  the claim that all  earlier  judgments  were liable to be ignored under Section 44 of the Evidence Act as the  proceedings were vitiated by fraud.  The  Single  Judge not only committed an error of procedure but misapplied  the law. [336B]

JUDGMENT: CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 277  of 1993. From  the Judgment and Order dated 14.10.1991 of the  Bombay High  Court in Crl.  Misc.  Application No. 2260/91 in  Crl. Revision Application No. 123 of 1991.

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Altaf  Ahmed,  Addl.  Solicitor General,  B.R.  Handa,  Mrs. Manjula  Rao, S.M. Jadhav, A.S. Bhasme and  A.M.  Khanwilkar for the Appellant. Dr. B. Subha Rao Respondent-in-person. The Judgment of the Court was delivered by R.M.   SAHAI,  J.  The  short  question  that   arises   for consideration  in  this  appeal is if  the  High  Court  was justified  in allowing the application filed by the  accused for  declaring  that the charges framed  by  the  Additional Sessions  Judge by order dated 24/27th July, 1990 were  null and  void as they were obtained by fraud, practised  by  the State. Merits  or  otherwise  of the  application,  alleging  fraud against  the  State,  apart, what  has  left  us  completely surprised is not so much the entertaining of the application filed  by  the  accused, for declaration  that  the  charges framed  against  him were nullity having  been  procured  by fraud  as the procedure adopted by the learned Single  Judge of granting the prayer 332 merely for failure of the State to file any reply by way  of counter-affidavit  than  by recording any finding  that  the State was guilty of procuring the order framing the  charges by  fraud.   One of the objections raised by the  State  was that  since  the High Court by its order passed  on  25/26th March  1991  in Criminal Writ Petition No. 966 of  1990  had specifically  held that the question of framing  charge  had become  final, therefore, it could not be re-opened,  cannot be  said to be without substance as the Division  Bench  had clearly  held  that it was not open to go behind  the  order passed  by  the learned Single Judge on 3rd/4th  April  1990 directing that the charges be framed against the accused not only  under Section 3 but under Section 5 as well.  Nor  can any exception be taken to the finding of the Bench that  the said  order  could not be said to have been  passed  without jurisdiction  in  as much as the learned  Single  Judge  had jurisdiction  to decide the revision  application  preferred under  the  provisions of the Code.  Even  the  question  of fraud  raised by the accused was negatived by  the  Division Bench and it was held that it was not capable of being  gone into  as it did not form part of the substratum of the  case of  the prosecution and was not germane to the  question  of deciding as to whether he was entitled to- be discharged  or not. However,  it is not necessary to rest the decision  on  this ground  as  the  learned Single  Judge  having  allowed  the application as being vitiated by fraud it appears  necessary to examine if the pleading on fraud in the application filed by  the  accused was sufficient in law to empower  the  High Court  to take cognizance of it and even if it was, did  the accuse  succeed in proving it as even if the State  did  not file  any  counter-affidavit the application  could  not  be allowed unless it was found as a fact that the State by  its acts or omissions acted-,deceitfully or it misled the court. ’Fraud’ is false representation by one who is aware that  it was  untrue with an intention to mislead the other  who  may act  upon. it to his prejudice and to the advantage  of  the representor.  It is defined in Oxford Dictionary as, ‘ using of false representations to obtain an unjust advantage or to injure  the rights or interests of another’.  In Webster  it is  defined  as, ’deception in order to  gain  by  another’s loss;  craft;  trickery-, guile; any artifice  or  deception practiced  to cheat, deceive, or circumvent another  to  his injury.   It has been defined statutorily in Section  17  of the  Contract Act as including certain acts  committed  with

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connivance   or   with  intent  to  deceive   another.    In Administrative  Law  it  has been  extended  to  failure  to disclose 333 all  relevant  and material facts which one has  a  positive duty  to disclose.  It is thus understood as deliberate  act or  omission to mislead other to gain undue advantage.   ’It consists  of  some  deceitful  practice  of  wilful  device, resorted  to with intent to deprive another of his right  or in   some  manner  to  do  him  an  injury’   (Black’s   Law Dictionary).    Effect  of  fraud  on  any  proceeding,   or transaction  is  that  it becomes nullity.   Even  the  most solemn  proceedings stand vitiated if they are  actuated  by fraud.  Such being the nature and consequence of it the  law requires not only strict pleading of it but strict proof  as well. Did the averments in the application made out case of  fraud ?  Were the statements of fact capable of giving rise to  an inference in law that the State was guilty of misleading the court  ? From the charge-sheet it is clear that it  complied with  the  requirements  of law and mentions  not  only  the offence  and  the section but the particulars  as  to  time, place  and  person.  Whether prosecution  was  possessed  of sufficient  evidence  to  prove  each  of  the  charges   is different matter, but they were framed on basis of documents seized from possession of the accused at the airport, search of  his  residence, on the next day, interrogations  of  the accused  and examination of prosecution witnesses.   In  the connected  appeal  No. 276 of 1993 [Arising  out  of  S.L.P. (Crl.)  No. 986 of 1992] directed against the  discharge  of the  accused  for failure to obtain sanction  a  very  brief summary  has  been  given of various attempts  made  by  the accused  to  get an order of discharge, on  merits,  without success.  It is not necessary to recount all that here.  Ul- timately when the accused was discharged for failure of  the State  to obtain sanction under Section 197 of the  Criminal Procedure   Code  (in  brief  ’the  Code’)  and  the   State challenged  the correctness of the order by way of  revision the  accused filed the application for the declaration  that the charge-sheet be declared null and void.  In paragraph  3 of  the  application  it was stated that  the  charges  were vitiated  by fraud as the Punchnama dated 30th May 1988  was fabricated  as it did not contain his signature and  it  was ante-dated.   It was further averred that three months  even the  copies  of the remand application filed by  the  police were denied to the applicant and the orders thereon were not supplied to him.  It was also claimed that the complaint was in  contradiction with the statement of witnesses.   May  or may  not  be so but that could be relevant when  the  merits were  gone  into.   It certainly, could not be  taken  as  a ground   for  claiming  that  the  framing  of  charge   was fraudulent, especially, when these aspects had been thrashed out  once before the learned Single Judge who by  his  order dated 3rd/4th 334 April  1990 held that the charges against the  accused  were made out not only under Section 3 but under Section 5 of the Act. In   the  same  paragraph  the  accused  extracted   certain observations  made by a learned Single Judge, in one of  the orders  and  claimed  that  they  furnished  guidelines   to distinguish  between offences under Sections 3 and 5 of  the O.S. Act.  According to him if honest and fair answer to the question, if any charge was made out, Was given by the State it  would  have  exonerated  the  applicant  but  the  State

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committed  fraud by keeping the Trial Judge in the  dark  of real  facts and induced him to entertain  erroneous  opinion and pass order on 24th July framing charges against him.  In paragraphs  4 to 8 various sentences from one or  the  other judgment  rendered for or against the accused  by  different courts  at one or the other stage were extracted and it  was claimed  that  the  State either  knowingly  did  not  place correct   facts  to  substantiate  those   observations   or deliberately   concealed  the  truth  and  made   fraudulent submissions  inducing the Trial Judge thereby to  frame  the charges.   Emphasis was laid on the submissions advanced  by the State and it was stated that it was result of fraudulent submissions  that  the  Trial court  was  induced  to  frame charges  against the accused.  No foundation giving rise  to fraud  was  laid.   Facts which could  be  fished  out  from paragraphs averring fraudulent submissions could not in  our opinion  be  said to be relevant for  alleging  fraud.   For instance in paragraph 4 it was stated,               "the Ld.  Addl.  Session Judge was deceived by               the aforesaid fraudulent and false  submission               of the Respondent in February 1989 during  the               judicial   proceedings  and  the  Ld.    Addl.               Session Judge was induced to believe that  the               applicant  was also found and caught  carrying               books on 30-5-1988 at the Sahar Airport Bombay               which  books,  as alleged by  the  Respondent,               could  not  have come into possession  of  the               Applicant  even in the ordinary  course,  when               the  applicant was holding the office  of  the               Captain  of  Navy.  The respondent  knew  very               well  that in the record of the Sessions  Case               no. 1084/88 there were no books as alleged  by               the  Respondent  and  moreover  the   disputed               documents  were not deposited in the  Sessions               Court in February 1989 when the Learned  Addl.               Session  Judge  was  induced  to  believe  the               fraudulent submissions of the 335               Respondent   in  February  1989.   The   above               mentioned   fraudulent  submissions   of   the               Respondent  were clearly meant to deceive  the               Session Court in February 1989 and to see that               the applicant was not discharged under Section               227 Cr.  P.C.’               Similarly in paragraph 5 it was stated,               "It  is significant to note that  in  February               1989  the documents were not deposited in  the               Session  Court though it was  mandatory  under               Section  209(c)  Cr.   P.C.  to  deposit   the               documents in the Session Court after the  Case               was committed to the Sessions on 22.9.1988  by                             the  Ld Magistrate.  Thus in  actual  position ,               there  were no documents in February 1989  for               ’consideration’  of  the Ld.   Addl.   Session               Judge  as prescribed under the  provisions  of               Sec.  227  Cr.  P.C. and the  Respondent  took               advantage of that situation and  intentionally               made  the aforesaid fraudulent submissions  in               Feb.  1989  during  the  judicial  proceedings               before  the  Ld.  Addl.   Session  Judge  Shri               Patel  and caused circumstances to induce  the               Ld.   Session  Judge Shri Patel  to  entertain               erroneous  opinions and pass orders  resulting               in miscarriage of justice’.

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             In paragraph 7 it was stated as under               "The  Ld.   Addl.  Session  Judge  Shri  Patel               passed  two orders dated 11-9-1989 and  11-10-               1989  to compel the Respondent to deposit  the               documents in the Session Court and accordingly               the  Documents were deposited in  the  Session               Court  only on 11-10-1989; which  conclusively               establishes   that  in  February   1989   when               "Charges" were framed the "Documents" were not               with the Session Court and the fraudulent  and               false  evidence advanced in February  1989  by               the Respondent alone became the basis to frame               ’Charges’ in February 1989." We  must  confess our inability to appreciate the  worth  of such averments to establish fraud.  Legal submissions cannot be  equated  to  misrepresentation.   In  our  opinion   the pleadings fell short of legal requirements 336 to  establish  fraud.   Various  sentences  extracted   from different judgments between the accused and State in various proceedings  could not give rise to an inference  either  in law or fact that the state was guilty of fraud.  Suffice  it to say that it was complete misapprehension under which  the accused was labouring and it was indeed unfortunate that the High Court not only entertained such application but adopted a  course  which  amounted to reviewing  and  setting  aside orders  of his predecessor without sufficient  material  and accept the claim that all earlier judgments were, liable  to be  ignored  under  Section 44 of the Evidence  Act  as  the proceedings  were vitiated by fraud.  We are constrained  to say  that the learned Judge not only committed an  error  of procedure but misapplied the law. In  the  result, this appeal succeeds and is  allowed.   The order  dated  14th October 1991  in  Criminal  Miscellaneous Application   No.  2260  of  1991  is  set  aside  and   the application  of  the accused for declaring the  order  dated 24/27th  February  1990 framing the charges against  him  as vitiated by fraud, is dismissed. N.V.K.                           Appeal allowed. 337