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CASE NO.: Special Leave Petition (crl.) 549  of  2000

PETITIONER: STATE OF TAMIL NADU

       Vs.

RESPONDENT: J. JAYALALITHA

DATE OF JUDGMENT:       09/05/2000

BENCH: K.T.THOMAS & R.C. Lahot

JUDGMENT:

THOMAS, J.

Leave granted. L...I...T.......T.......T.......T.......T.......T.......T..J     The  former  Chief  Minister  of   Tamil  Nadu  Ms.   J. Jayalalitha  was  arraigned  before the court of  a  Special Judge,  Chennai, along with 10 others, depicting her as  the hub  of a cabal for knocking off a huge sum of public  money to  make  vast  pecuniary  gains at the cost  of  the  State exchequer.  The Special Judge at the stage of framing charge felt  that  the materials shown to him were insufficient  to frame  a  charge  against her and also against  one  of  her former  cabinet  colleagues (V.R.  Nedunchezhian).  So  they were  discharged by the Special Judge, but a charge has been framed   against  the  other   nine  accused  for   criminal conspiracy  to  misappropriate  Government funds  and  other related  offences.   The State of Tamil Nadu challenged  the aforesaid order of discharge before the High Court of Madras in  revision,  but a learned Single Judge did not  interfere with  the  order.  In the meanwhile V.R.  Nedunchezhian  has passed  away.   This  appeal is by the Sate as  against  Ms. Jayalalitha  (respondent  herein) in challenge of  the  said order of the High Court.

   The  substance  of  the police case is that  during  the period between February 1992 and October 1993, all the above 11  accused  and certain foreign coal suppliers had  entered into  a  criminal conspiracy to import coal for  Tamil  Nadu Electricity   Board(hereinafter   referred    to   as    the ‘Electricity  Board’)  for  such  price as  to  obtain  huge pecuniary  advantage  to  themselves by  causing  heavy  and wrongful  loss to the State to the tune of about 6.5  crores of rupees.

   There are three Thermal Power Stations in Tamil Nadu (at Ennore,  Mettur and Tuticorin) which generate electric power by  using coal as fuel.  The annual requirement of coal  for those  three stations was about 12 million metric tonnes  of coal.   As the stock position of coal in March 1992 appeared insufficient to meet the requirement a decision was taken to import at least 2 million metric tonnes of coal from foreign

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countries.  The allegation is that such a decision was taken pursuant  to  a criminal conspiracy hatched by  the  accused persons for obtaining huge pecuniary advantage.  Pursuant to the decision, tenders were invited from foreign suppliers of coal.   On  10.3.1993, tenders were opened, but only  11  of them were found to be in order.  However, those bidders were asked  to  revise  the  price bid after  adding  three  more parameters,  such as size, ash content and volatile  matter. The  idea  was to facilitate import of inferior  quality  of coal  at higher price by showing favouritism to certain coal suppliers of Indonesia, according to the allegation.

   The  Government Secretary (PWD) raised strong objections against the said tenders being accepted.  A company based at Singapore  (M/s.   Counter  Corporation) made  an  offer  to supply  6 lacs metric tonnes of coal at the rate of 35.24 US Dollars.    But  it  was   rejected  without  even  starting negotiation  with them.  But the Electricity Board fixed the price  of coal at 40.20 US Dollars per metric ton and  three Indonesian  bidders  were permitted to supply coal  at  that price.   Subsequently M/s.  Counter Corporation  (Singapore) was  also  asked  to supply coal at the increased  price  of 40.20 US Dollars per metric ton.

   The offences alleged against all the accused are Section 120-B  read with Section 409 of IPC as well as Section 13(2) of the Prevention of Corruption Act, 1988.

   What  persuaded the Special Judge to adopt the view that materials  produced before him were insufficient to frame  a charge against the respondent, are briefly the following:

   The  strong  objection  raised by  Government  Secretary (Shri  V.  Sundaram) against the proposal to import coal  at such  a high price would not have reached the notice of  the respondent  because  it  is an admitted position  that  some crucial  sheets  in the Current File were removed  and  such sheets  were  later added after obtaining approval from  the Chief  Minister.   Special  Judge  has  made  the  following observations:   "It is not known as to how and where and  at what  point of time the pages 223 to 226 and also the  pages 21   to   32  were  removed   from  the   Secretariat   file (no.55360/U2/93).   This part of the file only contains  the objections  raised by Sundaram, objections in paras 21 to 32 are  based on the objections already raised in pages 223  to 246.   I  have carefully gone through the  materials  placed before me to find out whether there is anything to show that the file was intact with the pages containing the objections of  Sundaram when the file reached the table of A11 and  A1. The pages containing the objections of Sundaram pages 223 to 246  and  pages 21 to 32 can be called as missing pages  for shortness.   The materials on record do not reveal how, when and where the missing pages were removed and secreted."

The Special Judge has further observed thus:

   "If  the  file  in  the present  condition  without  the missing  pages had been submitted to A1 and A11, they  would not have been in a position to know the removal of pages and suspect foul play.  If these missing pages have been removed either by 2nd or 3rd accused before sending the file to 11th accused  and 1st accused, then there might not have been any occasion  for 11th and 1st accused to note the objections of Sundaram."

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   Learned  Single  Judge  of the Madras High  Court  while affirming  the  said order pointed out that the entire  case against  the respondent is based on the statement of Shri V. Sundaram  and  another statement made by Shri  Venkataraman, the  then  Chief  Secretary  (who is arrayed  as  the  third accused  in  the charge sheet, against whom the trial  court has framed charge).  The latter statement was recorded under Section  164  of the Code of Criminal Procedure  (for  short ‘the  Code’).   Regarding the objections put forward  by  V. Sundaram  in the Current File, learned Single Judge  noticed that  Page Nos.  225 to 245 of that file remained missing at a  particular  point of time and the objections made  by  V. Sundaram  were  on those sheets.  When there is  nothing  to show  that  those  sheets  were removed  at  the  behest  of respondent  Jayalalitha it must be presumed that she had not come  across  those objections, according to learned  Single Judge of the High Court.

   While  considering the possibility of those pages  being surreptitiously   removed  at  the   behest  of   respondent Jayalalitha learned Single Judge has stated thus:

   "A  mere imagination cannot be said to be a presumption. There  is  no evidence on record to show that the  file  had gone  to  the first accused and she ordered the  removal  of those pages at the time when she signed the said file.  When the  file  was sent from witness Sundaram those  pages  were found  in the file and thereafter, it has gone to number  of officials  and  the  Minister for Public Works, who  is  the second  accused in this case and from him, the said file has gone  to  A-11  and finally to A-1.  The fact  of  the  file containing those pages and thereafter missing of those pages when  the file once gain reached him after the signature  of the  accused  and the fact of inserting those missing  pages together in the file by one Easakki Muthu are also spoken to by  witness  Sundaram.   However,  there  is  absolutely  no evidence as to what had happened in between."

   Thereafter  learned  Single Judge proceeded to  consider the  statement  attributed  to 3rd accused  Venkataraman  as recorded  under  Section 164 of the Code and found that  the said  material is not capable of being converted into  legal evidence later on after framing the charges.

   We  may,  at the outset, point out that there is no  use with  the  said  statement attributed to the  third  accused Venkataraman  on account of two reasons.  First is that  the said  author of the statement has already been arraigned  in the  case and a charge has been framed against him.   Second is  that on a reading of the statement we have noticed  that it  is exculpatory in nature.  Hence the said statement  can only  lie  in  store and no court can possibly treat  it  as evidence.

   Shri Sushil Kumar, learned senior counsel who argued for respondent  Jaylalitha contended that if the said  statement is  to  be kept at bay there is nothing else to connect  the respondent  with  the  criminal   conspiracy  alleged.    He submitted  that  there  is  no  material  to  indicate  that respondent had ever come to know of the adverse remarks made by  V.   Sundaram  in  the file  concerned  as  those  notes happened  to be on those sheets which were missing from  the Current  File.   If  that be so, according  to  the  learned senior  counsel,  respondent  could only have acted  on  the

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recommendations  submitted by the departmental heads in  the Note, and on the proposals prepared by the high officials in the  bureaucracy.   No  head of the executive  can  in  such circumstances  be  asked  to answer any charge  of  criminal conspiracy, according to Shri Sushil Kumar.

   On  the  other hand Shri Shanti Bhushan, learned  senior counsel  presented  before  us  a number  of  materials  and circumstances  which,  according to him, are  sufficient  to bring  home the guilt of the respondent.  He submitted  that it  is for the respondent to controvert those  circumstances by  participating in the trial and defend herself and if she fails  in that endeavour she would end in conviction of  the offences  being the inevitable consequence thereof.  Learned senior  counsel  on  that  premise  attacked  the  order  of discharge  passed  by the Special Judge and made a  forceful onslaught on the order passed by the learned Single Judge of the  High Court for not correcting the mistake committed  by the Special Judge.

   At  this  stage we have to proceed on a premise  that  a criminal  conspiracy  was hatched in respect of import of  2 million  metric  tonnes of coal during the relevant  period. Such  a  premise can be adopted as the Special Judge,  after hearing  both sides, has decided to frame charge against the other  nine accused persons presuming that there was such  a conspiracy  and those nine accused have involved  themselves as the conspirators therein.  Hence the only question now to be  considered  is whether at this stage such a  presumption can be stretched towards respondent Jayalalitha as well.

   Chapter  II  of  the Evidence Act - deals with  "of  the Relevancy  of  Facts." One particular provision included  in that  Chapter  to  deal with evidence relating  to  criminal conspiracy  is  Section 10.  It is useful to have a look  at that  section at this stage.  Therefore, we may now refer to Section 10 of the Evidence Act.

   "10.  Things said or done by conspirator in reference to common  design.- Where there is reasonable ground to believe that  two or more persons have conspired together to  commit an  offence  or an actionable wrong, anything said, done  or written  by  any one of such persons in reference  to  their common  intention,  after the time when such  intention  was first  entertained by any one of them, is a relevant fact as against each of the persons believed to be so conspiring, as well  for  the  purpose  of proving  the  existence  of  the conspiracy  as  for  the purpose of showing  that  any  such person was a party to it."

   The  question of using anything said, done or written by any  one of such conspirators would arise only if the  facts would  help  to sustain the first limb of the  section  i.e. there  is  reasonable  ground to believe that  two  or  more persons  have  conspired  together  to  commit  an  offence. Unless  the  court  has  some   materials  to  believe  that respondent  is one of those persons referred to in the first limb  of the section, so far as the conspiracy in this  case is  concerned, any consideration for what she had said, done or  written would not be a relevant fact as against each  of the  conspirators.   Nevertheless, it is open to the  court, even  at  this stage to consider the materials  relating  to what  an  accused  would  have said, done  or  written  with reference  to  the common intention between the accused  for the  purpose of deciding whether there is reasonable  ground

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to  believe that the said accused would have been one of the conspirators.   In  State vs.  Nalini {1999 (5) SCC  253}  a three  Judge  Bench  of  this Court  has  stated  the  legal position  thus regarding the first limb of Section 10 of the Evidence Act:

   "The first condition which is almost the opening lock of that  provision  is the existence of ‘reasonable  ground  to believe’  that  the  conspirators have  conspired  together. This  condition  will be satisfied even when there  is  some prima  facie evidence to show that there was such a criminal conspiracy.   If  the  aforesaid  preliminary  condition  is fulfilled  then  anything  said by one of  the  conspirators becomes  substantive  evidence against the  other,  provided that  should  have been a statement ‘in reference  to  their common intention’.  Under the corresponding provision in the English  law  the expression used is ‘in furtherance of  the common  object’.  No doubt, the words ‘in reference to their common  intention’ are wider than the words used in  English law  {vide  Sardar  Sardul  Singh  Caveeshar  v.   State  of Maharashtra (AIR 1965 SC 682)}."

   So now what we have to consider is whether the materials are  sufficient to show the prospect for holding that "there is reasonable ground to believe" that respondent Jayalalitha would  also  have been at least one of the conspirators,  if not the kingpin of it.

   In  the above context it is useful to notice the  office held  by  the other persons against whom the  Special  Court framed  the  charge  in  the same case for  the  offence  of criminal  conspiracy.  They can be shown by reference to the rank  allotted  to each of them in the challan submitted  by the  police.   A-2  was  the  Minister  in  the  cabinet  of respondent  Jayalalitha  for the portfolio relating to  PWD. A-3  was  the Chief Secretary, A-4 was the Chairman  of  the Electricity  Board,  A-5  and A-6 were  the  Secretaries  to Government  of  Tamil  Nadu in the  Finance  and  Industries departments  respectively.  A-7, A-8 and A-9 were members of the Electricity Board and A-10 was the Chief Engineer of the Electricity Board (Coal Wing).

   Shri  Shanti  Bhushan submitted that the above  officers would  not  have  even  dreamt   of  committing  a  criminal conspiracy  for  knocking  off such a fabulous fund  of  the Tamil  Nadu  Government  without   the  direct,  active  and positive   involvement   of  the    then   Chief   Minister, particularly  due to the peculiar set up of the  ministerial network  arranged  by the respondent herself.  For that  the first  circumstance which learned senior counsel highlighted is  a  Government  Order issued by the State  Government  on 6.11.1991.   This  was issued almost soon  after  respondent assumed the office of Chief Minister of the State.  The said Government Order pointed out that there was no uniformity in the  procedure followed by the public sector undertakings in the State regarding settlement and purchase of contracts and tenders,  and hence it was considered essential that  proper scrutiny  is  exercised before approval of such tenders  and contracts.  So the Government ordered that prior approval of the  Government  should  be obtained in respect of  all  the tenders  and  all  the  purchases "where the  value  of  the contract  exceeds  Rs.one crore".  It was directed that  the file  shall,  therefore,  be  circulated  to  the  concerned Minister,  Minister  of Finance and the Chief  Minister  for such proper scrutiny and prior approval.

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   The  next  circumstance pointed out is the D.O.   letter which  respondent  herself  addressed  to  the  then   Union Minister  for Coal (Shri P.A.  Sangma).  The letter was sent on  8.10.1991 seeking permission to import 7 lacs tonnes  of coal from Australia.  But the Union Minister discouraged her from  buying  coal from outside India, by pointing  out  the following:

   "As  reported  by Coal India Ltd., these power  stations had  a coal stock of 7.95 lakh tonnes at the end of  October ’91 as compared to 0.44 lakh tonnes at the end of March ’91. I have also been told that because of large stocks, TNEB has not  been  lifting  coal from  Paradeep,  Vishakapatnam  and Haldia Ports as per programme.  As such it would appear that TNEB  prima-facie  does  not   have  any  justification  for importing  any  coal  for the present.  They would  be  well advised to accumulate as much indigenous coal as possible so that they have comfortable stocks during this busy season."

   The  respondent  did not stop there and she addressed  a D.O.    letter  dated  30.7.1992  to  the   Prime   Minister requesting him to accord special permission to the aforesaid Electricity  Board for importing one million tonnes of  coal "as a one time measure, on an emergency basis free of import duty."  Referring  to the said letter which  respondent  has addressed  to  the Prime Minister the Central  Minister  for Coal  wrote a reply to her on 29.9.1992, informing her  that the  stock  position  of  coal at the  three  Thermal  Power Stations  of TNEB was quite comfortable.  A chart was  given by  him  showing  the  stock at the  three  different  power stations.   The  Central  Minister   therefore  advised  the respondent against import of coal.

   It   appears  that  the   respondent  was  insistent  on importing  coal  in spite of the strong advice  against  it. However,  even  those  persons who opposed such  import  had subsequently  yielded  to her insistence.   Nonetheless  the Central  Government  put a rider that such import  shall  be routed  through  Central Government.  It was in the wake  of the above materials that the next circumstance was projected against  the respondent as she did not agree to abide by the said  rider  as  well  and it was  decided  to  import  coal directly through the State and not via the Centre.

   Shri  Shanti Bhushan invited our attention to the strong language  used  by  Shri V.  Sundaram  (PWD  Secretary)  for castigating  the  proposal  for importing coal, as  per  his letter  dated  26.5.1993, addressed to the Chairman  of  the Electricity  Board, with copies to all members of the Board. Some of the excerpts of the said letter are the following:

   "The  question  how these two Indonesian sources,  whose original  offers stipulated maximum C.V.  of 6000 will  meet the  requirements of TNEB whose minimum stipulation of  C.V. is  6000  baffles me.  ...........................  In  fact the  specifications of these 2 Indonesian supply sources  is so  divergent  from  TNEB tender specification  in  so  many critical  elements that they should not merit even a cursory look as can be seen from the table below."

   After  giving the table in his letter Shri V.   Sundaram further  noted that "in fact High Moisture and High Volatile matter  alone should eliminate these two Indonesian sources.

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I  have  been  advised that the combination  of  High  Total Moisture and High Volatile Matter could prove to be deadly", and he concluded thus:

   "These  are only some of the points that come to my mind immediately.   All in all, I am very uncomfortable about the way  this  tender has been issued and processed.  I  have  a feeling  of lurking uneasiness that we will one day discover yet  another bloomer which might land us all in considerable embarrassment,  besides  involving  TNEB and  Government  in protracted  legal  wrangles  and heavy  losses,  apart  from unseemly public controversy."

   On 18.6.1993, the Secretary of the Ministry of Coal, New Delhi,  sent an urgent communication to the Chairman of  the Electricity  Board  as  well as to Shri V.   Sundaram.   The relevant  portion of the communication reads thus:  "In view of  sufficient  stock of coal available with the Tamil  Nadu Power Stations there is no justification for import of coal. Moreover  the  time  limit  for import of  coal  expires  in September  1993.  One cannot visualise as to how import will materialise  within these few months.  I request any case be opposed  to  any  extension of  concessional  duty  facility beyond  September  1993.  I have been informed  that  tender specifications have been drawn in such a manner that it will exclude domestic producers from bidding.  If that is true it will  be unfortunate.  Kindly appreciate that import of coal on  concessional  duty  has been allowed to  give  fair  and competitive chance to the domestic producers also."

   Shri  Ramachandran,  a  Joint Secretary  to  Government, strongly  wrote  against accepting the said tenders  in  his Note  dated  22.6.93.   It is not necessary to  extract  the whole  Note as the same is replete with warnings against the proposal.   Yet  we  may extract only  the  barest  relevant portion:

   "It  is  apprehended that an excess of  Rs.8,64,93,100/- has  to  be incurred by the Tamil Nadu Electricity Board  on account of the present recommendation of the tender proposal by  the Tamil Nadu Electricity Board vide Annexure 6 at page 39  of  flag A.  Further, the quality of Indonesian coal  is poor and could cause fire explosion in the mill."

   The above note has been fully concurred by Shri Sundaram by further writing the following in his note dated 23.6.93:

   "I  have  explained the difficulties to Minister  (PWD). The tender proposal may be returned to the Board for various reasons  like  admitting  certain firms with post  -  tender clarification  and proposing allotment of quantities to them besides other infirmities."

   It  is  pertinent to point out that the above  materials are  included in the Current File which was submitted to the respondent.   There  is no case for the respondent that  the above  were not in that File when she scrutinised it nor  is it  anybody’s case that those warnings were included only in the  missing  sheets.  If respondent came to know  of  those prompt  warnings  and  despite them she accorded  her  green signal to import the coal, how could it be concluded at this premature  stage  that  she  was not aware  of  the  serious implications of the clandestine deal on the State exchequer.

   We  again repeat that at this stage we are proceeding on

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the  assumption  that  there was a  criminal  conspiracy  to commit  the  offence  under Section 409 of IPC  and  Section 30(2)  of the PC Act, because the trial court has chosen  to frame  charge  against the co-accused including one  Cabinet Minister who was working under the respondent.  Shri Shushil Kumar contended that it is not necessary that she would have read   those  portions  in   the  Notes.   Alternatively  he contended  that  even if she had read those notes she  would have  been persuaded to grant permission on the strength  of the later note submitted in same Current File.

   Shri  Shanti  Bhushan,  learned senior counsel,  on  the other  hand, contended that it is next to impossibility that the  Chief  Minister would have missed the above  materials, particularly when it was her Government which wanted through the G.O.  dated 6.11.1991 that all the files shall be routed through  the  Chief  Minister   for  her  "proper  scrutiny" regarding   any  venture  of   public  sector   undertakings involving  more than a crore of rupees.  The said G.O.   was issued  with the idea that without the specific scrutiny and supervision  of  the  Chief Minister no approval  should  be granted.

   Learned  senior  counsel further contended that  if  the Chief  Minister had read the whole Note of Shri V.  Sundaram it  is  for  her to put forth satisfactorily  that  she  was convinced  in  spite  of  such warnings that  the  deal  was genuine  and  in the best interest of the State or that  she had  discussed those points with the said Secretary and  she had  good reasons to overrule the objections.  We find force in  the  said contention that until the  respondent  affords satisfactory  explanation the court can presume that she was aware  of the serious consequences of the deal on the  State exchequer  as pointed out by the said PWD Secretary.   Court can  also  presume at this stage that there  are  reasonable grounds  to believe that she was involved in the  conspiracy as envisaged in Section 10 of the Evidence Act.

   In  the  written  submission presented  by  the  learned counsel for the respondent it is contended, inter alia, that when the "Current File" reached respondent as Chief Minister the  relevant  sheets were missing therefrom and  hence  she acted  on  the  latest Note put up by the officials  of  the department  which was countersigned by the same V.  Sundaram on  7.7.1993.  On the said premise learned counsel argued  - why  should a conspiring Chief Minister be kept in the dark; why  should  the  pages  at  all be  removed  and  the  File renumbered if respondent was a co-conspirator?

   Sri   Shanti  Bhushan  invited   our  attention  to  the statement  recorded from Sri V.Sundaram under Section 161 of the  Code on 13.12.1996 in which there is a narrative of the details  of  the circumstances in which he had to initial  a Note  prepared by the other departmental heads including the Chief  Secretary  (A3).  The aggressive and  truculent  role attributed  to a lady by name "Sasikala" looms large in  the said  statement  of  V.Sundaranm and that he  was  veritably threatened  that he would be dismembered if he would persist with  his  opposition  to the clearance of the  proposal  to import the coal.  Learned counsel submitted that prosecution would  prove that the said Sasikala was the surrogate of the respondent  and wielded considerable influence on her during the relevant time.

   We  would choose to refrain from dealing with the  above

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contention,  lest any comment made by us may turn out to  be detrimental   to  one  or  the   other  side  of  the  case. Nevertheless,  it  is  for the prosecution  to  explain  how certain  relevant  sheets  were found  missing  and  whether respondent  had any knowledge of and also why the respondent should  have  caused  them to be removed.  This is  not  the stage for weighing the pros and cons of all the implications of  the materials nor for sifting the materials presented by the  prosecution.   The  exercise at this  stage  should  be confined  to considering the police report and the documents to  decide  whether the allegations against the accused  are "groundless"  or whether "there is ground for presuming that the accused has committed the offences." Presumption therein is  always rebuttable by the accused for which there must be opportunity of participation in the trial.

   For  all the above reasons we have no doubt in our  mind that  the  court would not, and should not, have  discharged the  respondent  at this premature stage in respect  of  the offences charged against the other nine accused persons.

   Therefore,  we set aside the order passed by the Special Court discharging respondent J.  Jayalalitha and that of the High  Court  which confirmed the said order.  We direct  the Special  Judge  to proceed against the respondent as one  of the  accused  in the case.  Regarding the witnesses  already examined  by  the prosecution we permit the  prosecution  to treat  the examination-in-chief already done as part of  the evidence  recorded in this case with all the accused on  the array.   Prosecution  can  elicit from those  witnesses  any further  materials and they can be recorded as the remaining portion   of  the   examination-in-chief.   Thereafter   the respondent shall have full opportunity to cross-examine such witnesses  as  though  the   entire  chief  examination  was conducted  with  her  on  the array of  the  accused.   This provision  is made by us for avoiding unnecessary delay  and repetition  of  re-recording the evidence already  recorded. On  completion of examination of such witnesses  prosecution can  examine any remaining witnesses.  Thereafter, trial can proceed in accordance with law.

   If  respondent Jayalalitha seeks permission to  dispense with  her  presence in the trial court it is open to her  to file  an application for the same before the Special  Judge. The Special Judge shall exempt her from personally appearing after  recording  her  plea, if she agrees to abide  by  the following conditions:

   (1)  A  counsel  on her behalf would be present  in  the court whenever the case is taken up.

   (2) She would not dispute her identity as the particular accused in the case.

   (3) She would be present on any day when her presence is required by the court.

   It  is needless to say that if she fails to abide by any of  the above conditions it is open to the Special Judge  to revoke the aforesaid benefit granted to her.

The appeal is disposed of accordingly.

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