STATE THROUGH DEPUTY SUPERINTENDENT OF POLICE versus R. SOUNDIRARASU ETC.

[2022] 7 S.C.R.

ASTATE THROUGH DEPUTY SUPERINTENDENT Of POLICE

R. SOUNDIRARASU ETC.

(Criminal Appeal Nos. 1452-1453 of 2022)

SEPTEMBER 05, 2022

[DINESH MAHESHWARI AND J. B. PARDIWALA. JJ.]

Code of Criminal Procedure, 1973: ss.239, 397, 401 –Discharge of accused – Respondent No.1 was serving as MotorVehicle Inspector during the check period – Respondent No. 2 isChis wife who is commerce graduate and is claiming to have aseparate source of income and paying the income tax from 1990onwards – FIR registered against Respondent No.1 for offences u/s 13(2) r/w 13(1)(e) PC Act r/w s.109 IPC – During investigation,role of his wife i.e. Respondent No.2 surfaced as an abettor –DCharge sheet filed in the Court of the Special Judge – Respondentsfiled petition u/s.239 for discharge – Special Judge rejected thepetition and held that there was prima facie case against theaccused persons to put them to trial for alleged offence and chargeslevelled against them cannot be said to be groundless so as todischarge them from prosecution – Respondents filed revisionEapplications before High Court – High Court discharged therespondents – On appeal, held: s.13(1)(e) of the PC Act makes adeparture from the principle of criminal jurisprudence that theburden will always lie on the prosecution to prove the ingredientsof the offences charged and never shifts on the accused to disproveFthe charge framed against him – legal effect of s.13(1)(e) is that itis for the prosecution to establish that the accused was in possessionof properties disproportionate to his known sources of income butthe term “known sources of income” would mean the sources knownto the prosecution and not the sources known to the accused andwithin the knowledge of the accused – It is for the accused toGaccount satisfactorily for the money/assets in his hands – The onusin this regard is on the accused to give satisfactory explanation –accused cannot make an attempt to discharge this onus upon him atthe stage of s.239 – The circumstances emerging from the record ofthe case indicate the involvement of the accused persons in theHalleged offence – It cannot be said that the charge against the

STATE THROUGH DEPUTY SUPERINTENDENT Of POLICE v.R. SOUNDIRARASU ETC.

accused persons was groundless – Special Court directed to framecharges against the accused persons and put them to trial – PenalCode,1860 – s.109 - Evidence Act, 1872 – s.106 – Prevention ofCorruption Act, 1988 – ss.13(2), 13(1)(e).

Prevention of Corruption Act, 1988: Known sources of income– Defined – It refers to the sources known to the prosecution andnot to the accused.

Prevention of Corruption Act, 1988: The onus or burden ison the accused to satisfactorily explain and account for the assetsfound to be possessed by the public servant.

Prevention of Corruption Act, 1988: Whether the investigatingofficer before filing FIR should consider explanation offered bythe accused – Held: The accused public servant does not have aright to be afforded chance to explain the alleged disproportionateassets to the investigating officer before the filing of chargesheet,a similar right cannot be granted to the accused before the filing ofan FIR by making preliminary inquiry mandatory.

Code of Criminal Procedure, 1973: Stage of charge framing– Approach of Court – Court has to form presumptive opinion asto the existence of the factual ingredients constituting the offencealleged – Court is not required to go deep into the probative valueof the materials on record.

Code of Criminal Procedure, 1973: s.239 – Prima facie caseu/s.239 – If the Magistrate considers the charge against the accusedto be groundless, he shall discharge the accused – The word‘groundless’ means that there must be no ground for presuming thatthe accused has committed the offence and that the materials placedbefore the Court do not make out or are not sufficient to make outa prima facie case against the accused – If no prima facie caseregarding the commission of any offence is made out, it wouldamount to charge being groundless.

Code of Criminal Procedure, 1973: Revisional powers of HighCourt – Ambit and scope of – Held: Revisional power can only beexercised to correct manifest error of law or procedure which wouldoccasion injustice, if it is not corrected – The revisional power cannotbe exercised in casual or mechanical manner – Revisional powercannot be equated with appellate power – revisional court cannot

Aundertake meticulous examination of the material on record as it isundertaken by the trial court or the appellate court – This powercan only be exercised if there is any legal bar to the continuance ofthe proceedings or if the facts as stated in the charge sheet aretaken to be true on their face value and accepted in their entiretydo not constitute the offence for which the accused has been chargedB– It is conferred to check grave error of law or procedure.

Allowing the appeals, the Court

HELD : 1. The expression “known sources of income”refers to the sources known to the prosecution, the expressionC“for which the public servant cannot satisfactorily account” refersto the onus or burden on the accused to satisfactorily explain andaccount for the assets found to be possessed by the public servant.This burden is on the accused as the said facts are within hisspecial knowledge. The explanation to Section 13(1)(e) is aprocedural Section which seeks to define the expression “knownDsources of income” as sources known to the prosecution and notto the accused. The explanation applies and relates to the modeand manner of investigation to be conducted by the prosecution,it does away with the requirement and necessity of theprosecution to have an open, wide and rowing investigation andEenquire into the alleged sources of income which the accusedmay have. It curtails the need and necessity of the prosecutionto go into the alleged sources of income which public servantmay or possibly have but are not legal or have not been declared.The undeclared alleged sources are by their very nature areexpected to be known to the accused only and are within hisFspecial knowledge. The effect of the explanation is to clarify andreinforce the existing position and understanding of theexpression “known sources of income” i.e. the expression refersto sources known to the prosecution and not sources known tothe accused. The second part of the explanation does away withGthe need and requirement for the prosecution to conduct an openended or rowing enquiry or investigation to find out all alleged/claimed known sources of income of an accused who isinvestigated under the PC Act, 1988. The prosecution can relyupon the information furnished by the accused to the authorities

STATE THROUGH DEPUTY SUPERINTENDENT Of POLICE v.R. SOUNDIRARASU ETC.

under law, rules and orders for the time being applicable to apublic servant. No further investigation is required by theprosecution to find out the known sources of income of the accusedpublic servant. [Para 41][666-G-H; 667-A-E]

2. In trial of warrant case, instituted on police report,the provisions for discharge are to be governed as per the termsof Section 239 which provide that direction for discharge canbe made only for reasons to be recorded by the court where itconsiders the charge against the accused to be groundless. Asper the provisions under Section 239 what needs to be consideredis whether there is ground for presuming that the offence hasbeen committed and not that ground for convicting the accusedhas been made out. At that stage, even strong suspicion foundedon material which leads the Court to form presumptive opinionas to the existence of the factual ingredients constituting theoffences alleged would justify the framing of charge against theaccused in respect of that offence, and it is only in case wherethe Magistrate considers the charge to be groundless, he is todischarge the accused after recording his reasons for doing so.Section 239 envisages careful and objective consideration ofthe question whether the charge against the accused is groundlessor whether there is ground for presuming that he has committedan offence. What Section 239 prescribes is not, therefore, anempty or routine formality. It is valuable provision to theadvantage of the accused, and its breach is not permissible underthe law. But if the Judge, upon considering the record, includingthe examination, if any, and the hearing, is of the opinion thatthere is “ground for presuming” that the accused has committedthe offence triable under the chapter, he is required by Section240 to frame in writing charge against the accused. The orderfor the framing of the charge is also not an empty or routineformality. It is of far reaching nature, and it amounts to decisionthat the accused is not entitled to discharge under Section 239,that there is,ground for presuming that he has committed anoffence triable under Chapter XIX and that he should be calledupon to plead guilty to it and be convicted and sentenced on thatplea, or face the trial. [Paras 59 & 60][677-D-H; 678-A-C]

A3. Section 239 has to be read along with Section 240 of theCrPC. If the Magistrate finds that there is prima facie evidenceor the material against the accused in support of the charge,hemay frame charge in accordance with Section 240 of the CrPC.But if he finds that the charge (the allegations or imputations)made against the accused does not make out prima facie caseBand does not furnish basis for framing charge, it will be case ofcharge being groundless, so he has no option but to dischargethe accused. Where the Magistrate finds that taking cognizanceof the offence itself was contrary to any provision of law, likeSection 468 of the CrPC, the complaint being barred by limitation,Cso he cannot frame the charge, he has to discharge the accused.Indeed, in case where the Magistrate takes cognizance of anoffence without taking note of Section 468 of the CrPC, the mostappropriate stage at which the accused can plead for his dischargeis the stage of framing the charge. He need not wait till completionof trial. The Magistrate will be committing no illegality inDconsidering that question and discharging the accused at the stageof framing charge if the facts so justify.The real test fordetermining whether the charge should be considered groundlessunder Section 239 of the CrPC is that whether the materials aresuch that even if unrebutted make out no case whatsoever, theEaccused should be discharged under Section 239 of the CrPC.The trial court will have to consider, whether the materials reliedupon by the prosecution against the applicant for the purpose offraming of the charge, if unrebutted, make out any case atall.[Paras 68 & 69][680-D-H; 681-A]F4. The revisional power cannot be exercised in casual ormechanical manner. It can only be exercised to correct manifesterror of law or procedure which would occasion injustice, if it isnot corrected. The revisional power cannot be equated withappellate power. revisional court cannot undertake meticulous

examination of the material on record as it is undertaken by theGtrial court or the appellate court. This power can only be exercisedif there is any legal bar to the continuance of the proceedings orif the facts as stated in the charge-sheet are taken to be true ontheir face value and accepted in their entirety do not constitutethe offence for which the accused has been charged. It is conferredHto check grave error of law or procedure. [Para 76][683-F-G]

5. Section 13(1)(e) of the Act 1988 makes departure fromthe principle of criminal jurisprudence that the burden will alwayslie on the prosecution to prove the ingredients of the offencescharged and never shifts on the accused to disprove the chargeframed against him. The legal effect of Section 13(1)(e) is that itis for the prosecution to establish that the accused was inpossession of properties disproportionate to his known sourcesof income but the term “known sources of income” would meanthe sources known to the prosecution and not the sources knownto the accused and within the knowledge of the accused. It is forthe accused to account satisfactorily for the money/assets in hishands. The onus is on the accused to give satisfactory explanation.The accused cannot make an attempt to discharge this onus uponhim at the stage of Section 239 of the CrPC. At the stage of Section239 CrPC, the Court has to only look into the prima facie caseand decide whether the case put up by the prosecution isgroundless.[Para 80][684-F-H; 685-A]

6. The circumstances emerging from the record of the case,prima facie, indicate the involvement of the accused persons inthe alleged offence. Having regard to the materials on record, itcannot be said that the charge against the accused persons isgroundless. There are triable issues in the matter. If there aretriable issues, the Court is not expected to go into the veracityof the rival versions.The impugned orders passed by the HighCourt discharging the accused persons from the prosecution arehereby set aside. The Special Court shall frame charge againstthe accused persons in accordance with law and put them to trial.[Paras 81 & 82][685-B-D]

State of Maharashtra v. Wasudeo RamchandraKaidalwar (1981) 3 SCC 199 : [1981] 3 SCR 675; N.Ramakrishnaiah v. State of A.P. 2009 Crl.L.J. 1767;Central Bureau of Investigation (CBI) and Anr. v.Thommandru Hannah Vijayalakshmi @ T.H.Vijayalakshmi and Anr. 2021 SCC OnLine SC 923;K. Veeraswami v. Union of India (1991) 3 SCC 655 :[1991] 3 SCR 189; Onkar Nath Mishra and Others v.State (NCT of Delhi) and Another (2008) 2 SCC 561 :[2007] 13 SCR 716; State of Maharashtra v. Som Nath

AThapa (1996) 4 SCC 659 : [1996] 1 Suppl. SCR 189;State of M.P. v. Mohanlal Soni (2000) 6 SCC 338;Sheoraj Singh Ahlawat and others v. State of UttarPradesh and Another (2013) 11 SCC 476 : [2012] 10SCR 1034; Century Spinning and Manufacturing Co.Ltd. v. State of Maharashtra AIR 1972 SC 545,BSuperintendent and Remembrancer of Legal Affairs,West Bengal v. Anil Kumar Bhunja AIR 1980 SC 52 :[1980] 1 SCR 323; Munna Devi v. State of Rajasthan& Anr. (2001) 9 SCC 631 – relied on.

State of Orissa v. Debendra Nath Padhi (2005) 1 SCCC568 : [2004] 6 Suppl. SCR 460; State of Tamil Nadu byInspector of Police, Vigilance and Anti-Corruption v.N. Suresh Rajan and Others (2014) 11 SCC 709 :[2014] 1 SCR 135; Jagan M. Seshadriv. State of TamilNadu, (2002) 9 SCC 639; Sajjan Singh v. State ofDPunjab AIR 1964 SC 464 : [1964] 4 SCR 630; C.D.S.Swami v. State, AIR 1960 SC 7 : [1960] 1 SCR 461; V.C. Shukla v. State through CBI AIR 1980 SC 962 :[1980] 2 SCR 380; K. Ramakrishna and Others v. Stateof Bihar and Another (2000) 8 SCC 547; State byKarnataka Lokayukta, Police Station, Bengaluru v. M.ER. Hiremath (2019) 7 SCC 515 : [2019] 8 SCR 713;Asian Resurfacing of Road Agency Pvt. Ltd. v. CentralBureau of Investigation (2018) 16 SCC 299 : [2018] 2SCR 1045 – referred to.

STATE THROUGH DEPUTY SUPERINTENDENT Of POLICE v.R. SOUNDIRARASU ETC.

CRIMINAL APPELLATE JURISDICTION: Criminal AppealNos. 1452-1453 of 2022.

From the Judgment and Order dated 27.04.2017 of the High Courtof Judicature at Madras in Criminal Revision Case Nos.702 and 703 of2016.

V. Krishnamurthy, AAG, Dr. Joseph Aristotle S., Nupur Sharma,Shobhit Dwivedi, Sanjeev Kumar Mahara, Ms. Richa Vishwakarma,Advs. for the Appellant.

K. Radhakrishnan, Sr. Adv., D. L. Chidananda, R. Janarthanan,S. Senthil Elangovan, S. Krishnamoorthy, K. Kumaravadivel, Advs. forthe Respondents.

The Judgment of the Court was delivered by

J. B. PARDIWALA, J.

1. Leave granted.

2. Since the issues raised in both the captioned appeals are thesame, those were heard analogously and are being disposed of by thiscommon judgment and order.

3. These appeals are at the instance of the State of Tamil Naduthrough the Deputy Superintendent of Police, Vigilance and Anti-Corruption, Salem District, Tamil Nadu and are directed against the twojudgments and orders passed by the High Court of Madras dated

A27.04.2017 allowing the criminal revision applications preferred by therespondents herein (original accused persons) discharging them fromthe prosecution under Section 13(2) read with 13(1)(e) of the Preventionof Corruption Act, 1988 (for short, “Act 1988”) read with Section 109 ofthe Indian Penal Code (for short, “the IPC”).

BFACTUAL MATRIX

4. The Respondents in these appeals are husband and wife. TheRespondent No.1 - R. Soundirarasu at the relevant point of time wasserving as Motor Vehicle Inspector (Grade 1) at Namakkal during thecheck period, i.e., from 01.01.2002 to 31.03.2004. The Respondent No.C2, namely, Suguna is the wife of the Respondent No. 1.

5. The Respondent No. 2 is commerce graduate and claims tobe having separate source of income. She was partner in partnershipfirm running in the name of S.K. Mat Industries along with one R. Kumarw.e.f. 23.10.1993. The partnership came to be dissolved on 31.03.2003,and, thereafter she continued as sole proprietor.D

6. It is the case of the Respondent No. 2 that she has been payingthe income tax from 1990 onwards and her IT Returns are beingscrutinized by the appropriate authorities.

7. It appears from the materials on record that First InformationEReport (FIR) came to be registered against the Respondent No. 1 hereindated 19.09.2005 at the Police Station, Vigilance and Anti-Corruption,District Salem for the offences under the Act 1988 as enumerated above.

8. For better and effective adjudication of the present appeals,we deem it necessary to reproduce the entire FIR as under:

F“Column No. 12 in FIR Cr. No.9/AC/2005/SL/SU

Tr. R. Sundararasu was working as Motor VehicleInspector Grade-1 at the office of the Regional TransportOfficer, Namakkal, Rasipuram and Sankari from March 98to May 2000 to July 2002 and September 2002 toSeptember2004 respectively and again in Namakkal from27.09.2004. He is Public Servant as defined u/s 2 (C) ofPrevention of Corruption Act, 1988.

The accused Tr. R. Sundararasu, Motor VehicleInspector Grade-1 hailed from an ordinary agriculturalfamily. He is second son to his parents. Tr. Ramasamy and

Tmt. Krishnammal. He has got diploma in MechnaicalEngineering and got B.E., degree by attending eveningclasses. He got married one Suguna D/o Tr. Duraisamy ofKavai on 12.2.90. He has got one son by name Sarankumarwho is studying VIIth standard in Holy Matriculation School,Salem.

On receipt of credible information that the accused hasacquired and he is in possession of assets in the form of housesites, lands, house building etc in his name and in the nameof his wife and father-in-law, worth more than his knownsources of income, preliminary verification made, duringwhich the following information has come to notice.

As on 1.1.2002, the accused is found to have been inpossession of assets in his name and in the name of his wifeTmt. Suguna, gold jewels, Silver ornaments, householdarticles etc. by way of gift and purchase etc. all worth aboutRs. 3,75,250.00.

As on 29.2.2004, the accused is found to have been inpossession of properties and pecuniary resources in the nameof his wife Smt. Suguna, his father-in-law Thiru.Duraisamyand his minor son Sarankumar of total value of Rs.18,41,680.00. These include, part from the properties andpecuniary resources in his possession as on 1.1.2002.Additionally acquired properties and pecuniary resourcessuch as House Building and construction of house building.

During the period from 1.1.2002 and 29.2.2004, theaccused is found to have acquired the following properties:

(i) Constructed terraced house worth about Rs.7,99,500/- in the name of his wife Tmt. Suguna at Door No.555, situated in S.No.11/1266 of Ganapathy Village, Ganapathypuram, Coimbatore after demolishing the old terrace house. (ii) Purchased terraced building worth Rs.8,61,270 /- with plinth area of 70 Sq. metre on the ground floor and 10 Sq. Metre on the 1[st ]floor in Bodinaikanpatty village S.No.69/1-A1 in the name of his father-in-law Tr.Duraisamy under Doc.No.499/2004 dt. 6.2.2004 of SRO, Sooramangalam and the same was transferred in the name of Sarankumar, the minor son of the accused, by way of Settlement Deed in Doc.No.645/2004, Dt. 16.02.2004 by the said Tr.Duraisamy incurring sum of Rs.5,160/- towards stamp duty and registration fees.

The Total value of the properties and pecuniaryresources acquired by the accused during the period from1.1.2002 to 29.2.2004 has been tentatively estimated to beRs.14,66,430/-

Accused’s wife Smt. Suguna is house wife. She is foundto have had no sufficient sources of income of her own toacquire the aforementioned assets. So also, Tr. Duraisamy,the father-in-law of the accused appears to have had nonecessity for the purchase and transfer of the property in thename of the grand son (son of the accused). Thus, the accusedappears to have acquired the above properties in the nameof aforesaid persons as his benami (benamis).

The total income of the accused and his family membersand expenditure of the accused and his family during theabove said period (i.e.1.1.2002 to 29.2.2004) have beententatively assessed as Rs.8,84,486 and 11,00, 198 respectivelyand hence there was no likely savings for the above saidperiod and on the contrary there was an excess expenditureover the income of the accused to the extent ofRs.2,15,712/-.

There are grounds to believe that the aforesaid assetsare for beyond and disproportionate to the known sources ofincome of the accused for the above said period to the extentof Rs.16,82,142 (Rs.14,66,430+2,15,712).

The above information discloses an offence of criminalmisconduct by public servant punishable u/ s 13(2) r /w13(1)(e) of prevention of Corruption Act, 1988, against theaccused and requires detailed investigation.

I am therefore, registering case in Cr.No.9/AC/2005/SL/SU against the accused for the above said offence for thepurpose of taking up investigation.

(SdXXX)(K.PERIYASAMY)DSP, V&AC, Spl.Cell,Salem.”

9. It appears that vide the letter dated 16.10.2007 the investigatingofficer called for the explanation from the Respondent No. 1 as regardsthe allegations levelled in the FIR.

10. The Respondent No. 1 vide his letter dated 1.11.2007 offeredhis explanation stating that he does not possess or had acquired anyassets disproportionate to the known source of his income. TheRespondent No. 1 also placed on record the income tax returns filed byhis wife from 1990 onwards and that of the partnership firm too from1993.

11. It appears that in the course of investigation the role of theRespondent No. 2 as the wife of the Respondent No. 1 also surfaced asan abettor.

12. Upon conclusion of the investigation, the Investigating Agencyfiled charge-sheet in the Court of the Special Judge, Salem for the offencesenumerated above. The filing of the charge-sheet culminated in theregistration of the Special Criminal Case No. 36/2008 in the Court of theSpecial Judge, Salem.

13. In such circumstances referred to above, the Respondentspreferred Crl. M.P. Nos. 87 and 86 of 2014 resply under Section 239 ofthe Code of Criminal Procedure (for short, ‘the CrPC’) seeking dischargefrom the trial essentially on the ground of lack of any prima facie caseagainst them.

14. The Special Judge adjudicated both the aforesaid applicationsfiled by the respondents and thought fit to reject those by two separateorders dated 29.03.2016. While rejecting the Crl. M.P. No. 86 of 2014filed by the respondent No. 2 (wife of respondent No. 1), the SpecialJudge observed as under :-

“15. Yet another ground urged by the petitioner is that theincome derived by the petitioner being partner in S.K. MatIndustries and by doing money lending business was not givendue credit by the Investigating Officer and as such the decisionarrived at by the Investigating Officer that the petitioner hasno wherewithals to acquire the properties standing in her nameand described in Statement II and to treat the said propertiesas the properties acquired by the 1st accused in the name ofthe petitioner is totally wrong. The Investigating Officer inhis final report has categorically mentioned that no documents

were produced during investigation, either by the petitioneror her husband, to showcase the income derived by thepetitioner by doing money lending business. Even in the presentapplication there is no whisper in this regard by the petitioner.The contentious issue as to whether the petitioner derivedincome from S.K. Mat Industries and through money lendingbusiness can be decided only during trial based on theevidence placed before the court in this regard. Hence thiscourt decides that the above ground urged by the petitioneris pre-matured one and thus cannot be entertained at thetime of framing charges.

16. In the present case the total value of assets and pecuniaryresources held by the petitioner, her husband and son at theend of the check-period has been computed by theInvestigating Officer at Rs.31,69,498/- as set out in StatementII. During investigation the petitioner and her husband havenot produced any documents except the Income-Tax returnsof the petitioner to trace the source of income of the petitionerto acquire the properties that stood recorded in her nameduring the check-period. Hence the Investigating Officer hasproceeded to treat the properties standing in the name of thepetitioner and her minor son as the properties of thepetitioner’s husband, the lst accused, which cannot be foundfault at this stage more so when the petitioner’s husband hasnot disclosed the acquisition of properties by his wife, thepetitioner herein, to the concerned Department as requiredunder Tamil Nadu Government Servants Conduct Rules.Hence this court decides that, at this stage, there is nosubstance in the contention’ of the petitioner that themethodology adopted by the Investigating Officer incomputing the value of the assets of the petitioner’s husbandis erroneous.

18. The materials produced by the Investigating Officer alongwith the final report prima facie disclose the existence of allthe ingredients essential to constitute the offence U / s 13 (2)r/w 13 (2) r/w 13 (1) (e) of the Prevention of Corruption Actread with Sec : 109 of the IPC alleged to have been committed

by the petitioner. Since the offence alleged against thepetitioner and her husband are grave in nature the petitionercannot be let scot free without facing trial and withoutaffording an opportunity to the prosecution to establish thecase during trial by adducing evidence.

19. Hence on conspectus evaluation of all legal and factualaspects involved in the application, this court decides thatthere is no merit in the contention that the charge levelledagainst the petitioner is groundless on the face of materialsavailable on record. Hence this court decides that thepetitioner is not entitled for an order of discharge as prayedfor.”

15. While rejecting the Crl. M.P. No. 87 of 2014 filed by theRespondent No. 1 (husband), the Special Judge observed as under:-

“8. Now let us consider the grounds urged by the petitionerin seriatum.

I. The Income-Tax returns submitted by the petitioner’swife, was not considered by the Investigating Officer in theproper perspective.

The learned counsel for the petitioner assiduouslyargued that through the Income-Tax returns submitted by thewife of the petitioner, who is arrayed as 2[nd] accused in themain case, it established beyond doubt that the petitionerswife had sufficient source to acquire properties mentioned inStatement II but the Investigating Officer in total disregard tothe Income-Tax returns has treated the properties standing inthe name of the petitioner’s wife as the properties of thepetitioner on the premise that the petitioner has purchasedthe properties benami in the name of his wife and as such thecomputation made by the Investigating Officer in arriving atthe total value of the assets acquired by the petitioner duringthe check period at Rs. 28,23,492/- as set out in Statement Vis grossly erroneous. As already pointed out the fact that thepetitioner’s wife, the 2[nd] accused is an Income-Tax assesseeand that she had submitted her Income-Tax returns to theconcerned Income-Tax authorities regularly is not seriouslydisputed. The petitioner is making an adroit effort to impress

upon the court that particulars set out in the Income-Taxreturns unequivocally establish the financial capabilities ofthe wife of the petitioner to purchase properties and hencethe properties standing in the name of the wife of the petitionerhas to be treated as self-acquired properties of the wife of thepetitioner.

11. (II). Income derived by the petitioner’s wife through moneylending business not given due consideration.

According to the petitioner, his wife, the 2[nd] accused bydoing money lending business was deriving size able incomebut the same was not considered by the Investigating Officerand as such the conclusion arrived at by the InvestigatingOfficer that the 2[nd] accused is an ostensible owner of theproperties standing in her name and that the petitioner is thetrue owner of the said properties is absolutely wrong. TheInvestigating Officer has categorically mentioned that inrespect of the so called money lending business no documentswere produced before him either by the petitioner or his wifeduring investigation. Even in the present application thepetitioner has not claimed that there are documents to establishthe money lending business carried out by his wife and theincome derived by her through the said business. Thecontentious issue as to whether the petitioner wife was derivingincome by doing money lending business can be decided onlyduring trial based on the evidence placed in this regard. Hencethis court decides that above contention raised by thepetitioner is pre-matured one and thus cannot be entertainedat the stage of framing charges. On conspectus evaluationof the legal and factual aspects involved in the case, thiscourt decides that the claim of the petitioner for an order ofdischarge alleging that the Investigating Officer has erred intreating the properties standing in the name of the petitioner’swife as the properties of the petitioner ignoring the separateincome of the petitioner’s wife through money lending businessis not sustainable under law.

12. (III). The methodology adopted by the InvestigatingOfficer in arriving at the total value of assets standing in the

name of the petitioner at the end of the check-perioderroneous:-

According to the petitioner the income derived by thepetitioner’s wife other than from S.K. Mat Industries duringthe relevant period of Rs. 5,90,342/- but the same has notbeen considered by the Investigating Officer even though thesame has been set out in the Income-Tax returns submitted bythe petitioner’s wife, the 2[nd] accused Suguan. The petitionerfurther allege that the properties of the petitioner’s wife andson more fully described in Statement II ought to have beenexcluded but strangely the Investigating Officer has includedthe same, which again clearly demonstrate that computationhas not been made in proper line. Based on the above saidcontentions the petitioner challenging the very methodologyadopted by the Investigating Officer, seek an order ofdischarge. As elaborately discussed in the earlier part of thisorder, the question as to whether the properties standing inthe name of the petitioner’s wife and son are in reality theirself acquired properties or whether those properties were infact acquired by the petitioner through his financial resourcescan be decided only at the time of trial based on the evidenceadduced by both parties in this regard. Since the nature ofproperties standing in the name of the petitioner’s wife andson cannot be decided at this stage, at no stretch of imaginationit can be contended that the methodology adopted by theInvestigating Officer in arriving at the total value of assetsand financial resources standing in the name of the petitionerat the end of the check period is erroneous.

13. Hence considering the materials available on record inthe back drop of the principles of law propounded by ourApex Court in the case of Suresh Rajan referred supra, thiscourt decides that the petitioner is not entitled for an order ofdischarge alleging that the methodology adopted by theInvestigating Officer is erroneous.

14. In the present case the total value of the assets andpecuniary resources of the petitioner and his family membersat the end of the check-period has been computed by theInvestigating Officer at Rs.31,69,498/- as set out in Statement

II. During investigation of the case, the petitioner has notproduced any documents before the Investigating Officerexcept the Income-Tax returns of his wife, the 2[nd] accused, totrace the source of income of the petitioner’s wife to acquirethe properties standing in her name. Hence the InvestigatingOfficer proceeded to treat the properties standing in the nameof the petitioner’s wife and his son as the properties of thepetitioner, which cannot be found fault at this stage more sowhen the petitioner has not disclosed the acquisition ofproperties by his wife to the concerned department as requiredunder the Tamil Nadu Government Servants conduct rules.Hence this court, at this stage, decides that there is nosubstance in the contention of the petitioner that themethodology adopted by the Investigating Officer incomputing the value of the assets of the petitioner is erroneous.

15. Conclusion :

The materials placed by the Investigating Officer alongwith the Final Report disclose grave suspecion against thepetitioner of having committed the alleged offence U/s 13 (1)(e) of the Prevention of Corruption Act. The guilt or otherwiseof the petitioner has to be decided by court by affording anopportunity to the prosecution to march in evidence in supportof its case. The materials placed by the Investigating Officeralong with the final report prima facie disclose the existenceof all the essential ingredients constituting the offence U/s 13(2) r/w 13 (1) (e) of the Prevention of Corruption Act 1988.Hence this court decides that the petitioner is not entitled foran order of discharge.

16. In the result the application is dismissed.”

16. Thus, while rejecting the discharge applications filed by therespondents herein, the learned Special Judge recorded categoricalfinding that there was more than prima facie case against the accusedpersons to put them to trial for the alleged offence. The learned SpecialJudge recorded clear finding that the charges levelled against theaccused persons cannot be said to be groundless so as to dischargethem from the prosecution in exercise of powers under Section 239 ofthe CrPC.

17. The respondents, being dissatisfied with the orders passed bythe Special Court rejecting their discharge applications, went before theHigh Court and challenged the orders by filing Criminal RevisionApplication Nos. 702 and 703 of 2016 resply. Both the RevisionApplications came to be heard by the High Court analogously and cameto be allowed by the common impugned judgment and order dated27.04.2017. The respondents herein came to be discharged from theprosecution. While allowing the Revision Applications, the High Courtheld as under :

“41. Taking into consideration all the relevant facts andcircumstances, this Court is of the view that the InvestigatingOfficer had not considered the explanation submitted by thefirst accused and also not taken into account any assets ofthe petitioners/ Al and A2.

42. This Court has also perused the statements of the listedwitnesses along with the impugned orders. As alreadydiscussed in the foregoing paragraphs and as decided in Stateof Maharashtra Vs Wasudeo (AIR 1981 SC 1186 : 19813sec199) cited supra, the nature and the extent of burden cast onthe accused is well settled and the accused is not bound toprove his innocence beyond all reasonable doubt. All that hewould do is to bring out preponderance of probability. Inso far as this case is concerned, the petitioners have broughtout preponderance of probability by way of establishingtheir case. As enunciated in Explanation to clause (e) of SubSection (1) to Section 13, the petitioners have intimated theirincome received from lawful source to the income taxauthorities concerned in accordance with the provisions ofthe Income Tax Act, which is applicable for the first accusedbeing the public servant to intimate his known source ofincome and therefore, this Court is of the view that theprosecution has miserably failed to make out prima faciecase against the petitioners/ Al and A2.

43. It is the cardinal principle that the accused is presumed tobe innocent unless proved to be guilty by the prosecution andthe accused is entitled to the benefit of every reasonable doubt.Thus, giving false information or failing to prove his innocenceis no ground to base conviction of accused and on the

contrary it offends the very basic principle of criminaljurisprudence which lays the burden on the prosecution toprove the offence against the accused.

44. In criminal cases, the guilt should be proved beyond anyreasonable doubt that reasonable man with ordinaryprudence can have. There should. be no doubt whether theaccused is guilty or not. If there is slightest doubt, no matterhow small it is, the benefit will go to the accused. In Indianlegal system the provision regarding burden of proof and howit is to be discharged are grandeurly laid down in ChapterVII of the Evidence Act, 1872. The rule is that whoever allegesa fact must prove it. In criminal trail it is the prosecutionwho alleges that the accused has committed the offence withrequisite mens rea and so the burden lies upon the prosecutionto prove the same.45. As observed in the preceding paragraphs the accused isnot bound to prove his innocence beyond all reasonabledoubt. All that he has to do is, to bring out preponderanceof probability. The phrase ‘preponderance of probability’appears to have been taken from Charless R.Cooper VF.W.Slade, (1857-59) 6 HLC 746. The observations madetherein make it clear that what ‘preponderance of probability’means is ‘more probable and rational view of the case’, notnecessarily as certain as the pleadings should be.

46. Section 397(1) confers sort of supervisory power. Thepurpose is to rectify miscarriage of justice. The mainconsideration was whether substantial justice was done sincethis Section confers the revisional jurisdiction upon both theSessions Court as well as the High Court (Criminal). Nobodycan claim it as matter of right as it confers supervisoryjurisdiction. When there is clear illegality in the order passedby the lower Court, revision could be entertained.

47. On coming to the provisions of Section 401 of the Code,as it is understood, the object behind this Section is to empowerthe High Court to exercise the powers of an Appellate Courtto prevent failure of justice in cases where the Code does notprovide for appeal.

48. The power, however, is to be exercised only in exceptionalcases where there has been miscarriage of justice owing to

(i) defect in the procedure or

(ii) manifest error on point of law;

(iii) excess jurisdiction,

(iv) abuse of power, &

(v) where the decision upon which the trial Court relied hassince been reversed or overruled when the revision petitionwas being heard.

49. As observed by the Supreme Court in State of M.P. Vs.S.B.Johari, (AIR 2000 SC 665: (2000) 2 sec 57: 2000 SCC(Crl) 311 : 2000 Crl.L.J.944), under Section 401 of CriminalProcedure Code quashing of the charge by the High Courtwould be justified if even on considering the entire prosecutionevidence, the offence is not made out.

50. Viewing it from any angle, this Court is of consideredopinion that the prosecution has not made out any case asagainst the petitioners/ Al and A2 to proceed with.

51. In the result, Criminal Revision Case Nos. 702 and 703 of2016 are allowed and the impugned orders, dated 29.03.2016and made in Crl.M.P.Nos.87 and 86 of 2014 in SpecialCC.No.76 of 2014 on the file of the learned Special Judge(for Corruption Cases), Salem are set aside and the petitionsin Crl.M.P.Nos.87 and 86 of 2014 in Special CC.No.76 of2014 are allowed. The petitioners/ Al and A2 are dischargedfrom the clutches of the charges.”

18. Thus, from the aforesaid, it appears that the High Court thoughtfit to discharge both the accused essentially on the following counts.

a) The Investigating Officer wrongly declined to consider theexplanation offered by the Respondent No. 1 as regards theallegations and also failed to take into consideration the lawfulassets of the Respondents.

b) The accused persons had disclosed their income to theincome tax authorities in accordance with the provisions of theIncome Tax Act and, in such circumstances, no prima faciecase could be said to have been made out against them.

c) The accused in prosecution under the Act 1988, moreBparticularly for the offences punishable under section 13(1)(e)of the Act, is obliged only to explain as regards the allegedassets disproportionate to the known sources of his income onthe principle of preponderance of probability.

d) As no prima facie case could be said to have been madeout against the accused persons, they deserve to be dischargedfrom the prosecution in exercise of revisional powers meantfor doing substantial justice.

19. In view of the aforesaid, the State being aggrieved anddissatisfied with the impugned orders passed by the High Court is hereDbefore this Court with the present appeals.

SUBMISSIONS ON BEHALF OF THE APPELLANT

20. Mr. V. Krishnamurthy, the learned Additional Advocate Generalappearing on behalf of the State vehemently submitted that the HighCourt committed serious error in discharging the accused persons fromEthe prosecution. He would submit that the whole approach of the HighCourt, more particularly the finding that “when the prosecuting agencyhas come forward with specific occasion, that the petitioners haveamassed wealth which is disproportionate to their known source ofincome, it is incumbent on the part of the prosecution, to prove theFindictment with clinching and impeccable evidence beyond allreasonable doubts, because the allegations made against thepetitioners would definitely affect their private rights and their self-respect as well” is erroneous and unsustainable.

21. He would submit that the High Court has erroneously cast aburden on the prosecution to prove the case against the accused personsGbeyond all reasonable doubt even at the stage of framing charge. Thescope and ambit of inquiry before framing the charge or at the stage ofdischarge has been well settled by this Court.

22. He would submit that the High Court grossly erred in takinginto consideration the documents produced by the accused persons inH

their defence such as the Income Tax Assessments of A2 and otherrecords, to come to the conclusion that the properties disclosed thereinought to be eschewed from consideration. The learned counsel submittedthat the practice of looking into the documents produced by the accusedat the stage of framing of charge has not been approved by this Court inthe case of State of Orissa v. Debendra Nath Padhi, (2005) 1 SCC568.

23. He would submit that the High Court could be said to haveconducted mini trial while considering the discharge applications filedby the accused persons. In other words, at the stage of framing of charge,roving and fishing inquiry is impermissible and that would defect theobject of the Code.

24. In the last, he submitted that the High Court overlooked thedictum as laid by this Court in the State of Tamil Nadu by Inspector ofPolice, Vigilance and Anti-Corruption vs. N. Suresh Rajan andothers, (2014) 11 SCC 709 @ 721 para 29, wherein this Court held that:

“It is trite that at the stage of consideration of an applicationfor discharge, the court has to proceed with an assumptionthat the materials brought on record by the prosecution aretrue and evaluate the said materials and documents with aview to find out whether the facts emerging therefrom takenat their face value disclose the existence of all the ingredientsconstituting the alleged offence. At this stage, probative valueof the materials has to be gone into and the court is notexpected to go deep into the matter and hold that the materialswould not warrant conviction.In our opinion, what needsto be considered is whether there is ground for presumingthat the offence has been committed and not whether groundfor convicting the accused has been made out. To put itdifferently, if the court thinks that the accused might havecommitted the offence on the basis of the materials on recordon its probative value, it can frame the charge; though forconviction, the court has to come to the conclusion that theaccused has committed the offence. The law does not permita mini trial at this stage.”

25. In such circumstances referred to above, the learned counselappearing for the State prayed that there being merit in his two appeals,

Athose may be allowed and the impugned orders passed by the HighCourt may be set aside.

SUBMISSIONS ON BEHALF OF THE ACCUSED

26. Mr. K. Radhakrishnan, the learned senior counsel appearingfor the accused persons, on the other hand, vehemently opposed bothBthe appeals submitting that no error, not to speak of any error of law,could be said to have been committed by the High Court in passing theimpugned orders discharging the accused persons from the prosecution.

27. The learned senior counsel would submit that withoutconsidering the explanation furnished by the respondent No. 1 and withoutCcalling for any explanation from his wife (second accused), thechargesheet for the offences punishable under Sections 13(2) r/w 13(1)(e)of the Act 1988 and Section 109 of the IPC could not have been filed.The learned counsel, relying on the decision of this Court in the case ofN. Suresh Rajan (supra), submitted as proposition of law that anyDproperty in the name of an income tax assessee, by itself, cannot be aground to assume that such property belongs to the assessee.

28. He would submit that this Court in N. Suresh Rajan (supra)was dealing with factual situation wherein the parents of the accusedto whom the property belonged were not having any independent sourceEof income unlike in the facts of the present case where the wife of therespondent is commerce graduate and an entrepreneur. She has herown independent source of income and had purchased the propertiesout of her own income and that one of those has been gifted by herfather. She has been an income tax assessee from the year 1990 andhas been regularly filing her income tax returns.F

29. He would submit that the Investigating Officer failed toconsider the explanation furnished by the Respondent No. 1. Relying onthe decision of this Court in the case of State of Maharashtra vs.Wasudeo Ramchandra Kaidalwar, (1981) 3 SCC 199, the learnedcounsel submitted that the nature and extent of burden cast on theGaccused is not to prove his innocence beyond reasonable doubt. All thatthe accused is obliged in law is to explain on preponderance of probability.In so far as the present case is concerned, the respondents have broughtout preponderance of probability by way of establishing their case.

30. The learned counsel in his written submissions has stated asHunder:-

i.“In determining the assets of the respondent, the assetsstanding in the name of his wife and their son must beeschewed.

ii.Income of Tmt. Suguna, wife of the respondent R.Soundirarasu could not be clubbed along with theincome of her husband when she is particularly havingBindependent source of income and pays income tax.

iii.Further, the investigating Officer has called for theexplanation from the respondent R. Soundirarasu, whichwas not considered by the IO.

iv.However, the IO has not called for the explanation fromTmt. Suguna. This approach of the IO is contrary to thelaw laid down by this Hon’ble Court. This Hon’ble Courtin the case of Devine Retreat Centra Vs. State of Kerala(2008) 3SCC 542, has held that no judicial order canever be passed by any court without providing areasonable opportunity of being heard to the personlikely to be affected by such order and particularlywhen such order results drastic consequences ofaffecting one’s own reputation.

v.Respondent-R. Soundirarasu in his explanation hadexplained that his wife Tmt. Suguna has independentsource of income. She is commerce graduate and wasa partner in S.K. Matt Industries along with one R.Kumar with effect from 23.10.1993. The partnershipwas dissolved on 31.3.2003 and thereafter she continuedas the sole proprietor. She had been paying income taxfrom 1990 onwards and her IT returns were scrutinizedby the appropriate authorities. She had been regularlyfiled her income tax returns even beyond the end of thecheck period.

vi.It is respectfully submitted that the Investigating Officerwhile collecting necessary details from both the incometax authority as well as the respondent R. Soundirarasu,had failed to consider them in proper perspective whichdo establish that his wife Tmt. Suguna had acquiredproperties from her own income. But the investigating

officer has erroneously stated in the final report thatshe had no source of income and that her father alsodid not possess any means to acquire property.

15. It is submitted that Statement No. 1 appended to theletter dated 16.10.2007 and the Charge Sheet is theassets and pecuniary resources that stood to the creditof respondent and his family members. The checkperiod, as per the prosecution has been determined from1.1.2002 to 31.3.2004. In statement No. 1, 14 items havebeen shown. In so far as Statement I is concerned,properties mentioned at item Nos, 01,02,08,10,12 and14 are exclusively the investments of his wife out of her

own resources.

16. It is submitted that in so far as Statement II isconcerned.

i.Item 1, the house was constructed at the cost of Rs.4,15,344/- by respondent’s wife Tmt. S. Suguna fromher independent resources derived from S.K. MatIndustries and other income and LIC Finance HousingLoan.

ii.Item No. 2 was purchased by respondent’s wife out ofher independent income derived from S.K. MatIndustries.

iii.Item no. 12, the Land measuring 0.67.½ cents comprisedin Survey No. 12/1Q situated at M. Chettipatti, OmalurFTaluk, Salem District was inherited by respondent’smother Krishnammal and subsequently settled thisproperty in favour of her three sons and thereby hehad received 1/3[rd] share.

iv.Item No. 13 was purchased by respondent’s father-in-law Thiru. T. Duraisamy with his own resources andGlater gifted by way of dhana settlement to his son Thiru.S.S.Saran Kumar on 16.02.2004. This property shouldbe taken into account as gift and the value thereofshould not have been included in the Statement.

v.Item No. 14, was inherited by respondent’s wife Tmt.HS.Suguna by virtue of Dhana settlement.

vi.Item No. 15 was purchased by respondent’s mother-in-Alaw Tmt. D. Shantha out of her own funds in the nameof his son and that neither he nor his wife had investedany money in this transaction.

vii.Item Nos. 17, 18, were purchased by respondent’s wifeTmt. S. Suguna out of her own resources.

viii.Items 19, 21 are related to respondent’s wife Tmt. S.Suguna and the same cannot be attributed to therespondent.

17. It is submitted that items 2, 3, 4, 5 of Schedule IIIpertains to respondent’s wife Tmt. S. Suguna and thesame cannot be attributed to the respondent.

18. It is submitted that in respect of Statement IV,

i.Item No. 2, the expenditure towards repayment of LIChousing loan to the extent of Rs. 1,19,934.30 cannotbe shown towards respondent’s expenditure as the loanwas availed and repaid by his wife Tmt. S. Suguna outof her own resources.

ii.Similarly, the expenditure being Rs. 1,80,000/- shownunder item No. 3 should not have been shown inrespondent’s account, since the loan was obtained byhis wife independently and repaid so far with interestby her, out of her own resources.

iii.Item No. 5, Telephone charges of Rs. 26,854/- were paidby respondent’s wife out of her own resources.

iv.Item No. 10, the house tax was paid by respondent’swife out of her own resources.

v.Item No. 09, the transaction pertains to respondent’swife. Therefore, the loss should not have been shown inrespondent’s account.

vi.Item No. 11 is subscription towards Sri Ram Chits wasmade by respondent’s wife out of her own resources.

vii.Item No. 12 the house tax for the house at Ganapathyis paid by respondent’s wife out of her own resources.

Aviii.Item No. 14, the income tax paid by his respondent’swife out of her own resources has been shown in hisaccount.

19. It is submitted that the calculation made by thepetitioner is incorrect. It is submitted that the correctBcomputation as has been explained by the respondentin his explanation is as follows,

i.The value of assets that stood to respondent’s credit aswell as to the credit of his family members at thebeginning of the check period is Rs. 1,31,254/-.

ii.The value of the assets that stood to respondent’s creditas well as to the credit of his family members at the endof the check period is Rs. 1,37,430/-

iii.Therefore, the value of assets acquired during the checkperiod is Rs. 6,176/-.

iv.Income derived by him and his family members duringthe check period is Rs. 3,11,547/-.

v.Expenditure during the check period is Rs. 1,91,910/-.vi.Thus, the savings during the check period is Rs.E1,19,636.80

Therefore, it is submitted that the assets acquired by therespondent (R. Soundirarasu) are not disproportionate to hisknown source of income.

20. It is submitted that in his explanation respondent (R.Soundirarasu), has referred to the provisions of the TamilNadu Government Servant Conduct Rules 1973 as amendedup to September 2006, Rules 7 (1) (a), which reads as follows:

(1)(a) No Government servant, shall except after notice tothe prescribed authority, acquire or dispose of any immovableGproperty by lease, mortgage, purchase, sale, gift, exchangeor otherwise either in his own name or in the name of anymember of his family.

Such notice will be necessary even where any immovableproperty is acquired by any member of the family of the

Government servant out of the resources of the Governmentservant:

Provided that the previous sanction of the prescribed authorityshall not be necessary for the acquisition of immovable-property in respect of housesite assigned by the Governmentin favour of the Government servant.

-ExplanationA Government servant is not required to givenotice to the prescribed authority or seek prior permissionfrom the prescribed authority for acquisition or disposal ofimmovable properties by the members of his family underclause (a), if the immovable property in question is notacquired from the resources of the Government servantconcerned.

The IO ought to have considered this provision before takingthe properties and other resources into account.

21. It is respectfully submitted that the High Court has decidedthe matter by following the principles of law laid down bythis Hon’ble Court. The High Court has only looked at thematerials relied upon in the chargesheet to ascertain whethera prima facie case is made out or not. It is submitted that theHigh Court has rightly arrived at the conclusion that theprosecution has not examined the materials and theexplanation afforded by the respondent. After examining thefacts emerging from of the materials brought on record by theprosecution, the High Court has concluded that prima faciethe materials on record does not disclose the existence of allthe ingredients constituting the offences alleged against therespondents. The High Court has rightly concluded that theevidences tagged along with the final report are also not inconsonance with the accusation made in the final report. TheHigh Court has rendered the judgment discharging theaccused to avert miscarriage of justice and to erase theprejudice caused to the accused at the instance of theinvestigating officer by not examining the explanationrendered by the first accused in proper perspective and withoutcalling for the explanation from the second accused.Prejudice is also caused by the finding of the Special judge

658SUPREME COURT REPORTS

[2022] 7 S.C.R.

Ato the effect that there are no materials/ evidence to provethat the second accused has separate and independent sourceof income.”

(Emphasis supplied)

In such circumstances referred to above, the learned counselBprayed that there being no merit in the two appeals filed by the State,those may be dismissed.

31. If we have to give fair idea as regards the case put up by theProsecution against the accused persons, we may do so as under:-

C(a)There are 14 items shown in the Statement No. 1, i.e. Assetsand pecuniary sources that stood to the credit of the accusedand his family members at the beginning of the check periodi.e., 01.01.2002 such as lands, house sites, shares, jewelsand other movables valued at Rs.3,46,006-00.

D(b)There are 21 items shown in the Statement No. II i.e., assetsand pecuniary source that stood to the credit of the accusedand his family members at the end of the check period ason 31.03.2004, valued at Rs. 31,69,498-00.

(c)There are 6 items shown in the Statement No. III as incomederived by the accused and his family members during theEcheck period i.e., 01-01-2002 to 31-03-2004, calculated atRs. 9,97,888-00.

(d)There are 15 items shown in the Statement No. IV i.e.,expenditure incurred by the accused and his family membersduring the check period from 01-01-2002 to 31-03-2004 asFfamily consumption expenditure, education, electricitycharges, housing loan, LIC premiums, telephone chargesetc. is calculated at Rs. 6,16,376-50.

(e)The value of assets acquired by the accused and his familymembers at the end of the check period i.e., 31-03-2004 asGshown in Statement No. V is at Rs. 28,23,492-00 (i.e. Rs.31,69,498 (-) Rs. 3,46,006-00).

(f)The likely savings of the accused and his family membersduring the check period as shown in Statement No. VI isarrived at Rs. 3,81,512-00 (i.e.,) Rs. 9,97,888-00 (-) Rs.H6,16,376-50).

STATE THROUGH DEPUTY SUPERINTENDENT Of POLICE v.659R. SOUNDIRARASU ETC. [J. B. PARDIWALA, J.](g)The value of disproportionate assets acquired by the accusedAand his family members as shown in the Statement No. VIIis calculated at Rs. 24,41,980-00.

(h)The percentage of disproportionate assets acquired by theaccused and his family members to the known sources oftheir income is calculated at 244.71% (Rs.24,41,980-00Bdivided by Rs.9,97,888-00 multiplied by 100).

Thus, in view of the aforesaid, the case of the prosecution is thatthe accused No. 1 (public servant) was found to be in possession ofassets disproportionate to the known sources of his income to the extentto Rs. 24,41,980/- as on 31.03.2004.

ANALYSIS

32. Having heard the learned counsel appearing for the partiesand having gone through the materials on record, the only question thatfalls for our consideration is whether the High Court committed anyerror in discharging both the accused from the charges levelled againstthem?

33. We have no hesitation in observing that the impugned orderspassed by the High Court are utterly incomprehensible. We shall explainin details why we say so.

PREVENTION OF CORRUPTION ACT, 1988

34. Section 13(1)(e) of the Act 1988 including explanation theretoreads as under :-

“13. Criminal misconduct by public servant.

(1) public servant is said to commit the offence of criminalmisconduct,-

(e) if he or any person on his behalf, is in possession or has,at any time during the period of his office, been in possessionfor which the public servant cannot satisfactorily account,of pecuniary resources or property disproportionate to hisknown sources of income.

Explanation.- For the purposes of this section, “knownsources of income” means income received from any lawfulsource and such receipt has been intimated in accordance

Awith the provisions of any law, rules or orders for the timebeing applicable to public servant.”

35. The explanation to Section 13(1)(e)defines the expression“known sources of income” and states that this expression means theincome received from any lawful source and also requires that the receiptBshould have been intimated by the public servant in accordance with anyprovisions of law, rules or orders for the time being applicable to public

servant. This explanation was not there in the Prevention of CorruptionAct, 1947 (for short, “Act 1947”). Noticing this fact in Jagan M. Seshadriv. State of Tamil Nadu, (2002) 9 SCC 639, this Court has observed asunder:-

“7. bare reading of Section 30(2) of the 1988 Act showsthat any act done or any action taken or purported to havebeen done or taken under or in pursuance of the repealedAct, shall, insofar as it is not inconsistent with the provisionsof this Act, be deemed to have been done or taken under orin pursuance of the corresponding provisions of the Act. Itdoes not substitute Section 13in place of Section 5of the 1947Act. Section 30(2) is applicable “without prejudice to theapplication of Section 6of the General Clauses Act, 1897”.In our opinion, the application of Section 13of the 1988 Actto the fact situation of the present case would offend Section6 of the General Clauses Act, which, inter alia provides thatrepeal shall not (i) affect the previous operation of anyenactment so repealed or anything duly done or sufferedthereunder, or (ii) affect any investigation, legal proceedingsor remedy in respect of any such rights, privilege, obligation,penalty, forfeiture or punishment. Section 13, both in thematter of punishment as also by the addition of the Explanationto Section 13(1)(e)is materially different from Section 5of the1947 Act. The presumption permitted to be raised under theExplanation to Section 13(1)(e)was not available to be raisedunder Section 5(1)(e) of the 1947 Act. This difference canhave material bearing on the case.”

36. The explanation to Section 13(1)(e) of the Act 1988 has theeffect of defining the expression “known sources of income” usedin Section 13(1)(e) of the Act 1988. The explanation to Section13(1)(e)of the Act 1988 consists of two parts. The first part states that

the known sources of income means the income received from anylawful source and the second part states that such receipt should havebeen intimated by the public servant in accordance with the provisionsof law, rules and orders for the time being applicable to public servant.

37. Referring to the first part of the expression “known sourcesof income” in N. Ramakrishnaiah v. State of A.P., 2009 Crl.L.J. 1767,this Court observed as under:

“15. The emphasis of the phrase “known sources of income”in Section 13(1)(e) (old Section 5(1)(e)) is clearly on the word“income”. It would be primary to observe that qua the publicservant, the income would be what is attached to his office orpost, commonly known as remuneration or salary. The term“income” by itself, is classic and has wide connotation.Whatever comes in or is received is income. But, however,wide the import and connotation of the term “income”, it isincapable of being understood as meaning receipt having nonexus to one’s labour, or expertise, or property, or investment,and being further source which may or may not yield aregular revenue. These essential characteristics are vital inunderstanding the term “Income”. Therefore, it can be saidthat, though “income” in receipt in the hand of its recipient,every receipt would not partake into the character of income.For the public servant, whatever return he gets of his service,will be the primary item of his income. Other income whichcan conceivably be income qua the public servant will be inthe regular receipt from (a) his property, or (b) his investment.A receipt from windfall, or gains of graft crime or immoralsecretions by persons prima facie would not be receipt forthe “known source of income” of public servant.”

38. The above brings us to the second part of the explanation,defining the expression “such receipt should have been intimated by thepublic Servant” i.e. intimation by the public servant in accordance withany provisions of law, rules or orders applicable to public servant.

39. The language of the substantive provisions of Section 5(3) ofthe Act 1947 before its amendment, Section 5 (1)(e) of the Act 1947 and13(1)(e) of the Act 1988 continues to be the same though Section 5(3)before it came to be amended was held to be procedural Section in the

Acase of Sajjan Singh v. State of Punjab, AIR 1964 SC 464. Section5(3) of the Act 1947 before it came to be amended w.e.f. 18[th] December,1964 was interpreted in the case of C.D.S. Swami v. State, AIR 1960SC 7, and it was observed:-

“5. Reference was also made to cases in which courts hadheld that if plausible explanation had been offered by anaccused person for being in possession of property whichwas the subject-matter of the charge, the court couldexonerate the accused from criminal responsibility forpossessing incriminating property. In our opinion, those caseshave no bearing upon the charge against the appellant inthis case, because the section requires the accused person to“satisfactorily account” for the possession of pecuniaryresources or property disproportionate to his known sourcesof income. Ordinarily, an accused person is entitled toacquittal if he can account for honest possession of propertywhich has been proved to have been recently stolen (seeillustration (a) to Section 114of the Indian Evidence Act,1872). The rule of law is that if there is prima facieexplanation of the accused that he came by the stolen goodsin an honest way, the inference of guilty knowledge isdisplaced. This is based upon the well- established principlethat if there is doubt in the mind of the court as to necessaryingredient of an offence, the benefit of that doubt must go tothe accused. But the legislature has advisedly used theexpression “satisfactorily account”. The emphasis must beon the word “satisfactorily”, and the legislature has, thus,deliberately cast burden on the accused not only to offer aplausible explanation as to how he came by his large wealth,but also to satisfy the court that his explanation was worthyof acceptance.

6. Another argument bearing on the same aspect of the case,is that the prosecution has not led evidence to show as towhat are the known sources of the appellant’s income. In thisconnection, our attention was invited to the evidence of theinvestigating officers, and with reference to that evidence, itwas contended that those officers have not said, in terms, asto what were the known sources of income of the accused, or

that the salary was the only source of his income. Now, theexpression “known sources of income” must have referenceto sources known to the prosecution on thoroughinvestigation of the case. It was not, and it could not be,contended that “known sources of income” means sourcesknown to the accused. The prosecution cannot, in the verynature of things, be expected to know the affairs of anaccused person. Those will be matters “specially within theknowledge” of the accused, within the meaning of Section106 of the Evidence Act. The prosecution can only leadevidence, as it has done in the instant case, to show that theaccused was known to earn his living by service under theGovernment during the material period. The prosecutionwould not be justified in concluding that travelling allowancewas also source of income when such allowance isordinarily meant to compensate an officer concerned for hisout-of-pocket expenses incidental to journeys performed byhim for his official tours. That could not possibly be allegedto be very substantial source of income. The source ofincome of particular individual will depend upon his positionin life with particular reference to his occupation or avocationin life. In the case of government servant, the prosecutionwould, naturally, infer that his known source of income wouldbe the salary earned by him during his active service. Hispension or his provident fund would come into calculationonly after his retirement, unless he had justification forborrowing from his provident fund. We are not, therefore,impressed by the argument that the prosecution has failed tolead proper evidence as to the appellant’s known sources ofincome. It may be that the accused may have made statementsto the investigating officers as to his alleged sources ofincome, but the same, strictly, would not be evidence in thecase, and if the prosecution has failed to disclose all thesources of income of an accused person, it is always open tohim to prove those other sources of income which have notbeen taken into account or brought into evidence by theprosecution.”

(Emphasis supplied)

DEF

A40. Even after Section 5(3) was deleted and Section 5(1)(e)wasenacted, this Court in the case of Wasudeo Ram Chandra Kaidalwar(supra) has observed that the expression “known sources of income”occurring in Section 5(1)(e) has definite legal connotation which in thecontext must mean the sources known to the prosecution and not sourcesrelied upon and known to the accused. Section 5(1)(e), it was observedBby this Court, casts burden on the accused for it uses the words “forwhich the public servant cannot satisfactorily account”. The onus is onthe accused to account for and satisfactorily explain the assets.Accordingly, in Wasudeo Ram Chandra Kaidalwar (supra) it wasobserved:-

“11. The provisions of Section 5(3) have been subject ofjudicial interpretation. First the expression “known sourcesof income” in the context of Section 5(3) meant “sourcesknown to the prosecution”. The other principle is equally well-settled. The onus placed on the accused under Section5(3)was, however, not to prove his innocence beyondreasonable doubt, but only to establish preponderance ofprobability. These are the well-settled principles: see C.S.D.Swamy v. State;Sajjan Singh v. State of Punjaband V.D.Jhingan v. State of U.P. Thelegislature thought it fit todispense with the rule of evidence under Section 5(3) andmake the possession of disproportionate assets by publicservant as one of the species of the offence of criminalmisconduct by inserting Section 5(1)(e)due to widespreadcorruption in public services.

12. The terms and expressions appearing in Section 5(1)(e) ofthe Act are the same as those used in the old Section 5(3).Although the two provisions operate in two different fields,the meaning to be assigned to them must be the same. Theexpression “known sources of incomes” means “sourcesknown to the prosecution”. So also, the same meaning mustbe given to the words “for which the public servant cannotsatisfactorily account” occurring in Section 5(1)(e). Nodoubt, Section 4(1) provides for presumption of guilt in casesfalling under Section 5(1)(a)and (b), but there was, in ouropinion, no need to mention Section 5(1)(e)therein. For, thereason is obvious. The provision contained in Section

5(1)(e) of the Act is self-contained provision. The first partof the section casts burden on the prosecution and thesecond on the accused. When Section 5(1)(e) uses the words“”for which the public servant cannot satisfactorily account,it is implied that the burden is on such public servant toaccount for the sources for the acquisition of disproportionateassets. The High Court, therefore, was in error in holdingthat public servant charged for having disproportionateassets in his possession for which he cannot satisfactorilyaccount, cannot be convicted of an offence under Section5(2) read with Section 5(1)(e) of the Act unless the prosecutiondisproves all possible sources of income.

13. That takes us to the difficult question as to the nature andextent of the burden of proof under Section 5(1)(e)of the Act.The expression “burden of proof” has two distinct meanings(1) the legal burden i.e. the burden of establishing the guilt,and (2) the evidential burden i.e. the burden of leadingevidence. In criminal trial, the burden of proving everythingessential to establish the charge against the accused lies uponthe prosecution, and that burden never shifts. Notwithstandingthe general rule that the burden of proof lies exclusively uponthe prosecution, in the case of certain offences, the burdenof proving particular fact in issue may be laid by law uponthe accused. The burden resting on the accused in such casesis, however, not so onerous as that which lies on theprosecution and is discharged by proof of balance ofprobabilities. The ingredients of the offence of criminalmisconduct under Section 5(2)read with Section 5(1)(e) arethe possession of pecuniary resources or propertydisproportionate to the known sources of income for whichthe public servant cannot satisfactorily account. Tosubstantiate the charge, the prosecution must prove thefollowing facts before it can bring case under Section5(1)(e), namely, (1) it must establish that the accused is apublic servant, (2) the nature and extent of the pecuniaryresources or property which were found in his possession,(3) it must be proved as to what were his known sources ofincome i.e. known to the prosecution, and (4) it must prove,quite objectively, that such resources or property found in

Apossession of the accused were disproportionate to his knownsources of income. Once these four ingredients are established,the offence of criminal misconduct under Section 5(1)(e) iscomplete, unless the accused is able to account for suchresources or property. The burden then shifts to the accusedto satisfactorily account for his possession of disproportionateBassets. The extent and nature of burden of proof resting uponthe public servant to be found in possession ofdisproportionate assets under Section 5(1)(e) cannot behigher than the test laid by the Court in Jhingan case i.e. toestablish his case by preponderance of probability. ThatCtest was laid down by the court following the dictum of ViscountSankey, L.C., in Woolmington v. Director of Public Prosecution.The High Court has placed an impossible burden on theprosecution to disprove all possible sources of income whichwere within the special knowledge of the accused. As laiddown in Swamy case, the prosecution cannot, in the very natureDof things, be expected to know the affairs of publicservant found in possession of resources or propertydisproportionate to his known sources of income i.e. hissalary. Those will be matters specially within the knowledgeof the public servant within the meaning of Section 106 ofEthe Evidence Act, 1872. Section 106 reads:

“When any fact is especially within the knowledge of anyperson, the burden of proving that fact is upon him.”

In this connection, the phrase the burden of proof is clearlyused in the secondary sense namely, the duty of introducingFevidence. The nature and extent of the burden cast on theaccused is well settled. The accused is not bound to prove hisinnocence beyond all the reasonable doubt. All that he needto do is to bring out preponderance of probability.”

41. While the expression “known sources of income” refers toGthe sources known to the prosecution, the expression “for which thepublic servant cannot satisfactorily account” refers to the onus or burdenon the accused to satisfactorily explain and account for the assets foundto be possessed by the public servant. This burden is on the accused asthe said facts are within his special knowledge. Section 106of theHEvidence act applies. The explanation to Section 13(1)(e) is procedural

Section which seeks to define the expression “known sources of income”as sources known to the prosecution and not to the accused. Theexplanation applies and relates to the mode and manner of investigationto be conducted by the prosecution, it does away with the requirementand necessity of the prosecution to have an open, wide and rowinginvestigation and enquire into the alleged sources of income which theaccused may have. It curtails the need and necessity of the prosecutionto go into the alleged sources of income which public servant may orpossibly have but are not legal or have not been declared. The undeclaredalleged sources are by their very nature are expected to be known tothe accused only and are within his special knowledge.The effect ofthe explanation is to clarify and reinforce the existing position andunderstanding of the expression “known sources of income” i.e. theexpression refers to sources known to the prosecution and not sourcesknown to the accused. The second part of the explanation does awaywith the need and requirement for the prosecution to conduct an openended or rowing enquiry or investigation to find out all alleged/claimedknown sources of income of an accused who is investigated under the PCAct, 1988. The prosecution can rely upon the information furnished bythe accused to the authorities under law, rules and orders for the timebeing applicable to public servant. No further investigation is requiredby the prosecution to find out the known sources of income of the accusedpublic servant. As noticed above, the first part of the explanation refersto income received from legal/lawful sources. This first part of theexpression states the obvious as is clear from the judgment of this Courtin N. Ramakrishnaiah (supra).(Emphasis supplied)

42. Thus, it is evident from the aforesaid that the expression“known source of income” is not synonymous with the words “for whichthe public servant cannot satisfactorily account.” The two expressionsconnote and have different meaning, scope and requirements.

43. In the case of Central Bureau of Investigation (CBI) andAnr. v. Thommandru Hannah Vijayalakshmi @ T.H. Vijayalakshmiand Anr., reported in 2021 SCC OnLine SC 923, this Court, after anexhaustive review of its various other decisions, more particularly thedecision in the case of K. Veeraswami v. Union of India, (1991) 3 SCC655, held that since the accused public servant does not have right tobe afforded chance to explain the alleged Disproportionate Assets tothe investigating officer before the filing of chargesheet, similar right

Acannot be granted to the accused before the filing of an FIR by makinga preliminary inquiry mandatory.

44. The above decision of this Court in the case of ThommandruHannah Vijayalakshmi @ T.H. Vijayalakshmi (supra) is directanswer to the contention raised on behalf of the accused persons thatBthe investigating officer wrongly declined to consider the explanationoffered by the public servant in regard to the allegations and also failedto take into consideration the assets lawfully acquired by his wife.

45. In K. Veeraswami (supra), this Court held thus:-

“75…since the legality of the charge-sheet has beenimpeached, we will deal with that contention also. Counsellaid great emphasis on the expression ¯for which he cannotsatisfactorily account ¯ used in clause (e) of Section 5(1) ofthe Act. He argued that that term means that the public servantis entitled to an opportunity before the Investigating Officerto explain the alleged disproportionality between assets andthe known sources of income. The Investigating Officer isrequired to consider his explanation and the charge-sheetfiled by him must contain such averment. The failure to mentionthat requirement would vitiate the charge-sheet and rendersit invalid. This submission, if we may say so, completelyoverlooks the powers of the Investigating Officer. TheInvestigating Officer is only required to collect material tofind out whether the offence alleged appears to have beencommitted. In the course of the investigation, he may examinethe accused. He may seek his clarification and if necessary,he may cross check with him about his known sources ofincome and assets possessed by him. Indeed, fair investigationrequires as rightly stated by Mr. A.D. Giri, learned SolicitorGeneral, that the accused should not be kept in darkness. Heshould be taken into confidence if he is willing to cooperate.But to state that after collection of all material the InvestigatingOfficer must give an opportunity to the accused and call uponhim to account for the excess of the assets over the knownsources of income and then decide whether the accounting issatisfactory or not, would be elevating the InvestigatingOfficer to the position of an enquiry officer or judge. TheInvestigating Officer is not holding an enquiry against the

conduct of the public servant or determining the disputedissues regarding the disproportionality between the assets andthe income of the accused. He just collects material from allsides and prepares report which he files in the court as”charge-sheet.

(Emphasis supplied)

46. The second contention canvassed on behalf of the accusedpersons that every bit of information in regard to the assets had beenintimated to the Income Tax Authorities and the documents in regard tothe same should be sufficient to exonerate the accused persons fromthe charges is without any merit. In other words, the contention that theHigh Court rightly took into consideration the aforesaid for the purposeof discharging the accused persons from the prosecution is without anymerit and erroneous more particularly in view of the decision of thisCourt in the case of Thommandru Hannah Vijayalakshmi @ T.H.Vijayalakshmi (supra). This Court has observed in paras 58, 60 & 61resply as under:-

“58. On the other hand, it has been argued on behalf of theappellant that the documents relied upon by the respondentsare not unimpeachable and have to be proved at the stage oftrial. Hence, it was urged that the arguments made on thebasis of these documents should not be accepted by this Court.The appellant has relied upon the judgment of two JudgeBench of this Court in J. Jayalalitha (supra), where it hasbeen held that documents such as Income Tax Returns cannotbe relied upon as conclusive proof to show that the income isfrom lawful source under the PC Act. Justice P Ghoseheld thus:“191. Though considerable exchanges had been made incourse of the arguments, centering around Section 43 of theEvidence Act, 1872, we are of the comprehension that thoseneed not be expatiated in details. Suffice it to state that evenassuming that the income tax returns, the proceedings inconnection therewith and the decisions rendered therein arerelevant and admissible in evidence as well, nothing as such,turns thereon definitively as those do not furnish anyguarantee or authentication of the lawfulness of the source(s)

of income, the pith of the charge levelled against therespondents. It is the plea of the defence that the income taxreturns and orders, while proved by the accused persons hadnot been objected to by the prosecution and further it(prosecution) as well had called in evidence the income taxreturns/orders and thus, it cannot object to the admissibilityof the records produced by the defence. To reiterate, even ifsuch returns and orders are admissible, the probative valuewould depend on the nature of the information furnished, thefindings recorded in the orders and having bearing on thecharge levelled. In any view of the matter, however, suchreturns and orders would not ipso facto either conclusivelyprove or disprove the charge and can at best be pieces ofevidence which have to be evaluated along with the othermaterials on record.Noticeably, none of the respondents hasbeen examined on oath in the case in hand. Further, the incometax returns relied upon by the defence as well as the orderspassed in the proceedings pertaining thereto have been filed/passed after the chargesheet had been submitted.Significantly, there is charge of conspiracy and abetmentagainst the accused persons. In the overall perspectivetherefore neither the income tax returns nor the orders passedin the proceedings relatable thereto, either definitively attestthe lawfulness of the sources of income of the accused personsor are of any avail to them to satisfactorily account thedisproportionateness of their pecuniary resources andproperties as mandated by Section 13(1)(e) of the Act. InVishwanath Chaturvedi (3) v. Union of India [VishwanathChaturvedi (3) v. Union of India, (2007) 4 SCC 380 : (2007)2 SCC (Cri) 302] , writ petition was filed under Article 32of the Constitution of India seeking an appropriate writ fordirecting the Union of India to take appropriate action toprosecute R-2 to R-5 under the 1988 Act for having amassedassets disproportionate to the known sources of income bymisusing their power and authority. The respondents were thethen sitting Chief Minister of U.P. and his relatives. Havingnoticed that the basic issue was with regard to allegedinvestments and sources of such investments, Respondents 2to 5 were ordered by this Court to file copies of income tax

and wealth tax returns of the relevant assessment years whichwas done. It was pointed out on behalf of the petitioner thatthe net assets of the family though were Rs 9,22,72,000, asper the calculation made by the official valuer, the then valueof the net assets came to be Rs 24 crores. It was pleaded onbehalf of the respondents that income tax returns had alreadybeen filed and the matters were pending before the authoritiesconcerned and all the payments were made by cheques, andthus the allegation levelled against them were baseless. It wasobserved that the minuteness of the details furnished by theparties and the income tax returns and assessment orders,sale deeds, etc. were necessary to be carefully looked intoand analyzed only by an independent agency with theassistance of chartered accountants and other accreditedengineers and valuers of the property. It was observed thatthe Income Tax Department was concerned only with thesource of income and whether the tax was paid or not and,therefore, only an independent agency or CBI could, on courtdirection, determine the question of disproportionate assets.CBI was thus directed to conduct preliminary enquiry intothe assets of all the respondents and to take further action inthe matter after scrutinizing as to whether case was madeout or not. This decision is to emphasize that submission ofincome tax returns and the assessments orders passed thereon,would not constitute foolproof defence against charge ofacquisition of assets disproportionate to the known lawfulsources of income as contemplated under the PC Act and thatfurther scrutiny/analysis thereof is imperative to determineas to whether the offence as contemplated by the PC Act ismade out or not.

xxxx

60. At the very outset, we must categorically hold that thedocuments which have been relied upon by the respondentscannot form the basis of quashing the FIR. The value andweight to be ascribed to the documents is matter of trial.Both the parties have cited previous decisions of two JudgeBenches of this Court in order to support their submissions.There is no clash between the decisions in Kedari Lal (supra)

and J. Jayalalitha (supra) for two reasons: (i) the judgmentin J. Jayalalitha (supra) notes that document like the IncomeTax Return, by itself, would not be definitive evidence inproviding if the —source of one‘s income was lawful sincethe Income Tax Department is not responsible for investigatingthat, while the facts in the judgment in Kedari Lal (supra)were such that the —source of the income was not in questionat all and hence, the Income Tax Returns were relied uponconclusively; and (ii) in any case, the decision in Kedari Lal(supra) was delivered while considering criminal appealchallenging conviction under the PC Act, while the presentmatter is at the stage of quashing of an FIR.

61. In the present case, the appellant is challenging the very—source of the respondents‘ income and the questioning theassets acquired by them based on such income. Hence, at thestage of quashing of an FIR where the Court only has toascertain whether the FIR prima facie makes out thecommission of cognizable offence, reliance on the documentsproduced by the respondents to quash the FIR would becontrary to fundamental principles of law. The High Courthas gone far beyond the ambit of its jurisdiction by virtuallyconducting trial in an effort to absolve the respondents.”

(Emphasis supplied)

47. Now, the reason why we say that the impugned orders passedby the High Court are utterly incomprehensible is because the HighCourt has not been able to comprehend the true scope and ambit ofSection 239 of the CrPC. The High Court has also not been able tocomprehend in what set of circumstances the revisional powers underSection 397 read with Section 401 of the CrPC are to be exercised.

48. We have gathered an impression that the High Court seemsto be labouring under serious mis-conception of law as is evident fromGthe two impugned orders and such erroneous mis-conceptions need tobe eradicated.

49. The learned counsel appearing for the State rightly submittedthat at the stage of consideration of discharge under Section 239 of theCrPC only prima facie case is to be seen and the Special Court havingrecorded satisfaction with regard to the existence of prima facieH

case there cannot be said to be any material error or illegality in theorders assailed before the High Court.

50. The procedure for trial of warrant cases by Magistrate isprovided for under Chapter XIX of the CrPC and Sections 239 and 240resply relate to discharge and framing of charge.

51. The primary consideration at the stage of framing of charge isthe test of existence of prima facie case, and at this stage, the probativevalue of materials on record is not to be gone into.

52. The provisions which deal with the question of framing ofcharge or discharge, relatable to: (i) sessions trial or, (ii) trial ofwarrant case, or (iii) summons case, are contained in three pairs ofSections under the CrPC. These are Sections 227 and 228 resply in sofar as, the sessions trial is concerned; Sections 239 and 240 resply relatableto the trial of warrant cases; and Sections 245(1) and 245(2) resply inrespect of summons case. The relevant provisions read as follows:-

“Section 227. Discharge - If, upon consideration of the recordof the case and the documents submitted therewith, and afterhearing the submissions of the accused and the prosecutionin this behalf, the Judge considers that there is not sufficientground for proceeding against the accused, he shall dischargethe accused and record his reasons for so doing.

Section 228. Framing of charge.—(1) If, after suchconsideration and hearing as aforesaid, the Judge is ofopinion that there is ground for presuming that the accusedhas committed an offence which—

(a) is not exclusively triable by the Court of Session, hemay, frame charge against the accused and, by order,transfer the case for trial to the Chief Judicial Magistrate,or any other Judicial Magistrate of the first class and directthe accused to appear before the Chief Judicial Magistrate,or, as the case may be, the Judicial Magistrate of the firstclass, on such date as he deems fit, and thereupon suchMagistrate shall try the offence in accordance with theprocedure for the trial of warrant-cases instituted on apolice report;

(b) is exclusively triable by the Court, he shall frame inwriting charge against the accused.

(2) Where the Judge frames any charge under clause (b)of subsection (1), the charge shall be read and explainedto the accused, and the accused shall be asked whetherhe pleads guilty of the offence charged or claims to betried.

Section 239. When accused shall be discharged.—If, uponconsidering the police report and the documents sent with itunder Section 173 and making such examination, if any, ofthe accused as the Magistrate thinks necessary and aftergiving the prosecution and the accused an opportunity ofbeing heard, the Magistrate considers the charge against theaccused to be groundless, he shall discharge the accused,and record his reasons for so doing.

Section 240. Framing of charge.—(1) If, upon suchconsideration, examination, if any, and hearing, theMagistrate is of opinion that there is ground for presumingthat the accused has committed an offence triable under thisChapter, which such Magistrate is competent to try and which,in his opinion, could be adequately punished by him, he shallframe in writing charge against the accused.

(2) The charge shall then be read and explained to theaccused, and he shall be asked whether he pleads guilty ofthe offence charged or claims to be tried.

Section 245. When accused shall be discharged.—(1) If, upontaking all the evidence referred to in Section 244, theMagistrate considers, for reasons to be recorded, that no caseagainst the accused has been made out which, if unrebutted,would warrant his conviction, the Magistrate shall dischargehim.

(2) Nothing in this section shall be deemed to prevent aMagistrate from discharging the accused at any previousstage of the case if, for reasons to be recorded by suchMagistrate, he considers the charge to be groundless.”

53. The aforestated Sections indicate that the CrPC contemplatesdischarge of the accused by the Court of Sessions under Section 227 ina case triable by it, cases instituted upon police report are covered bySection 239 and cases instituted otherwise than on police report aredealt with in Section 245. The three Sections contain somewhat differentprovisions in regard to discharge of the accused. As per Section 227, thetrial judge is required to discharge the accused if “the Judge considersthat there is not sufficient ground for proceeding against the accused”.The obligation to discharge the accused under Section 239 arises when“the Magistrate considers the charge against the accused to begroundless”. The power to discharge under Section 245(1) is exercisablewhen “the Magistrate considers, for reasons to be recorded, that nocase against the accused has been made out which, if unrebutted wouldwarrant his conviction”. Sections 227 and 239 resply provide for dischargebeing made before the recording of evidence and the consideration as towhether the charge has to be framed or not is required to be made onthe basis of the record of the case, including the documents and oralhearing of the accused and the prosecution or the police report, thedocuments sent along with it and examination of the accused and afteraffording an opportunity to the parties to be heard. On the other hand,the stage for discharge under Section 245 is reached only after theevidence referred to in Section 244 has been taken.

54. Despite the slight variation in the provisions with regard todischarge under the three pairs of Sections referred to above, the settledlegal position is that the stage of framing of charge under either of thesethree situations, is preliminary one and the test of “prima facie” casehas to be applied — if the trial court is satisfied that prima facie caseis made out, charge has to be framed.

55. The nature of evaluation to be made by the court at the stageof framing of charge came up for consideration of this Court in OnkarNath Mishra and others v. State (NCT of Delhi) and another, (2008)2 SCC 561, and referring to its earlier decisions in the State ofMaharashtra v. Som Nath Thapa, (1996) 4 SCC 659, and the State ofM.P. v. Mohanlal Soni, (2000) 6 SCC 338, it was held that at that stage,the Court has to form presumptive opinion as to the existence of thefactual ingredients constituting the offence alleged and it is not expectedto go deep into the probative value of the materials on record. The relevantobservations made in the judgment are as follows:-

A“11. It is trite that at the stage of framing of charge the courtis required to evaluate the material and documents on recordwith view to finding out if the facts emerging therefrom,taken at their face value, disclosed the existence of all theingredients constituting the alleged offence. At that stage, thecourt is not expected to go deep into the probative value ofBthe material on record. What needs to be considered is whetherthere is ground for presuming that the offence has beencommitted and not ground for convicting the accused hasbeen made out. At that stage, even strong suspicion foundedon material which leads the court to form presumptiveCopinion as to the existence of the factual ingredientsconstituting the offence alleged would justify the framing ofcharge against the accused in respect of the commission ofthat offence.”

56. Then again in the case of Som Nath Thapa (supra), three-DJudge Bench of this Court, after noting the three pairs of Sections i.e. (i)Sections 227 and 228 resply in so far as the sessions trial is concerned;(ii) Sections 239 and 240 resply relatable to the trial of warrant cases;and (iii) Sections 245(1) and (2) qua the trial of summons cases, whichdealt with the question of framing of charge or discharge, stated thus:(SCC p. 671, para 32).E

“32...if on the basis of materials on record, court couldcome to the conclusion that commission of the offence is aprobable consequence, case for framing of charge exists.To put it differently, if the court were to think that the accusedmight have committed the offence it can frame the charge,Fthough for conviction the conclusion is required to be thatthe accused has committed the offence. It is apparent that atthe stage of framing of charge, probative value of thematerials on record cannot be gone into; the materials broughton record by the prosecution has to be accepted as true atGthat stage.”

57. In later decision in Mohanlal Soni (supra), this Court, referringto several of its previous decisions, held that: (SCC p. 342, para 7)

“7. The crystallised judicial view is that at the stage of framingcharge, the court has to prima facie consider whether there

is sufficient ground for proceeding against the accused. Thecourt is not required to appreciate evidence to concludewhether the materials produced are sufficient or not forconvicting the accused.”

58. Reiterating similar view in Sheoraj Singh Ahlawat andothers v. State of Uttar Pradesh and another, (2013) 11 SCC 476, itwas observed by this Court that while framing charges the court isrequired to evaluate the materials and documents on record to decidewhether the facts emerging therefrom taken at their face value woulddisclose existence of ingredients constituting the alleged offence. At thisstage, the court is not required to go deep into the probative value of thematerials on record. It needs to evaluate whether there is ground forpresuming that the accused had committed the offence and it is notrequired to evaluate sufficiency of evidence to convict the accused. Itwas held that the Court at this stage cannot speculate into the truthfulnessor falsity of the allegations and contradictions & inconsistencies in thestatement of witnesses cannot be looked into at the stage of discharge.

59. In the context of trial of warrant case, instituted on policereport, the provisions for discharge are to be governed as per the termsof Section 239 which provide that direction for discharge can be madeonly for reasons to be recorded by the court where it considers thecharge against the accused to be groundless. It would, therefore, followthat as per the provisions under Section 239 what needs to be consideredis whether there is ground for presuming that the offence has beencommitted and not that ground for convicting the accused has beenmade out. At that stage, even strong suspicion founded on material whichleads the Court to form presumptive opinion as to the existence of thefactual ingredients constituting the offences alleged would justify theframing of charge against the accused in respect of that offence, and itis only in case where the Magistrate considers the charge to begroundless, he is to discharge the accused after recording his reasonsfor doing so.

60. Section 239 envisages careful and objective considerationof the question whether the charge against the accused is groundless orwhether there is ground for presuming that he has committed an offence.What Section 239 prescribes is not, therefore, an empty or routineformality. It is valuable provision to the advantage of the accused, andits breach is not permissible under the law. But if the Judge, upon

Aconsidering the record, including the examination, if any, and the hearing,is of the opinion that there is “ground for presuming” that the accusedhas committed the offence triable under the chapter, he is required bySection 240 to frame in writing charge against the accused. The orderfor the framing of the charge is also not an empty or routine formality. Itis of far-reaching nature, and it amounts to decision that the accusedBis not entitled to discharge under Section 239, that there is, on the otherhand, ground for presuming that he has committed an offence triableunder Chapter XIX and that he should be called upon to plead guilty to itand be convicted and sentenced on that plea, or face the trial. (See :V.C. Shukla v. State through CBI, AIR 1980 SC 962).

61. Section 239 of the CrPC lays down that if the Magistrateconsiders the charge against the accused to be groundless, he shalldischarge the accused. The word ‘groundless’, in our opinion, meansthat there must be no ground for presuming that the accused hascommitted the offence. The word ‘groundless’ used in Section 239 ofDthe CrPC means that the materials placed before the Court do not makeout or are not sufficient to make out prima facie case against theaccused.

62. The learned author Shri Sarkar in his Criminal P.C., 5th Edition,on page 427, has opined as:-E

“The provision is the same as in S. 227, the only differencebeing that the Magistrate may examine the accused, ifnecessary, of also S. 245. The Magistrate shall discharge theaccused recording reasons, if after (i) considering the policereport and documents mentioned in S. 173; (ii) examining theFaccused, if necessary and (iii) hearing the arguments of bothsides he thinks the charge against him to be groundless, i.e.,either there is no legal evidence or that the facts do not makeout any offence at all.”

63. In short, it means that if no prima facie case regarding theGcommission of any offence is made out, it would amount to chargebeing groundless.

64. In Century Spinning and Manufacturing Co. Ltd. v. Stateof Maharashtra, AIR 1972 SC 545, this Court has stated about theambit of Section 251(A)(2) of the CrPC 1898, which is in pari materiawith the wordings used in Section 239 of the CrPC as follows:-H

“It cannot be said that the Court at the stage of framing thecharge has not to apply its judicial mind for consideringwhether or not there is ground for presuming the commissionof the offence by the accused. The order framing the chargesdoes substantially affect the person’s liberty and it cannot besaid that the Court must automatically frame the charge merelybecause the prosecuting authorities by relying on thedocuments referred to in S. 173 consider it proper to institutethe case. The responsibility of framing the charges is that ofthe Court and it has to judicially consider the question ofdoing so. Without fully adverting to the material on the recordit must not blindly adopt the decision of the prosecution.”

In para 15, this Court has stated as:-

“Under sub-sec. (2), if upon consideration of all the documentsreferred to in S. 173, Criminal P.C. and examining the accused,if considered necessary by the Magistrate and also afterhearing both sides, the Magistrate considers the charge tobe groundless, he must discharge the accused. This sub-section has to be read along with sub- sec. (3), according towhich, if after hearing the arguments and hearing the accused,the Magistrate thinks that there is ground for presuming thatthe accused has committed an offence triable under Chap.XXI of the Code within the Magistrate’s competence and forwhich he can punish adequately, he has to frame in writing acharge against the accused. Reading the two sub-sectionstogether, it clearly means that if there is no ground forpresuming that the accused has committed an offence, thecharges must be considered to be groundless, which is thesame thing as saying that there is no ground for framing the”charges. (Emphasis supplied)

65. Thus the word ‘groundless’, as interpreted by this Court, meansthat there is no ground for presuming that the accused has committed anoffence.

66. This Court has again dealt with this aspect of the matter inSuperintendent and Remembrancer of Legal Affairs, West Bengalv. Anil Kumar Bhunja, AIR 1980 SC 52. This Court has stated in thesaid case as:-

A“At this stage, even very strong suspicion found uponmaterials before the Magistrate, which leads him to form apresumptive opinion as to the existence of the factualingredients constituting the offence alleged, may justify theframing of charges against the accused in respect of thecommission of that offence.”

67. The suspicion referred to by this Court must be founded uponthe materials placed before the Magistrate which leads him to form apresumptive opinion as to the existence of the factual ingredientsconstituting the offence alleged. Therefore, the words “a very strongsuspicion” used by this Court must not be strong suspicion of vacillatingCmind of Judge. That suspicion must be founded upon the materialsplaced before the Magistrate which leads him to form presumptiveopinion about the existence of the factual ingredients constituting theoffence alleged.

68. Section 239 has to be read along with Section 240 of theDCrPC. If the Magistrate finds that there is prima facie evidence or thematerial against the accused in support of the charge (allegations), hemay frame charge in accordance with Section 240 of the CrPC. But ifhe finds that the charge (the allegations or imputations) made againstthe accused does not make out prima facie case and does not furnishEbasis for framing charge, it will be case of charge being groundless, sohe has no option but to discharge the accused. Where the Magistratefinds that taking cognizance of the offence itself was contrary to anyprovision of law, like Section 468 of the CrPC, the complaint being barredby limitation, so he cannot frame the charge, he has to discharge theaccused. Indeed, in case where the Magistrate takes cognizance of anFoffence without taking note of Section 468 of the CrPC, the mostappropriate stage at which the accused can plead for his discharge isthe stage of framing the charge. He need not wait till completion of trial.The Magistrate will be committing no illegality in considering that questionand discharging the accused at the stage of framing charge if the factsGso justify.

69. The real test for determining whether the charge should beconsidered groundless under Section 239 of the CrPC is that whetherthe materials are such that even if unrebutted make out no casewhatsoever, the accused should be discharged under Section 239 of theHCrPC. The trial court will have to consider, whether the materials relied

upon by the prosecution against the applicant herein for the purpose offraming of the charge, if unrebutted, make out any case at all.

70. The provisions of discharge under Section 239 of the CrPCfell for consideration of this Court in K. Ramakrishna and others v.State of Bihar and another, (2000) 8 SCC 547, and it was held that thequestions regarding the sufficiency or reliability of the evidence to proceedfurther are not required to be considered by the trial court under Section239 and the High Court under Section 482. It was observed as follows:-

“4. The trial court under Section 239 and the High Courtunder Section 482 of the Code of Criminal Procedure is notcalled upon to embark upon an inquiry as to whether evidencein question is reliable or not or evidence relied upon issufficient to proceed further or not. However, if upon theadmitted facts and the documents relied upon by thecomplainant or the prosecution and without weighing orsifting of evidence, no case is made out, the criminalproceedings instituted against the accused are required to bedropped or quashed. As observed by this Court in RajeshBajaj v. State NCT of Delhi, [1999 (3) SCC 259] the HighCourt or the Magistrate are also not supposed to adopt astrict hypertechnical approach to sieve the complaint througha colander of finest gauzes for testing the ingredients ofoffence with which the accused is charge. Such an endeavourmay be justified during trial but not during the initial stage.”71. In the case of State by Karnataka Lokayukta, Police Station,Bengaluru v. M.R. Hiremath, (2019) 7 SCC 515, this Court observedand held in paragraph 25 as under:-

“25. The High Court ought to have been cognizant of thefact that the trial court was dealing with an application fordischarge under the provisions of Section 239 CrPC. Theparameters which govern the exercise of this jurisdiction havefound expression in several decisions of this Court. It is asettled principle of law that at the stage of considering anapplication for discharge the court must proceed on theassumption that the material which has been brought on therecord by the prosecution is true and evaluate the material inorder to determine whether the facts emerging from the

material, taken on its face value, disclose the existence of theingredients necessary to constitute the offence. In State ofT.N. v. N. Suresh Rajan [State of T.N. v. N. Suresh Rajan,(2014) 11 SCC 709, adverting to the earlier decisions on thesubject, this Court held: (SCC pp. 721-22, para 29)

B“29. … At this stage, probative value of the materials hastobe gone into and the court is not expected to go deepinto the matter and hold that the materials would not warranta conviction. In our opinion, what needs to be consideredis whether there is ground for presuming that the offencehas been committed and not whether ground forCconvicting the accused has been made out. To put itdifferently, if the court thinks that the accused might havecommitted the offence on the basis of the materials onrecord on its probative value, it can frame the charge;though for conviction, the court has to come to theDconclusion that the accused has committed the law does

not permit mini trial at this stage.””

72. The ambit and scope of exercise of power under Sections 239and 240 of the CrPC, are therefore fairly well settled. The obligation todischarge the accused under Section 239 arises when the MagistrateEconsiders the charge against the accused to be “groundless”. The Sectionmandates that the Magistrate shall discharge the accused recordingreasons, if after (i) considering the police report and the documents sentwith it under Section 173, (ii) examining the accused, if necessary, and(iii) giving the prosecution and the accused an opportunity of being heard,he considers the charge against the accused to be groundless, i.e., eitherFthere is no legal evidence or that the facts are such that no offence ismade out at all. No detailed evaluation of the materials or meticulousconsideration of the possible defences need be undertaken at this stagenor any exercise of weighing materials in golden scales is to be undertakenat this stage - the only consideration at the stage of Section 239/240 is asGto whether the allegation/charge is groundless.

73. This would not be the stage for weighing the pros and cons ofall the implications of the materials, nor for sifting the materials placedby the prosecution- the exercise at this stage is to be confined toconsidering the police report and the documents to decide whether theHallegations against the accused can be said to be “groundless”.

74. The word “ground” according to the Black’s Law Dictionaryconnotes foundation or basis, and in the context of prosecution in criminalcase, it would be held to mean the basis for charging the accused orfoundation for the admissibility of evidence. Seen in the context, theword “groundless” would connote no basis or foundation in evidence.The test which may, therefore, be applied for determining whether thecharge should be considered groundless is that where the materials aresuch that even if unrebutted, would make out no case whatsoever.

SPOPE OF EXCERICSE OF REVISIONAL POWER ATTHE STAGE OF CHARGE

75. In Munna Devi v. State of Rajasthan & Anr., (2001) 9 SCC631, this Court held as under:-

“3.....The revision power under the Code of CriminalProcedure cannot be exercised in routine and casual manner.While exercising such powers the High Court has no authorityto appreciate the evidence in the manner as the trial and theappellate courts are required to do. Revisional powers couldbe exercised only when it is shown that there is legal baragainst the continuance of the criminal proceedings or theframing of charge or the facts as stated in the first informationreport even if they are taken at the face value and acceptedin their entirety do not constitute the offence for which theaccused has been charged.”

76. Thus, the revisional power cannot be exercised in casual ormechanical manner. It can only be exercised to correct manifest errorof law or procedure which would occasion injustice, if it is not corrected.The revisional power cannot be equated with appellate power. revisionalcourt cannot undertake meticulous examination of the material on recordas it is undertaken by the trial court or the appellate court. This powercan only be exercised if there is any legal bar to the continuance of theproceedings or if the facts as stated in the charge-sheet are taken to betrue on their face value and accepted in their entirety do not constitutethe offence for which the accused has been charged. It is conferred tocheck grave error of law or procedure.

77. This Court in Asian Resurfacing of Road Agency Pvt. Ltd.v. Central Bureau of Investigation, (2018) 16 SCC 299, has held thatinterference in the order framing charges or refusing to discharge is

Acalled for in the rarest of rare case only to correct the patent error ofjurisdiction.

78. The High Court has acted completely beyond the settledparameters, as discussed above, which govern the power to dischargethe accused from the prosecution. The High Court could be said to haveBdonned the role of chartered accountant. This is exactly what thisCourt observed in the case of Thommandru Hannah Vijayalakshmi

@ T.H. Vijayalakshmi (supra). The High Court has completely ignoredthat it was not at the stage of trial or considering an appeal against averdict in trial. The High Court has enquired into the materials producedby the accused persons, compared with the information complied by theCinvestigation agency and pronounced verdict saying that the explanationoffered by the accused persons deserves to be accepted applying thedoctrine of preponderance of probability. This entire exercise has beenjustified on account of the investigating officer not taking into theexplanation offered by the public servant and also not taking intoDconsideration the lawful acquired assets of the wife of the public servanti.e. the Respondent No. 2 herein.

79. By accepting the entire evidence put forward by the accusedpersons applying the doctrine of preponderance of probability, the caseput up by the prosecution cannot be termed as “groundless”. As observedEby this Court in C.D.S. Swami (supra) that the accused might havemade statements before the investigating officer as to his alleged sourcesof income, but the same, strictly, would not be evidence in the case.

80. Section 13(1)(e) of the Act 1988 makes departure from theprinciple of criminal jurisprudence that the burden will always lie on theFprosecution to prove the ingredients of the offences charged and nevershifts on the accused to disprove the charge framed against him. Thelegal effect of Section 13(1)(e)is that it is for the prosecution to establishthat the accused was in possession of properties disproportionate to hisknown sources of income but the term “known sources of income” wouldmean the sources known to the prosecution and not the sources knownGto the accused and within the knowledge of the accused. It is for theaccused to account satisfactorily for the money/assets in his hands. Theonus in this regard is on the accused to give satisfactory explanation.The accused cannot make an attempt to discharge this onus upon him atthe stage of Section 239 of the CrPC. At the stage of Section 239 of the

CrPC, the Court has to only look into the prima facie case and decidewhether the case put up by the prosecution is groundless.

81. In the overall view of the matter, we are convinced that theimpugned orders passed by the High Court are not sustainable in lawand deserve to be set aside. The circumstances emerging from the recordof the case, prima facie, indicate the involvement of the accused personsin the alleged offence. Having regard to the materials on record, it cannotbe said that the charge against the accused persons is groundless. Thereare triable issues in the matter. If there are triable issues, the Court isnot expected to go into the veracity of the rival versions.

82. In the result, both the appeals succeed and are hereby allowed.The impugned orders passed by the High Court discharging the accusedpersons from the prosecution are hereby set aside. The Special Courtshall now proceed to frame charge against the accused persons inaccordance with law and put them to trial.

83. It is clarified that the observations made by this Court in thisjudgment shall not be construed as final expressions of the innocence orguilt of the accused persons. The guilt or innocence of the accusedpersons shall be determined by the trial court on the basis of the evidencethat may be led by both the prosecution and the defence. We have confinedour adjudication only to consider the legality and validity of the impugnedorders passed by the High Court discharging the accused persons.

84. Pending application, if any, also stands disposed of.

Devika Gujral

Appeals allowed.

(Assisted by : Neha Sharma, LCRA)