Supreme Court of India (Division Bench (DB)- Two Judge)

Appeal (Crl.), 2602 of 2014, Judgment Date: Dec 17, 2014

                                                                  Reportable

                        IN THE SUPREME COURT OF INDIA

                       CRIMINAL APPELLATE JURISDICTION

                      CRIMINAL APPEAL NO.2602 OF 2014 @
                SPECIAL LEAVE PETITION (CRL.) NO.3134 OF 2012



STATE TR. INSP. OF POLICE                                   ..... APPELLANT

                                   Versus

A. ARUN KUMAR & ANR.                                        ....RESPONDENTS



                               J U D G M E N T


UDAY UMESH LALIT, J.

1.    Leave granted.   This appeal arises out  of  the  judgment  and  order
dated 22.08.2011 passed by the High Court of Madras in Crl. R.C.  No.106  of
2009 whereby it set aside the order of the Special  Court  dated  19.12.2008
dismissing the  application  for  discharge  preferred  by  the  Respondents
herein.

2.     On  08.02.2007  RC-1/E/2007-CBI/EOW/CHENNAI  was   registered   under
sections 120B read with section 420, 467, 468, 471 IPC  and  477-A  IPC  and
section 13 (2) read with section 13(1)(d) of The  Prevention  of  Corruption
Act, 1988 (POC Act for short) and section 32 of the  Customs  Act,  1962  on
the allegations that accused nos. 1-3  named  therein  had  entered  into  a
criminal conspiracy with accused no.4 who was Appraiser of  Customs,  Inland
Container Depot (ICD), Irugur, Coimbatore and with accused  no.5,  Inspector
of Customs, Inland Container Depot, Irugur, Coimbatore during 2004-2005  and
in pursuance of said conspiracy had filed false and fabricated documents  to
claim duty draw back to the tune  of  Rs.2.14  crores  (approximately)  from
ICD, Irugur.  It was alleged that said accused  nos.1-3  had  filed  certain
Shipping Bills and that the export documents were assessed by  accused  no.4
i.e. respondent no.1 and after such assessment the goods  were  examined  by
accused  no.5  i.e.  respondent  No.2.   After  completion  of  the  customs
formalities the goods were stuffed  in  containers  which  were  sealed  and
transported to Cochin  for  consignment  to  Dubai.   It  was  alleged  that
accused no.1 produced different sets of forged shipping bills  by  adding  a
digit before the total quantity of shipment thereby inflating the  value  of
shipment and fraudulently claimed duty draw  back.   These  forged  shipping
bills were endorsed by the respondents.  A chart was  relied  upon  to  show
how the total quantity and the present market value differed by addition  of
a digit.  The chart was as follows:
|Name of the  |Total Qty. in|Total Qty.   |Present      |Present      |
|Firm         |Kg (Net      |(Net Weight  |Market Value |Market Value |
|             |Weight as    |as declared  |declared in  |declared in  |
|             |declared in  |in GR Form   |transference |GR Form      |
|             |transference |Shipping     |Shipping Bill|Shipping Bill|
|             |copy of      |Bill)        |(Indian      |(Indian      |
|             |Shipping Bill|presented to |Rupee)       |Rupee)       |
|             |(presented to|RBI for      |             |             |
|             |Cochin       |matching for |             |             |
|             |Customs)     |foreign      |             |             |
|             |             |Exchange     |             |             |
|             |             |Realisation  |             |             |
|[1]          |[2]          |[3]          |[4]          |[5]          |
|M/s J.S.     |79257        |479257       |17492880     |117492880    |
|Babu, Inc.   |             |             |             |             |
|M/s Samy     |27176        |187176       |4850990      |44850990     |
|Metal        |             |             |             |             |
|Industries   |             |             |             |             |
|M/s Ayyappan | 38836       |258836       |8586055      |63586055     |
|Industries   |             |             |             |             |
|Total        |             |             |30929925     |225929925    |


3.    A regular case was registered on  the  allegations  as  aforesaid  and
investigation was conducted by CBI which later filed  charge  sheet  against
said five accused on 28.04.2008.  The allegations against respondent nos.  1
& 2 were:
"......... A-4 Arun Kumar while preparing GR Forms  is  supposed  to  assess
the value in Indian rupees for the value mentioned  in  US  dollars  by  the
Exporter.  While preparing GR Forms, A-1 Manish  Kumar  Jain  and  A-2  R.V.
Shanmugam prepared two such documents one showing correct weight in  kg  and
value in US dollars and the other having inflated weight in kg and value  in
US dollars.  A-1 Manish Kumar Jain and  A-2  R.V.  Shanmugam  have  put  two
before the weight inflating by 20,000 kgs and one before  the  value  in  US
dollars inflating it by 1 lakh dollars.  But A-4 Arun Kumar while  endorsing
it in the reverse of the form assessed and calculated the  value  of  export
in rupees and wrote the same in his own  handwriting  under  his  signature.
But in the present market value mentioned in the GR Forms by  the  Exporter,
a digit five has been added before the value in rupees, thus  inflating  the
value by Rs.50 lakhs.  This value, of course could not be the correct  value
if calculate at the rate of Rs.43.55 per US dollar.  This  was  deliberately
overlooked by A-4 Arun Kumar and he  failed  to  prepare  the  GR  Forms  in
consultation with the Shipping Bills where there is a  difference  of  Rs.50
lakhs in each and every GR Forms  submitted  by  the  Exporter.   When  such
malpractices by the Officers of ICD, Irugur came to  the  knowledge  of  the
Directorate General of Central Excise Intelligence, A-4 Arun Kumar with  the
connivance of A-5 Santhosh Kumar, Sr. Tax Assistant (STA) destroyed all  the
Shipping Bills and A-5 Santosh Kumar made corrections in the Shipping  Bills
Register as instructed by A-4 Arun Kumar and Shri Bindusaran."

".....  In pursuance of the said criminal conspiracy A-1 Manish  Kumar  Jain
and A-2 R.V. Shanmugam prepared two sets of Shipping Bills and GR Forms  and
exported  some  stainless  steel  utensils  in  the  name  of  M/s  Ayyappan
Industries, M/s Shri J.S. Babu Inc.  and  M/s  Samy  Metal  Industries.   In
furtherance of the criminal conspiracy, A-1 Manish Kumar  Jain  and  A-3  N.
Rajan prepared the shipping bills.  The documents were filed by  A-1  Manish
Kumar Jain and A-2 R. V. Shanmugam at ICD, Irugur with the connivance of  A-
4 Arun Kumar who allowed the export of less quantity  and  entered  inflated
quantity in the Shipping Bills Register  in  conspiracy  with  A-5  Santhosh
Kumar, STA and also filed wrong GR Forms to RBI.  But before the  duty  draw
back was allowed, the  process  was  stopped  by  the  intervention  of  the
Directorate General of Central Excise Intelligence and the  accused  persons
removed/destroyed the documents available with them  and  tried  to  replace
the documents with the actual export documents  by  reconstruction  process.
While the actual exports was only worth Rs.3.22 crores, with  eligible  duty
draw back of Rs.35,000/-  by  forging  the  Shipping  Bills,  GR  Forms  and
Shipping Bills Register, the accused persons  attempted  to  claim  inflated
duty draw back of Rs.2.5 crores on inflated export of  Rs.22.72  crores  and
thereby attempted to cheat the Government of India."


4.    The respondents preferred application under  section  239  of  Cr.P.C.
seeking discharge.  The special court after having  considered  the  matter,
came to  the  conclusion  that  a  case  for  framing  charges  against  the
respondents under section 468, 471 and 201 IPC and under section 15  of  the
POC Act and under sections 132 and 136 of the  Customs  Act  was  made  out.
The special  court  thus  dismissed  the  application  by  its  order  dated
19.12.2008.   The  respondents  being  aggrieved  preferred  revision  under
section 397 read with 401 of Cr.P.C. before  the  High  Court.   During  the
pendency of  said  revision  the  special  court  framed  following  charges
against the accused:

|Charge No.  |Accused      |Offences under section/s                |
|I           |A-1 to A-5   |120-B r/w 511 IPC, 468, 471 and 201     |
|            |             |IPC/Section 15 of the prevention of     |
|            |             |Corruption Act, 1988 and section 132 and|
|            |             |136 of the Custom Act.                  |
|II          |A-1 to A-2   |468 IPC                                 |
|III         |A-1 to A-2   |468 r/w 471 IPC                         |
|IV          |A-1 to A-3   |511 r/w 420 IPC                         |
|V           |A-1 to A-2   |201 IPC                                 |
|VI          |A-4 to A-5   |201 IPC                                 |
|VII         |A-1 to A-3   |132 of the customs Act                  |
|VIII        |A-4 to A-5   |136 of the customs Act                  |
|IX          |A-4 to A-5   |15 of the Prevention of Corruption Act, |
|            |             |198                                     |

5.    The High Court took the view that  there  was  nothing  on  record  to
justify framing of charges against the respondents.  It was observed thus:
"..... It is to be stated that this Court is also constrained to state  that
even for raising  such  suspicion  much  less  very  strong  suspicion;  the
prosecution has not produced a scrap of material  either  through  statement
or through any other document to make out a prima  facie  case  against  the
petitioners for framing the charges."

As regards charges under Section 15 of the POC Act, the High Court  observed
as under:
".... Section 15 of the Prevention of Corruption Act, 1988,  punishment  for
attempt, could be invoked only in the event of charge  framed  under  clause
(c) of clause (d) of sub-section (1) of Section 13.  As far as the  case  on
hand is concerned, the trial court has not charged the petitioners  for  the
offence under Section 13(1)(c) or (d)."

The High Court, thus accepted the submission that no case made out to  frame
any charges against  the  respondents  and  allowing  the  Revision  by  its
judgment and order dated 22.08.2011, set aside the  order  dated  19.12.2008
of the Special Court.

6.    The present appeal challenges the correctness of  the  view  taken  by
the High Court.   By way of an additional affidavit,  the  appellant  placed
on record, copies of relevant Shipping Bills and the corresponding  Exchange
Control declaration forms.   We have heard Ms. Vibha Dutt  Makhija,  learned
senior counsel appearing for the appellant  who  invited  our  attention  to
documents on record to bring home the point about discrepancy in  the  total
quantity of shipment and the value of shipment in  two  sets  of  documents.
It was submitted that  the  High  Court  was  not  right  and  justified  in
observing that there was no material on record at all.  Mr.  B.A.  Khan  and
Mr. Ratnakar Dash, learned senior counsel  appearing  for  Respondent  Nos.1
and 2, respectively supported the view taken by  the  High  Court.   It  was
submitted by the learned counsel  that  there  never  existed  two  sets  of
shipping bills, that none of the witnesses deposed against  the  respondents
that no duty draw back had been claimed at all and that the High  Court  was
right in concluding that there was  no  material  against  the  respondents.
Relying on Ganga Kumar Srivastava v. State of Bihar[1]it was submitted  that
no case for interference by this Court was made out.

7.     We have gone through two sets of documents  which  were  filed  along
with an additional affidavit.  By way of sample, Shipping Bill No.000810  is
for the  quantity  of  3568  Kgs  with  value  at  Rs.7,88,830  whereas  the
corresponding Exchange Control Declaration (GR)  mentions  the  quantity  as
23568 Kgs i.e. to say  digit  "2"  stands  added  and  the  value  shown  is
Rs.57,88,830 i.e. to say digit "5" stands added.  In the process, the  value
was inflated which would in  turn  increase  the  amount  of  duty  drawback
multifold.    The documents placed on record which are part of  the  charge-
sheet, certainly raise grave suspicion against the respondents.

8.    The law on the point is succinctly stated  by  this  Court  in  Sajjan
Kumar v. CBI[2] wherein after referring to Union of India v. Prafulla  Kumar
Samal[3]      and Dilawar Balu Kurane v. State of Maharashtra[4] this  Court
observed in para 19 thus:
"It is clear that at the initial stage,  if  there  is  a  strong  suspicion
which leads the Court to think that there is ground for presuming  that  the
accused has committed an offence, then it is not open to the  court  to  say
that there is no sufficient ground for proceeding against the  accused.  The
presumption of the guilt of the accused which is to be drawn at the  initial
stage is only for the purpose of deciding  prima  facie  whether  the  Court
should proceed with the trial or not. If the evidence which the  prosecution
proposes to adduce prove the guilt of the accused  even  if  fully  accepted
before it is challenged in cross-examination  or  rebutted  by  the  defence
evidence, if any, cannot show that the accused committed the  offence,  then
there will be no sufficient ground for proceeding with the trial."

      This Court the went on to cull out  principles  as  regards  scope  of
Sections 227 and 228 of the  Code,  which  in  our  view  broadly  apply  to
Sections 238 and 239 of the Code as well.  It was observed thus in para 21:
"Exercise of jurisdiction under Sections 227 & 228 of Cr.P.C.
21.     On  consideration  of   the   authorities   about   the   scope   of
Section 227 and 228 of the Code, the following principles emerge:

(i) The Judge while considering the question of framing  the  charges  under
Section 227 of the Cr.P.C. has the undoubted power to  sift  and  weigh  the
evidence for the limited purpose of finding  out  whether  or  not  a  prima
facie case against the accused has been made  out.  The  test  to  determine
prima facie case would depend upon the facts of each case.

(ii) Where the materials placed before the Court  disclose  grave  suspicion
against the accused which has not been properly explained,  the  Court  will
be fully justified in framing a charge and proceeding with the trial.

(iii) The Court cannot act merely as a Post Office or a  mouthpiece  of  the
prosecution but has to consider the broad probabilities  of  the  case,  the
total effect of the evidence and the documents produced  before  the  Court,
any basic infirmities etc. However, at this stage, there cannot be a  roving
enquiry into the pros and cons of the matter and weigh the  evidence  as  if
he was conducting a trial.

(iv) If on the basis of the material on record,  the  Court  could  form  an
opinion that the accused might have committed  offence,  it  can  frame  the
charge, though for conviction  the  conclusion  is  required  to  be  proved
beyond reasonable doubt that the accused has committed the offence.

(v) At the time of framing of  the  charges,  the  probative  value  of  the
material on record cannot be gone into  but  before  framing  a  charge  the
Court must apply its judicial mind on the  material  placed  on  record  and
must be satisfied  that  the  commission  of  offence  by  the  accused  was
possible.

(vi) At  the  stage  of  Sections 227 and 228,  the  Court  is  required  to
evaluate the material and documents on record with a view  to  find  out  if
the facts emerging  therefrom  taken  at  their  face  value  discloses  the
existence of all the ingredients constituting the alleged offence. For  this
limited purpose, sift the evidence as it cannot be  expected  even  at  that
initial stage to accept all that the  prosecution  states  as  gospel  truth
even if it is opposed to common sense or  the  broad  probabilities  of  the
case.

(vii) If two views are possible and one of  them  gives  rise  to  suspicion
only, as distinguished  from  grave  suspicion,  the  trial  Judge  will  be
empowered to discharge the accused and at this  stage,  he  is  not  to  see
whether the trial will end in conviction or acquittal."

9.    In our  considered  view,  the  material  on  record  discloses  grave
suspicion against the  respondents  and  the  Special  Court  was  right  in
framing charges against the respondents.  We  must  also  observe  that  the
High Court was not justified in stating that  Section  15  of  the  POC  Act
could not be invoked in the present case.  Since the duty draw back was  not
actually availed, the prosecution had rightly  alleged  that  there  was  an
attempt to commit offence under the relevant clauses  of  Section  13(1)  of
the POC Act.  It is not the requirement of law that in order  to  charge  an
accused under Section 15 of the POC Act  he  must  also  be  charged  either
under Section 13(1)(c) of 13(1)(d) of the POC Act.  The  assessment  of  the
High Court in that behalf is not correct.

10.   In our view the instant case calls for  interference  by  this  Court.
We, therefore, set aside the judgment and order passed  by  the  High  Court
and restore the order of the Special Court.  The respondents  thus  continue
to stand charged and must consequently face the trial.  However, it must  be
recorded that this Court has considered  the  matter  only  from  the  stand
point whether the respondents be discharged or  not  and  we  shall  not  be
taken to have expressed any opinion on merits.  The matter  shall  and  must
be dealt with purely on merits by the concerned court.

11.   We allow this appeal in the aforesaid terms.

                                            .............................J.
                                                     (Dipak Misra)


                                             ............................J.
                                                 (Uday Umesh Lalit)
New Delhi,
December 17, 2014

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[1]    (2005) 6 SCC 211
[2]    (2010) 9 SCC 368
[3]    (1909) 3 SCC 4
[4]    (2002) 2 SCC 135

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