1986 (4) TMI 338 - SC - Indian Laws

Whether a charge should be framed or not? Held that - It is difficult to understand as to how over 600 employees working in the Taj Group of Hotels suddenly came to know must a little prior to 31st March 1981 that three trusts had been floated by the respondent when they were executed and registered only a few days before that. How is it that within 4 or 5 days over 600 employees of the Taj Group of Hotels came to know about the existence of these trusts and how did they come to know that these 3 trusts were established for the purpose of undertaking programmes of rural development in the rural areas of Konkan Region. It is also stated in the minutes that Ajit Kerkar in his capacity as the Managing Director reported that the trustees of these 3 trusts were very eminent public personalities. We wonder whether the respondent s wife and Sheroo Kanuga could be said to be very eminent public personalities . It Is also strange that though a large sum of 26 lakhs was being paid by way of donations J.J. Bhabha did not even bother to inquire as to who were the eminent public personalities who were trustees of these three trusts. It is prima facie difficult to accept the explanation offered by Ajit Kerkar. We do not think we would be unjustified on the material on record to take the prima facie view that these donations of 26 lakhs were also connected with the negotiations which took place on 25th March 1981 between Ajit Kerkar on the one hand and Gavai and the respondent on the other. We must therefore hold that a prima facie case has been made out on behalf of the prosecution for framing 23rd 24th 25th 41st 42nd and 43rd draft charges against the respondent. The learned Trial Judge in our opinion fell into an error in discharging the respondent in respect of these charges. Before we close we may make it clear that we have examined the evidence on record merely for the purpose of deciding whether the evidence is of such a nature that if unrebutted it would warrant the conviction of the respondent. It will be open to the respondent to rebut this evidence and to make out his defence when the trial proceeds against him on the charges already framed by the learned Trial Judge and the additional charges which we have directed to be framed against him.

Issues Involved:
1. Application of Section 4 of the Prevention of Corruption Act, 1947.
2. Scope and ambit of Section 165 of the Indian Penal Code (IPC).
3. Transaction involving M/s Nanubhai Jewellers.
4. Donations made by M/s Hira Nandani Builders and Hira Nandani Construction Private Limited.
5. Transactions of the National Centre for the Performing Arts (NCPA).
6. Allegations of extortion under Section 384, IPC.
7. Allegations of cheating under Section 420, IPC.
8. Conspiracy under Section 120-B, IPC.
9. Role of additional accused persons.

Detailed Analysis:

1. Application of Section 4 of the Prevention of Corruption Act, 1947:
The court discussed whether the presumption under Section 4 of the Prevention of Corruption Act, 1947, applies at the stage of framing charges. The court concluded that the presumption must be taken into account even when considering whether a charge should be framed, as the court must examine the evidence as it stands without rebuttal to determine if it would justify the conviction of the accused.

2. Scope and Ambit of Section 165 of the IPC:
The court emphasized the distinction between Section 161 and Section 165 of the IPC. While Section 161 involves gratification connected with specific official actions, Section 165 is broader and covers the acceptance of valuable things without consideration or for inadequate consideration from persons connected with the public servant's official functions. The court noted that Section 165 must be interpreted to advance the remedy and suppress the mischief it aims to curb.

3. Transaction Involving M/s Nanubhai Jewellers:
The court examined the evidence related to the payment of Rs. 8 lakhs by M/s Nanubhai Jewellers to Indira Gandhi Pratibha Pratishthan for a no objection certificate (NOC). The court found prima facie evidence suggesting that the payment was made as a quid pro quo for the NOC. The court noted discrepancies in the dates on the endorsement and the rapid issuance of the NOC after the payment, supporting the prosecution's case.

4. Donations by M/s Hira Nandani Builders and Hira Nandani Construction Private Limited:
The court analyzed the donations made by these entities to Indira Gandhi Pratibha Pratishthan in connection with cement allotments. The court found that the donations were closely related to the permits issued for cement allotments, with the timing and amounts of the donations indicating a quid pro quo arrangement. The court concluded that a prima facie case was made out for framing charges under Sections 161 and 165 of the IPC and Section 5(2) read with Section 5(1)(d) of the Prevention of Corruption Act, 1947.

5. Transactions of the National Centre for the Performing Arts (NCPA):
The court examined the negotiations and agreements involving NCPA and the respondent, highlighting the donations made to Indira Gandhi Pratibha Pratishthan and other trusts. The court found evidence suggesting that these donations were made in consideration of concessions granted to NCPA, supporting the framing of charges under Sections 161 and 165 of the IPC and Section 5(2) read with Section 5(1)(d) of the Prevention of Corruption Act, 1947.

6. Allegations of Extortion under Section 384, IPC:
The court concluded that the evidence did not support the charge of extortion, as there was no clear indication that the managements of the sugar co-operatives were put in fear of injury or that the contributions were made under such fear. The court upheld the trial judge's decision to discharge the respondent on these charges.

7. Allegations of Cheating under Section 420, IPC:
The court found that the prosecution had made out a prima facie case for cheating, based on the misrepresentation of the nature of Indira Gandhi Pratibha Pratishthan as a government trust and the unauthorized association of Mrs. Gandhi's name with the trust. The court directed the framing of charges under Section 420, IPC.

8. Conspiracy under Section 120-B, IPC:
The court noted that the facts were interconnected and supported the charge of conspiracy. The court directed the framing of charges under Section 120-B, IPC, in addition to the other charges.

9. Role of Additional Accused Persons:
The court acknowledged the involvement of other individuals but noted that the trial judge had the discretion to decide whether to proceed against them. The court did not express a definite view on this matter but indicated that it was open to the trial judge to consider it based on the available material.

Conclusion:
The Supreme Court allowed the appeal in part, directing the framing of charges under Sections 120-B, 161, 165, and 420 of the IPC, and Section 5(1) read with Section 5(2) of the Prevention of Corruption Act, 1947, while upholding the discharge on charges of extortion under Section 384, IPC. The court requested the Chief Justice of the High Court to nominate another judge to take up the trial from the stage at which it was left by the previous judge.

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