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TMI Blog1986 (4) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... them in some detail. Since the genesis of this appeal has been set out by my learned brother at length I do not propose to repeat what has been so ably said by him and I will confine myself only to the facts relating to the charges which are going to be dealt with by me But I may be permitted to say a few words in regard to two points which have been discussed by my learned brother in his judgment since they are of some importance and can without impropriety bear further discussion. The first point arises out of a contention raised by the learned counsel appearing on behalf of the first respondent (hereinafter referred to as the 'respondent') that the presumption under Section 4 of the Prevention of Corruption Act 1947 applies only after a charge is framed against an accused and has no application at the stage when the court is considering the question whether a charge should be framed or not. It is said in geometry that a point has position but no magnitude, but we are constrained to observe that this point raised on behalf of the first respondent has not only no magnitude but has even no position. It is wholly without substance and indeed it is surprising that it should have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the scope and ambit of Section 165 of the Indian Penal Code. I agree with my learned brother that it may not be desirable at this stage to define the precise ambit and coverage of Section 165 because that is a matter which will have to be considered by the Nigh Court in depth when the case goes back before the High Court and the first respondent is called upon to face his trial on the charges framed against him. But it is necessary to indicate the broad parameters of Section 165 and to emphasize the basic distinction which exists between that Section and Section 161. It may be pointed out straight away that these two sections have been enacted by the Legislature with a view to eradicating corruption in public life. We may usefully quote here the following pertinent observations made by this Court in Re Special Courts Bill which came by way of Presidential Reference and which is reported in 1979 (2) S.C.R. 476 "....As I read it, this measure is the embryonic expression of a necessitous legislative project, which, if full-fledged, will work a relentless break-through towards catching, through the compulsive criminal process, the higher inhabitants of Indian public and political deck ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 65 we do not propose to discuss these decisions. Suffice it to point out at the present stage that on its plain terms Section 165 is wider than Section 161 and that an act of corruption not falling within Section 161 may yet come within the wide terms of Section 165. What Section 161 envisages is that any gratification other than legal remuneration should have been accepted or obtained or agreed to be accepted or attempted to be obtained by the accused for himself or for any other person as a motive or reward for doing or forbearing to do any official act or for showing or forbearing to show, in the exercise of his official function, favour or disfavour to any person, or for rendering or attempting to render any service or disservice to any person, while Section 165 does not require taking of gratification as a motive or reward for any specific official action, favour or service but strikes at obtaining by a public servant of any valuable thing without consideration or for a consideration which he knows to be inadequate, from any person whom he knows to have been or to be or likely to be concerned in any proceeding or business transacted or about to be transacted by such public ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were partners to Indo-Suez Bank. The facts giving rise to these charges in so far as relevant may be briefly stated as follows. There was a firm called M/s Nanubhai Jewellers which was in possession of certain ground floor premises situate at 113/ 115, Mahatma Gandhi Road, Fort, Bombay as a tenant. There were various changes in the constitution on this firm from time to time but we are not concerned with these changes in the present appeal. What is material to note is that at the relevant time this firm consisted of Mukesh Dadlani, Lal Chand Rohra, Ramesh Merchant his father and two other partners. The rent payable by this firm was originally Rs. 3000 per month but under a new agreement of lease dated 27th September 1979 the rent was raised to Rs. 15000 per month in consideration of the landlords giving to the tenant power to sub-let the premises. It seems that since 1979-80 this firm was incurring losses and was not in a position to make use of the premises for its own purposes and hence it decided to sub-let the entire premises barring about 500 sq. ft. to Indo-Suez Bank at a monthly rent of Rs. 1,24,120 and an agreement of lease was entered into between them on 12th December 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that according to the inquiry made by the office no vacancy had actually occurred at any time in the premises and there was accordingly no suppressed vacancy and moreover only a part of the premises was proposed to be sub-let by the firm of M/s Nanubhai Jewellers and hence the premises could not be requisitioned as a suppressed vacancy and consequently no objection certificate might be granted. The file containing these notings thereafter went to the Additional Chief Secretary who also placed his signature below that of Shri Rawat indicating his agreement with the endorsement made by Shri Rawat. The date below the signature of the Additional Chief Secretary is a little doubtful but we can safely take it to be 2nd March F 1981 since there is an endorsement at the bottom of the page showing that the file was received in the Secretariat of the Additional Chief Secretary on 12th March 1981 and obviously it must have gone to the Secretariat to the Chief Minister after making of the endorsement by the Additional Chief Secretary. The page of the file containing the endorsement of Shri Rawat also contains in red ink an endorsement made by the first respondent and this endorsement reads " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t he would consult his other partners and let him know. Ramesh Merchant thereafter contacted Lal Chand Pohra and other partners and told them that he had met the first respondent in connection with the grant of no objection certificate and the first respondent had demanded Rs. 10 lakhs for the no objection certificate but it was ultimately agreed that the firm of M/s Nanubhai Jewellers would pay Rs; 8 lakhs by way of donation to a Government Trust namely Indira Gandhi Pratibha Pratishthan. Lal Chand Rohra and other parties agreed to donate the amount of Rs. 8 lakhs to Indira Gandhi Pratibha Pratishthan and a cheque for Rs. 8 lakhs was accordingly issued by the partners of the firm of M/s Nanubhai Jewellers. Ramesh Merchant took this cheque to the first respondent at his residence on 16th April 1981 and on being informed that a cheque had been brought the first respondent called one of his secretaries and asked Ramesh Merchant to hand-over the cheque to him. Ramesh Merchant accordingly handed over the cheque for Rs. 8 lakhs to the Secretary. Ramesh Merchant was at this stage in his evidence asked the following question by the learned counsel appearing on behalf of the appellant. Wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... connection between the grant of no objection certificate and the donation of Rs. 8 lakhs which came to be independently made on 16th April 1981. This argument is prima facie specious and does not appeal to us. We do not see any reason why for the purpose of considering whether a charge should be framed or not we should disbelieve the evidence of Ramesh Merchant and Lalchand Rohra. What we have to consider is whether the evidence led on behalf of the complainant in regard to this transaction is such that if unrebutted that would warrant the conviction of the first respondent. We are clearly of the view that a prima facie case has been made out on behalf of the prosecution and the evidence led before the court is such as to warrant the conviction of the first respondent unless satisfactorily rebutted. The first question that we must consider is whether the endorsement sanctioning the grant of no objection certificate to the firm of M/s Nanubhai Jewellers was made by the first respondent on 16th March 1981 or it was made on 16th April 1981 but the figure "16/4" below the endorsement of the first respondent was at some stage tempered with and altered to "16/3" by overwriting the figur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remises were to be sub-let to Indo-Suez Bank there should be no difficulty in granting no objection certificate but he asked Ramesh Merchant to make a handsome donation to Indira Gandhi Pratibha Pratishthan. The context in which the demand for a handsome donation was made by the first respondent left Ramesh Merchant in no doubt that a handsome donation would have to be given by his firm in consideration of getting the no objection certificate. When asked as to how much he would like the firm of Nanubhai Jewellers to donate, the first respondent asked Ramesh Merchant to donate Rs. 10 lakhs and when Ramesh Merchant pointed out that the Government of India have permitted the Indo-Suez Bank to open its branch in Bombay and the premises were being sub-let to Indo-Suez Bank and requested him to name a reasonable figure for the donation, the first respondent considered the request of Ramesh Merchant sympathetically and asked him to donate Rs. 8 lakhs. The circumstance that Ramesh Merchant had to request the first respondent to name a reasonable amount for the donation and that the first respondent considered this request reasonably, does go to show that pressure was exercised on Ramesh Me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they themselves were incurring losses. Prima Facie, the inference to be drawn from these circumstances is irresistible and unless the first respondent can rebut this evidence, it is difficult to reject the contention of the prosecution that a prima facie case has been made out against the first respondent in respect of this transaction. It is undoubtedly true that in cross-examination by the learned counsel for the first respondent Ramesh Merchant stated that no objection certificate has been granted on the merits of the application and not as a favour to the firm of M/s Nanubhai Jewellers but this statement cannot make any difference to the correct evaluation of the evidence because whatever be the view of Ramesh Merchant as to whether the no objection had been granted to him on merits or not, it is the totality of the evidence which has to be considered and even if the firm of M/s Nanubhai Jewellers were entitled to obtain no objection certificate on merits, still the first respondent could bargain for a handsome donation as quid pro quo for granting the no objection certificate which was entirely within his power to do so. We are, therefore, of the view that a prima facie case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere started sometime in 1980 and 1981. One of the construction works undertaken by Hira Nandani was in the name of Hira Nandani Enterprises and this construction work was undertaken under an agreement with Udyogik Shramik Kamgar Housing Society. It appears that in respect of the construction work undertaken by the various concerns of Hira Nandani there was a stalemate in or about April 1981 and the construction works were held up for want of cement. The concerns of Hira Nandani had received some small quantities of cement but the quantities received were wholly inadequate and no further quantities of cement were available because cement was a controlled item and unless allotment of quota of cement was made by the State Government, it was not possible for any builder to obtain cement. Now the record shows that the entire control over allotment of quota of cement was retained by the respondent with himself in his capacity as Chief Minister and no allotment could be made without his sanction or approval. Since the concerns of Hira Nandani were starved of cement and they could not proceed with the construction works undertaken by them without cement they made applications to the respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 metric tonns of cement was lifted on the application of Hira Nagar Construction Ex. 357 and 357A but this allotment also lapsed and Hira Nagar Construction could not obtain the delivery of any quantity out of 200 metric tonns allotted to them but in this case also a subsequent order of allotment was made on 23rd July, 1981 alloting 50 metric tonns of cement and this quantity of 50 metric tonns was lifted by Hira Nagar Construction. The same position obtained in regard to Messrs Hira Nandani Enterprises. In the case of this concern also allotment of 100 metric tonns was made on the application Ex. 358 and 358A but this allotment lapsed because it was made in such a manner that this concern could not obtain delivery of any quantity out of 100 metric tonns allotted to it. Subsequently on the same date as in the case of the other three concerns, that is, on 23rd July, 1981 an order was made alloting 50 metric tonns of cement to Hira Nandani Enterprises and delivery of 50 metric tonns of cement was taken by this concern pursuant to the order of allotment. It will thus be seen that in the case of these four concerns, namely, Hira Nandani Construction Private Limited, Hira Nagar Develo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1, one for 50 metric tonns in favour of Hira Nandani Enterprises and the other for 200 metric tonns in favour of Udyogic Shramik Kamgar Housing Society. Now it is common ground between the parties that one metric tonn of cement would comprise 20 bags and 50 metric tonns would be equivalent to 1000 bags while 200 metric tonns would be equivalent to 4000 bags. The record shows that on 4th July, 1981 being the same date on which the two permits were issued for 50 metric tonns and 200 metric tonns respectively, two donations were made to Indira Gandhi Pratibha Pratishthan, one for Rs. 30,000 made by Hira Nandani Constructions Private Limited and the other for Rs. 1,20,000 made by Hira Nandani Builders both being concerns of Hira Nandani. The donations of Rs. 30,000 by Hira Nandani Construction Private Limited was made by means of a cheque dated 22nd June, 1981 while the donation of Rs.1,20,000 by Hira Nandani Builders was made by a cheque dated 4th July, 1981. It was admitted by Hira Nandani that though the cheque for Rs. 30,000 dated 22nd June, 1981 was given to Indira Gandhi Pratibha Pratishthan alongwith the cheque dated 4th July, 1981 for Rs. 1,20,000. On these facts the prosecutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was addressed to the Deputy Secretary with a copy to the Minister, Food and Civil Supplies for information. It was recorded there by V.T. Chari that he had also "submitted a note separately to C.M. for confirmation of the action being taken by the Department". A note addressed to the respondent was accordingly made by V.T. Chari simultaneously and it was in the following terms : "C.M. may kindly recall that he had mentioned to me yesterday (24th June 1981) that Shri P.D. Tata will be giving to me to-day applications for cement indicating the quantity to be sanctioned. C.M. observed that the cases had his approval and the Deptt. should take necessary action thereon and report to C.M. for confirmation. 2. Shri P.D. Tata saw me to-day (25/6/81) and gave me 3 sets of applications with statements indicating the quantity applied for and the quantity to be sanctioned. In all there are 58 applications and the total quantity to be sanctioned comes to 9,700 metric tonns. 3. A copy of the 3 statements is annexed to this note. 4. Necessary action is being taken separately on the applications. The main papers will be submitted to C.M. after issue of allotment orders. C.M. may kindly see fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ote Ex. 420 on the file. It would be foolhardy on the part of V.T. Chari, a senior and experienced I.A.S. Officer, to make a false endorsement on the file attributing to the Chief Minister of the State something which he never said. The note made by V.T. Chari also proceeded to state that Pesi Tata had given him 3 sets of applications each with a covering statement showing the quantity asked for and the quantity to be sanctioned and that necessary action should be taken and thereafter the papers should be submitted to the first respondent through Secretary, Food and Civil Supplies Department and Minister, Food and Civil Supplies. If the first respondent had not given him the instructions set out in the note, would V.T. Chari, if he were in his senses, ever direct the Department that the papers should be submitted to the first respondent after taking necessary action. That would be the easiest way for him to secure his exposure. Then again, if no such instructions had been given to him by the first respondent, is it possible that he would have prepared the note Ex. 421 and submitted it to the first respondent on the same day. If V.T. Chari had decided to allot 9700 metric conns of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even on the material on record, there is reason to believe that the three statements which accompanied the note Ex. 421 must have formed the basis of the three allotment orders dated 1st July, 1981 and 2nd July, 1981 part of Ex. 421, because like the statements, the allotment orders were also three in number and the aggregate quantity allotted under the three allotment orders was 9,700 metric tonns which is the same as the aggregate quantity shown in the three statements. Moreover, the application dated 15th June, 1981 Ex. 648 and 648A made by Hira Nandani Builders and the application dated 23rd June, 1981 Ex. 649 and 649A made by Apex Builders figured in the first allotment order dated 1st July, 1981 and in respect of these two applications, it was stated in the allotment order that it had been decided to allot 300 metric tonns of cement to Hira Nandani Builders and 250 metric tonns of cement to Apex Builders. Obviously, therefore these two applications formed part of the applications which were handed over by Pesi Tata to V.T. Chari, as mentioned in Exs. 420 and 421 and the fact when it was put to Hira Nandani that these two applications were in the possession of Pesi Tata, Hir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mited and Hira Nandani Builders were the donations of Rs. 30,000 and Rs. 1,20,000 to Indira Gandhi Pratibha Pratishthan. It is in these circumstances prima facie difficult to understand as to what prompted Hira Nandani Construction Private Limited and Hira Nandani Builders to make the donations of Rs. 30,000 and Rs. 1,20,000 respectively to Indira Gandhi Pratibha Pratishthan when they were not making any profits at all and they had not made any substantial donations to any other charities, despite large and frequent demands on the Hira Nandani family. Moreover it is not without significance that the two donations of Rs. 30,000 and Rs. 1,20,000 were handed over to Indira Gandhi Pratibha Pratishthan on the same day, namely, 4th July, 1981 on which the permits were issued by the authorities alloting 50 metric tonns to Hira Nandani Enterprises and 200 metric tonns to Udyogic Shramik Kamgar Housing Society. When Hira Nandani was asked as to how it happened that he paid the two cheques of Rs. 30,000 and Rs. 1,20,000 on 4th July, 1981 which was also the date of the two permits, the answer given by him was that it was purely coincidental. It is true that sometimes coincidences do happen bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d basis. First, an area admeasuring 5 acres, that is, 20,200 sq. metres was granted under Government resolution dated 10th May 1968 and then subsequently additional area admeasuring about 3 acres, that is, 10219.4 sq. metres was granted under Government resolution dated 15th May 1970. Both the grants were on the same terms and conditions and the ground rent payable by NCPA was Re.1 per annum in respect of each of these two areas of land. It was provided that NCPA will construct on the plot necessary buildings and structures for carrying out its performances including residential quarters for essential staff working in the Centre and for visiting artists and students provided the Centre would be at liberty to make available these facilities to outside parties at such compensation as it may deem fit so long as the income from the land and buildings was appropriated for the objects of the Centre and further a sum equal to 25% of the net annual profits of the Centre was credited to the Government of Maharashtra. The Government of Maharashtra was given a right to nominate two representatives on the Council of the Centre. Thus, a plot of about 8 acres in the Backbay Reclamation area was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ans of a commercial building with rentable area of 400,000 sq. ft. But, to the great dismay and consternation of the Directors of NCPA, a Government resolution was passed an 23rd March 1978 providing that since two separate leases were given to NCPA in respect of 7,892.59 sq. metres and 23,689.90 sq. metres, that is, approximately 1/4 and 3/4 area of the plot, the construction to be carried "on the land should be with reference to the F.S.I. permissible for each individual plot separately". The consequence of this Government resolution was that on the basis of F.S.I. of 3.5, NCPA could build a commercial building having a net rentable area of only 240,000 sq. ft. instead of 400,000 sq. ft. Moreover, prior to the issue of this Government resolution, a notification was issued by the Bombay Municipal Regional Development Authority (hereinafter referred to as "BMRDA") on 19th June, 1977 reducing the F.S.I. from 3.5 to 1.33. On the basis of this new F.S.I of 1.33, the net rentable area of the commercial building which could be put up by NCPA was still further reduced to 90,000 sq. ft. instead of the required 400,000 sq. ft. These developments which took place in 1977- 1978 jeopardized t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d put forward a scheme under which the entire plot of 8 acres would be treated as covered by one lease so that the net rentable area available to NCPA for building purposes would be determinable by applying to the F.S.I. to the whole of the area of the plot instead of applying it separately to each of the two areas into which the plot was decided. The scheme provided that the commercial development of the plot would be confined to one-fourth of the area of the plot, the F.S.I. used for such development would not exceed 450,000 sq.ft., that is 1.33 for the entire plot and shops and office would be restricted to 50% of this area and the balance would be used for a hotel and the construction on the remaining three-fourth area though in excess of 1.33 for the whole plot, would be exempted from BMRDA Notification and would be "approximately 1.00 for the whole plot" so that the total F.S.I. used would be approximately 2.33 and the income of the Government of Maharashtra would be "restricted to 50% of the net income from the commercial-cum-hotel development after meeting all expenses of NCPA." The scheme also provided for making of donations to Indira Gandhi Pratibha Pratishthan. The disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icting FSI to 1.33, but that floor space area available on the basis of 1.33 FSI in respect of the entire area of the plot should be sufficient for NCPA for construction. Gavai and Prabhakar pointed out that on 1/4th area of the plot, NCPA could build a residential hotel in addition to high-grade shops and offices for which permission was already given. Ajit Kerkar agreed to this suggestion provided "not less than 50% of the area is allotted to be utilised for hotel and the balance for the purpose of shops and offices". This condition proposed by Ajit Kerkar was found acceptable to Gavai and Prabhakar. It was also agreed that the condition providing for payment of 25% of the net profit of the Centre to the Government of Maharashtra would remain unchanged and so also would the provision that 50% of the net income from the commercial complex should be paid by NCPA to the Government of Maharashtra. Now at this meeting held on 25th March 1981 the question of making donations to Indira Gandhi Pratibha Pratishthan was also discussed as a part of the negotiations and Ajit Kerkar stated that the following donations would be made by NCPA either by itself or through others : i) Initial dona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This noting made at a time when no controversy had arisen at all must prima facie be accepted as correct. Moreover, its correctness was deposed to by Prabhakar when he was in the witness box. Ajit Kerkar of course disputed that any such agreement was arrived at between him on the one hand and Gavai Prabhakar and the respondent on the other but prima facie we are inclined to accept the testimony of Ajit Kerkar to this effect because we would prefer documentary evidence to oral evidence in case of conflict between the two. It is a trite saying that witnesses may lie but documents do not. Secondly, it is significant to note that a donation of Rs. 1 crore was made by four Tata concerns to Nirmal Sethia Foundation which was a Foundation in which the respondent, his wife, Nirmal Sethia, his wife and Ajit Kerkar were trustees. This donation of Rs. 1 crore was made up of four cheques, one dated 31st July, 1981 for Rs. 30 lakhs issued by Indian Hotels Company Limited, the second also dated 31st July, 1981 for Rs.60 lakhs drawn by Lake Palace Hotel and Motel Private Limited, the third dated 17th August, 1981 for Rs. 50 lakhs drawn by Piem Hotel Company Limited and the fourth dated 1st Sept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should have given a donation of Rs. 10 lakhs to Nirmal Sethia Foundation by a post-dated cheque when on the date of handing over of the cheque, it did not have sufficient funds in the bank. The only answer which Ajit Kerkar could give in explanation, which is rather strange conduct, was that Ta; Trade and Transport Company Limited "expected that sufficient funds would be deposited in its account by 1.9.1981". There is another circumstance which is of a baffling character - indeed it defies any rational conduct - and this circumstance is that the four cheques representing the aggregate donation of Rs. 1 crore were handed over by these four Tata concerns to Nirmal Sethia Foundation by way of donation without any resolution being passed by the Borad of Directors in that behalf and strangely enough these four cheques paid by way of donation were credited as deposits in the books of Nirmal Sethia Foundation. When examined on this point, Ajit Kerkar stated, "Initially all the four amounts were to be treated as deposits and were to be treated later as donations after obtaining the sanction of the Board of Directors". This is indeed a strange explanation which is prima facie difficult to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gly addressed a letter dated 1st April, 1981 Ex. 216 to Gavai. mis letter was collected from J.J. Bhabha's office by Sen Gupta, Executive Assistant of Ajit Kerkar in order that Ajit Kerkar should be able to personally hand over to Gavai and pursue the matter with the Government. The letter dated 1st April, 1981 Ex. 216 was accompanied by a note prepared by J.J. Bhabha. When Ajit Kerkar got this letter dated 1st April, 1981 Ex. 216 alongwith the note, he dictated to Sen Gupta an endorsement to be made at the foot of the note and his endorsement was written out by Sen Gupta in his own handwriting as per the dictation of Ajit Kerkar. This endorsement was written down by Sen Gupta in the morning of 10th April, 1981 and it is marked 'B' at the foot of Ex. 216. It is significant to note what this endorsement said : "The NCPA by itself or through others, will arrange to make the following donations to Indira Pratibha Pratishthan, an allied organisation involved in giving similar support to the performing and non performing acts; one time within six months of Govt.'s confirmation Rs. 1 crore three years after i.e. On completion and commissioning of the commercial complex. RS. 25 lakhs pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 10th April, 1981. It was when this note of Pengulkar came to Prabhakar that he recorded the note dated 29th April, 1981 marked 'B' to which we have referred in some detail. The note of Prabhakar dated 29th April, 1981 marked 'B' supported by the oral evidence of Prabhakar clearly establishes that NCPA had agreed to make donations set out in the endorsement marked 'B' in Ex. 216 to Indira Gandhi Pratibha Pratishthan and that it was agreed that the donations so made would not be treated as deductible expenses. It seems that Sen Gupta and Shakur Khan, representatives of NCPA again made another effort to persuade Gavai and Prabhakar to agree that donations to be made to Indira Gandhi Pratibha Pratishthan should be allowed to be deducted as expenses before determining the net income of the commercial complex of NCPA. But as appears clearly from the note of Gavai dated 30th April, 1981 part of Ex. 230, Gavai and Prabhakar clearly pointed out to Sen Gupta and Shakur Khan that NCPA would have to pay these donations after 50 per cent of the net income was paid to the Government and that such donations cannot be treated as expenses. This note of Gavai also establishes beyond doubt that NC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kanuga PW-16 and in all these four trusts the respondent, his wife and Sheroo Kanuga were the only trustees and it was provided in each of these four trusts that any vacancy arising the office of trustee would be filled up from the family of the respondent. It is the evidence of Sheroo Kanuga that the drafts of these four trust deeds were prepared by him on the basis of the trust deed of Indira Gandhi Pratibha Pratishthan and the respondent had not examined these four trust deeds but merely the broad features were explained to the respondent. Now the trust deeds in respect of these four trusts were executed by the trustees on 20th March 1981 and they were lodged with the Charity Commissioner on 23rd March 1981. On the application of Sheroo Kanuga compliance with Rule 7A of the Maharashtra Public Trusts Rules was dispensed with even though it was legally not permissible to do so. Sheroo Kanuga also obtained certificates from the Income-tax Authorities exempting donations made to these four trusts. Sheroo Kanuga explained in his evidence that all this had to be rushed through in order to enable donations to be taken from the potential donor companies before 31st March 1981. He admit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar to be true. If Jadav was pressing on behalf of the employees of the Ta; Group of Hotels for doing something for the families of the employees in the Konkan Region it is difficult to see why no donations or contributions were made by Indian Hotels Company Limited to any other trusts such as Konkan Unnati Mitra Mandal prior to 25th March 1981. Moreover we fail to appreciate why the employees in the Taj Group of Hotels should be so keen in securing development of the Konkan Region instead of demanding improvement in their own living conditions in Bombay. Moreover, the minutes of the meeting of the Board of Directors of Indian Hotels Company Limited held on 31st March 1981 do not bear out the story put forward by Ajit Kerkar that it was at the instance of Jadav that these donations came to be made. What is stated in the minutes of the meeting is as follows : "The Managing Director reported to the Board that over 600 employees working in Grades I to V in the Taj Mahal and Taj Mahal Intercontinental Hotels, Bombay, and who hail from the Konkan Region, had A approached the Managing Director to contribute amounts to certain public charitable trusts recently established for the purpose o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. RANGANATH MISRA, J. This appeal by special leave is directed against the order of a learned Single Judge of the Bombay High Court dated April 30, 1985, refusing to frame charges on 22 heads while framing charges under 21 other heads This litigation has had a chequered career. A short account of the events relevant for the disposal of this appeal may now be indicated. The appellant, R.S. Nayak, filed a petition of complaint on September 11, 1981, in the Court of the Chief Metropolitan Magistrate, Esplanade, Bombay, alleging commission of several offences by the respondent and some other persons. The learned Chief Metropolitan Magistrate declined to take cognizance of the offences punishable under sections 161 and 165, I.P.C. and Section 5(2) of the Prevention of Corruption Act (II of 1947) ('Act' f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . of the Bombay High Court. The trial opened before Khatri, J. on April 9, 1984, and 16 witnesses were examined before him by July 27, 1984. Then followed the dispute relating to fabrication of the public records, produced in the Court. Khatri, J. ordered inspection of the files as also an inquiry into the allegations. By an order dated April 23, 1984, he found that the prosecution allegations against the respondent of tampering with the files by removing and interposing certain documents and interpolating endorsements on some other documents were not well-founded. The prosecution, thereupon, applied for transfer of the case to some other Judge. That was refused but on the request of Khatri, J. that he may be relieved of trying the case, the learned Chief Justice nominated Mehta, J., another Judge of that court as the trial Judge. Fortyone more witnesses were examined before Mehta, J. and after examination of 57 witnesses in all for the prosecution, the trial Judge was invited to consider the framing of charges. Fortythree draft charges were placed for his consideration. By the impugned order the learned Trial Judge framed 21 charges and refused to frame the remaining 22 charges pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustees. So far as IGPP is concerned, the respondent represented that the State Cabinet had taken a decision on October 6, 1980, to create the same. On October 7, 1980, the respondent at a Press Conference made a declaration to this effect and in official publications also this fact was duly publicised. It is the prosecution case that the late Smt. Indira Gandhi, the then Prime Minister, had never agreed to have her name associated with the Trust which came to be registered with the Charity Commissioner on October 18, 1980. Though it was not a Government Trust and Smt. Gandhi had not agreed to her name being associated with it, the respondent personally and through others gave a lot of publicity representing as if these were facts with a view to inducing people to believe that IGPP was a Government Trust and the late Prime Minister had agreed to associate her name with that Trust. These representations were made with a view to creating an appropriate impact on the mind of the people at large. According to the prosecution, as a fact, Mrs. Gandhi had not consented to associate her name with the Trust and that fact was disclosed on the floor of the Lok Sabha by the then Defence Ministe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hol and cement allocations ; 6. Mr. N.M. Tidke, Minister of Co-operation. Admittedly, by July 5, 1984, the trial had already begun and several witnesses for the prosecution had already been examined. The learned Trial Judge did not accept the prosecution case regarding the offence of cheating and extortion. Similarly, the charge of conspiracy was not accepted. The learned Trial Judge framed 21 charges in respect of six transactions relating to cement and one relating to industrial alcohol for offences under ss. 161 and 165, IPC and s. 5(2) read with s. 5(1)(d) of the Act. For these 7 transactions, 21 charges in all were framed, 3 charges for each transaction. As pointed out by the Constitution Bench in the judgment to which reference has been made, the relevant sections of the Code of Criminal Procedure ('Code' for short) for the trial of a case of this type are sections 244, 245 and 246. Section 245(1) provides : "If upon taking of the evidence referred to in s. 244, the Magistrate considers, for reasons to be recovered, that no case against the accused has been made out which, if unrebutted, would warrant his conviction, the Magistrate shall discharge him." While section 246( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tituted on complaint applied the prima facie test. In State of Bihar v. Ramesh Singh, [1978] 1 S.C.R. 257, this Court again pointed out that the standard of test and judgment which is to be finally applied before recording a finding regarding guilt or otherwise of the accused, is not to be applied at the stage of deciding the matter under s. 227. It was further observed : "If the evidence which the prosecution proposes to adduce to 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. An exhaustive list of circumstances to indicate as to what will lead to one conclusion or the other is neither possible nor advisable. We may just illustrate the difference of the law by one more example. If the scales of pan as to the guilt or innocence of the accused are something like even at the conclusion of the trial, then, on the theory of benefit of doubt the case is to end in his acquittal. But, if on the other hand, it is so at the initial stage of making an order under s. 227 or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant's counsel that the trial Judge had acted wrongly in taking up the question of framing of charges prematurely.Obviously this complaint could not be made since after 57 witnesses had been examined it was the prosecution itself which invited the learned Trial Judge to take up the matter of framing of charges. Admittedly, the witnesses examined for the prosecution have been cross-examined and in the case of some, at great length. There is no scope for doubt that the rebuttal case envisaged in s. 245(1) of the Code is fairly clear from the cross-examination of prosecution witnesses as also from the documents exhibited before the Court, apart from direct evidence being led by the defence independently. Under the scheme of the Code there is no scope for the accused to lead defence evidence until the prosecution is closed and the examination of the accused under s. 313 of the Code is over. With the amendment of the Code of 1898 in 1955 and under the new Code of 1973 the procedure relating to all varieties of criminal trials, excepting warrant cases on private complaints, has been simplified. The procedure in respect of trials according to warrant procedure in private complain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isdiction to direct that charges be framed. It was further pointed out that a direction to frame charges on the basis of the statement filed has to be on the footing that the prosecution evidence in support of the charges was such that unless rebutted, the respondent would liable to be convicted. This observation made by us was merely a restatement of the legal position and was not meant to prejudice the respondent in any manner. But it cannot be disputed that in order to decide whether the order of discharge should be sustained or set aside, we have to consider whether on the material on record, a prima facie case has been made out on behalf of the prosecution. As hearing proceeded, at one stage we were inclined to lay down generally the para-metres of the provisions of s. 165, I.P.C. Mr. Rao for the respondent while making his submissions in regard to the actual scope of the offence covered by s. 165, I.P.C. pointed out on more than one occasion that the respondent might be prejudiced in his defence if while laying down the parametres of that offence, we indicated a straightjacket formula. He also suggested that the matter should be left to be argued and the learned Trial Judge s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dance with the prevailing procedure. The persons to whom allotments of cement have been made have in many cases contributed large sums of money to the Trust funds. In regard to the NCPA there is contemporaneous documentary evidence as also oral evidence to show that certain concessions were extended by Government and payments had been received which have gone into the Trust funds. While the prosecution has alleged that the payments of money were a consideration for the favour shown to NCPA, the defence has A come out with the version that the payments made and stipulated were unconnected and the large sum of money agreed to be paid was for the purpose of improving the lot of the people of Konkan region. Similarly, in regard to the grant of 'No Objection Certificate' in respect of the premises of Nanubhai Jewellers, there is evidence from the side of the prosecution to support its allegation that the power of the State was exercised for a consideration while there is no denial regarding receipt of the payment but the link is denied and disputed. Similarly, in regard to industrial alcohol at least so far as Kolhapur Sugars are concerned, there is the evidence of PW. 50 and payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "rebuttable presumptions of law are a result of the general experience of a connection between certain facts or things one being usually bound to be the companion or affect of the other. The connection, however, in this class is not so intimate or so uniform as to be conclusively presumed to exist in every case; yet, it is so done that the law itself without the aid of a jury infers one fact from the crude existence of the other in the absence of opposing evidence. In this mode, the law advances the nature and amount of the evidence which is sufficient to establish a prima facie case and throws the burden of proof upon the other pary; and if no opposing evidence is offered, the jury are bound to find in favour of the presumption. A contrary verdict might be set aside as being against evidence. The rules in this class of presumptions as in the former have been adopted by common consent from motives of public policy and for the promotion of the general good; yet, not as in the former (conclusive proof) class forbidding all further evidence but only dispensing with it till some proof is given on the other side to rebut the presumption raised. Thus, as men do not generally violate the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 61, IPC, are : (1) that the accused was a public servant; (2) that he must be shown to have obtained from any person any gratification other than legal remuneration; and (3) that the gratification should be as a motive or reward for doing or forbearing to do any official act or for showing or forbearing to show, in the exercise of his official function, favour or disfavour to any person. Ordinarily, when the first two ingredients are established by evidence, a rebuttable presumption arises in respect of the third. For the offence under s. 165, IPC the essential ingredients are : (i) the accused was a public servant; (ii) he accepted or obtained or agreed to accept or obtain a valuable thing without consideration or for an inadequate consideration knowing it to be inadequate; (iii) the person giving the thing must be a person concerned or interested in or related to the person concerned in any proceeding or business transacted or about to be transacted by the government servant or having any connection with the official of him self or of any public servant to whom he is subordinate; and (iv) the accused must have knowledge that the person giving the thing is so concerned or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the offence under s. 384, I.P.C." The learned Judge considered framing of charge relating to extortion, in paragraphs 97-107 of his order. According to him, the evidence of PW. 1 Shalinitai did not establish that the accused or anybody on his behalf held out any threat either personally to her or to the Sangli Karkhana. According to the learned counsel, the learned Judge fell into an error in confining his consideration of the issue by referring to the deposition of PW. 1 alone. The evidence of PW.51, Gilda, was equally relevant and germane to the issue of extortion according to him and should have been referred to and relied upon while dealing with the consideration of the charge. Mr. Jethmalani next contended that the following features which had been established should have led the learned Judge to hold that there was material for the view that a case in respect of the charge had been made out by the prosecution. (i) The respondent had decided to raise Rs. 10 crores for the IGPP out of which a moiety was to be raised during the crushing season of 1980-81 and the remainder during the following season; (ii) The IGPP between the date of its formation and 31.3.81 had been able ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the donations; (ix) Mr. Jethmalani pointed out that it was the respondent's own case that if the management had made payments which were illegal, they themselves abetted the offence of cheating. This suggestion had been put to three relevant prosecution witnesses. The fact that these witnesses closely connected with the sugar co-operatives had committed even a criminal offence goes to show that their act was not at all voluntary and the fiscal interest of the factories must have been their sole and primary consideration for such conduct. On the basis of these facts and circumstances, learned counsel for the appellant argued that the three charges of extortion had been prima facie established and the learned trial Judge was, therefore, not justified in refusing to frame charges for the offence under s. 384, IPC. Mr. Rao for the respondent relied upon the definition of 'extortion' in s. 383 in the Indian Penal Code and contended that the ingredients of the offence had not been prima facie established so as to justify framing of a charge for the said offence. 'Extortion' is thus defined in s. 383, I.P.C. : "whoever intentionally puts any person in fear of any injury to that pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of committing an offence of cheating under s. 427 of the Indian Penal Code. The accused embarked upon a systematic campaign to associate the name of the Prime Minister of India, Mrs. Indira Gandhi with this Trust in order that the contributions to this Trust would be easily forthcoming. This was, in fact, intended to strengthen the impression that not only Mr. Antulay's Government but also Mrs. Indira Gandhi was actively involved in his operations. That such an impression was sought to be created is further borne out by the fact that for inaugurating the said trust, a function was held at the Raj Bhavan, in Bombay on 11th October 1980. The Prime Minister especially flew in to perform the inauguration ceremony. A picture of the Prime Minister and the accused standing by her side while the former is signing documents connected with the Trust appeared in most of the leading newspapers in their issues dated 12th October 1980." The allegations in regard to this offence are two- fold: (i) though IGPP was not a State Government Trust, publicity was given by the respondent himself and through his agents as also through news media owned by the State Government and the public press to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment publication. mis position would get support from the decision of this Court in Harpal Singh & Anr. v. State of Himachal Pradesh,[1981] 1 S.C.C. 560. The prosecution has also relied on the Government of Maharashtra publication 'Lok Rajya'. The English and Marathi versions of this publication for October 1980 have been proved as Exts. 179-180 respectively. Similarly, there is another Government of Maharashtra publication known as "Maharashtra Marches Ahead," Ext. 181, which is a publication of December 1980. These documents, according to the prosecution, give an impression that IGPP was a Government created Trust. The Trust Deed of the IGPP is Ext. 208 and it clearly shows that it is not a Government Trust nor was it created by the Government. Even the respondent was not a Trustee qua Chief Minister. As a fact IGPP was registered as a public trust with the charity commissioner. PW.1, an erstwhile Cabinet colleague of the respondent has deposed that on the 11th October, 1980, when she attended the function at the Raj Bhavan to which we shall presently advert, she came to know the actual state of affairs, viz., though the respondent was trying to create an impression that IGPP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned order to deal with the charge under s. 420, IPC. He referred to the statement of PW 1 that she had actually known the real state of affairs before the contribution was made to the IGPP. He ultimately took the view that the material placed on record did not justify a charge under 8. 420 IPC being framed. We do not propose to refer to every item of evidence on record relating to the allegation of cheating. We are afraid that if we follow that procedure and express our opinion one way or the other with reference to each item of evidence, either party is likely to be prejudiced when the matter goes for trial notwithstanding our statement that we were doing so only for the purpose of finding out whether a prima facie case had been made out. We would, therefore, not refer to the evidence any further. Cheating is defined in 8. 415 of the IPC and the ingredients for that offence are : (i) there should be fraudulent or dishonest inducement of a person by deceiving him; (ii) (a) the person so induced should be intentionally induced to deliver any property to any person or to consent that any person shall retain any property, or (b) the person so induced should be intentionally induc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that other persons who have been named in the application of the complainant Ext. 214-A, should also be proceeded against, particularly in regard to the charge of conspiracy punishable under s.l20-B, IPC. As we have already pointed out, Pessi Tata is dead. One of the other persons shown in Ext. 214-A is also dead as indicated therein. Excepting Tidke, the Minister of Co-operation, Gavai, PW. 13, and Ajit Kerkar, PW. 44, and a few other public officers who have been specifically named in Ext. 214-A, names of others were not disclosed and a prayer was made that all other officers who were involved in the matter may be proceeded against. It may be that some of these officers or outsiders have not behaved in an independent manner and have failed to act up to the expectation of the office they held. But that by itself may not be sufficient justification for prosecuting them criminally. Again, as pointed out by the learned trial Court, if that is to be done at this stage, the trial which has already been sufficiently protracted would have to be de novo and would required further time to be spent. It appears that some of these officers like Gavai have already retired and are no more in se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said to be reliable evidence against Gavai." These observations against Chari appear to be totally unwarranted and the learned trial Judge should not have, on the facts before him, come to this conclusion and castigated the public officer in the manner referred to above. We are somewhat surprised that the learned trial Judge did not even refer to the contents of the document, Ext. 421, with reference to which considerable evidence had been led. In this connection the evidence of PWs. 46, 47 and 49 should also have been considered by the learned trial Judge. These observations must, therefore, be expunged. The learned trial Judge will consider the entire evidence in its proper perspective when he finally disposes of the case. We have no intention to make anything final at this stage except that the prosecution for the offence under 8. 384, IPC, must fail. Any observation made by us in any part of our Judgment is confined to the question as to whether charges should be framed and/or the order of discharge should be upheld. Even where we have said that a charge is to be framed the position is that a frime facie case has been made out which is open to be rebutted by the 1st responde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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