Rajeev Kumar S/O N.K. Prasad vs The State Of Maharashtra And Anr

1/101 J APEAL 1376-12.odt

MANDIRA MILIND SALGAONKAR Digitally signed by MANDIRA MILIND SALGAONKAR Date: 2024.06.27 21:59:03 +0530 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO.1376 OF 2012

Rajeev Kumar son of N.K.Prasad Aged 39 years, Occ : Service, Residing at C1, Income Tax Colony, Peddar Road, Mumbai (At present in Aartharv Road Jail at .. Appellant Bandra) Versus 1. The State of Maharashtra, Through the office of Public Prosecutor, High Court, Bombay

2. Central Bureau of Investigation, .. Respondents Anti-Corruption Bureau, Mumbai

WITH CRIMINAL APPLICATION NO.1105 OF 2015 WITH CRIMINAL APPLICATION NO.67 OF 2013 WITH CRIMINAL APPLICATION NO.609 OF 2018 WITH CRIMINAL APPLICATION NO.551 OF 2017 WITH CRIMINAL APPLICATION NO.463 OF 2015 WITH CRIMINAL APPLICATION NO.1224 OF 2015 IN CRIMINAL APPEAL NO.1376 OF 2012 ...

Mr.Rajeev Kumar, Appellant-in-Person. Ms.Ameeta Kuttikrishnan for the Respondents. ...

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 2/101 J APEAL 1376-12.odt

CORAM: BHARATI DANGRE, J.

RESERVED ON : 20th FEBRUARY, 2024 PRONOUNCED ON : 18th JUNE, 2024

JUDGMENT:

1. Being aggrieved by the judgment and order dated 22.12.2012 passed by the learned Special Judge for CBI, Greater Bombay in CBI Special Case No.52 of 2000 in RC 7(A)/1998-Mumbai [State of Maharashtra (CBI, ACB, Mumbai) Vs. Mr. Rajeev Kumar S/o N.K. Prasad], the appeal is preferred by the Accused-Shri Rajeev Kumar. He is aggrieved by the findings rendered by the learned Special Judge, recording his guilt for the offence punishable under Section 7 of the Prevention of Corruption Act (for short, "PC Act") and also under Section 13(1)(d) read with Section 13(2) and on being sentenced to suffer rigorous imprisonment of five years and the direction to pay fine of Rs.15,000/-, in default to undergo further rigorous imprisonment for one month on both counts; substantive sentences being directed to run concurrently.

On the appeal being preferred the sentence imposed came to be suspended and the appellant came to be released on bail.

2. The appeal is filed on several grounds assailing the impugned judgment and alleging that the learned Judge has failed and neglected to consider the most relevant and material evidence on record and has arrived at perverse,

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 3/101 J APEAL 1376-12.odt

arbitrary and illegal findings, thereby convicting the appellant and subjecting him to punishment coupled with fine. It is also a ground raised in the appeal, that prosecution has failed miserably to prove the case against the appellant in any manner, muchless beyond reasonable doubt but the trial Judge preferred to convict the appellant on his own assumptions and surmises. Another ground raised in the appeal is about the impetuous decision of the learned Judge, who has conveniently overlooked the material and arguments placed on record on behalf of the accused and has disregarded certain significant aspect of the same, being the testimony of PW6-Mr. Garg on the point of sanction and it is a prominent ground raised in the appeal that the Finance Minister had refused to accord sanction and since the concerned Department, took a conscious decision of conducting regular department enquiry against the accused instead of prosecuting him. However, the learned Judge failed to consider that despite no new material or circumstances being brought forth, the sanction was allegedly accorded in the third attempt, while it is refused on earlier two occasions, which rendered the sanction order dated 12.06.2000 invalid, non est and void ab initio.

Another ground on which the appeal is filed is the failure and neglect of the learned Special Judge to appreciate that the complainant had not disclosed about the proceedings being instituted under Section 226 (3) of the Income Tax Act (for short, "IT Act") and the attachment of his account by the appellant, at the time of lodging of the complaint. Further, the evidence of PW2-Mr. Tangsali, the shadow witness is also alleged to have been resulting in the Trial Judge's failure to

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 4/101 J APEAL 1376-12.odt

appreciate that he is the same witness who was declared hostile in the criminal case before the Metropolitan Magistrate, when the accused faced the charged of assaulting a public servant.

The impugned judgment is further challenged on the ground that there is no consideration of an important aspect of delay in lodging the complaint as well as inconsistency in the prosecution case, specifically the contradiction that has surfaced on record in the evidence of the complainant as well as the shadow witness, making the case of the prosecution extremely doubtful. Further, non-examination of the most relevant person, Mr. Dudhani (Chartered Accountant of the complainant), has affected the case of the prosecution materially but the same was ignored by the learned Judge is also a separate ground in Appeal.

It is also a ground raised in the appeal memo that the learned Judge failed and neglected to appreciate the argument of the accused regarding suppression of tape recording by the prosecution and his specific stand that the complainant had planted the money in the cupboard to falsely implicate him.

In short, the appeal memo has raised various grounds, in an attempt to assail the finding rendered by the learned Judge and the appeal memo contains grounds from point (a) to point (dddd), as certain important grounds were permitted to be inserted by way of an amendment and now form part of the Appeal.

The additional grounds, which were permitted to be a part of the memo of appeal, included a ground of perjury by PW2-Mr. Tangsali, since the material contradictions in his

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 5/101 J APEAL 1376-12.odt

evidence were brought on record while cross-examining him, and he being confronted with his specific statement before another legally competent Court and the material contradiction, according to the appellant, has affected the credibility of the prosecution case. The relevant grounds as regards the tape recorder inserted in form of grounds (ttt) and (uuu), where it is specifically alleged that the learned Judge failed to appreciate that the talk which is alleged to have taken on place on 25.03.1998, as regards the demand of bribe is falsified by the fact that the prosecution has suppressed tape recorded conversation, which has given rise to a serious doubt about the alleged conversation as learned Judge has failed to appreciate that no search of complainant was offered, who himself admitted that he was carrying a micro cassette recorder though he had deposed that it was not functioning. The pre-trap panchanama (Exhibit-16) is alleged to be manipulated and substituted for the original panchanma and the suppression of micro cassette recorder by the prosecution and incorporation of post investigation fact of correct designation of the accused is projected, to have created a huge dent in the case of the prosecution and according to the appellant on the ground set out in the appeal memo, the appeal deserves to be allowed by setting aside the impugned judgment dated 22.12.2012 passed by the Special Judge for CBI, Greater Bombay.

3. I have heard Mr. Rajeev Kumar, who on completing the necessary formalities of obtaining necessary permission from the committee constituted for the purpose of allowing a party

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 6/101 J APEAL 1376-12.odt

in-person to appear before the Court and on facing the interview has succeeded in establishing that he is capable of presenting his case before the Court and is competent to argue in-person.

The CBI, ACB, Mumbai is represented by Ms Ameeta Kuttikrishnan and with the able assistance of Mr. Rajeev Kumar and Ms Ameeta Kuttikrishnan, I have perused the entire record and proceedings placed before me alongwith the memo of appeal, which has assisted me in appreciating the grounds raised in the appeal memo, raising various grounds in assailing the impugned judgment of conviction and imposition of sentence.

4. I have taken the note of the various orders passed in the appeal which is pending since 2012 and specifically the order dated 15.09.2015 as well as the order dated 23.09.2015 and the subsequent order suspending the sentence of the appellant.

In order to appreciate the grounds in Appeal, it is necessary to narrate the case of the prosecution which has surfaced on record before the learned Special Judge in Special Case No.52 of 2000 and as to how it was unfolded before him, by the prosecution by examining eight witnesses, who were permitted to be cross-examined.

5. On 27.11.2006, the Special Judge framed the charge against the accused - Rajeev Kumar, which read to the following:

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 7/101 J APEAL 1376-12.odt

"FIRSTLY - You, Rajiv Kumar while functioning as Asst. Commissioner of Income Tax, Investigation Circle - 27 (1) posted at commissioner of Income Tax, Mumbai City - IX Piramal Chambers, Mumbai being public servant abused your official position in as much as that you agreed to do an illegal demand of Rs.1 lakh and obtained Rs.75,000/- in the first week of March, 1998 to show favour in income tax assessment of complainant Shri. Raju Manwani.

You, Rajiv Kumar further demanded the remaining balance and accepted illegal gratification other than legal remuneration of Rs.25,000/- on 25.3.98 for showing favour to the complainant Shri. Raju Manwani in his Income Tax assessment for the year, 1995-96 and thereby committed an offence punishable U/s. 7 of P.C. Act, 1988 and within my cognizance.

SECONDLY - You, Rajiv Kumar being a public servant obtained illegal gratification of Rs.25,000/- on 25.3.1998 for yourself to show favour in Income Tax assessment of the complainant Shri Raju Manwani for the year, 1995-96 & thereby you committed an offence punishable U/s. 13 (2) r/w 13 (1) (d) of P.C. Act, 1988.

And I hereby direct that you be tried by this court on the charge aforesaid."

The Accused-Rajiv Kumar pleaded not guilty to the charge and chose to face the trial.

Upon commencement of the trial, the CBI, ACB, Mumbai filed an application under Section 294 of the Code of Criminal Procedure (for short, "Cr.P.C.") for depositing the original documents for admission or denial by the accused and the list included 13 documents to the following effect -

1. Complaint dated 25.03.1998 from Shri Raju Manwani.

2. F.I.R. dated 25.03.1998 in RC 07(A)/98 CBI, ACB, Bombay.

3. Panchanama No.1(Pre-Trap Panchanma) dated 25.03.1998.

4. Post Trap Panchanama dated 25.03.1998.

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 8/101 J APEAL 1376-12.odt

5. Panchanama dated 09.05.1998.

6. Computer print out of draft Assessment order dated 20.03.1998 of Shri Raju Manwani prepared by Shri Raju Kumar.

7. Panchanama dated 13.08.1998 for taking print out of draft assessment order.

8. Hand-written papers of Shri Rajiv Kumar pages 256 to 258 (numbered in red ink and both sides and inclusive of both pages) in IT file No.AC(Inv) Cir 27 (1)/10-R, name Raju Manwani, A.Y. 1995-96.

9. Draft assessment order dated 20.03.1998 of Shri Raju Manwani for A.Y. 1995-96 by Shri Rajiv Kumar ACIT from pages 265 to 270 (numbered in red ink and both sides and inclusive of both pages) in IT file No.AC(Inv) Cir 27(1)/10-R name Raju Manwani A.Y. 1995-96.

10.Assessment order dated 31.03.1998 by Shri Dinesh Singh, ACIT, Income Tax of Shri Raju Manwani for A.Y. 1995-96 in IT file No.AC(Inv) Cir 27(1)/10-R name Raju Manwani, A.Y. 1995-96.

11. Letter dated 03.04.1998 from Shri Dinesh Singh, ACIT, Cir. 21(1) to DCIT, range 21 Mum. Pages 294 to 295 in IT file No.AC(Inv) Cir. 27(1)/10-R. name Raju Manwani, A.Y. 1995-

96.

12. Noting side page 1 to 6 in IT file No.AC (Inv) Cir.27(1)/10- R name Raju Manwani, A.Y. 1995-96.

13. CFSI Peort No.C-224 dated 02.06.1998.

Upon the application of the Prosecution, the Advocate for the accused endorsed as below-

"The defence at this stage does not admit the genuineness of the document."

6. A list of articles was also tendered at the inception of the trial, which included the following -

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 9/101 J APEAL 1376-12.odt

1. Exhibit-A: One sealed envelope containing sample of Phenophthalein powder

2. Exhibit-B : One sealed bottle containing right hand wash solution of accused Sh. Rajiv Kumar.

3. Exhibit-C : One sealed bottle containing left hand wash solution of accused Sh.Rajiv Kumar

4. Exhibit-D : One sealed envelope containing Trap Money of Rs.25,000/-

The CBI also moved an application to deposit the original articles and the learned Special Judge by his order dated 17.09.2007 granted the application and even the original documents were also deposited in the Court, as per the list.

7. In order to support the case of the prosecution which charged the Appellant for committing an offence punishable under Sections 7 and 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988, the prosecution chose to examine eight witnesses.

As per the prosecution case, the accused-Mr. Rajeev Kumar was serving as Assistant Commissioner at Piramal Chambers, Parel, Mumbai and one Shri Raju Manwani, Chairman and Managing Director of Castles Group of Companies engaged in real estate business, was an income tax payer, whose assessment of income for the year 1995-96 was scrutinized by the accused.

Raju Manwani lodged a complaint with the CBI, where he made a grievance that in his Income Tax Return for the year 1995-96, he had reflected his income at around Rs.5,75,000/- which included huge amount of money in form of loan obtained

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 10/101 J APEAL 1376-12.odt

from his friends and relatives and unless it was regularized as loan, it was likely to be subjected to tax and in this connection in or around February-1998, he called up on the accused, who asked him to produce the proof in that regard or indicated that it would be declared as income and shall be subjected to tax. However, he suggested Mr. Manwani to pay amount of Rs.1,00,000/-as bribe, to avoid it being taxed.

According to the case of the prosecution, the complainant about ten days thereafter paid Rs.75,000/- to the accused in his cabin and was assured by the accused that the loan would be regularized. But despite the payment of amount and as assured, since it was not regularized, he once again approached the accused, who asked him to pay the unpaid amount of Rs.25,000/- and further told him that he will now have to pay a big amount to settle the matter.

Being aggrieved by this conduct of the accused, Mr.Manwani approached the CBI office and lodged complaint. Pursuant to which, it was decided to lay a trap and Mr. Anand Tangsali and Mr. Sudhir Dani were roped into to act as panchas and the complainant produced the bribe money of Rs.25,000/-.

After following the requisite procedure, the complainant alongwith raiding party and the panchas reached Piramal Chambers, where the cabin of the accused was located. According to the prosecution, upon the demand of the balance amount of Rs.25,000/- by the accused, the complainant handed it over to him in an envelope, which was opened by the accused to ensure that it contained the requisite amount and he kept back it in the envelope and the envelope was kept in

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 11/101 J APEAL 1376-12.odt

the cupboard. Upon the agreed signal given to the sleuths waiting nearby, the accused was apprehended and according to the prosecution, he resisted the arrest by indulging in brawl, but subsequently succumbed. His fingers were tested in the lime solution, which turned pink and even the tainted money was recovered from the cupboard.

The post-trap panchanama being drawn, recorded recovery of two more envelopes from the cupboard of which the keys were with the accused and this led to seizure of an amount Rs.70,000/- and Rs.75,000/- with certain marking.

Pursuant to the arrest, necessary formalities were completed and the statement of the witnesses were recorded. The matter then forwarded to the competent authority for sanction and the Under Secretary (Department of Revenue), Government of India, New Delhi accorded the sanction.

On completion of investigation, the charge-sheet came to be filed under Sections 7 and 13(1)(d) read with Section 13(2) of the PC Act and the charge was framed.

8. To establish its case, prosecution examined - Mr. Raju Manwani (complainant) its star witness as PW1.

He deposed that he was engaged in real-estate business under the name and style 'Castles Development and Consultant', a proprietary concern and was paying income tax since last 15 years and was filing the income tax returns through his Chartered Accountant Mr. Bharat Dudhani. He stated that in the year 1998, he had obtained loan from persons located abroad and in Mumbai but since there appeared to be some problem with regard to confirmation of

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 12/101 J APEAL 1376-12.odt

the loans, shown in the tax return his Chartered Accountant advised him to see the Income Tax Officer, which prompted him to approach the office of Income Tax, located in Piramal Chambers, Lalbaug, where he met Mr. Rajeev Kumar, the Income Tax Officer.

According to the complainant, the Income Tax Officer told him that there was no confirmation for his loans and if he did not confirm the same, it shall be treated as income and subjected to heavy income tax and asked him to submit the proof of the loans immediately and also asked him to pay Rs.1,00,000/- if he wanted to avoid the complications. He sought some time for submitting the confirmation and he deposed as under :

"2. ............. He said to me "You Decide fast or I had to convert as your income". So, I was forced to pay him Rs.75,000/- to accused then and there. He then asked me to see him after sometime to give him balance amount of Rs.25,000/-.

3. Then I contacted accused on 18th or 19th March, 1998 at Piramal Chambers, 3rd floor, Lalbaug. At that time he told me "Your problems are very much high which cannot be sorted out in Rs.1 lacs, and you will have to pay me Rs.4 lacs more". I explained him that I had cash crunch due to Voluntary Disclosure of Income Scheme (VDIS). Then he said that "You will have to pay heavy taxes." I requested him for more time. I was disturbed because of sudden change and greed of accused. I decided not to pay anything more to the accused.

4. I then contacted Anti Corruption, Worli. They guided me to contact at CBI Office, Tanna House. Now says before leaving office of accused, he said him that he would pay Rs.2 lacs in the month of March and Rs.2 lacs in the month of April. I had been to CBI office on 25.3.1998. Between 20.3.1998 to 25.3.1998, I had been thinking over whether to make complaint to CBI. I had also contacted my friends to decide where and how to lodge the complaint."

9. PW1 deposed that he met Mr. Sarwade, SP, CBI, who asked him to give the complaint in writing. He therefore

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 13/101 J APEAL 1376-12.odt

scribed a single page complaint in his own handwriting and handed it over to Mr.Sarwade (Exh.13). On receipt of the complaint, Mr. Sarwade requisitioned services of two persons, who were employees of the Bank and the MTNL and even two officers of CBI were called including one Mr.Surve. Instructions were given by Mr. Sarwade to the panchas and he was asked to produce the bribe amount of Rs.25,000/-. Accordingly, the complainant handed over 20 notes of 500 rupees denomination and 300 notes of 50 denomination, which were put in an envelope, on which the complainant mentioned the figure as 'Rs.25,000/-'.

He further deposed that the numbers of the currency notes were noted on a paper and the envelope containing the amount was handed over to the complainant by issuing instructions that he shall not touch the envelope and one panch shall accompany him, who shall be introduced to the accused as Jijaji (brother-in-law) and he was instructed to give signal by wiping his face with handkerchief, after the accused has accepted the bribe and the panch, was told to give the necessary signal by removing his spectacles.

10. As per PW1, upon visit to Piramal Chambers at around 5.30 pm by vehicle, the complainant kept the marked money in the car and left alongwith panch for going to the cabin of the accused and his narration of the events, has surfaced in his evidence in the following manner :

"8. .... Myself and panch went to the cabin of accused on 3 rd floor. Accused was not there. We waited there for sometime. After sometime, accused came to his cabin where I introduced panch to him as my Jijaji. We sat there. I then discussed with accused about my income tax matter. He asked me as to how much amount was brought by me. He gave me calculator to print the amount. I printed

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 14/101 J APEAL 1376-12.odt

Rs.25,000/- on it and showed it to him in such a way that panch would be in a position to see it. Then he asked me to give him Rs.25,000/- immediately, 2 lacs in the month of March and rest 2 lacs in April, to confirm my loan as there were lot of problems in my matter. I told accused that I would go on ground floor and bring money from my car. Myself and panch then went towards my car. Myself and panch accompanying me informed officers of CBI about the demand made by accused at that time. I took out marked money from the car and again went to the cabin of accused alongwith panch. I entered in cabin of accused, followed by panch. Accused said panch to wait outside. Panch waited at the door."

In his cross-examination, PW1 admit that he was called after trap on 27.03.1998 by CBI officers but his statement was not recorded at that time.

11. In response to the pertinent questions put to him, he has answered to the following effect :

"12. Q. Is it correct to say that in the previous 7 to 8 years prior to assessment year 1995-96, you had shown large amount received by way of loan in your income tax returns ?

A. May be.

13. I do not know if in the assessment year prior to 1995-96, there were certain amounts due from me towards income tax. I do not know which officer from Income Tax Dept. dealt with my tax matters prior to present incident. I had visited Income tax office twice or thrice prior to present incident. I do not remember which officer which officer I had met, at that time."

12. During his cross-examination, he admit that he had met the accused at the end of February, 1998 but he did not meet him between 19th March to 25th March and he did not lodge any complaint to any officer with regard to demand of bribe by the accused, since he was concerned about the effect that would follow. He also admit that accused had demanded bribe but he did not try to take any of his friend to CBI office when he lodged the complaint.

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 15/101 J APEAL 1376-12.odt

PW 1 also divulged the reason for taking the amount of Rs.25,000/- at the time of lodging of complaint by deposing that he always carried cash with him.

In the cross-examination, he state he did not remember the name of panch and as regards his past brush with the Income Tax Department as regards his dealings, he has categorically deposed as under:

"17. I cannot say if I had shown my jewellery in my income tax returns and accounts 15 years prior to 1998. It is correct to suggest that in the search of my house in 1991, cash of Rs.2,50,000/- was found. My C.A. had not told me that I was liable under Income Tax Act for action for possessing Rs.2,50,000/- cash. I had not asked for compounding offences under Income Tax Act. I do not know if I was pardoned by the income tax dept. in respect of Income Tax Offence, subject to certain conditions.

18. It is correct to suggest that action was taken against me by Enforcement Director in respect of violations of Foreign Exchange Regulation Act. (Witness volunteers that it was after present incident)."

13. PW1, on being suggested admit that in space opposite to the cabin of the accused, staff of his department sit but the place is covered by placing cupboards and when he went to the cabin of the accused, the door was shut but when he knocked, he was asked to come-in and he shook hand with the accused and then enquired about his file. As per PW1, the sequence of the conversation, was to the following effect :

"I shook hand with the accused when I entered his cabin. Then I asked him about my file. Then he said to me "That there were lot of problems about your loan and did you get what I had asked you". I said yes, partly. Then immediately he gave me calculator, to print a sum of Rs.25,000/-. Accused then said O.K. and gave it to him."

PW1 deny the suggestion that the accused was not there in the cabin when the trap party followed the panch and took

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 16/101 J APEAL 1376-12.odt

up the position. He clarified that when he entered the cabin of the accused, he saw panch standing next to him near the door and he was near the door which was two feet away from the door and the accused had extended his hand over the table. On being further cross-examined, he state that after the Accused was caught, keys were found on his person and that key was used to open the cupboard, where he had put the packet, containing the bribe amount. But he was unaware that the officers of CBI had taken the key in their custody.

He admit that last date of time bar in his case for the assessment year 1995-96 was 31.03.1998 and also admit that he had an account with the Bank of Rajashtan, Varsova Branch and one account was in the name of company and Income Tax Department had served notice to freeze his account with bank in the name of company 23.03.1998. He is unaware about the income to which he was assessed for the year 1995-96.

PW1 further deposed as under:

"29. When accused talked to me about paying 4 lakhs rupees, I believe that it had reference of paying bribe to him. It is correct to say that it was the first time that accused had asked for more than 1 lakhs rupees as bribe. I had not mentioned while giving my statement to CBI Officer that between 18th or 19th March, 1998, accused had asked for bribe of Rs.4 lakhs."

14. PW1 has further deposed that Mr. Dudhani used to look after his income tax return and all the details about the same were known to him. In para 33, the answers given by PW1 are specifically recorded where he pleaded ignorance on some vital aspect as regard his income tax portfolio, when he testified as under:-

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 17/101 J APEAL 1376-12.odt

"33. I do not remember if my income tax return for the assessment year 1995-96 was filed within time. I do not know if finally I was assessed for 45 lakhs rupees more than my declared income. I do not remember if I was shown owner of 19 house properties; in the assessment year 1995-96. I had given my house properties on rent but I do not remember the rental I was getting.

34. It is not correct to suggest that I was in arrears of more than 7 lakhs rupees as tax in the assessment year 1995-96. It is not correct to suggest that I did not feel that I was being harassed by income tax authorities. It is not correct to suggest that I had decided to lodge false complaint against accused and I lodged false complaint on 25/3/1998 against him. It is not correct to suggest that I did not meet accused on 18 th or 19th March, 1998. It is not correct to suggest that I was carrying large sum to catch the accused, after lodging false complaint."

15. In terms of the order passed by the High Court on 06.11.2012, this witness was recalled and his cross- examination was resumed and he was cross-examined by the accused himself and some relevant facts are brought on record. It is relevant to note that the permission was granted to the accused to recall the witness, as in the peculiar circumstances when the witnesses had deposed in Criminal Case No.65/P/1998 and in order to confront them with the evidence adduced in the criminal case, it was deemed it to necessary to recall the these witnesses.

16. In the cross-examination by the accused in-person, Mr.Manwani admit that his statement was recorded by the CBI on 27.03.1998 and his earlier statement that CBI had not recorded statement is false. He further deposed that he did not remember whether he opened the discussion with accused with reference to attachment of bank accounts but thereafter he admit that he opened discussion with the accused about the attached accounts in assessed case on 25.03.1998 but denied that the accused told him that there are other accounts

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 18/101 J APEAL 1376-12.odt

attached by the Income Tax Department. He admit that he had told the accused, that because of voluntary disclosure of income scheme he was having cash problem and therefore he could not keep promise for payment. The following portion of the cross-examination bear great relevance to the defence of the accused and it is necessary to reproduce the same:

"38. ....... In the discussion of the attached accounts there was also a discussion on the tax demand against me. In the notices received from IT department it was mentioned that the Income Tax of Rs.8.1 lakhs was outstanding against me. I do not remember whether the Tax recovery was for that year of 1995-96 or even assessment years prior to that. It is true that pursuant to the order passed by the accused my bank account in bank of Rajastan was attached. I do not remember whether the account was A/c no.1003334. I do not remember whether the notices of attachment of the accounts issued by the accused was dated 18.3.1998 and whether it was served on 23.3.1998. I do not remember whether on 21.3.1998 I had withdrawn Rs.1,62,000/- from my account by cheque and whether it was cheque no.768712. It is true that during discussions the accused that said to me that there were foreign gifts in my account and for that I will have to pay heavy income tax. It is not true that I have purposefully omitted to state the above facts to the Court when earlier my evidence was recorded. It is true that in the FIR I had stated that I had three meetings with the accused. I do not remember whether the IO had asked me any of the three dates of my meetings with the accused. It is not true that I did not give any of the dates because the complaint which I have lodged was false. I do not remember whether I was seen in the corridor of Piramal Chambers at 2.30 p.m. on 25.3.1998."

17. The complainant was subjected to extensive cross- examination as regards the reference to the accused, since in the complaint (Exhibit-13) he had referred to him as Assistant Commissioner of Income Tax and in FIR (Exhibit-38) his designation was set out as Assistant Commissioner Investigation, Circle 27 (1).

He expressed ignorance about non-existence of such designation in the Income Tax Department or that Assistant

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 19/101 J APEAL 1376-12.odt

Commissioner is in-charge of a circle whereas Income Tax Officer, Group-B Officer in-charge of a ward.

He further deny that he never had alleged three meetings as stated in the FIR. He admit that he did not see the name plate with designation of the officer on the door of the cabin.

Another important revelation from this witness reads to the following:

"I do not remember whether on 20.3.1998 an order was passed for additional income of Rs.19,78,010/- declaring my total income at Rs.25,53,080/-. I did not attend with my Chartered Accountant hearing before the accused. I do not remember whether my claim for regularization of loan was decided against me in the order dated 20.3.1998. I do not remember whether on occasions prior to that income tax department had attached my bank account. I did feel aggrieved by attachment of the bank accounts. I do not remember whether the tax demand against me for 1989-90 was Rs.2,27,567/-, 91-92 Rs.4,46,579/-, 90-91 Rs.1,02,192/- and Rs.8,000/-, 93-94 Rs.23,297/-, 96-97 Rs.4,832/-. I do not remember whether I made payment of only Rs.1 lakh."

18. One more decision in his testimony reads to the following:

"40. In the FIR I did not state that I had promised to pay the accused Rs. 4 lakhs in installment of Rs.2 lakhs each respectively in month on March and April. I do not remember as to who had given me the micro cassette recorder while my visit to the accused on 25/3/98, I do not know whether I withdrew Rs. 16,000/- from my bank account A/c no.14349 on 21.3.1998. I do not remember whether the accused had asked me to produce bank guarantee and copy of the paid challan during the discussion with him for withdrawal of the attachment of accounts. I do not remember whether the accused had asked we to show payment of tax for withdrawal of attachment. It is not true that I am giving false evidence."

19. The complaint lodged by the PW1 with the CBI dated 25.03.1998 is marked at Exhibit-13, where he has referred Mr.

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 20/101 J APEAL 1376-12.odt

Rajeev Kumar as Assistant Commissioner of Income Tax, Ward 27(1) and his complaint precisely state as under:

"As I have taken loans from my friends and relatives and some confirmation regarding those loans were not provided by me. So I went to see Mr. Rajeev Kumar, Assistant Commissioner of Income Tax one month back as he was Assessing my case, then Mr. Rajeev Kumar asked me to submit the evidence of loans from friends and relatives immediately as he would declare the same as my income and then I would have to pay more tax.

Then I requested for some more time to submit the proof of loans but Mr. Rajeev said, that he will order for the Assessment without waiting for the proofs otherwise pay some bribe to avoid this problems.

Then I enquire how much I have to pay him, then he told me to give Rs.1,00,000/- (Rs. One lakh only) then he will regularise the loans. Accordingly, about 20 days back I paid Rs.75000/- (Rs. Seventy Five Thousand Only) in his cabin at Piramal chamber and he assured me to regularise my loans.

But even after fortnight, he did not regularise my loan. So about four-five days back, I went inquire about that from Mr. Rajeev Kumar. Then Mr. Rajeev Kumar told me to pay balance Rs.25,000/- (Rs. Twenty Five Thousand Only) immediately and further said that you have to pay a give amount to settle the whole matter. Since I do not want to pay bribe amount any more, so I request you to take legal action against the corrupt officer Shri Rajeev Kumar, whose office is situated at Piramal Chambers, 3rd Floor, Parel Mumbai."

The complaint is signed by the Complainant and worth it to note that it is bereft of any particulars of the dates when he met the accused, who is referred to as Assistant Commissioner of Income Tax, who was assessing his case or the date on which he paid Rs.75,000/- and on the exact date when he went to enquire about regularization of his loans from Mr. Rajeev Kumar.

20. The next witness examined by the prosecution is the panch, Mr. Anand Parshuram Tangsali (PW2) serving as

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 21/101 J APEAL 1376-12.odt

Manager in Bank of Baroda at Ballard Pier, Mumbai. When he attended Tanna house on 25.03.1998, he was informed about the complaint of Mr. Manwani in presence of Mr. Dani. The complaint by Mr. Manwani was received by Inspector Mr. Shukla and after reading the same, he along with Mr. Dani put their signatures over the complaint. This statement is corroborated by the signature on Exhibit-13.

21. According to PW2, they were informed to act as panchas in respect of complaint of Mr. Manwani and he along with Mr. Dani accepted to act as panchas.

He has deposed about the procedure that was followed when the currency notes were collected from Mr. Manwani and numbers were recorded on a paper as well as the procedure followed by applying Phenolphthalein powder to the currency notes and the said notes being packed in the envelope, as well the necessary instructions received by him.

The pre-trap panchanam drawn on 25.03.1998 at 12.00 hours is proved by him and exhibited at Exhibit-16.

As per PW 1, the shadow witness, he reached Piramal Chambers in the car of Mr. Raju Manwani, to be followed by the trap party and he has narrated the sequence of happenings in his words as below:

"5. Thereafter we reached at Piramal Chamber at ground floor. Trap party also reached there. Thereafter there was talk between us and trapping party. Thereafter I and Raju Manwani went to 3rd floor of Piramal Chamber in Room No.320. We entered in the cabin. We noticed one person sitting on the chair in the cabin and two chairs were kept before him after the table. I sat on the chair towards right side of Raju Manwani. Raju Manwani introduced me to accused and vise versa Mr. Rajivkumar Accused with whom I was introduced is sitting before the Court in the dock of accused. Raju Manwani told to accused that he is in the liquidity

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 22/101 J APEAL 1376-12.odt

crunch so his friezed account shall be defriezed. Mr. Accused told to Mr. Raju Manwani that account of various persons are freezed and without having any cause we do not freeze account of anybody. It was further stated that the figures which were shown in to the income tax written as a loan can not be accepted under that head and those will have to treated as gifts and therefore Mr. Raju Manwani will have to pay heavy tax over it. It was told by the accused that previously claimed amount by him from Mr. Manwani was less so he will have to pay more amount. Accused asked Mr. Raju Manwani to pay Rs.25,000/- out of the previous deal and was further asked to pay Rs.4,00,000/- afresh. It was stated by Raju Manwani that he was declared large amount under V.D.R.S. Scheme so he do not possess liquidity to pay the amount. Mr. Raju Manwani told that he will pay Rs.2,00,000/- by 31 st of March, and remaining amount at the end of April. Thereafter accused asked to Mr. Raju Manwani whether he has brought the balance amount and asked to disclose the figure. At that time accused handed over his calculator to Mr. Raju Manwani. Mr. Raju Manwani written figure of Rs.25,000/- and shown it to me and then handed over calculator to accused. Accused told that the amount stated is very less and further stated that people makes the promise to pay but does not pay. Raju Manwani again explained to the accused that he is in financial crises. Accused asked to Mr. Raju Manwani whether he has brought the amount at that time Mr. Raju Manwani told that he has brought the amount but it is kept the car below. Thereafter accused asked to bring the amount so I and Mr. Raju Manwani went to ground floor. At ground floor trap party and panch No.2 Mr. Dani were present I have narrated the happening to Mr. Dani as well as to the trap party.

6. Thereafter trap party told to us in what manner they will remain present and stand and again reminded us the manner of giving signal as specified above. Thereafter I and Raju Manwani taken away the cash amount from the car and went to the cabin of accused located on 3rd floor. When we entered in the cabin we noticed that accused was not present there so we waited outside of the cabin. After the gap of five minutes accused came there and he called Raju Manwani in cabin. I also followed Mr. Raju Manwani. Accused asked me to wait so I halted in the door of the cabin. Mr. Raju Manwani handed over the plastic bag with him to the accused by his right hand. Rajiv Kumar i.e. accused taken the bag in his right hand and opened it with left hand. Thereafter accused opened the green envelop seen the currency notes therein again folded the envelop took the bag and kept it in cupboard. Thereafter I and Mr. Raju Manwani came out of his cabin. Thereafter I have taken away my spect and given signal to the trapping party as predecided. At that time Rajiv Kumar/accused came out of the cabin. I gave signal to the trapping party about the accused by pointing out finger towards him. At that time two persons from trap party caught hold accused by holding his both hands below wrist meanwhile another panch Mr. Dani also came there. At that time Mr. Shukla made query with the accused as to whether he has accepted the bribe

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 23/101 J APEAL 1376-12.odt

amount, by disclosing his identity, accused kept mum and he became violent and tried to escape. The other trap party members came there and over powered the accused and taken him to his cabin. Accused during the process of escaping gave push to the trap party members including giving push by legs he was also trying to make his hands free from clutches of CBI persons. In cabin also accused became violent. The query was again made with the accused whether he has accepted the bribe amount where upon accused kept mum. At that time also accused was making effort to make himself free from the clutches of CBI persons. He was trying to make himself free so as to enable him to rub his hands palm on his wearings. Thereafter Mr. Shukla asked the accused that a legal proceeding is being followed against him so he shall co-operate and Mr. Shukla sought the help of local police."

22. According to PW2-Mr.Shukla questioned the accused about bribe amount but he kept silent and Mr. Raju Manwani was called in the cabin, who told that the accused had kept the packet of amount in the cupboard. Thereafter, the accused was asked to hand over the keys but when he opposed, he was subjected to personal search, which led to the bunch of keys in his pocket. He was also possessing his identity card, Gymkhana card and U.S. dollars notes and frank notes. Thereafter, cupboard was opened.

According to PW2, the bag given to accused by Mr. Manwani was lying on second rack, which was removed from the cupboard and the envelope was opened and currency notes contained therein were tallied with the numbers noted on the paper. The lime water was applied to the envelope as well as currency notes, which turned violet and the currency notes were seized.

According to PW2, search of the cupboard of the accused led to two plastic bags which contained currency of Rs.70,000/- and Rs.75,500/- respectively. The post-trap panchanama is also exhibited through PW2 and it is marked as Exhibit-17.

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 24/101 J APEAL 1376-12.odt

23. On subjected to cross-examination, PW2 admit that the accused was prosecuted in another case of mounting and assault on police party and his evidence was recorded before the Court of Metropolitan Magistrate and in that case, he had deposed that he had not witnessed the scuffle between the police party and the Accused. PW2 categorically testified that "on the envelope where in the currency notes were kept a figure of Rs.25,000/- was written over it. It was written by the complainant. I do not recollect whether the figure of Rs.25,000/- was written by complainant on envelop after applying Phenolphthalein powder or prior to that."

He deny the suggestion that for the first time when he along with the complainant, Mr. Manwani went to the cabin of accused on the third floor he was not present in the cabin. He deposed that for the first time he alongwith Mr. Manwani entered into the chamber of accused and had talked to the accused, which lasted for about half an hour.

Contradicting the complainant himself, when specifically asked whether there was exchange of handshake between the accused and the complainant when they entered his chamber, he has answered in the negative. He could offer no justification as to why the currency kept in the car but state that it was as per directives of Mr. Shukla.

Regarding the second visit, PW2 has deposed that, when they reached cabin of the accused on the second time, he was not found present and the complainant entered the cabin and told him that the accused is not present. When the complainant and himself tried to enter the cabin, he was asked to wait outside.

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 25/101 J APEAL 1376-12.odt

According to PW2, he waited outside the door which was half open and he kept halting in the door, but could hear the talk, which was going on between accused and the complainant, as the distance was of 2-3 feet.

He has specifically denied the suggestion that on first and second occasion when he alongwith the complainant went to the cabin of the accused he was not present and he denied the suggestion that no scuffle took place when the accused was caught in the door.

Another important revelation coming from PW2 is to the following effect:

"A tape recorder was tried into the CBI office which was Micro cassette recorder but it was not functioning. I can not tell why then it was taken at the spot of raid."

24. The envelope being marked as Article-C bearing the signature of the panch was opened in presence of the Advocate for the accused as well as the witness, which contained three bundles of 100 notes each of Rs.50/- and 20 notes of Rs.500/-. In cross-examination, PW2 categorically deposed as under:

"21. Now I am confronted with all the packets which were in the sealed packet but none of packet bears the figure of Rs.25,000/- written, over it as claimed by me in my evidence."

25. Even PW2 is recalled as per order dated 13.11.2009 and was cross-examined and the cross-examination is focused on the timelines, when he admit that he took 45 minutes to reach Piramal Chambers from Tanna House and it took 10 to 15 minutes to reach the room/cabin of the accused, once they reached the Piramal Chambers. He deposed that they were in the room of the accused for about 15 minutes thereafter and thereafter they came to the ground floor.

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 26/101 J APEAL 1376-12.odt

PW2 was also confronted with his testimony before the Court of Metropolitan Magistrate No.29 Dadar in C.C. No.65P/1998 (State Vs. Rajeevkumar) and he assert that he had stated the truth before the Court.

On being confronted with portion marked 'A' in the certified copy of the deposition dated 26.08.2003, he state that the version is not correct and he do not remember whether he had made such a statement. He further volunteered that only timing in the portion marked 'A' is incorrect and he could offer no explanation why the mistake has crept in his statement. He is also confronted with his deposition and the portion marked 'B', 'C' and 'D'. At this juncture, I must also reproduce portion marked 'A' to 'H'.

"(A) I went along with the complainant i.e. one Sindhi to Income Tax office at Piramal Chambers at Lalbaug at about 2.30 pm.

(B) The said office was situated at 4th floor of Piramal Chamber.

(C) The complainant agreed to pay the said amount at the end of office hours on that day.

(D) Thereafter, I myself and complainant left the office and we came on the ground floor of the building. We spent time upto 5 pm.

(E) I did not see whether any scuffle took place between CBI officer and accused as it was not visible from the place where I was standing.

(F) I did not see that accused assaulted CBI Officer, Shivankar and accused assaulted Surve by fist blows.

(G) I do not remember where Sindhi complainant went when I was standing outside the cabin.

(H) The accused was brought in his cabin and he was asked to put his hands in water and thereafter I was asked to sit in the another cabin and I was sitting in the said cabin till next day morning and I could not see anything from the cabin what was happening outside the cabin."

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 27/101 J APEAL 1376-12.odt

26. Pre-panchanama no.1 (Exhibit-16) is marked through PW2, where the date of the panchanama is reflected as 25.03.1998 at 14.00 hours and place of the panchanama is set out as CBI, ACB, Tanna House and the panchanama is prepared by the panchas PW2 as well as Mr. Sudhir Dani, who were called by Mr. D.S. Shukla, DySP, CBI, ACB on receipt of the complaint against Mr. Rajeev Kumar, Assistant Commissioner of Income Tax, Investigation Circle 27(1), Mumbai.

Exhibit-16 Panchanama record that the panchanama started at 14.05 hours and concluded at 16.15 hours on 25.03.1998 and the panchas read the panchanama and according to them it was recorded correctly.

The panchanama has recorded as below :

"Both the panchas 1 and 2 and the complainant were directed to proceed by complainant's motor vehicle and other trap party members were followed them in convenient groups in two vehicles. The other members of the trap party were directed to wait in surrounding areas of Piramal Chambers, Lalbag, Mumbai by taking convenient/suitable positions.

The panchanama started at 14.05 hours on 25.03.1998 and concluded at 16.15 hours on the same date. The panch read the panchanama which is recorded correctly. We have put our dated signature on the same."

27. Exhibit-17 is the post panchanama prepared in the office of the Assistant Commissioner of Income Tax, Ward 27(1), allegedly referring to the accused, Mr. Rajeev Kumar and at the end of the panchanma what is recorded is necessary to reproduce :

"The panchanama has been drawn correctly as told by us and we both the panchas put our dated signatures on the same. The panchanama started at 6.35 pm at 25.3.98 and was concluded at 4.30 am on 26.3.98. A copy of panchanama is being handed over to Shri Rajeev Kumar after obtaining the receipt."

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 28/101 J APEAL 1376-12.odt

28. The aforesaid panchanama/post-trap panchanama record that on reaching the third floor alongwith the complainant, the complainant took PW2 to a cabin and before entering the cabin he saw board in Hindi on the door which mentioned "jktho dqekj] Hkk-jk-ls-" and the number of the cabin was mentioned as "320".

On entering the cabin, one person was sitting in a chair and he was introduced by the complainant as a Rajeev Kumar. The panchanama recorded as follow:

"After occupying the seats opposite him, the complainant discussed with Shri Rajeev Kumar about his attached accounts regarding his pending case. Rajeev Kumar told the complainant that his is not the only account attached by Income Tax but there are many other parties accounts which are attached by Income Tax. On this, the complainant told Rajeev Kumar that because of VDPS he is having liquidity crunch and cannot keep his promise. He further explained that as per his demand he has given the required amount to him but he cannot fulfill his additional demand because of March end."

As per PW 2, the conversation that took place between the complainant and the officer Shri Rajeev Kumar was partly in Hindi and English. The same is as under :-

"Rajeev Kumar - The foreign free gifts received by you and which are included in IT returns attract heavy tax and you have to pay more tax. I will not treat them as loans. But I will help you. I have gone through your files. Whatever I have demanded initially is less. Firstly you pay me the balance Rs.25000/- and the remaining 4 lakhs you pay me in 2 installments. Everybody promises but never pays.

Complainant- I have fulfilled my promise of 1 st installment partly. Rest 2 lakhs will be paid before 31st March and the balance amount will be paid by end of April.

Rajeev Kumar - How much money you have brought? After saying this, he gave his calculator to the complainant to show the amount which he has brought. On this, the complainant showed the amount of 25000/- on the screen of the calculator to him.

Rajeev Kumar -This is a very small amount. On this the complainant explained his difficulties which he is facing and asked

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 29/101 J APEAL 1376-12.odt

for some time. Thereafter Shri Rajeev Kumar agreed and said ok and he asked for money.

Complainant - I have brought the money but it is in the car down before. I will go down and get it.

Thereafter both of us left the cabin of Shri Rajeev Kumar and came down."

29. The panchanma further record the manner in which the accused was apprehended and it also record that after going inside Mr. Rajeev Kumar was asked to state his name, designation and jurisdiction and he disclosed his name as Mr. Rajeev Kumar, Assistant Commissioner of Income Tax, Incharge of Investigation Circle 27(1) and further the procedure that was adopted in recovery of the amount.

The panchanama record that after the cupboard was opened, the raiding party found a plastic bag containing the tainted amount in the second rack of the cupboard and the bag was taken out and contents of the same was verified. The said bag was found to contain one green colour big envelope in a folded position and when the said envelope was taken out and wet lime was applied on the envelope, it showed traces of Phenolphthalein powder as said portion turned pink. It is further recorded that the said envelope was found to contain words/figure 'Rs.25000/-'.

The notes taken out were tallied with the numbers which were noted and it was kept back in envelope, which was again kept back in a plastic bag bearing inscription of "A House of all Ethinic Rajasthan items - Disha Collection". Two other plastic bags with distinct marking with cash amount of Rs.70,000/- and Rs.75,000/- are also specifically recorded in the panchanama.

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 30/101 J APEAL 1376-12.odt

30. Another witness examined by the prosecution is PW3-Mr. Shiaji Shaji Nilakh, who was holding the post of Income Tax Inspector in the Income Tax office in the year 1998 and the accused was working as his superior.

He was confronted with file bearing No.AC (Investigation) Circle 27(1)/10-R for the assessment year 1995-96 in respect of Mr. Raju Manwani. He deposed that there are noting made in the file at pages serial nos.1 to 4 and these notings, according to PW3, are in the handwriting of Mr. Rajeev Kumar which also bear his signature. The notings were marked as Exhibit-21.

PW3 further deposed that accused used to keep the document related to important cases in his cabin in a cupboard, the key of which used to be with accused who alone had access to the cupboard.

PW3 was cross-examined by the accused in-person and was specifically asked whether on behalf of the assessee Mr. Bharat Dudhani, the Chartered Accountant, was present on all dates and whether he has signed the order sheet. He responded by stating that he could not state with certainty as to whose signature it was.

In paragraphs 3 and 4, he has deposed as under:

"3. There were arrears of taxes against Mr. Raju Manwani in the year 1998 before March. It is a fact that attachment order of property and Bank account of Mr. Manwani was ordered from our department in respect of arrears of taxes. The attachment proceeding were initiated in view of provision of Sec.226(3) of Income Tax Act. I do not recollect the figure of outstanding due taxes which were against the complaint. Assessment order of year 1995-1996 and recovery proceeding are to different subject matter. I do not recollect whether name of complainant as appearing in the dossier list having arrears of Rs.5 lackh and more. I was knowing complainant by name as Raju Manwani but I was having not much acquaintance with him.

4. In 25-3-1998 I was on duty in my office. I had seen Raju Manwani in the office on that day in the care-door of the office in the noon time after lunch hour around 2-30 to 3-30 pm. I have served

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 31/101 J APEAL 1376-12.odt

the bank attachment order on the bank where the account of complainant was. The attachment was made towards the arrears of legally recoverable taxes."

31. PW3 further deposed that Mr. Khatri who holding the post of Assistant Commissioner of Income Tax (Circular 27-1 Investigation) and on 25.03.1998 he was present in the office and he had retired from service at that time. He further deposed he had formal talk with Mr. Khatri on that day and he had seen Mr. Raju Manwani on third floor of Income Tax office on 25.03.1998. According to PW3, at the relevant time, the accused was holding the charge of AC (Circle) 27 (3) Mumbai and he categorically state that cabin of AC Circle 27(3) was located on 3rd floor but in another corridor and the cases under the control of accused, wherein the process of search and seizure and assessment related to it was already completed.

The order sheet of the complainant's case for the assessment year 1995-96 is exhibited at Exhibit-21 through this witness, to which I shall refer to a little while later.

32. The next witness examined by the prosecution is Vivek Krishnarao Kandivalikar (PW4), working as Tax Assistant in Income Tax Department, who was working under the accused and was entrusted with the duty of tax calculation, preparing various statistical information.

PW4 categorically deposed that due to shortage of Steno he used to type the assessment orders given to him in writing by the accused, on his computer.

On being confronted with the handwritten notes in the hand writing running into three pages, (Exhibit-23 Colly.), he

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 32/101 J APEAL 1376-12.odt

deposed that he prepared the assessment order on computer and taken out its print being marked as Exhibit-24.

In cross-examination, PW4 admitted that there was no computer available in the office of ACIT Investigation Circle 27-1 at that time and he denied suggestion that there were some more pages in hand writing, which were missing. Though, according to this witness, he had not seen Mr. Khatri in Income Tax office on 25.03.1998 and the file of Mr. Raju Manwani was with the accused. The handwritten notes, typed notes and the assessment order are exhibited through this witness, which shall also be referred by me at the relevant point of time when the case of the prosecution against the accused, as regards the notings being kept in abeyance shall be discussed.

33. The prosecution also examined a peon working in the Income Tax office, Piramal Chambers Mr. Prakash Joshi (PW5), who deposed that cabin number of Mr. Rajeev Kumar was 320 and staff used to have the keys of the cabin but he was not in possession of the keys of the cupboard. He had no information as to which clerk in the office was possessing key of which almirah and he state that there were seven almirahs in the cabin occupied by Mr. Rajeev Kumar, who was holding the charge of another post also. On being asked whether Mr. Raju Manwani had occasion to meet the accused in his cabin prior to 25.03.1998, he is unable to recollect.

34. Mr. Sandeep Garg, Additional Commissioner of Income Tax, working as under Secretary CBDT, New Delhi, Department of Revenue, Ministry of Finance, was examined as PW6, who was authorized to sign the sanction order on behalf

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 33/101 J APEAL 1376-12.odt

of President of India under the Authentication Rules, 1958 issued by the Ministry of Home Affairs under clause (2) of Article 77 of the Constitution of India.

PW6 deposed that there is Directorate of Vigilance in CBDT, which receives report of CBI and concerned documents, which on processing entire case and on examining the documents, put up the matter for approval of sanction before the Finance Minister through Member Personnel, Chairman, CBDT, Revenue Secretary under Ministry of Finance. According to PW6, once the Minister of Finance accord approval for sanction of prosecution, the file come back to Directorate of Vigilance and is sent to Vigilance and Litigation Section of CBDT.

On being confronted with the sanction order dated 12.06.2000 (Exhibit-30), PW6 identified his signature and stamp his office.

He categorically deposed that -

"The accused in this case hails from Indian Revenue Services (Group 'A') i.e. Central Services under Union of India. The President of India is a competent authority to appoint and remove him.

Prior to grant of sanction to prosecute, the file of the concerned delinquent officer is examined by three to four senior officials."

In cross-examination, he specifically stated that in the present case, the person who applied mind for granting sanction for prosecution of accused was the then Finance Minister Shri Yashwant Sinha. As regards the prior refusal, he deposed that unless, he has seen the record, but was unable to tell whether the sanction was refused twice before or not on earlier occasion. The most relevant portion of his cross- examination reads as below:

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 34/101 J APEAL 1376-12.odt

"5.The President of India is the appointing & removing authority for accused. By delegation of powers the papers are put up before Minister of Finance, who is the authority by virtue of delegation.

My post & post of accused at the relevant time was equivalent. In the first instance the Finance Minister raised certain queries & sent back without according approval for sanction. The proposal was sent on 10.3.1999 & queries were raised on 31.3.1999. The Chairman C.B.D.T. recommended for instituting regular Departmental inquiry against accused after compliance of queries. This recommendation was approved by Secretary of Finance and Finance Minister. Because of difference of opinion between disciplinary authority i.e. Finance Minister and C. V. C. The case was referred to Department of Personnel & Training. I was not party to any of these proceedings. My office made reference to D.O.P.&T.I was not party to the recommendation to C. B. D. T. or Chairman C. B. D. T. As the Ministry of Finance approved the proposal I use the words Central Government in para Nos.7 & 8 of Sanction Order Ex.30. On first & second instance the Ministry of Finance did not approve grant of sanction for prosecution in respect of accused & asked for Departmental Inquiry. In the third instance the Finance Minister accorded approval for sanction. As D.O.P.&T. opine by note sheet entry dt.5.4.2000 they advised disciplinary authority to accord sanction for prosecution. Draft sanction was received by Directorate of Vigilance from S.P.C.B.I. The said draft sanction was part of the file before I signed sanction order in respect of sanction order. On seeing the draft sanction order I say that there are some changes. The said draft Sanction Order is marked as 30-A. The changes done are minor in nature. Para 1 is same. I have never communicated personally with Finance Minister. There was no direct communication from Finance Minister to me. The letter dt. 23.8.1999 by Addl. Secretary Revenue Dept. of Revenue addressed to Director CBI, is not in the file today produced by me. If the said letter is available it will be produced with the due process. I did not apply my mind to accord sanction for prosecution as it was done by Finance Minister."

During the cross-examination of this witness, original records of the concerned office were produced and hence the re-examination by the prosecution was deferred.

35. Recording that the witness is an official, to whom the work of signing the sanction order was assigned under Authentication Rules and since he was the person incharge of the file, at the time of the signing the sanction order and was aware of the entries in the file made by the officials concerned

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 35/101 J APEAL 1376-12.odt

in the process of grant of sanction for prosecution therefore the matter being connected with the official duties and pertaining to official transactions during the official business, he was permitted to be questioned by the Special Public Prosecutor as regards the record.

On the questions being put by the Special Public Prosecutor, the witness has categorically answered that the file was placed before the Finance Minister and when asked whether he had applied his mind to the fact of the case, he answered that he was aware of the fact but he was not supposed to apply his mind to the facts of the case.

The witness was once again permitted to be cross- examined on behalf of the accused, when has deposed as under:

"10. ....... I did not put any paper before Minister of Finance personally. I have no power to go beyond the recommendations of Finance Minister. I was not party in replying queries by the Finance Minister. I do not know personally which CBI papers were put up before Finance Minister. The witness volunteers that he can make out from the file as to which papers were put up before the Finance Minister. I can not tell whether these are only two files put up before the Finance Minister.The reference to D. O. P. & T. could be found in these files only. There is report of Superintendent of Police, CBI and list of witnesses. The statements of witnesses and Panchnama are not contained in this file. There is mention on note sheet 21/N and 22/N that CCTT has expressed the view that there is no sufficient material to accord sanction for prosecution therefore sanction needs to be declined."

36. The sanction order is exhibited through him as Exhibit- 30 is signed by the under Secretary to the Government of India, though the order issued in the name of the President of India.

At this juncture, I deem it appropriate to reproduce the sanction order, as much arguments are advanced by Mr. Rajeev Kumar upon the validity of the sanction order.

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 36/101 J APEAL 1376-12.odt

"F.No.C-14011/7/98-V&L Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes

New Delhi, the 12th June, 2000

SANCTION ORDER

Whereas Shri Rajeev Kumar while function as Assistant Commissioner of Income Tax, Investigation Circle-27(1) in the Office of Commissioner of Income Tax, Mumbai City-IX, Piramal Chambers, Parel, Lalbagh, Mumbai, abused his official position in as such as he in March, 1988, demanded and accepted illegal gratification from Shri Raju Manwani, a Real Estate Businessman to the tune of Rs.25,000/- for showing favour to him in his income-tax assessment and,

2. Whereas Shri Raju Manwani, a private businessman operating from 3, Empire Building, Lokhandwala Complex, Andheri(W), Mumbai, had filed his Income Tax return for the assessment year 1995-96 and had shown many inland and foreign loans from friends and relatives, and

3. Whereas Shri Rajeev Kumar, the then ACIT (now redesignated as DCIT), was assessing the income of the Shri Raju Manwani for the assessment year 1995-96 and in order to show favour to Shri Raju Manwani in assessment of loans, he initially demanded Rs.1 lakh as bribe from Shri Raju Manwani and,

4. Whereas after payment of Rs.75,000/- by Shri Raju Manwani, Shri Rajeev Kumar in the first week of March, 1988, further demanded balance amount of Rs.25,000/- and in pursuance of his demand accepted the same on 25.3.98 and,

5. Whereas Shri Rajeev Kuamr was caught red handed while demanding and accepting bribe of Rs.25,000/- from Shri Raju Manwani an assessee on 25.3.98. The trap money was recovered from the cupboard of Shri Rajeev Kumar, where he had kept the same after accepting.

6. Whereas the above acts on the part of Shri Rajeev Kuamr, the then Asstt. Commissioner of Income Tax (now redesignated as DCIT) constitute offences punishable u/s. 7 and 13(2) r/w 13(1)(d) of P.C. Act, 1988.

7. AND Whereas Central Government after fully and carefully examining the statements and material placed before them with regard to the said allegations and circumstances of the case, consider that the said Shri Rajeev Kumar, committed the offence and should be prosecuted in the Court of Law for the said offences in the Competent Court.

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 37/101 J APEAL 1376-12.odt

8. Now, therefore the Central Government doth hereby accord sanction under Section 19(1)(a) of the Prevention of Corruption Act, 1988 for the prosecution of said Shri Rajeev Kumar, for the said offences and any other offence punishable under the provisions of law in respect of the acts aforesaid and for taking cognizance of the said offences by a court of competent jurisdiction.

By order and in the name of President of India.

(Sandip Garg) Under Secretary to the Govt. of India

Dy. Inspector General of Police, Central Bureau of Investigation, Anti Corruption Branch, Mumbai.

Copy to :

1.CCIT, Mumbai.

2.Director of Income Tax (Vigilance)

3.Copy to Estt. D Section, DOP&T wtt their decision dated 5.4.2000.

(Sandip Garg) Under Secretary to the Govt. of India"

37. A draft sanction order being marked as Exhibit-30A is forwarded by the SP, CBI and he admit that the changes done in the final order are minor in nature.

I shall deal with the arguments relating to the validity of the sanction order advanced by accused and would refer to the aforesaid documents in detailed.

Alongwith a pursis the prosecution on 12.01.2009 placed the relevant file relating to grant of sanction to prosecute the accused before the Court through Mr. Jitmal, under Secretary to Government of India, Ministry of Finance, which was contained in two volumes including the notes.

By order dated 12.01.2009, the Special Judge allowed the production and permitted the prosecution to supply the

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 38/101 J APEAL 1376-12.odt

xerox copies of the two files produced and the Advocate for the accused was permitted to offer comment upon the same. At a subsequent point of time by treating the relevant pages 17 to 52 on record as they were only the relevant documents as per the prosecution the original file was allowed to be returned.

With the able assistance of Ms Ameeta Kuttikrishnan and Mr. Rajeev Kumar, I have perused the relevant documents, which were relied by the prosecution and by Mr. Rajeev Kumar to establish non-application of mind and to prove his point that sanction was refused on earlier two occasions and without change in any circumstances, the sanction was granted on third occasion.

38. Mr. Dhirendra Shankar Shukla, Deputy Superintendent of Police, CBI (ACB), Mumbai, the Investigating Officer, was examined as PW7 and he categorically informed the Court that FIR was not filed by him but it was filed by Mr. N. Sarwade, Superintendent of Police, CBI (ACB), Mumbai.

The FIR was permitted to be taken on record on the permission being sought by the Special Public Prosecutor and it was marked at Exhibit-38.

39. PW7 depose that on receipt of the complaint by Mr. Raju Manwani (Exh.13), it was decided to lay a trap and he deposed about the necessary procedure that was followed. In his examination-in-chief, he categorically stated as below:

"Before handing over trap money to the complainant his personal search was taken in presence of panch witnesses. Whatever found in the possession of complainant was noted in panchnama. The envelope containing trap money was handed over to the complainant in a polythene bag. The complainant was instructed to wipe his face with handkerchief if accused accept money and give

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 39/101 J APEAL 1376-12.odt

us a signal accordingly. The complainant was asked to go to the office of accused. The complainant was asked to take one of the panch witness with him and introduced him to accused as his relative i.e. Jijaji, when he meets the accused person. He was instructed to keep trap money in his car and then go to meet the accused person and talk to him about his assessment file."

Through PW7 the panchnama (Exhibit-16) bearing his signature along with the signature of panch witness came to be exhibited.

PW7 also deposed about the movement of the trap party, as he was a part of the entire process, and was awaiting on the spot, with the other trap party members, after accused came out and the Panch No.1 and complainant pointed out towards him suggesting that he is the person who has taken the money.

The accused is identified by PW7 and he deposed that the accused started pushing over the Inspector and started attacking him by his legs but was controlled with great difficulty and taken to the room, where he had accepted the bribe amount. Once again he turned violent and was controlled and his hands were washed in fresh lime solution, which turned pink.

PW7 categorically state that personal search of the accused was taken which resulted into discovery of keys, with which the cupboard was opened and the trap money was recovered by the panch witnesses. According to him, the trap money was found in the polythene bag which was handed over to the complainant during pre-trap proceedings and from the polythene bag taken out, the envelope was pulled out, which contained the currency notes, which were tallied with the currency notes mentioned in the pre-trap panchnama (Exh.16).

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 40/101 J APEAL 1376-12.odt

PW7 further deposed that he had recorded the statement of panch no.1 - Mr. Tangsali as well as panch no.2 - Mr. S.L.Dani. On 27.03.1998, he had recorded statement of complainant Mr. Raju Manwani as per his say and he also recorded statement of Mr. Dinesh Singh, Assistant Commissioner of Income Tax. On 01.07.1998, the assessment file of complainant Mr. Raju Manwani was handed over by Income Tax Department for investigation and the statement of other witnesses Mr. Prakash Joshi, Mr. Vivek Kandiwalikar was recorded by him in the month of September, 1998.

On being subjected to regressive cross-examination, certain significant aspects surfaced on record and it is necessary to reproduce the same, which read as under:

"7. There is no date of first meeting of accused with mentioned in Ex.13 but it is mentioned that he met accused one month prior to filing of the complaint. On the second occasion complainant meet accused twenty days prior to lodging of the complaint and no specific date is mentioned in Ex.13. On the third occasion the complainant meet accused prior to four to five days before lodging complaint and no specific date is mentioned in Ex.13. The complainant alleged that the demand of illegal gratification is made one month prior to lodging of complaint. I have not investigated about delay of one month in lodging complaint by complainant. The FIR was send to me immediately after registering it but I do not remember the precise time. I have not made any endorsemenet on FIR as when it was received by me. However I have mentioned it in my case diary. According to my case diary the FIR was sent to me at about 13.45 hrs. on 25.3.1998 Ex.38 is based on Ex.13."

40. This witness is cross-examined at length about the designation of Mr. Rajeev Kumar and he has deposed as below:

"8. The place of panchnama as per Ex.17 is office of Assistant Commissioner Income Tax, ward 27(1), 3 rd floor, Piramal Chambers, Lalbaug, Mumbai. I do not know exact how many officers, of Income Tax officers are housed on the third floor of Priramal Chambers. I also do not know whether specific room numbers were allocated to each of the specific officers of Income Tax or not. The room number is not mentioned in the first page of

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 41/101 J APEAL 1376-12.odt

Ex.17 at the place of Panchnama. But it is mentioned on page no. 2. In Ex.16 the name, designation of the officer and his charge is mentioned as "Rajeev Kumar Assistant Commissioner of Income Tax Investigation Circle, 27(1)." The place of Panchnama Ex.16 & 17 is not the same. I cannot tell the correct designation of the accused Officer referring Ex. 16 & Ex. 11. I have not investigated regarding the correct designation of accused officer. The designation of the officer, Officer's name plate hanging at the door of the chamber is mentioned in the post trap panchanama. In FIR Ex.38 the designation of the officer is shown as Assistant Commissioner of Income Tax, Investigation Circle 27(1), Piramal Chambers, Lalbaug. I cannot explained the discrepancy in Ex.13 & Ex.38, as Ex.38 was recorded by Superintendent of Police CBI (ACB), Mumbai. In Ex.16 it is Assistant Commissioner of Income Tax, Investigation Circle 27(1) and the Ex.17 it is Assistant Commissioner of Income Tax, Ward 27(1). This discrepancy would have arisen because of knowledge of internal sections of Income Tax Department. It is not true to say that place and designation mentioned on page one of Ex.17 is wrong and non existent. I do not know whether Income Tax Officers are In-charge of wards in the Income Tax Department or not. I do not know whether Circles are headed by Assistant Commissioner in Income Tax Department or not. It is incorrect to say that I have not done panchnama in the office of Assistant Commissioner of Income Tax, Investigation Circle 27(1), Piramal Chambers, Lalbaug and therefore I have not mentioned correct designation. It is incorrect to say the a Room No.320 ought to have been mentioned as a place of panchnama and as the panchanama is not made there it is not mentioned. It is not true to say that I prepared false panchnama Ex.17 in my office at Tanna House, Colaba, Mumbai and obtained signatures of panch witnesses under pressure at my office. It is not true to say that pretrap panchnama Ex.16 is actually post post trap panchnama. It is incorrect to say that Ex.38 is a post investigation document. I am not aware copy of FIR was forwarded to the concerned Court. It is not true to say that complaint Ex.13 was obtained subsequently and therefore the FIR was not forwarded to the Court in time as per the law."

Further, PW7 admit that he was a trap laying officer but he cannot tell as to whether the trap laying officer is prohibited from carrying out further investigation or not. He also admit that he is not aware of the report of the Superintendent of Police, which mentions Mr. V.N. Shingnapurkar as trap laying Officer. He further admit that he did not investigate whether complainant was running chit- fund business or not nor did he investigate whether

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 42/101 J APEAL 1376-12.odt

complainant was a FERA violator. He deny the suggestion that he deliberately avoided to investigate FERA violation by the complainant and he did not remember whether the complainant was in arrears of the income tax even prior to assessment year 1995-96 and he did not recollect whether a raid was conducted on a complainant by the Income Tax Department. He further refused to comment upon the income tax related issues of the assessment file and informed the Court that the witnesses from the department can depose about it.

41. PW7 was also confronted with the order sheet of the proceedings against Mr. Manwani and on being confronted with the notings dated 21.01.1998, he admit that he had not carried out any investigation pertaining to this notings about loan transactions and he did not investigate about recovery proceedings against the complainant by the Income Tax Department. He specifically deposed as under:

"10. ......... I did not investigate as to whether all bank accounts of complainant were attached by the accused officer for recovery of arrears of taxes or not. I do not remember whether I called for the folder mentioned for recovery of arrears of taxes against complainant in Income Tax department or not. According to me pending recovery proceedings against complainant is not material fact in this case. I did not investigate as to why complainant was not able to give exact date and time of meeting with the accused on any of the occasions mentioned in Ex.13. On going through Ex.21 I say that complainant Raju Manwani has not attended any date in Income Tax Department before accused or any other officer presiding at the relevant time. I have not examined Mr. Bharat Dudhani Chartered Accountant (Authorised representative of complainant in the proceedings before the Income Tax authorities). I cannot assign any reason as to why I did not examined Mr. Dudhani.

11. During the search office of accused on 25.3.1998 I could not get assessment file of complainant in the office for the assessment year 1995-96. I saw the assessment file of complainant for year 1995-96

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 43/101 J APEAL 1376-12.odt

for the first time on 1.6.1998. I could not tell where the said file was placed on 25.3.1998 or with whom it was. It was my duty to search for the file and I searched it but could not get it on 25.3.1998. I inquired with Income Tax Authorities as to where the file was but I was not disclosed about it. I inquired with Mr. Manne, Deputy Commissioner Income Tax. But he could not locate the file or gave information about it."

42. Further deposition of PW7 is relied upon by the accused to bring about the contradictions in his examination-in-chief and the inconsistencies in the version of the prosecution case and I shall be referring to the same when I deal with the argument of Mr. Rajeev Kumar.

Another Investigating Officer Mr. Navin Goil, who was posted as DySP, CBI (ACB) is also examined as PW8 for a limited purpose as he recorded the statement of PW3 and PW4 and on receiving sanction he filed the charge-sheet against the accused. In cross-examination, he admit that Mr. Shukla was trap laying officer and he has deposed that he did not enter into any correspondence with the sanctioning authority prior to getting the sanction but he was not aware whether there were any queries raised when the sanction was pending and on being confronted with the relevant pages of the note-sheet (Exh.34), he admit that he had never came across these documents nor he was aware that the Finance Minster of Union of India was the sanctioning authority, but according to him, Government of India was the sanctioning authority. He admit that he did not put anything before the Court as to how many seals were put on the articles and where they were fixed, when he filed the charge- sheet. He also admit that he had not moved any application before the Court for unsealing or sealing bribe money and was not aware that Article number Exhibit-D is received in torn condition and who had put the signature.

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 44/101 J APEAL 1376-12.odt

43. The statement of the accused Mr. Rajeev Kumar was recorded under Section 313 of the Code of Criminal Procedure (for short, "CrPC") and he denied the case of the prosecution in its entirety but chose to file additional written statement under Section 313 of the CrPC on 26.03.2009. The detailed written statement as broadly categorized his defence under the following heads :

(i) Case based upon an absolutely false case of demand of bribe and imaginary complaint.

(ii) Fabrication of evidence by ante dating and ante timing of documents particularly Exhibit-38 i.e. FIR, which is submitted to the Court after 11 long years. Similarly, he also referred to the discrepancies in his designation as according to written statement the correct designation and address of the accused officer was only a post investigation fact, as same was not even known to the complainant though he claimed that he went to meet the officer three time earlier before filing the complaint. However, even correct designation was not known to the investigating officer and this is admitted by PW7.

(iii) Making of false panchanam Exhibit-17 and dishonest and bogus investigation by CBI official.

(iv) Lacunae and invalidity of sanction of prosecution under Section 19 of the PC Act.

44. The accused Rajiv Kumar had filed an application under Section 294 of CrPC, wherein he sought production of the judgment dated 30.10.2004 delivered by the 29 th Court of

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 45/101 J APEAL 1376-12.odt

Metropolitan Magistrate, Dadar, Mumbai in C.C. No.65/P/98 and notes of the evidence of the investigating officer as well as the witnesses examined. He also sought production of documents received under Right to Information Act from the office of Central Public Information Officer, Aayaakar Bhawan, Mumbai on 23.01.2006 concerning the subject matter of the case, which included -

(1) Report dated 02.04.1998 written by DCIT, Range 27, Mumbai CIT, M.C.IX, Mumbai.

(2) Another report dated 02.04.1998 written by DCIT, Range 27, Mumbai CIT, M.C.IX, Mumbai with subject verification by CBI officers in connection with Raju Manwani's case.

(3) Forwarding letter dated 27.03.1998 of SP, CBI ACB, Mumbai.

(4) Pages of Arrears Demand & Collection Register Vol.II of AC. INV. Circle 27(1) page Nos.33, 32, 53, 77, 85, 101, and 114 related to arrears against complainant Mr. R Manwani.

(5) Report dated 03.06.1998 F .no. Misc(Vig)/6/98.

In the same application, the accused sought production of documents before Court by Mr. Sandeep Garg under Secretary (V&L), CBDT, Department of Revenue, New Delhi, which included

(i) Note sheet pages from sanction for prosecution folder.

(ii) Certified copy of documents from correspondence folder.

The accused also demanded copy of the letter dated 23.08.1999 from the Additional Secretary Revenue addressed to Director, CBI referred in evidence of PW6 and connected letter of Director, CBI dated 19.05.1999.

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 46/101 J APEAL 1376-12.odt

45. On the above evidence being placed before the learned Special Judge for CBI, by the prosecution and Shri Rajiv Kumar, by judgment dated 20.12.2012, the following points were set out for consideration, for appreciating the evidence placed by the prosecution and stand of denial and false implication adopted by the accused :

(1) Does the prosecution prove that a valid sanction for prosecution was accorded.

(2) Does the prosecution prove that the accused, while acting as a public servant and assessing income of Mr. Raju Manwani demanded and accepted illegal gratification from him.

46. On appreciating evidence placed and on assessing its evidentiary value, the learned trial Judge on the first point by making reference to the notings placed before him, concluded as below :

"26. After due consideration of the evidence I am unable to accept the above argument of the learned defence counsel. From the papers at Ex.34, it becomes clear that there is a single file system in the concerned department of finance ministry. It was routed through officers and each of them made endorsement and the file is pushed ahead. Secondly, it becomes clear that final decision is taken after deliberations, discussions and after each of the officer has put his view of the matter. It is not that the Finance Minister would take his unilateral decision and convey it. Ex.34 therefore shows transparency in the matter and further that the matter is considered from various angles before a decision is taken.

27. In the noting dated 31.3.1999, the finance minister did raise certain queries about the papers submitted before him. They were whether the panch witnesses were reliable and secondly whether there was no on there staff member present in the Income Tax Office when the accused was arrested. By no stretch of imagination, these observations of the minister can be called as a decision. He did not either grant or refuse or refuse to grant sanction. All he did was to express certain doubts. It only meant that he wanted to satisfy himself on two aspect of the case. That only showed that he had gone through the papers and had applied

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 47/101 J APEAL 1376-12.odt

his mind. But the above noting does not mean that he had taken any decision. The first-part-of the defence argument is therefore devoid of merit and is rejected."

47. The trial Judge inferred that Exhibit-34 collectively revealed that the matter was scrutinized in depth by all concerned and finally the matter was forwarded to the CVC and the commission opined in favour of prosecution and the papers were forwarded with notings on 14.10.1999, which were signed by one Mr. Singh and the matter was again considered from another angle and finally the sanction was accorded. Reliance is placed upon Exhibit-34 to reveal that there was total application of mind before sanction was granted as doubts were raised, queries made, information sought and the concerned officer had deliberated on their respective points of view and thereafter sanction was accorded and, hence, there can be no better evidence of application of mind.

Dealing with the arguments that the sanction order is nothing but a copy of draft order, the learned Judge rejected the same by holding that it is not the form but the substance, which must prevail, as every sanctioning authority seem to follow the same pattern as it ensures uniformity.

What is important is to note that the process of application of mind is a step before passing the order and the order which comes next, is the justification offered by the learned Judge, when he observed to the following effect.

"34. ...... What is important to note that the process of application of mind is a step before writing the order. The order comes next. Before that only the sanctioning authority should be found to have applied his mind to the facts and circumstances of the case. Typing

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 48/101 J APEAL 1376-12.odt

out the order is a clerical task and we can not expect that the sanctioning authority should either dictate the wordings or typewrite personally.

35. As a whole therefore, I am unable to endorse any of the points advanced in the defence argument. The sanction is duly accorded. There is no infirmity in it. In view of the above, part of the defence argument that the authority could not review its own order and so on does not survive."

48. Dealing with the second point for determination, the trial Judge admit that the evidence of Mr. Manwani is indicative, that he had concealed his income from the Income Tax Department and he was prosecuted for FERA violation and the tax amount of Rs.8.1 lakh was outstanding against him and when he joined the voluntary disclosure income scheme, his assessment for the year 1995-96 was found by the accused to be 1/5th of his taxable income and he was also running a chit- fund business.

The learned Judge has taken note, that the defence has brought on record, that the bank accounts of the complainant were frozen and he had asked for compounding of the offence against him and all these factors appear to be incriminating against the complainant. However, he posed a question, whether the factor that he was a tax evader and his financial dealings were not clean and he had concealed his taxable income, would make the complainant unworthy of credit.

Adopting a reason that taxpayers have tendency to save tax by undervaluing their assets, which may have an element of illegality, but only because of that it would be wrong to brand them as unworthy of credit and applying the same standard one cannot say that Mr. Manwani was dishonest and

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 49/101 J APEAL 1376-12.odt

had no credit only because of the lapses on his part, in hiding real income from the income tax authorities.

Appreciating the evidence of PW2- Mr Tangsali, and on being confronted with the contradiction, what is inferred by him is, the prosecution case is about payment of bribe and he recorded his finding as below:

"47. In the above exercise, however, one thing can not be forgotten. The Prosecution case is very much about payment of bribe to the accused almost at the end of the office hours. The party had left for the office of the accused at about 4.15 pm. They could have reached by say 5 pm. It was only thereafter that Manwani and Tangsale had gone to the cabin of the accused. Therefore, not all these contradictions but the one where the hour of visit was stated to be 2.30 pm and another where Tangsali stated that they had spent time on the ground floor only appear to be material. The another contradiction marked 'H' is certainly material and its impact shall be considered while dealing with the post-trap evidence. But for that the other contradictions do not appear to be important and material. Here again, it would be said that the evidence of PW2 Tangsali shall be approached carefully."

49. For the learned Special Judge pivotal point for the case was, as he suggested in paras 53 and 54 of the judgment;

"53. But that is not such a pivotal point for the present case. The question would still be about impact of the above facts on the present case. We can presume on that basis that Mr. Manwani had grievances against the Income Tax department and also against the accused. The question is whether these grounds would motivate Mr. Manwani to implicate the accused ? Would it be such a life threatening desperate situation for him that he would without knowledge of anyone plant money on a brad day light in the cupboard of the accused ? No doubt, these possibilities would be verified later on but at this stage it can be said that they appear unconscionable.

54. On the other hand, the above factors also indicate that position of Mr. Manwani could be viewed as vulnerable. They show that Mr. Manwani definitely knew as to what action, Income Tax Department could take against him. These possible actions could add to anyone's apprehensions. He could very much sense that he could be made to pay heavy amount of income tax for the amount shown in the income tax returns as loan from foreign sources. His

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 50/101 J APEAL 1376-12.odt

bank accounts were also frozen and he could not operate them. He must be knowing that a search of premises by income tax authorities would be a stigma."

50. After making exhaustive reference to the notings at Exhibit-21 (Colly.) till around 21.09.1998, it is inferred by the learned Judge that something was being decided and discussed between Mr. Dudhani, the C.A. and the accused and from the Roznama dated 29.01.1998, it is seen that the accused appears to have taken certain decision and that Mr. Dudhani, the C.A. for the complainant had failed to furnish loan confirmation and he ordered that the assessee should provide all the details by 18.02.1998. The matter was adjourned to 13.02.1998 and thereafter to 27.02.1998 and then to 17.03.1998 but the accused did not pass any order. Therefore, it is inferred that the accused had not arrived at some conclusion in the matter because of failure of the complainant to provide proof of regularization of loan and on the contrary, he had already prepared a draft order and even got it typed. The successor of the accused had stated in the Roznama dated 27.03.1998 that the case file consisting of 308 number of papers also contained a rough draft order prepared by the accused in his handwriting and a computer print out of assessment order and this was proved by PW4.

The impugned judgment further record that in the order Exhibit-24, the accused has indeed arrived at a conclusion that the complainant Mr. Manwani had failed to produce proof for regularization of loan and he has detailed how the loan amount of Rs.15,73,200/- projected as loan, by Mr. Manwani would be subject to tax on account of his failure to produce the necessary evidence and in the same order the total income of

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 51/101 J APEAL 1376-12.odt

Mr. Manwani was assessed at Rs.25,53,080/-, which was liable for payment of income tax.

Conclusively, it is therefore observed, that the accused had his mindset for passing order and assessing the income of the complainant for tax purpose and before he was trapped, he had the order in his file but he was obviously waiting for certain things, which were outside the enquiries he was conducting and this is indicative of his culpability, What is held to support this inference is following observations;

"62. The cross-examination of Mr. Manwani shows that he was trying to persuade the accused as income tax authority to regularize the loans shown in his annual returns as being received from foreign sources. If they were regularized he was bound to save a big amount of income tax. But if they were not regularized and shown as income he was liable for payment of heavy income tax.

63. All these factors clearly mean that though the order was also ready with the accused and though the matter was posted only for passing the order, the accused did not pronounce it before he was arrested. What is most important to note in the draft typed order Ex. 24 is that even date of the order is given as 20th March 1998 in column no.12. The accused was arrested five days thereafter. There could be no logical reason why the accused did not pronounce the order on 20/03/1998 as stated though it was ready with him in the file. All he had to do was only to put his signature thereon. But he did not do that. This is another very strong circumstance which lends support to a probability that there was talk of gratification being paid to the accused and therefore he was delaying the matter."

51. The argument advanced on behalf the accuse that the complainant did not approach the Anti Corruption Authority immediately also found an answer by the learned Judge since in cross-examination Mr. Manwani had stated that he did not file the complaint immediately, as he was concerned about the effect that would follow and Mr. Manwani had several times faced income tax inquiries and therefore it was most probable for him

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 52/101 J APEAL 1376-12.odt

to consider the consequences of approaching the authority against the bribe demand by the accused.

The learned Judge also derived a timeline, though the complainant never gave the exact date in the complaint and an attempt was made to fit it into the proceedings, which were going before the accused as an Income Tax Officer who was assessing Mr. Manwani's income and the evidence brought on record by the prosecution was therefore found to be sufficient enough to establish its case of the bribe amount being demanded and it being accepted by the accused.

Variance in the evidence of Mr. Manwani (PW1) and Mr. Tangsali (PW2) is also brushed aside in paragraphs 87 to 90 of the impugned judgment, by observing that what was most relevant is recovery of the tainted money and conduct on the part of the accused. The circumstance indicating that the Mr. Manwani had planted the money in cupboard of the accused taking advantage of his temporary absence from the cabin and probability of this being done is also dealt with and did not receive approval from the learned Judge by concluding that the evidence is so convincing that no contrary argument of planting money can be considered probable and the rejection of the argument specifically recorded in paras 96 and 97, which is reproduced below:

"96. The arguments on the second point are also devoid of merit. The evidence has to be read as a whole. Even if the accused had admitted or pointed to the place where he had kept money, that would be hit by section 25 of Evidence Act. Moreover, in view of the contradiction 'H' in Ex.98, I am excluding evidence of Mr. Tangsali as to developments after the phenolphthalein test of the accused. Mr. Manwani was not far away. The cabin was not a very large one. Mr. Manwani was bound to be nearby. The IO could ask him about the place where the accused had kept money and that could be indicated by him. Therefore, the argument can not be accepted.

97. It is true that the IO did not seize the keys. It is also true that on

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 53/101 J APEAL 1376-12.odt

some more front, the investigation is not satisfactory. That is discussed subsequently. Even then, such omissions of the IO can not be a bonus point to the accused if the trap, recovery of money is otherwise established. At this stage, it would be sufficient to state that non seizure of the keys of the cupboard does not render the story infirm in any manner. The evidence clearly points that a bunch of keys was found from possession of the accused and one of the keys in the bunch was used for opening the cupboard. That is sufficient. On that basis, I reject the so called third circumstance as indicating anything like planting of money."

52. The aspect of Mr. Sarwade being trap laying officer whereas, as per the report of SP, it was Mr. Shinganapurkar whereas the evidence laid is it was Mr. Shukla (PW7), it is observed that the post-trap panchanama attested by DySP Mr. Singanapurkar besides Mr. Shukla as well as panch and on the basis of oral evidence as well as on the documents being exhibited, it leads to a conclusion that though the complainant had met Mr. Sarwade and he had taken initial steps, Mr. Shukla's evidence shows that he was entrusted the papers after the FIR(Exh.38) was registered and Mr. Shukla was all the while present when the actual trap was laid. The post-trap panchanama, according to the learned Judge, at the end bear the signature of Mr. Shinganapurkar and therefore Mr. Sarwarde may have mentioned his name in the SP's report, as the trap laying officer and this possibility could not be ruled out is what has been held in the impugned judgment. As regards violation of CBI Manual, the learned Judge record that if the act on the part of Mr.Shukla invited a disciplinary action, the department is free to decide the same but there is no irregularity affecting the merits of the case.

53. The conclusion reached is contained in para 114, is recorded in the following words:

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 54/101 J APEAL 1376-12.odt

"114. Considering all the facts, the circumstances, the proof offered and the law cited, I am of the firm view that the accused had initially demanded Rs.1,00,000/- from Mr. Manwani. He received Rs.75,000/- then and there but did not regularise the loan as shown in Mr. Manwani's returns. It is also proved that when Mr Manwani went to see the accused, he told him that the work involved was much more and for that he will have to pay him Rs.4,00,000/- more.

It is also proved beyond doubt that the accused misused his official position and tried to and squeeze exploit Mr. Manwani and as a part of that only caused freezing of his bank accounts when the recovery proceeding was altogether different. The timing chosen to issue the notice was nothing but to coerce Mr. Manwani to meet his demands. It was a part of that, that the accused accepted Rs.25,000/- being the balance of the earlier graft amount. Therefore, this is the most appropriate case where the statutory presumption must be drawn against the accused. The offences charged are therefore duly established against him. The points under consideration are therefore answered against him."

54. It is this judgment which is assailed in the present appeal and Mr. Rajeev Kumar, the appellant in person, has invited my attention to two previous orders passed on 15.09.2015 and 23.09.2015, while hearing the application for suspension of sentence, this Court took into account an important aspect of the matter being presence of the micro cassette and he would submit that while hearing the appeal, sufficient opportunity was accorded for the prosecution to come clean, as it had intentionally concealed a very important aspect of the micro cassette recorded conversation dated 25.03.1998 from the Sessions Court and the same was attempted to be done before this Court but the prosecution stood exposed when the Court specifically asked the CBI to throw light on the said aspect.

In this background, Mr. Rajeev Kumar therefore insisted upon the CBI to adopt a clear stand. But, according to him, even when the matter is listed before this Court and an opportunity was afforded, Ms Kuttikrishnan, who had instructions to argue the finally, with the admitted fact of the micro cassette recorded conversation being made available.

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 55/101 J APEAL 1376-12.odt

He would stressfully submit that the prosecution had failed to avail this golden opportunity which they ought to have accepted, and hence gross failure of justice has occasioned by concealing this material evidence and he had suffered for 26 long years because of wrongful prosecution and his whole career suffered on account of fraudulent criminal prosecution, as if he would have continued in service, he would have reached to the highest position in the Income Tax Department.

Mr. Rajeev Kumar, therefore, by relying upon the decision of the Supreme Court would request to pass an appropriate direction for payment of compensation for unjust prosecution against him, as appreciating the evidence on record, according to him, the impugned judgment in no way can be sustained.

55. Mr. Rajeev Kumar has emphasized on the various points, while he has taken me through the evidence lead by the prosecution and this according to him rendered the case of the prosecution most unreliable and the finding rendered in the impugned judgment factually and legally unsustainable; a. Trap-laying Officer Mr. Shinganapurkar has not been examined and even SP, CBI, Mr. N.S.Sarwade, who registered the FIR has also not examined.

b. FIR(Exh.13) empty time and empty dated and the FIR is produced by PW7, who is not author of the document and who has admitted so during the cross-examination therefore he was unable to explain the discrepancy in the same.

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 56/101 J APEAL 1376-12.odt

c. PW7 Mr.D.S. Shukla has deposed that he is the trap- laying Officer in contradiction to SP, CBI's report, which has categorically declared Mr. Shinganapurkar as the trap-laying officer and therefore either this document contain false document or PW7's statement is incorrect. d. The inconsistency in the version of PW1 and PW2 has made the prosecution case fall to its ground as proof of demand and acceptance of illegal gratification by public servant as fact in issue by prosecution is a sine qua non in order to establish the guilt of the accused public servant under Sections 7 and 13(1)(d) (i) and (ii) of the PC Act.

e. The sanction order (Exhibit-30) falls short of the requirement of Section 19 of the PC Act as it is based on suppression of material evidence in form of the micro cassette recorder conversation dated 25.03.1998 as well as ante time and ante dated FIR (Exhibit-38) hence the sanction is vitiated.

f. The sanction order is illegal and void ab initio as the most relevant material i.e. taped conversation is not placed before the Finance Minister therefore he had no opportunity to apply his mind to the entire material placed before him.

g. The sanction being refused on earlier two occasions cannot be reviewed without any new material fact coming out on record and reliance is placed upon the decision of the Apex Court in the case of State of Himachal Pradesh Vs. Nishant Sarin1. It is also vitiated on the ground of the authority acting under the dictat as the draft sanction 1 2010(13) Scale 245

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 57/101 J APEAL 1376-12.odt

order is converted into final order as it is without reflection of application of mind by the sanctioning authority. Reliance is also placed on the decision in case of Purtabpore Company Ltd. Vs. Cane Commissioner of Bihar2 and also on the decision in the case of Mansukhlal Vithaldas Chauhan vs State Of Gujarat3.

h. Serious inconsistencies in the case of prosecution amount to deliberate manipulation of evidence through dust in the eyes of the trial Judge and this amounts to perpetrating serious fraud by the prosecution officials involved in the matter for the reasons best known to them and judgment of the Court, no order of the Minister can be allowed to stand, if it has been obtained by fraud unravels everything.

i. Concealment of separate proceedings under Chapter- XVII and correction and recovery against the complainant under section 226 and 226(3) of the IT Act.

It is on this broad grounds Mr. Rajeev Kumar has assailed the impugned judgment.

56. Ms Ameeta Kuttikrishnan representing the CBI would however support the impugned judgment, though she concede to the fact that the sanction order do not make any reference to tape recorded conversation. She would also concede to the position that PW2 Mr.Tangsali was examined in the assault case, did not refer to the demand of four lakhs afresh. But she would submit that he is the panch witness who is independent and there is no reason to doubt his credibility, particularly

2 AIR 1970 SC 1896 3 AIR 1997 SC 3400

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 58/101 J APEAL 1376-12.odt

when the bribe amount is seized from the cupboard of the accused, with keys in his pocket. She would make an attempt to justify that though the tape recorder was fixed as has been mentioned by PW1, it was not in working condition.

As regards the sanction is concerned, she would submit that there was no refusal to grant sanction on the earlier two occasions but since there was difference of opinion whether conduct of the disciplinary proceedings against a young officer would suffice, the matter was referred to DOPT, but ultimately the decision was taken to prosecute Mr. Rajeev Kumar for the alleged serious act of demanding bribe in discharge of his official duties.

According to Ms. Kuttikrishnan, the evidence on record is sufficient enough to sustain the finding of conviction and imposition of sentence upon Mr. Rajeev Kumar and the impugned judgment do not warrant any interference.

57. The appellant - Mr. Rajeev Kumar faced the charge under Section 7 of the PC Act as he was charged of abusing his official position as a public servant while functioning as Assistant Commissioner as Income Tax, and as he agreed to do an illegal demand of Rs.1,00,000/- and obtained Rs.75,000/- in the first week of March, 1998 to show favour in income tax assessment of PW1, Mr. Raju Manwani.

He faced the accusation of demanding the balance and acceptance of illegal gratification other than legal remuneration of Rs.25,000/- on 25.03.1998 to show favour to him in his tax assessment for year 1995-96.

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 59/101 J APEAL 1376-12.odt

In addition, he faced a charge for obtaining illegal gratification of Rs.25,000/- on 25.03.1998 to show favour in the income tax assessment of Mr. Raju Manwani for the year 1995-96 and thus committing an offence punishable under Section 7 read with Section 13(1)(d) of the PC Act.

58. To prove this accusation, the prosecution relied upon the evidence of the complainant who had lodged the complaint to the SP, CBI ACB on 25.03.1998 (Exhibit-38) under his signature and which is also signed by PW2- Mr. Tangsali, and another Panch Mr. Dani.

On the left side of the complaint there is an endorsement, which read to the following effect :

"DySP Shukla to take action."

As per Mr. Manwani, he met Mr. Sarwade, SP CBI when he went to lodge the complaint about the bribe being demanded by the accused. He was asked to give the complaint in writing and gave it to Mr. Sarwade. According to PW1, it is Mr. Sarwade who requisitioned two panchas and two officers of CBI and the process was explained to him by Mr. Sarwade. One of the officer for CBI was introduced to PW1 as Mr. Surwe. The procedure was explained to him by Mr. Sarwade and the panch who accompanied him was also instructed by Mr. Sarwade, the SP.

Admittedly, Mr. Sarwade is not examined as a witness by the prosecution nor the FIR bears his signature.

As far as the panch Mr. Tangsali is concerned, when he attended Tanna House he met Mr. Shukha in presence of one

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 60/101 J APEAL 1376-12.odt

Mr. Dani. PW2 however do not make any reference to Mr. Sarwade as according to PW1, entire procedure of trap was explained to the complainant and the panchas by Mr. Shukla and it is he who instructed that two panchas would accompany him, while going to the office of the accused.

When asked to produce Rs.25,000/- he handed over the amount to Mr. Sarwade and the currency notes were put in an envelope on which he mentioned figure of Rs.25,000/- and the envelope containing the amount was put in a plastic bag and given to him. PW1 do not refer to Mr.Shukla giving instructions and on this aspect there is inconsistency in the version of PW1 and PW2. As far as the pre-trap panchanma (Exhibit-16) is concerned, it record that the panchas were called by Mr. D.S. Shukla, DySP, CBI ACB and it is Mr. Shukla who conducted the entire process. The pre-trap panchanama is under the signature of Mr.D.S.Shukla (PW7) without any mention of Mr. Sarwade.

59. At this stage, it is necessary to refer to the FIR (Exhibit-

38) and as Mr. Sarwade did not enter the witness box it is produced through PW7, though he has not recorded the same.

The FIR (Exhibit-38) record the name of the investigation officer as D.S. Shukla, DySP, CBI ACB but bears the signature of Mr. Sarwade, Superintendent of Police indicating that the FIR is lodged by him on the complaint received from Raju Manwani and in furtherance of which Crime No.7(A)/98-Mum is registered and date and time of the report is reflected as 25.03.1998 at 13.13 hours.

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 61/101 J APEAL 1376-12.odt

60. PW7 in cross-examination admit that the FIR was sent to him after registering it but he do not remember the precise time, as he had not made any endorsement on the FIR and according to his case diary the FIR was sent to him at about 13.45 hours on 25.03.1998.

In his examination-in-chief, PW7 has stated that on 25.03.1998 RC 7A Mumbai was entrusted to him for investigation and it bears the signatures of Mr. Sarwade, Superintendent of Police, CBI ACB, Mumbai.

Proceeding on the basis that the FIR is recorded by Mr. Sarwade and investigation of the same is entrusted to PW7, at 13.13 hours, the case of the prosecution has to be appreciated in light of these timelines.

61. Exhibit-16, the pre-trap panchanama has recorded the time commencement as 14.05 hours and concluding the same on 16.15 hours on the same day. Since the pre-trap panchanama recorded that the panchas and the complainant were directed to proceed by complainant's motor vehicle to Piramal Chambers for the purpose of the trap, the evidence of the prosecution has to be looked into.

As per Mr. Manwani, after receiving instructions from Mr. Sarwade, he proceeded to Piramal Chambers alongwith Panch no.1 i.e. Mr. Tangsali and in another car another panch and CBI officer travelled. According to him, they reached Piramal Chambers at 05.30 pm and he alongwith panch went to the cabin of accused on third floor but the accused was not there and he came after sometime. Thereafter, according to PW1,the

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 62/101 J APEAL 1376-12.odt

accused asked how much money was brought by him and he was asked to give him the amount of Rs.25,000/- immediately, when he told the accused he would go on the ground floor and bring the money. He alongwith the panch then went towards the car and informed officers of the CBI about the demand and he took the money from the car and went to the cabin of the accused alongwith panch when the panch was asked to wait outside at the door. Thereafter, he extended right hand with marked money and the accused accepted it from his right hand, opened the envelope, saw currency notes and put back the same in the envelope, which he kept by his right hand in the right side cupboard and locked the cupboard.

As per panch (PW2), Mr. Manwani handed over the bribe money to Mr. Shukla, which was applied with Phenophthalein powder and it was kept in green envelope and even powder was applied to the envelope. This envelope was thereafter kept in polythene bag.

As per PW2, after preparing pre-trap panchanama (Exhibit-16) he proceeded to Piramal Chambers in car of Mr. Raju Manwani to be followed by the trap party. On reaching the ground floor, according to PW2, there was talk between them and the trap party and he accompanied Mr.Manwani to third floor of Piramal Chambers in Room No.320.

By contradicting complainant, PW2 has stated that when they entered the cabin one person was sitting on the chair in the cabin and he was introduced by Mr. Manwani to be the accused.

The happenings in the cabin is narrated by the PW2 by giving a different version when deposed about the demand in the following words :

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 63/101 J APEAL 1376-12.odt

"It was told by accused that previously claimed amount by him from Mr. Manwani was less so he will have to pay more amount. The accused asked Mr. Manwani to pay Rs.25,000/- out of the previous deal and further asked to pay Rs.4,00,000/- afresh. Thereafter, the accused asked Mr. Raju Manwani whether he has brought the balance amount and disclose the figure and handed over the calculator when Mr. Raju Manwani written figure Rs.25,000/- and shown it to PW2 and handed over the calculator to the accused."

As per PW2, Mr. Raju Manwani explained his financial crisis and thereafter they came down to fetch the money which was kept in the car. On ground floor Mr. Dani was present and he narrated the happenings to Mr. Dani as well as trap party.

On entering the cabin, according to PW2, accused was not present so he alongwith Mr. Manwani waited outside the cabin and after five minutes the accused came and he called Mr. Raju Manwani in cabin but the panch was asked to wait outside and therefore he halted at the door. Thereafter, Raju Manwani handed the plastic bag to the accused, who kept it in the cupboard and thereafter on the instructed signal being indicated, the accused was apprehended.

The post-trap panchanama (Exhibit-17), has indicated its recording time as 06.35 pm and the concluding time as 04.30 am on 26.03.1998. The post-trap panchanama bear the signature of the two panchas, Mr. D.S. Shukla, DySP and also Mr. V.N. Shinganapurkar, DySP, CBI.

The post-trap panchanama record that the complainant alongwith panch nos.1 and 2 left for Pirmamal Chambers in the vehicle of Mr. Manwani and party consisting Mr. Shinganapurkar, DySP, Mr. Shukla, DySP, Mr. Bhimshankar Surve, DySP, Mr. Shahapurkar, PI, CBI ACB, Mumbai and Mr. Chikne and Mr. Ugale both police constable followed them in two

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 64/101 J APEAL 1376-12.odt

vehicles and they reached at Lalbaug at 05.30 pm and the complainant and panch no.1 entered in Piramal Chamber, while the trap party was waiting at convenient position. After about half an hour, complainant was seen coming with PW1 and they met the trap-party, panch no.1 was asked as to what happened and he told that the person seen sitting in chamber no.320, which had name plate "Rajeev Kumar, Bha.Ra.Se. (IRS)" and complainant discussed about his attached accounts regarding his pending case and told him that he is having liquidity crunch and, therefore, cannot keep his promise and cannot fulfill his additional demand.

The conversation recorded in the post trap panchanma, where the accused is alleged to have told Mr. Manwani that the foreign free gifts, which are included in the income tax, shall attract heavy tax and he will have to pay more tax and he shall not treat them as loans but he can help him.

It is further recorded that Mr. Rajeev Kumar told Mr. Manwani that he had gone through the file and whatever was demanded initially is less and firstly he shall pay the balance Rs.25,000/- and the remaining Rs.4,00,000/- in two installments. Thereupon, the complainant stated that he had fulfilled the promise by paying the first installment partly and rest Rs.2,00,000/- will be paid before 31st March. Thereafter, as per the panchanama, the accused alongwith pancha no.1 came down collected the money and handed over to Mr. Rajeev Kumar in the chamber.

The post-panchanama record about the opening of the cupboard with the keys fetched from the accused, which lead

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 65/101 J APEAL 1376-12.odt

to a plastic bag containing the tainted amount in the second rack of the cupboard.

62. PW7-Mr. Shukla has deposed to be the trap laying officer and according to him only panch no.1 accompanied the complainant, who was instructed to represent himself as relative of the complainant and hear the conversation that would took place and later inform the trap party.

Thereafter, he has disclosed the conversation in the cabin between the complainant and accused and on coming out out of cabin, he confirmed the demand of Rs.25,000/- and also of amount of Rs.4,00,000/- to be paid later on, showing favour to the complainant. Pursuant to this, the money was collected as per PW7 and they again went to the cabin of the accused and on receiving the signal from panch no.1, when the accused also came to the place where PW7 and other trap members had taken position, panch no.1 had indicated that he is the person, who has taken the money and who had apprehended.

PW7 corroborate the panch witness about the keys being obtained from the accused, leading to the trap money.

63. It is PW2, who has referred to the conversation, whereas complainant himself in cross-examination has deposed that when the accused talked to him about paying Rs.4,00,000/- more, it was his belief that it had reference of paying bribe to him and he admit that it was the first time that accused had

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 66/101 J APEAL 1376-12.odt

asked for more than one lakh rupees, as a bribe but this was not mentioned, while giving his statement to CBI officer between 18th or 19th March 1998 that the accused has demanded bribe as Rs.4,00,000/-.

64. In the examination-in-chief, it is the version of Mr.Manwani that since there was problem with regard to confirmation of loan shown in the income tax return, his CA had advised him to see the income tax officer and he went to Piramal Chambers and met Mr. Rajeev Kumar, who is referred to as the Income Tax Officer. There is no mention of any specific date when he visited the accused but he was told that unless and until there was confirmation of loan, it would be treated as income but he can avoid the complication by paying Rs.1,00,000/- and he sought time for submitting confirmation of loans and it is the case of the complainant that he paid Rs.75,000/- to the accused then and there.

About payment of this amount, which is also alleged to be the bribe money, there is no specific demand as what according to the complainant, the accused is alleged to have said, " you decide fast or I have to convert it as your income" and therefore he was forced to pay him Rs.75,000/- then and there. According to the complainant, he was asked to see the accused after sometime for balance of Rs.25,000/-.

Very vaguely, then case of the complainant is he contacted the accused on 18th or 19th March 1998 and what is relevant is the complainant is not certain about the date. He offered no clarity, whether it was a telephonic call or he had met the accused in-person and it is on this conversation,

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 67/101 J APEAL 1376-12.odt

demand of Rs.4,00,000/- is based and he once again requested for some more time and decided to approach the ACB.

He ultimately approached to CBI on 25.03.1998 and the explanation offered for delay, that is the adverse consequences of lodging of complaint, weighed with the learned trial Judge, who found the explanation plausible. As per the complainant, from 20th March to 25th March, 1998 he was thinking over whether to lodge complaint with CBI. In the cross-examination, he admit that in FIR he reported that he had three meetings with the accused, but he was not sure whether investigating officer had asked him any of the three dates.

In the complaint lodged with the CBI (Exh.13), the complainant had stated that he had taken loan from his friends and relatives but there was no confirmation for the same therefore he went to Mr. Rajeev Kumar, Assistant Commissioner of Income tax one month back as he was assessing his case and was told that he would be required to pay more tax. He was told by Mr. Rajeev Kumar that he will order for the assessment without waiting for the proofs and demand was raised for bribe amount of Rs.1,00,000/-, so that the loans can be regularized.

In the complaint, he stated that about 20 days back he had paid Rs.75,000/- in the cabin of the accused and there is clear inconsistency in the case of the prosecution, as PW1 complainant had deposed that on the first date when he went to see Mr. Rajeev Kumar he paid Rs.75,000/- but in the complaint he had stated that 20 days back he had paid the

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 68/101 J APEAL 1376-12.odt

amount but for the first time he saw Mr. Rajeev Kumar one month back and he is referred to as Assistant Commissioner of Income Tax. Further, in the complaint, even after paying Rs.75,000/- fortnight had passed, still his loan was not regularized, so about 4 to 5 days back he went to enquire from Mr. Rajeev Kumar, who asked him to pay balance amount of Rs.25,000/- immediately and he is further alleged to have stated, that he should pay a big amount of settle the whole matter. What is surprising is there is no mention of Rs.4,00,000/- and if this amount was also demanded as a bribe, there is no reason why the complainant should omit to mention it in its complaint. In utter contrast, in his examination-in-chief, he has categorically stated that he had agreed to pay initially Rs.2,00,000/- and Rs.2,00,000/- at a later point of time.

65. Here is a complainant whose case is, there was a demand of Rs.4,00,000/- from accused, but demand of such huge amount is conspicuously absent in his complaint to the CBI, as he has deposed that before leaving the office of the accused he told him that he would pay Rs.2,00,000/- in the month of March and Rs.2,00,000/- in the month of April and therefore he visited the CBI on 25.03.1998, and it is surprising that he carried the bribe amount of Rs.25,000/- only.

This conduct of the complainant definitely makes one feel suspicious, as he did not approach the CBI with the actual demand when his case was he was forced to pay Rs.75,000/- though there is a clear contradiction about whether the amount was paid in the first visit or on the subsequent visit.

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 69/101 J APEAL 1376-12.odt

Another important facet which has caught my attention, is if he had visited the accused on 18 th or 19th March 1998 why did he wait till 25.03.1998, to approach the CBI to lodge the complaint. Infact, he was quite aware about the income tax return being finalized before 31st March, the year ending and he should have being in a hurry, as according to him, the accused had threatened him that if the bribe amount is not paid then the income shown shall be taxable.

Further, if the balance amount of Rs.25,000/- was to be paid, the version of the complainant that the accused asked him how much money he has brought and asked him to print the amount on the calculator also do not gel well with his version, to the ACB that balance amount of Rs.25,000/- was demanded as there is no whisper about demand of Rs.4,00,000/-.

Another suspicious thing is why should he keep the money in the car, when he had clearly come-up with the case before the CBI that balance bribe amount of Rs.25,000/- was asked for by the accused and since he was not interested in paying the same he had lodged the complaint.

66. The complainant who offers a bribe is an interested person in proving the accused guilty and therefore he must come clean before the Court. Here is a complainant who has failed to offer details of the dates, when he visited the accused and he has contradicted himself on the above aspect. When specifically questioned whether in the previous 7 to 8 years prior to the assessment year 1995-96 he had shown large amount received by way of loan in his income tax return, he

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 70/101 J APEAL 1376-12.odt

had answered by saying, "maybe". He plead ignorance as to which officer from Income Tax Department dealt with his matter prior to the incident and state that he had visited the Income Tax office twice or thrice prior to the incident but do not remember which officer he had met but as far as the present income tax officer for the present assessment year, he clearly remember his visit and offered an explanation of the consequences that would follow.

67. Here is a complainant who has dubious record with the Income Tax Department, who admit that in search of 1991, cash of Rs.2,51,000/- was found and he is not aware as to what action he faced on this count. The complainant also faced an action by Enforcement Director under FERA.

In the cross-examination, he also admit that he used to run chit-fund and all details of his income tax matters are only known to Mr. Dudhani, the CA. He do not even remember whether his income tax return for the assessment year 1995-96 was filed within time and what was the amount for which he was assessed and he is not even aware whether, he was owner of 19 house properties in the assessment year 1995-96 nor does he remember the rentals that he was getting.

He deny the suggestion that he was in arrears of more than Rs.7,00,000/- as tax and that he felt harassed by the income tax authority and therefore he decided to lodge a complaint.

68. In the cross-examination by the accused in-person, he admit that he opened the discussion with the accused about his attached bank accounts in assessment case and the portion marked as "A" and "B" of his statement is admitted by him to

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 71/101 J APEAL 1376-12.odt

be correct. He also categorically admitted that there was discussion on tax demand, as in the notices received from the Income Tax Department it was mentioned that income tax of Rs.8.1 lakhs was outstanding against him.

It is thus clear from this admission that there was crystallized demand against the complainant and the accused had attached various bank accounts of the complainant, as it was year ending, for recovery of this amount.

The version of the complainant is therefore full of inconsistencies and he also do not come clear about the person whom he approached as regards his income tax returns and whether it was Inspector of Income Tax or Assistant Commissioner of Income Tax. He admitted that he had never attended the hearing before the accused along with his Chartered Accountant and even unaware about the order passed on 20.03.1998. He categorically admit that he was aggrieved by the attachment of bank accounts.

As regards the micro cassette, in the cross-examination, PW 1 admitted about being given the micro cassette recorder though he did not remember who had given the micro cassette recorder while his visit to the accused on 25.03.1998. The complainant also do not remember whether the accused asked him to produce the bank guarantee and copy of the paid challan during discussion with him for withdrawal of attachment of accounts as account could be defreezed if bank guarantee is given. Infact, the discussion between the accused and the complainant took place for almost half an hour, as per PW 2, contradicting the complainant. As per PW2, the panch,

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 72/101 J APEAL 1376-12.odt

who had accompanied him accused had asked Mr. Manwani to pay Rs.25,000/- of previous deal and further asked to pay Rs.4,00,000/- afresh but according to the complainant, in his examination-in-chief, he was asked to give Rs.25,000/- immediately, Rs.2,00,000/- in the month of March and rest in April to confirm the loan account. It is Mr. Raju Manwani who told him that he will pay Rs.2,00,000/- by March and remaining by end of April. It is surprising to note that if the demand was of Rs.4,00,000/-, the accused was happy to receive Rs.25,000/- for getting work done, which according to the prosecution was within his official capacity. Hence, the prosecution case about the demand is not conclusively established and the prosecution has failed to establish the demand of Rs.4,00,000/- and has even failed to establish that Rs.25,000/- was the balance amount of the bribe amount of Rs.1,00,000/- demanded, as Rs.75,000/- was already paid, without offering any details as to when this amount was paid.

The law as regards demand is well settled. In P. Satyanarayana Murthy Vs. The Dist. Inspector of Police & Ors. 4, the Apex Court has summarized the well settled law to the effect that to prove an offence under Section 7 of the PC Act relating to the public servants taking bribe requires a demand of illegal gratification and acceptance thereof and the proof of demand is a sine qua non. The relevant observations deserve a reproduction.:-

"23. The proof of demand of illegal gratification, thus, is the gravamen of the offence under Sections 7 and 13(1)(d)(i) & (ii) of the Act and in absence thereof, unmistakably the charge therefor, would fail. Mere acceptance of any amount allegedly by way of illegal gratification or recovery thereof, dehors the proof of demand,

4 (2015) 10 SCC 152

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 73/101 J APEAL 1376-12.odt

ipso facto, would thus not be sufficient to bring home the charge under these two sections of the Act. As a corollary, failure of the prosecution to prove the demand of illegal gratification would be fatal and mere recovery of the amount from the person accused of the offence under Section 7 or 13 of the Act would not entail his conviction thereunder."

69. Coming to the second aspect about acceptance of bribe amount. If according to the complainant, a tape recorder/micro cassette recorder was attached to him, on his visit to the accused on 25.03.1998, it is unusual that the pre- trap panchanam do not make a reference to the same. If PW2 was accompanying the complainant all the while, even he has deposed that the tape recorder that has been tried into CBI office, which was micro cassette recorder but it was not functioning but he was unable to tell the reason why was it then taken at the spot of raid. As far as the Investigating Officer PW7 is concerned, he remains silent on this aspect and reference to the order dated 15.09.2015 passed by this Court (Coram: Abhay M. Thipsay,J.), who has recorded as below:

"9. The applicant's contention is that the pre-trap conversation between him and the said defacto complainant was actually recorded by the CBI. He submits that not only such conversation was not produced before the trial court but the fact that any such conversation was recorded, was also suppressed from the court. According to him, even when this was attempted to be brought on record, the Investigating Officer denied the existence of any such tape recorded conversation between the applicant and the defacto complainant.

10. The applicant has also contended that the pre-trap panchnama was manipulated to bring it in conformity with the facts that subsequently took place. He has given some grounds on the basis of which he expects such a conclusion to be arrived at by the court.

11. Without going deeper in the matter at this stage, it may be observed that certainly the fact that there was a micro cassette which purported to contain discussion between the defacto complainant and the applicant was suppressed by the investigating agency during the trial. That such cassette existed, and was in

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 74/101 J APEAL 1376-12.odt

custody of the CBI is now clear, in as much as, pursuant to an application made by the applicant, the said cassette was produced before this court by an officer of the CBI, through the counsel for the CBI. Thus, the existence of such cassette, and the fact that it was not mentioned in any of the records by the CBI cannot be doubted even at this stage."

The very same order further record the contention of counsel for CBI that what is contained in the cassette or what is the conversation that has been recorded is not yet known. Upon this argument, Justice Thipsay has further remarked as below:

"17. .....Though this is true, one thing is certain, that the CBI does not want the conversation to be brought on record. Atleast, it did not do so before the trial court. It also tried to suppress that any such cassette existed.

18. The contention that the pre-trap panchanama was manipulated cannot be discarded outright as without substance, and the evidence in that regard would need careful examination at the time of the hearing of the appeal. This is simply because in the pre-trap panchanama, there is no mention of there being any micro cassette recorder, having been used for recording the conversation. It is highly unlikely, that despite a micro cassette tape recorder having indeed been used, it would not be so mentioned by the Investigating Officer or the trap laying officer in the pre-trap panchnama. Therefore, non-mention of this in the pre-trap panchnama is a factor capable of creating doubt about the pre-trap panchnama being an accurate record of the happenings and about it indeed having been drawn at a time it is claimed to have been. These contentions cannot simply be brushed aside, and would need a reply from the CBI which has yet not been given."

70. On further date, when the CBI was directed to take instructions i.e. on 23.09.2015, the following observations were made :

"3. Smt.Rebecca Gonsalves, the learned counsel for the CBI, on instructions from Shri G.S.Bagul, P.I., CBI ACB, Mumbai, who is present in court, further submits that since it is a fact that a micro

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 75/101 J APEAL 1376-12.odt

cassette does exist, as claimed by the applicant / appellant, in all fairness, further evidence, as contemplated under Section 391 of the Code of Criminal Procedure (Code), needs to be taken. On specific questioning, and on instructions from P.I. G.S.Bagul, she submits that she has no objection either for finally deciding the appeal by setting aside the order of conviction and remanding the matter back to the trial court for deciding it afresh after taking further evidence, or for taking evidence, as contemplated under Section 391 of the Code, by retaining the appeal with this court.

4. The applicant, however, has some reservations about adopting such a course. According to him, his contention has been merely to the effect that there existed a micro cassette, which was supposed to contain the conversation between him and the defacto complainant, and that, the existence of such a cassette was falsely denied by the CBI. He submits that this contention is now found to be correct. He submits that he would require some time to consider whether to consent for remanding the matter back to the trial court for deciding it afresh after recording further evidence."

71. The aforesaid fact which has surfaced in the two orders must be viewed with all seriousness, as there is no reason why the prosecution should have not brought on record the tape recorded conversion if the micro cassette recorder was given to the complainant and in these circumstances it definitely would lead to an adverse inference being drawn against the prosecution for intentionally withholding the material evidence in form of the tape recorded conversation.

The taped cassette containing alleged conversation dated 25.03.1998 was produced on 20.04.2015, as per order dated 09.04.2015 in Criminal Application No.463 of 2015. The cassette (marked as Article-1) was produced sealed in an envelope and the signature allegedly upon the same is dated 25.03.1998 being signed by Mr. Tangsali (PW2). The said envelope as per CBI's own malkhana register has been deposited in malkhana after one year by Mr. Navin Goel. Copy of the relevant page of the malkhana register is produced and

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 76/101 J APEAL 1376-12.odt

exhibited, was marked 'A' in Criminal Application No.463 of 2015, which is on record.

The question, therefore, arises that if this cassette is sealed under the signature of panchas, why Exhibit-16 and 17 do not contain a whisper about any recorded conversation and the benefit of this default on the part of the prosecution must definitely yield in favour of the accused as the prosecution not only withheld that taped conversation but suppressed it from the trial Judge and this would lead an inference to be drawn that the material withheld did not favour the prosecution and, hence, deliberately concealed.

An option suggested by the counsel appearing for the CBI, at that relevant time i.e. in 2015, need not be permitted to be availed at this stage since the case is too old to permit such an exercise, the trap being laid in the year 1998 and the only option left at this stage is to proceed ahead by taking note of this important aspect of the matter.

72. Though Mr. Rajeev Kumar have taken out two applications nos.1105 of 2015 and 1224 of 2015 alleging that withholding of the relevant material and manipulation in the investigation should be construed as fraud played upon the court and appropriate action should be taken against the perpetrators of the fraud, who are prima facie guilty of committing offences under Sections 193 and 195 of the Indian Penal Code (for short, "IPC"), I do not intend to go into this aspect as I have already made it clear to Mr. Rajeev Kumar that since appeal is being heard finally, these applications do not warrant consideration and ultimately the effect of non-

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 77/101 J APEAL 1376-12.odt

production of these material which affect the creditability of the prosecution case, the benefit must go in favour of the accused.

Mr. Rajeev Kumar has placed reliance upon the decision of this Court in Criminal Appeal No.346 of 2005 (Balkrishana Bhau Desai Vs. State of Maharashtra) dated 24.03.2015 where an accused came to be acquitted in the wake of suppression regarding taped conversation. In para 26 of the said decision, it is recorded that, according to the de-facto complainant, a tape recorder was provided to him and the conversation between him and the Appellant were recorded however the Investigating Officer denied that any tape recorder was used or any conversation has been recorded. Though, he did not explain why it was not recorded, though such facility was available and though he was aware that usually in trap cases the conversation is recorded, the discrepancy that had surfaced was therefore construed to be sufficient to create a doubt about the truth of the prosecution version and the appellant was held entitled for an acquittal by the following observations :

"18. In my opinion, this is a serious discrepancy in the prosecution case. This shows that the prosecution did not want to produce the record of the conversation between Raje-Bhosale and the appellant. Needless to say that in such a situation, the inference that the recorded conversation, if produced, would not have supported the prosecution case, or the account of the happenings as given by the de facto complainant Raje-Bhosale, can legitimately be drawn."

As a result, the appeal filed by the State calling for interference with impugned judgment and order was dismissed.

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 78/101 J APEAL 1376-12.odt

73. The complaint lodged by the complainant (Exhibit-13) has referred to meetings with the accused but surprisingly no further details are offered by the complainant clarifying whether the meetings were in-person or the demand that was alleged to have been raised was on telephone. PW1, in his deposition before the Court, has referred to two meetings whereas in his complaint he refer to three meetings, first being one month before, second being when the demand of Rs.75,000/- raised by the accused being satisfied and third when a demand was made for balance bribe amount. In the cross-examination, he has denied any meeting taking place between 19th to 25th March and the complainant had thus contradicted himself in establishing the demand by the accused.

One important aspect which must be taken note of is the registration of FIR dated 25.03.1998 (Exhibit-38) and this document exhibited through PW7, though he is not author of the document, which has recorded the date and time of the report as 25.03.1998 at 13.30 hours, which makes reference to the complaint of Mr. Manwani and based on this complaint the FIR is registered disclosing commission of offence punishable under the PC Act and the regular case is registered against the accused and entrusted investigation to Mr. D.S. Shukla, DySP, CBI ACB, Mumbai.

Though Mr. Rajeev Kumar has attempted to refer this document as post-investigation document, I am unable to persuaded by this argument, as this is a first information report upon receipt of the complaint and not a report which is

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 79/101 J APEAL 1376-12.odt

normally filed after completion of the trap proceedings and it is only report for setting investigation machinery into motion and therefore the report been filed under the signature of Mr.Sarwade, who had received the complaint from Mr.Manwani (PW1) and he simply registered a case against Mr. Rajeev Kumar and set the investigating machinery into motion, directing the investigation to be completed by Mr. D.S. Shukla, DySP, CBI ACB.

74. The prosecution case becomes more vulnerable in the wake of discrepancies in the timings as panch witness Mr. Tangsali has contradicted himself when he was confronted with portion marked 'A' in his statement where he had stated that the trap team reached Piramal Chambers at 2.30 pm whereas even according to PW3 - Mr. Shiaji Shaji Nilakh, Income Tax Inspector, working in Income Tax office located at Piramal Chambers, in cross-examination, he has admitted that he had seen Mr. Raju Manwani in the office on 25.03.1998 in the corridor of the office in noon time after lunch hour around 2.30 to 3.30 pm. Though in the examination-in-chief, PW2, on being confronted with the panchanama (Exhibit-16) drawn at 12.00 hours, recognized his signature and has deposed that after the panchnama (Exhibit-16) was drawn they proceeded to Piramal Chambers and reached on the ground floor. Exhibit- 16 has recorded that panchanama started at 14.05 hours and concluded at 16.15 hours whereas post-trap panchanam (Exhibit-17) has recorded that the panchanama has started at 6.35 pm.

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 80/101 J APEAL 1376-12.odt

The aforesaid lead to an inference that complainant accompanied with the trap team and the panchas left from Tanna House after 4.15 pm and the entire trap process completed before 6.35 pm.

When cross-examination of PW2 is perused, he has stated it took 45 minutes to reach Piramal Chambers thereafter they had reached the room of the accused within 10 to 15 minutes and they were in his room for about 15 minutes then they came on the ground floor.

The prosecution witness PW3 has contradicted the case of the prosecution, when he has stated he had seen Mr. Raju Manwani in the corridor at around 2.30 to 3.30 pm, which clearly contradict the version of PW2 creating a serious doubt in its veracity.

75. Again there is also discrepancy about the correct designation of the accused and in the wake of the discrepancy in Exhibits-13, 16, 17 and 38, PW7 on being confronted state that he was not in a position to tell the correct designation of the officer referred to in Exhibit-16 and 17 and he had not investigated regarding his correct designation. He admit that in FIR (Exhibit-38) the designation of the officer is shown as Assistant Commissioner of Income Tax (Investigation) and infact the designation of the officer could be read from the plate hanging at the door of his chamber. He has categorically admitted that he cannot explain the discrepancy in Exhibit-13 and 38 as Exhibit-38 was recorded by Superintendent of Police, CBI (ACB), Mumbai and in Exhibit-16 the designation is Assistant Commissioner of Income Tax, Investigation Circle

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 81/101 J APEAL 1376-12.odt

27 (1) and in Exhibit-17 it is Assistant Commissioner of Income Tax (Ward 27) though he deny the suggestion that the place and designation mentioned on page no.1 of Exibit-17 is wrong and nonexistent. It is stated by PW7 that it is incorrect to say that Exhibit-38 is a post-investigation document and complaint Exhibt-13 was obtained subsequently and therefore the FIR was not forwarded to the Court in time as per law.

This discrepancies have been overlooked by the learned Judge when in para 103 of the order he has concluded as follows :

"103. It is true that above discrepancies are not explained in the evidence and they do create some doubt about the manner in which the record is created and maintained by concerned persons. But beyond doubt, the doubt does not extend."

For the above reasoning of the learned Judge speaks for itself, as if there is any doubt created in the case of the prosecution, the benefit must go to the accused.

76. Coming to the proceedings pending before the accused as he was assessing the tax returns of the complainant, the entire proceedings are seized but the Investigating Officer had admitted that he had not carried out any investigation pertaining to the notings about loan transactions and he did not investigate about recovery proceedings against the complainant by the Income Tax Department. He further categorically deposed that he did not investigate as to what all bank accounts of the complainant were attached by the accused officer for recovery of arrears of taxes or not, nor did he remember whether he had called for the folder mentioned

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 82/101 J APEAL 1376-12.odt

for recovery of arrears of taxes against the complainant, which he in fact did.

The notings of the file bearing No.AC(Investigation) Circle 27(1)/10-R for the assessment year 1995-96 is produced by PW3, who has identified the handwriting of the accused on the notings and also his signature running into eight pages.

A careful reading of the aforesaid would disclose that the file of Mr. Raju Manwani for AY 1995-96 reveal that the proceedings commenced from 13.10.1997 when Mr. Bharat Dudhani, his CA, appeared and requested for adjournment. On 21.10.1997, Mr. Bharat Dudhani was asked to furnish details in furtherance of the discussion regarding the gifts received by the assessee and loan from foreign sources and he was asked a copy of the bank account of the donor and to prove the identity and financial status, with certified attestation from the Government of India Embassy officials with passport number etc. In addition, the noting was also reflect that the assessee shall pay the arrears of income tax and dues, which appeared on the capital account of the assessee and the cash accumulation upto Rs.22,50,000/- has to be shown with supporting evidence.

On these counts, repeatedly the queries are raised and the assessee is asked to satisfy the same. The proceedings are then adjourned to 12.11.1997, when Mr. Bharat Dudhani again appeared and filed the details but he was asked to file further details relating to the remaining loan confirmation with GIR (General Index Register) number alongwith other requirement

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 83/101 J APEAL 1376-12.odt

like copy of all bank accounts of the assessee. On 24.11.1997, it is recorded that there is no compliance and hence the matter be fixed for hearing on 18.12.1997. Once again on this date Mr. Dudhani, CA, appeared and he was asked to furnish certain information which included the information whether RBI's permission has taken for taking loan from foreign resident and also about the financial status of the donor to be proved in case of loan where GIR numbers are not given. On 23.12.1997, further detail as regards the loan creditor is asked for.

On 09.01.1998, adjournment is sought by Mr. Dudhani and on 21.01.1998, he filed his written submissions alognwith the details. However, as regards the loan confirmation what is recorded in the order is to the following effect :

"Regarding remaining loan confirmation which has not been filed. A.R. submits that assessee is not able to get it from those creditors (4)."

On 29.01.1998, Mr. Dudhani again appeared and it is recorded he has not been able to furnish the loan confirmation in four cases mentioned therein. On four further dates time is sought to file details.

Worth it to note that on 27.02.1998, Mr. Dudhani appeared and requested for some more time to file details and hence the proceedings were adjourned on 17.03.1998 and the trap is laid on 25.03.1998.

77. Worth it to note that on the subsequent dates when the accused was under arrest i.e. on 27.03.1998, the successor of the accused took up the case of the Mr. Manwani for

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 84/101 J APEAL 1376-12.odt

assessment and he referred to the notices issued under Section 143(3)/ 142(1) etc., details furnished by him from time to time and the rough draft order prepared by the Assessing Officer Mr.Rajeev Kumar, AC (Incharge), 27(1) in his handwriting an assessment order under Section 143(3) on computer printer.

Letter was issued to the assessee informing him about the change of the jurisdiction and a notice was issued under Section 143(2) fixing the hearing on 30.03.1998. On 30.03.1998, Mr. Dudhani attended pursuant to the notice and confirmed that a loan of Rs.8,00,000/- has been given to Mr. Manwani and the same was outstanding and the IT number has not been given.

The Chartered Accountant categorically admitted that there were no proof of RBI permission for acceptance loan from NRI and he has stated that as the assessee's business is of real-estate consultant. Regarding loan from Dishna Manwani, his daughter, it was submitted it consisted of Rs.73,000/- and the balance Rs.29,500/- received in the year, for which the details of the source was not furnished. The successor of Mr. Rajeev Kumar recorded that Mr. Dudhani has not requested for reopening of any previous proceedings by the earlier AO. Subsequently, on 31.03.1998, an order under Section 143(3) is passed with the approval of the superiors.

78. A perusal of the above noting would clearly reveal that the successor of the accused had acted on the handwritten note of the appellant and typed order and proceeded ahead. Since, the entire discussion with Mr. Bharat Dudhani, the

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 85/101 J APEAL 1376-12.odt

Chartered Accountant, is taken on record and the file came in the hand of CBI from the Department, it prima facie can be seen that proof was repeatedly asked from the assessee for the loan obtained from foreign entity or else it was made clear that it would be shown as taxable income and since everything was recorded in black and white, which included the noting in the handwriting of the accused himself as regards the loan obtained from NRI, which was even translated into a typed copy of the assessment dated 20.03.1998, in form of an assessment order where it is categorically recorded that the assessee has not been able to submit the loan confirmation in four cases set out therein despite sufficient opportunity having been accorded and as a result, the officer is left with no option but it treat it as unexplained money in the hands of the assessee and therefore an amount of Rs.15,73,200/- is added to the net profit of the assessee. The assessment order has therefore computed the net profit, added the disallowables, which include unproved loans to the tune of Rs.15,73,200/- and the assessee is assessed under Section 143(3) of the IT Act by giving credit to the taxes paid, if any, after due verification.

79. Since the appellant Mr. Rajeev Kumar had already passed the assessment order, which obviously has to be issued prior to 31st March, when financial year come to an end and this formed the basis for the subsequent order, who relied upon this very order, I fail to understand the case of the prosecution that the amount of bribe was demanded to treat this amount of Rs.15,73,200/- as income. It is not the case that the assessee was not taxable under other heads, as the assessment order

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 86/101 J APEAL 1376-12.odt

would clearly reveal that he is subject to tax under 10 house properties mentioned in the assessment order and also for the income from profession, the total of which is computed as Rs.23,11,915/- alongwith the income calculated under section 23(2)(c) of the IT Act.

80. The learned Judge has failed to take into consideration this aspect of the matter and solely focused upon the acceptance of the sum of Rs.25,000/- when the prosecution had failed to prove the demand itself by producing evidence, of conclusive in nature.

The trial Judge has grossly erred in concluding that Exhibit-24 and 25 was the assessment order against the complainant, which was kept ready and it was even typed on 20.03.1998 and the appellant had to just sign and to declare it. However, merely because the order is ready and typed do not make it conclusive and final as it may require checking and corrections, as it is the case of the appellant that there were several typographical mistakes which are apparent from comparison of the handwritten and typed order i.e. Exhibit-23 and 24.

Reading the order sheets in continuity would persuade me to draw an inference that the proceedings against Mr. Raju Manwani as an assessee were continued since last four months and there is no specific reason why the appellant demanded the particular amount as suggested by the complainant in the month of February, which is ultimately paid by the assessee on 25.03.1998. The complainant's failure to approach CBI promptly after the first demand as he anticipated retaliation is

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 87/101 J APEAL 1376-12.odt

not a satisfactory explanation as in the past also the assessee/ complainant was responsible for various flaws and infact he was in arrears of tax, which he has clearly admitted.

The case of the prosecution therefore appears to be doubtful and in absence of the demand being satisfactorily proved, with the inconsistencies and contradictions that have surfaced on record in the prosecution case, the benefit necessarily must go to the appellant.

81. Another important aspect which deserve consideration is about ground of sanction.

It is trite position of law that the sanctioning authority in whom the discretion is vested under a statute must act independently and he shall not pass an order under instructions from any other authority but must apply mind to all the points placed before him.

PW6 has deposed in the witness box on the aspect of grant of sanction. The sanction order dated 12.06.2000 is exhibited through PW6, which is signed by him in the capacity as under Secretary of Government of India.

The Central Government after full and careful examination of the statement and material placed before them with regard to allegations and circumstances of the case considered that he should be prosecuted in the Court of law and therefore sanction was accorded under Section 19(1)(a) of the PC Act for the prosecution of Mr. Rajeev Kumar. Pertinent to note that there is no reference to what is the material placed before the authority and as PW6 has deposed that the sanction

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 88/101 J APEAL 1376-12.odt

was accorded pursuant to application of mind by the Finance Minister, and hence, there is nothing on record to demonstrate what material was placed before the Finance Minister.

Admittedly, the tape recorded conversation which has now come on record is not made available to the sanctioning authority, which make the consideration incompete.

The Finance Minister Mr. Yashwant Sinha, who alleged to have accorded the sanction is not a witness, who could have disclosed as to on what basis he arrived at a conclusion that the case was fit for accord of sanction and Mr. Sandeep Garg has deposed on being authorized under Authentication Rules issued by the Ministry of Home Affairs under clause (2) Article 77 of the Constitution of India as he has signed the sanction order on behalf of the President of India.

He deposed the procedure adopted by informing that there is Directorate of Vigilance in CBDT, which receive the report of CBI and concerned documents. It processed the entire case and the documents and put up the matter for approval of sanction before the Hon'ble Finance Minister, through the Revenue Secretary under Ministry of Finance. Once the Minister of Finance accorded approval, file came back to Directorate of Vigilance and after going through the approval by the Minister for sanction, the order was signed.

Admittedly, the accused hails from Indian Revenue Services i.e. Central Services under Union of India and the President of India, is the competent authority to appoint and remove him.

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 89/101 J APEAL 1376-12.odt

PW6 has deposed that prior to grant of sanction to prosecute, the file of the delinquent officer is examined by 3 to 4 officers but it is ultimately the Finance Minister who applied his mind and granted sanction.

82. Admittedly, PW6 is unaware of the material placed before the sanctioning authority nor he is aware, whether on previous occasion sanction was refused. However, in cross- examination, he admitted that Finance Minister has raised certain queries and sent back the file without according sanction. The Chairman, CBDT recommended for instituting regular departmental enquiry after compliance of queries and this recommendation was approved by the Secretary of Finance and also the Finance Minister but because of difference of opinion between the Finance Minister and Central Vigilance Commission (CVC), case was referred to Department of Personnel and Training but admittedly PW6 was not a privy to any of this proceedings nor was he a privy to the recommendations made to the CBDT. He categorically admitted that on first and second instance the Ministry of Finance did not approve grant of sanction for prosecution and suggested the mode of departmental enquiry but it is on the third instance, the Finance Minister accorded approval for sanction.

83. PW6 has categorically admitted that draft sanction was received by Directorate of Vigilance and it formed part of the file before he signed the sanction order and he has stated that changes made in the final sanction order are minor in nature.

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 90/101 J APEAL 1376-12.odt

PW6 did not receive any communication from the Finance Minister and he has not even produced the letter from the Additional Secretary from Revenue Department addressed to the Director, CBI. Admittedly, PW6 is not the Officer who has applied his mind before according sanction.

In cross-examination, PW6 has pleaded ignorance in respect of the material placed before the Finance Minister and he is not sure which of the documents are placed before him and he was confronted with notings which are marked as Exhibit-33 and its perusal would reflect that the correspondence exchanged before the sanction order was finally signed.

The CCIT in its report has recorded that there is no doubt that Mr. Rajeev Kumar had prepared the draft assessment order but the proceedings were not closed and therefore there was no finality. The noting also record as under:

"3. The CCIT, in its report, has said that whereas there is no doubt that Shri Rajiv Kumar had prepared and kept draft assessment order in the file, it is also true that as on that date the asst. proceedings were not closed. Therefore, there was no finality of this draft order. After 27.2.98 the case was adjourned to 17.3.98 for filing the details but there was no entry in the ordersheet in the handwriting of Shri Rajiv Kumar. Thus, there is a possibility of presumption that a daft order was subjected to amendment by Shri Rajiv Kumar on receipt of the details sought for. Even his successor assessing officer had made the additional of those loans because it could not be proved whether or not the foreign loans were received with the RBI's permission. Therefore, it was not a conclusive proof which led to the addition in the final order. The CCIT has, therefore, said that the difference in the total income as assessed in the draft

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 91/101 J APEAL 1376-12.odt

order and final order cannot be a cause for attaching malafide. ... the Supreme Court in a recent judgment said that two draft order diametrically opposite decisions are possible for which malafide could be attributed. In view of these comments the opined that the charge of motive had not been established by CBI by any level of strict evidence. In the result, the ingredients of demand, acceptance and recovery did not survive. As per commentary 21 below section 7 of the P.C. Act, the receipt any gratification alone does not constitute an offence unless motive/reward has been established. Further, the CBI ..... (illegible) of Shri Bharat Dudani, CA who was presenting the case before Shri Rajiv Kumar and subsequently before Shri Dinesh Singh, successor Assessing Officer. This would have been necessary to support the charge as such.

3.1 The CCIT has also commented on the sequence of the events as detailed in post trap panchanma revealed that there was a time gap between the handing over the bribe money and its recovery so much so that receipt of the bribe money, its handling and keeping in cupboard for safe custody and his going out and being caught by the trap party away from his cabin No.320. The plausibility of this situation could come up for question n the Court. Secondly, the CCIT has referred to the commentary below section 7 of the P.C. Act, according to which the prosecut on must examine independent evidence to corroborate evidence of trap witnesses which has not been done. The CCIT has also referred to the occurrence of violence during the proceedings. The representation of Shri Rajiv Kumar and the report of Shri H.Y. Vaidya, catetaker of the building clearly shows that there was beating of Shri Rajiv Kumar in his chamber by the CBI authoritative. This would render the role of the CBI authorities to question in the trap proceedings. The CCIT, in the end refers to the recovery of Rs.1.45 lakhs from the cupboard of Shri Rajiv Kumar. He says that the CBI have not found, on inquiry from concerned bank as to whom these notes were issued. The CBI's failure to link these amounts found and recovered from the cupboard of Shri Rajiv Kumar has also a bearing on this case when

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 92/101 J APEAL 1376-12.odt

viewed from the fact that Shri Rajiv Kumar had stated that all ................... (illegible) planted by some else to implicate him. Thus, on the basis of above comments, the CCIT has expressed the view that there is sufficient material to accord sanction for prosecution of Shri Rajiv Kumar under the P.C. Act and, therefore, sanction needs to be sanctioned. He, however, recommended the departmental proceedings for imposition of major penalty."

84. Further, Additional DIT (Vigilance) Unit-II, Shri H.P. Kain has offered comments and by relying upon the statement of Taxing Officer who had stated that he had been directed to by Mr. Rajeev Kumar to prepare the order and the order sheet entries in the hands of Mr. Rajeev Kumar are only upto 17.03.1998, on which date there might have been discussion about settling of the matter and therefore he has commented that order sheet entry does not prove that Mr. Rajeev Kumar did not intent to pass this order which was kept as draft order and since there was recovery of money from his cupboard, a matter has to be investigated by the police with whom the FIR has been lodged and normally sanction for prosecution should be accorded even if there is some doubt about its result. Reference is made to the Vigilance Manual and on 16.02.1999, a note is put up for the Finance Minister's approval by recording that CVC had agreed with CBI and the Department have advised according of sanction of prosecution of Mr. Rajeev Kumar.

At Page 26/N once again Directorate of Income Tax (Vigilance) and Chief Vigilance Officer put a noting before the Hon'ble Finance Minister and Ministry of Finance at page 30/N under the signature of the Finance Minister raised a query with the following :

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 93/101 J APEAL 1376-12.odt

"30/N Ministry of Finance Normally, one would like to go by the prima facie case, rather than analyse and appraise the evidence. However, this case indicates some peculiar features.

As per the trap panchnama, the trap party reached the charged officer's office at 5.30 PM (pg 31) and the complainant and panch witness no.1 were with the C.O. for about half an hour. After that, they collected the bribe amount from the car and went up again and the complainant and panch witness no.1 came out of the C.O.'s cabin after another 15 minutes or so (pg 33). The officer was allegedly apprehended while leaving his cabin after accepting the tainted amount. The post trap panchnama is started at 6.35 PM. The statement of the complainant (pg 78) and of panch no.1 (pg 98) indicate that C.O. was not in his cabin when they reached there the second time and waited outside for five minutes. However, the trap panchnama and statement of panch no.2 does not indicate this, although he and other members of trap party were "scattered in convenient positions in the corridor".

In the circumstances, would it be worthwhile to check whether any other officer/staff of IT Department was present during the alleged events? Would it be desirable to check whether the panchas had been selected with due care and can be considered as totally reliable.

(YASHWANT SINHA) FINANCE MINISTER MARCH 31, 1999"

85. Pursuant to the aforesaid observations, the response was sought and it was recorded that it will be the CBI who shall have necessary information to answer the queries and draft letter therefore forwarded to CCIT, Mumbai for corresponding with CBI. The further correspondence indicate that reply was received from the CBI on the queries raised by the Hon'ble Finance Minister, the CBI had stated as under:

(1) The trap was laid in presence of independent panch witnesses and no other officer /staff of the income tax was present at the time of trap.

(2) Out of two panch witnesses; one was bank officer and other was telecom officer.

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 94/101 J APEAL 1376-12.odt

(3) As far as panch witnesses are concerned they are reliable.

(4) Narrating the sequence of events from post-trap panchanama CBI submitted that commencement of post trap is at 6.35 pm.

(5) As regards statement of complainant and panch no.1 regarding absence of CO in his cabin, complainant and panch no.1 waited outside the cabin for five minutes and parties took convenient position.

In response to the aforesaid, the Chairman (DT) on 27.07.1999 has observed as under:

"4. Although in my note dated 18.2.99 on page 29/N, I had recommended that sanction for prosecution could be accorded in this case yet I would now urge that a second alternative viz., of instituting a Regular Departmental Enquiry be considered in this case. The officer involved is service before him. Prosecution launched by the CBI would take a long time - which can be upto 10 years - before a final verdict is obtained and all appellate proceedings are finished. On the other hand, if we choose to institute a regular departmental enquiry it can be conducted under a Commissioner of Departmental Enquiries (working under the CVC) and a decision, on way or the other, can be obtained wihtin a much shorter time frame, can be obtained within a much shorter time frame. Considering all the circumstances of this case and the fact that we are dealing with a young officer. I would recommond that we consider the second alternative."

However, the Additional DIT-II in light of the advise of the CVC which has reiterated its earlier advise for according sanction for prosecution, recorded as under:

"3. As is apparent from above, the CVC have not agreed to the Department's proposal for initiating disciplinary proceedings for imposition of major penalty instead of prosecution of the officer. This is therefore a case of difference in opinion between the Disciplinary authority & the CVC. As per para 10.2 of Chapter VII of Vigilinance Manual No.1, we may therefore refer the case to DOPT for a final decision. If approved, draft note for FM suggesting reference to DOPT will be put up."

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 95/101 J APEAL 1376-12.odt

Since the CVC did not agree to the department's proposal for initiating disciplinary proceedings for imposing of major penalty in terms of para 10.2 of Chapter VII of Vigilance Manual Volume No.1, the file was again put up before the Finance Minister for referring the case for DOPT for final decision in the matter.

86. In the wake of the aforesaid, the DOPT agreeing with the advise of CVC proposed disciplinary authoritative to sanction prosecution of Mr. Rajeev Kumar under Section 19 (1) of the PC Act and also advise conduct of the disciplinary proceedings for the alleged misconduct. This noting is made by the section officer of the DOPT on 05.04.2000 and once again the file is forwarded to DIT (Vigilance) and the Ministry of Finance. Thereafter, the CVC remarked as below :

"6. The tentative view now is to accept the aforesaid final decision of the DOPT, FM may kindly accord sanction for prosecution of Sh. Rajeev Kumar u/s 19(1) of the Prevention of Corruption Act, 1988. The proposal for initiation of disciplinary proceedings for imposition of major penalty, as advised by the DOPT, would be processed separately after obtaining relevant material from the CBI."

87. On 26.05.2000, the noting reflect as under:

"Ref Prepose, A draft of sanction order for prosecution of Shri Rajeev Kumar, ACIT (now redesignated as as DCIT) on the lines as directed by the CBI in their report (P.237/C), is placed below for favourble approval, before issue by V&L.

On 19.06.2000, it is recorded as under:

"Fair orders issued vide Board's F.No.C-14011/7/98-V&L dt.17/6/2000. A copy is placed below. We may, if approved,return the file to DIT (Vig)"

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 96/101 J APEAL 1376-12.odt

88. From perusal of the above, it is difficult to assume that after entire correspondence the file was put afresh before the Hon'ble Finance Minister, who has applied his mind in the changed circumstances though a file contained a draft note for the Finance Minister and the endorsement below reflect the signature of the Chairman, CBDT, Finance Secretary, MOSF Revenue and Finance Secretary.

89. Grant of sanction being a serious business necessarily contemplate application of mind which is conspicuously absent here. The grant of sanction is not idle formality or an acrimonious exercise but solemn and sacrosanct act, which accord protection to the Government servant against frivolous prosecution and therefore requires strict compliance. Though it is the submission of Mr. Rajeev Kumar, that the sanction was declined twice I do not view the notings amounting to refusal of the sanction, but initially it is evident that certain queries were raised by the Hon'ble Finance Minister, which on being satisfied, an upshot was suggested to conduct the disciplinary enquiry, however on making reference to the DOPT, it was finally concluded that the officer should be prosecuted and shall also be subjected to disciplinary proceedings.

The noting as itself indicate that a draft order was received from CBI and this is what is finally sanctioned and this is so admitted by PW6.

In Mansukhlal's (supra) case, the Apex Court has clearly observed as under:

"19. Since the validity of "sanction" depends on the applicability of mind by the sanctioning authority to the facts of the

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 97/101 J APEAL 1376-12.odt

case as also the material and evidence collected during investigation, it necessarily follows that the sanctioning authority has to apply its own independent mind for the generation of genuine satisfaction whether prosecution has to be sanctioned or not. The mind of the sanctioning authority should not be under pressure from any quarter nor should any external force be acting upon it to take a decision one way or the other. Since the discretion to grant or not to grant sanction vests absolutely in the sanctioning authority, its discretion should be shown to have not been affected by any extraneous consideration. If it is shown that the sanctioning authority was unable to apply its independent mind for any reason whatsoever or was under an obligation or compulsion or constraint to grant the sanction, the order will be bad for the reason that the discretion of the authority "not to sanction" was taken away and it was compelled to act mechanically to sanction the prosecution."

Reference must be also made to the decision of the Supreme Court in the case of Nishant Sareen (supra) in particular para 12 and 13, which read thus :-

"12. It is true that the Government in the matter of grant or refusal to grant sanction exercises statutory power and that would not mean that power once exercised cannot be exercised again or at a subsequent stage in the absence of express power of review in no circumstance whatsoever. The power of review, however, is not unbridled or unrestricted. It seems to us a sound principle to follow that once the statutory power under Section 19 of the 1988 Act or Section 197 of the Code has been exercised by the Government or the competent authority, as the case may be, it is not permissible for the sanctioning authority to review or reconsider the matter on the same materials again. It is so because unrestricted power of review may not bring finality to such exercise and on change of the Government or change of the person authorised to exercise power of sanction, the matter concerning sanction may be reopened by such authority for the reasons best known to it and a different order may be passed. The opinion on the same materials, thus, may keep on changing and there may not be any end to such statutory exercise.

13. In our opinion, a change of opinion per se on the same materials cannot be a ground for reviewing or reconsidering the earlier order refusing to grant sanction. However, in a case where fresh materials have been collected by the investigating agency subsequent to the earlier order

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 98/101 J APEAL 1376-12.odt

and placed before the sanctioning authority and on that basis, the matter is reconsidered by the sanctioning authority and in light of the fresh material an opinion is formed that sanction to prosecute the public servant may be granted, there may not be any impediment to adopt such a course."

90. In the wake of above, since sanction which is granted to prosecute the appellant is under the dictate of the CBI without any independent application of mind by the sanctioning authority, the Finance Minister and nothing has been placed on record by the prosecution to establish that the entire material was placed before the sanctioning authority and the sanction order do not reflect what was the material placed and particularly when the sanctioning authority has not stepped into the witness box, according to me, the sanction suffers from non-application of mind by the sanctioning authority as what is expected for him is to apply its independent mind for generation of genuine satisfaction as to whether the prosecution has to be sanctioned or not. The mind of the sanctioning authority should not be under any pressure or from any quarter nor should any external force. Acting upon it to take a one way or the other and the grant of sanction of sanction must be exclusive prerogative of the sanctioning authority with all the material being placed before it.

If the CBI forwarded a draft sanction order and which receive the approval by the Finance Minister, without deliberating upon the queries which were raised earlier, the sanction order dated 12.06.2000 definitely suffers from illegality and therefore even on this count, the prosecution of Mr. Rajeev Kumar suffers from grave legal lacuna.

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 99/101 J APEAL 1376-12.odt

91. In light of the settled position of law to the effect that offence under Section 7 of the PC Act for taking bribe requires a demand of illegal gratification and acceptance thereof and if the prosecution fails to prove this demand, with cogent and reliable evidence, it's failure would be fatal and merely because some amount is recovered from the person accused of the offence, the conviction cannot be sustained.

In the present case, the prosecution has failed to establish by bringing on record cogent evidence to establish that the appellant-Rajeev Kumar demanded the balance amount of Rs.25,000/- by way of illegal gratification, as the complaint is restricted to this payment, as it is alleged that an amount of Rs.75,000/- was already paid by the complainant to the accused. True it is that when this amount was recovered from the cupboard of the accused, there was also other huge sum of money found and mere recovery of the amount in a packet, do not conclusively lead to an inference that the amount was accepted by way of illegal gratification other than legal remuneration, particularly when the prosecution has failed to establish its case of demand of the amount as bribe to show favour in the income tax assessment.

92. The complainant himself is inconsistent in his version and in addition, he contradicts PW 2-the panch witness, who accompanied him to the cabin of the accused. The complainant, who is found to be a income tax payee for a considerable length of time, is expected to be aware of the manner in which the income is liable to be taxed and from his cross-examination, what has surfaced on record is his

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 100/101 J APEAL 1376-12.odt

callousness towards his responsibility in paying the tax and though the trial Court has refused to discredit him on this count, I find the finding to be unjustified and in fact the conduct of the complainant itself has created a doubt in the case of the prosecution, when he made a complaint belatedly after the demand was raised and that too, after he had paid the major chunk i.e. a sum of Rs.75,000/- in the first week of March 1998 itself.

The prosecution has, thus, failed to prove its case against the appellant-Rajeev Kumar beyond reasonable doubt and in the light of serious loopholes in its case, the benefit must yield to the accused, which would result in reversing the impugned judgment convicting him and imposing a sentence pursuant thereto.

As a result of the aforesaid discussion, the impugned judgment dated 22.12.2012 passed by the learned Special Judge for CBI, Gr.Bombay in CBI Special Case No.52 of 2000 is quashed and set aside. The appellant stands acquitted in CBI Special Case No.52 of 2022, by cancelling his bail bond.

Criminal Appeal No.1376 of 2012 is allowed in the aforestated terms.

93. Since Criminal Application Nos.609/18, 1224/15 and 67/13 were not pressed by the Appellant on 05/01/2024, no orders are required on the same.

94. In view of the disposal of the Appeal, Criminal Application Nos.463 and 1105 of 2015 do not survive and stand disposed off.

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 ::: 101/101 J APEAL 1376-12.odt

95. As far as Cri. Application No.551 of 2017 is concerned, by reserving the liberty in the Estate Officer to seek necessary relief in appropriate proceedings, the same is also disposed off.

( SMT. BHARATI DANGRE, J.)

Wagh

::: Uploaded on - 27/06/2024 ::: Downloaded on - 07/07/2024 11:51:19 :::