State represented by Deputy Superintendent of Police vs K.N. Nehru etc.

REPORTABLE

IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 1222 OF 2017 [ARISING OUT OF S.L.P.(CRL.) NO.1182 OF 2015]

State represented by Deputy Superintendent of Police …Appellant

VERSUS

K.N. Nehru etc. …Respondents

JUDGMENT

1. Leave granted

2. In impugnment, is the judgment and order dated

19.12.2013 of the Madras High Court , Madurai Bench whereby

the assail to the order dated 05.04.2013 passed by the Special

Court for Trial of Cases under Prevention of Corruption Act,

Tiruchirappalli made by the appellant/State has been dismissed

and the prayer by the respondents for their discharge from the

Special Case No.92 of 2012 under Sections 13(2) r/w 13(1)(e) of Signature Not Verified Digitally signed by HEMALATHA MOHAN the Prevention of Corruption Act, 1988 (for short, hereinafter to Date: 2017.07.21 16:53:07 IST Reason:

be referred to as the “Act”) and Section 109 of the Indian Penal

Code (for short hereinafter to be referred to as the “IPC”) has 2

been allowed.

3. We have heard Mr. Mukul Rohtagi, learned Senior Counsel

for the appellant and M/s. Jaideep Gupta and Vivek K. Tankha,

learned Senior Counsel for the respondent Nos. 1 and 2

respectively.

4. The genesis of the present discord is traceable to the first

information report being FIR No.25/2011 dated 15.09.2011

lodged by the Deputy Superintendent of Police, Vigilance and

Anti-Corruption, Kajamalai, Trichy alleging that the respondent

No.1 while serving as the Minister of Transport, Government of

Tamil Nadu from May, 2006 to March 2011 had acquired assets

in his name and in the names of his wife Shanta (respondent

No.2) and son Arun, far beyond their known sources of income.

The check period was mentioned therein to be from 13.05.2006

to 24.03.2011. It was imputed that the respondents and their

son on the date of commencement of the check period were in

possession of pecuniary resources and assets worth

Rs.2,83,87,518.58 which swelled to Rs.18,52,99,420.40 on

24.03.2011 i.e. at the end of the check period. Further details

being unnecessary at this stage, it would be suffice to state that

on the basis of these allegations the aforementioned case was 3

registered and was taken up for investigation.

5. In course of the investigation that followed, the respondent

No.1, in writing was offered an opportunity to explain the

allegation of possession by him and his family members, of

pecuniary resources and assets disproportionate to his known

source of income, to which he responded in writing on

09.07.2012, in substance referring to the remuneration from

M/s. True Value Homes (India) Private Limited, Chennai received

by his son Arun, income tax by way of TDS paid by his said son

for the remuneration so received, loan availed by his son from

M/s. True Value Homes (India) Private Limited, Chennai for

purchase of house property and repayment of loan by him and

mentioned the amounts corresponding to each head.

6. On the completion of the investigation, charge-sheet was

laid against the respondents herein under Section 13(2) r/w

Section 13(1)(e) of the Act against respondent No.1 and under

Section 109 IPC r/w Section 13(2) r/w Section 13(1)(e) of the Act

against the respondent No.2, his wife. The charge-sheet

mentioned the amount which according to the prosecution

represented assets disproportionate to the known sources of

income of the respondents. However, it was recorded that in 4

working out the quantum of disproportionate assets in the FIR,

the properties of Arun had also been accounted for as he was

shown to be a dependent of respondent No.1. It further

mentioned that the investigation disclosed that Arun had not

filed any Income Tax Return during the check period and

therefore his exact income could not be ascertained and thus his

name was deleted from the case and his properties were not

clubbed with that of the public servant i.e. the respondent No.1.

7. At this juncture, the respondents herein filed an

application under Section 239 of the Criminal Procedure Code

before the Trial Court, seeking their discharge. Sans the

inessential details, enough it would be to mention that the Trial

Court on a consideration of the materials placed before it, was of

the opinion that in view of the explanation offered by the

respondent No.1, it was necessary to get the genuineness or

otherwise of the income of Arun inquired into for which further

investigation was called for. Being so satisfied that such a probe

was indispensable to appropriately comprehend the charge of

disproportionate assets as laid, the Trial Court by order dated

05.04.2013 directed such investigation into the income and

properties of Arun. As it was perceived that the exercise so 5

ordered would consume some time, the Trial Court dispensed

with the personal appearance of the respondents herein till the

completion thereof.

8. Being aggrieved by this order, the State/Prosecution filed a

revision petition before the High Court for a direction to frame

charge against the respondents, who in turn prayed for their

discharge.

9. By the impugned order, to reiterate, the respondents have

been discharged. However, the direction for further investigation

vis-à-vis Arun has been affirmed.

10. The High Court in substance concurred with the Trial

Court that in view of the explanation offered by the respondent

No.1, the prosecution was expected to verify from the relevant

records as to whether Arun had paid the amount to him and

further to ascertain the source of income of Arun. It held the

view that even if Arun had not submitted his own accounts and

other details, the prosecution was expected to include his name

as one of the accused to prove that he had not advanced any

amount to the respondent No.1. The High Court inferred from

such omission, that Arun indeed had lent money to the

respondent No.1 and thus the accusation of disproportionate 6

assets qua him was untenable. It also recorded that the fact

that Rs. 60 lacs had been paid by Arun to the respondent No.1

stood proved. While endorsing the direction of the Trial Court

for further investigation to verify the source of income of Arun as

well as payments by him to respondent No.1, the High Court

ordered discharge of the respondents.

11. Mr. Rohtagi, learned Senior Counsel for the State has

urged that in the overall conspectus of facts bearing on the

charge leveled against the respondents and the materials already

gathered in course of the investigation, the High Court ought not

to have discharged them at this stage while affirming further

investigation into the source of income of their son Arun. This is

more so in the face of the explanation offered by the respondent

No.1. According to the learned Senior Counsel, not only the

observations made by the High Court in the impugned order

suggesting the innocence of the respondents are not borne out

by the records, those are patently predetermined and are likely

to adversely affect the further investigation, as ordered by the

Trial Court and affirmed by it. Mr. Rohtagi has maintained that

as the outcome of the further investigation would have a vital

bearing on the charge leveled against the respondents, their 7

discharge at this stage is wholly unwarranted. Considering the

gravity of the charge and the disclosures in the investigation

already conducted, the order of discharge ought to be interfered

with by this Court, he insisted.

12. As against this, Mr. Gupta has strenuously argued that as

the respondents have a right in law to satisfactorily explain the

lawful source of income and the assets alleged to be

disproportionate before being prosecuted under the Act and it

being evident on the face of the records at this stage that the

available materials do not substantiate the allegation, the

discharge of the respondents is perfectly justified and does not

merit any interference. According to the learned Senior Counsel,

the investigation into the lawfulness or otherwise of the source(s)

of income of Arun and the assets acquired therefrom though is

relatable to the explanation furnished by the respondent No.1 to

the charge leveled against him, their continuance as accused

pending the probe as ordered is indefensible in law.

13. The rival assertions have been duly considered. Having

regard to the First Information Report, the explanation provided

by the respondent No.1, the charge-sheet submitted as well as

the indispensability of the scrutiny of the sources of income of 8

Arun and his assets, we are of the view that the Courts below

had rightly directed further investigation to verify the

genuineness or otherwise of the source(s) of income of Arun and

his assets and the bearing thereof, if any, on the charge leveled

against the respondents. In this perspective, we are constrained

to observe that the High Court having endorsed the direction for

further investigation vis-à-vis Arun ought not to have recorded

its findings of exoneration of the respondents at this stage. In

fact, the discharge of the respondents flies in the face of the

direction for further investigation into the affairs of Arun in order

to verify the lawfulness or otherwise of his source of income and

his assets. In our estimate, in view of the correlation of the

explanation provided by the respondent No.1 to the imputation

of disproportionate assets and the probe ordered into the affairs

of Arun, to say the least, the discharge of the respondents before

the completion of the investigation is visibly prematured. The

finding in particular that the respondent No.1 had proved that

he had received the amount only from his son Arun and that the

latter had received remuneration for which he had paid TDS

under the Income Tax Act and therefore the question of

disproportionateness of his assets did not arise, in the face of the 9

pending investigation, amounts to prejudging the charge against

the respondents. We have thus no hesitation to hold that the

order of the High Court, discharging the respondents herein,

pending the investigation against Arun, at this stage, is

unsustainable in law as well as on facts.

14. The decisions cited on behalf of the respondent No. 1 in

State of M.P. vs. Sheetla Sahai and others (2009) 8 SCC

617, Randhir Singh Rana vs. State (Delhi Administration)

(1997) 1 SCC 361 and Reeta Nag vs. State of West Bengal

and others (2009) 9 SCC 129 are of no avail to him in view of

the prima facie evaluation of the materials on record made by the

courts below and the concurrent view entertained that in the

facts and circumstances of the case, having regard to the gravity

of the allegations and the tone and tenor of the explanation of

respondent No. 1, further investigation is called for to ascertain

the sources of income of Arun and the extent thereof so as to

render the assets claimed to be of his, is feasible therefrom. As

the investigating agency in the instant case has not questioned

the order for further investigation and rather has endorsed the

same in order to disinter the correct facts pertaining to the case,

the approach adopted by the trial court deserves to be endorsed 10

in the singular facts of the case.

15. We hereby uphold the direction of the courts below for

further investigation, as ordered. The Investigating Agency

would, bear in mind, the seriousness of the charge and the

avowed objectives of the anti-corruption law involved and

conduct the investigation as expected of it and submit its report

as expeditiously as possible. The appeal is thus allowed. The

impugned order directing the discharge of the respondents is

hereby set aside and the order of the Trial Court vis-à-vis them

is restored. To reiterate, the Investigating Agency would complete

the further investigation as ordered at the earliest so as to

enable the Trial Court to proceed thereafter in accordance with

law. It is made clear that we have not offered any comment on

the merits of the case.

…........................................J. [ARUN MISHRA]

…........................................J. [AMITAVA ROY] NEW DELHI;

JULY 21, 2017.