Vipin Sahni vs Central Bureau Of Investigation (Cbi)

2024 INSC 284 Reportable

IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION

Criminal Appeal No._________ of 2024 (@ Special Leave Petition (Crl.) No. 2772 of 2023)

Vipin Sahni and another … Appellants

Versus

Central Bureau of Investigation … Respondent

JUDGMENT

SANJAY KUMAR, J

1. Leave granted.

2. Exercising power under Section 239 Cr.P.C, the learned Special

Judicial Magistrate, CBI Court, Ghaziabad, discharged the appellants Signature Not Verified Digitally signed by Nirmala Negi Date: 2024.04.08

herein of a charge under Sections 420 and 120B IPC, vide order dated 16:36:55 IST Reason:

31.08.2019 in Case No. 456 of 2012 arising out of RC-219 2011 (E) 0016

1 registered on the file of Police Station CBI, EO-1, New Delhi. Aggrieved

thereby, the Central Bureau of Investigation (for short, ‘CBI’) approached

the High Court of Judicature at Allahabad, under Section 482 Cr.P.C, by

way of Application U/S 482 No. 11426 of 2021. By order dated 20.01.2023

passed therein, the High Court set aside the discharge order and directed

the learned Magistrate to proceed with the case against the appellants.

Assailing the said order, they are before this Court.

3. The appellants had established Sunshine Educational and

Development Society, NOIDA, Uttar Pradesh, and registered it under the

Societies Registration Act in the year 2004. The aims and objectives of this

Society, inter alia, included propagation of technical education. Appellant

No. 1 was the Chairman of the said Society while his wife, viz., appellant

No. 2, was its Secretary. In September, 2006, the Society acquired 4.90

acres of land in Greater NOIDA, Uttar Pradesh, on a 90-year lease from

Greater Noida Industrial Development Authority, Gautambudh Nagar, Uttar

Pradesh, for setting up educational institutions. The Society filed

application dated 22.01.2007 seeking approval of the All India Council for

Technical Education (AICTE) to establish ‘Business School of Delhi’,

offering a Post-Graduate Diploma Course in Business Management

(PGDM), in an extent of one acre out of the leased land. In the application,

2 the Society disclosed that a loan of ₹5.75 Crore had been availed by it from

Corporation Bank and that the outstanding loan stood at above ₹3 Crore. It

also disclosed, in response to clause 6(v), that a loan/mortgage had been

raised against the land, by ticking the ‘Yes’ box. However, in the tabular

form in the first page, against the query – ‘Mortgaged with Bank - Yes/No’,

the answer was stated as ‘No’. There was, thus, an apparent contradiction

in the application itself. In any event, approval was accorded by the AICTE

on 17.08.2007 to start the ‘Business School of Delhi’.

4. Thereafter, the Society submitted another application to the AICTE

on 27.10.2007 seeking to establish ‘Business School for Women’, offering

PGDM course. A day later, on 28.10.2007, the Society filed yet another

application seeking approval from the AICTE to start a third institute,

named ‘International Business School of Delhi’. The first and third

applications were moved on behalf of the Society by appellant No. 1, being

its Chairman, while the second application was filed by appellant No. 2, as

its Secretary. In the two later applications, the Society failed to mention that

the leased land was mortgaged but it disclosed the fact that it had already

been granted approval in the year 2007 to operate another institute from

the same premises. By proceedings dated 29.05.2008, the AICTE granted

approval for starting the ‘Business School for Women’ in an extent of 0.8

3 acres out of the said land. On 19.06.2008, the AICTE accorded approval to

commence the ‘International Business School of Delhi’ in the leased land.

5. While so, it appears that an anonymous complaint was made to

the Chief Vigilance Commissioner alleging that officials of the AICTE had

shown undue favour to the Society. On the strength thereof, the Chief

Vigilance Commissioner referred the matter to the CBI for investigation. In

the first instance, the Regional Officer of the CBI at Kanpur addressed

letter dated 24.07.2011 to the Station-in-charge, Police Station Greater

NOIDA, to register a case for investigation but the District Police of

Gautambudh Nagar, Uttar Pradesh, opined that the complaint did not justify

registering of a FIR and/or proceeding with investigation as no cognizable

offence was made out.

6. However, on 30.11.2011, Case Crime No. 219 2011 (E) 0016 was

registered on the file of PS CBI, EO-1, New Delhi, under Sections 420 and

120B IPC along with Section 13(2) read with Section 13(1)(d) of the

Prevention of Corruption Act, 1988. This FIR was registered against the

appellants and unnamed officials of the AICTE, alleging that the appellants

had obtained approval by deceitful means from the AICTE, in violation of

Section 4.2(iii) of the AICTE Approval Process 2006. As per this provision,

the land approved for starting an educational institution ought not to be

4 encumbered. After completion of the investigation, Charge Sheet No. 11 of

2012 was filed by the CBI for offences under Sections 420 and 120B IPC,

naming only the appellants as the accused. No official of the AICTE was

charged with criminality in granting approval to the Society’s institutions.

7. Aggrieved by their arraignment, the appellants approached the

High Court at Allahabad under Section 482 Cr.P.C, vide Application U/S

482 No. 37398 of 2012, seeking quashing of the criminal proceedings

against them. By order dated 14.02.2013, the High Court accepted their

plea and quashed the said proceedings. However, upon the CBI

approaching this Court in Criminal Appeal No. 239 of 2015, by order dated

05.02.2018 passed therein, this Court set aside the order dated 14.02.2013

but made it clear that the Trial Court would be at liberty to go into the merits

of the issue raised at the stage of framing of charges. Thereafter, on

02.07.2018, the Trial Court granted bail to the appellants.

8. On 25.09.2018, the appellants moved an application for discharge

before the learned Special Judicial Magistrate, CBI Court, Ghaziabad, but

the learned Magistrate rejected their plea by order dated 15.02.2019 and

directed the matter to be listed for framing of charges. The appellants,

thereupon, preferred Criminal Revision No. 101 of 2019 before the learned

Additional Sessions Judge, Ghaziabad, under Section 397 Cr.P.C. The

5 revision was allowed by the learned Additional Sessions Judge, vide order

dated 29.05.2019, whereby the order passed by the learned Magistrate

was set aside and the matter was remanded for hearing afresh, in the light

of the observations made in the revisional order. In consequence, the

learned Magistrate reheard the case and passed order dated 31.08.2019,

discharging the appellants from the alleged offence under Sections 420

and 120B IPC. Nearly one and a half years after the passing of this

discharge order, i.e., on 21.02.2021, the CBI filed a petition under Section

482 Cr.P.C assailing it before the High Court at Allahabad. The petition was

taken on file as Application U/S 482 No. 11426 of 2021 and the High Court

allowed the same by way of the impugned order, leading to the present

appeal.

9. Before we proceed to examine the case on merits, we may first

take note of relevant legal provisions. Section 415 IPC defines ‘Cheating’

and it reads thus: -

‘415. Cheating.-

Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to “cheat”.

Explanation.- A dishonest concealment of facts is a deception within the meaning of this section.’

6 Section 420 IPC, the provision we are concerned with presently,

reads as under: -

‘420. Cheating and dishonestly inducing delivery of property.-

Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.’

Sections 120A IPC and 120B IPC read thus: -

‘120A. Definition of criminal conspiracy.-

When two or more persons agree to do, or cause to be done, (1) an illegal act, or (2) an act which is not illegal by illegal means, such an agreement is designated a criminal conspiracy:

Provided that no agreement except an agreement to commit an offence shall amount to a criminal conspiracy unless some act besides the agreement is done by one or more parties to such agreement in pursuance thereof.’

‘120B. Punishment of criminal conspiracy.-

(1) Whoever is a party to a criminal conspiracy to commit an offence punishable with death, [imprisonment for life] or rigorous imprisonment for a term of two years or upwards, shall, where no express provision is made in this Code for the punishment of such a conspiracy, be punished in the same manner as if he had abetted such offence. (2) Whoever is a party to a criminal conspiracy other than a criminal conspiracy to commit an offence punishable as aforesaid shall be punished with imprisonment of either description for a term not exceeding six months, or with fine or with both.]’

10. The sine qua non to make out an offence under Section 420 IPC,

insofar as the present case is concerned, is an act on the part of the

7 appellants to ‘cheat and thereby dishonestly induce the person so

deceived, viz., the AICTE, to deliver any property’. Therefore, the

appellants, while applying for and on behalf of the Society, should have

either suppressed material information or projected incorrect information so

as to induce the AICTE, by such dishonest means, to grant approval for its

educational institutions. Further, as no official of the AICTE has been

implicated in the offence, as per the charge sheet, the alleged ‘criminal

conspiracy’ under Section 120B IPC would also be attributable to the

appellants only.

11. Viewed in this light, we may note that the first application dated

22.01.2007 submitted by appellant No. 1 for starting ‘Business School of

Delhi’ clearly mentioned the fact that a part of the leased land admeasuring

about 5 acres was to be used for setting up this institution and that a term

loan of ₹5.75 crore had been raised from the Corporation Bank. The

repayable outstanding loan was also shown as above ₹3 crore. Clause 6 of

the application dealt with ‘Land’ and it was stated thereunder that the

government’s leased land of about 5 acres was intended to be used for

establishing the college. Clause 6(v) of the application and the Society’s

response thereto are extracted hereunder.

‘(v) Any loans/mortgage raised against the titles of the land Yes No’

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12. Further, as already noted, the AICTE deemed it fit to grant

approval on 17.08.2007 to start this institution. This was despite the

AICTE’s ‘Approval Process 2006’ providing that the land should have been

registered in the name of the applicant’s society/trust on or before the date

of submission of the proposal, free from any encumbrances. However, no

official of the AICTE has been implicated in any wrongdoing.

13. Coming to the Society’s second application for the ‘Business

School for Women’, the same extent of 5 acres was shown against clause

6 but there was non-disclosure of the mortgage of the land to secure the

outstanding bank loan. Under clause 6(v), the society failed to state that a

loan/mortgage had been raised against the title of the land and

tick-marked ‘No’ instead of ‘Yes’. Similarly, the application for starting the

‘International Business School of Delhi’ also mentioned the same extent of

5 acres of land but again, clause 6(v) contained incorrect information as

against the question whether any loan/mortgage had been raised against

the title of the land. The word ‘No’ was tick-marked instead of ‘Yes’.

14. These are the actions which formed the foundation for the CBI’s

case against the appellants. As already stated hereinbefore, it was not the

AICTE that claimed that it was deceived and dishonestly induced to grant

approval owing to suppression of material information by the appellants

9 acting on behalf of the Society. It was a third party who chose to remain

anonymous that initiated the investigation. Further, by not implicating any

official of the AICTE in the charge sheet and by dropping the provisions of

the Prevention of Corruption Act, 1988, the CBI found that the AICTE’s

officials were not complicit at all and they were given a clean chit.

15. At this stage we may note that, though the appellants were initially

successful in getting the proceedings quashed by the High Court, this Court

reversed the said order but left it open to the Trial Court to examine the

issue raised, on merits, at the time of framing of charges. It is pursuant to

the liberty granted by this Court that the learned Special Judicial

Magistrate, CBI Court, chose to exercise power under Section 239 Cr.P.C

and discharged the appellants. The validity of that exercise was called in

question before the High Court, which ultimately held against the

appellants.

16. Significantly, the High Court was not inclined to accept the

preliminary objection raised by the appellants to the effect that the CBI

ought to have filed a revision under Section 397 Cr.P.C against the

discharge order and could not maintain a petition under Section 482 Cr.P.C.

In this regard, the High Court observed that it could always treat a petition

filed under Section 482 Cr.P.C as a revision under Section 397 Cr.P.C and,

10 therefore, the appellants’ objection had no substance. On merits, the High

Court opined that the appellants had deliberately withheld relevant

information knowing fully well that if the land was encumbered in any

manner, approval for setting up the educational institutions there would be

declined. Holding so, the High Court set aside the discharge order.

17. We are, however, of the considered opinion that the finding of the

High Court as to deliberate withholding of information by the appellants

cannot be accepted on the given facts. It is a matter of record that the first

application dated 22.01.2007 filed by appellant No. 1 on behalf of the

Society disclosed that a bank loan was still outstanding and that the subject

land of nearly 5 acres had been mortgaged to secure the loan. This was

followed by scrutiny and verification by the officials of the AICTE, including

a spot inspection, following which, approval for starting the ‘Business

School of Delhi’ was accorded on 17.08.2007. No wrongdoing has been

attributed to the officials of the AICTE in that regard. It was only the later

application dated 27.10.2007 for the ‘Business School for Women’ and the

application dated 28.10.2007 for the ‘International Business School of

Delhi’ that did not state correct information with regard to the outstanding

bank loan and the mortgage of the land in connection therewith. However,

all three applications mentioned the extent of nearly 5 acres and the AICTE

11 could not be said to be in ignorance of the fact that the said land was under

an encumbrance at the time the applications were made. Notably, both the

later applications mentioned the fact that an institution was already granted

approval in 2007 to operate from the same premises. This was obviously in

reference to the ‘Business School of Delhi’ and the application for the same

did disclose the subsistence of the loan and the encumbrance on the land.

18. That apart, it was not even the case of the AICTE that it was under

any illusions, whereby it was dishonestly induced to grant approval for

establishment of the colleges in question. The only party who can speak of

being ‘dishonestly induced to do or not do something’ is that party itself and

when the AICTE made no such complaint, it was not for others to insinuate

that the AICTE was dishonestly induced to do something.

19. In Ram Jas v. State of U.P.1, the ingredients required to constitute

an offence of cheating were succinctly summed up thus: -

‘(i) there should be fraudulent or dishonest inducement of a person by deceiving him;

(ii) (a) the person so deceived should be induced to deliver any property to any person, or to consent that any person shall retain any property; or

(b) the person so deceived should be intentionally induced to do or omit to do anything which he would not do or omit if he were not so deceived; and

(iii) in cases covered by (ii) (b), the act or omission should be one which causes or is likely to cause damage or harm to the person induced in body, mind, reputation or property.’

1 (1970) 2 SCC 740

12

20. In V.P.Shrivastava vs. Indian Explosives Limited and others 2,

this Court observed that in order to constitute an offence of cheating, it

must be shown that the accused had a fraudulent or dishonest intention at

the time of making the representation or promise and such a culpable

intention should be there at the time of entering into the agreement. On

facts, it was found that the party alleged to have been cheated was fully

conscious of the situation at the time it decided to enter into the contract

and there was no dishonest inducement.

21. In the case on hand, there was disclosure of the fact that the

subject land was mortgaged to secure the bank loan but despite the same,

the AICTE granted approval for the ‘Business School of Delhi’ and it never

complained that it was under any misinformation in that regard. Thus, the

essential requisite to make out an offence of cheating is lacking. Mere

carelessness on the part of the appellants in filling up the second and third

applications and a part of the first application also cannot be taken to be

motivated by deliberate deception, on the admitted factual position, so as to

invite criminal charges.

22. Further, there is no evidence of the appellants consciously

agreeing or conspiring to deliberately furnish false information to the AICTE

so as to garner its approval for their colleges. As already noted, appellant 2 (2010) 10 SCC 361

13 No.1 filed the first application, divulging the relevant details of the bank loan

and the mortgage over the leased land, but he failed to do so in the third

application filed by him. Appellant No.2 filed the second application with the

same non-disclosure but there is no evidence whatsoever of the appellants

resorting to deception in that regard willfully and in connivance with each

other. Therefore, the charge under Section 120B IPC also does not

withstand judicial scrutiny.

23. As regards the objection raised by the appellants as to the

maintainability of the CBI’s petition filed before the High Court under

Section 482 Cr.P.C., we may note that, as per Article 131 in the Schedule to

the Limitation Act, 1963, the limitation period for filing a criminal revision

under Section 397 Cr.P.C, be it before the High Court or the Sessions

Court, is 90 days. However, there is no limitation prescribed for invocation

of the inherent powers of the High Court under Section 482 Cr.P.C. and it

can be at any time. It is a matter of record that when the learned Special

Magistrate, CBI Court, dismissed the appellants’ discharge petition in the

first instance, they had filed a revision before the Sessions Court under

Section 397 Cr.P.C. and the matter was remanded for hearing afresh.

However, the CBI did not choose to adopt this course when the appellants’

discharge petition was allowed by the learned Special Magistrate in the

14 second round. Long after the expiry of the limitation period of 90 days, the

CBI filed a petition before the High Court at Allahabad under Section 482

Cr.P.C. This was obviously to get over the hurdle of the limitation for filing of

a revision under Section 397 Cr.P.C. In this regard, useful reference may

be made to the decision of this Court in Mohit alias Sonu and another vs.

State of U.P. and another3, wherein it was observed thus:

‘28. So far as the inherent power of the High Court as contained in Section 482 CrPC is concerned, the law in this regard is set at rest by this Court in a catena of decisions. However, we would like to reiterate that when an order, not interlocutory in nature, can be assailed in the High Court in revisional jurisdiction, then there should be a bar in invoking the inherent jurisdiction of the High Court. In other words, inherent power of the Court can be exercised when there is no remedy provided in the Code of Criminal Procedure for redressal of the grievance. It is well settled that the inherent power of the Court can ordinarily be exercised when there is no express provision in the Code under which order impugned can be challenged.

29. Courts possess inherent power in other statute also like the Code of Civil Procedure (CPC), Section 151 whereof deals with such power. Section 151 CPC reads:

“151. Saving of inherent powers of court.—Nothing in this Code shall be deemed to limit or otherwise affect the inherent power of the court to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the court.”

30. This Court in Padam Sen v. State of U.P. [AIR 1961 SC 218 : (1961) 1 Cri LJ 322] regarding inherent power of the Court under Section 151 CPC observed:

(AIR p. 219, para 8) “8. … The inherent powers of the court are in addition to the powers specifically conferred on the court by the Code. They are complementary to those powers and therefore it must be held that the Court is free to exercise them for the purposes mentioned in Section 151 of the Code when the exercise of those 3 (2013) 7 SCC 789

15 powers is not in any way in conflict with what has been expressly provided in the Code or against the intentions of the legislature. It is also well recognised that the inherent power is not to be exercised in a manner which will be contrary to or different from the procedure expressly provided in the Code.”

31. In a Constitution Bench decision rendered in Manohar Lal Chopra v. Seth Hiralal [AIR 1962 SC 527] , this Court held that: (AIR p. 537, para 43) “43. … The inherent jurisdiction of the court to make orders ex debito justitiae is undoubtedly affirmed by Section 151 of the Code, but [inherent] jurisdiction cannot be exercised so as to nullify the provisions of the Code of Civil Procedure.

Where the Code of Civil Procedure deals expressly with a particular matter, the provision should normally be regarded as exhaustive.”

32. The intention of the legislature enacting the Code of Criminal Procedure and the Code of Civil Procedure vis-à-vis the law laid down by this Court it can safely be concluded that when there is a specific remedy provided by way of appeal or revision the inherent power under Section 482 CrPC or Section 151 CPC cannot and should not be resorted to.’

24. In the light of the above edict, it was not open to the CBI to blithely

ignore the statutory remedy available to it under Section 397 Cr.P.C and

thereafter resort to filing of an application under Section 482 Cr.P.C.

25. We may also note that in the event a revision is lawfully instituted

before the High Court but the same is thereafter found to be not

maintainable on some other ground, it would be open to the High Court to

treat the same as a petition filed under Section 482 Cr.P.C in order to do

justice in that case. However, the reverse analogy may not apply in all

cases and it would not be open to the High Court to blindly convert or treat

a petition filed under Section 482 Cr.P.C as one filed under Section 397

Cr.P.C., without reference to other issues, including limitation. When the

16 specific remedy of revision was available to the CBI, it could not have

ignored the same and filed a petition under Section 482 Cr.P.C. We,

therefore, find in favour of the appellants even on this count.

26. On the above analysis we are of the opinion that the learned

Magistrate was fully justified in exercising power under Section 239 Cr.P.C.

and discharging the appellants from criminal proceedings in relation to

Case No. 456 of 2012. The High Court adopted a rather technical approach

and practically concluded that the appellants were guilty of deliberately

withholding relevant information so as to secure the approvals by deceitful

means. This finding of the High Court is not supported by the admitted

facts, which indicate disclosure of the mortgage at the outset when the first

application was made and, therefore, there is no possibility of inferring that

the appellants conspired in terms of Section 120A IPC to commit an illegal

act of suppression so as to secure the approvals. Further, the AICTE itself

never claimed that it was dishonestly induced to grant such approvals and

that essential link is altogether missing, whereby any such criminal charge

of cheating can be sustained against the appellants. The impugned order

dated 20.01.2023 passed by the Allahabad High Court in Application U/S

482 Cr.P.C No. 11426 of 2021 is, therefore, set aside and the order of

discharge passed by the learned Special Judicial Magistrate, CBI Court,

17 Ghaziabad, in Case No. 456 of 2012 is restored. In consequence, the

appellants shall stand discharged of the alleged offence under Sections

420 and 120B IPC in Case Crime No. 219 of 2011 (E) 0016.

The criminal appeal is allowed accordingly.

Pending applications shall stand closed.

………………………..,J (ANIRUDDHA BOSE)

………………………..,J (SANJAY KUMAR) April 8 2024;

New Delhi.

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