2014 (9) TMI 295 - HC - Central Excise

Court upholds conviction under anti-corruption law, reduces sentence, emphasizes proof of corrupt intent

The High Court upheld the conviction of the accused under Section 11 of the Prevention of Corruption Act, 1988, for accepting valuable consideration ... Conviction under Section 11 of the Prevention of Corruption Act, 1988 - Acceptance of gratification - Held that:- From the sub-section (1) of Section 20, it is clear that once it is proved in trial relating to offence punishable under Section 11 that the accused has accepted any valuable thing, it shall be presumed that such person has accepted it as a motive or reward, unless contrary is proved. In the opinion of this Court, the mere fact that the Appellate Authority has upheld the correctness of the order cannot justify the acceptance of valuable thing or money during the proceeding of adjudication or subsequent thereto, particularly when such consideration is accepted not long after the adjudication. Vehicle was donated by the assessee to Zami Memorial Charitable Trust made in the name of mother of the accused/appellant, Smti L.R. Mithran during the proceedings of the adjudication by getting made payment through M/s. Warren Tea Ltd., of which Vinay Kumar Goenka (son of Shri. S.P. Goenka, Chairman of M/s. Kitply Industries Ltd., i.e. Assessee) was the Managing Director. There is sufficient evidence on record establishing the fact as to how Shri S.P. Goenka, Chairman of M/s. Kitply Industries Ltd. (assessee) got made Demand Draft through M/s. Warren Tea Ltd., of which he was the Financial Adviser. Court is in agreement with the trial court that the prosecution has successfully proved charge of offence punishable under Section 11 of Prevention of Corruption Act, 1988 against accused/appellant, Smti L.R. Mithran. As such, the conviction recorded against her does not require any interference. But as far as sentence awarded by the trial court is concerned, in the facts and circumstances of the case, particularly when the order passed by the accused/appellant, Smti L.R. Mithran, Commissioner of Central Excise was not only upheld by the CEGAT (Appellate Authority) but also penalty awarded against the assessee was reduced, this Court is of the view that awarding of sentence of 6(six) months which is the minimum sentence prescribed under Section 11 of Prevention of Corruption Act, 1988 would have met the ends of justice. - Decided against Appellant. Issues Involved:1. Conviction under Section 11 of the Prevention of Corruption Act, 1988.2. Sentencing of the accused.3. Validity of the adjudication order passed by the accused.4. Acceptance of valuable consideration by the accused.5. Presumption under Section 20 of the Prevention of Corruption Act, 1988.6. Arguments regarding mens rea and bona fide transactions.Detailed Analysis:Conviction under Section 11 of the Prevention of Corruption Act, 1988:The accused, Smti L.R. Mithran, was convicted under Section 11 of the Prevention of Corruption Act, 1988, for accepting valuable consideration without adequate consideration from a person involved in a proceeding she adjudicated. The court found sufficient evidence proving that the accused received a donation of Rs. 5,00,000 and a vehicle for the Zami Memorial Charitable Trust from M/s. Kitply Industries Ltd., whose case she adjudicated.Sentencing of the Accused:The trial court sentenced the accused to four years of imprisonment and a fine of Rs. 20,000. However, the High Court reduced the sentence to six months, considering that the adjudication order passed by the accused was upheld by the Appellate Authority and the Apex Court. The fine remained unchanged, and the period already undergone by the accused was to be set off from the six-month imprisonment.Validity of the Adjudication Order Passed by the Accused:The adjudication order by the accused, which reduced the duty payable by M/s. Kitply Industries Ltd., was upheld by the Customs Excise and Gold Control Appellate Tribunal (CEGAT) and the Supreme Court. The court clarified that the correctness of the adjudication order was not in question but whether the accused received any valuable consideration in connection with the adjudication.Acceptance of Valuable Consideration by the Accused:The court found that the accused accepted valuable consideration in the form of a donation and a vehicle for the Zami Memorial Charitable Trust from M/s. Kitply Industries Ltd. during and after the adjudication proceedings. The evidence included testimonies and documents proving the donation and the involvement of the accused's family members in the trust.Presumption under Section 20 of the Prevention of Corruption Act, 1988:Section 20(1) of the Prevention of Corruption Act creates a presumption that any valuable thing accepted by a public servant is as a motive or reward unless proven otherwise. The court held that the presumption applied in this case, and the accused failed to rebut it. The timing of the donation, shortly after the adjudication, supported the presumption of corrupt intent.Arguments Regarding Mens Rea and Bona Fide Transactions:The defense argued that the donation was made after the adjudication and was bona fide, claiming exemption under Section 80G of the Income Tax Act. However, the court rejected this argument, emphasizing that the acceptance of valuable consideration, even after the adjudication, constituted an offense under Section 11. The court also dismissed the argument that there was no mens rea, stating that the presumption under Section 20 applied.Conclusion:The High Court upheld the conviction of the accused under Section 11 of the Prevention of Corruption Act, 1988, but reduced the sentence to six months. The court found that the prosecution successfully proved that the accused received valuable consideration connected to her official duties, and the defense failed to rebut the presumption of corrupt intent. The case highlights the strict application of anti-corruption laws and the importance of maintaining integrity in public office.