2021 (12) TMI 1107 - HC - Indian Laws

Court upholds rejection of discharge petitions, frames charges for conspiracy & corruption under IPC

Anup Kumar Lakhotia Versus The Union of India through Central Bureau of Investigation

The court upheld the lower court's decision to reject the discharge petitions and frame charges against the petitioner. It found prima facie evidence of ... Conspiracy - introduction of huge share capital through shell/paper companies in the books of the assessee companies - prosecution granted under Section 19 of the Prevention of Corruption Act - HELD THAT:- The materials which been collected during investigation prima-facie reveal that the assessment orders resulting in huge addition of income interalia, against the companies of the petitioner on account of unverifiable investors in the companies through shell companies were passed by the income tax authorities at Kolkata, appeals were also filed, but in absence of stay, orders for attachment of bank accounts were passed. The allegation is that a number of accused persons including the petitioner who is director of the two assessee companies as well as Tapas Kumar Dutta , the Chief Commissioner of Income Tax having jurisdiction for Ranchi and Hazaribagh conspired with each other to get rid of the demand raised at Kolkata in assessment proceedings and in furtherance thereof, the PANs and the records were transferred from Kolkata to Jharkhand , Revision petitions were filed under section 264 of Income Tax Act before Tapas Kumar Dutta during pendency of appeals at Kolkata. Thereafter, pending appeals at Kolkata were sought to be withdrawn by the petitioner but instead of permitting withdrawal, the appellate authority dismissed the appeals. There are materials on record to show that the transfer of PANs and records from Kolkata to Jharkhand was itself a part of the conspiracy as no business or office of the companies actually existed in the place of their transfer to Jharkhand and the transfer was itself a device to facilitate the co-accused Tapas Kumar Dutta to enable him to pass orders in favour of the companies of the petitioner in which the petitioner was a director. The allegations reveal that huge investments were made in the companies of the petitioner by non-existing parties / shell companies - Volumes of transcripts of recorded conversations have been collected which reveal conversation amongst the accused persons although it has been argued by the learned counsel for the petitioner that the conversations do not involve the petitioner. This court is of the considered view that this is not the stage for scrutinizing the transcripts of recorded conversations in order to record any direct or indirect links of the petitioner with the alleged offence. Suffice is to say that there are sufficient incriminating materials and circumstances, collected against the petitioner during investigation, to constitute prima–facie case indicating involvement of the petitioner in the alleged offence. This court finds that the learned court below has considered the totality of the materials collected during investigation to find prima-facie case against the petitioner. The petitioner has argued that the Tapas Kumar Dutta had acted as per the Income Tax Act and only remanded the case vide order passed under Section 264 of the Income Tax Act. This court is of the considered view that material on record prima-facie show that Tapas Kumar Dutta had misused his office and the official position to give undue favour to the petitioner in conspiracy with others and is a co-accused in this case for which sanction for prosecution has also been granted. The orders of remand passed under Section 264 of the Income Tax Act have the effect of nullifying the demand raised pursuant to the orders of assessments - the sanction for prosecution of Sri Tapas Kumar Dutta, the then Chief Commissioner of Income Tax, Ranchi has been granted under Section 19 of the Prevention of Corruption Act and a copy of the same has been produced by the opposite party before this court. It is not in dispute that the trial has already commenced. There are no illegality or perversity or material irregularity in the impugned order of refusing to discharge the petitioner and also the impugned order framing charge against the petitioner. This court finds that the impugned orders are well reasoned orders based on materials on record and do not call for any interference in revisional jurisdiction of this court - the present revision petition is dismissed. Issues Involved:1. Legality of the order rejecting the discharge petitions.2. Validity of the charges framed against the petitioner.3. Allegations of criminal conspiracy and corruption.4. Applicability of Sections 120(B) of IPC and Sections 7, 12, and 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988.5. The role of a non-public servant in the alleged criminal conspiracy.6. Procedural correctness in framing charges.Detailed Analysis:1. Legality of the Order Rejecting the Discharge Petitions:The court examined whether the discharge petitions were rightly rejected by the lower court. The petitioner argued that there was no material evidence linking him to the alleged conspiracy and that the transfer of PAN was legally permissible. The court, however, found that the materials collected during the investigation prima facie revealed a conspiracy involving the petitioner and other accused persons, which justified the rejection of the discharge petitions.2. Validity of the Charges Framed Against the Petitioner:The petitioner challenged the framing of charges, arguing that the actions taken were within the legal framework of the Income Tax Act and did not constitute any criminal offense. The court, however, found sufficient material to frame charges under Section 120(B) of IPC read with Sections 7, 12, and 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, and Section 15 of the Prevention of Corruption Act read with Section 511 of IPC. The court emphasized that at the stage of framing charges, the probative value of the material on record cannot be gone into, and the material brought on record by the prosecution must be accepted as true.3. Allegations of Criminal Conspiracy and Corruption:The prosecution alleged that the petitioner, in conspiracy with other accused persons, including a high-ranking income tax official, manipulated the transfer of PANs and filed revisions under Section 264 of the Income Tax Act to obtain favorable orders, resulting in a significant loss of revenue. The court found prima facie evidence supporting these allegations, including the recovery of substantial cash and gold from the residence of the principal accused, and the dubious nature of the PAN transfers and subsequent orders.4. Applicability of Sections 120(B) of IPC and Sections 7, 12, and 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988:The petitioner contended that as a non-public servant, he could not be charged under these sections. The court, however, held that a non-public servant could indeed be charged with criminal conspiracy to commit offenses under the Prevention of Corruption Act if there was prima facie evidence of such conspiracy. The court found sufficient material indicating the petitioner’s involvement in the conspiracy to influence a public servant to obtain favorable orders.5. The Role of a Non-Public Servant in the Alleged Criminal Conspiracy:The petitioner argued that he could not be tried for offenses under the Prevention of Corruption Act as he was not a public servant. The court rejected this argument, stating that a person could be charged with conspiracy to commit an offense under the Act if there was evidence of an agreement to do an illegal act. The court found prima facie evidence of such an agreement involving the petitioner.6. Procedural Correctness in Framing Charges:The petitioner alleged procedural irregularities in the framing of charges, including the lack of specific content in the charges as required under Section 211 of Cr.P.C. The court found that the trial court had applied its judicial mind and that the materials on record justified the framing of charges. The court emphasized that at the stage of framing charges, the court is not to see whether the trial will end in conviction or acquittal but only whether there is sufficient ground for proceeding against the accused.Conclusion:The court dismissed the revision petition, upholding the lower court’s order rejecting the discharge petitions and framing charges against the petitioner. The court found no illegality, perversity, or material irregularity in the impugned orders and held that there was sufficient material on record to proceed with the trial. The court clarified that its observations would not prejudice the case of the parties before the trial court.