TaxTMI 
TaxTMI 
2020 (5) TMI 740
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.... appellant states that he was elected as a member of Bihar Legislative Assembly for the first time in the year 2000. On 15.11.2000, the State of Jharkhand was carved out from the erstwhile State of Bihar. The appellant held the office of the Minister of the State for Rural Engineering Organization thereafter and continued to do so till the year 2003. It is stated that thereafter, he held the office of Minister of Panchayati Raj of Special Arrangement. The appellant successfully contested the elections for the Legislative Assembly in the year 2005 and in September 2006 was appointed the Chief Minister of the State of Jharkhand. He continued to hold the said office till 23.08.2008. 3. The appellant has been convicted by the impugned order in a case captioned "CBI v. M/s. Vini Iron and Steel Udyog Limited and Ors. "arising from FIR No. RC 219 2012 E 0012. The Trial Court found that the appellant had abused his position as a public servant in order to obtain the allocation of Rajhara Coal Block in favour of M/s. Vini Iron and Steel Udyog Limited (hereafter 'VISUL'), without any public interest. Submissions 4. Mr. Abhimanyu Bhandari, learned counsel appearing for the ap....
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....5; R. Venkatkrishnan vs. CBI: (2009) 11 SCC 737; and State of Rajasthan vs. Fatehkaran Mehdu: (2017) 3 SCC 198. 8. He briefly narrated the facts as found by learned Trial Court and submitted that the same clearly establish that VISUL had been favoured with allocation of the Coal Block at the instance of the appellant. He also countered the submission that the benefit of PC Amendment Act, 2018 could be extended to the appellant. He referred to Section 6(d) of the General Clauses Act, 1897 (hereafter 'the General Clauses Act') and contended that since the appellant had been convicted prior to the PC Amendment Act, 2018 coming into force, the benefit of the same could not be extended to the appellant. 9. Next, he submitted that this was a case of conspiracy and the facts of the case clearly established that the appellant was complicit in the offence notwithstanding that his connection with Vijay Joshi had not been irrefutably established. 10. Lastly, he submitted that whilst at the interim stage, the sentence awarded to a convict can be suspended on the basis of a prima facie view; his conviction cannot be stayed without considering the wider ramifications. He referre....
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....May 2008, the ownership of M/s. VISUL changed hands from the Tulsyan family to one Vijay Joshi, who is alleged to be a close associate of the appellant. And, with the change in the shareholding of VISUL, its fortunes also changed for the better. 18. All applications pertaining to steel and cement sector were considered by the 36th Screening Committee headed by the Secretary, Ministry of Coal, Government of India at its meetings held on 07.12.2007, 08.12.2007, 07.02.2008, 08.02.2008 and on 03.07.2008. The said Committee made the final recommendations in its meeting held on 03.07.2008. 19. On 02.07.2008, Shri. B.K. Bhattacharya-who was a Section Officer with the Department of Mines, State Government of Jharkhand-prepared a note stating that the performance of M/s. Zoom Vallabh Steel Ltd was not satisfactory but the progress of VISUL was, and therefore VISUL be recommended for allocation of the Rajhara Coal Block. 20. It is stated that one of the co-accused, A.K. Basu, the then Chief Secretary, Government of Jharkhand attended the final meeting of the 36th Screening Committee held on 03.07.2008 as a representative of the State, Government of Jharkhand. And, despite being awar....
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....f sub clause (ii) and sub-clause (iii) of clause (d) sub-section (1) of section 13 of the PC Act indicates that a public servant would commit an offence of criminal misconduct if he, by abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage. A plain reading of the sub-clauses of clause (d) of section 13(1) of the PC Act do not indicate that a demand of illegal gratification is a necessary ingredient of the offence of criminal misconduct. Thus, there is no reason to read-in such a condition in the said sub-clauses. 27. Mr. Bhandari had rested his contention on the strength of certain decisions rendered by the Supreme Court. In B. Jayaraj (supra), the Supreme Court had observed as under: "7. Insofar as the offence under Section 7 is concerned, it is a settled position in law that demand of illegal gratification is sine qua non to constitute the said offence and mere recovery of currency notes cannot constitute the offence under Section 7 unless it is proved beyond all reasonable doubt that the accused voluntarily accepted the money knowing it to be a bribe. The above position has been succinctly laid....
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....ocal terms, that mere possession and recovery of currency notes from an accused without proof of demand would not establish an offence Under Section 7 as well as 13(1)(d)(i) and (ii) of the Act. It has been propounded that in the absence of any proof of demand for illegal gratification, the use of corrupt or illegal means or abuse of position as a public servant to obtain any valuable thing or pecuniary advantage cannot be held to be proved. The proof of demand, thus, has been held to be an indispensable essentiality and of permeating mandate for an offence under Sections 7 and 13 of the Act. Qua Section 20 of the Act, which permits a presumption as envisaged therein, it has been held that while it is extendable only to an offence under Section 7 and not to those under Sections 13(1)(d)(i) & (ii) of the Act, it is contingent as well on the proof of acceptance of illegal gratification for doing or forbearing to do any official act. Such proof of acceptance of illegal gratification, it was emphasized, could follow only if there was proof of demand. Axiomatically, it was held that in absence of proof of demand, such legal presumption under Section 20 of the Act would also not arise. ....
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....fence under Section 13(1)(d) of the PC Act in conjunction with the offence under Section 7 of the PC Act. Clearly, in order to establish the offence in such cases, it would be necessary for the prosecution to establish that the accused had demanded or had obtained illegal gratification either himself or by any other person as the same is necessary for securing a conviction of an offence under Section 7 of the PC Act. 32. Apart from criminal misconduct being in conjunction of demand for illegal gratification, an offence under Section 13(1)(d) of the PC Act could also be established as a standalone offence. In Neera Yadav v. CBI (supra), the Supreme Court had examined the provisions of Section 13 of the PC Act as then in force and had explained the ingredients necessary for commission of the said offence. Paragraphs 16 and 17 of the said decision are relevant and are set out below: "16. Section 13 of the PC Act in general lays down that if a public servant, by corrupt or illegal means or otherwise abusing his position as a public servant obtains for himself or for any other person any valuable thing or pecuniary advantage, he would be guilty of "criminal misconduct". Sub-....
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....ut up a note on the directions of Smt. Neera Yadav for proposing a revision in the layout plan of Plot Nos. 26, 27 and 28 in Sector 14A, by increasing their size from 450 square meters to 562 square meters, 525 square meters and 487.5 square meters respectively. Smt. Neera Yadav approved the same to her benefit. It was alleged that by a subsequent change in the plan, a 7.5 meter wide road was carved out to the east of plot no. 26, which also resulted in benefiting her. In addition to the above, the prosecution established that Smt. Neera Yadav had abused her position in securing allotments of two plots in favour of her daughters. Both her daughters were allotted shops in Noida and on the basis of such allotment, they had applied for allotment of residential plots, which were also allotted to them. Since the allegations against Ms. Neera Yadav were established, she was convicted for criminal misconduct under Section 13(1)(d) of the PC Act read with Section 13(2) of the PC Act. She was sentenced to undergo rigorous imprisonment for a period of three years with the fine of ` 1,00,000/-. The Allahabad High Court upheld her conviction. Ms. Neera Yadav appealed to the Supreme Court. The ....
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....nefit or pecuniary advantage to an unconnected party, may be not be sufficient to impute that the exercise of such power is culpable misconduct under sub-clause (ii) of clause (d) of sub-section (1) of Section 13 of the PC Act. First of all, it would be necessary for the prosecution to establish that the public servant had abused his official position; that is, used it for wrongdoing and for a purpose he ought not to have. Secondly, the same was for securing a valuable thing or pecuniary advantage for himself or for any other person, without any public interest. Obviously, if the third person, who has acquired a valuable thing or pecuniary advantage, is unconnected with the public servant, it would be difficult to accept that the conduct of the public servant is culpable in terms of Sub-clause (ii) of clause (d) of Subsection (1) of Section 13 of the PC Act. 38. The legislative intent is not to punish a public servant for any erroneous decision; but to punish him for corruption. The preamble of the PC Act indicates that it was enacted "to consolidate and amend the law relating to the prevention of corruption and for matters connected therewith." Thus, to fall within the four cor....
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....time during the period of his office, been in possession of pecuniary resources or property disproportionate to his known sources of income which the public servant cannot satisfactorily account for. Explanation 2.--The expression "known sources of income" means income received from any lawful sources.". (2) Any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall be not less than four years but which may extend to ten years and shall also be liable to fine." 43. In T. Barai (supra), the question, which fell for consideration before the Supreme Court, related to the applicability of Section 16A of the Prevention of Food Adulteration Act, 1954 as inserted by the Prevention of Food Adulteration (Amendment) Act, 1976 (referred to as 'the Central Amendment Act') in relation to the prosecution that was launched under Section 16(1)(a) as applicable in the State of West Bengal between the period 29.04.1974 to 01.04.1976. The offences in question were punishable with imprisonment for life and therefore triable by the Court of Sessions by virtue of the Act as amended by Prevention of Adulteration of Food, Dr....
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.... foul fall of Article 20(1) of the Constitution of India. There is no reason to restrict the retrospective operation of such an enactment, which reduces the rigors of the law. In view of the aforesaid principles, the Supreme Court held that merely because the Central Amendment Act had not expressly repealed the West Bengal Amendment Act, it could not be said that the former was not retrospective in its operation. The Supreme Court found that the legislation had substituted the scheme and, therefore, the Act as amended by the West Bengal Amendment Act stood repealed. The Court was also of the view that the intention of the legislature was to do so with retrospective effect. It is material to note that one of the reasons that persuaded the Supreme Court to take the said view was the fact that the Central Amendment Act was in respect of the same offence that was earlier punishable under Section 16(1)(a) of the Act. 45. The provisions of Section 13 of the PC Act were substituted by virtue of the PC (Amendment) Act, 2018. It is well settled that the effect of substitution of a statutory provision by another is that the earlier provision is repealed and is replaced by the provisions s....
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....on of Corruption (Amendment) Bill, 2013 makes it clear that the said Bill was introduced pursuant to India's ratification of the United Nations Convention against Corruption (UNCAC) in May 2011, judicial pronouncements, and the need to bring domestic laws in line with international practices. The Statement of Objects and Reasons reads as under:- "The Prevention of Corruption Act, 1988 provides for prevention of corruption and for matters connected therewith. The ratification by India of the United Nations Convention Against Corruption, the international practice on treatment of the offence of bribery and corruption and judicial pronouncements have necessitated a review of the existing provisions of the Act and the need to amend it so as to fill in the gaps in description and coverage of the offence of bribery so as to bring with it in line with the current international practice and also to meet more effectively, the country's obligations under the aforesaid convention." 47. The said Bill was introduced in the Rajya Sabha on 19.08.2013 and was referred to the Department related Standing Committee on Personnel, Public Grievances, Law and Justice which presented i....
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.... existing anti corruption laws more effective by widening their coverage and strengthening the provisions. It was enacted to consolidate and amend the law relating to prevention of corruption and for matters related thereto. The Prevention of Corruption Act, 1947 did not include any offence of the nature as specified under Section 13(1)(d)(iii) of the PC Act. It does appear that the said provision was introduced only for the purpose of expanding the scope and coverage of the law relating to prevention of corruption. Thus, for the first time, an act/conduct resulting in a pecuniary advantage to a third party was held culpable, as a species of corruption, merely because such an act or conduct was without public interest. 50. There were serious concerns expressed that decisions which did not involve any mens rea or any guilty intention or knowledge could, nonetheless, be considered as offences under the PC Act. Some stakeholders also expressed the view that such an interpretation would make public servants reluctant to make any decisions involving grant of any advantage to any third party. 51. It is apparent that said concerns were addressed by substituting Section 13 of the PC ....
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.... is prima facie merited, this Court does not consider it apposite to consider this aspect in any detail at this stage. 57. In the light of the above, the principal question to be examined is whether the conviction of the appellant is liable to be stayed. The power of a court to stay a conviction has been considered by the Supreme Court in several decisions. In Navjot Singh Sidhu v. State of Punjab (2007) 2 SCC 574, the Supreme Court had summarized the legal position as under: "4. Before proceeding further it may be seen whether there is any provision which may enable the Court to suspend the order of conviction as normally what is suspended is the execution of the sentence. Subsection (1) of Section 389 says that pending any appeal by a convicted person, the appellate Court may, for reasons to be recorded by it in writing, order that the execution of the sentence or order appealed against be suspended and, also, if he is in confinement, that he be released on bail, or on his own bond. This Sub-section confers power not only to suspend the execution of sentence and to grant bail but also to suspend the operation of the order appealed against which means the order of conv....
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.... cons and if it feels satisfied that a case is made out for grant of such an order, it may do so and in so doing it may, if it considers it appropriate, impose such conditions as are considered appropriate to protect the interest of the shareholders and the business of the company." 5. The aforesaid view has recently been reiterated and followed by another Three Judge Bench in Ravi Kant S. Patil v. Sarvabhouma S. Bagali: JT 2006 (1) SC 578. After referring to the decisions on the issue, viz., State of Tamil Nadu v. A. Jaganathan (1996) 5 SCC 329, K.C. Sareen v. C.B.I., Chandigarh (2001) 6 SCC 584, B.R. Kapur v. State of T.N. & Anr. (2001) 7 SCC 231 and State of Maharashtra v. Gajanan & Anr. (2003) 12 SCC 432, this Court concluded (para 12.5 of the report): "16.5. All these decisions, while recognizing the power to stay conviction, have cautioned and clarified that such power should be exercised only in exceptional circumstances where failure to stay the conviction, would lead to injustice and irreversible consequences." The Court also observed:- "11. It deserves to be clarified that an order granting stay of conviction is not the rule but is an e....
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....rs. v. Union of India and Ors. (2019) 3 SCC 224, the Supreme Court had observed as under: "2. The constitutional functionaries, who have taken the pledge to uphold the constitutional principles, are charged with the responsibility to ensure that the existing political framework does not get tainted with the evil of corruption. However, despite this heavy mandate prescribed by our Constitution, our Indian democracy, which is the world's largest democracy, has seen a steady increase in the level of criminalization that has been creeping into the Indian polity. This unsettlingly increasing trend of criminalization of politics, to which our country has been a witness, tends to disrupt the constitutional ethos and strikes at the very root of our democratic form of government by making our citizenry suffer at the hands of those who are nothing but a liability to our country." 61. The Court considered the plea of the petitioner in that case to disqualify persons who were charged with heinous offences to contest elections to public offices. The Law Commission, in its 244th Report, had also recommended that a person against whom the charges have been framed be disqualified f....