A report was published in newspapers and aired on TV channels
regarding allegations of disproportionate assets against former
Uttar Pradesh, Chief Minister Mulayam Singh Yadav and his family.
While CBI was enquiring the matter, a news article was published
titled "CBI may admit Mulayam was framed-DIG's internal
note says agency had not verified in PIL". A complaint was
filed for generating a fake and fabricated report to tarnish the
reputation of CBI. The CBI filed a closure report due to inability
in establishing as to who forged the documents in question as the
journalists did not disclose their source and therefore there was
lack of sufficient material to bring charges against any
person.
The Court observed that a bare perusal of the untrace report
shows that the CBI has not chosen to take the investigation to its
logical conclusion as "Merely because the
concerned journalists denied to reveal their respective sources, as
stated in the final report, the investigating agency should not
have put a halt to the entire investigation."
The court added that there is no statutory exemption to journalists
from disclosing their sources to investigating agencies, specially
where such disclosure is necessary for aiding and assisting in
investigation. Accordingly, the court directed that CBI would be at
liberty to carry out further investigation and file a supplementary
report.
CBI v. Closure Report
CBI No. 99/19
[Rouse Avenue District Court, New Delhi]
The accused was acquitted by the Trial Court in a complaint
under Section 138 Negotiable Instruments Act, 1881 (NI Act) which
was challenged before the Madras High Court, and the High Court
reversed the acquittal order and convicted the accused.
The accused had examined the Income Tax officer, during trial,
who had produced certified copies of the Income Tax Returns (ITR)
of the complaint for the relevant financial year to show that the
complainant had not declared that he had lent Rs. 3 lakhs to the
accused and that the complainant did not have the financial
capacity to lend the money as alleged. The Trial Court found that
the ITR of the complainant did not disclose that he had indeed lent
the amount to the accused and that the declared income was not
sufficient to give out a loan of Rs. 3 lakhs. The Trial Court,
therefore found it highly doubtful that the complainant had
actually lent an amount of Rs. 3 lakhs to the accused.
The Hon'ble Supreme Court agreed with the view of the Trial
Court and observed that the standard of proof for rebutting the
presumption under Section 139 of the NI Act is that of
"preponderance of probability" which the appellant
satisfies that once the execution of cheque is admitted, Section
139 of NI Act mandates a presumption that the cheque was for the
discharge of any debt or other liability. It has however been held
that the presumption under Section 139 is a rebuttable presumption
and the onus is on the accused to raise the probable defence. The
standard of proof for rebutting the presumption is that of
preponderance of probabilities and that inference of preponderance
of probabilities can be drawn not only from the materials brought
on record by the parties but also by reference to the circumstances
on which they rely.
Rajaram S/O Sriramulu Naidu (Since Deceased) Through
L.R.S. v. Maruthachalam (Since Deceased) Through
L.R.S., Criminal Appeal No. 1978 of 2013
[Supreme Court of India]
24.01.2023
An FIR was registered under Sections 120B and 420 of the Indian
Penal Code, 1860 (IPC) along with Sections 13(2) and 13(1)(d) of
Prevention of Corruption Act, 1988 (POCA). The FIR alleged that
Prakash Industries had actively misrepresented in its application
for allocation of a coal block, certain disclosures with respect to
net worth. However, the allocation of coal block came to be
cancelled after the Supreme Court ruling in Manohar Lal
Sharma v. The Principal Secretary & Ors. On the
heels of the CBI FIR, ED lodged an ECIR on identical allegations
and proceeded to record that on the commission of criminal
offences, ED has reason to believe that proceeds of crime were
generated. While investigation was underway, a complaint was lodged
by ED and impugned PAO was passed on the allegations of
manipulation of share prices and inducements made for the purposes
of allotment of preferential shares. A petition was moved before
the Delhi High Court by M/S Prakash Industries Limited challenging
the PAO.
The Delhi High Court quashed the PAO and noted that neither the
chargesheet filed by CBI nor the ECIR contained allegations
relating to allotment of preferential shares and benefits derived
therefrom. It also observed that the ED can only
'investigate' offence of money laundering and cannot
'assume' a predicate offence stands committed from the
material gathered by it during investigation.
The Hon'ble Court referred to the Supreme Court judgement
inVijay Mandanlal Choudhary v. Union of
India, wherein it was held that authorities under
Prevention of Money Laundering Act, 2002 (PMLA) cannot resort to
action against a person for money laundering on an assumption that
a scheduled offence has been committed. The court also observed
that initiation of action under Section 5 of PMLA is premised on
the competent authority having reason to believe that a person is
in possession of proceeds of crime and that formation of such
opinion is not related to the commission of a scheduled offence.
The court opined that ED is not empowered to either try or examine
whether an offence under any other statute stands committed nor it
can pass a PAO on a mere assumption that an offence independently
created under any other statute is established to have been
committed.
M/s Prakash Industries Ltd. v. Union of India &
Anr.
W.P. (C) 13361/2018
[Delhi High Court]
25.01.2023
An application was preferred by the Respondent for seeking
information relating to money laundering business, hawala money
transactions, smuggling and tax evasion from the Central Economic
Intelligence Bureau (CEIB). The RTI applicant sought information
about the status of his complaint and action taken on the same.
The Petitioner refused the said information on the ground that
the same is exempted under Section 24(1) read with Schedule II of
the Right to Information Act, 2005 (RTI Act) which was challenged
by the Respondent before the CIC. The CIC held that RTI act is not
applicable to the Petitioner however, the Petitioner was directed
to inform the Respondent about the status of his complaint.
Aggrieved by the order of the Central Information Commissioner
(CIC) the Petitioner filed a writ petition before the Delhi High
Court.
The Hon'ble Delhi High Court held that the information about
money laundering, hawala transactions, acts of tax evasion and
smuggling do not relate to corruption or human rights violations
and therefore, intelligence and security organisations are not
bound to provide such information under RTI Act. The court
concluded that the CEIB is exempted under Section 24(1) read with
Schedule II of the RTI Act and the direction to provide the outcome
of the complaint is not sustainable and contrary to law.
CPIO, Central Economic Intelligence Bureau v. G.S.
Srinivasan, W.P. (C) 10124/2021 and CM Appl. 31234/
2021
[Delhi High Court]
31.01.2023
The appellants had challenged an order passed by the High Court
in a Petition under Section 482 Cr.P.C. seeking quashing of a
F.I.R. registered against them under Sections 323, 384, 406, 423,
467, 468, 420 and 120B of Indian Penal Code (IPC). The FIR was
registered in furtherance of an application under Section 156(3) of
Cr.P.C. filed by the complainant alleging therein
fabrication/forgery of a trust deed and subsequent criminal conduct
of the accused persons. The High Court had declined to exercise its
jurisdiction under Section 482 of Cr.P.C. on the ground that on
perusal of the case diary as also the materials on record,
prima facie case for investigation was
made out.
The High Court had noted that jurisdiction under Section 482 of
Cr.P.C. was to be exercised with care and caution and sparingly.
After going through the application under Section 156(3) of Cr.P.C
the court found sufficient material on record for police to
investigate.
The Supreme Court while setting aside the judgment of the High
Court, held that criminal proceedings can be quashed in exercise of
powers under Section 482 Cr.P.C. when it is found that the attempt
was to give a "cloak of criminal offence" to a dispute
which is essentially of civil nature. The Court quashed the
criminal proceedings after noting that the application filed under
Section 156(3) Cr.P.C did not satisfy the essential ingredients to
attract the alleged offences and that the allegations were vague.
The court based its findings on a fact which the High Court had
failed to consider, that the existence of a pending civil dispute
on the causative incident was not disclosed in the application,
which was held by the Apex Court to be a material concealment.
Usha Chakraborty & Anr. v. State of WB
SLP (Crl.) No. 5866 of 2022
[Supreme Court of India]
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Prakash Industries Limited is an India-based company, which is engaged primarily in the business of manufacture and sale of steel products and generation of power. It operates in iron and steel segment. The Company is also engaged in iron ore and coal mining businesses. The Company is involved in extraction of iron ore from Sirkaguttu Mine in Keonjhar district of Odisha. The Company is also focused on operating Bhskarpara Coal Mine in Chhattisgarh. The Company's products include sponge iron, ferro alloys, steel blooms and billets, TMT Bars, Wire Rods, and HB Wires. It operates a captive power plant to meet the requirement of power in steel making at its Integrated Steel Plant using Waste Heat Recovery Boilers and Fluidized Bed Boilers. The Company has also set up Wind Power Generating Farms at Muppandal in the state of Tamil Nadu.