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Monday, 19 September 2011 18:21

HCS(J) PRELIMINARY EXAMINATION-2011

HCS(J) PRELIMINARY EXAMINATION-2011
1; The Directive Principles of State Policy as embodied in Chapter IV of the
Constitutionwere derived by us from:-
a. TheConstitutionof Ireland b. The Constitutionof U.S.S.R.
c. TheConstitutionof Switzerland
d. TheGandhianConstitutionfor Free India
2. State whichof the following statements is correct:
a. Preambleis not part ofthe Constitution
b. Preambleis part ofthe Constitutionand relates to its basic structure.
c. Preamble is not part of the Constitutionbut a sort of introduction to the
Constitution.
d. Preambleis likea prologueto the Constitution
3. State which of the following statements is correct:-
a. The Americandoctrine of waiver of fundamental rights is part of the Indian
Constitution. .
b. Noperson can waive his fundamental rights under the Indian Constitution as
they are sacrosanct and no individualcan tinkerwith them.
c. Anon-citizencan waive hisfundamentalrights.
d. Acitizencan waive his fundamental rightswhichare for his individualbenefit.
4. The right to equality means that no person is above law. To this rule, certain
exceptions are recognized. State which of the following come under the
exception:
a. President of India b. Ambassador of USA.
c..Judges of the HighCourts. d. Allthe above
6. Which one of the following writs can be issued only against the judicial or
quasi-judicial authorities?
a. Mandamus b. Habeas Corpus
c. Certiorari d. Quo Warranto
6. State which of the following statements is incorrect:
a. Awritcan be issued against the HighCourt.
b. Government of India and State Governments.
c. Anyauthorityunder the powerand controlof the Governmentof India.
d. Parliament or a State Legislature.
7. TheDirective Principles are:-
a. justiciable the same way as the fundamental rights.
b. justiciable though not the same way as the fundamental rights.
c. decorative portions of the IndianConstitution.
d. not justiciable, yet fundamental in the governance of the country~
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8.Whichcoinout of the followinghas been withdrawn by RBIin 2011:
a. 20Paisa b. 10 paisa
c. 25Paisa d. 5 paisa
9. The total number of Ministers, including the Prime Minister in the Council of
Minister should not exceed:-
a. 20%of the total number of members of Lok Sabha.
b. 15%of the total number of members of Lok Sabha.
c. 20%of the total number of members of Rajya Sabha.
d. 15%of the total number of members of both the Houses.
10. Whohas been conferred with Rajiv Gandhi Khel Ratna Award in the year 2011.
a. AbhinavBindra b. Gagan Narang
c. KapilDev d. Sachin Tendulkar
11. Vast powers and functions vested in the Indian President make him:
a. Almosta dictator b.Abenevolentruler
c. Realhead of the Government d.AnominalConstitutionHead
12. Only that person can be appointed a judge of the Supreme Court who is a
citizen of Indiaand:
a. judge of the HighCourtfor at least fiveyears.
b. advocate of the Supreme Courtfor at least 10 years' standing.
c. judge of the HighCourtfor at least ten years.
d. advocate of the HighCourtfor at least fifteenyears.
13. While a proclamation of emergency is in operation the State Government:-
a. Cannot legislate.
b. Can legislate only on subjects in the ConcurrentList.
c. Can legislate on the subject in the State List.
d. Is suspended.
14. 'What cannot be done directly cannot be done indirectly'. This statement
epitomises the doctrine of:-
a. Pith and substance.
c. Ancillarypowers.
b. Implied powers.
d. Colourable legislation.
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15. Residuary powers are vested in:
a. executive
c. parliament
b. judiciary
d. state legislatures
16. Who said that the Supreme Court in India has the highest powers whic h no
other court in the world possess?
a. Mahatma Gandhi
c. Sardar Vallabh Bhai Patel
b. Jawahar Lal Nehru
d. Alladi Krishna Swamy Iyyer
17. TheConstitution of India is:-
a. Highlyfederal
c. Neitherfederal nor unitary
b. Highly unitary
d. Partly federal and partly unitary
18. Whoamongst the following is not a 'public officer' within the meaning of
Section 2 (17) of CPC.
a. a Judge
b. a person in service under the pay of Government
c. sarpanch of a Gram Panchayat
d. all of the above
19. Give response to the statement
Equality before law under Article 14 of the Constitution is with reference to
a.laws enacted by legislature
b. orders passed by the executive
c. notifications issued by the Government only
d. laws enacted by legislature, executive order etc.
20. A change of nature of obligation of a contract is known as
a. repudiation b. rescission
c. alteration d. none of the above
21.1ndiraSwahney V. Union of India is a case popularly known as:
a. Ayodhyajudgment b. Mandaijudgment
c. Suicidejudgment d. ElectionCommissionjudgment
22.The Advisory opinion tendered by the Supreme Court:
a. is bindingon the President
b. is not binding on the President
c. is binding on the President only if it is unanimouslymade
d. is not made public at all
23.Among the following States, which one sends the highest number of members
to Lok Sabha?
a. Andhra Pradesh
c. Kamataka
b. Bihar
d. Madhya Pradesh
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-24. Acontract, which is formed without the free consent of the parties, is
a. voidab initio b. void c. illegal
d. voidableat the instanceof the partywhose consentwas not free.
25. Which of the following legal pleas need not be pleaded
a. estoppel b. limitation
c. res-judicata d. none ofthe above
26.At present the Vice President of India is:-
a. Meera Kumari b. Bhairon SinghShekhawat
c. Dr.KaranSingh d. A.H.Ansari
27.Thesmallestmilitary outfit is called a
a. Division b. Brigade
c. Section d. Platoon
28. India's largest and most sophisticated indigenously built warship which wa$
commissioned in 1994-95 is:
a. INS Delhi
c. INSSatpura
b.INS Mysore
d. INS Kulish
29. The Battle of Longewala took place in the year:
a.1965 b. 1967
c. 1969 d. 1971
30. The National Anthem was first sung at this session of the Indian National
Congress in 1911:-
- a. Pune
c. Lucknow
b. Calcutta
d. Ahmedabad
3-1.Goodwill of a partnership business is the property of the partnership
a. underSection14 b.underSection13
c. underSection12 d. d. underSection11
32.The State with the highest population density in India is:
a. Uttar Pradesh b.West Bengal
c. Gujarat d. Maharashtra
33.The Indian State with the highest female sex ratio is:
a. Punjab b. Madhya Pradesh
c. Maharashtra d. Kerata
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34.Thefirst recipient of the Bharat Ratnaafter it was revived in 1980was:
a.AcharyaVinobaShave b. MotherTeresa
c. M.G.Ramachandran d. V.V.Giri
35. Comp'ulsorydissolution of a firm has been provided under
a. Section39 of the Act b. Section41 of the Act
c. Section40 of the Act d. Section44 of the Act
36. An act done by a partner on behalf of the firm beyond the implied autno rity
a. canbe ratifiedexpressly b. can be ratifiedimpliedlyby conduct
c. either(a) or (b) d. neither(a) nor (b)
37. After dismissal of a complaint under Section 203, a fresh similar complaint on
the same facts
a. is banned
b. is not banned but will be entertained only in exceptional circumstances
c. is not banned and will be entertained in all circumstances
d. either (a) or (c)
38. A new person can be introduced into a firm as a partner under Section 31 of
the Act by
a. unanimous consent of all the partners
b. majority consent amongst the partners
c. with the consent of the managing partner
d. none of the above
39. Complaint may relate to:
a. a cognizable offence
b. a non cognizable offence
c. both (a) & (b) are correct
d. must be for a non-cognizable
investigate such an offence.
offence as the police has no power to
40. If th, person who is competent to compound offence is dead, the
compounding
a. cannot be done
b. can be done by the legal representative of the deceased without the
permission of the court
c. can be done by the legal representative of the deceased only with the
permission of the court.
d. both (b) & (c)
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41. Ina bailableoffence:
a. conditionscan be imposedwhilegrantingbailbythe policeofficer
b.conditionscan be imposedwhilegrantingbailbythe court
c. noconditioncan be imposedwhilegrantingbailbythe policeofficer or by the
court
d. onlymildconditionscan be imposed bythe courtonly
42. In cas~ where an inquiry, trial or other proceedings have been conducted in a
wrong place:
a. the inquiry,trialor other proceedingsshall be voidab initio
b. the inquiry,trialor other proceedingscannot be set aside as voidunless it has
occasionedin failureofjustice
c. the inquiry,trial or other proceedings, cannot be set aside even if it has
occasionedin failureofjustice
d. either(a) or (c)
43. Incomputing the period of limitation the time during which
a. the accused avoided arrest byabsconding has to be excluded
b. the accused remained absent fromIndiahas to be excluded
c. both(a)&(b)
d. Neither(a) nor (b)
44. Irregularities which do not vitiate trial have been stated in
a. Section460 of Cr.P.C b. Section461 of Cr.P.C
c. Section462 of Cr.P.C d. Section 466 of Cr.P.C
45. Objection as to the lack of territorial jurisdiction of the criminal court:
a. can be taken before or at the time of commencement of trial
b. can be taken at any time after the commencement oftrial
c. can be taken in appeal for the firstime
d. all the above.
46. power to recall any witness(es) under Section 311 of Cr.P.C. can be exercised:
a. even after the evidence of both the sides is closed
b. after the evidence of the prosecution is closed, but before the evidence of
defence is closed
c. before the evidence of the prosecution is closed, ifthe witness is to be called
on the motion of the prosecution
d. ~fter the evidence of the prosecution is closed if the witness is called on the
motionof the defence
47. Words 'competentjurisdiction' under Section 39 of CPC refers to
a. pecuniary jurisdiction of transferee court
b. territorialjurisdiction of the transferee court
c. pecuniary and territorialjurisdictionofthe transferee court
d. none ofthe above
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48. Section 428 Cr.P.C provides for concession to the effect that period of
detention undergone by accused be set off
a. againstthe substantiveperiodof imprisonmentawarded;
b. againstthe periodof imprisonmentin defaultof paymentoffine.
c. a&babove. .
d. none ofthe above.
49. UnderSection 167 of Cr.P.C, the Magistrate can authorise detention for a total
period of 90 days during investigation, in cases of offences punishable
a. withdeath
b.withimprisonmentfor life
c. withimprisonmentfor a term not less than 10years
d. allthe above
50. UnderSection 216 of Cr.P.C, the Court has the power to:
a. add to the charge(s) already framed
b. alterthe charge(s) alreadyframed
c. neitherto alter norto add to the charge alreadyframed
d. add to and alter the charge both.
51. Under Order VI, Rule 17 of CPC, an application for amendment of pleadings
can be allowed .
a. beforethe commencement oftrial b. afterthe commencement of trial
c. either before or afterthe commencement oftrial d. none ofthe above
52. Under .Section 315 of Cr.PC
a. an accused cannot be a witness
b. an accused can be compelledto give his ownevidence generally
c. an accused can be called as a witness onlyon his own request inwriting
d. either (a) or (b)
53. Under Section 439 of Cr.PC, the jurisdiction to cancel the bail vests with:
a. The Court of Sessions b. The HighCourt
c. The Court of Magistrate d. Only(a) &(b)
54. With reference to Crime response the following:
a. it is a state wrong b. it is a civilwrong
c. it is a private wrong d. none of the above
55. Actus ~us includes:
a. positive (intentional doing) as well as negative (intentional non-doing. Le.
omission) acts.
b. only positive acts.
c. external (bodily)as well as internal(mind)acts
d. both (a) and (c)
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5,6. Section 34 of IPC
a. creates a substantiveoffence
c. both(a) and (b)
b. is a ruleof evidence
d. neither (a) nor (b)
57. Preparationand attempt are two stages of commission of crime. Pre~aration is
not punishable generally but attempt is. One basic reason as to why preparation is
not punishable is that there:
a. isno nexus between preparationand attempt.
b. can be chances of change ofmindbefore commissionof offence
c. isabsence of intention.
d. is absence of attempt.
58. Illegalsignifies:
a. everythingwhichis an offence
b. everythingwhichis prohibitedbylaw
c. everythingwhichfurnishes groundfor civilaction
d. allthe above
59. Howmany types of punishments have been prescribed under the Indian Penal
Code:
a. three
c. five
b. six
d. four
60. Second appeal under Section 100 of CPC lies
a. on question offacts b. on substantial questions of law
c. on mixedquestion of law&fact d. none ofthe above
61. The maxim 'ignorantia juris non excusat'means:
a. ignorance of lawis no excuse b. ignorance of fact is no excuse
c. ignorance of lawis an excuse d. ignorance of fact is an excuse
62. Section 76 &Section 79 of IPC provide the general exception of
a. mistake of law b. mistake of fact
c. both mistake of lawand fact d. either mistake of lawor offact
63. A hangman who hangs the prisoners pursuant to the order of the court is
exempt from criminal liability by virtue of
a. Section 76 of IPC
c. Section 77 of IPC
b. Section 78 of IPC
d. Section 80 of IPC
64. "A",with the intention to kill, shoots aiming at "B", instead "c" gets killed.The
principle for holding "A" liable is known as
a. The doctrine of intention b. The doctrine of transferred malice
c. The doctrine that no one can escape d. None ofthese
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65.Therightto privatedefenceis based on the naturalinstinct of
a. self-preservation b. self-respect
c. self-sufficiency d. self-reliance
66. Section511 does not apply in the case of
a. attemptof riot b. attemptof murder
c. attemptoftheft d. attemptof affray
67. Theessence of sedition is
a. intention
c. result
b. benefitsor gains ofthe accused
d. bothintentionand result.
68. Amental pain is
a. also covered underthe offenceofsimple hurt.
b. not covered underthe offenceof simple hurt.
c. sometimes covered under the offence ofsimplehurt.
d. none ofthe above.
69.UnderIndianPenal Code,there can be abetmentto
a. a person of unsound mind b. an infant
c. both (a)&(b) d. neither (a) nor (b)
70. Inwhich of the following cases, the punishment must be 'simple'
a. Refusingto take oath.
b. Disobedienceto an order dulypromulgatedbya publicservant.
c. Wrongfulrestraint.
d. Allof the above.
71. Fight under Section 159 of IPCsignifies
a. twoopposite parties activelyinvolved
b. two parties one ofwhich is passive
c. two parties both of which are passive
d. none of the above
72. Misconduct in public by a drunken person is
a. publicmischief. b. annoyance
c. intentionalinsult d. all of the above
73. Which of the following is defamation:
a. Xsays, "Yis an honest man, he never stole Z's watch," intendingto cause itto
be believed that Ydid steal Z's watch.
b.Xis asked, "whostole Z's watch?"Xpoints to Y.
c. Xdraws a picture ofYrunningawaywithZ's watch.
d. Allof the above.
74. Assault can be caused by
a. gestures
c. both (a) &(b)
b. preparations
d. neither (a)nor(b)
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75. TrespasSbeing made in a surreptitious manner (concealment) is call~d
a. house-trespass b. house-breaking
c. lurkinghouse-trespass d. noneof the above
76. Theword 'takes' in Section 361of IPC signifies
a. takingbyforce b. takingbyfraud
c. physicaltaking d. all the above
77. The expression 'harm' is used in Section 81 of the Indian Penal Code in the
sense of
a.hurt
c. physicalinjury
b. injury or damage
d. moral wrong or evil
78. Which one of the following is not a "Public Servant":-
a. liquidator
b. a Civil Judge
c. member of a panchayat assisting a Court of Justice
d. secretary of a Co-operative Society
79. The causing of death of child in the mother's womb is not homicide under
a. Indianlaw only b. Englishlaw only
c. Both Englishand Indian law d. neitherin Indian law nor in English law
80. The difference between Section 34 and Section 149of Indian Penal Code is
a. that whereas in Section 34 there must at least be five persons, Section 149
requiresonly two persons
b. that Section 149 is only a rule of evidence whereas Section 34 creates a
specific offence and providesfor its punishment
c. that Section 34 requires active participation in action whereas Section 149
requiresmerepassivemembershipof the unlawfulassembly .
d. that Section 34 need not be joined with the principle offence,whereas Section
149 must be combinedwith the principle offence.
81. A confession made by a person while in police custody is inadmissible under:
a. Section 29 of EvidenceAct b. Section26 of EvidenceAct
c. Section 25 of Evidence Act d. Section 27 of Evidence Act
8~. A co-defendant in a case
a. cannot be cross-examined by another co-defendant under any circumstance
b. can be cross-examined by another co-defendant if their interests are identical
c. can be cross-examined by another co-defendant when their interests adverse
to each other
d. can be cross-examined by another co-defendant as a matter of right.
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83. Adyingdeclaration
a. canformthe sole basis of convictionwithoutany corroborationby inde pendent
evidence '
b. canformthe basis of convictiononlyon corroborationbyindependent witness
c. cannotformthe sole basis of convictionunless corroboratedby independent
witness
d. is nota substantivepiece ofevidence
84. Ahusband or wife are permitted to disclose any communication between them
during marriage:
a. in civilproceedings betweenthe parties
b. incriminalproceedings betweenthe parties
c. inmatrimonialproceedings between the parties
d. allthe above
85. Admissions
a. are conclusiveproofofthe matters admitted
b. are notconclusiveproofof the matters admittedbut operate as estoppel
c. are conclusiveproofof the matter and also operate as estoppel'
d. none ofthe above
86. Alibi is governed by
a. Section9 of EvidenceAct
c. Section 10 of EvidenceAct
b. Section 12 of EvidenceAct
d. Section 11 of EvidenceAct
87. Burden of introducing evidence under Section 102 of Evidence Act
a. never shifts b. occasionallyshifts
c. constantlyshifts d. only(a) and not (b) or (c)
88. Burden of proof is lightened by
a. presumption b. admissions
c. estoppels d. all ofthe above
89. Contents of a document under Section 59 of Evidence Act
a. can be proved by oral evidence
b. cannot be proved by oral evidence
c. mayor may not be proved byoral evidence
d. can onlybe proved by oral evidence under the order of the court
90. Estoppel
a. is a cause of action in itself
c. both (a) &(b) are correct
b. creates a cause of action
d.neither (a) nor (b) is correct
91. In criminal trials, the accused
justification of an offence
a. beyond reasonable doubt
c. substantially
has to establish his plea mitigation or
b. primafacie
d. partially
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92. Necessityrule as to the admissibility of evidence is applicable, when the maker
of a statement
a. is dead or has become incapable of givingevidence
b. is a person who can be found but his attendance cannot be procured without
unreasonabledelay or expenses
c. is a personwho cannot be found
d. all ofthe above
93. Re-examinationof a witness
a. can be forthe purposes offillingwhat is left-overinexamination-in-chief
b. can be for the purposes of explaining the matters referred to in crossexamination.
c. can be for the purposes of explaining the matters referred to in the
examination-in-chief.
d. allthe above
. 94. Section105of EvidenceActapplies to
a. criminaltrials b. civiltrials
c. both (a)&(b) d. neither(a) nor (b)
95. Testimony of an accomplice before it is accepted &acted upon
a. mustbe corroboratedfromthetestimonyofanotheraccomplice.
b. must be corroboratedfroman independent source
c. need not be corroborated at all
d. either (a) or (c)
96. The t~rm "character" as explained in Section 55 of the Indian Evidence Act,
1872, means
a. good and bad character
b. reputationand disposition of general nature
c. reputationformed on the basis of particulardisposition
d. character in a criminalact
97. Under the law of evidence, as a general rule
a. opinion on a matter of fact is relevant but noton a matter of law
b. opinion on a matter of law is relevant but not on a matter offact
c. opinion on a matter of fact and lawboth are relevant
d. opinionwhether on a matter of fact or law, is irrelevant
98. Apost-marriage agreement to liveseparately in future is
a. void b. voidable
c. yalid d. invalid
99. Afterthe passing of a decree for judicial separation, co-habitation is
a. obligatory b. not obligatory
c. directory d. either(a)or (c)
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1 00.Deg~s ofprohibited relationship include relationship by
a. f~1Iblood b. halfor uterineblood
c. qdoption d. allthe above
101. Insanity isa ground for
a. gettingthe marriageannulledas voidable b. judicialseparation
c. di"orce d. allthe above
1.02.Remed1(ofrestitution of conjugal rights is aimed at
a. dissolvingthe marriage b. preservingthe marriage
c. both(a)&(b) d. either (a) or (b)
103. Under MuslimLaw,the only natural guardian is
a. Father b. Mother
c. Grand-father d. Grand-mother
104. The renunciation of Islam by a married Muslimwomen of her conversion to a
fajth other than Islam
a. shall notby itself dissolve marriage
c. maybyitselfdissolve marriage
b. shall by itselfdissolve marriage
d. none ofthe above
105. Mother's rightto have the custody of minor child is known as
a. Hizamat b. Hazina
c. Khula d. Ahula
106. Adecision on issue of law
a. shall alwaysoperate as res-judicata
b. shall neveroperate as res-judicata
c. mayor maynot operate as res-judicata
d. none ofthe above
107. A defendant under Order V,Rule 1(1)of CPC is required to appear, anSWer the
claim and to file the written statement
a. within 90 days from the date of service of summons
b. within 60 days from the date of service of summons
c. within 30 days from the date of service of summons
d. within 15 days from the date of service of summons
108.A party filing affidavit in reply to interrogatories
a. can be cross-examined upon it
b. the other partycan adduce evidence to contradictit
c. can neither cross-examine nor adduce any evidence to contradict it, as it is a
conclusive proof
d. none of the above
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109. A person arrested &detained in civil imprisonment in execution
can be released
a. onpaymentofthe outstandingamount
b. onthegroundof illnessof self
c. onthe groundof illnessofa memberofhis family
d. both(a)and (b)
of a decree
110. A plaintcan be rejected
a. underOrder8, Rule 10ofCPC
c. underOrder7, Rule 11 ofCPC
b. under Order8, Rule 10A of CPC
d. none ofthe above
111. Asuit filedon behalf of a minor can be
a. withdrawnat any timeas a matter of right b. cannot be withdrawn
c. withdrawnonlywiththe leave of the court d. none ofthe above
112. A witness who has already been examined can be recalled under Order 18,
Rule 17 ofCPC
a. bythe partycallingthe witness
c. bythe court
b. bythe opposite party
d. none ofthe above
113. After dismissal of suit under Order 9, Rule 8 of CPC, a fresh suit on the same
cause of action, under Order 9 Rule 9 of CPC
a. is barred
b. is not barred under any circumstances
c. is not barred subject to lawof limitation
d. .none of the above
114.An executing court can go behind the decree where
a. the decree has been passed without jurisdiction-pecuniary,territorial. or
subject-matter.
b. the decree is a nullityhaving been passed against a dead person Without
bringinghis legal representatives on the record.
c. where the decree is ambiguous
d. none ofthe above
115.Compromise under Order XXIII,Rule 3 of CPC
a. must be inwritingand signed bythe parties .
b. must be inwritingbut need not be signed bythe parties
c. must be inwritingbut need not be lawful
d. Noneof theabove
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116. For the application of the principle res-subjudice, which of the following is
essential
a. suitsbetweenthesamepartiesorlitigatingunderthe sametitle
b. thetwosuits must be pendingdisposal ina court
. C. the matters in issue in the two suits must be directlyand substantially the
same
d. none of the above
117. If a document, which ought to be produced in the court along with the
pleadings, is not produced, under Order VII, Rule 14(3) of CPC~ at the he~ring of
the suit
a.the same shall not be received in evidence on behalf of the plaintiff
b. thesameshall not be receivedin evidenceon behalf of the defendant
c. thesameshall not be receivedin evidenceon behalfof third party
d. noneof the above
118. Inherentpowers under Section 151 of CPCare
a. discretionaryin nature
b. in additionto the powerconferredunderthe other provisionof the Code
c. both(a)& (b)
d. noneofthe above
119. Legal representative under Section 2(11)of CPC means a person who is a
a. Relativeof parties to the suit
b. co-sharerof the benefitsassumingto the partiesto the suit
c. who in law representsthe estate of the deceased
d. noneofthe above
120. Lodging of caveat under Section 148-Aof CPC
a. entitlesthe caveator to receive notice of the application
b. makes the caveator a partyto the suit
c. both (a) & (b)
d. none of the above
121. On default in filing of written statement under Order 8,
pronouncement of judgment
a. is mandatory
c. directory
Rule 10 of CPC,
b. discretionary
d. none of the above
122.Parties by their consent/agreement
a. can conferjurisdiction on a court, where there is none in law
b. can oust the jurisdiction of the court wherethere is one in law
c. can oust the jurisdiction of one of the courts when there are two
simultaneously having jurisdiction in law.
d. none of the above.
courts
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123. Provisionsof Section 10of CPCare
a. directory b. mandatory
c. discretionary d. none of the above
124. Provisions of Section 80 of CPC are binding on
a. thecourtof a CivilJudge b. the court of DistrictJudge
c. the HighCourt d. allofthe above
125. Review is maintainable
a. when an appeal is provided, but no appeal preferred
b. when no appeal is provided
c. both(a)& (b)
d. neither(a) nor (b)

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PUNJAB AND HARYANA HIGH COURT (LARGE BENCH)
Before :- Vijender Jain, CJ., M.M. Kumar, Jasbir Singh, Rajive Bhalla and Rajesh Bindal, JJ.
C.W.P. No. 3575 of 2003. D/d. 25.7.2007.
Prithvi Raj - Petitioner Versus State Election Commission, Punjab & others-Respondents
For the Petitioner :- Mr. P.S.KHURANA , Advocate.
For the Respondent Nos. 1 to 3 :- Mr. A.G. Masih, Sr.DAG, Punjab.
IMPORTANT
HINT . Election to Municipal Council - High Court not to entertain writ petition - Aggrieved party to file election petition before Tribunal. Though writ is maintainable but High Court not to entertain writ petition by exercising judicial restraint. FURTHER HELD :-
(A) Article 243(ZG)(b) of Constitution and Section 74 of Election Commission Act do not place any embargo on or in any manner curtail a High Court's jurisdiction under Article 226 of the Constitution.
(B) Petition that "calls into question" an "election", during the period of the "election", would not be entertained, under Article 226 of the Constitution of India - Redress to any such grievance, would have to await the outcome of the election and then also would be urged, by filing an election petition, under the provisions of the Election Commission Act - The aforementioned conclusions, however, shall not be construed to oust the jurisdiction of a High Court, under Article 226 of the Constitution of India - A High Court's power of judicial review is merely postponed, to a time and a stage, after the conclusion of the election and then also to a judicial appraisal of any judgment or order that may be passed by an Election Tribunal, duly constituted, in terms of Section 73 of Election Commission Act.
(C) Power of a High Court, under Article 226 of the Constitution of India would, however, be available, where exercise of the said power subserves the progress of the election, facilitates its completion and is exercised to further the election process. 1998(9) SCC 594, AIR 1952 SC 64 and 1998(3) RCR(Civil) 255 (FB) explained relied.
HINT.  Constitution of India, Articles 226 and 227 -Article 226 of the Constitution encapsulates a High Court's power to issue writs, directions, or orders `including' writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, so as to enforce the rights conferred by Part III of the Constitution `and for any other purpose' - One of the pillars that supports the edifice of the Constitution is the power of judicial review which is integral to and an inalienable part of the basic structure of the Constitution .
HINT . Article 226 of the Constitution of India, is integral to the Scheme of judicial review, and thus to the basic structure of the Constitution - Without Article 226, the Constitution, would be an empty shell, lacking substance, and a mere piece of paper, devoid of any means to protect and enforce its lofty ideals.
Cases referred :
1. Lal Chand v. State of Haryana, 1998(3) RCR(Civil) 255 : 1998(1) PLJ 577.
2. Anugrah Narain Singh v. State of U.P., 1997(1) RCR(Civil) 386 : (1996)6 SCC 303.
3. Mohinder Singh v. Chief Election Commissioner, AIR 1978 SC 851.
4. Kesavananda Bharti v. State of Kerala, AIR 1973 SC 1461.
5. Minerva Mills Limited v. Union of India, AIR 1980 SC 1789.
6. I.R. Coelhlo (dead) by L.Rs. v State of Tamil Nadu, 2007(2) SCC 292.
7. State of U.P. v. Pradhan Sangh Kshetra Samiti, AIR 1995 SC 1512.
8. Jaspal Singh Arora v. State of Madhya Pradesh, 1998(9) SCC 594.
9. N.P. Ponnuswami v. The Returning Officer, Namakkal, AIR 1952 SC 64.
10. Mohinder Singh Gill v. The Chief Election Commissioner, New Delhi, AIR 1978 SC 851.
11. Election Commission of India v. Ashok Kumar, (2000)8 SCC 216.
12. Meghraj Kothari v. Delimitation Commission, (1967)1 SCR 400 : (AIR 1967 SC 669).
JUDGMENT
Vijender Jain, C.J. - We are called upon to answer, a reference, dated 30.6.2004, doubting, the correctness of the opinion, rendered by a Full Bench, in Lal Chand v. State of Haryana, 1998(3) RCR(Civil) 255 : 1998(1) PLJ 577.
2. In order to place the present controversy in its correct perspective, it would be necessary to briefly recapitulate the facts leading to the present reference.
3. Election to Municipal Council, Jalalabad, was notified. The petitioner filed his nomination papers as a candidate from ward No. 12. His name appeared in the array of candidates. The State Election Commission deleted his name on the ground that his name had been deleted from the electoral roll. The petitioner approached this Court by way of this petition, praying for issuance of a writ in the nature of certiorari to quash the order, passed by the State Election Commission, Punjab. The petitioner asserted that though his nomination papers were validly accepted by the Returning Officer, the State Election Commissioner passed the impugned order deleting his name from the array of contesting candidates, on the ground that his name stood deleted from the electoral rolls.
4. The respondents raised a preliminary objection as to the maintainability of the petition by asserting that clause (b) of Article 243-ZG of the Constitution of India, states that notwithstanding anything contained in the Constitution no election to a Municipal Council shall be called in question except by an election petition and therefore the jurisdiction of the High Court to entertain a writ petition against the impugned order, was barred. It was further asserted that the State of Punjab, in obedience to the mandate of Articles 243K and 243ZA of Constitution, had enacted the Punjab State Election Commission Act, 1994 (herein after referred to as "Election Commission Act"). Article 243ZG(b) of the Constitution and Section 74 of the Election Commission Act provide that no election shall be called in question except by an election petition presented in accordance with the provisions of the Election Commission Act. Section 73 of the Election Commission Act envisages the setting of election tribunals to entertain election petitions. In the light of the above constitutional and statutory provisions, it was prayed that this Court had no jurisdiction to entertain the writ petition, as the petitioner's remedy was to file an election petition.
5. The petitioner, however, relied upon the judgment in Lal Chand's case (supra), to contend that Article 243ZG(b) of the Constitution, did not oust the jurisdiction of the High Court. It was asserted in support of the maintainability,of the writ petition that in Lal Chand's case (supra), while considering the provisions of Articles 243O and 243ZG of the Constitution, it was held that the High Court's jurisdiction, to entertain a writ petition was not barred and Articles 243O and 243ZG of the Constitution would have to be read down, and subject to Article 226 of the Constitution. The above ratio was based on the doctrine of basic structure of the Constitution and it was held that as Article 226 of the Constitution was integral to the basic structure of the Constitution, Articles 243O and 243ZG, could not be read to create a bar on the powers conferred by Article 226 of the Constitution, and, therefore, they would have to be read down, and subject to the powers conferred upon a high court, under Article 226 of the Constitution.
6. Doubting the correctness of the aforesaid opinion, a Division Bench, made a reference to a larger Bench. The larger Bench, thereafter, made a further reference, which reads as follows :-
"Article 243-ZG of the Constitution of India reads as under :-
"Bar to interference by Courts in electoral matters :-
Notwithstanding anything in this Constitution. -
(a) the validity of any law relating to the delimitation of constituencies or the allotment of seats to such constituencies, made or purporting to be made under Article 243-ZA shall not be called in question in any Court;
(b) no election to any Municipality shall be called in question except by an election petition presented to such authority and in such manner as is provided for by or under any law made by the Legislature of a State".
(2) This Article came for interpretation by the Apex Court in Anugrah Narain Singh and another v. State of U.P and others, 1997(1) RCR(Civil) 386 : (1996)6 SCC 303, and it was held as follows :-
" 11. The question that came up for decision before the Allahabad High Court has been stated in the judgment in the following words :
".....the common question raised in all these petitions is as to whether in terms of Article 243-ZG of the Constitution there is complete and absolute bar in considering any matter relating to municipal election on any ground whatsoever after the publication of the notification for holding municipal election."
12. The answer must be emphatically in the affirmative. The bar imposed by Article 243-ZG is twofold. Validity of laws relating to delimitation and allotment of seats made under Article 243-ZA cannot be questioned in any Court. No election to a municipality can be questioned except by an election petition.........."
(3) A Full Bench of our Court in Lal Chand v. State of Haryana, 1998(1) PLJ 577 held to the effect that since powers of judicial review is the basic feature of our constitutional system, it cannot be tinkered with or eroded and, thus, keeping in view the facts and circumstances of the case a challenge can be made directly before the High Court.
(4) The judgments of the Apex Court in Anugrah Narain Singh (supra), which was rendered on September 10, 1996 and Mohinder Singh v. Chief Election Commissioner, AIR 1978 SC 851, which have bearing on the issue involved, were also not brought to the notice of the Full Bench in Lal Chand's case (supra).
(5) It is well settled that an Article of the Constitution of India cannot be declared ultra vires of its another Article.
(6) We, therefore, consider desirable to refer the issue in regard to the jurisdiction of the High Court under Article 226 of the Constitution qua Article 243-ZG of the Constitution of India to a 5 Judges Bench to avoid our embarrassment to say anything in regard to the ratio laid down in Lal Chand (supra)
(7) We order accordingly.
(8) Let the office place the record before one of us (the Chief Justice) on his administrative side."
7. As the reference order, calls into question, the ratio, laid down in Lal Chand's case (supra), it would, be appropriate to extract the reasoning, adopted by the Full Bench, in paras 22, 23 & 24 of Lal Chand's case (supra), as under :-
"22. We, however, do not find any merit in the contention raised by the learned counsel for the State. In this connection, reference may be made to a 13 judge Bench judgment of the Supreme Court in the case of Kesavananda Bharti (supra). In this case by a majority of 7 against 6, the Supreme Court held that Article 368 of the Constitution does not enable Parliament to alter the basic structure or frame work of the Constitution. The majority also opined that the basic structure of the Constitution could not be altered by any Constitution amendment and it was held in unambiguous terms that one of the basic features is the existence of the Constitutional system of judicial review. This view was followed by a Constitution Bench of the Supreme Court in the case of Minerva Mills (supra).
23. In the case of L. Chandra Kumar (supra) a seven judge Bench of the Supreme Court has held hat the jurisdiction conferred upon the High Courts under Articles 226/227 of the Constitution and upon the Supreme Court under Article 32 of the Constitution cannot be ousted. The relevant portion from the said judgment is reproduced hereunder:-
"The jurisdiction conferred upon the High Court under Articles 226/227 and upon the Supreme Court under Article 32 of the Constitution is part of the inviolable basic structure of our Constitution. While this jurisdiction cannot be ousted. Other courts and Tribunals may perform a supplemental role in discharging the powers conferred by Articles 226/227 and 32 of the Constitution. The Tribunals created under Article 323-A and Article 323-B of the Constitution are possessed of the competence to test the constitutional, validity of statutory provisions and rules. All decisions of those Tribunals will, however, be subject to scrutiny before a Division Bench of the High Court within whose jurisdiction the concerned Tribunal falls. The Tribunal will, nevertheless continue to act like courts of first instance in respect of the areas of law for which they have been constituted."
24. Since the power of judicial review under Articles 226/227 of the Constitution has been held by the Apex Court as an essential feature of the Constitution, which can neither be tinkered with nor eroded, we are of the opinion that the words "Notwithstanding anything in this constitution" will have to be read down to mean as "Notwithstanding anything in this Constitution subject, however, to Article 226/227 of the Constitution". In view of this, clause (b) of Article 243-O and clause (b) of Article 243-ZG will be read to mean as follows "No election to any panchayat/Municipality shall be called in question except by an election petition presented to such authority and in such manner as is provided for by or under any law made by the legislature to a state but this will not oust the jurisdiction of the High Court under Article 226/227 of the Constitution."
8. Before we proceed to answer the questions posed, in the reference order, it would be appropriate to briefly refer to the nature of the powers, conferred upon a High Court, under Article 226 of the Constitution.
9. Article 226 of the Constitution encapsulates a High Court's power to issue writs, directions, or orders 'including' writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, so as to enforce the rights conferred by Part III of the Constitution 'and for any other purpose'. A High Court's jurisdiction to issue rule nisi, thus, flows from Article 226 of the Constitution. The power of judicial review is neither arbitrary nor unbridled. High Courts, while upholding their jurisdiction to issue writs, orders or directions have generally, declined to exercise jurisdiction where an alternative and efficacious remedy is available, the cause suffers from unexplained delay and laches, or involves adjudication of disputed questions of facts, and relevant to the present case, in election matters, where the process of election has commenced. These restraints,that a High Court, places, on exercise of the power of judicial review, cannot be equated with a lack of jurisdiction or an assertion that the High Court lacks powers to entertain a writ petition.
10. There is no dispute that one of the pillars that supports the edifice of the Constitution is the power of judicial review which is integral to and an inalienable part of the basic structure of the Constitution. The doctrine of "basic structure", though not defined in, or delimited in any part of the Constitution was propounded, in Kesavananda Bharti v. State of Kerala, AIR 1973 SC 1461 and thereafter affirmed in numerous judicial pronouncements including Minerva Mills Limited v. Union of India, AIR 1980 SC 1789 and L. Chandra Kumar (supra). In a recent judgment, I.R. Coelhlo (dead) by L.Rs. v State of Tamil Nadu & Others, 2007(2) SCC 292, the Apex Court, opined thus :-
"130. Equality, rule of law, judicial review and separation of powers form parts of the basic structures of the Constitution. Each of these concepts are intimately connected. There can be no rule of law, if there is no equality before the law. These would be meaningless if the violation was not subject to the judicial review. All these would be redundant if the legislative, executive and judicial powers are vested in one organ. Therefore, the duty to decide whether the limit have been transgressed has been placed on the judiciary."
11. Thus no degree of judicial scholarship is required to hold that Article 226 of the Constitution of India, is integral to the scheme of judicial review, and thus to the basic structure of the Constitution. Without Article 226, the Constitution, would be an empty shell, lacking substance, and a mere piece of paper, devoid of any means to protect and enforce its lofty ideals.
12. We now proceed to consider and answer the reference. The reference order questions the correctness of the ratio laid down by a Full Bench, in Lal Chand's case, i.e. whether it was rightly held that Article 243ZG(b) of the Constitution, would have to be read down and subject to Article 226. As a necessary corollary the ambit and scope of Article 243ZG(b) of the Constitution would have to be considered. Reference has been made to judgments of the Apex Court in State of U.P. v. Pradhan Sangh Kshetra Samiti, AIR 1995 SC 1512, Anugrah Narain Singh and another v. State of Uttar Pradesh and others, JT 1996(8) SC 733, Jaspal Singh Arora v. State of Madhya Pradesh, 1998(9) SCC 594, N.P. Ponnuswami v. The Returning Officer, Namakkal, AIR 1952 SC 64 and Mohinder Singh Gill and another v. The Chief Election Commissioner, New Delhi and others, AIR 1978 SC 851, Election Commission of India v. Ashok Kumar and others, (2000)8 SCC 216. The reference order, in essence suggests that in view of the plenary bar enacted by, Article 243ZG(b) of the Constitution, a High Court would have no jurisdiction to entertain, a petition calling into question an election, as an "election" can only be called into question, by way of an election petition.
13. In order to adjudicate the present controversy, it would be necessary to reproduce the relevant provisions of the Constitution, the Punjab Municipal Act, 1911, (herein after referred to as "the Municipal Act", as also the provisions of the Election Commission Act.
14. Articles 243K, 243ZA, 243O, 243ZG of the Constitution of India read as follows :-
"243K Elections to the Panchayats. - The superintendence, direction and control of the preparation of electoral rolls for, and the conduct of, all elections to the Panchayats shall be vested in a State Election Commission consisting of a State Election Commissioner to be appointed by the Governor.
(2) Subject to the provisions of any law made by the Legislature of a State the conditions of service and tenure of office of the State Election Commissioner shall be such as the Governor may by rule determine :
Provided that the State Election Commissioner shall not be removed from his office except in like manner and on the like ground as a Judge of a High Court and the conditions of service of the State Election Commissioner shall not be varied to his disadvantage after his appointment.
(3) The Governor of a State shall, when so requested by the State Election Commission, make available to the State Election Commission such staff as may be necessary for the discharge of the functions conferred on the State Election Commission by clause (4) Subject to the provisions of this Constitution, the Legislature of a State may, by law, make provision with respect to all matters relating to, or in connection with, elections to the Panchayats."
243-O. Bar to interference by Courts in electoral matters. - Notwithstanding anything in this Constitution -
(a) the validity of any law relating to the delimitation of constituencies or the allotment of seats to such constituencies made or purporting to be made under article 243K, shall not be called in question in any court;
(b) no election to any Panchayat shall be called in question except by an election petition presented to such authority and in such manner as is provided for by or under any law made by the Legislature of a State."
243ZA. Elections to the Municipalities. - (1) The superintendence, direction and control of the preparation of electoral rolls for, and the conduct of, all elections to the Municipalities shall be vested in the State Election Commission referred to in article 243K.
(2) Subject to provisions of this Constitution, the Legislature of a State may, by law, make provision with respect to all matters relating to, or in connection with, elections to the Municipalities.
243ZG. Bar to interference by courts in electoral matters. - Notwithstanding anything in this Constitution, -
(a) the validity of any law relating to the delimitation of constituencies or the allotment of seats to such constituencies, made or purporting to be made under article 243ZA shall not be called in question in any court;
(b) no election to any Municipality shall be called in question except by an election petition presented to such authority and in such manner as is provided for by or under any law made by the Legislature of a State."
15. Pursuant to Articles 243K and 243ZA of the Constitution, the State of Punjab, has enacted the Punjab State Election Commission Act, 1994 and has thereunder set up the Punjab State Election Commission which supervises, amongst others, elections to Municipal Committees. The Act also provides for the setting up of election tribunals and sets out the grounds upon which challenge may be laid to an election.
16. The word 'election' is defined in Section 3(4c) of the Municipal Act. An election to a Municipality is notified under Section 13-A of the Act. Sections 3(4c) and 13-A of the Municipal Act read as follows :-
"3. Definitions. -
xx xx xx xx xx
(4c) "election means and includes the entire election process commencing on and from the date of notification calling for such election of members and ending with the date of declaration and notification of results thereof -
13-A Power of State Government to direct holding of general election - (1) Subject to the provisions of this Act and the rules made there under, the State Government, may by notification, direct that a general election of the members of the Municipalities or an election to fill a casual vacancy shall be held by such date as may be specified in the notification and different dates may be specified for elections for different Municipalities or group or groups of Municipalities.
(2) As soon as a notification is issued under sub-section (1), the Election Commissioner shall take necessary steps for holding such general election."
17. Article 243ZG(b) of the Constitution postulates that notwithstanding anything contained in the Constitution, no 'election' to any municipality shall be called in question except by way of an election petition.
18. An election to a Municipality commences with the issuance of a notification by the State Government under Section 13-A(1) of the Municipal Act and concludes with the declaration of the result. The word `election' as defined in Section 3(4-c) of the Municipal Act, includes the entire process of election commencing on and from the date of notification calling for such an election and ending with the date of declaration and notification, of the result. Thus, the term "election," as defined in Section 3(4c) of the Municipal Act, takes within its ambit the period commencing from the issuance of a notification calling for an election, to the declaration of the result. The "election" is to be conducted by the Election Commission, duly constituted under the Election Commission Act.
19. Section 73 of the Election Commission Act prescribes the setting up of Election Tribunals, to hear election petitions. Section 74 of the aforementioned enactment postulates that an election shall only be called into question, by way of an election petition. Section 76 thereof, provides that an election petition may be filed on one or more of the grounds specified in sub-section (1) of Section 89 of the Election Commission Act. Section 89 enumerates the grounds for declaring an election void. Section 108 of the Election Commission Act defines corrupt practices and electoral offences that render an election void. The Election Commission Act, thus, prescribes, the setting up of election tribunals, and sets out the grounds, upon which challenge may be laid to an election. It also prescribes the procedure i.e. the mode and manner for filing of election petitions.
20. Article 243ZG of the Constitution commences with a non-obstante clause........ "Notwithstanding anything in this Constitution........." Thereafter, clauses (a), 243ZG postulates that the validity of any law relating to the delimitation of constituencies or allotment of seats to such constituencies shall not be called in question. Clause (b) of the aforementioned Article, interpretation whereof is subject matter of the present reference, postulates that no election to any municipality shall be called in question except by an election petition.
21. A conjoint reading of the provisions of Constitution, the Municipal Act and the Election Commission Act leads to a singular conclusion, namely, that once an election has been notified under Section 13-A(2) of the Municipal Act, an "election", as defined in Section 3(4-c) thereof, can only be called into question, by way of an election petition, filed in accordance with the provisions, and the mode and manner, as set out in the Election Commission Act.
22. The words used in sub-clause (b) of Article 243(ZG), and section 74 of the Election Commission Act, do not, by specific intent or necessary inference, place any embargo on or in any manner curtail a High Court's jurisdiction under Article 226 of the Constitution. Neither Article 243ZG of the Constitution nor Section 74 of the Election Commission Act makes any reference to the High Court. However, where the cause placed before a High Court calls into question an "election," the High Court would in the exercise of judicial restraint, desist from exercising jurisdiction. This principle of judicial/jurisdictional restraint, was propounded, by the Apex Court in Ponnuswami's case (supra) and then followed and further explained in Mohinder Singh Gill's case (supra), while interpreting the provisions of Article 329(b) of the Constitution. The salutary object that underlines these judgments is the paramount need in a democracy, to ensure an expeditious conclusion of elections. It was therefore held that a High Court, would not entertain, a writ petition calling into question an "election". Another conclusion that flows from these judicial pronouncements, is that challenge to an election, though not barred, judicial review thereof would be postponed to the post election stage. In order to appreciate the ratio of the above judgments it would be necessary to refer to Article 329(b) of the Constitution which reads as follows :-
"329. Bar to interference by courts in electoral matters. -
xx xxx xx xx xx
(b) no election to either House of Parliament or to the House or either House of the Legislature of a State shall be called in question except by an election petition presented to such authority and in such manner as may be provided for by or under any law made by the appropriate Legislature."
23. Article 329(b) of the Constitution postulates that notwithstanding anything in this Constitution, no election to either House of Parliament or to either House of Legislature of a State shall be called in question except by an election petition.
24. The language used in Article 329(b) of the Constitution is similar to the language used in Article 243ZG(b). Therefore, the judgment in Mohinder Singh Gill's case (supra), which succinctly explains the nature and the extent of the bar, contained in Article 329(b) of the Constitution and therefore the import of the words and expressions used in Article 243ZG(b) of the Constitution, is relevant and in our considered opinion a complete answer to questions posed in the reference order. A relevant extract from the judgment in Mohinder Singh Gill's case (supra) reads as follows :-
"28. What emerges from this perspicacious reasoning, if we may say so with great respect, is that any decision sought and rendered will not amount to 'calling in question' an election if it subserves the progress of the election and facilitates the completion of the election. We should not slur over the quite essential observation "Anything done towards the completion of the election proceeding can by no stretch of reasoning be described as questioning the election". Likewise, it is fallacious to treat 'a single step taken in furtherance of an election' as equivalent to election.
29. Thus, there are two types of decisions, two types of challenges. The first relates to proceedings which interfere with the progress of the election. The second accelerates the completion of the election and acts in furtherance of an election. So, the short question before us, in the light of the illumination derived from Ponnuswami, is as to whether the order for re- poll of the Chief Election Commissioner is "anything done towards the completion of the election proceeding" and whether the proceedings before the High Court felicitated the election process or halted its progress. The question immediately arises as to whether the relief sought in the writ petition by the present appellant amounted to calling in question the election. This, in turn, revolves round the point as to whether the cancellation of the poll and the reordering of fresh poll is 'part of election' and challenging it is 'calling it in question'.
30. The plenary bar of Article 329(b) rests on two principles : (1) The peremptory urgency of prompt engineering of the whole election process without intermediate interruptions by way of legal proceedings challenging the steps and stages in between the commencement and the conclusion. (2) The provision of a special jurisdiction which can be invoked by an aggrieved party at the end of the election excludes other form, the right and remedy being creatures of statutes and controlled by the Constitution. Durga Shankar Mehta (supra) has affirmed this position and supplemented it by holding that, once the Election Tribunal has decided, the prohibition is extinguished and the Supreme Court's overall power to interfere under Article 136 springs into action. In Hari Vishnu (supra) this Court upheld the rule in Ponnuswami excluding any proceeding, including one under Article 226, during the ongoing process of election, understood in the comprehensive sense of notification down to declaration. Beyond the declaration comes the election petition, but beyond the decision of the Tribunal the ban of Article 329(b) does not bind.
31. If 'election' bears the larger connotation, if 'calling in question' possesses a semantic sweep in plain English, if policy and principle are tools for interpretation of statutes, language permitting, the conclusion is irresistible, even though the argument contra may have emotional impact and ingenious appeal, that the catch-all jurisdiction under Article 226 cannot consider the correctness, legality or otherwise of the direction for cancellation integrated with re-poll. For, the prima facie purpose of such a re-poll was to restore a detailed poll process and to complete it through the salvationary effort of a re-poll. whether, in fact or law, the order is validly made within his powers or violative of natural justice can be examined later by the appointed instrumentality, viz., the Election Tribunal. That aspect will be explained presently. We proceed on the footing that re-poll in one polling station or in many polling stations, for good reasons, is lawful. This shows that re-poll in many or all segments, all-pervasive or isolated, can be lawful. We are not concerned only to say that if the regular poll, for some reason, has failed to reach the goal of choosing by plurality the returned candidate and to achieve this object a fresh poll (not a new election) is needed, it may still be a step in the election. The deliverance of Dunkirk is part of the strategy of counter attack. Wise or valid, is another matter.
32. On the assumption, but leaving the question of the validity of the direction for re-poll open for determination by the Election Tribunal, we hold that a writ petition challenging the cancellation coupled with re-poll amounts to calling in question a step in 'election' and is therefore, barred by Article 329(b). If no re-poll had been directed the legal perspective would have been very different. The mere cancellation would have then thwarted the course of the election and different considerations would have come into play. We need not chase a hypothetical case."
25. In order to further fortify the conclusion, drawn herein above, para 9 of the judgment in Digvijay Mote's case (supra) reads as follows :-
(9) " However, it has to be stated this power is not unbridled. Judicial review will still be permissible, over the statutory body exercising its functions affecting public law rights. We may, at this stage, usefully quote Judicial Remedies in Public Law- Clive Lewis, page 70 :
" The term 'public law, has, in the past, been used in at least two senses. First, it may refer to the substantive principles of public law governing the exercise of public law powers, and which form the grounds for alleging that a public body is acting unlawfully. These are the familiar Wednesbury principles. A public law 'right' in this sense could be described as right to ensure that a public body acts lawfully in exercising its public law powers. The rights could be described in relation to the individual heads of challenge, for example, the right to ensure that natural justice is observed, or to ensure that the decision is based on relevant not irrelevant considerations, or is taken for a purpose authorised by statute, or is not Wednesbury unreasonable. Secondly, 'public law' may refer to the remedies that an individual may obtain to negative an unlawful exercise of power. These are essentially remedies used to set aside unlawful decisions, or prevent the doing of unlawful acts, or compel the performance of public duties. These remedies now include the prerogative remedies of certiorari, mandamus and prohibition, and the ordinary remedies of declarations and injunctions when used for a public law purpose involving the supervisory jurisdiction of the Courts over public bodies."
26. The aforementioned judgments, thus, set out, in no uncertain terms, that a Court shall not entertain a petition "calling in question", an "election," once the "election" has been notified.
27. An "election", under the Municipal Act, commences with the issuance of a notification, by the State Government, under Section 13-A(2) of the Municipal Act. The election is thereafter held by the State Election Commission. The 'election' concludes, as provided in the aforementioned statutory provision, with the declaration of the result. Thus, a petition that "calls into question" an "election", during the period of the "election", would not be entertained, under Article 226 of the Constitution of India. Redress to any such grievance,would have to await the outcome of the election and then also would be urged, by filing an election petition, under the provisions of the Election Commission Act. The aforementioned conclusions, however, shall not be construed to oust the jurisdiction of a High Court, under Article 226 of the Constitution of India. A High Court's power of judicial review is merely postponed, to a time and a stage, after the conclusion of the election and then also to a judicial appraisal of any judgment or order that may be passed by an Election Tribunal, duly constituted, in terms of Section 73 of Election Commission Act.
28. The words and expressions that appear in Article 243 ZG(b) of the Constitution must be strictly construed and any interpretation beyond the simple grammatical connotations of the words and expressions appearing therein would be impermissible. The word "election........ and the expression........ "called into question......", used in Article 243ZG(b) of the Constitution, clearly postulate that where an election can be called into question by way of an election petition, presented before such authority and in such manner as is provided for by a statute enacted by the Legislature of a State, challenge to such election i.e calling in question the election, would have to be made by way of an election petition,filed before an Election Tribunal. In such a situation, the High Court, in the exercise of its discretion, under Article 226 of the Constitution of India would relegate the petitioner to his remedy of filing an election petition.
29. However the High Court's jurisdiction to issue an appropriate writ, order or direction to further the cause of an election would not be affected, in any manner, as, such a petition does not call into question an election. A petition, seeking an expeditious conclusion of an election, or filed with the object of facilitating the conduct of an election, would not be a cause, calling into question, an election and, adjudication, thereof would not be declined, by relegating the aggrieved petitioner to the remedy of filing an election petition. Thus, the words, appearing in Article 243 ZG(b) of the Constitution, clearly postulate that the legislative intent expressed therein, would come into operation only where a petition discloses a grievance, that calls into question an election.
30. The above exposition requires further elucidation. If the grievance put forth, falls within any of the grounds enumerated, for the filing of an election petition under Sections 89 and 108 of the Election Commission Act, Article 243 ZG(b) of the Constitution would come into play, and the grievance urged, would have to be redressed by filing an election petition, after the conclusion of the election. The High Court, would in the exercise of judicial restraint,relegate such a petitioner to his remedy of an election petition. This exercise of judicial restraint cannot be equated with lack of or bar of jurisdiction. Thus,the Full Bench, in Lal Chand's case (supra) did not commit any error of law, while holding that Article 226 of the Constitution, being an integral part of the basic structure of the Constitution, could not be diluted and exercise thereof could not be barred by any provision of the Constitution of India. The judgments of the Hon'ble Supreme Court in Ponnuswami's case and Mohinder Singh Gill's case (supra), were apparently not brought to the notice of the Full Bench. The principle of judicial/jurisdictional restraint enunciated therein was apparently not placed before the Full Bench.
31. Reference may also be made to judgments of the Hon'ble Supreme Court reported as State of U.P. v. Pradhan Sangh Kshetra Samiti, AIR 1995 SC 1512, Anugrah Narain Singh and another v. State of Uttar Pradesh and others, JT 1996(8) SC 733, Jaspal Singh Arora v. State of Madhya Pradesh, 1998(9) SCC 590.
In State of U.P. v. Pradhan Sangh Kshetra Samiti (supra), the Hon'ble Supreme Court, while considering the ambit and scope of clause (a) of Article 243O of the Constitution, which bars any Court from taking cognizance of any dispute, raised with respect to delimitation of constituencies etc., held as follows :-
"What is more objectionable in the approach of the High Court is that although clause (a) of Article 243-O of the Constitution enacts a bar on the interference by the Courts in electoral matters including the questioning of the validity of any law relating to the delimitation of the constituencies or the allotment of seats to such constituencies made or purported to be made under Article 243-K and the election to any panchayat, the High Court has gone into the question of the validity of the delimitation of the constituencies and also the allotment of seats to them. We may, in this connection, refer to a decision of this Court in Meghraj Kothari v. Delimitation Commission, (1967) 1 SCR 400 : (AIR 1967 SC 669). In that case, a notification of the Delimitation Commission whereby a city which had been a general constituency was notified as reserved for the Scheduled Castes. This was challenged on the ground that the petitioner had a right to be a candidate for Parliament from the said constituency which had been taken away. This Court held that the impugned notification was a law relating to the delimitation of the constituencies or the allotment of seats to such constituencies made under Article 327 of the Constitution, and that an examination of Sections 8 and 9 of the Delimitation Commission Act showed that the matters therein dealt with were not subject to the scrutiny of any Court of law. There was a very good reason for such a provision because if the orders made under Sections 8 and 9 were not to be termed as final, the result would be that any voter, if he so wished, could hold up an election indefinitely by questioning the delimitation of the constituencies from Court to Court. Although an order under Section 8 or 9 of the Delimitation Commission Act and published under Section 10(1) of that Act is not part of an Act of Parliament, its effect is the same. Section 10(4), of that Act puts such an order in the same position as a law made by the Parliament itself which could only be made by the Parliament itself which could only be made by it under Article 327. If we read Articles 243-C, 243-K and 243-O in place of Article 327 and Section 2 (kk), of the Delimitation Act, 1950, it will be obvious that neither the delimitation of the panchayat area nor of the constituencies in the said areas and the allotments of seats to the constituencies could have been challenged or the Court could have entertained such challenge except on the ground that before the delimitation, no objections were invited and no hearing was given. Even this challenge could not have been entertained after the notification for holding the elections was issued. The High Court not only entertained the challenge but has also gone into the merits of the alleged grievances although the challenge was made after the notification for the election was issued on 31st August, 1994."
32. In Jaspal Singh Arora's case (supra), while interpreting Article 243 ZG, and after taking into consideration the judgment of the Hon'ble Supreme Court rendered in Anugrah Narain Singh and another's case (supra), held as follows :-
"These appeals must be allowed on a short ground. In view of the mode of challenging the election by an election petition being prescribed by the M.P. Municipalities Act, it is clear that the election could not be called in question except by an election petition as provided under that Act. The bar to interference by courts in electoral matters contained in Article 243-ZG of the Constitution was apparently overlooked by the High Court in allowing the writ petition. Apart from the bar under Article 243-ZG, on settled principles interference under Article 226 of the Constitution for the purpose of setting aside election to a municipality was not called for because of the statutory provision for election petition and also the fact that an earlier writ petition for the same purpose by a defeated candidate had been dismissed by the High Court."
33. An appraisal of the provisions of Article 226 of the Constitution, and the judgments of the Hon'ble Supreme Court, as noticed herein above, in our considered opinion, clearly postulate that once the electoral process commences, with the issuance of a notification, under the Municipal Act, any grievance, touching upon an "election" would be justifiable, only by way of an election petition. Interference by Courts in election matters, after the commencement of the election process,would not be permissible, except to the limited extent noticed herein above.
34. As regards the second question, the Full Bench in Lal Chand's case (supra) has held that the provisions of Article 243 of the Constitution would have to be read down and subject to Article 226. This interpretation in our considered opinion negates the ratio in Mohinder Singh Gills case (supra) In our considered opinion, a harmonious interpretation to these provisions, as assigned by the Hon'ble Supreme Court in Mohinder Singh Gill's case (supra), while interpreting a similar provision, namely, Article 329(b) of the Constitution, and as explained, herein above, would suitably resolve this apparent conundrum of constitutional interpretation. Article 243ZG(b) of the Constitution, cannot be read down or held to be ultra vires of the provisions of Article 226 of the Constitution of India. The provisions of Article 243ZG(b) of the Constitution have to be read in the light of the principles of law, as set down in Mohinder Singh Gill's case (supra), and the judgments refereed to in the preceding paragraphs, namely, that the High Court would not entertain a challenge "calling in question" an "election." Challenge to an election, would be postponed, to a time and stage after the conclusion of the "election" and then also by an election petition, a High Court would, in the exercise of judicial restraint, postpone judicial review to a stage after the Election Tribunal adjudicates the election petition. The power of a High Court, under Article 226 of the Constitution of India would, however, be available, where exercise of the said power subserves the progress of the election, facilitates its completion and is exercised to further the election process. One should not forget that the statutory mandate to the authority under the Election Commission Act is to conduct free and fair pool. For achieving that objective and in furtherance thereof, there is no fetter to achieve that objective by invoking extra ordinary powers of this Court under Article 226 of the Constitution.
35. The reference is, thus, answered in the aforementioned terms. The writ petition be set down for hearing as per roster.
Reference answered.
REPORTED IN
2007(3) R.C.R.(Civil) 817 : 2007(3) PLR 453 : 2007(2) ILR(Punjab) 206 : 2007 AIR (Punjab) 178

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Saturday, 17 September 2011 07:55

State of A.P. v. Cheemalapati Ganeswara Rao, (SC)

SUPREME COURT OF INDIA

Before :- K. Subba Rao, Raghubar Dayal And J. R. Mudholkar, JJ.

Criminal Appeal No. 39 of 1961. D/d. 23.4.1963.

State if A.P. - Appellant

Versus

Cheemalapati Ganeswara Rao and another - Respondent

For the Appellant :- Mr A. S.R. Chari, Senior Advocate, M/S. K. R. Chaudhuri and P. D. Menon Advocates.

For the Respondent No. 1:- Mr. Bhimasankaram, Senior Advocate, Mr .R. Thiagarajan Advocates.

For the Respondent No. 2:- Mr. R. Mahalingier, Advocate.

HINT 1. Criminal Procedure Code, 1898, Sections 239, 233, 234, 235 and 236 - Criminal Procedure - Joinder And Misjoinder of charges and persons--effect

HINT 2. Evidence Act, 1872, Held it is relevant under Sections 5 and 11 and can be proved by B's account books, but it cannot be so done under Section 34 of Evidence Act.

Cases referred :

1. T.B. Mukherji v. State' AIR 1954 All 501

2. Srirangarachariar v. Emperor, AIR 1943 Mad 673

3. D. K Chandra v. The State, AIR 1952 Bom 177 (FB).

4. State of Andhra Pradesh v. K. Subbaiah, 1962-1 SCR 194.

5. K. V. Krishna Murthy Iyer v. State of Madras, AIR 1954 SC 406

6. Whllie (William) Slaney v. State of Madhya Pradesh 1955-5 SCR 1140.

7. Birichh Bhuian v. State of Bihar, Cri. App No.224 of 1960, decided on 20-11-1962.

8. R. v. Dawson, 1960-1 All ER 558.

9. S. Swamirathnam v. State of Madras, AIR 1957 SC 340 at pp. 343, 344.

10. Natwarlal Sakarlal Mody v. State of Bombay Cri App. No. 111 of 1959 decided on 19-1-1961 (SC).

11. Queen Empress v. Grees Chunder, ILR 10 Cal 1024

12. Sarwan Singh v. State of Punjab, 1957 SCR 953.

13. Winsor v. Queen, 1866 1 QB 289.

14. E. G. Barsay v. State of Bombay, 1962-2 SCR 195.

JUDGMENT

Mudholrar, J. - The respondent No.1 was tried before the Court of Session. Visakhapatnam for offences under Section 120-B Indian Penal Code, S.409, S.477-A and Section 471 read with Section 467, I.P.C while respondent No. 2 was tried for an offence under Section 120-B and for offences under Section 409 read with Ss. 109, 477-A and 471 read with Section 467 I. P. C. Each of the respondents was connected of the first two offences, but the respondent No.1 alone was convicted of the other two offences. Various sentences were passed against them by the Additional Sessions Judge, Visakhapatnam, who presided over the court. The respondents preferred appeals before the High court challenging their convictions and sentences. The State on the other hand preferred an application for revision under Section 439, Cr.P.C. for the enhancement of the sentences passed on the respondents. The High Court allowed the two appeals, acquitted the respondents and dismissed the application for revision preferred by the State. The State of Andhra Pradesh has come up before this Court in appeal by obtaining special leave under Article 136 of the Constitution.

2. The prosecution case in so far as it is material for the decision of the appeal is as follows :

3. In the Year 1929 the Andhra Engineering Co., which was originally a partnership farm formed by one D. L. N. Raju was converted into a private limited company with its headquarters at Visakhapatnam.(We shall refer to this company throughout as the AECO). It obtained licences from the Government under the Electricity Act for supply of electrical energy to Visakhapatnam Anakapalli and some other Places. As the AECO did not have the necessary capital to undertake the work Raju floated in the Year 1933, a public limited company called Visakhapatnam Electric Supply Corporation LTD., (referred to hereafter as VESCO) and another in the year 1936 called the Anakapalli Electric Supply Corporation Ltd. The AECO transferred its licences for the supply of electrical energy to the consumers of Visakhapatnam to VESCO and similarly transferred to VESCO the licence to supply electrical energy to consumers at Anakapalli. The AECO was appointed Managing Agent for each of these Corporations under separate agreements. Some time later other industrial concerns, the Andhra Cements Ltd., Vijayawada and the East Coast Ceremics, Rajahmundry were started apparently by Raju himself and the AECO was appointed the Managing Agent of each of these concerns. The original managing agency agreement in favour of AECO with respect to VESCO was for a period of 15 Years i.e. from 1933 to 1948 and was later renewed for the remaining term of the currency of the licence granted by the Government under the Electricity Act. A mention may be made of the fact that in June 1952 the VESCO undertaking was acquired by the Government under the provisions of the Electricity Undertaking Acquisition Act" but nothing turns on It.

4. The VESCO had its own Board of Directors while the AECO had also its separate Board of Directors. The VESCO had no Managing Director but at each meeting of its Board of Directors one of the Directors used to be elected Chairman. The same practice was followed at the meeting of the general body of the shareholders. The AECO on the other hand always had a Managing Director first of Whom was .D.L.N. Raju. He died in the Year 1939 and was succeeded by R.K.N. G..Raju, an Advocate of Rajahmundry. This person however, did not shift to Visakhapatnam on his becoming Managing. Director but continued to stay most of the time at Rajahmundry. According to the prosecution both these concerns were running smoothly and efficiently during the lifetime of D.L.N. Raju because - he was personally attending to their D affairs. His successor, however, apart from the fact that he continued to be staying mostly at Rajahmundry, was also interested in several other ventures, including a sugar factory at Dewas in Central India. Eventually many of those ventures failed. According to the prosecution the second Raju was not bestowing sufficient care and attention on the affairs of VESCO.

5. The AECO as Managing Agents of VESCO had appointed in the year 1930 one D.V. Appala Raju, a trusted employee as its representative and as the secretary of VESCO. In 1944 this person resigned from his appointments and started his own business in radio and electrical goods in name of D. Brothers. He was succeeded by T. Visweswara Rao, P.W.6, an employee of the AECO.

6. The respondent No. 1, Ganeswara Rao was also an old employee of AECO, having been appointed a steno-typist in the year 1923 on an initial salary of Rs. 40/- p.m. Eventually he became the head clerk therein. He pressed his claim for appointment as Secretary of VESCO and representative of the Managing Agents at Visakhapatnam and R.K.N.G. Raju appointed him to that post. All this is not disputed. The respondent No. 1, even after his appointment on two posts connected to VESCO, continued to work with AECO also whose business had by then been confined only to that of Managing Agents of the four companies floated by D.L.N. Raju.

7. It is the prosecution case that as Secretary of VESCO and the resident representative of the Managing Agents, the respondent No. 1 was attending to the day to day affairs of VESCO which included the receiving all sums of money due to VESCO; spending money for the purposes of VESCO attending to the appointment, supervision and control of the staff of VESCO, purchasing materials required for the purpose of VESCO and supervising over the accounts of VESCO. He was thus all important with respect to the every day affairs of VESCO. His dual capacity enabled the respondent No.1 to earn the confidence not only of the Directors of AECO but also of those of VESCO. The accounts maintained by the VESCO used to be explained by him not only to the Directors but also to the Shareholders. The knowledge of the financial Position of VESCO obtained by them used to be derived essentially from the respondent No.1. As secretary of the VESCO it was his duty to convene the meetings of the Board of Directors, to present before them the periodical statements of receipts and expenditure of VESCO, to convene meetings of the General body, to prepare the Managing, Agents:. report and the Directors' report as also to see the representation of auditor's report and the Statement of accounts. The explanation of the Managing Agents and the Directors of VESCO with respect to the items mentioned in the orders of the Board used also to be placed by him before the shareholders. It was also his duty to have the accounts of VESCO audited by the Auditors elected by the General body and to produce before the auditors the relevant accounts, Vouchers, bank statements and so on.

8. There was no complaints about the management of the affairs of VESCO or AECO till the end of 1946or the beginning of 1947. One significant fact, however, which occurred prior to 1946 is referred to by the prosecution. Till the year 1945 Messrs C.P. Rao and co., a firm of Chartered Accountants were the auditors of VESCO but after the respondent No.1 became Secretary, one B. Rajan was elected auditor not only for VESCO but for all the other four concerns, including AECO. This person was auditor for Greenland Hotel at Visakhapatnam, of which the respondent No.1 was a director.

9. R.K.N.G. Raju took ill towards the end of 1947 and died in Madras in April, 1948. According to the prosecution the respondent No.1 wanted to take advantage of this fact and concieved of a scheme for misappropriating as much money belonging to VESCO as possible before the managing agency agreement of AECO came to an end in October, 1948. The respondent No.1 secured the promotion of the Approver K. V. Ramana who was originally Accounts clerk, to the post of Senior Accountant. Similarly K.V Gopala Raju was transferred from the post of Stores Clerk to the General department and K.S.N. Murthy, the discharged accused, was appointed Stores Clerk in his place. Later, however, Murthy was also got transferredto the General section and replaced by P.W. 18, Srinivasa Rao, originally a stores boy.

10. The approver who was originally an Accounts Clerk with the AECO was, it may be mentioned, appointed a cashier in VESCO in 1946 at the instance of the respondent no. 1 and was thus beholden to him. He was later promoted as Senior Accountant and in his place the respondent no. 2 Lakshminarayana Rao was appointed the cashier. According to the prosecution the respondent no. 1 took both the approver and Lakshminarayana Rao in his confidence as also some other persons "Known and unknown" for carrying out his nefarious purpose, namely, the misappropriation of the funds of VESCO during the subsistence of AECO's managing agency of VESCO. The conspiracy is said to have been hatched in the year 1947, and falsification of accounts and misappropriation of funds of VESCO went on till the end of the accounting year. The term of the managing agency was renewed in 1948 and AECO continued to be managing agents until the VESCO was taken over by the Government in 1952. The respondent No. 1 continued to be the Secretary of VESCO and resident representative of the Managing Agents throughout the period of conspiracy.

11. After the death of R.K.N.G. Raju, it was discovered that the AECO was indebted to many concerns which were under its managing agency, the liability being shown either as that of AECO or that of R.K. N.G Raju personally. Again, the VESCO was shown as indebted to the Andhra Cements to the extent of Rs. 42,000/-. This amount was, however, paid by the AECO from the funds of VESCO. The respondent No. 1 and some of his friends were in search of a rich and substantial man who would be amenable to them to fill the post of Managing director of AECO. Eventually their choice fell on G. V. Subba Raju, P.W.25, a resident of Manchili, who held a large number of shares in the AECO and who was, besides related to R.KN.G. Raju by marriage. It is said that this person has not received much education and knows only how to sigh his name in English. He was assured that by consenting to become the Managing Director he would not be required to discharge onerous duties and that the respondent No.1 would look to all the affairs of VESCO. He was also told that apart form signing important papers which may be sent to him by the respondent No.1 from time to time to Manchilli or wherever he might be, he would have no work to do. He agreed and was elected Managing Director of AECO in the middle of 1948. Upon this understanding he accepted the position offered to him.

12. The VESCO used to receive large amounts of money from high tension power consumers such as the railways, K.G. Hospital the Port Administration, the Andhra University etc., by cheques. But domestic consumers usually paid their bills in cash to the bill collectors who used to hand over their collections to the respondent No.2. The respondent Noo.2 was asked by the respondent No.1 to maintain a private note book. In that book payments which used to be made by respondent No.2 on the basis of slips issued by the respondent No.1 (which included payments to his relatives or to business firms in which he was personally interested) used to be noted and the amount totalled up at the end of the day. This amount was posted in VESCO's Cash Handover Book as "by safe" indication that this amount was kept in the safe, though in fact it was not. on the basis of the entries in the Handover Book the final accounts were written up. The respondent No.1 opened four personal accounts in different banks, including the Imperial Bank of India (as the Slate Bank then was). When the respondent No.l had to issue a personal cheque on any of these Banks he used to ask the second respondent to send an equivalent amount to the Bank concerned for being credited to his account. These amounts also used to be noted in the private note book and entered 'by safe, in the Handover Book.

13. Another thing which the respondent No.1 initiated was opening a heading in the ledger called "advance purchase of materials". Amounts which had been misappropriated used to be posted therein though in fact no orders were placed for any material. It may be mentioned that Subba Raju used to visit Visakhapatnam twice a month and check up the account books. At that time it used to be represented to him that the amounts which were shown to be in the safe and not found therein (but which were actually mis-appropriated) had been sent to the Bank for being deposited. Apparently Subba Raju was not Fully satisfied with this and other explanations and, therefore he appointed one C. S. Raju, who was the Manager of Andhra Cements to supervise over the affairs of VESCO. Apparently because of this a new method of misappropriatmn was adopted by the respondents by starting in the VESCO account books. an account called "suspense account".. A lakh of rupees passed through that account. Amounts which were misappropriated used to find their way in this account. A new cash book was also said to have been prepared by the conspirators with the object of covering up the misappropriations which had been made.

14. Subba Raju was not satisfied with the nature of supervision exercised by C.S. Raju over the affairs of VESCO because he used to look only at the cash book entries of the days on which he paid visits to VESCO's office, to which he used to go with previous intimation. Besides that, C.S. Raju's management of Andhra Cements had landed it into a loss of Rs. 30,000/-. Because of all these things he had C.S.Raju replaced towards the end of the year 1951 by one Subbaramayya, a Retired Finance Officer form the Madras Electricity Board both as a Director of Andhra Cements and as a supervisor over the accounts of VESCO Subbaramayya took his work seriously and called for information on a number of points from the respondent No.1. He, however, was unable to obtain any information. In January, 1952 he therefore brought one S.G. Krishan Aiyar who had vast experience in the maintenance of accounts of electrical undertaking, having been Chief Accountant of the South Madras Electric Supply Corporation, to undertake an investigation and then to act as Financial Adviser.

15. In the meantime on November 29, 1951 there was a meeting of the General Body at which the accounts were, among other things to be considered. There was A considerable uproar at that meeting because the respondent No.1 said that the Auditor's report had not been received. The shareholders felt that the report had been received but was being suppressed or deliberately withheld. However, the meeting was postponed and eventually held on December 9,1951. on that date the respondent No.1 produced the auditor's report (Ex. P. 234 of which Ex. P. 235 is a printed copy). According to the prosecution the report is a forged document. That was also the feeling of a number of shareholders who wanted to see the original but one Dutt who was Chairman of the meeting, after seeing Ex. P. 234 said that the report seemed to be a genuine one.

16. S.G. Krishna Aiyar after his appointment in January, 1952 made close enquiry and submitted an interim report. That report showed that during the period 1948-49 Rs33,271-10-6 shown as paid to the Andhra Power System were in fact not paid. The respondent No.1 on being asked to explain said that he would give his explanation to the Managing Director. The Interim Report showed that there was a shortage of about Rs. 90,000/- for this period. On February 12,1952 the respondent No. 1 wrote to the Managing Director admitting his responsibility and agreed to make good the amounts found short or such other amounts as would be found short upto the end of March,1952. Further scrutiny of the accounts was being carried out by Krishna Aiyar and in his subsequent report he pointed out that Rs. 2,38,000 which were shown as having been paid to the Andhra Power System had actually not been paid. In fact in April,1952 the Collector attached VESCO properties for realising this amount. On April 30, 1952 the respondent No. l; by selling some of his property, himself paid Rs. 50,000/- to the Andhra Power System towards the sum due to it from VESCO and has promised to pay the balance shortly thereafter. He was given time for doing so but he failed to pay it.

17. The Directors of VESCO thereafter authorised K S. Dutt one of the Directors so lodge a complaint with the notice which be accordingly lodged on May 1952. On the next day the police placed an armed guard around the office of the respondent No. 1 and seized a number of papers. As a result of investigation they found that there was a total misappropriation of Rs. 3,40,000/-. On May 13, 1954 a charge -sheet was filed against the two respondents as well as Murti and the approver Ramana. On September 13, 1954 Ramana offered to make a full confession to the Additional District Magistrate (Independent) who was empowered to grant pardon under Section 337 of the Code of Criminal Procedure. He, however, directed Ramana to make his confession before a sub-magistrate. The latter accordingly made a confession on November 15,1954 and on November 17, 1954 the Additional District Magistrate (Independent) granted him pardon and that is how he came to be examined as a witness in this case.

18. As already stated, the Additional Sessions Judge convicted both the respondents. The respondent No. 1 in respect of each head of the offences with which he was charged and the respondent No. 2 in respect only of the offences of conspiracy and misappropriation. The High Court set aside the conviction of the respondents on a number of grounds. In the first place according to the High Court, joint trial of two or more persons in respect of different offences committed by each of them is illegal and that here as they were charged with having committed offences' under Sec. 120-B, Sec. 409, Section 477-A and Section 476/467, I. P. C. they could not be tried jointly. According to it the provisions of Section 239 were of no avail: Next according to the High Court even if Section 239 is applicable its provisions are subject to those of Section 234 and as such the trial being for more than three offences was impermissible. Then according to the High Court offences under Section 409 and Sections 471/467-are of different kinds and are not capable of joint commission. Therefore, they could not be jointly tried. Further' according to the High Court where a conspiracy has yielded its Fruits the conspirators can be charged with the actual offences committed and not with conspiracy to commit those offences. Charge of conspiracy, according to the High Court, can be validly made only when the prosecution establishes that every conspirator expected to receive a personal benefit from it and that the respondent No. 2 or the prosecution has not been able to establish that the approver evidently had any such expectations since they did not in fact receive any corresponding benefit. In so far as the respondent No. 2 is concerned the High Court has held that since he was charged with a specific offence under Section 409, I. P. C. he could not be convicted of mere abetment of an offence. The approver's evidence was held by the High Court to be inadmissible because the pardon granted to him was illegal. The High Court has also held that his evidence is unreliable and further that the Additional Sessions Judge was in error in allowing him to refresh his memory by referring to various documents in a manner not permitted by Section 159 of Evidence Act. The High Court has further stated that inadmissible evidence was taken on record by the Additional Sessions Judge, namely, account books of Billimoria Brothers, maintained in Gujrati and further that the Additional Sessions Judge was in error in allowing the prosecution to use those account books for establishing absence of entries with regard to certain payment alleged in the VESCO books to have been made to them. Finally, the High Court held that the examination of the respondent under Section 342 of the Code was unfair for a number of reasons and that the Additional Sessions Judge had failed to perform an important duty in that he did not call the attention of the respondents to the provisions of Section 342 which enable an accused person to give evidence in his own behalf

19. Mr. Bhimasankaram, appearing for the two respondents, however, has not sought to support the judgment of the High Court on all these points. The points which he urged are briefly these :

(1) That there was a misjoinder of charges and persons in that the various provisions of Section 239 were clubbed together and an omnibus charge of conspiracy was framed which on its face was one likely to embarrass the respondents and make their task of defending themselves difficult.

(2) The procedure adopted in the investigation and committal stages was irregular.

(3) Irrelevant evidence was introduced and some evidence was introduced in a manner not authorised by the Evidence Act.

(4) That the Court abused its powers under Section 342, Cr. P.C. while conducting the examination of the respondents.

(5) The evidence of the approver was inadmissible because the pardon granted to him was illegal, that, in any case, it is unreliable, was so found even by the Sessions Judge and must, therefore, be rejected. If the evidence of the approver is left out the remaining evidence would be inadequate to sustain the prosecution case.

20. We shall deal with Mr. Bhimasankar's contentions in the order in which we have set them out. The first question for consideration is whether there was a misjoinder of charges and of persons. The first charge is in respect of the conspiracy alleged to have been entered into by the two respondents, K V. Ramana, the approver, and others "known and unknown" to commit criminal breach of trust of the funds of VESCO and, in order to screen its detection, to falsify the accounts of VESCO and to use forged documents as genuine. On the face of it this is a valid charge . But certain objections have been taken to it with which we will deal at the appropriate place. The second charge is for an offence of criminal breach of trust punishable under Section 409 and the accusation therein is that the two respondents along with Ramana, misappropriated 69 items aggregating to a little over Rs. 3,20,000/-. It is clear from the charge that some of the amounts were misappropriated between April, 1947 and March, 1950, some between April, 1947 and March, 1949, some between April, 1947 and March, 1951 and quite a large number between September, 1947 and March, 1950 and a still larger number between April, 1951 and March, 1952. It is thus apparent that offences committed within a space of 12 months were tried along with offences committed beyond that period. Unless, therefore, the provisions of Section 239 are applicable it would follow that there was a misjoinder of charges . The third charge is that the two respondents, along with the approver Ramana made false entries on seven different dates in the account books between September 19, 1947 and March 18, 1952 and thus committed an offence under Section 477-A, I. P. C. The fourth charge is that the two respondents, along with the approver Ramana forget six documents on different dates between March 28, 1949 and November 12, 1951 and thus committed an offence under Section 471 read with Section 467, I. P. C. As we have pointed out earlier the respondent No. 1 alone was convicted by the Additional Sessions Judge in respect of the third and fourth charges .

21. Mr. Bhimasankaram supports the reasons given by the High Court for coming to the conclusion that there was a misjoinder of charges . The main reasons upon which the conclusion of the High Court is based are firstly that there could be no clubbing together of the provisions of the various clauses of Section 239 and secondly that the respondents were charged with more than three offences of the same kind and that this was in contravention of Section 239 (c). In coming to the conclusion that the provisions of various clauses of Section 239 cannot be applied cumulatively the High Court has relied upon the decision in Re. Vankayalapati Gopala Rao, AIR 1956 Andhra 21. There the learned Judges have held thus :

"These clauses are mutually exclusive and they cannot be simultaneously applied and to construe them as supplementing each other would be enlarging the scope of the exceptions. Each clause is an exception to the general rule enacted in Section 233, Cr. P. C. If such a combination is permissible, all persons accused of offences described in cls. (a) to (e) can be tried together in one case which certainly involves a bewildering multiplicity of charges and which would obviously set at naught the salutary principle contained in Section 233." (p. 24).

In support of this view the High Court in that case has relied upon the decision in T.B. Mukherji v. State' AIR 1954 All 501 and referred to the decision in Srirangarachariar v. Emperor, AIR 1943 Mad 673 and D. K Chandra v. The State, AIR 1952 Bom 177 (FB).

22. Before considering these decisions it will be useful to look at the scheme of Chapter XIX of the Code of Criminal Procedure which deals with the charge . The chapter is split up into two sub-heads, "Form of charges " and " Joinder of charges ". Sections 221 to 232 are comprised under the first sub-head and Sections 233 to 240 in the second. Sections 221 to 223 deal with the framing and content of charge , Section 224 deals with the interpretation of the language of the charge and Section 225 with the effect of errors in the charge . Sections 226 to 231 deal with the power of the court with regard to framing and altering charges and the procedure to be adopted at the trial where a charge is found to be defective or there is no charge or where a new charge is to be framed. Section 232 deals with the power of the appellate court or the High Court when it discovers that there is material error in the charge . Then we come to the other sub-head of this chapter. Section 233 provides that for every distinct offence of which any person is accused there shall be a separate charge . It thus lays down the normal rule to be followed in every case. But it also provides that this will be subject to the exceptions contained in Sections 234, 235, 236 and 239. The first three provisions relate to the framing of charges against a single accused person. Section 234(1) deals with the trial of a person for offences of the same kind not exceeding three committed within the space of 12 months from the first to the last of such offences and Section 234(2) deals with what is meant by the expression 'offences of the same kind'. This provision lifts partially the ban on the trial of a person for more than one offence at the same trial. Section 235 (1), however, goes a step further and permits the trial of a person for more offences than one if they are so connected together as to form the same transaction. Thus under this provision if the connection between the various offences is established the limitations placed by Section 234(1) both as regards the number and the period during which the offences are alleged to have been committed will not apply. Full effect cannot possibly be given to this provision if we hold that it is subject to the limitation of Section 234(1). Subsection (2) of Section 235 deals with a case where an offence falls within two definitions and sub-section (3) deals with a case in which a number of acts are alleged against an accused person, different combinations of which may constitute different offences. Then we come to Section 236 which provides- that if a single act or series of acts is of such a nature that it is doubtful which of several offences the facts which can be proved will constitute, the accused may be charged with having committed all or any of such offences and further provides that any number of such charges may be tried together. It also permits that charges could be framed against an accused person in the alternative if the court thinks fit. Thus, this is a special provision available in case of doubt and is neither subject to the limitations prescribed by Section 233 nor those of the other preceding provisions.

23. Now, if the respondent No. 1 were alone tried upon the second, third and the fourth charges the provisions of Section 235(1) could have been pressed in aid if the allegations were that the offences were so connected together as to form one and the same transaction and the validity of the trial would not have been open to any attack. Similarly if the second respondent were alone tried on the second charge his trial would not have been open to any objection if the allegation were that the offences were so connected together as to form the same transaction. Here, however, we have a case where the prosecution alleges that there was additionally a conspiracy to which apart from the two respondents the approver and some other persons were parties and wherein both the respondents were tried together. A conspiracy must be regarded as one transaction and, therefore, a single individual charged with it could be tried with the aid of Section 235(1) for all the acts committed by him in furtherance or in pursuance of the conspiracy without the limitations imposed by Section 234(1). For, where all the acts are referable e to the same conspiracy their connection with one another is obvious.

24. The only provision in the Code which permits the joint trial of more than one person is Section 239, and what we have to see is whether under that provision the two respondents could have been jointly tried for the offences with which they were charge d. Let us, therefore examine closely the provisions of Section 239. It will be useful to set out the provisions of that section which run thus :

"The following persons may be charged and tried together, namely:

(a) persons accused of the same offence committed in the course of the same transaction;

(b) persons accused of an offence and persons accused of abetment or of an attempt to commit such offence;

(c) persons accused of more than one offence of the same kind within the meaning of Section 234 committed by them jointly within the period of twelve months;

(d) persons accused of an offence committed in the course of the same transaction;

(e) persons accused of an offence which includes theft, extortion, or criminal misappropriation, and persons accused of receiving or retaining, or assisting in the disposal or concealment of property possession of which is alleged to have been transferred by any such offense committed by the first-named persons, or of abetment of or attempting to commit any such last named offence;

(f) persons accused of offences under Sections 411 and 414 of the Indian Penal Code or either of those sections in respect of stolen property the possession of which has been transferred by one offence; and

(g) persons accused of any offence, under Chapter XII of the Indian Penal Code relating to counterfeit coin, and persons accused of any other offence under the said Chapter relating to the same coin, or of abetment of or attempting to commit any such offence;

and the provisions contained in the former part of this Chapter shall, so far as may be, apply to all such charges .

25. The first thing to be noticed is that Section 239 does not read as if its various clauses can be applied only alternatively. On the other hand at the end of clause (f) there is a conjunction 'and?. If the intention of the Legislature was that the provisions of these clauses should be available only alternatively it would have used the word "or and not "and" which has the opposite effect. Grammatically, therefore it would appear that the provisions of the various clauses are capable of being applied cumulatively. The opening words of the section show that it is an enabling provision and, therefore the Court has a discretion to avail itself cumulatively of two or more clauses. Of course a Court has the power to depart from the grammatical construction if it find that strict adherence to the grammatical construction will defeat the object the Legislature had in view. The concluding portion of Section 239 shows that the provisions contained in the former part of Chapter XIX shall, as far as may be apply to the charges framed with the aid of Section 239. Does this mean that the provisions of Sections 233, 234, 235 and 236 must also be complied with. Obviously, Section 233 does not override the provisions of Section 239. Section 234 cannot also be regarded as an overriding provision because reading it that way will lead to the clear result that whereas several accused persons can be charged at the same trial with any number of different offences committed by them in the course of the same transaction they cannot be tried also for offences of the same kind exceeding three in number and committed beyond a space of 12 months from the first to the last. It could not have been the intention of the Legislature to create such a situation. Again as already stated, Section 234(1) does not override the provisions of Section 235(1) which permits trial of a person for more offences than one committed during any period provided they are so connected together as to form one transaction. Unless we read Section 234(1) as not enacting a fetter on Section 235(1), it may not be possible to give full effect to the latter. Now, since Section 234(1) cannot be properly read as overriding Section 235(1) there is no valid reason for construing it as overriding the provisions of Section 239 either. There are also other reasons which point to this conclusion which we will set out while considering the argument advanced by Mr. Bhimasankaram.

26. Mr. Bhimasankaram contended that Section 239 must be read at least subject to Sections 234(1) and 235(1) on the ground that if there are certain restrictions with respect to the trial of a single accused there is no reason why those restrictions will disappear if an accused is tried along with several other persons. Thus he points out that where several persons are accused of more offences than one of the same kind committed by them jointly within a period of 12 months, the number of offences for which they could be tried cannot exceed three. In this connection he relied upon the words "within the meaning of Section 234" occurring in clause (c) of Section 239. These words, he-contended, clearly show that clause (c) of Section 239 is subject to the provisions of Section 234. In our opinion the "words" "within the meaning of Section 234" indicate that what was meant by the words "offence of the same kind" in clause (c) of Section 239 is the same thing as was meant by the identical expression used in Section 234(1) and defined in Section 234(2) and nothing more. If it was the intention of the Legislature to provide that the number of offences for which several accused persons could be tried under cl.(c) of Section 239 should be limited to three as provided in Section 234(1), the Legislature would either have said "persons accused of more offences than one of the same kind not exceeding three in number" or may have used the words "Persons accused of more than one offence of the same kind to the extent permissible under Section 234". Language of this kind would have made perfectly clear that clause (c) of Section 239 was subject to Section 234(1). As already stated, if Section 239(c) is construed as being subject to Section 234 1), there would be this anomaly that whereas he same accused persons could be charged with and tried jointly for any number of offences of different kinds committed by them, for more than three offences of the same kind committed by them jointly there will have to be a separate trial with respect to such offenses.. Surely such could not have been the intention of the Legislature. The object of enacting Section 239 was to avoid multiplicity of trials and the only limitation which could properly be placed on the trial of several persons for the same kind of or different offences would be that which considerations of justice and fairness would require. No doubt, such a construction would also give rise to the result that whereas so far as the trial of a single accused person is concerned the charges must be limited to three offences committed by him within the space of 12 months from the first to the last of such offences, there would be no such limitation when along with that accused person there are one or more persons who have jointly committed those offences. The reason for this possibly is that the Legislature did not want to differentiate between cases where any number of different offences were committed jointly by a group of persons from cases where any number of offences of the same kind were committed by a group of persons.

27. According to Mr. Chari Section 235(t) cannot be construed as having an overriding effect on Section 239 because whereas it contemplates acts so connected together as to form the same transaction resulting in more offenses 'than one, Section 239(d) contemplates offenses committed in the course of the same transaction and nothing more. The question is whether for the purposes of Section 239(d) it is necessary to ascertain anything more than this that the different offences were committed in the course of the same transaction or whether it must further be ascertained whether the acts are intrinsically connected with one another. Under Section 235(1) what has to be ascertained is whether the offences arise out of acts so connected together as to form the same transaction, but the words "so connected together as to form". are not repeated after (sic) the words "same transaction" in Section 239. What has to be ascertained then is whether these words are also to be read in all the clauses of Section 239 which refer to the same transaction. Section 235(1), while providing for the joint trial for more than one offence, indicates that there must be connection between the acts and the transaction. According to this provision there must thus be a connection between a series of acts before they could be regarded as forming the same transaction. What is meant by "same transaction" is not defined anywhere in the Code. Indeed, it would always be difficult to define precisely what the expression means. Whether a transaction can be regarded as the same would necessarily depend upon the particular facts of each case and it seems to us to be a difficult task to undertake a definition of that which the Legislature has deliberately left undefined. We have not come across a single decision of any Court which has embarked upon the difficult task of defining the expression. But it is generally thought that where there is proximity of time or place or unity of purpose and design or continuity of action in respect of a series of acts, it may be possible to infer that they form part of the same transaction. It is, however, not necessary that every one of these elements should co-exist for a transaction to be regarded as the same. But if several acts committed by a person show a unity of purpose or design that would be a strong circumstance to indicate that those acts form part of the same transaction. The connection between a series of acts seems to us to be an essential ingredient for those acts to constitute the same transaction and, therefore, the mere absence of the words "so connected together as to form" in cls. (a), (c) (sic) and (d) of Section 239 would make little difference. Now, a transaction may consist of an isolated act or may consist of a series of acts. The series of acts which constitute a transaction must of necessity be connected with one another and if some of them stand out independently they would not form part of the same transaction but would constitute a different transaction or transactions. Therefore, even if the expression "same transaction" alone had been used in Section 235(1) it would have meant a transaction consisting either of a single act or of a series of connected acts. The expression "same transaction" occurring in cls. (a), (c) (sic) and (d) of Section 239 as well as that occurring in Section 235(1) ought to be given the same meaning according to the normal rule of construction of statutes. Looking at the matter in that way, it is pointless to inquire further whether the provisions of Section 239 are subject to those of Section 235(1). The provisions of sub-ss. (2) and (3) of Section 235 are enabling provisions and quite plainly can have no overriding effect. But it would be open to the court to resort to those provisions even in the case of a joint trial of several persons permissible under Section 239.

28. Section 236 is also an enabling provision to be availed of in case of doubt and it is meaningless to say that Section 239 is subject to Section 236. Bearing in mind the fact that the provisions in the Former parts of Chapter XIX are applicable to charges made with the aid of Section 239 only "so far as may be" it would not be right to construe Section 239 as being subject to the provisions of Sections 233 to 236. It was contended by Mr. Chari that the expression "former part" would apply to the first sub-division of chapter XIX which deals with the form and content of the charges and the powers of the court with regard to the absence of charge and alteration of charge . We cannot, however, give the expression such a restricted meaning. For, even in the absence of those words, the earlier provisions could not have been ignored. For, it is a rule of construction that all the provisions of a statute are to be read together and given effect to and that it is, therefore, the duty of the Court to construe a statute harmoniously. Thus, while it is clear that the sections preceding Section 239 have no overriding effect on that section, the courts are not to ignore them but apply such of them as can be applied without detracting from the provisions of Section 239. Indeed, the very expression 'so far as may be' emphasises the fact that while the earlier provisions have to be borne in mind by the Court while applying Section 239 it is not those provisions but the latter which is to have an overriding effect.

29. Apart from this, the question whether the provisions of Sections 233 to 236 have no overriding effect on Section 239 is not strictly germane to the question considered by the High Court that is, clubbing together all the provisions of the various clauses of Section 239. Whether they can or cannot be read cumulatively must be determined by consideration of the language used in those clauses. We have already indicated how those clauses may be grammatically read. On a plain construction of the provisions of Section 239, therefore, it is open to the Court to avail itself cumulatively of the provisions of the different clauses of Section 239 for the purpose of framing charges and charges so framed by it will not be in violation of the law, the provisions of Sections 233, 234 and 235 notwithstanding.

30. The decision of the Allahabad High Court in T. B. Mukherji's case, AIR 1954 All 501 is directly in point and is clearly to the effect that the different clauses of Section 239 are mutually exclusive in the sense that it is not possible to combine the provisions of two or more clauses in any one case and to try jointly several persons partly by applying the provisions of one clause and partly by applying those of another or other clauses. A large number of decisions of the different High Courts and one of the Privy Council have been considered in this case. No doubt, as has been rightly pointed out in this case, separate trial is the normal rule and joint trial is an exception. But while this principle is easy to appreciate and follow where one person alone is the accused and the interaction or intervention of the acts of more persons than one does not come in, it would, where the same act is committed by several persons, be not only inconvenient but injudicious to try all the several persons separately. This would lead to unnecessary multiplicity of trials involving, avoidable inconvenience to the witnesses and avoidable expenditure of public time and money. No corresponding advantage can be gained by the accused persons by following the procedure of separate trials. Where, however, several offences are alleged to have been committed by several accused persons it may be more reasonable to follow the normal rule of separate trials. But here, again, if those offences are alleged not to be wholly unconnected but as forming part of the same transaction the only consideration that will justify separate trials would be the embarrassment or difficulty caused to the accused persons in defending themselves. We entirely agree with the High Court that joint trial should be founded on some principle. But we find it difficult to appreciate what seems to be the view of the High Court that because each clause of Section 239 enunciates a separate principle those principles are, so to speak, mutually exclusive and cannot be cumulatively resorted to for trying several persons jointly in respect of several offences even though they form part of the same transaction. The High Court has propounded that the connection described in each of the various clauses is mutually exclusive, that no two of them can exist simultaneously in any case and that one cannot therefore, have in any case person connected with one another in two or more ways. In other words, as the High Court puts it, persons included in two or more of the groups cannot all be tried together and that since there is absolutely nothing to connect one group with any other, the persons of one group cannot be tried with those of any other. No reason has been stated in support of this view. Let us consider whether there is anything intrinsically incompatible in combining two clauses of Section 239. Take cls. (a) and (b). Clause (a) says that persons accused of the same offence committed in the course of the same transaction may be charged and tried together. Clause (b) says that persons accused of an offence and persons accused of abetment, or, of an attempt to commit such offence may also be charged and tried together. Now, if persons A, B and C are tried for an offence of murder what intrinsic difficulty would there be in trying X,Y and Z of abetment of the same offence? The transaction in which all of them have participated is the same and the abetment by X,Y and Z of the offence committed by A, B and C would itself establish the connection of their acts with those of X,Y and Z. Next, let us take cls. (a) and (c). Clause (c) provides that persons accused of more than one offence of the same kind within the meaning of Section 234 committed by them jointly within the period of twelve months could also be charged and tried together. Let us consider these clauses along with another illustration. Two persons A and B enter a house at night and first together commit the murder of a man sleeping there and then also his wife. Each of them has committed two offences and each of them participated in the same offence. Why can they not be tried Jointly for both murders and why should there be two trials for the two murders?

The offences are of the same kind and must be deemed to have been committed in the course of the same transaction because of association and mutual connection. Now, supposing in the illustration given A killed the man and B killed his wife. Under d. (c) they could be tried together because the offences are of the same kind. It would be ridiculous to say that they cannot be tried together for jointly committing the murder of the man and the wife because cls. (a) and (d) cannot be combined. For, without combining these two clauses their joint trial for the two offences in each of which both have participated would be impermissible. Then take cls. (a) and (d). Under clause (d) persons accused of different offenses committed in the course of the same transaction can be tried together. Let us suppose that a group of persons are accused of having been members of an unlawful assembly the common object of which was to over-awe by sheer force another group of persons and take possession of a piece of land. Some of the members of the unlawful assembly carried axes with them while some others carried lathis and attacked the other group. During the course of the attack one person from the second group was killed, as a result of blows with an axe indicated by the aggressors A, B and C. Two persons of the second group sustained grievous hurt as a result of lathi blows and one person sustained simple hurt.

Let us say that the grievous hurt was caused as a result of lathi blows given by X and Y.

Simple hurt was caused by lathi blows given by Z. Here, the offences committed were those under Sections 147, 302, 325 and 323, I.P.C. The offences being different and the persons committing the offence being different,- they could not be tried jointly only with the help of clause (a) of Section 239. Nor again, could they be tried jointly only with the help of clause (d). Yet the transaction in which the offences were committed is the same and there is a close association amongst the persons who have committed the different offences. What intrinsic difficulty is there in trying them all together be simultaneously availing of cls. (a) and (d) of Section 239. These are enabling provisions which circumstance implies that the court may avail itself of one ore more of these provisions unless doing so would amount to an infringement of any of the provisions of the Code. All these persons can be jointly tried for offences under Section 147 by recourse to clause (a). So also A, B and C could be Jointly tried together for an offence under Section 302. X and Y can be charged not only with offences under Sections 147 and 325, I. P. C. but also under Section 302 read with Section 149. Similarly Z can be charged with offences under Sections 147, 323 and offences under Section 302 read with Section 149 and Section 325 read with Section 149. The same offence committed by all of them is that under Section 147 and all of them can be tried jointly in respect of that offence under clause (a). Similarly if we take clause (d) by itself all of them can be tried jointly for the different offences committed by each of them in the course of the same transaction and if clause (a) is unavailable they could not be tried for the offence under Section 147 at the same trial. This means that the trial for an offence under Section 147 will have to be separated from the trial for the different offences committed by them. It is difficult to appreciate what purpose would be served by separating the trial for the same offence from the trial for different offences. To repeat the object of the legislature in enacting Section 239, Cr. P. C. clearly was to prevent multiplicity of trials and not only would that object be defeated but an extraordinary result will ensue if the various clauses of Section 239 are read disjunctively. The reasons given by the Allahabad High Court, therefore, do not merit acceptance.

31. The decision in Srirangarachariar's case, AIR 1934 Mad 673 has really no bearing upon the point before us. What was held there was that Section 235 (1) and Section 236 are mutually exclusive and if a case is covered by one of them it cannot be covered by the other. In that case the question was whether a person who was first tried for an offence under Section 380, I.P.C. for stealing a blank second class railway ticket from the booking office, tried for it and acquitted, could not be tried subsequently for the offence of forgery by making entries in that ticket and using it. The acquittal in the previous case was urged as a bar under Section 403 (1) of the Code to the trial for an offence under Section 467, I P. C. The contention apparently was that this was a case which fell under Section 236, Cr. P. C. and that if he had been tried alternatively for both the offences at the same trial the Court could have dealt with him under Section 237, Cr. P. C. The High Court, however, held that to be a kind of case which fell under Section 235 (1) of the Code and that since that was so, the provisions of Section 236 were excluded. It is difficult to appreciate how this case assists the conclusion arrived at by the High Court.

32. In D. K. Chandra's case, AIR 1952 Bom 177 (FB) it was held that the provisions of Sections 234, 235 and 236 being exception to Section 233 must be strictly construed and that if joinder of charges did not fall under any of them it would be illegal and contrary to law. The precise point which we have to consider here did not fall for consideration in that case i.e., whether the provisions of the various clauses of Section 239 could be used together or not. This decision is, therefore, of little assistance. On the other hand there is the decision of this Court in State of Andhra Pradesh v. K. Subbaiah, 1962-1 SCR 194 which is to the effect that where several persons had committed of fences in the course of the same transaction, they could jointly be tried in respect of all those offences under Section 239 of the Code of Criminal Procedure and the limitation placed by Section 234 of the Code could not come into operation. There, nine persons were jointly tried for an offense under Section 5 (1) (c) and (d) of the Prevention of Corruption Act, 1947, and Section 109, 1. P. C. read with Section 420, Section 466 and Section 467, I.P.C. and all except one for offenses under Sections 420, 467/471, I.P.C. Some of them were also charged with separate offences under some of these provisions. Two of the accused persons preferred a revision application before the High Court of Andhra Pradesh in which they challenged the charges framed against them. The High Court allowed the revision application. But on appeal by the State of Andhra Pradesh to this Court, this Court held that there was no misjoinder of charges , that the introduction of a large number of charges spread over a long period was a question of propriety and that it should be left to the Judge or the Magistrate trying the case to adopt the course which he thought to be appropriate in the facts and circumstances of the case. In so far as some of the charges were concerned this Court pointed out that the Special Judge who was to try the case should consider splitting them up so that the accused persons would not be prejudiced in answering the charges and defending themselves. It is true that the question of reading the various clauses cumulatively did not specifically arise for decision in that case but the High Court had held that the first charge was an omnibus charge containing as many as 203 offences and that it was in direct violation of Sections 234, 235 and 239 of the Code of Criminal Procedure. Dealing with this matter this Court held at p. 200:

"No doubt, sub-sec. (1) of Section 234 provides that not more than three offenses of the same kind committed by an accused person within the space of 12 months can be tried at the same trial. But then Section 235(1) provides that if in any one series of acts so connected together as to form the same transaction more offences than one are committed by the same person, he may be charged with and tried at one trial for every such offence. Therefore, where the alleged offences have been committed in the course of the same transaction the limitation placed by Section 234(1) cannot operate No doubt, the offence mentioned in charge No 1 is alleged to have been committed not by just one person but by all the accused and the question is whether a these persons can be jointly tried in respect of all these offences. To this kind of charge Section 239 would apply. This section provides that the following persons may be charged and tried together, namely

(1) person accused of the same offense committed in the course of the same transaction;

(2) persons accused of an offence and persons accused of abetment or an attempt to commit such an offence;

(3) persons accused of different offences committed in the course of the same transaction.

Clearly, therefore, all the accused per sons could be tried together in respect of all the offences now comprised in charge No. 1"

This Court has thus clearly read the provisions of the various clauses cumulatively and we see no reason to read them differently.

33. There remains the decision of this Court in K. V. Krishna Murthy Iyer v. State of Madras, AIR 1954 SC 406 on which Mr. Bhimasankaram strongly relied. In that case this Court upheld the order of the High Court of Madras in quashing the charges in the exercise of its inherent powers even before the conclusion of the trial. It is true that there the charges were 67 in number and spread over a long period of time. That again was a matter which came before the High Court before conviction and not after the trial was over. When an objection is taken at an early stage, there is time enough to rectify an error. But in the case before us no objection was taken to multiplicity or misjoinder of charges before the learned Additional Sessions Judge and it was only in the High Court that the point was raised. In such circumstances what the Court has to consider is whether prejudice has in fact been caused to the accused by reason of the multiplicity of charges or misjoinder, if any, of the charges . This is quite clear from the provisions of Section 53-7 of the Code as amended by Act 26 of 1955. In Whllie (William) Slaney v. State of Madhya Pradesh 1955-5 SCR 1140 all learned Judges were in agreement on the point that this section and Section 535 cover every case in which there is departure from the rules set out in Ch. XIX ranging from error, omissions and irregularities in charges that are framed, down to charges that might have been framed and were not and include a total omission to frame a charge at all at any stage of the trial. The whole question has again been examined by this Court recently in Birichh Bhuian v. State of Bihar, Cri. App No.224 of 1960, decided on 20-11-1962. Subha Rao J., who delivered the judgment of the Court has stated the position thus:

"To summarise: a charge is a precise formulation of a specific accusation made against a person of an offence alleged to have been committed by him. Sections 234 to 239 permit the joinder of such charges under specified conditions for the purpose of a single trial. Such a joinder may be of charges in respect of different offenses committed by a single person or several persons. If the joinder of charges was contrary to the provisions of the Code it would be a misjoinder of charges . Section 537 prohibits the revisional or the appellate court from setting aside a finding, sentence or order passed by a court of competent jurisdiction on the ground of such a misjoinder unless it has occasioned a failure of justice."

Even if we were to assume that there has been a misjoinder of charges in violation of the provisions of Sections 233 to 239 of the Code, the High Court was incompetent to set aside the conviction of the respondents without coming to the definite conclusion that misjoinder had occasioned failure of justice. This decision completely meets the argument based upon R. v. Dawson, 1960-1 All ER 558. Merely because the accused persons are charged with a large number of offences and convicted at the trial the conviction cannot be set aside by the appellate court unless it in fact came to the conclusion that the accused persons were embarrassed in their defence with the result that there was a failure of justice. For all these reasons we cannot accept the argument of learned counsel on the ground of misjoinder of charges and multiplicity of charges .

34. Mr. Bhimasankaram, supporting the view taken by the High Court then contends that it is not permissible to frame a charge of conspiracy when the matter has proceeded beyond the stage of conspiracy and that in pursuance of it offences have actually been committed. A similar view was expressed by the same High Court in the case which was reversed by this Court in 1962-1 SCR 194 and it was held that conspiracy to commit an offense being itself an offence a person can be separately charged with respect to such a conspiracy. Then this Court has observed:

"Where a number of offences are committed by several persons in pursuance of a conspiracy it is usual to charge them with those offences as well as with the offence of conspiracy to commit those offences. As an instance of this we may refer to the case in S. Swamirathnam v. State of Madras, AIR 1957 SC 340 at pp. 343, 344. Though the point was not argued......before this Court in the way it appears to have been argued before the High Court of Andhra Pradesh, this Court did not see anything wrong in the trial of several persons accused of offences under Section 120 B and Section 420, I. P. C. We cannot therefore accept the view taken by the High Court of Andhra Pradesh that the charge of conspiracy was bad. If the alleged offences are said to have flown out of the conspiracy the appropriate form of charge would be a specific charge in respect of each of those offences along with the charge of conspiracy." (pp. 201202 of SCR): (at p. 1244 of AIR).

This decision is sufficient to dispose of the point under consideration.

35. In Swamirathnam's case, which is a decision of this Court certain persons were tried for the offence of conspiracy to cheat the members of the public and for specific offences of cheating in pursuance of that conspiracy. It was urged before this Court there was misjoinder of charges and persons. Negativing the contention this Court held that the charge as framed disclosed a single conspiracy although spread over several years, that there was one object of the conspiracy an] that was to cheat the members of the public, that the fact that in the course of years others joined the conspiracy or that several incidents of cheating took place in pursuance of the conspiracy did not have the effect of splitting the conspiracy into several conspiracies that the several instances of cheating being alleged to be in pursuance of that conspiracy were parts of the same transaction and therefore, the joint trial of the accused persons for the different offences was not vitiated. No doubt there is no discussion there as to the question whether the various clause of Section 239 could be combined or as to the impact of the provisions of Sections 233 to 236 on those of Section 239. The actual decision of the case is, however, directly opposed to the contention now put forward before us. This decision has been followed in Natwarlal Sakarlal Mody v. State of Bombay Cri App. No. 111 of 1959 decided on 19-1-1961 (SC). In that case the impact of Section 120-B I. P. C. on Sections 233 and 239 of the Code of Criminal Procedure was considered by this Court and this Court observed:

"The combined effect of the three provisions (Ss. 235 236 and 239) is that if there s a criminal conspiracy to commit different offences the persons who are members of that conspiracy may be charged and tried together but the necessary condition for invoking the provisions of Section 239 (d) is that the offence should have been committed in the course of one transaction i.e. in the present case one and the same conspiracy. Here again, the question of clubbing together of the various provisions of cls. (a) to (d) of Section 239 was not raised expressly in the argument before the Court. But the ultimate decision of the case would negative such argument.

36. Mr. Bhimasankaram then relying upon the decision in 1961-1 All ER 558 contended that it any event it was not desirable to try the respondents at the same trial for as many as 83 offences and pointed out that these observations had received the approval of this Court in 1962-1 SCR 194. In the first place there the trial had not actually begun. Again, what was said by this Court was that It is undesirable to complicate a trial by introducing a large number of charges spread over a long period but even so this was a question of propriety which should be left to the discretion of the Judge or Magistrate trying the case.

37. Objection was taken very seriously by Mr. Bhimasankaram to the charge of conspiracy framed in this case. That charge reads thus:

"That both of you along with K. V. Ramana, Ex-Senior Accountant of the Vizagapatam Electric Supply Corporation Ltd.,Visakhapatnam (approver) and others, known or unknown, in, or about April, 1947 at Visakhapatnam agreed to do 'illegal acts to wit commit criminal breach of trust in respect of the funds belonging to the Vizagapatam Electric Supply Corporation Ltd., Vizagapatam; and to screen yourselves from detection of the same to wailfully, and with intent to defraud, falsify the accounts of the said Vizagapatam Electric Supply Corporation Ltd. Visakhapatnam and that pursuant to the said agreement (you committed criminal breach of trust in respect of funds of the said Vizagapatam Electric Supply Corporation Ltd., Visakhapatnam to the extent of over Rs. 3 20,000 and falsified the said accounts between April, 1947, and March, 1952, and also used forged documents as genuine) offences punishable under Section 409 Indian Penal Code and 477-A, Indian Penal Code and 471 read with Section 467. Indian Penal Code; and thereby committed an offence of criminal conspiracy punishable under Section 120-B of the Indian Penal Code and within my cognizance."

Adverting to the portion which we have bracketed, his first objection was that the charge comprises within it not merely the conspiracy but also what was in fact done in pursuance of the conspiracy. His next objection on was that it brought within its purview all the various offences which were alleged to have been committed by the respondents. The third objection was that no charge of conspiracy could have been framed after the conspiracy had borne its fruits. The last objection was that the charge of conspiracy was added to the charge sheet very late.

38. We shall first deal with the third point. The offence of conspiracy is an entirely independent offence and though other offences are committed in pursuance of the conspiracy the liability of the conspirators for the conspiracy itself cannot disappear. In the Indian Penal Code as originally enacted conspiracy was not an offence. Section 120-B which makes criminal conspiracy punishable was added by the Indian Criminal Law Amendment Act, 1913 (8 of 1913) along with Section 120-A. Section 120-A defines conspiracy and Section 12-B provides for the punishment for the offence of conspiracy. Criminal conspiracy as defined in Section 120-A consists of an agreement to do an illegal act or an agreement to do an act which is not illegal by illegal means. Section 120-B provides that 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 be punishable in the same manner as if he has abetted such offence unless there was an express provision in the Code for the punishment of such conspiracy. Criminal conspiracy was however, not an unknown thing before the amendment of the Indian Penal Code in 1913. But what the amendment did was to make that conspiracy itself punishable. The idea was to prevent the commission of crimes by, so to speak, nipping them in the bud. But it does not follow that where crimes have been committed the liability to punishment already incurred under Section 120-B by having entered into a criminal conspiracy is thereby wiped away. No doubt, as already stated, where offences for committing which a conspiracy was entered into have actually been committed it may not, in the particular circumstances of a case, be desirable to charge the offender both with the conspiracy and the offences committed in pursuance of that conspiracy. But that would be a matter ultimately within the discretion of the court before which the trial takes place. In so far as the fourth point is concerned, that would have a bearing not on the form of the charge but on the credibility of the evidence bearing on the point of conspiracy. As we are remanding the appeal to the High Court for a fresh decision after full consideration of the evidence adduced in the case it would be open to it to consider this matter particularly while judging the credibility of the evidence of the approver.

39. In so far as the portion included in the bracket is concerned we agree with the learned counsel that it should not have found place there. The idea, however, of the committing magistrate in stating all that is said there appears to have been merely to describe the conspiracy and do nothing more. We do not think that either that or the other objection raised, that is, that charge embraces within it all the offences said to have been committed by the respondents can properly be said to vitiate the charge. The object in saying what has been set out in the first charge was only to give notice to the respondents as to the ambit of the conspiracy to which they will have to answer and nothing more. Even assuming for a moment that this charge is cumbersome, in the absence of any objection by the respondents at the proper time and in the absence of any material from which we could infer prejudice they are precluded by the provisions of Section 225 from complaining about it at any rate after their conviction by the trial court.

40. Coming to the next point of Mr. Bhimasankaram regarding the abuse of powers under Section 342 his first contention was that long and involved questions were put to the respondents. His second contention was that reference was made to a number of documents in some of these questions and those documents were not made available to the respondents for answering those questions. The third contention was that the questions were involved, confusing and, bordered on cross-examination. Finally he said that the court did not perform its duty under Section 342(4) of the Code as amended as it failed to bring to the notice of the respondents that they may, if they chose, give evidence in their defence.

41. In support of his first contention be referred to questions Nos. 4, 8, 9, 10, and 20 put to the respondent No. 1 and question No. 12 put to the respondent No. 2 and tried to show that those questions rolled up a large number of separate questions and that it could not have been possible for the respondents to give any rational answers to those questions. We have read the questions and so also the answers. While we are disposed to agree with the learned counsel that the questions embrace a number of matters and that it would have been better if those matters had been made the subjects of separate questions, the answers given by the respondents clearly show that they understood the questions and wherever possible they have given complete answers to those questions. That is to say, they have given their explanation regarding the circumstances appearing in the evidence set out in the questions and wherever that was not feasible they have said that they would do so in their written statements, In fact written statements have been filed by each of them in which every point left over has been fully answered. We are informed that the questions had been prepared before hand by the learned Additional Sessions Judge copies thereof were made available to each of the respondents and it was with reference to those copies that they gave their answers in the court. A pointed reference was made to question No. 20 put to respondent No. 1 which contains as many as 22 sub-heads and it is said that it was an extremely unfair and embarrassing question. What the learned Addl. Sessions Judge has done is to err on the side of over-cautiousness by putting every circumstance appearing in the evidence to the respondents for eliciting their explanations. His object was to obviate the possibility of a complaint before the appellate court that they were denied the opportunity of explaining the circumstances appearing in evidence against them because of defective questions. Nor again, do we think that there is any substance in the complaint made that the respondents had no opportunity of referring to the documents to which reference has been made in certain questions. No ojections was taken on their behalf before the learned Additional Sessions Judge and from the manner in which they have answered the questions there is no doubt that they must have had opportunity to look at the relevant documents and answer the questions. We are also satisfied that there is no substance in the complaint that the questioning bordered on cross-examination. Undoubtedly the learned Additional Sessions Judge has questioned the respondents very fully and elaborately but to say that this bordered on cross-examination is wholly unjustifiable. The object of the learned Additional Sessions Judge quite clearly was, as already stated, to leave no loophole for a complaint to be made before the appellate court of incomplete or insufficient examination under Section 342.

42. Finally we are clear that it was not the duty of the court to draw the pointed attention of the respondents to the provisions of subsection (4) of Section 342 and tell them that they may if they chose, enter the witness box It is true that by introducing this provision the disability placed on an accused person in respect of giving evidence on oath in his own defence has been removed and to that extent such person is placed on par with an accused person under the English law. The new provision, however, does no more than lift the ban and does not impose a duty on the court to draw the attention of an accused person to its contents. Apart from that, the respondents were represented by counsel at the trial who knew very well what the law was. No complaint was made by the respondents even in appeal that they were ignorant of their right, that had they known about it they would have given evidence on oath in their defence and that because of this they have been prejudiced. In the circumstances this point must also be rejected as being without substance.

43. The irrelevant evidence to which Mr. Bhimasankaram referred was certain account books. The entries in the account books of VESCO show that certain sums of money were paid to various parties, Crompton Engneering Co., Lumin Electric Co., D. Brothers, Radio and Electricals Madras, Vizagapatam Municipality, P. V. Ramanayya Bros., and Andhra Power System. They also show payment of electricity duty to Government. The prosecution case was that the payments which were entered in the accounts of VESCO do not find a place in the account books of the corresponding firms or authorities because they were never made by VESCO. The High Court has pointed out that the main evidence on which the prosecution rests its case that the amount represented by the entries against these venous firms were in ract misappropriated by the respondents in he circumstances that there are no corresponding entries in the account books of those firms. The argument before the High Court was and before us is that the absence of an entry cannot be established by reference to Section 34 of the Evidence Act which reads thus:

"Entries in books of account, regularly kept in the course of business' are relevant whenever they refer to a matter into which the Court has to inquire, but such statements shall not alone be sufficient evidence to charge any person with liability."

This section appears in a group of sections headed "Statements made under special circumstances." What it does is to make entries in books of account regularly kept in the course of business relevant in all proceedings in a court of law. These entries are, however, not by themselves sufficient to charge any person with liability. Therefore, when A sues B for a sum on money it is open to him to put his account books in evidence provided they are regularly kept in the course of business and show by reference to them that the amount claimed by him is debited against B. The entry though made by A in his own account books, and though it is in his own favour is a piece of evidence which the court may take into consideration for the purpose of determining whether the amount referred to therein was in fact paid by A to B. The entry by itself is of no help to A in his claim against B but it can be considered by the Court along with evidence of A for drawing the conclusion that the amount was paid by A to B. To this limited extent entries in the account books are relevant and can be proved. Section 34 does not go beyond that. It says nothing about non-existence of entries in account books. We, therefore, agree with the High Court that the account books of the various concerns to whom payments are said to have been made by the respondents are not by themselves evidence of the fact that no payments were received by them. The decisions in Queen Empress v. Grees Chunder, ILR 10 Cal 1024 upon which reliance is placed by the High Court in support of its view is also to that effect. Similarly in Ram Pershad Singh v Lakbpati Koer, ILR 30 Cal 231 at p. 247 (PC) Lord Robertson during the course of the hearing has observed that no inference can be drawn from the absence of any entry relating to any particular matter which observation supports the view taken in ILR 10 Cal 1024. That, however, is not the only provision to be considered. There is Section 11 of the Evidence Act which provides that facts not otherwise relevant are relevant if they are inconsistent with any fact in issue or relevant fact. Some of the facts in issue in this case are whether payments of certain sums of money were made to Crompton Engineering Co., and other firms or authorities. These are relevant facts. Absence of entries in their account books would be inconsistent with the receipt of the amounts and would thus be a relevant fact which can be proved under Section 11. The fact that no payments were received by those firms has been deposed to by persons connected with those firms and whose duty it was to receive and acknowledge amounts received by the fines or who were in charge of the accounts of these firms. For the purpose of showing that no amounts were received by the 'firms, their account books would thus be as relevant as the VESCO account books for the purpose of showing the contrary. Similarly there is Section 5 of the Evidence Act which reads thus: "Evidence may be given in any suit or proceeding of the existence or non-existence of every fact in issue and of such other facts as are hereinafter declared to be relevant and of no others".

It is the case of the prosecution that the alleged payments were never made by VESCO to the various firms. It is also their case that these firms maintain their accounts in the regular course of business and it is their practice to enter in those accounts all payments received by them. Both the sets of facts are relevant, that is, non-receipt of the amounts by the firms and non-existence of entries in their account books pertaining to those amounts. It is permissible, therefore, for the prosecution to lead evidence to prove both these facts. The best evidence to prove the latter set of Acts consists of the account books of the firms themselves. It is under these provisions that the account books of the firms must be held to be relevant. What value of attach to them is another matter and would be for the Court of fact to consider.

44. It may further be mentioned that the account books of VESCO show certain payments made to Billimoria and Co., of kharagpur. Papers seized by the police include receipts purporting to have been signed by one J. J. Billimoria on behalf of the firm. The prosecution case is that these receipts are forged documents and the entries in the account books of VESCO are false. One of the partners of the firm was examined by the prosecution as a witness in the case and he produced the accounts books of the firm. Those account books are in Gujrati and he stated in his evidence that the accounts were regularly kept and that there were no entries in them corresponding to the entries in the VESCO accounts. The High Court held that since the account books were not translated they are not admissible in evidence. The High Court was clearly wrong. in so holding. In coming to this conclusion it has relied upon the provisions of Section 356(2A) of the Code of Criminal Procedure. That section reads thus:

"When the evidence of such witness is Even in any other language, not being English, than the language of the Court, the Magistrate or Sessions Judge may take it down in that language with his own hand, or cause it to be taken down in that language in his presence and heard and under his personal direction and superintendence, and an authenticated translation of such evidence in the language of the Court or in English shall form part of the record".

45. This provision relates only to the oral evidence adduced in a case and not to documentary evidence. Mr. Bhimasankaram, therefore, very rightly did not support the view of the High Court. In the circumstances we wish to say nothing further on the point. We may, however, point out that Billimoria himself gave his evidence in English.

46. Another point urged by Mr. Bhimasankaram was that as many as 2,000 documents were "dumped" by the prosecution in this case out of which 1,600 documents were not sought to be proved by it. Further, 64 documents were missing from the record when they came to the High Court and that this has caused serious prejudice to the respondent. No objection, however, was taken in the courts below on this score and in the absence of any prejudice to the respondents we do. not think that we should take notice of the complaint made by Mr. Bhimasankaram.

47. The third point stressed by him was that the approver was allowed to refresh his memory, while deposing in the case, by referring, extensively to the account books and various documents produced in the case. This, according to him, was an abuse of the provisions of Section 159 of the Evidence Act. Now, Section 159 expressly enables a witness while under examination to refresh his memory by referring to any writing made by himself at the time of the transactions concerning which he is being questioned, or soon afterwards, or to a writing made similarly by another person and read by the witness immediately or soon after the writing was made. Section 160 provides that a witness may also testify to the facts mentioned in any such document as it mentioned in Section 159. The complaint of Mr. Bhimasankaram is that the approver should have been questioned about the various facts which were sought to be established through his evidence and it was only if and when he was in a difficulty that he should have been allowed to refer to the account books. Instead of doing that what he was permitted to do was just to prove the various documents or read those documents and then depose with reference to them. In our opinion, where a witness has to depose to a large number of transactions and those transactions are referred to or mentioned either in the account books or in other documents there is nothing wrong in allowing the witness to refer to the account books and the documents while answering the questions put to him in his examination. He cannot be expected to remember every transaction in all its details and Section 160 specifically permits a witness to testify the facts mentioned in the documents referred to in Section 159 although he has no recollection of the facts themselves if he is sure that the facts were correctly recorded in the document. That is precisely what happened in this case and we do not think that the Additional Sessions Judge adopted a procedure which was either a violation of law or was an abuse of the powers of the Court.

48. The next point is a formidable one. According to Mr. Bimasankaram, the pardon tendered to the approver was illegal and if the pardon is illegal his evidence is wholly inadmissible. Further, according to him, the evidence of the approver was found by the Additional Sessions Judge to be unreliable and, therefore, the first condition referred to in Sarwan Singh v. State of Punjab, 1957 SCR 953 was not satisfied. For all these reasons the evidence of the approver must be left out of account. If it left out of account, he contends, there is nothing left in the prosecution case, because, as pointed out by the Additional Sessions Judge himself the evidence of the approver is the pivot of the prosecution case.

49. The pardon is stated to be illegal for two reasons. The first reason is that none of the offences alleged to have been committed falls within Section 337 of the Code of Criminal Procedure and the second reason is that the pardon was granted by an authority not empowered to grant it. Section 337(1) as it stood before its amendment by Act 26 of 1955 reads thus:

"In the case of any offence triable exclusively by the High Court or Court of Session, or any offence punishable with imprisonment which may extend to ten years, or any offence punishable under Section 211 of the Indian Penal Code with imprisonment which may extend to seven years, or any offence under any of the following sections of the Indian Penal Code namely, sections 161, 165, 165A, 216A, 369, 401, 431, 435 and 477-A, the District Magistrate, a Presidency Magistrate, a sub-divisional Magistrate or any Magistrate of the first class may, at any stage of the investigation or inquiry into., or the trial of the offence, with a view to obtaining the evidence of any person supposed to have been directly or indirectly concerned in or privy to the offence, tender a pardon to such person on condition of his making a full and true disclosure of the whole of the circumstances within his knowledge relative to the offence and to every other person concerned, whether as principal or abettor, in the commission thereof:

Provided that, where the offence is under inquiry or trial, no Magistrate of the first class other than the District Magistrate shall exercise the power hereby conferred unless he is the Magistrate making the inquiry or holding the trial and, where the offence is under investigation, no such Magistrate shall exercise the said power unless he is a Magistrate having jurisdiction in a place where the offence might be inquired into or tried and the sanction of the District Magistrate has been obtained to the exercise thereof."

His contention is that where one of the offences is exclusively triable by the High Court or the Court of Session pardon could be granted only if the offences are punishable with imprisonment which could extend to ten years but not if a higher punishment were provided for them. Here, one of the offences alleged against the respondents is criminal breach of trust punishable under Section 409, I. P. C. It is not exclusively triable by a court of Session and the punishment as set out in the 7th column of Schedule IL Cr. P. C. was transportation for life or imprisonment of either description for ten Years and fine. He contends that since the offence is punishable with transportation for life, Section 337 (1) could not be availed of for granting pardon to the approver. It seems to us that it would not be correct to read Section 337 (1) in the way sought by learned counsel. The very object of this provision is to allow pardon to be tendered in cases where a grave offence is alleged to have been committed by several persons so that with the aid of the evidence of the person pardoned the offence could be brought home to the rest. The gravity is of course to be determined with reference to the sentence awardable with respect to that offence. On the strength of these considerations Mr. Chari for the State contends that if the words "any offence punishable with imprisonment which may extend to 10 years" were interpreted to mean offences which were punishable with imprisonment of less than 10 years grave, offences which are not exclusively triable by a Court of Session will be completely out of Section 337(1). He suggests that this provisions can also, be reasonably interpreted to mean that where the offences are punishable with imprisonment exceeding 10 years pardon may be granted to the approver. No doubt if this interpretation is accepted the object of the section, that is, to embrace within it the graver offence, would be fulfilled, but we wish to express no opinion on it. For, the pardon granted in this case can be regarded as being within the ambit of Section 337(1) for another reason. It will be noticed that transportation for life was not the only punishment provided 'for an offence under Sec. 409 of the Indian Penal Code even before the amendment made to the Indian Penal Code by Section 117 of Act 26 of 1955, the other alternative being imprisonment upto 10 years. Therefore, since the offence under Section 409 was not merely punishable with transportation for life but alternatively also punishable with imprisonment which could extend to 10 years, Section 337(1) would apply. This section does not expressly say that the only punishment provided for the offence should be imprisonment not exceeding 10 years. The reason why two alternative maximum sentences are given in col. 7, that is, transportation for life (now imprisonment for life), and imprisonment not exceeding 10 years appears to be that the offence is not exclusively triable by a court of session and could also be tried by a Magistrate, who, except when empowered under Section 30 would be incompetent to try offences punishable with transportation for life (now imprisonment for life) and the further reason that it should be open to the court of Session, instead of awarding the sentence of transportation for life to a convicted person to award him imprisonment in a jail in India itself for a period not exceeding 10 years. Now, of course, by the amendment made by Section 117, of Act 26 of 1955 for the words "transportation for life"- the words "imprisonment for life" have been substituted, but the original structure of all the sections now amended continues. That is why they read rather queer but even so they serve the purpose of allowing certain offences triable by a court of Session, to be triable also by Magistrates of the First Class. Be that as it may, there is no substance in the first ground.

50. What we have said about pardon in respect of an offence under Section 409 would apply equally to that for one under Section 120-B because the punishment for it is the same as that for the offence under Section 409.

51. The offence under Section 467 read with Section 471 is punishable with imprisonment for life or imprisonment of either description for a period of 10 years but it is exclusively triable by a court of Session and, therefore, in so far as such offence is concerned the argument of Mr. Bhimasankaram would not even have been available. As regards the offence under Section 477-A it is one of those sections which are specifically enumerated in Section 337(1) and the argument advanced before us - and which we have rejected- would also not be available with regard to the pardon in respect of that offence. It is true that the respondent No.1 alone was convicted by the additional Sessions Judge of this offence and the offence under Section 467 read with Section 471 but the validity of a pardon is to be determined with reference to the offence alleged against the approver alone and not with reference to the offence or offences of which his associates were ultimately convicted.

52. Corning to the next ground of attack on the validity of the pardon, the argument of Mr. Bhimasankaram is that whereas Sec. 337(1) speaks of pardon being a granted by a District Magistrate or Presidency Magistrate, a Sub-Divisional Magistrate or any Magistrate of First Class, except in cases where an enquiry or trial was pending before another Magistrate, the pardon here was granted by the Additional District Magistrate in a case where an enquiry was pending before the District Magistrate and is, therefore, illegal and of no avail He contends that Section 337(1) speaks of the District Magistrate which expression does not include an Additional District Magistrate. Mr. Bhimasankaram's argument on the point may be summarised thus: Such a power cannot be conferred upon an Additional District Magistrate because S 337(1) does not contemplate grant of pardon by an Additional District Magistrate and that the Additional District Magistrate would have no status other than that of a Magistrate, First Class. No doubt under entry (9-a) in Part III of Sch. III to the Code a Magistrate, First Class, has the power to grant pardon under Section 337 but it is limited by the proviso thereto to certain classes of cases. A case under enquiry or trial before another magistrate does not fall in any of these classes. Therefore, a pardon granted by him in such a case would be illegal. The Magistrate before whom the enquiry or trial is proceeding or the District Magistrate would be the only authorities competent to grant a pardon in such a case. Alternatively, the State Government has not made any directions under sub- section (2) of Section 10 specifying the powers of the District Magistrate which would be exercisable by the Additional District Magistrate concerned.

53. In order to appreciate and consider the argument it is desirable to bear in mind the changes in the magisterial set up in the former province of Madras which comprised within it the district of Visakhapatnam. By Government order No. 3106 dated September 9 1949 the Government of the Province of Madras issued certain instructions to the Magistrates in pursuance of the separation of the judiciary from the executive. It divided the magistrates into two groups, judicial magistrate and executive magistrates. The latter category comprises of the executive officers of the Revenue Department, on whom the responsibility for the maintenance of law and order was to continue to rest. Para 4 of the instructions provides "..... To enable them to discharge this responsibility, these officers will continue to be magistrates. The Collector by virtue of office, will retain some of the powers of a District Magistrate and will be called the 'Additional District Magistrate'. To distinguish him from his personal Assistant, he may be called 'Additional District Magistrate (Independent).' He will continue to be the Head of the Police. Similarly, the Revenue Divisional Officers will be ex-officio First Class Magistrates and the Tehsildars and the Deputy Tehsildars will be ex-officio Second Class Magistrates. The extent of their magisterial powers will be as indicated in the Schedule of allocation of powers They will exercise these powers within their respective revenue jurisdictions." Para 5 provides that as Officers of the Revenue Dept., those magistrates would be under the control of the Government through the Board of Revenue. The Additional District Magistrates (Independent) would also be under the control of the Government through the Board of Revenue. The category of Judicial Magistrates was constituted of the following : (1) District Magistrate (2) Sub-divisional Magistrates; (3) Additional First Class Magistrates and (4) Second Class Magistrates (Sub-magistrates). The District Magistrate was constituted as the principal magistrate of the District and as such was entrusted with the duty of general administration and superintendence and control over the other judicial magistrates in the district. In addition to his general supervisory functions and the special powers under the Code of hearing revision petitions, transfer petitions, appeals from Second Class Magistrates and the like, the District Magistrate was also to be assigned a specific area, the cases arising from which would be disposed of normally by himself. This body of Magistrates was made subordinate to the High Court. Till the separation between the judiciary and the executive was effected the Collector as the head of the Revenue Department was also the District Magistrate. Consequent on the separation he became only an Additional District magistrate. Part IV of the Government order deals with the allocation of powers between the judicial and executive magistrates. Para 19(3) occurring in this part deals with allocation of powers under the provisions of the Code otherwise than those referred to in the earlier paragraphs. It specifically provides that the power to tender pardon under Section 337 shall be exercised by executive magistrates except in cases referred to in the proviso to sub-section (1) of that section, in which case a judicial magistrate may exercise that power.

54. In spite of the Government order all Magistrates who have, under Sch. III to the Code of Criminal Procedure, the power to grant pardon will continue to have that power and, therefore, a pardon granted by a judicial magistrate in contravention of the Government Order will not be rendered invalid. However, that is not the point which is relevant while considering the argument of Mr. Bhimasankaram. His point is that the proviso to Section 337 (1) confers the power on "the District Magistrate to grant pardon in a case pending before another Magistrate and not on "a District Magistrate" and, therefore, his power to grant pardon in such cases cannot be conferred under sub-section (2) of Section 10 on an Additional District Magistrate. According to him, under that section only the powers of "a District magistrate" meaning thereby only the powers under Entry 7 (a) in Part V of Sch. III as distinguished from the power under the proviso to Section 337(1) can be conferred upon an Additional District Magistrate. Secondly, according to him, no direction has in fact been shown to have been made by the State Government conferring upon an Additional District Magistrate the power of the District Magistrate to grant pardon. In our opinion, there is no substance in the contention. The power conferred by subsection (1) of Section 337 on the different classes of Magistrates is of the some character. The power to grant pardon in a case pending before another Magistrate is no doubt conferred by the proviso only on the District Magistrate. But Entry 7(a) in Part V of Sch. III when it refers to the power of a District Magistrate under Section 337(1) does not exclude the power under the proviso. There is, therefore, no warrant for drawing a distinction between the powers of "the District Magistrate" and the powers of "a District Magistrate". The power of a District Magistrate to grant pardon has been specifically conferred on Additional District Magistrates as would appear from S. No. 37 of Sch. III of the Government Order, which reads thus :

"Sl. no.

Judl. Magistrate

Exec. magistrate

Concurrent jurisdiction

Remarks

37

............

............

337(l), 2nd paragraph (proviso)

Reference to District Magistrate in the
proviso should be construed as reference
to the Executive District Magistrate.
Reference to the Magistrate making the enquiry or
holding the trial etc., should be construed as
a reference to the Judicial Magistrate."

No doubt, here the reference is to the Executive District Magistrate. But it is clear from the other part of the Government Order that what is meant by that is the Additional District Magistrate (Independent). This was and, we are told, is being regarded as a direction of the Government falling under sub-section (2) of Section 10 of the Code. Whether the interpretation is correct or not, we feel little doubt that the action of the Additional District Magistrate (independent) Visakhapatnam in granting a pardon to the approver in this case though it was Rending enquiry before the District Magistrate (Judicial), was bona fide. A pardon granted bona fide is fully protected by the provisions of Section 529, Cr. P. C.

55. The High Court has not considered any of the provisions to which we have referred but held that as the offence was being enquired into by the District Magistrate, the Additional District Magistrate could not usurp the functions of the former and grant a pardon. Had it done so, it would not have come to this conclusion. We are, therefore, unable to accept it.

56. Mr. Chari for the State advanced a further argument before us in case his main argument that the pardon was valid failed and said that the approver, even if we ignore the pardon, was a competent witness. In support of his contention he strongly relied upon the decision in Kandaswamy Gounder, In re, ILR 1957 Mad 715 for enabling him to explain the circumstances appearing in evidence against him. If pardon is tendered to an accused person and eventually it is found that the pardon is illegal such person is pushed back into the rank of an accused person and being no more than an accomplice would be a competent witness. The question raised is an important one and requires a serious consideration. Mr. Chari in support of his contention had cited a large number of cases, Indian as well as English, and certain passages from Halsbury's Laws of England. But in the view we take about the legal validity of the pardon tendered, we do not wish to pronounce one way or the other on this very interesting question.

57. Now, as regards the reliability of the approver. It is no doubt true that an approver has always been regarded as an infamous witness, who, on his own showing has participated in a crime or crimes and later to save his own skin, turned against his former associates and agreed to give evidence against them in the hope that he will be pardoned for the offence committed by him. The High Court seems to think that before reliance could be placed upon the evidence of the approver it must appear that he is a penitent witness. That, in our opinion, is not the correct legal position. The section itself shows that the motivating factor for an approver to turn, what in England is called "King's evidence" is the hope of pardon and not any noble sentiment line contrition at the evil in which he has participated. Whether the evidence of the approver should in any given case be accepted or not will have to be determined by applying the usual tests such as the probability of the truth of what he has deposed to, the circumstances in which he had come to give evidence, whether he has made a full and complete disclosure, whether his evidence is merely self-exculpatory and so on and so forth. The court has, in addition, to ascertain whether his evidence has been corroborated sufficiently in material particulars. What is necessary to consider is whether applying all these tests the evidence of the approver should be acted upon.

58. We, however, find that certain documents upon which Mr. Chari wants to rely are not included in the paper book. It would take considerable time if we were to adjourn this matter now and give an opportunity to the parties to include those documents on record. The better course would be for us to set aside the acquittal of the respondents and send back the appeal to the High Court for being decided on merits. The High Court will of course be bound by the findings which we have given on the questions-of law agitated before us. What it must now do is to consider the entire evidence and decide for itself whether it is sufficient to bring home all or any of the offences to the respondents. We may mention that the High Court's observation that the approver's evidence was treated as unreliable by the learned Additional Sections Judge is not correct.. Of course, the view taken by the Additional Sessions Judge is not binding on the High Court. But it should remove from its mind the misconception that the Additional Sessions Judge has not believed him. There is another thing which we would like to make clear. The decision in 1957 SCR 953 on which reliance has been placed by the High Court has been explained by this Court in the case or E. G. Barsay v. State of Bombay, 1962-2 SCR 195. This Court has pointed out in the latter decision that while it must be shown that the approver is a witness of truth the evidence adduced in a case cannot be considered in compartments and that even for judging the credibility of the approver the evidence led to corroborate him in material particulars would be relevant for consideration. The High Court should bear this in mind for deciding whether the evidence of the approver should be acted upon or not. Then again it would not be sufficient for the High Court to deal with the evidence in a general way. It would be necessary for it to consider for itself the evidence adduced by the prosecution on the specific charges and then to conclude whether those charges have been established or not. The prosecution would be well advised if, instead of placing the evidence on each and every one of those large number of charges against the respondents, it choses to select a few charges under each head other than the head of conspiracy and on centrates on establishing those charges, the would save public in and also serve the purpose of the prosecution. With these observations we set aside the acquittal of the respondents and remit the appeal to the High Court for decision of merits in the light of our observations.

Case remanded

REPORTED AS

1963 AIR (SC) 1850 : 1964(3) SCR 297

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Wednesday, 14 September 2011 13:58

Ram Jethmalani v. Union of India (SC)

SUPREME COURT OF INDIA

Before :- P. Sathasivam and H.L. Gokhale, JJ.

Writ Petition (Civil) No. 176 of 2009. D/d. 4.7.2011.

Ram Jethmalani and others - Petitioners

Versus

Union of India - Respondent

With

I.A. No. 1 of 2009.

For the Appearing Parties :- Mr. Anil Divan, Senior Advocate, Ms. Lata Krishnamurthi, Mr. R.N. Karanjawala, Ms. Manik Karanjawala, Sandeep Kapur, Ranvir Singh, Mr. Ravi Sharma, Mr. Pranav Diesh, Karan Kalia and Arjun Mahajan for M/s. Karanjawala and Co., Advocates.

For Intervenor K.V.M. PAI :- Mr. Krishnan Venugopal, Senior Advocate, Mrs. Anuradha Mutatkar, Mrs. Anagha S. Desai, Mr. Shyamohan and s. Meenakshi Arora, Advocates.

For UOI :- Mr. Gopal Subramanium, SG and Mr. H.P. Raval, ASG, Mr. Devansh Mohta, Mr. T.A. Khan, Mr. Arijit Parasad, Mr. Kunal Bahri, Mr. B.V. Balaram Das and Mr. B. Krishna Prasad, Advocates, Mr. Mukul Rohatgi, Senior Advocate, Mr. Rajiv Nanda, Advocate.

For RR-3 (SEBI) :- Mr. Pratap Venugopal, Ms. Surekha Raman, Mr. Dileep Poolakkit, Ms. Namrata Sood, Mr. Anuj Sarma, Advocates for M/s. K.J. John and Co., Mr. Kuldeep S. Parihar, Mr. H.S. Parihar, Mr. Sanjay kharde, Ms. Asha Gopalan Nair, Mr. P.P. Malhotra, ASG, Mr. J.S. Attri, Senior Advocate, Ms. Sadhana Sandhu, Ms. Anil Katiyar, Mr. Samir Ali Khan, Advocates, Mr. Rajiv Mohiti and Mr. I.P. Bagadia, Senior Advocate, Mr. Santosh Paul, Mr. B.V. Reddy, Mr. Arvind Gupta, Ms. Arti Singh, Ms. Mohita Bagati, and Mr. Ashok Kumar Gupta-I, Advocate.

HINT- Special Investigation Team under chairmanship of retired Judge of Supreme Court set up to investigate black money cases.

Cases Referred :

1. Vineet Narain v. Union of India, 1998(1) R.C.R.(Criminal) 357 : (1996)2 SCC 199.

2. NHRC v. State of Gujarat, (2004)8 SCC 610.

3. Sanjiv Kumar v. State of Haryana, (2005)5 SCC 517.

4. Centre for PIL v. Union of India, (2011)1 SCC 560.

5. Union of India v. Azadi Bachao Andolan, (2004)10 SCC 1.

JUDGMENT

I

1. "Follow the money" was the short and simple advice given by the secret informant, within the American Government, to Bob Woodward, the journalist from Washington Post, in aid of his investigations of the Watergate Hotel break in. Money has often been claimed, by economists, to only be a veil that covers the real value and the economy. As a medium of exchange, money is vital for the smooth functioning of exchange in the market place. However, increasing monetization of most social transactions has been viewed as potentially problematic for the social order, in as much as it signifies a move to evaluating value, and ethical desirability, of most areas of social interaction only in terms of price obtained in the market place.

2. Price based notions of value and values, as propounded by some extreme neo-liberal doctrines, implies that the values that ought to be promoted, in societies, are the ones for which people are willing to pay a price for. Values, and social actions, for which an effective demand is not expressed in the market, are neglected, even if lip service is paid to their essentiality. However, it cannot be denied that not everything that can be, and is transacted, in the market for a price is necessarily good, and enhances social welfare. Moreover, some activities, even if costly and without being directly measurable in terms of exchange value, are to be rightly viewed as essential. It is a well established proposition, of political economy, and of statecraft, that the State has a necessary interest in determining, and influencing, the kinds of transactions, and social actions, that occur within a legal order. From prevention of certain kinds of harmful activities, that may range from outright crimes, to regulating or controlling, and consequently mitigating, socially harmful modes of social and economic production, to promotion of activities that are deemed to be of higher priority, than other activities which may have a lower priority, howsoever evaluated in terms of social utility, are all the responsibilities of the State. Whether such activities by the State result in directly measurable benefits or not is often not the most important factor in determining their desirability; their absence, or their substantial evisceration, are to be viewed as socially destructive.

3. The scrutiny, and control, of activities, whether in the economic, social or political contexts, by the State, in the public interest as posited by modern constitutionalism, is substantially effectuated by the State "following the money." In modern societies very little gets accomplished without transfer of money. The incidence of crime, petty and grand, like any other social phenomena is often linked to transfers of monies, small or large. Money, in that sense, can both power, and also reward, crime. As noted by many scholars, with increasing globalization, an ideological and social construct, in which transactions across borders are accomplished with little or no control over the quantum, and mode of transfers of money in exchange for various services and value rendered, both legal and illegal, nation-states also have begun to confront complex problems of cross-border crimes of all kinds. Whether this complex web of flows of funds, instantaneously, and in large sums is good or bad, from the perspective of lawful and desired transactions is not at issue in the context of the matters before this Court.

4. The worries of this Court that arise, in the context of the matters placed before us, are with respect to transfers of monies, and accumulation of monies, which are unaccounted for by many individuals and other legal entities in the country, in foreign banks. The worries of this Court relate not merely to the quantum of monies said to have been secreted away in foreign banks, but also the manner in which they may have been taken away from the country, and with the nature of activities that may have engendered the accumulation of such monies. The worries of this Court are also with regard to the nature of activities that such monies may engender, both in terms of the concentration of economic power, and also the fact that such monies may be transferred to groups and individuals who may use them for unlawful activities that are extremely dangerous to the nation, including actions against the State. The worries of this Court also relate to whether the activities of engendering such unaccounted monies, transferring them abroad, and the routing them back to India may not actually be creating a culture that extols the virtue of such cycles, and the activities that engender such cycles are viewed as desirable modes of individual and group action. The worries of this court also relate to the manner, and the extent to which such cycles are damaging to both national and international attempts to combat the extent, nature and intensity of cross-border criminal activity. Finally, the worries of this Court are also with respect to the extent of incapacities, system wide, in terms of institutional resources, skills, and knowledge, as well as about incapacities of ethical nature, in keeping an account of the monies generated by various facets of social action in the country, and thereby developing effective mechanisms of control. These incapacities go to the very heart of constitutional imperatives of governance. Whether such incapacities are on account of not having devoted enough resources towards building such capacities, or on account of a broader culture of venality in the wider spheres of social and political action, they run afoul of constitutional imperatives.

5. Large amounts of unaccounted monies, stashed away in banks located in jurisdictions that thrive on strong privacy laws protecting bearers of those accounts to avoid scrutiny, raise each and every worry delineated above. First and foremost, such large monies stashed abroad, and unaccounted for by individuals and entities of a country, would suggest the necessity of suspecting that they have been generated in activities that have been deemed to be unlawful. In addition, such large amounts of unaccounted monies would also lead to a natural suspicion that they have been transferred out of the country in order to evade payment of taxes, thereby depleting the capacity of the nation to undertake many tasks that are in public interest.

6. Many schools of thought exist with regard to the primary functions of the State, and the normative expectations of what the role of the State ought to be. The questions regarding which of those schools provide the absolutely correct view cannot be the criteria to choose or reject any specific school of thought as an aid in constitutional adjudication. Charged with the responsibility of having to make decisions in the present, within the constraints of epistemic frailties of human knowledge, constitutional adjudicators willy-nilly are compelled to choose those that seem to provide a reasoned basis for framing of questions relevant, both with respect to law, and to facts. Institutional economics gives one such perspective which may be a useful guide for us here. Viewed from a functional perspective, the State, and governments, may be seen as coming into existence in order to solve, what institutional economists have come to refer to as, the coordination problems in providing public goods, and prevent the disutility that emerges from the moral hazard of a short run utility maximizer, who may desire the benefits of goods and services that are to be provided in common to the public, and yet have the interest of not paying for their production.

7. Security of the nation, infrastructure of governance, including those that relate to law making and law keeping functions, crime prevention, detection and punishment, coordination of the economy, and ensuring minimal levels of material, and cultural goods for those who may not be in a position to fend for themselves or who have been left by the wayside by the operation of the economy and society, may all be cited as some examples of the kinds of public goods that the State is expected to provide for, or enable the provision of. In as much as the market is primarily expected to cater to purely self centered activities of individuals and groups, markets and the domain of purely private social action significantly fail to provide such goods. Consequently, the State, and government, emerges to rectify the coordination problem, and provide the public goods.

8. Unaccounted monies, especially large sums held by nationals and entities with a legal presence in the nation, in banks abroad, especially in tax havens or in jurisdictions with a known history of silence about sources of monies, clearly indicate a compromise of the ability of the State to manage its affairs in consonance with what is required from a constitutional perspective. This is so in two respects. The quantum of such monies by itself, along with the numbers of individuals or other legal entities who hold such monies, may indicate in the first instance that a large volume of activities, in the social and the economic spheres within the country are unlawful and causing great social damage, both at the individual and the collective levels. Secondly, large quanta of monies stashed abroad, would also indicate a substantial weakness in the capacity of the State in collection of taxes on incomes generated by individuals and other legal entities within the country. The generation of such revenues is essential for the State to undertake the various public goods and services that it is constitutionally mandated, and normatively expected by its citizenry, to provide. A substantial degree of incapacity, in the above respect, would be an indicia of the degree of failure of the State; and beyond a particular point, the State may spin into a vicious cycle of declining moral authority, thereby causing the incidence of unlawful activities in which wealth is sought to be generated, as well as instances of tax evasion, to increase in volume and in intensity.

9. Consequently, the issue of unaccounted monies held by nationals, and other legal entities, in foreign banks, is of primordial importance to the welfare of the citizens. The quantum of such monies may be rough indicators of the weakness of the State, in terms of both crime prevention, and also of tax collection. Depending on the volume of such monies, and the number of incidents through which such monies are generated and secreted away, it may very well reveal the degree of "softness of the State."

10. The concept of a "soft state" was famously articulated by the Nobel Laureate, Gunnar Myrdal. It is a broad based assessment of the degree to which the State, and its machinery, is equipped to deal with its responsibilities of governance. The more soft the State is, greater the likelihood that there is an unholy nexus between the law maker, the law keeper, and the law breaker.

11. When a catchall word like "crimes" is used, it is common for people, and the popular culture to assume that it is "petty crime," or crimes of passion committed by individuals. That would be a gross mischaracterization of the seriousness of the issues involved. Far more dangerous are the crimes that threaten national security, and national interest. For instance, with globalization, nation states are also confronted by the dark worlds of international arms dealers, drug peddlers, and various kinds of criminal networks, including networks of terror. International criminal networks that extend support to home-grown terror or extremist groups, or those that have been nurtured and sustained in hostile countries, depend on networks of formal and informal, lawful and unlawful mechanisms of transfer of monies across boundaries of nation-states. They work in the interstices of the micro- structures of financial transfers across the globe, and thrive in the lacunae, the gaps in law and of effort. The loosening of control over those mechanisms of transfers, guided by an extreme neo-liberal thirst to create a global market that is free of the friction of law and its enforcement, by nation- states, may have also contributed to an increase in the volume, extent and intensity of activities by criminal and terror networks across the globe.

12. Increasingly, on account of "greed is good" culture that has been promoted by neo-liberal ideologues, many countries face the situation where the model of capitalism that the State is compelled to institute, and the markets it spawns, is predatory in nature. From mining mafias to political operators who, all too willingly, bend policies of the State to suit particular individuals or groups in the social and economic sphere, the raison d'etre for weakening the capacities and intent to enforce the laws is the lure of the lucre. Even as the State provides violent support to those who benefit from such predatory capitalism, often violating the human rights of its citizens, particularly it's poor, the market begins to function like a bureaucratic machine dominated by big business; and the State begins to function like the market, where everything is available for sale at a price.

13. The paradigm of governance that has emerged, over the past three decades, prioritizes the market, and its natural course, over any degree of control of it by the State. The role for the State is visualized by votaries of the neoliberal paradigm as that of a night watchman; and moreover it is also expected to take its hands out of the till of the wealth generating machinery. Based on the theories of Arthur Laffer, and pushed by the Washington Consensus, the prevailing wisdom of the elite, and of the policy makers, is that reduction of tax rates, thereby making tax regimes regressive, would incentivise the supposed genius of entrepreneurial souls of individuals, actuated by pursuit of self-interest and desire to accumulate great economic power. It was expected that this would enable the generation of more wealth, at a more rapid pace, thereby enabling the State to generate appropriate tax revenues even with lowered tax rates. Further, benefits were also expected in moral terms - that the lowering of tax rates would reduce the incentives of wealth generators to hide their monies, thereby saving them from the guilt of tax evasion. Whether that is an appropriate model of social organization or not, and from the perspective of constitutional adjudication, whether it meets the requirements of constitutionalism as embedded in the texts of various constitutions, is not a question that we want to enter in this matter.

14. Nevertheless, it would be necessary to note that there is a fly in the ointment of the above story of friction free markets that would always clear, and always work to the benefit of the society. The strength of tax collection machinery can, and ought to be, expected to have a direct bearing on the revenues collected by the State. If the machinery is weak, understaffed, ideologically motivated to look the other way, or the agents motivated by not so salubrious motives, the amount of revenue collected by the State would decline, stagnate, or may not generate the revenue for the State that is consonant with its responsibilities. From within the neo-liberal paradigm, also emerged the under-girding current of thought that revenues for the State implies a big government, and hence a strong tax collecting machinery itself would be undesirable. Where the elite lose out in democratic politics of achieving ever decreasing tax rates, it would appear that state machineries in the hands of the executive, all too willing to promote the extreme versions of the neoliberal paradigm and co-opt itself in the enterprises of the elite, may also become all too willing to not develop substantial capacities to monitor and follow the money, collect the lawfully mandated taxes, and even look the other way. The results, as may be expected, have been disastrous across many nations.

15. In addition, it would also appear that in this miasmic cultural environment in which greed is extolled, conspicuous consumption viewed as both necessary and socially valuable, and the wealthy viewed as demi-gods, the agents of the State may have also succumbed to the notions of the neo-liberal paradigm that the role of the State ought to only be an enabling one, and not exercise significant control. This attitude would have a significant impact on exercise of discretion, especially in the context of regulating economic activities, including keeping an account of the monies generated in various activities, both legal and illegal. Carried away by the ideology of neo- liberalism, it is entirely possible that the agents of the State entrusted with the task of supervising the economic and social activities may err more on the side of extreme caution, whereby signals of wrong doing may be ignored even when they are strong. Instances of the powers that be ignoring publicly visible stock market scams, or turning a blind eye to large scale illegal mining have become all too familiar, and may be readily cited. That such activities are allowed to continue to occur, with weak, or nonexistent, responses from the State may, at best, be charitably ascribed to this broader culture of permissibility of all manner of private activities in search of ever more lucre. Ethical compromises, by the elite - those who wield the powers of the state, and those who fatten themselves in an ever more exploitative economic sphere- can be expected to thrive in an environment marked by such a permissive attitude, of weakened laws, and of weakened law enforcement machineries and attitudes.

16. To the above, we must also add the fragmentation of administration. Even as the range of economic, and social activities have expanded, and their sophistication increased by leaps and bounds, the response in terms of administration by the State has been to create ever more specialized agencies, and departments. To some degree this has been unavoidable. Nevertheless, it would also appear that there is a need to build internal capacities to share information across such departments, lessen the informational asymmetries between, and friction to flow of information across the boundaries of departments and agencies, and reduce the levels of consequent problems in achieving coordination. Life, and social action within which human life becomes possible, do not proceed on the basis of specialized fiefdoms of expertise. They cut across the boundaries erected as a consequence of an inherent tendency of experts to specialize. The result, often, is a system wide blindness, while yet being lured by the dazzle of ever greater specialization. Many dots of information, now collected in ever increasing volume by development of sophisticated information technologies, get ignored on account of lack of coordination across agencies, and departments, and tendency within bureaucracy to jealously guard their own turfs. In some instances, the failure to properly investigate, or to prevent, unlawful activities could be the result of such over-specialization, frictions in sharing of information, and coordination across departmental and specialized agency boundaries.

17. If the State is soft to a large extent, especially in terms of the unholy nexus between the law makers, the law keepers, and the law breakers, the moral authority, and also the moral incentives, to exercise suitable control over the economy and the society would vanish. Large unaccounted monies are generally an indication of that. In a recent book, Prof. Rotberg states, after evaluating many failed and collapsed states over the past few decades :

"Failed states offer unparalleled economic opportunity - but only for a privileged few. Those around the ruler or ruling oligarchy grow richer while their less fortunate brethren starve. Immense profits are available from an awareness of regulatory advantages and currency speculation and arbitrage. But the privilege of making real money when everything else is deteriorating is confined to clients of the ruling elite. The nation-state's responsibility to maximize the well-being and prosperity of all its citizens is conspicuously absent, if it ever existed.... Corruption flourishes in many states, but in failed states it often does so on an unusually destructive scale. There is widespread petty or lubricating corruption as a matter of course, but escalating levels of venal corruption mark failed states." (The Failure and Collapse of Nation-States - Breakdown, Prevention and Repair" in "WHEN STATES FAIL : CAUSES AND CONSEQUENCES", Rotberg, Robert I., Ed. Princeton University Press (2004)).

18. India finds itself in a peculiar situation. Often celebrated, in popular culture, as an emerging economy that is rapidly growing, and expected to be a future economic and political giant on the global stage, it is also popularly perceived, and apparently even in some responsible and scholarly circles, and official quarters, that some of its nationals and other legal entities have stashed the largest quantum of unaccounted monies in foreign banks, especially in tax havens, and in other jurisdictions with strong laws of secrecy. There are also apparently reports, and analyses, generated by Government of India itself, which place the amounts of such unaccounted monies at astronomical levels.

19. We do not wish to engage in any speculation as to what such analyses, reports, and factuality imply with respect to the state of the nation. The citizens of our country can make, and ought to be making, rational assessments of the situation. We fervently hope that it leads to responsible, reasoned and reasonable debate, thereby exerting the appropriate democratic pressure on the State, and its agents, within the constitutional framework, to bring about the necessary changes without sacrificing cherished, and inherently invaluable social goals and values enshrined in the Constitution. The failures are discernible when viewed against the vision of the constitutional project, and as forewarned by Dr. Ambedkar, have been on account of the fact that man has been vile, and not the defects of a Constitution forged in the fires of wisdom gathered over eons of human experience. If the politico-bureaucratic, power wielding, and business classes bear a large part of the blame, at least some part of blame ought to be apportioned to those portions of the citizenry that is well informed, or is expected to be informed. Much of that citizenry has disengaged itself with the political process, and with the masses. Informed by contempt for the poor and the downtrodden, the elite classes that have benefited the most, or expects to benefit substantially from the neoliberal policies that would wish away the hordes, has also chosen to forget that constitutional mandate is as much the responsibility of the citizenry, and through their constant vigilance, of all the organs of the state, and national institutions including political parties. To not be engaged in the process, is to ensure the evisceration of constitutional content. Knee jerk reactions, and ill advised tinkering with the constitutional framework are not the solutions. The road is always long, and needs the constant march of the citizenry on it. There is no other way. To expect instant solutions, because this law or that body is formed, without striving to solve system wide, and systemic, problems that have emerged is to not understand the demands of a responsible citizenry in modern constitutional republican democracies.

20. These matters before us relate to issues of large sums of unaccounted monies, allegedly held by certain named individuals, and loose associations of them; consequently we have to express our serious concerns from a constitutional perspective. The amount of unaccounted monies, as alleged by the Government of India itself is massive. The show cause notices were issued a substantial length of time ago. The named individuals were very much present in the country. Yet, for unknown, and possibly unknowable, though easily surmisable, reasons the investigations into the matter proceeded at a laggardly pace. Even the named individuals had not yet been questioned with any degree of seriousness. These are serious lapses, especially when viewed from the perspective of larger issues of security, both internal and external, of the country.

21. It is in light of the above, that we heard some significant elements of the instant writ petitions filed in this Court, and at this stage it is necessary that appropriate orders be issued. There are two issues we deal with below: (i) the appointment of a Special Investigation Team; and (ii) disclosure, to the Petitioners, of certain documents relied upon by the Union of India in its response.

II

22. The instant writ petition was filed, in 2009, by Shri. Ram Jethmalani, Shri. Gopal Sharman, Smt. Jalbala Vaidya, Shri. K.P.S. Gill, Prof. B.B. Dutta, and Shri. Subhash Kashyap, all well known professionals, social activists, former bureaucrats or those who have held responsible positions in the society. They have also formed an organization called Citizen India, the stated objective of which is said to be to bring about changes and betterment in the quality of governance, and functioning of all public institutions.

23. The Petitioners state that there have been a slew of reports, in the media, and also in scholarly publications that various individuals, mostly citizens, but may also include non-citizens, and other entities with presence in India, have generated, and secreted away large sums of monies, through their activities in India or relating to India, in various foreign banks, especially in tax havens, and jurisdictions that have strong secrecy laws with respect to the contents of bank accounts and the identities of individuals holding such accounts. The Petitioners allege that most of such monies are unaccounted, and in all probability have been generated through unlawful activities, whether in India or outside India, but relating to India. Further, the Petitioners also allege that a large part of such monies may have been generated within India, and have been taken away from India, breaking various laws, including but not limited to evasion of taxes.

24. The Petitioners contend: (i) that the sheer volume of such monies points to grave weaknesses in the governance of the nation, because they indicate a significant lack of control over unlawful activities through which such monies are generated, evasion of taxes, and use of unlawful means of transfer of funds; (ii) that these funds are then laundered and brought back into India, to be used in both legal and illegal activities; (iii) that the use of various unlawful modes of transfer of funds across borders, gives support to such unlawful networks of international finance; and (iv) that in as much as such unlawful networks are widely acknowledged to also effectuate transfer of funds across borders in aid of various crimes committed against persons and the State, including but not limited to activities that may be classifiable as terrorist, extremist, or unlawful narcotic trade, the prevailing situation also has very serious connotations for the security and integrity of India.

25. The Petitioners also further contend that a significant part of such large unaccounted monies include the monies of powerful persons in India, including leaders of many political parties. It was also contended that the Government of India, and its agencies, have been very lax in terms of keeping an eye on the various unlawful activities generating unaccounted monies, the consequent tax evasion; and that such laxity extends to efforts to curtail the flow of such funds out, and into, India. Further, the Petitioners also contend that the efforts to prosecute the individuals, and other entities, who have secreted such monies in foreign banks, have been weak or nonexistent. It was strongly argued that the efforts at identification of such monies in various bank accounts in many jurisdictions across the globe, attempts to bring back such monies, and efforts to strengthen the governance framework to prevent further outflows of such funds, have been sorely lacking.

26. The Petitioners also made allegations about certain specific incidents and patterns of dereliction of duty, wherein the Government of India, and its various agencies, even though in possession of specific knowledge about the monies in certain bank accounts, and having estimated that such monies run into many scores of thousands of crores, and upon issuance of show cause notices to the said individual, surprisingly have not proceeded to initiate, and carry out suitable investigations, and prosecute the individuals. The individual specifically named is one Hassan Ali Khan. The Petitioners also contended that Kashinath Tapuria, and his wife Chandrika Tapuria, are also party to the illegal activities of Hassan Ali Khan.

27. Specifically, it was alleged that Hassan Ali Khan was served with an income tax demand for Rs. 40,000.00 Crores (Rupees Forty Thousand Crores), and that the Tapurias were served an income tax demand notice of Rs. 20,580.00 Crores (Rupees Twenty Thousand and Five Hundred and Eighty Crores). The Enforcement Directorate, in 2007, disclosed that Hassan Ali Khan had "dealings amounting to 1.6 billion US dollars" in the period 2001-2005. In January 2007, upon raiding Hassan Ali's residence in Pune, certain documents and evidence had been discovered regarding deposits of 8.04 billion dollars with UBS bank in Zurich. It is the contention of the Petitioners that, even though such evidence was secured nearly four and half years ago, (i) a proper investigation had not been launched to obtain the right facts from abroad; (ii) the individuals concerned, though present in India, and subject to its jurisdiction, and easily available for its exercise, had not even been interrogated appropriately; (iii) that the Union of India, and its various departments, had even been refusing to divulge the details and information that would reveal the actual status of the investigation, whether in fact it was being conducted at all, or with any degree of seriousness; (iv) given the magnitude of amounts in question, especially of the demand notice of income tax, the laxity of investigation indicates multiple problems of serious non- governance, and weaknesses in the system, including pressure from political quarters to hinder, or scuttle, the investigation, prosecution, and ultimately securing the return of such monies; and (v) given the broadly accepted fact that within the political class corruption is rampant, ill-begotten wealth has begun to be amassed in massive quantities by many members in that class, it may be reasonable to suspect, or even conclude, that investigation was being deliberately hindered because Hassan Ali Khan, and the Tapurias, had or were continuing to handle the monies of such a class. The fact that both Income Tax department, and the Enforcement Directorate routinely, and with alacrity, seek the powers for long stretches of custodial interrogation of even those suspected of having engaged in money laundering, or evaded taxes, with respect to very small amounts, ought to raise the reasonable suspicion that inaction in the matters concerning Hassan Ali Khan, and Tapurias, was deliberately engineered, for nefarious reasons.

28. In addition, the Petitioners also state that in as much as the bank in which the monies had been stashed by Hassan Ali Khan was UBS Zurich, the needle of suspicion has to inexorably turn to high level political interference and hindrance to the investigations. The said bank, it was submitted, is the biggest or one of the biggest wealth management companies in the world. The Petitioners also narrated the mode, and the manner, in which the United States had dealt with UBS, with respect to monies of American citizens secreted away with the said bank. It was also alleged that UBS had not cooperated with the U.S. authorities. Contrasting the relative alacrity, and vigour, with which the United States government had pursued the matters, the Petitioners contend the inaction of Union of India is shocking.

29. The Petitioners further allege that in 2007, the Reserve Bank of India had obtained some "knowledge of the dubious character" of UBS Security India Private Limited, a branch of UBS, and consequently stopped this bank from extending its business in India by refusing to approve its takeover of Standard Chartered Mutual Funds business in India. It was also claimed by the Petitioners that the SEBI had alleged that UBS played a role in the stock market crash of 2004. The said UBS Bank has apparently applied for a retail banking license in India, which was approved in principle by RBI initially. In 2008, this license was withheld on the ground that "investigation of its unsavoury role in the Hassan Ali Khan case was pending investigation in the Enforcement Directorate." However, it seems that the RBI reversed its decision in 2009, and no good reasons seem to be forthcoming for the reversal of the decision of 2008.

30. The Petitioners contend that such a reversal of decision could only have been accomplished through high level intervention, and that it is further evidence of linkages between members of the political class, and possibly even members of the bureaucracy, and such banking operations, and the illegal activities of Hassan Ali Khan and the Tapurias. Hence, the Petitioners argued, in the circumstances it would have to be necessarily concluded that the investigations into the affairs of Hassan Ali Khan, and the Tapurias, would be severely compromised if the Court does not intervene, and monitor the investigative processes by appointing a special investigation team reporting directly to the Court.

31. The learned senior counsel for the Petitioners sought that this Court intervene, order proper investigations, and monitor continuously, the actions of the Union of India, and any and all governmental departments and agencies, in these matters. It was submitted that their filing of this Writ Petition under Article 32 is proper, as the inaction of the Union of India, as described above, violates the fundamental rights - to proper governance, in as much as Article 14 provides for equality before the law and equal protection of the law, and Article 21 promises dignity of life to all citizens.

32. We have heard the learned senior counsel for the Petitioners, Shri. Anil B. Divan, the learned senior counsel for interveners, Shri. K.K. Venugopal, and the learned senior counsel for the petitioners in the connected Writ Petition, Shri. Shanti Bhushan. We have also heard the learned Solicitor General, Shri. Gopal Subramaniam, on behalf of the respondents.

33. Shri. Divan, specifically argued that, having regard to the nature of the investigation, its slow pace so far, and the non-seriousness on the part of the respondents, there is a need to constitute a Special Investigation Team ("SIT") headed by a former judge or two of this court. However, this particular plea has been vociferously resisted by the Solicitor General. Relying on the status reports submitted from time to time, the learned Solicitor General stated that all possible steps were being taken to bring back the monies stashed in foreign banks, and that the investigations in cases registered were proceeding in an appropriate manner. He expressed his willingness for a Court monitored investigation. He also further submitted that the Respondents, in principle, have no objections whatsoever against the main submissions of the Petitioners.

34. The real point of controversy is, given above, as to whether there is a need to constitute a SIT to be headed by a judge or two, of this court, to supervise the investigation.

35. We must express our serious reservations about the responses of the Union of India. In the first instance, during the earlier phases of hearing before us, the attempts were clearly evasive, confused, or originating in the denial mode. It was only upon being repeatedly pressed by us did the Union of India begin to admit that indeed the investigation was proceeding very slowly. It also became clear to us that in fact the investigation had completely stalled, in as much as custodial interrogation of Hassan Ali Khan had not even been sought for, even though he was very much resident in India. Further, it also now appears that even though his passport had been impounded, he was able to secure another passport from the RPO in Patna, possibly with the help or aid of a politician.

36. During the course of the hearings the Union of India repeatedly insisted that the matter involves many jurisdictions, across the globe, and a proper investigation could be accomplished only through the concerted efforts by different law enforcement agencies, both within the Central Government, and also various State governments. However, the absence of any satisfactory explanation of the slowness of the pace of investigation, and lack of any credible answers as to why the respondents did not act with respect to those actions that were feasible, and within the ambit of powers of the Enforcement Directorate itself, such as custodial investigation, leads us to conclude that the lack of seriousness in the efforts of the respondents are contrary to the requirements of laws and constitutional obligations of the Union of India. It was only upon the insistence and intervention of this Court has the Enforcement Directorate initiated and secured custodial interrogation over Hassan Ali Khan. The Union of India has explicitly acknowledged that there was much to be desired with the manner in which the investigation had proceeded prior to the intervention of this court. From the more recent reports, it would appear that the Union of India, on account of its more recent efforts to conduct the investigation with seriousness, on account of the gravitas brought by this Court, has led to the securing of additional information, and leads, which could aid in further investigation. For instance, during the continuing interrogation of Hassan Ali Khan and the Tapurias, undertaken for the first time at the behest of this Court, many names of important persons, including leaders of some corporate giants, politically powerful people, and international arms dealers have cropped up. So far, no significant attempt has been made to investigate and verify the same. This is a further cause for the grave concerns of this Court, and points to the need for continued, effective and day to day monitoring by a SIT constituted by this Court, and acting on behalf, behest and direction of this Court.

37. In light of the fact that the issues are complex, requiring expertise and knowledge of different departments, and the necessity of coordination of efforts across various agencies and departments, it was submitted to us that the Union of India has recently formed a High Level Committee, under the aegis of the Department of Revenue in the Ministry of Finance, which is the nodal agency responsible for all economic offences. The composition of the High Level Committee ("HLC") is said to be as follows: (i) Secretary, Department of Revenue, as the Chairman; (ii) Deputy Governor, Reserve Bank of India; (iii) Director (IB); (iv) Director, Enforcement; (v) Director, CBI; (vi) Chairman, CBDT; (vii) DG, Narcotics Control Bureau; (vii) DG, Revenue Intelligence; (ix) Director, Financial Intelligence Unit; and (x) JS (FT & TRI), CBDT. It was also submitted that the HLC may co-opt, as necessary, representation not below the rank of Joint Secretary from the Home Secretary, Foreign Secretary, Defense Secretary and the Secretary, Cabinet Secretariat. The Union of India claims that such a multi-disciplinary group and committee would now enable the conducting of an efficient and a systematic investigation into the matters concerning allegations against Hassan Ali Khan and the Tapurias; and further that such a committee would also enable the taking of appropriate steps to bring back the monies stashed in foreign banks, for which purposes a need may arise to register further cases. The Union of India also claims that the formation of such a committee indicates the seriousness with which it is viewing the entire matter.

38. While it would appear, from the Status Reports submitted to this Court, that the Enforcement Directorate has moved in some small measure, the actual facts are not comforting to an appropriate extent. In fact we are not convinced that the situation has changed to the extent that it ought to so as to accept that the investigation would now be conducted with the degree of seriousness that is warranted. According to the Union of India the HLC was formed in order to take charge of and direct the entire investigation, and subsequently, the prosecution. In the meanwhile a charge sheet has been filed against Hassan Ali Khan. Upon inquiry by us as to whether the charge-sheet had been vetted by the HLC, and its inputs secured, the counsel for Union of India were flummoxed. The fact was that the charge-sheet had not been given even for the perusal of the HLC, let alone securing its inputs, guidance and direction. We are not satisfied by the explanation offered by the Directorate of Enforcement by way of affidavit after the orders were reserved. Be it noted that a nodal agency was set up, pursuant to directions of this Court in Vineet Narain case given many years ago. Yet the same was not involved and these matters were never placed before it. Why ?

39. From the status reports, it is clear that the problem is extremely complex, and many agencies and departments spread across the country have not responded with the alacrity, and urgency, that one would desire. Moreover, the Union of India has been unable to answer any of the questions regarding its past actions, and their implications, such as the slowness of the investigation, or about grant of license to conduct retail banking by UBS, by reversing the decision taken earlier to withhold such a license on the grounds that the said bank's credentials were suspect. To this latter query, the stance of the Union of India has been that entry of UBS would facilitate flow of foreign investments into India. The question that arises is whether the task of bringing foreign funds into India override all other constitutional concerns and obligations ?

40. The predominant theme in the responses of Union of India before this court has been that it is doing all that it can to bring back the unaccounted monies stashed in various banks abroad. To this is added the qualifier that it is an extremely complex problem, requiring the cooperation of many different jurisdictions, and an internationally coordinated effort. Indeed they are complex. We do not wish to go into the details of arguments about whether the Union of India is, or is not, doing necessary things to achieve such goals. That is not necessary for the matters at hand.

41. What is important is that the Union of India had obtained knowledge, documents and information that indicated possible connections between Hassan Ali Khan, and his alleged co-conspirators and known international arms dealers. Further, the Union of India was also in possession of information that suggested that because the international arms dealing network, and a very prominent dealer in it, could not open a bank account even in a jurisdiction that is generally acknowledged to lay great emphasis on not asking sources of money being deposited into its banks, Hassan Ali Khan may have played a crucial role in opening an account with the branch of the same bank in another jurisdiction. The volume of alleged income taxes owed to the country, as demanded by the Union of India itself, and the volume of monies, by some accounts US $8.04 billion, and some other accounts in excess of Rs. 70,000 crores, that are said to have been routed through various bank accounts of Hassan Ali Khan, and Tapurias. Further, from all accounts it has been acknowledged that none of the named individuals have any known and lawful sources for such huge quantities of monies. All of these factors, either individually or combined, ought to have immediately raised questions regarding the sources being unlawful activities, national security, and transfer of funds into India for other illegal activities, including acts against the State. It was only at the repeated insistence by us that such matters have equal, if not even greater importance than issues of tax collection, has the Union of India belatedly concluded that such aspects also ought to be investigated with thoroughness. However, there is still no evidence of a really serious investigation into these other matters from the national security perspective.

42. The fact remains that the Union of India has struggled in conducting a proper investigation into the affairs of Hassan Ali Khan and the Tapurias. While some individuals, whose names have come to the adverse knowledge of the Union of India, through the more recent investigations, have been interrogated, many more are yet to be investigated. This highly complex investigation has in fact just begun. It is still too early to conclude that the Union of India has indeed placed all the necessary machinery to conduct a proper investigation. The formation of the HLC was a necessary step, and may even be characterized as a welcome step. Nevertheless, it is an insufficient step.

43. In light of the above, we had proposed to the Union of India that the same HLC constituted by it be converted into a Special Investigation Team, headed by two retired judges of the Supreme Court of India. The Union of India opposes the same, but provides no principle as to why that would be undesirable, especially in light of the many lapses and lacunae in its actions in these matters spread over the past four years.

44. We are of the firm opinion that in these matters fragmentation of government, and expertise and knowledge, across many departments, agencies and across various jurisdictions, both within the country, and across the globe, is a serious impediment to the conduct of a proper investigation. We hold that it is in fact necessary to create a body that coordinates, directs, and where necessary orders timely and urgent action by various institutions of the State. We also hold that the continued involvement of this Court in these matters, in a broad oversight capacity, is necessary for upholding the rule of law, and achievement of constitutional values. However, it would be impossible for this Court to be involved in day to day investigations, or to constantly monitor each and every aspect of the investigation.

45. The resources of this court are scarce, and it is overburdened with the task of rendering justice in well over a lakh of cases every year. Nevertheless, this Court is bound to uphold the Constitution, and its own burdens, excessive as they already are, cannot become an excuse for it to not perform that task. In a country where most of its people are uneducated and illiterate, suffering from hunger and squalor, the retraction of the monitoring of these matters by this Court would be unconscionable.

46. The issue is not merely whether the Union of India is making the necessary effort to bring back all or some significant part of the alleged monies. The fact that there is some information and knowledge that such vast amounts may have been stashed away in foreign banks, implies that the State has the primordial responsibility, under the Constitution, to make every effort to trace the sources of such monies, punish the guilty where such monies have been generated and/or taken abroad through unlawful activities, and bring back the monies owed to the Country. We do recognize that the degree of success, measured in terms of the amounts of monies brought back, is dependent on a number of factors, including aspects that relate to international political economy and relations, which may or may not be under our control. The fact remains that with respect to those factors that were within the powers of the Union of India, such as investigation of possible criminal nexus, threats to national security etc., were not even attempted. Fealty to the Constitution is not a matter of mere material success; but, and probably more importantly from the perspective of the moral authority of the State, a matter of integrity of effort on all the dimensions that inform a problem that threatens the constitutional projects. Further, the degree of seriousness with which efforts are made with respect to those various dimensions can also be expected to bear fruit in terms of building capacities, and the development of necessary attitudes to take the law enforcement part of accounting or following the money seriously in the future.

47. The merits of vigour of investigations, and attempts at law enforcement, cannot be measured merely on the scale of what we accomplish with respect to what has happened in the past. It would necessarily also have to be appreciated from the benefits that are likely to accrue to the country in preventing such activities in the future. Our people may be poor, and may be suffering from all manner of deprivation. However, the same poor and suffering masses are rich, morally and from a humanistic point of view. Their forbearance of the many foibles and failures of those who wield power, no less in their name and behalf than of the rich and the empowered, is itself indicative of their great qualities, of humanity, trust and tolerance. That greatness can only be matched by exercise of every sinew, and every resource, in the broad goal of our constitutional project of bringing to their lives dignity. The efforts that this Court makes in this regard, and will make in this respect and these matters, can only be conceived as a small and minor, though nevertheless necessary, part. Ultimately the protection of the Constitution and striving to promote its vision and values is an elemental mode of service to our people.

48. We note that in many instances, in the past, when issues referred to the Court have been very complex in nature, and yet required the intervention of the Court, Special Investigation Teams have been ordered and constituted in order to enable the Court, and the Union of India and/or other organs of the State, to fulfill their constitutional obligations. The following instances may be noted : Vineet Narain v. Union of India, 1998(1) R.C.R.(Criminal) 357 : (1996)2 SCC 199, NHRC v. State of Gujarat, (2004)8 SCC 610, Sanjiv Kumar v. State of Haryana, (2005)5 SCC 517, and Centre for PIL v. Union of India, (2011)1 SCC 560.

49. In light of the above we herewith order :

(i) That the High Level Committee constituted by the Union of India, comprising of (i) Secretary, Department of Revenue; (ii) Deputy Governor, Reserve Bank of India; (iii) Director (IB); (iv) Director, Enforcement; (v) Director, CBI; (vi) Chairman, CBDT; (vii) DG, Narcotics Control Bureau; (vii) DG, Revenue Intelligence; (ix) Director, Financial Intelligence Unit; and (x) JS (FT & TR-I), CBDT be forthwith appointed with immediate effect as a Special Investigation Team;

(ii) That the Special Investigation Team, so constituted, also include Director, Research and Analysis Wing;

(iii) That the above Special Investigation Team, so constituted, be headed by and include the following former eminent judges of this Court: (a) Hon'ble Mr. Justice B.P. Jeevan Reddy as Chairman; and (b) Hon'ble Mr. Justice M.B. Shah as Vice-Chairman; and that the Special Investigation Team function under their guidance and direction;

(iv) That the Special Investigation Team, so constituted, shall be charged with the responsibilities and duties of investigation, initiation of proceedings, and prosecution, whether in the context of appropriate criminal or civil proceedings of : (a) all issues relating to the matters concerning and arising from unaccounted monies of Hassan Ali Khan and the Tapurias; (b) all other investigations already commenced and are pending, or awaiting to be initiated, with respect to any other known instances of the stashing of unaccounted monies in foreign bank accounts by Indians or other entities operating in India; and (c) all other matters with respect to unaccounted monies being stashed in foreign banks by Indians or other entities operating in India that may arise in the course of such investigations and proceedings. It is clarified here that within the ambit of responsibilities described above, also lie the responsibilities to ensure that the matters are also investigated, proceedings initiated and prosecutions conducted with regard to criminality and/or unlawfulness of activities that may have been the source for such monies, as well as the criminal and/or unlawful means that are used to take such unaccounted monies out of and/or bring such monies back into the country, and use of such monies in India or abroad. The Special Investigation Team shall also be charged with the responsibility of preparing a comprehensive action plan, including the creation of necessary institutional structures that can enable and strengthen the country's battle against generation of unaccounted monies, and their stashing away in foreign banks or in various forms domestically.

(v) That the Special Investigation Team so constituted report and be responsible to this Court, and that it shall be charged with the duty to keep this Court informed of all major developments by the filing of periodic status reports, and following of any special orders that this Court may issue from time to time;

(vi) That all organs, agencies, departments and agents of the State, whether at the level of the Union of India, or the State Government, including but not limited to all statutorily formed individual bodies, and other constitutional bodies, extend all the cooperation necessary for the Special Investigation Team so constituted and functioning;

(vii) That the Union of India, and where needed even the State Governments, are directed to facilitate the conduct of the investigations, in their fullest measure, by the Special Investigation Team so constituted and functioning, by extending all the necessary financial, material, legal, diplomatic and intelligence resources, whether such investigations or portions of such investigations occur inside the country or abroad.

(viii) That the Special Investigation Team also be empowered to further investigate even where charge-sheets have been previously filed; and that the Special Investigation Team may register further cases, and conduct appropriate investigations and initiate proceedings, for the purpose of bringing back unaccounted monies unlawfully kept in bank accounts abroad.

50. We accordingly direct the Union of India to issue appropriate notification and publish the same forthwith. It is needless to clarify that the former judges of this Court so appointed to supervise the Special Investigation Team are entitled to their remuneration, allowances, perks, facilities as that of the judges of the Supreme Court. The Ministry of Finance, Union of India, shall be responsible for creating the appropriate infrastructure and other facilities for proper and effective functioning of the Special Investigation Team at once.

III

51. We now turn our attention to the matter of disclosure of various documents referenced by the Union of India, as sought by the Petitioners. These documents, including names and bank particulars, relate to various bank accounts, of Indian citizens, in the Principality of Liechtenstein ("Liechtenstein"), a small landlocked sovereign nation-state in Europe. It is generally acknowledged that Liechtenstein is a tax haven.

52. Apparently, as alleged by the Petitioners, a former employee of a bank or banks in Liechtenstein secured the names of some 1400 bank account holders, along with the particulars of such accounts, and offered the information to various entities. The same was secured by the Federal Republic of Germany ("Germany"), which in turn, apart from initiating tax proceedings against some 600 individuals, also offered the information regarding nationals and citizens of other countries to such countries. It is the contention of the Petitioners that even though the Union of India was informed about the presence of the names of a large number of Indian citizens in the list of names revealed by the former bank employee, the Union of India never made a serious attempt to secure such information and proceed to investigate such individuals. It is the contention of the Petitioners that such names include the identities of prominent and powerful Indians, or the identities of individuals, who may or may not be Indian citizens, but who could lead to information about various powerful Indians holding unaccounted monies in bank accounts abroad. It is also the contention of the Petitioners that, even though they had sought the information under the Right to Information Act (2005), the Respondents had not revealed the names nor divulged the relevant documents. The Petitioners argue that such a reluctance is only on account of the Union of India not having initiated suitable steps to recover such monies, and punish the named individuals, and also because revelation of names of individuals on the list would lead to discovery of powerful persons engaged in various unlawful activities, both in generation of unlawful and unaccounted monies, and their stashing away in banks abroad.

53. It was also alleged by the Petitioners that in fact Germany had offered such information, freely and generally to any country that requests the same, and did not specify that the names and other information pertaining to such names ought to be requested only pursuant to any double taxation agreements it has with other countries. The Petitioners also alleged that Union of India has chosen to proceed under the assumption that it could have requested such information only pursuant to the double taxation agreement it has with Germany. The Petitioners contend that the Government of India took such a step primarily to conceal the information from public gaze.

54. The response of the Union of India may be summed up briefly: (i) that they secured the names of individuals with bank accounts in banks in Liechtenstein, and other details with respect to such bank accounts, pursuant to an agreement of India with Germany for avoidance of double taxation and prevention of fiscal evasion; (ii) that the said agreement proscribes the Union of India from disclosing such names, and other documents and information with respect to such bank accounts, to the Petitioners, even in the context of these ongoing proceedings before this court; (iii) that the disclosure of such names, and other documents and information, secured from Germany, would jeopardize the relations of India with a foreign state; (iv) that the disclosure of such names, and other documents and information, would violate the right to privacy of those individuals who may have only deposited monies in a lawful manner; (v) that disclosure of names, and other documents and information can be made with respect to those individuals with regard to whom investigations are completed, and proceedings initiated; and (vi) that contrary to assertions by the Petitioners, it was Germany which had asked the Union of India to seek the information under double taxation agreement, and that this was in response to an earlier request by Union of India for the said information.

55. For the purposes of the instant order, the issue of whether the Union of India could have sought and secured the names, and other documents and information, without having to take recourse to the double taxation agreement is not relevant. For the purposes of determining whether Union of India is obligated to disclose the information that it obtained, from Germany, with respect to accounts of Indian citizens in a bank in the Principality of Liechtenstein, we need only examine the claims of the Union of India as to whether it is proscribed by the double taxation agreement with Germany from disclosing such information. Further, and most importantly, we would also have to examine whether in the context of Article 32 proceedings before this court, wherein this court has exercised jurisdiction, the Union of India can claim exemption from providing such information to the Petitioners, and also with respect to issues of right to privacy of individuals who hold such accounts, and with respect of whom no investigations have yet been commenced, or only partially conducted, so that the State has not yet issued a show cause and initiated proceedings.

56. We have perused the said agreement with Germany. We are convinced that the said agreement, by itself, does not proscribe the disclosure of the relevant documents and details of the same, including the names of various bank account holders in Liechtenstein. In the first instance, we note that the names of the individuals are with respect to bank accounts in the Liechtenstein, which though populated by largely German speaking people, is an independent and sovereign nation-state. The agreement between Germany and India is with regard to various issues that crop up with respect to German and Indian citizens' liability to pay taxes to Germany and/or India. It does not even remotely touch upon information regarding Indian citizens' bank accounts in Liechtenstein that Germany secures and shares that have no bearing upon the matters that are covered by the double taxation agreement between the two countries. In fact, the "information" that is referred to in Article 26 is that which is "necessary for carrying out the purposes of this agreement", i.e. the Indo-German DTAA. Therefore, the information sought does not fall within the ambit of this provision. It is disingenuous for the Union of India, under these circumstances, to repeatedly claim that it is unable to reveal the documents and names as sought by the Petitioners on the ground that the same is proscribed by the said agreement. It does not matter that Germany itself may have asked India to treat the information shared as being subject to the confidentiality and secrecy clause of the double taxation agreement. It is for the Union of India, and the courts, in appropriate proceedings, to determine whether such information concerns matters that are covered by the double taxation agreement or not. In any event, we also proceed to examine the provisions of the double taxation agreement below, to also examine whether they proscribe the disclosure of such names, and other documents and information, even in the context of these instant proceedings.

57. Relevant portions of Article 26 of the double taxation agreement with Germany, a copy of which was submitted by Union of India, reads as follows:

"1. The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the purposes of this Agreement. Any information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) involved in the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes covered by this Agreement. They may disclose the information in public court proceedings or in judicial proceedings.

2. In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State the obligation:

(a) to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State;

(b) to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State;

(c) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy (order public)"

58. The above clause in the relevant agreement with Germany would indicate that, contrary to the assertions of Union of India, there is no absolute bar of secrecy. Instead the agreement specifically provides that the information may be disclosed in public court proceedings, which the instant proceedings are. The proceedings in this matter before this court, relate both to the issue of tax collection with respect to unaccounted monies deposited into foreign bank accounts, as well as with issues relating to the manner in which such monies were generated, which may include activities that are criminal in nature also. Comity of nations cannot be predicated upon clauses of secrecy that could hinder constitutional proceedings such as these, or criminal proceedings.

59. The claim of Union of India is that the phrase "public court proceedings", in the last sentence in Article 26(1) of the double taxation agreement only relates to proceedings relating to tax matters. The Union of India claims that such an understanding comports with how it is understood internationally. In this regard Union of India cites a few treatises. However, the Union of India did not provide any evidence that Germany specifically requested it to not reveal the details with respect to accounts in the Liechtenstein even in the context of proceedings before this court.

60. Article 31, "General Rule of Interpretation", of the Vienna Convention of the Law of Treaties, 1969 provides that a "treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose." While India is not a party to the Vienna Convention, it contains many principles of customary international law, and the principle of interpretation, of Article 31 of the Vienna Convention, provides a broad guideline as to what could be an appropriate manner of interpreting a treaty in the Indian context also.

61. This Court in Union of India v. Azadi Bachao Andolan, (2004)10 SCC 1 approvingly noted Frank Bennion's observations that a treaty is really an indirect enactment, instead of a substantive legislation, and that drafting of treaties is notoriously sloppy, whereby inconveniences obtain. In this regard this Court further noted the dictum of Lord Widgery, C.J. that the words "are to be given their general meaning, general to lawyer and layman alike.... The meaning of the diplomat rather than the lawyer." The broad principle of interpretation, with respect to treaties, and provisions therein, would be that ordinary meanings of words be given effect to, unless the context requires or otherwise. However, the fact that such treaties are drafted by diplomats, and not lawyers, leading to sloppiness in drafting also implies that care has to be taken to not render any word, phrase, or sentence redundant, especially where rendering of such word, phrase or sentence redundant would lead to a manifestly absurd situation, particularly from a constitutional perspective. The government cannot bind India in a manner that derogates from Constitutional provisions, values and imperatives.

62. The last sentence of Article 26(1) of the double taxation agreement with Germany, "[T]hey may disclose this information in public court proceedings or in judicial decisions," is revelatory in this regard. It stands out as an additional aspect or provision, and an exception, to the preceding portion of the said article. It is located after the specification that information shared between contracting parties may be revealed only to "persons or authorities (including courts and administrative bodies) involved in the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to taxes covered by this Agreement." Consequently, it has to be understood that the phrase "public court proceedings" specified in the last sentence in Article 26(1) of the double taxation agreement with Germany refers to court proceedings other than those in connection with tax assessment, enforcement, prosecution etc., with respect to tax matters. If it were otherwise, as argued by Union of India, then there would have been no need to have that last sentence in Article 26(1) of the double taxation agreement at all. The last sentence would become redundant if the interpretation pressed by Union of India is accepted. Thus, notwithstanding the alleged convention of interpreting the last sentence only as referring to proceedings in tax matters, the rubric of common law jurisprudence, and fealty to its principles, leads us inexorably to the conclusion that the language in this specific treaty, and under these circumstances cannot be interpreted in the manner sought by Union of India.

63. While we agree that the language could have been tighter, and may be deemed to be sloppy, to use Frank Bennion's characterization, negotiation of such treaties are conducted and secured at very high levels of government, with awareness of general principles of interpretation used in various jurisdictions. It is fairly well known, at least in Common Law jurisdictions, that legal instruments and statutes are interpreted in a manner whereby redundancy of expressions and phrases is sought to be avoided. Germany would have been well aware of it.

64. The redundancy that would have to be ascribed to the said last sentence of Article 26(1) of the double taxation agreement with Germany, if the position of Union of India were to be accepted, also leads to a manifest absurdity, in the context of the Indian Constitution. Such a redundancy would mean that constitutional imperatives themselves are to be set aside. Modern constitutionalism, to which Germany is a major contributor too, especially in terms of the basic structure doctrine, specifies that powers vested in any organ of the State have to be exercised within the four corners of the Constitution, and further that organs created by a constitution cannot change the identity of the constitution itself.

65. The basic structure of the Constitution cannot be amended even by the amending power of the legislature. Our Constitution guarantees the right, pursuant to Clause (1) of Article 32, to petition this Court on the ground that the rights guaranteed under Part III of the Constitution have been violated. This provision is a part of the basic structure of the Constitution. Clause (2) of Article 32 empowers this Court to issue "directions or orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, whichever may be appropriate for the enforcement of any of the rights conferred by" Part III. This is also a part of the basic structure of the Constitution.

66. In order that the right guaranteed by Clause (1) of Article 32 be meaningful, and particularly because such petitions seek the protection of fundamental rights, it is imperative that in such proceedings the petitioners are not denied the information necessary for them to properly articulate the case and be heard, especially where such information is in the possession of the State. To deny access to such information, without citing any constitutional principle or enumerated grounds of constitutional prohibition, would be to thwart the right granted by Clause (1) of Article 32.

67. Further, in as much as, by history and tradition of common law, judicial proceedings are substantively, though not necessarily fully, adversarial, both parties bear the responsibility of placing all the relevant information, analyses, and facts before this court as completely as possible. In most situations, it is the State which may have more comprehensive information that is relevant to the matters at hand in such proceedings. However, some agents of the State may perceive that because these proceedings are adversarial in nature, the duty and burden to furnish all the necessary information rests upon the Petitioners, and hence the State has no obligation to fully furnish such information. Some agents of the State may also seek to cast the events and facts in a light that is favourable to the government in the immediate context of the proceedings, even though such actions do not lead to rendering of complete justice in the task of protection of fundamental rights. To that extent, both the petitioners and this Court would be handicapped in proceedings under Clause (1) of Article 32.

68. It is necessary for us to note that the burden of asserting, and proving, by relevant evidence a claim in judicial proceedings would ordinarily be placed upon the proponent of such a claim; however, the burden of protection of fundamental rights is primarily the duty of the State. Consequently, unless constitutional grounds exist, the State may not act in a manner that hinders this Court from rendering complete justice in such proceedings. Withholding of information from the petitioners, or seeking to cast the relevant events and facts in a light favourable to the State in the context of the proceedings, even though ultimately detrimental to the essential task of protecting fundamental rights, would be destructive to the guarantee in Clause (1) of Article 32, and substantially eviscerate the capacity of this Court in exercising its powers contained in clause (2) of Article 32, and those traceable to other provisions of the Constitution and broader jurisprudence of constitutionalism, in upholding fundamental rights enshrined in Part III. In the task of upholding of fundamental rights, the State cannot be an adversary. The State has the duty, generally, to reveal all the facts and information in its possession to the Court, and also provide the same to the petitioners. This is so, because the petitioners would also then be enabled to bring to light facts and the law that may be relevant for the Court in rendering its decision. In proceedings such as those under Article 32, both the petitioner and the State, have to necessarily be the eyes and ears of the Court. Blinding the petitioner would substantially detract from the integrity of the process of judicial decision making in Article 32 proceedings, especially where the issue is of upholding of fundamental rights.

69. Furthermore, we hold that there is a special relationship between Clause (1) of Article 32 and Sub-Clause (a) of Clause (1) of Article 19, which guarantees citizens the freedom of speech and expression. The very genesis, and the normative desirability of such a freedom, lies in historical experiences of the entire humanity: unless accountable, the State would turn tyrannical. A proceeding under Clause (1) of Article 32, and invocation of the powers granted by Clause (2) of Article 32, is a primordial constitutional feature of ensuring such accountability. The very promise, and existence, of a constitutional democracy rests substantially on such proceedings.

70. Withholding of information from the petitioners by the State, thereby constraining their freedom of speech and expression before this Court, may be premised only on the exceptions carved out, in Clause (2) of Article 19, "in the interests of sovereignty and integrity of India, security of the State, friendly relations with foreign States, public order, decency or morality, or in relation to contempt of court, defamation or incitement to an offence" or by law that demarcate exceptions, provided that such a law comports with the enumerated grounds in Clause (2) of Article 19, or that may be provided for elsewhere in the Constitution.

71. It is now a well recognized proposition that we are increasingly being entwined in a global network of events and social action. Considerable care has to be exercised in this process, particularly where governments which come into being on account of a constitutive document, enter into treaties. The actions of governments can only be lawful when exercised within the four corners of constitutional permissibility. No treaty can be entered into, or interpreted, such that constitutional fealty is derogated from. The redundancy, that the Union of India presses, with respect to the last sentence of Article 26(1) of the double taxation agreement with Germany, necessarily transgresses upon the boundaries erected by our Constitution. It cannot be permitted.

72. We have perused the documents in question, and heard the arguments of Union of India with respect to the double taxation agreement with Germany as an obstacle to disclosure. We do not find merit in its arguments flowing from the provisions of double taxation agreement with Germany. However, one major constitutional issue, and concern remains. This is with regard to whether the names of individuals, and details of their bank accounts, with respect to whom there has been no completed investigations that reveal wrong doing and proceedings initiated, and there is no other credible information and evidence currently available with the Petitioners that there has been any wrong doing, may be disclosed to the Petitioners.

73. Right to privacy is an integral part of right to life. This is a cherished constitutional value, and it is important that human beings be allowed domains of freedom that are free of public scrutiny unless they act in an unlawful manner. We understand and appreciate the fact that the situation with respect to unaccounted monies is extremely grave. Nevertheless, as constitutional adjudicators we always have to be mindful of preserving the sanctity of constitutional values, and hasty steps that derogate from fundamental rights, whether urged by governments or private citizens, howsoever well meaning they may be, have to be necessarily very carefully scrutinised. The solution for the problem of abrogation of one zone of constitutional values cannot be the creation of another zone of abrogation of constitutional values. The rights of citizens, to effectively seek the protection of fundamental rights, under Clause (1) of Article 32 have to be balanced against the rights of citizens and persons under Article 21. The latter cannot be sacrificed on the anvil of fervid desire to find instantaneous solutions to systemic problems such as unaccounted monies, for it would lead to dangerous circumstances, in which vigilante investigations, inquisitions and rabble rousing, by masses of other citizens could become the order of the day. The right of citizens to petition this Court for upholding of fundamental rights is granted in order that citizens, inter alia, are ever vigilant about the functioning of the State in order to protect the constitutional project. That right cannot be extended to being inquisitors of fellow citizens. An inquisitorial order, where citizens' fundamental right to privacy is breached by fellow citizens is destructive of social order. The notion of fundamental rights, such as a right to privacy as part of right to life, is not merely that the State is enjoined from derogating from them. It also includes the responsibility of the State to uphold them against the actions of others in the society, even in the context of exercise of fundamental rights by those others.

74. An argument can be made that this Court can make exceptions under the peculiar circumstances of this case, wherein the State has acknowledged that it has not acted with the requisite speed and vigour in the case of large volumes of suspected unaccounted monies of certain individuals. There is an inherent danger in making exceptions to fundamental principles and rights on the fly. Those exceptions, bit by bit, would then eviscerate the content of the main right itself. Undesirable lapses in upholding of fundamental rights by the legislature, or the executive, can be rectified by assertion of constitutional principles by this Court. However, a decision by this Court that an exception could be carved out remains permanently as a part of judicial canon, and becomes a part of the constitutional interpretation itself. It can be used in the future in a manner and form that may far exceed what this Court intended or what the Constitutional text and values can bear. We are not proposing that Constitutions cannot be interpreted in a manner that allows the nation-state to tackle the problems it faces. The principle is that exceptions cannot be carved out willy-nilly, and without forethought as to the damage they may cause.

75. One of the chief dangers of making exceptions to principles that have become a part of constitutional law, through aeons of human experience, is that the logic, and ease of seeing exceptions, would become entrenched as a part of the constitutional order. Such logic would then lead to seeking exceptions, from protective walls of all fundamental rights, on grounds of expediency and claims that there are no solutions to problems that the society is confronting without the evisceration of fundamental rights. That same logic could then be used by the State in demanding exceptions to a slew of other fundamental rights, leading to violation of human rights of citizens on a massive scale.

76. It is indeed true that the information shared by Germany, with regard to certain bank accounts in Liechtenstein, also contains names of individuals who appear to be Indians. The Petitioners have also claimed that names of all the individuals have been made public by certain segments of the media. However, while some of the accounts, and the individuals holding those accounts, are claimed to have been investigated, others have not been. No conclusion can be drawn as to whether those who have not been investigated, or only partially investigated and proceedings not initiated have committed any wrong doing. There is no presumption that every account holder in banks of Liechtenstein has acted unlawfully. In these circumstances, it would be inappropriate for this Court to order the disclosure of such names, even in the context of proceedings under Clause (1) of Article 32.

77. The revelation of details of bank accounts of individuals, without establishment of prima facie grounds to accuse them of wrong doing, would be a violation of their rights to privacy. Details of bank accounts can be used by those who want to harass, or otherwise cause damage, to individuals. We cannot remain blind to such possibilities, and indeed experience reveals that public dissemination of banking details, or availability to unauthorized persons, has led to abuse. The mere fact that a citizen has a bank account in a bank located in a particular jurisdiction cannot be a ground for revelation of details of his or her account that the State has acquired. Innocent citizens, including those actively working towards the betterment of the society and the nation, could fall prey to the machinations of those who might wish to damage the prospects of smooth functioning of society. Whether the State itself can access details of citizens bank accounts is a separate matter. However, the State cannot compel citizens to reveal, or itself reveal details of their bank accounts to the public at large, either to receive benefits from the State or to facilitate investigations, and prosecutions of such individuals, unless the State itself has, through properly conducted investigations, within the four corners of constitutional permissibility, been able to establish prima facie grounds to accuse the individuals of wrong doing. It is only after the State has been able to arrive at a prima facie conclusion of wrong doing, based on material evidence, would the rights of others in the nation to be informed, enter the picture. In the event citizens, other persons and entities have credible information that a wrong doing could be associated with a bank account, it is needless to state that they have the right, and in fact the moral duty, to inform the State, and consequently the State would have the obligation to investigate the same, within the boundaries of constitutional permissibility. If the State fails to do so, the appropriate courts can always intervene.

78. The major problem, in the matters before us, has been the inaction of the State. This is so, both with regard to the specific instances of Hassan Ali Khan and the Tapurias, and also with respect to the issues regarding parallel economy, generation of black money etc. The failure is not of the Constitutional values or of the powers available to the State; the failure has been of human agency. The response cannot be the promotion of vigilantism, and thereby violate other constitutional values. The response has to necessarily be a more emphatic assertion of those values, both in terms of protection of an individual's right to privacy and also the protection of individual's right to petition this Court, under Clause (1) of Article 32, to protect fundamental rights from evisceration of content because of failures of the State. The balancing leads only to one conclusion: strengthening of the machinery of investigations, and vigil by broader citizenry in ensuring that the agents of State do not weaken such machinery.

79. In light of the above we order that :

(i) The Union of India shall forthwith disclose to the Petitioners all those documents and information which they have secured from Germany, in connection with the matters discussed above, subject to the conditions specified in (ii) below;

(ii) That the Union of India is exempted from revealing the names of those individuals who have accounts in banks of Liechtenstein, and revealed to it by Germany, with respect of who investigations/enquiries are still in progress and no information or evidence of wrongdoing is yet available;

(iii) That the names of those individuals with bank accounts in Liechtenstein, as revealed by Germany, with respect of whom investigations have been concluded, either partially or wholly, and show cause notices issued and proceedings initiated may be disclosed; and

(iv) That the Special Investigation Team, constituted pursuant to the orders of today by this Court, shall take over the matter of investigation of the individuals whose names have been disclosed by Germany as having accounts in banks in Liechtenstein, and expeditiously conduct the same. The Special Investigation Team shall review the concluded matters also in this regard to assess whether investigations have been thoroughly and properly conducted or not, and on coming to the conclusion that there is a need for further investigation shall proceed further in the matter. After conclusion of such investigations by the Special Investigation Team, the Respondents may disclose the names with regard to whom show cause notices have been issued and proceedings initiated.

80. Compliance reports shall be filed by Respondents, with respect of all the orders issued by this Court today. List for further directions in the week following the Independence Day, August 15, of 2011.

Ordered accordingly.

REPORTED AS

2011(3) R.C.R.(Criminal) 480 : 2011(3) R.C.R.(Civil) 643 : 2011(4) Recent Apex Judgments (R.A.J.) 1

 

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Saturday, 10 September 2011 13:58

Mangesh v. State of Maharashtra (SC)

SUPREME COURT OF INDIA
Before :- P. Sathasivam and Dr. B.S. Chauhan, JJ.
Criminal Appeal No. 14 of 2011 (arising out of S.L.P. (Cri) No. 1981 of 2010). D/d. 5.1.2011
5.1. 2011
Mangesh - Petitioner
Versus
State of Maharashtra - Respondent
For the Petitioner :- Ms. Jaspreet Gogia, Advocate.
For the Respondent :- Ajay Pal, Advocate.
HINT . Indian Penal Code, 1860, Sections 300, 302 and 304, Part I
Cases Referred :
1. Gali Venkataiah v. State of Andhra Pradesh, AIR 2008 SC 462.
2. Kailash v. State of M.P., 2006 (11) SCC 420.
3. Karuppusamy v. State of Tamil Nadu, (2006) 11 SCC 459.
4. Sridhar Bhuyan v. State of Orissa, AIR 2004 SC 4100.
5. State, Pulicherla Nagaraju alias Nagaraja Reddy v. State of A.P., AIR 2006 SC 3010.
JUDGMENT
Dr. B.S. Chauhan, J. - Leave granted.
2. This appeal has been preferred against the judgment and order dated 25.8.2009 passed in Criminal Appeal No.242/04 by the High Court of Judicature at Bombay, Nagpur Bench, affirming the judgment and order dated 16.3.2004 passed by 2nd Additional Sessions Judge, Nagpur, in Sessions Trial No.366/03 convicting the appellant under Section 302 of Indian Penal Code, 1860 (hereinafter called IPC) and awarding the sentence of life imprisonment and, in addition thereto a fine of Rs.1000/- had also been imposed and in default of payment to undergo further rigorous imprisonment for the period of one year.
3. Facts and circumstances giving rise to this appeal are that the appellant's sister Sandhya had a love affair with Prashant (deceased) which continued for 2-3 years. The appellant was fully aware of the said affair and expressed his displeasure, having had altercations with Prashant (deceased) several times. On 30.4.2003, the appellant saw Prashant (deceased) and his sister Sandhya chatting with each other at about 9.15 p.m. at a short distance from his house. He assaulted Prashant (deceased) with the knife thrice and ran away from the spot.
4. The appellant's sister Sandhya (PW.6) called the police jeep passing through the road. The police shifted Prashant, injured, to hospital and while going to the hospital Prashant made a statement to PSI Bhaurao Meshram (PW.7) which was treated to be an FIR under Section 307 IPC. As subsequently, Prashant died, the FIR was converted to one under Section 302 IPC. Prashant made two dying declarations (Exh. 20 and 26), one to PSI Bhaurao Meshram (PW.7) on 30.4.2003 and another to Mr. Prakash, Special Judicial Magistrate (PW.3) on 1.5.2003 to the effect that the appellant had caused knife injuries to him.
5. After conclusion of the investigation, charge sheet was filed against the appellant under Section 302 IPC. In support of the case, the prosecution examined several witnesses, however, the eye- witnesses including Sandhya (PW.6) did not support the case of the prosecution and they were declared hostile. The trial Court after considering the evidence on record and the arguments made by learned counsel for prosecution as well as the defence, convicted the appellant under Section 302 IPC vide judgment and order dated 16.3.2004 awarding the life imprisonment and a fine of Rs.1000/- and in default of payment to undergo further rigorous imprisonment for the period of one year.
6. Being aggrieved, the appellant preferred Criminal Appeal No.242/04 which has been dismissed vide impugned judgment and order dated 25.8.2009. Hence, this appeal.
7. Shri Gaurav Agrawal, learned counsel appearing for the appellant has made large number of submissions regarding the veracity of the evidence on record; pointed out contradictions in two dying declarations; prosecution case was not supported by any of the eye-witnesses including Sandhya (PW.6) who had called the police jeep which had taken Prashant (deceased) to the hospital; and the panchnama witnesses of the recovery of knife also did not support the case of the prosecution. However, realising the fact that there have been concurrent findings of fact by the two courts below, wherein after considering the contentions of the defence in detail the courts have recorded the finding that there was no material contradiction in both the dying declarations and the conviction could be based solely on the said dying declarations, he restricted his case only to the nature of offence. It has been submitted by Mr. Agrawal that as the act of the appellant had not been pre-meditated and it all happened because of sudden provocation, conviction could be only under Section 304, Part I IPC and not under Section 302 IPC.
8. Mr. Shabkar Chillarge, learned counsel appearing for the State has submitted that considering the gravity of injuries, no interference is required with the impugned judgment by this Court. The appellant has rightly been convicted under Section 302 IPC. The appeal lacks merit and is liable to be dismissed.
9. We have considered the rival submissions made by learned counsel for the parties and perused the record.
10. The admitted facts, in the case, have been that the love affair of Sandhya, sister of the appellant, continued with Prashant (deceased) for 2-3 years. The appellant did not like the relationship and had altercations with Prashant (deceased) several times. On seeing both of them together at an odd hour i.e. 9.15 P.M. on 30th April, 2003, he suddenly assaulted Prashant with knife and caused stab injuries. Later on, Prashant (deceased) succumbed to the said injuries and died on 2nd May, 2003. The following injuries were found on his body as per the postmortem report :
i) Stitched wound over left side of chest 9th intercostal space in posterior auxiliary line of size 1 cm x 0.5 cm angles and margins clear cut cavity deep.
ii) Continued abrasion left shoulder, anterior aspect 3 cm x 0.5 cm, reddish.
iii) Grazed abrasion over left arm, anterior aspect 4 cm x 3 cm, reddish brown.
iv) Contused abrasion over dorsum of left hand, 3 cm x 2 cm, reddish brown.
v) Stab wound in the mid of right thigh medial aspect 1.5 cm x 0.5 cm x muscle deep, angles and margins clean.
vi) Stab wound over right thigh, lateral aspect in its middle 4.5 cm x 1.5 cm, muscle deep, angles and margins clear cut.
Doctor Amit Kumar (PW.1) found the following internal injuries :
i) Internal injuries to thorax cut injury to the parietal pleura corresponding to the injury no. 1.
ii) Internal injury to diaphragm cut injury through and through corresponding to injury no. 1.
iii) Peritoneum cut injury to peritoneum corresponding to injury no. 1.
iv) Cut injury to left gastric artery, cut injury to outer layer of stomach cut injury to peritoneum corresponding to injury no. 1.
Cause of death was opined to be hemorrhagic shock due to stab injury.
In the opinion of the doctor, injury no.1 was of grave nature and proved to be fatal. Injury nos.2, 3, and 4 were simple injuries. Injury nos. 5 and 6 did not cause any internal damage.
11. In both dying declarations made by Prashant (deceased), the contradiction had been regarding place of injuries and nothing else which has been held by both the courts below to be immaterial. What is material in both the dying declarations that on seeing Prashant, deceased and Sandhya together, appellant got annoyed and immediately took out the knife which he had with him and gave three blows on the body of deceased.
12. It is evident from the medical report that the appellant has not given the knife blow with full force. Otherwise, the depth of the injury No.1 would have been more than just "cavity deep". The fact that the appellant stabbed the deceased twice in the thigh and only once in the chest is indicative of a lack of intention to cause death. Had the appellant intended to kill the deceased, it is unlikely that he would flee from the scene without having inflicted more injuries on the deceased.
13. The judgment cited by the learned counsel for the State, Pulicherla Nagaraju alias Nagaraja Reddy v. State of A.P., AIR 2006 SC 3010., is quite distinguishable from the present case as in that case the knife blow that caused death was given with full force and the single injury was found to be 12 c.m. deep. Even in that case the law has been laid down as under :
"The intention to cause death can be gathered generally from a combination of a few or several of the following, among other, circumstances: (i) nature of the weapon used; (ii) whether the weapon was carried by the accused or was picked up from the spot; (iii) whether the blow is aimed at a vital part of the body; (iv) the amount of force employed in causing injury; (v) whether the act was in the course of sudden quarrel or sudden fight or free for all fight; (vi) whether the incident occurs by chance or whether there was any premeditation; (vii) whether there was any prior enmity or whether the deceased was a stranger; (viii) whether there was any grave and sudden provocation, and if so, the cause for such provocation; (ix) whether it was in the heat of passion; (x) whether the person inflicting the injury has taken undue advantage or has acted in a cruel and unusual manner; (xi) whether the accused dealt a single blow or several blows. The above list of circumstances is, of course, not exhaustive and there may be several other special circumstances with reference to individual cases which may throw light on the question of intention".
14. This Court has re-iterated the same view in Sridhar Bhuyan v. State of Orissa, AIR 2004 SC 4100.; and Gali Venkataiah v. State of Andhra Pradesh, AIR 2008 SC 462.
15. It is not the case even in any of the dying declarations that the appellant had premeditated or preplanned his actions or was having any information prior to the incident that the deceased would be found with his sister Sandhya at the place of occurrence. Their meeting might have been taken by the appellant as temerity. Therefore, it is a clear cut case of loss of self control and in the heat of passion, the appellant caused injuries to Prashant (deceased). By no means, can it be held to be a case of premeditation. The appellant did not cause all the injuries on the vital part of the body. Nor the appellant caused the fatal injury No.1 with full force, otherwise the said injury could have been very deep. On examining the weapon, Dr. Amit Kumar (PW.1) opined that injury Nos. 1, 2 and 3 could be caused by handle of the knife. Death of Parshant (deceased) was not instantaneous rather he died on third day of the incident. The appellant has not taken any undue advantage or acted in cruel or in unusual manner.
16. Undoubtedly, injury No.1 had been caused on the vital part of the body of the deceased but it must also be borne in mind that when a person loses his sense he may act violently and that by itself may not be a ground to be considered against him while determining the nature of the offence. Each case is to be considered on its own facts, however, taking a holistic view of the matter. In such a case, the entire attending circumstances must be taken into consideration in order to find out the nature of the actual offence committed. (See: Kailash v. State of M.P., (2006 (11) SCC 420.; and Karuppusamy & Anr. v. State of Tamil Nadu, (2006) 11 SCC 459.
17. Thus, the facts and circumstances of the case require alteration of conviction of the appellant from Section 302 IPC to Section 304 Part-I IPC and ends of the justice would be met by awarding ten years rigorous imprisonment to the appellant. Ordered accordingly. The appeal is disposed of.
Order accordingly.
REPORTED IN
2011 AIR (SC) 637: 2011(2) SCC 123 : 2011(2) MLJ (Criminal) 106 : 2011(1) AICLR 607 : 2011(73) ACC 316 : 2011(1) JCC 330 : 2011(1) Crimes (SC) 152 : 2011 AIR (SC) (Cri) 336 : 2011(2) AIR (Jharkhand) 721 : 2011 CriLJ 1166

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Saturday, 10 September 2011 13:57

Swaminathan v. State of Tamil Nadu (SC)

SUPREME COURT OF INDIA
Before :- Harjit Singh Bedi and Chandramuali Kr. Prasad, JJ.
Criminal Appeal No. 294 of 2003. D/d. 12.1.2011.
Swaminathan & Anr. - Appellants
Versus
State of Tamil Nadu - Respondents
For the Appellant :- K.K. Mani, Advocate.
For the Respondent :- S. Thananjayan, Advocate.
HINT . --Indian Penal Code, 1860, Section 304, Part II --Accused alleged to have come to spot by chance and each caused simple injury with stone - No prior meeting of mind established as incident happened on spur of moment- Conviction set aside
JUDGMENT
Harjit Singh Bedi, J. - At about 9.30 a.m. on the 5th April, 1994 A.1 Ramasamy came to the wine shop of PW.3 Muthu Selvin and enquired if his uncle Velan was present in the wine shop. At that time Palanisamy deceased came riding a bicycle and dashed against A.1. The same evening at about 3.00 p.m. Palanisamy was going towards the field of Alagesan and as he was passing in front of the house of A.1., A.1 came out and shouted at him and thereafter lifted a stick and hit him on the head. A.2 Swaminathan and A.3 Raman who were standing close by picked up stones lying on the spot and hit the deceased on the cheek and forehead respectively. The incident was witnessed by PW.1 Narayanan. He went and informed Ganesan, the brother of the deceased, and thereafter returned to the place of incident and found that Palanisamy was dead. He accordingly lodged the report at Police Station Theevattipatti, and case under Section 302 was registered at about 4.30 p.m. The dead body was also subjected to a post mortem examination and nine injuries were detected thereon, seven allegedly caused by a lathi and two by stones. The Doctor also opined that the death had been caused by a lathi injury and that the fatal injury was injury No.1. The Trial Court relying on the evidence of PW.1 (Narayanan), the only eye-witness, convicted the accused A.1 under Section 304 Part II and sentenced him to undergo three years' rigorous imprisonment. A.2 and A.3 were convicted and sentenced for the same offence and term with the aid of Section 34 of the IPC. An appeal was thereafter taken to the High Court which has confirmed the conviction and sentence awarded by the Trial Court.
2. The present appeal has been filed by A.2 and A.3 alone.
3. Mr. K.K. Mani, the learned counsel for the appellants has raised only one argument before us. He has urged that even accepting the prosecution story in its entirety the vicarious liability under Section 34 of the IPC could not be fastened on A.2 and A.3 as the facts did not indicate so. He has pointed out that the incident had happened all of a sudden when Palanisami was passing by the house of A.1 and there was absolutely no pre-planning and that he too had caused several blows after picking the lathi from the spot. It has also been submitted that the common intention on the part of A.2 and A.3 had also not made out as they had come to the spot by chance and there was no prior meeting of minds, and they had caused one simple injury each on the person of the deceased with stones picked up from the site. He has accordingly submitted that the conviction of the two appellants with the aid of Section 34 was not called for.
4. We have heard the learned counsel for the parties and also gone through the evidence. Concededly, as per the post mortem report, injury No.1 on the person of the deceased was the fatal injury and had been caused by A.1 with a lathi. There is also no reference whatsoever to any involvement of A.2 and A.3 in the incident in the morning. It appears that A.2 and A.3 who had been either passing by or were near the spot picked up stones on the spur of the moment and caused a simple injury each. It is therefore evident that A.2 and A.3 could not have had the knowledge of involvement of A.1 in a situation where death could be caused. We therefore feel that the conviction of A.2 and A.3 with the aid of Section 34 was not called for.
5. We accordingly allow the appeal and order their acquittal. Their bail bonds shall stand cancelled.
Appeal allowed


REPORTED IN
2011 AIR (SC) 1592 : 2011 AIR (SC) (Cri) 581 : 2011 Cri.L.J. 1683 : 2011(3) AIR Jhar R. 309

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Friday, 09 September 2011 10:21

Ram Jethmalani v. Union of India (SC)

SUPREME COURT OF INDIA
Before :- P. Sathasivam and H.L. Gokhale, JJ.
Writ Petition (Civil) No. 176 of 2009. D/d. 4.7.2011.
Ram Jethmalani and others - Petitioners
Versus
Union of India - Respondent
With
I.A. No. 1 of 2009.
For the Appearing Parties :- Mr. Anil Divan, Senior Advocate, Ms. Lata Krishnamurthi, Mr. R.N. Karanjawala, Ms. Manik Karanjawala, Sandeep Kapur, Ranvir Singh, Mr. Ravi Sharma, Mr. Pranav Diesh, Karan Kalia and Arjun Mahajan for M/s. Karanjawala and Co., Advocates.
For Intervenor K.V.M. PAI :- Mr. Krishnan Venugopal, Senior Advocate, Mrs. Anuradha Mutatkar, Mrs. Anagha S. Desai, Mr. Shyamohan and s. Meenakshi Arora, Advocates.
For UOI :- Mr. Gopal Subramanium, SG and Mr. H.P. Raval, ASG, Mr. Devansh Mohta, Mr. T.A. Khan, Mr. Arijit Parasad, Mr. Kunal Bahri, Mr. B.V. Balaram Das and Mr. B. Krishna Prasad, Advocates, Mr. Mukul Rohatgi, Senior Advocate, Mr. Rajiv Nanda, Advocate.
For RR-3 (SEBI) :- Mr. Pratap Venugopal, Ms. Surekha Raman, Mr. Dileep Poolakkit, Ms. Namrata Sood, Mr. Anuj Sarma, Advocates for M/s. K.J. John and Co., Mr. Kuldeep S. Parihar, Mr. H.S. Parihar, Mr. Sanjay kharde, Ms. Asha Gopalan Nair, Mr. P.P. Malhotra, ASG, Mr. J.S. Attri, Senior Advocate, Ms. Sadhana Sandhu, Ms. Anil Katiyar, Mr. Samir Ali Khan, Advocates, Mr. Rajiv Mohiti and Mr. I.P. Bagadia, Senior Advocate, Mr. Santosh Paul, Mr. B.V. Reddy, Mr. Arvind Gupta, Ms. Arti Singh, Ms. Mohita Bagati, and Mr. Ashok Kumar Gupta-I, Advocate.
Cases Referred :
1. Vineet Narain v. Union of India, 1998(1) R.C.R.(Criminal) 357 : (1996)2 SCC 199.
2. NHRC v. State of Gujarat, (2004)8 SCC 610.
3. Sanjiv Kumar v. State of Haryana, (2005)5 SCC 517.
4. Centre for PIL v. Union of India, (2011)1 SCC 560.
5. Union of India v. Azadi Bachao Andolan, (2004)10 SCC 1.
JUDGMENT

1. "Follow the money" was the short and simple advice given by the secret informant, within the American Government, to Bob Woodward, the journalist from Washington Post, in aid of his investigations of the Watergate Hotel break in. Money has often been claimed, by economists, to only be a veil that covers the real value and the economy. As a medium of exchange, money is vital for the smooth functioning of exchange in the market place. However, increasing monetization of most social transactions has been viewed as potentially problematic for the social order, in as much as it signifies a move to evaluating value, and ethical desirability, of most areas of social interaction only in terms of price obtained in the market place.
2. Price based notions of value and values, as propounded by some extreme neo-liberal doctrines, implies that the values that ought to be promoted, in societies, are the ones for which people are willing to pay a price for. Values, and social actions, for which an effective demand is not expressed in the market, are neglected, even if lip service is paid to their essentiality. However, it cannot be denied that not everything that can be, and is transacted, in the market for a price is necessarily good, and enhances social welfare. Moreover, some activities, even if costly and without being directly measurable in terms of exchange value, are to be rightly viewed as essential. It is a well established proposition, of political economy, and of statecraft, that the State has a necessary interest in determining, and influencing, the kinds of transactions, and social actions, that occur within a legal order. From prevention of certain kinds of harmful activities, that may range from outright crimes, to regulating or controlling, and consequently mitigating, socially harmful modes of social and economic production, to promotion of activities that are deemed to be of higher priority, than other activities which may have a lower priority, howsoever evaluated in terms of social utility, are all the responsibilities of the State. Whether such activities by the State result in directly measurable benefits or not is often not the most important factor in determining their desirability; their absence, or their substantial evisceration, are to be viewed as socially destructive.
3. The scrutiny, and control, of activities, whether in the economic, social or political contexts, by the State, in the public interest as posited by modern constitutionalism, is substantially effectuated by the State "following the money." In modern societies very little gets accomplished without transfer of money. The incidence of crime, petty and grand, like any other social phenomena is often linked to transfers of monies, small or large. Money, in that sense, can both power, and also reward, crime. As noted by many scholars, with increasing globalization, an ideological and social construct, in which transactions across borders are accomplished with little or no control over the quantum, and mode of transfers of money in exchange for various services and value rendered, both legal and illegal, nation-states also have begun to confront complex problems of cross-border crimes of all kinds. Whether this complex web of flows of funds, instantaneously, and in large sums is good or bad, from the perspective of lawful and desired transactions is not at issue in the context of the matters before this Court.
4. The worries of this Court that arise, in the context of the matters placed before us, are with respect to transfers of monies, and accumulation of monies, which are unaccounted for by many individuals and other legal entities in the country, in foreign banks. The worries of this Court relate not merely to the quantum of monies said to have been secreted away in foreign banks, but also the manner in which they may have been taken away from the country, and with the nature of activities that may have engendered the accumulation of such monies. The worries of this Court are also with regard to the nature of activities that such monies may engender, both in terms of the concentration of economic power, and also the fact that such monies may be transferred to groups and individuals who may use them for unlawful activities that are extremely dangerous to the nation, including actions against the State. The worries of this Court also relate to whether the activities of engendering such unaccounted monies, transferring them abroad, and the routing them back to India may not actually be creating a culture that extols the virtue of such cycles, and the activities that engender such cycles are viewed as desirable modes of individual and group action. The worries of this court also relate to the manner, and the extent to which such cycles are damaging to both national and international attempts to combat the extent, nature and intensity of cross-border criminal activity. Finally, the worries of this Court are also with respect to the extent of incapacities, system wide, in terms of institutional resources, skills, and knowledge, as well as about incapacities of ethical nature, in keeping an account of the monies generated by various facets of social action in the country, and thereby developing effective mechanisms of control. These incapacities go to the very heart of constitutional imperatives of governance. Whether such incapacities are on account of not having devoted enough resources towards building such capacities, or on account of a broader culture of venality in the wider spheres of social and political action, they run afoul of constitutional imperatives.
5. Large amounts of unaccounted monies, stashed away in banks located in jurisdictions that thrive on strong privacy laws protecting bearers of those accounts to avoid scrutiny, raise each and every worry delineated above. First and foremost, such large monies stashed abroad, and unaccounted for by individuals and entities of a country, would suggest the necessity of suspecting that they have been generated in activities that have been deemed to be unlawful. In addition, such large amounts of unaccounted monies would also lead to a natural suspicion that they have been transferred out of the country in order to evade payment of taxes, thereby depleting the capacity of the nation to undertake many tasks that are in public interest.
6. Many schools of thought exist with regard to the primary functions of the State, and the normative expectations of what the role of the State ought to be. The questions regarding which of those schools provide the absolutely correct view cannot be the criteria to choose or reject any specific school of thought as an aid in constitutional adjudication. Charged with the responsibility of having to make decisions in the present, within the constraints of epistemic frailties of human knowledge, constitutional adjudicators willy-nilly are compelled to choose those that seem to provide a reasoned basis for framing of questions relevant, both with respect to law, and to facts. Institutional economics gives one such perspective which may be a useful guide for us here. Viewed from a functional perspective, the State, and governments, may be seen as coming into existence in order to solve, what institutional economists have come to refer to as, the coordination problems in providing public goods, and prevent the disutility that emerges from the moral hazard of a short run utility maximizer, who may desire the benefits of goods and services that are to be provided in common to the public, and yet have the interest of not paying for their production.
7. Security of the nation, infrastructure of governance, including those that relate to law making and law keeping functions, crime prevention, detection and punishment, coordination of the economy, and ensuring minimal levels of material, and cultural goods for those who may not be in a position to fend for themselves or who have been left by the wayside by the operation of the economy and society, may all be cited as some examples of the kinds of public goods that the State is expected to provide for, or enable the provision of. In as much as the market is primarily expected to cater to purely self centered activities of individuals and groups, markets and the domain of purely private social action significantly fail to provide such goods. Consequently, the State, and government, emerges to rectify the coordination problem, and provide the public goods.
8. Unaccounted monies, especially large sums held by nationals and entities with a legal presence in the nation, in banks abroad, especially in tax havens or in jurisdictions with a known history of silence about sources of monies, clearly indicate a compromise of the ability of the State to manage its affairs in consonance with what is required from a constitutional perspective. This is so in two respects. The quantum of such monies by itself, along with the numbers of individuals or other legal entities who hold such monies, may indicate in the first instance that a large volume of activities, in the social and the economic spheres within the country are unlawful and causing great social damage, both at the individual and the collective levels. Secondly, large quanta of monies stashed abroad, would also indicate a substantial weakness in the capacity of the State in collection of taxes on incomes generated by individuals and other legal entities within the country. The generation of such revenues is essential for the State to undertake the various public goods and services that it is constitutionally mandated, and normatively expected by its citizenry, to provide. A substantial degree of incapacity, in the above respect, would be an indicia of the degree of failure of the State; and beyond a particular point, the State may spin into a vicious cycle of declining moral authority, thereby causing the incidence of unlawful activities in which wealth is sought to be generated, as well as instances of tax evasion, to increase in volume and in intensity.
9. Consequently, the issue of unaccounted monies held by nationals, and other legal entities, in foreign banks, is of primordial importance to the welfare of the citizens. The quantum of such monies may be rough indicators of the weakness of the State, in terms of both crime prevention, and also of tax collection. Depending on the volume of such monies, and the number of incidents through which such monies are generated and secreted away, it may very well reveal the degree of "softness of the State."
10. The concept of a "soft state" was famously articulated by the Nobel Laureate, Gunnar Myrdal. It is a broad based assessment of the degree to which the State, and its machinery, is equipped to deal with its responsibilities of governance. The more soft the State is, greater the likelihood that there is an unholy nexus between the law maker, the law keeper, and the law breaker.
11. When a catchall word like "crimes" is used, it is common for people, and the popular culture to assume that it is "petty crime," or crimes of passion committed by individuals. That would be a gross mischaracterization of the seriousness of the issues involved. Far more dangerous are the crimes that threaten national security, and national interest. For instance, with globalization, nation states are also confronted by the dark worlds of international arms dealers, drug peddlers, and various kinds of criminal networks, including networks of terror. International criminal networks that extend support to home-grown terror or extremist groups, or those that have been nurtured and sustained in hostile countries, depend on networks of formal and informal, lawful and unlawful mechanisms of transfer of monies across boundaries of nation-states. They work in the interstices of the micro- structures of financial transfers across the globe, and thrive in the lacunae, the gaps in law and of effort. The loosening of control over those mechanisms of transfers, guided by an extreme neo-liberal thirst to create a global market that is free of the friction of law and its enforcement, by nation- states, may have also contributed to an increase in the volume, extent and intensity of activities by criminal and terror networks across the globe.
12. Increasingly, on account of "greed is good" culture that has been promoted by neo-liberal ideologues, many countries face the situation where the model of capitalism that the State is compelled to institute, and the markets it spawns, is predatory in nature. From mining mafias to political operators who, all too willingly, bend policies of the State to suit particular individuals or groups in the social and economic sphere, the raison d'etre for weakening the capacities and intent to enforce the laws is the lure of the lucre. Even as the State provides violent support to those who benefit from such predatory capitalism, often violating the human rights of its citizens, particularly it's poor, the market begins to function like a bureaucratic machine dominated by big business; and the State begins to function like the market, where everything is available for sale at a price.
13. The paradigm of governance that has emerged, over the past three decades, prioritizes the market, and its natural course, over any degree of control of it by the State. The role for the State is visualized by votaries of the neoliberal paradigm as that of a night watchman; and moreover it is also expected to take its hands out of the till of the wealth generating machinery. Based on the theories of Arthur Laffer, and pushed by the Washington Consensus, the prevailing wisdom of the elite, and of the policy makers, is that reduction of tax rates, thereby making tax regimes regressive, would incentivise the supposed genius of entrepreneurial souls of individuals, actuated by pursuit of self-interest and desire to accumulate great economic power. It was expected that this would enable the generation of more wealth, at a more rapid pace, thereby enabling the State to generate appropriate tax revenues even with lowered tax rates. Further, benefits were also expected in moral terms - that the lowering of tax rates would reduce the incentives of wealth generators to hide their monies, thereby saving them from the guilt of tax evasion. Whether that is an appropriate model of social organization or not, and from the perspective of constitutional adjudication, whether it meets the requirements of constitutionalism as embedded in the texts of various constitutions, is not a question that we want to enter in this matter.
14. Nevertheless, it would be necessary to note that there is a fly in the ointment of the above story of friction free markets that would always clear, and always work to the benefit of the society. The strength of tax collection machinery can, and ought to be, expected to have a direct bearing on the revenues collected by the State. If the machinery is weak, understaffed, ideologically motivated to look the other way, or the agents motivated by not so salubrious motives, the amount of revenue collected by the State would decline, stagnate, or may not generate the revenue for the State that is consonant with its responsibilities. From within the neo-liberal paradigm, also emerged the under-girding current of thought that revenues for the State implies a big government, and hence a strong tax collecting machinery itself would be undesirable. Where the elite lose out in democratic politics of achieving ever decreasing tax rates, it would appear that state machineries in the hands of the executive, all too willing to promote the extreme versions of the neoliberal paradigm and co-opt itself in the enterprises of the elite, may also become all too willing to not develop substantial capacities to monitor and follow the money, collect the lawfully mandated taxes, and even look the other way. The results, as may be expected, have been disastrous across many nations.
15. In addition, it would also appear that in this miasmic cultural environment in which greed is extolled, conspicuous consumption viewed as both necessary and socially valuable, and the wealthy viewed as demi-gods, the agents of the State may have also succumbed to the notions of the neo-liberal paradigm that the role of the State ought to only be an enabling one, and not exercise significant control. This attitude would have a significant impact on exercise of discretion, especially in the context of regulating economic activities, including keeping an account of the monies generated in various activities, both legal and illegal. Carried away by the ideology of neo- liberalism, it is entirely possible that the agents of the State entrusted with the task of supervising the economic and social activities may err more on the side of extreme caution, whereby signals of wrong doing may be ignored even when they are strong. Instances of the powers that be ignoring publicly visible stock market scams, or turning a blind eye to large scale illegal mining have become all too familiar, and may be readily cited. That such activities are allowed to continue to occur, with weak, or nonexistent, responses from the State may, at best, be charitably ascribed to this broader culture of permissibility of all manner of private activities in search of ever more lucre. Ethical compromises, by the elite - those who wield the powers of the state, and those who fatten themselves in an ever more exploitative economic sphere- can be expected to thrive in an environment marked by such a permissive attitude, of weakened laws, and of weakened law enforcement machineries and attitudes.
16. To the above, we must also add the fragmentation of administration. Even as the range of economic, and social activities have expanded, and their sophistication increased by leaps and bounds, the response in terms of administration by the State has been to create ever more specialized agencies, and departments. To some degree this has been unavoidable. Nevertheless, it would also appear that there is a need to build internal capacities to share information across such departments, lessen the informational asymmetries between, and friction to flow of information across the boundaries of departments and agencies, and reduce the levels of consequent problems in achieving coordination. Life, and social action within which human life becomes possible, do not proceed on the basis of specialized fiefdoms of expertise. They cut across the boundaries erected as a consequence of an inherent tendency of experts to specialize. The result, often, is a system wide blindness, while yet being lured by the dazzle of ever greater specialization. Many dots of information, now collected in ever increasing volume by development of sophisticated information technologies, get ignored on account of lack of coordination across agencies, and departments, and tendency within bureaucracy to jealously guard their own turfs. In some instances, the failure to properly investigate, or to prevent, unlawful activities could be the result of such over-specialization, frictions in sharing of information, and coordination across departmental and specialized agency boundaries.
17. If the State is soft to a large extent, especially in terms of the unholy nexus between the law makers, the law keepers, and the law breakers, the moral authority, and also the moral incentives, to exercise suitable control over the economy and the society would vanish. Large unaccounted monies are generally an indication of that. In a recent book, Prof. Rotberg states, after evaluating many failed and collapsed states over the past few decades :
"Failed states offer unparalleled economic opportunity - but only for a privileged few. Those around the ruler or ruling oligarchy grow richer while their less fortunate brethren starve. Immense profits are available from an awareness of regulatory advantages and currency speculation and arbitrage. But the privilege of making real money when everything else is deteriorating is confined to clients of the ruling elite. The nation-state's responsibility to maximize the well-being and prosperity of all its citizens is conspicuously absent, if it ever existed.... Corruption flourishes in many states, but in failed states it often does so on an unusually destructive scale. There is widespread petty or lubricating corruption as a matter of course, but escalating levels of venal corruption mark failed states." (The Failure and Collapse of Nation-States - Breakdown, Prevention and Repair" in "WHEN STATES FAIL : CAUSES AND CONSEQUENCES", Rotberg, Robert I., Ed. Princeton University Press (2004)).
18. India finds itself in a peculiar situation. Often celebrated, in popular culture, as an emerging economy that is rapidly growing, and expected to be a future economic and political giant on the global stage, it is also popularly perceived, and apparently even in some responsible and scholarly circles, and official quarters, that some of its nationals and other legal entities have stashed the largest quantum of unaccounted monies in foreign banks, especially in tax havens, and in other jurisdictions with strong laws of secrecy. There are also apparently reports, and analyses, generated by Government of India itself, which place the amounts of such unaccounted monies at astronomical levels.
19. We do not wish to engage in any speculation as to what such analyses, reports, and factuality imply with respect to the state of the nation. The citizens of our country can make, and ought to be making, rational assessments of the situation. We fervently hope that it leads to responsible, reasoned and reasonable debate, thereby exerting the appropriate democratic pressure on the State, and its agents, within the constitutional framework, to bring about the necessary changes without sacrificing cherished, and inherently invaluable social goals and values enshrined in the Constitution. The failures are discernible when viewed against the vision of the constitutional project, and as forewarned by Dr. Ambedkar, have been on account of the fact that man has been vile, and not the defects of a Constitution forged in the fires of wisdom gathered over eons of human experience. If the politico-bureaucratic, power wielding, and business classes bear a large part of the blame, at least some part of blame ought to be apportioned to those portions of the citizenry that is well informed, or is expected to be informed. Much of that citizenry has disengaged itself with the political process, and with the masses. Informed by contempt for the poor and the downtrodden, the elite classes that have benefited the most, or expects to benefit substantially from the neoliberal policies that would wish away the hordes, has also chosen to forget that constitutional mandate is as much the responsibility of the citizenry, and through their constant vigilance, of all the organs of the state, and national institutions including political parties. To not be engaged in the process, is to ensure the evisceration of constitutional content. Knee jerk reactions, and ill advised tinkering with the constitutional framework are not the solutions. The road is always long, and needs the constant march of the citizenry on it. There is no other way. To expect instant solutions, because this law or that body is formed, without striving to solve system wide, and systemic, problems that have emerged is to not understand the demands of a responsible citizenry in modern constitutional republican democracies.
20. These matters before us relate to issues of large sums of unaccounted monies, allegedly held by certain named individuals, and loose associations of them; consequently we have to express our serious concerns from a constitutional perspective. The amount of unaccounted monies, as alleged by the Government of India itself is massive. The show cause notices were issued a substantial length of time ago. The named individuals were very much present in the country. Yet, for unknown, and possibly unknowable, though easily surmisable, reasons the investigations into the matter proceeded at a laggardly pace. Even the named individuals had not yet been questioned with any degree of seriousness. These are serious lapses, especially when viewed from the perspective of larger issues of security, both internal and external, of the country.
21. It is in light of the above, that we heard some significant elements of the instant writ petitions filed in this Court, and at this stage it is necessary that appropriate orders be issued. There are two issues we deal with below: (i) the appointment of a Special Investigation Team; and (ii) disclosure, to the Petitioners, of certain documents relied upon by the Union of India in its response.
II
22. The instant writ petition was filed, in 2009, by Shri. Ram Jethmalani, Shri. Gopal Sharman, Smt. Jalbala Vaidya, Shri. K.P.S. Gill, Prof. B.B. Dutta, and Shri. Subhash Kashyap, all well known professionals, social activists, former bureaucrats or those who have held responsible positions in the society. They have also formed an organization called Citizen India, the stated objective of which is said to be to bring about changes and betterment in the quality of governance, and functioning of all public institutions.
23. The Petitioners state that there have been a slew of reports, in the media, and also in scholarly publications that various individuals, mostly citizens, but may also include non-citizens, and other entities with presence in India, have generated, and secreted away large sums of monies, through their activities in India or relating to India, in various foreign banks, especially in tax havens, and jurisdictions that have strong secrecy laws with respect to the contents of bank accounts and the identities of individuals holding such accounts. The Petitioners allege that most of such monies are unaccounted, and in all probability have been generated through unlawful activities, whether in India or outside India, but relating to India. Further, the Petitioners also allege that a large part of such monies may have been generated within India, and have been taken away from India, breaking various laws, including but not limited to evasion of taxes.
24. The Petitioners contend: (i) that the sheer volume of such monies points to grave weaknesses in the governance of the nation, because they indicate a significant lack of control over unlawful activities through which such monies are generated, evasion of taxes, and use of unlawful means of transfer of funds; (ii) that these funds are then laundered and brought back into India, to be used in both legal and illegal activities; (iii) that the use of various unlawful modes of transfer of funds across borders, gives support to such unlawful networks of international finance; and (iv) that in as much as such unlawful networks are widely acknowledged to also effectuate transfer of funds across borders in aid of various crimes committed against persons and the State, including but not limited to activities that may be classifiable as terrorist, extremist, or unlawful narcotic trade, the prevailing situation also has very serious connotations for the security and integrity of India.
25. The Petitioners also further contend that a significant part of such large unaccounted monies include the monies of powerful persons in India, including leaders of many political parties. It was also contended that the Government of India, and its agencies, have been very lax in terms of keeping an eye on the various unlawful activities generating unaccounted monies, the consequent tax evasion; and that such laxity extends to efforts to curtail the flow of such funds out, and into, India. Further, the Petitioners also contend that the efforts to prosecute the individuals, and other entities, who have secreted such monies in foreign banks, have been weak or nonexistent. It was strongly argued that the efforts at identification of such monies in various bank accounts in many jurisdictions across the globe, attempts to bring back such monies, and efforts to strengthen the governance framework to prevent further outflows of such funds, have been sorely lacking.
26. The Petitioners also made allegations about certain specific incidents and patterns of dereliction of duty, wherein the Government of India, and its various agencies, even though in possession of specific knowledge about the monies in certain bank accounts, and having estimated that such monies run into many scores of thousands of crores, and upon issuance of show cause notices to the said individual, surprisingly have not proceeded to initiate, and carry out suitable investigations, and prosecute the individuals. The individual specifically named is one Hassan Ali Khan. The Petitioners also contended that Kashinath Tapuria, and his wife Chandrika Tapuria, are also party to the illegal activities of Hassan Ali Khan.
27. Specifically, it was alleged that Hassan Ali Khan was served with an income tax demand for Rs. 40,000.00 Crores (Rupees Forty Thousand Crores), and that the Tapurias were served an income tax demand notice of Rs. 20,580.00 Crores (Rupees Twenty Thousand and Five Hundred and Eighty Crores). The Enforcement Directorate, in 2007, disclosed that Hassan Ali Khan had "dealings amounting to 1.6 billion US dollars" in the period 2001-2005. In January 2007, upon raiding Hassan Ali's residence in Pune, certain documents and evidence had been discovered regarding deposits of 8.04 billion dollars with UBS bank in Zurich. It is the contention of the Petitioners that, even though such evidence was secured nearly four and half years ago, (i) a proper investigation had not been launched to obtain the right facts from abroad; (ii) the individuals concerned, though present in India, and subject to its jurisdiction, and easily available for its exercise, had not even been interrogated appropriately; (iii) that the Union of India, and its various departments, had even been refusing to divulge the details and information that would reveal the actual status of the investigation, whether in fact it was being conducted at all, or with any degree of seriousness; (iv) given the magnitude of amounts in question, especially of the demand notice of income tax, the laxity of investigation indicates multiple problems of serious non- governance, and weaknesses in the system, including pressure from political quarters to hinder, or scuttle, the investigation, prosecution, and ultimately securing the return of such monies; and (v) given the broadly accepted fact that within the political class corruption is rampant, ill-begotten wealth has begun to be amassed in massive quantities by many members in that class, it may be reasonable to suspect, or even conclude, that investigation was being deliberately hindered because Hassan Ali Khan, and the Tapurias, had or were continuing to handle the monies of such a class. The fact that both Income Tax department, and the Enforcement Directorate routinely, and with alacrity, seek the powers for long stretches of custodial interrogation of even those suspected of having engaged in money laundering, or evaded taxes, with respect to very small amounts, ought to raise the reasonable suspicion that inaction in the matters concerning Hassan Ali Khan, and Tapurias, was deliberately engineered, for nefarious reasons.
28. In addition, the Petitioners also state that in as much as the bank in which the monies had been stashed by Hassan Ali Khan was UBS Zurich, the needle of suspicion has to inexorably turn to high level political interference and hindrance to the investigations. The said bank, it was submitted, is the biggest or one of the biggest wealth management companies in the world. The Petitioners also narrated the mode, and the manner, in which the United States had dealt with UBS, with respect to monies of American citizens secreted away with the said bank. It was also alleged that UBS had not cooperated with the U.S. authorities. Contrasting the relative alacrity, and vigour, with which the United States government had pursued the matters, the Petitioners contend the inaction of Union of India is shocking.
29. The Petitioners further allege that in 2007, the Reserve Bank of India had obtained some "knowledge of the dubious character" of UBS Security India Private Limited, a branch of UBS, and consequently stopped this bank from extending its business in India by refusing to approve its takeover of Standard Chartered Mutual Funds business in India. It was also claimed by the Petitioners that the SEBI had alleged that UBS played a role in the stock market crash of 2004. The said UBS Bank has apparently applied for a retail banking license in India, which was approved in principle by RBI initially. In 2008, this license was withheld on the ground that "investigation of its unsavoury role in the Hassan Ali Khan case was pending investigation in the Enforcement Directorate." However, it seems that the RBI reversed its decision in 2009, and no good reasons seem to be forthcoming for the reversal of the decision of 2008.
30. The Petitioners contend that such a reversal of decision could only have been accomplished through high level intervention, and that it is further evidence of linkages between members of the political class, and possibly even members of the bureaucracy, and such banking operations, and the illegal activities of Hassan Ali Khan and the Tapurias. Hence, the Petitioners argued, in the circumstances it would have to be necessarily concluded that the investigations into the affairs of Hassan Ali Khan, and the Tapurias, would be severely compromised if the Court does not intervene, and monitor the investigative processes by appointing a special investigation team reporting directly to the Court.
31. The learned senior counsel for the Petitioners sought that this Court intervene, order proper investigations, and monitor continuously, the actions of the Union of India, and any and all governmental departments and agencies, in these matters. It was submitted that their filing of this Writ Petition under Article 32 is proper, as the inaction of the Union of India, as described above, violates the fundamental rights - to proper governance, in as much as Article 14 provides for equality before the law and equal protection of the law, and Article 21 promises dignity of life to all citizens.
32. We have heard the learned senior counsel for the Petitioners, Shri. Anil B. Divan, the learned senior counsel for interveners, Shri. K.K. Venugopal, and the learned senior counsel for the petitioners in the connected Writ Petition, Shri. Shanti Bhushan. We have also heard the learned Solicitor General, Shri. Gopal Subramaniam, on behalf of the respondents.
33. Shri. Divan, specifically argued that, having regard to the nature of the investigation, its slow pace so far, and the non-seriousness on the part of the respondents, there is a need to constitute a Special Investigation Team ("SIT") headed by a former judge or two of this court. However, this particular plea has been vociferously resisted by the Solicitor General. Relying on the status reports submitted from time to time, the learned Solicitor General stated that all possible steps were being taken to bring back the monies stashed in foreign banks, and that the investigations in cases registered were proceeding in an appropriate manner. He expressed his willingness for a Court monitored investigation. He also further submitted that the Respondents, in principle, have no objections whatsoever against the main submissions of the Petitioners.
34. The real point of controversy is, given above, as to whether there is a need to constitute a SIT to be headed by a judge or two, of this court, to supervise the investigation.
35. We must express our serious reservations about the responses of the Union of India. In the first instance, during the earlier phases of hearing before us, the attempts were clearly evasive, confused, or originating in the denial mode. It was only upon being repeatedly pressed by us did the Union of India begin to admit that indeed the investigation was proceeding very slowly. It also became clear to us that in fact the investigation had completely stalled, in as much as custodial interrogation of Hassan Ali Khan had not even been sought for, even though he was very much resident in India. Further, it also now appears that even though his passport had been impounded, he was able to secure another passport from the RPO in Patna, possibly with the help or aid of a politician.
36. During the course of the hearings the Union of India repeatedly insisted that the matter involves many jurisdictions, across the globe, and a proper investigation could be accomplished only through the concerted efforts by different law enforcement agencies, both within the Central Government, and also various State governments. However, the absence of any satisfactory explanation of the slowness of the pace of investigation, and lack of any credible answers as to why the respondents did not act with respect to those actions that were feasible, and within the ambit of powers of the Enforcement Directorate itself, such as custodial investigation, leads us to conclude that the lack of seriousness in the efforts of the respondents are contrary to the requirements of laws and constitutional obligations of the Union of India. It was only upon the insistence and intervention of this Court has the Enforcement Directorate initiated and secured custodial interrogation over Hassan Ali Khan. The Union of India has explicitly acknowledged that there was much to be desired with the manner in which the investigation had proceeded prior to the intervention of this court. From the more recent reports, it would appear that the Union of India, on account of its more recent efforts to conduct the investigation with seriousness, on account of the gravitas brought by this Court, has led to the securing of additional information, and leads, which could aid in further investigation. For instance, during the continuing interrogation of Hassan Ali Khan and the Tapurias, undertaken for the first time at the behest of this Court, many names of important persons, including leaders of some corporate giants, politically powerful people, and international arms dealers have cropped up. So far, no significant attempt has been made to investigate and verify the same. This is a further cause for the grave concerns of this Court, and points to the need for continued, effective and day to day monitoring by a SIT constituted by this Court, and acting on behalf, behest and direction of this Court.
37. In light of the fact that the issues are complex, requiring expertise and knowledge of different departments, and the necessity of coordination of efforts across various agencies and departments, it was submitted to us that the Union of India has recently formed a High Level Committee, under the aegis of the Department of Revenue in the Ministry of Finance, which is the nodal agency responsible for all economic offences. The composition of the High Level Committee ("HLC") is said to be as follows: (i) Secretary, Department of Revenue, as the Chairman; (ii) Deputy Governor, Reserve Bank of India; (iii) Director (IB); (iv) Director, Enforcement; (v) Director, CBI; (vi) Chairman, CBDT; (vii) DG, Narcotics Control Bureau; (vii) DG, Revenue Intelligence; (ix) Director, Financial Intelligence Unit; and (x) JS (FT & TRI), CBDT. It was also submitted that the HLC may co-opt, as necessary, representation not below the rank of Joint Secretary from the Home Secretary, Foreign Secretary, Defense Secretary and the Secretary, Cabinet Secretariat. The Union of India claims that such a multi-disciplinary group and committee would now enable the conducting of an efficient and a systematic investigation into the matters concerning allegations against Hassan Ali Khan and the Tapurias; and further that such a committee would also enable the taking of appropriate steps to bring back the monies stashed in foreign banks, for which purposes a need may arise to register further cases. The Union of India also claims that the formation of such a committee indicates the seriousness with which it is viewing the entire matter.
38. While it would appear, from the Status Reports submitted to this Court, that the Enforcement Directorate has moved in some small measure, the actual facts are not comforting to an appropriate extent. In fact we are not convinced that the situation has changed to the extent that it ought to so as to accept that the investigation would now be conducted with the degree of seriousness that is warranted. According to the Union of India the HLC was formed in order to take charge of and direct the entire investigation, and subsequently, the prosecution. In the meanwhile a charge sheet has been filed against Hassan Ali Khan. Upon inquiry by us as to whether the charge-sheet had been vetted by the HLC, and its inputs secured, the counsel for Union of India were flummoxed. The fact was that the charge-sheet had not been given even for the perusal of the HLC, let alone securing its inputs, guidance and direction. We are not satisfied by the explanation offered by the Directorate of Enforcement by way of affidavit after the orders were reserved. Be it noted that a nodal agency was set up, pursuant to directions of this Court in Vineet Narain case given many years ago. Yet the same was not involved and these matters were never placed before it. Why ?
39. From the status reports, it is clear that the problem is extremely complex, and many agencies and departments spread across the country have not responded with the alacrity, and urgency, that one would desire. Moreover, the Union of India has been unable to answer any of the questions regarding its past actions, and their implications, such as the slowness of the investigation, or about grant of license to conduct retail banking by UBS, by reversing the decision taken earlier to withhold such a license on the grounds that the said bank's credentials were suspect. To this latter query, the stance of the Union of India has been that entry of UBS would facilitate flow of foreign investments into India. The question that arises is whether the task of bringing foreign funds into India override all other constitutional concerns and obligations ?
40. The predominant theme in the responses of Union of India before this court has been that it is doing all that it can to bring back the unaccounted monies stashed in various banks abroad. To this is added the qualifier that it is an extremely complex problem, requiring the cooperation of many different jurisdictions, and an internationally coordinated effort. Indeed they are complex. We do not wish to go into the details of arguments about whether the Union of India is, or is not, doing necessary things to achieve such goals. That is not necessary for the matters at hand.
41. What is important is that the Union of India had obtained knowledge, documents and information that indicated possible connections between Hassan Ali Khan, and his alleged co-conspirators and known international arms dealers. Further, the Union of India was also in possession of information that suggested that because the international arms dealing network, and a very prominent dealer in it, could not open a bank account even in a jurisdiction that is generally acknowledged to lay great emphasis on not asking sources of money being deposited into its banks, Hassan Ali Khan may have played a crucial role in opening an account with the branch of the same bank in another jurisdiction. The volume of alleged income taxes owed to the country, as demanded by the Union of India itself, and the volume of monies, by some accounts US $8.04 billion, and some other accounts in excess of Rs. 70,000 crores, that are said to have been routed through various bank accounts of Hassan Ali Khan, and Tapurias. Further, from all accounts it has been acknowledged that none of the named individuals have any known and lawful sources for such huge quantities of monies. All of these factors, either individually or combined, ought to have immediately raised questions regarding the sources being unlawful activities, national security, and transfer of funds into India for other illegal activities, including acts against the State. It was only at the repeated insistence by us that such matters have equal, if not even greater importance than issues of tax collection, has the Union of India belatedly concluded that such aspects also ought to be investigated with thoroughness. However, there is still no evidence of a really serious investigation into these other matters from the national security perspective.
42. The fact remains that the Union of India has struggled in conducting a proper investigation into the affairs of Hassan Ali Khan and the Tapurias. While some individuals, whose names have come to the adverse knowledge of the Union of India, through the more recent investigations, have been interrogated, many more are yet to be investigated. This highly complex investigation has in fact just begun. It is still too early to conclude that the Union of India has indeed placed all the necessary machinery to conduct a proper investigation. The formation of the HLC was a necessary step, and may even be characterized as a welcome step. Nevertheless, it is an insufficient step.
43. In light of the above, we had proposed to the Union of India that the same HLC constituted by it be converted into a Special Investigation Team, headed by two retired judges of the Supreme Court of India. The Union of India opposes the same, but provides no principle as to why that would be undesirable, especially in light of the many lapses and lacunae in its actions in these matters spread over the past four years.
44. We are of the firm opinion that in these matters fragmentation of government, and expertise and knowledge, across many departments, agencies and across various jurisdictions, both within the country, and across the globe, is a serious impediment to the conduct of a proper investigation. We hold that it is in fact necessary to create a body that coordinates, directs, and where necessary orders timely and urgent action by various institutions of the State. We also hold that the continued involvement of this Court in these matters, in a broad oversight capacity, is necessary for upholding the rule of law, and achievement of constitutional values. However, it would be impossible for this Court to be involved in day to day investigations, or to constantly monitor each and every aspect of the investigation.
45. The resources of this court are scarce, and it is overburdened with the task of rendering justice in well over a lakh of cases every year. Nevertheless, this Court is bound to uphold the Constitution, and its own burdens, excessive as they already are, cannot become an excuse for it to not perform that task. In a country where most of its people are uneducated and illiterate, suffering from hunger and squalor, the retraction of the monitoring of these matters by this Court would be unconscionable.
46. The issue is not merely whether the Union of India is making the necessary effort to bring back all or some significant part of the alleged monies. The fact that there is some information and knowledge that such vast amounts may have been stashed away in foreign banks, implies that the State has the primordial responsibility, under the Constitution, to make every effort to trace the sources of such monies, punish the guilty where such monies have been generated and/or taken abroad through unlawful activities, and bring back the monies owed to the Country. We do recognize that the degree of success, measured in terms of the amounts of monies brought back, is dependent on a number of factors, including aspects that relate to international political economy and relations, which may or may not be under our control. The fact remains that with respect to those factors that were within the powers of the Union of India, such as investigation of possible criminal nexus, threats to national security etc., were not even attempted. Fealty to the Constitution is not a matter of mere material success; but, and probably more importantly from the perspective of the moral authority of the State, a matter of integrity of effort on all the dimensions that inform a problem that threatens the constitutional projects. Further, the degree of seriousness with which efforts are made with respect to those various dimensions can also be expected to bear fruit in terms of building capacities, and the development of necessary attitudes to take the law enforcement part of accounting or following the money seriously in the future.
47. The merits of vigour of investigations, and attempts at law enforcement, cannot be measured merely on the scale of what we accomplish with respect to what has happened in the past. It would necessarily also have to be appreciated from the benefits that are likely to accrue to the country in preventing such activities in the future. Our people may be poor, and may be suffering from all manner of deprivation. However, the same poor and suffering masses are rich, morally and from a humanistic point of view. Their forbearance of the many foibles and failures of those who wield power, no less in their name and behalf than of the rich and the empowered, is itself indicative of their great qualities, of humanity, trust and tolerance. That greatness can only be matched by exercise of every sinew, and every resource, in the broad goal of our constitutional project of bringing to their lives dignity. The efforts that this Court makes in this regard, and will make in this respect and these matters, can only be conceived as a small and minor, though nevertheless necessary, part. Ultimately the protection of the Constitution and striving to promote its vision and values is an elemental mode of service to our people.
48. We note that in many instances, in the past, when issues referred to the Court have been very complex in nature, and yet required the intervention of the Court, Special Investigation Teams have been ordered and constituted in order to enable the Court, and the Union of India and/or other organs of the State, to fulfill their constitutional obligations. The following instances may be noted : Vineet Narain v. Union of India, 1998(1) R.C.R.(Criminal) 357 : (1996)2 SCC 199, NHRC v. State of Gujarat, (2004)8 SCC 610, Sanjiv Kumar v. State of Haryana, (2005)5 SCC 517, and Centre for PIL v. Union of India, (2011)1 SCC 560.
49. In light of the above we herewith order :
(i) That the High Level Committee constituted by the Union of India, comprising of (i) Secretary, Department of Revenue; (ii) Deputy Governor, Reserve Bank of India; (iii) Director (IB); (iv) Director, Enforcement; (v) Director, CBI; (vi) Chairman, CBDT; (vii) DG, Narcotics Control Bureau; (vii) DG, Revenue Intelligence; (ix) Director, Financial Intelligence Unit; and (x) JS (FT & TR-I), CBDT be forthwith appointed with immediate effect as a Special Investigation Team;
(ii) That the Special Investigation Team, so constituted, also include Director, Research and Analysis Wing;
(iii) That the above Special Investigation Team, so constituted, be headed by and include the following former eminent judges of this Court: (a) Hon'ble Mr. Justice B.P. Jeevan Reddy as Chairman; and (b) Hon'ble Mr. Justice M.B. Shah as Vice-Chairman; and that the Special Investigation Team function under their guidance and direction;
(iv) That the Special Investigation Team, so constituted, shall be charged with the responsibilities and duties of investigation, initiation of proceedings, and prosecution, whether in the context of appropriate criminal or civil proceedings of : (a) all issues relating to the matters concerning and arising from unaccounted monies of Hassan Ali Khan and the Tapurias; (b) all other investigations already commenced and are pending, or awaiting to be initiated, with respect to any other known instances of the stashing of unaccounted monies in foreign bank accounts by Indians or other entities operating in India; and (c) all other matters with respect to unaccounted monies being stashed in foreign banks by Indians or other entities operating in India that may arise in the course of such investigations and proceedings. It is clarified here that within the ambit of responsibilities described above, also lie the responsibilities to ensure that the matters are also investigated, proceedings initiated and prosecutions conducted with regard to criminality and/or unlawfulness of activities that may have been the source for such monies, as well as the criminal and/or unlawful means that are used to take such unaccounted monies out of and/or bring such monies back into the country, and use of such monies in India or abroad. The Special Investigation Team shall also be charged with the responsibility of preparing a comprehensive action plan, including the creation of necessary institutional structures that can enable and strengthen the country's battle against generation of unaccounted monies, and their stashing away in foreign banks or in various forms domestically.
(v) That the Special Investigation Team so constituted report and be responsible to this Court, and that it shall be charged with the duty to keep this Court informed of all major developments by the filing of periodic status reports, and following of any special orders that this Court may issue from time to time;
(vi) That all organs, agencies, departments and agents of the State, whether at the level of the Union of India, or the State Government, including but not limited to all statutorily formed individual bodies, and other constitutional bodies, extend all the cooperation necessary for the Special Investigation Team so constituted and functioning;
(vii) That the Union of India, and where needed even the State Governments, are directed to facilitate the conduct of the investigations, in their fullest measure, by the Special Investigation Team so constituted and functioning, by extending all the necessary financial, material, legal, diplomatic and intelligence resources, whether such investigations or portions of such investigations occur inside the country or abroad.
(viii) That the Special Investigation Team also be empowered to further investigate even where charge-sheets have been previously filed; and that the Special Investigation Team may register further cases, and conduct appropriate investigations and initiate proceedings, for the purpose of bringing back unaccounted monies unlawfully kept in bank accounts abroad.
50. We accordingly direct the Union of India to issue appropriate notification and publish the same forthwith. It is needless to clarify that the former judges of this Court so appointed to supervise the Special Investigation Team are entitled to their remuneration, allowances, perks, facilities as that of the judges of the Supreme Court. The Ministry of Finance, Union of India, shall be responsible for creating the appropriate infrastructure and other facilities for proper and effective functioning of the Special Investigation Team at once.
III
51. We now turn our attention to the matter of disclosure of various documents referenced by the Union of India, as sought by the Petitioners. These documents, including names and bank particulars, relate to various bank accounts, of Indian citizens, in the Principality of Liechtenstein ("Liechtenstein"), a small landlocked sovereign nation-state in Europe. It is generally acknowledged that Liechtenstein is a tax haven.
52. Apparently, as alleged by the Petitioners, a former employee of a bank or banks in Liechtenstein secured the names of some 1400 bank account holders, along with the particulars of such accounts, and offered the information to various entities. The same was secured by the Federal Republic of Germany ("Germany"), which in turn, apart from initiating tax proceedings against some 600 individuals, also offered the information regarding nationals and citizens of other countries to such countries. It is the contention of the Petitioners that even though the Union of India was informed about the presence of the names of a large number of Indian citizens in the list of names revealed by the former bank employee, the Union of India never made a serious attempt to secure such information and proceed to investigate such individuals. It is the contention of the Petitioners that such names include the identities of prominent and powerful Indians, or the identities of individuals, who may or may not be Indian citizens, but who could lead to information about various powerful Indians holding unaccounted monies in bank accounts abroad. It is also the contention of the Petitioners that, even though they had sought the information under the Right to Information Act (2005), the Respondents had not revealed the names nor divulged the relevant documents. The Petitioners argue that such a reluctance is only on account of the Union of India not having initiated suitable steps to recover such monies, and punish the named individuals, and also because revelation of names of individuals on the list would lead to discovery of powerful persons engaged in various unlawful activities, both in generation of unlawful and unaccounted monies, and their stashing away in banks abroad.
53. It was also alleged by the Petitioners that in fact Germany had offered such information, freely and generally to any country that requests the same, and did not specify that the names and other information pertaining to such names ought to be requested only pursuant to any double taxation agreements it has with other countries. The Petitioners also alleged that Union of India has chosen to proceed under the assumption that it could have requested such information only pursuant to the double taxation agreement it has with Germany. The Petitioners contend that the Government of India took such a step primarily to conceal the information from public gaze.
54. The response of the Union of India may be summed up briefly: (i) that they secured the names of individuals with bank accounts in banks in Liechtenstein, and other details with respect to such bank accounts, pursuant to an agreement of India with Germany for avoidance of double taxation and prevention of fiscal evasion; (ii) that the said agreement proscribes the Union of India from disclosing such names, and other documents and information with respect to such bank accounts, to the Petitioners, even in the context of these ongoing proceedings before this court; (iii) that the disclosure of such names, and other documents and information, secured from Germany, would jeopardize the relations of India with a foreign state; (iv) that the disclosure of such names, and other documents and information, would violate the right to privacy of those individuals who may have only deposited monies in a lawful manner; (v) that disclosure of names, and other documents and information can be made with respect to those individuals with regard to whom investigations are completed, and proceedings initiated; and (vi) that contrary to assertions by the Petitioners, it was Germany which had asked the Union of India to seek the information under double taxation agreement, and that this was in response to an earlier request by Union of India for the said information.
55. For the purposes of the instant order, the issue of whether the Union of India could have sought and secured the names, and other documents and information, without having to take recourse to the double taxation agreement is not relevant. For the purposes of determining whether Union of India is obligated to disclose the information that it obtained, from Germany, with respect to accounts of Indian citizens in a bank in the Principality of Liechtenstein, we need only examine the claims of the Union of India as to whether it is proscribed by the double taxation agreement with Germany from disclosing such information. Further, and most importantly, we would also have to examine whether in the context of Article 32 proceedings before this court, wherein this court has exercised jurisdiction, the Union of India can claim exemption from providing such information to the Petitioners, and also with respect to issues of right to privacy of individuals who hold such accounts, and with respect of whom no investigations have yet been commenced, or only partially conducted, so that the State has not yet issued a show cause and initiated proceedings.
56. We have perused the said agreement with Germany. We are convinced that the said agreement, by itself, does not proscribe the disclosure of the relevant documents and details of the same, including the names of various bank account holders in Liechtenstein. In the first instance, we note that the names of the individuals are with respect to bank accounts in the Liechtenstein, which though populated by largely German speaking people, is an independent and sovereign nation-state. The agreement between Germany and India is with regard to various issues that crop up with respect to German and Indian citizens' liability to pay taxes to Germany and/or India. It does not even remotely touch upon information regarding Indian citizens' bank accounts in Liechtenstein that Germany secures and shares that have no bearing upon the matters that are covered by the double taxation agreement between the two countries. In fact, the "information" that is referred to in Article 26 is that which is "necessary for carrying out the purposes of this agreement", i.e. the Indo-German DTAA. Therefore, the information sought does not fall within the ambit of this provision. It is disingenuous for the Union of India, under these circumstances, to repeatedly claim that it is unable to reveal the documents and names as sought by the Petitioners on the ground that the same is proscribed by the said agreement. It does not matter that Germany itself may have asked India to treat the information shared as being subject to the confidentiality and secrecy clause of the double taxation agreement. It is for the Union of India, and the courts, in appropriate proceedings, to determine whether such information concerns matters that are covered by the double taxation agreement or not. In any event, we also proceed to examine the provisions of the double taxation agreement below, to also examine whether they proscribe the disclosure of such names, and other documents and information, even in the context of these instant proceedings.
57. Relevant portions of Article 26 of the double taxation agreement with Germany, a copy of which was submitted by Union of India, reads as follows:
"1. The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the purposes of this Agreement. Any information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) involved in the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes covered by this Agreement. They may disclose the information in public court proceedings or in judicial proceedings.
2. In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State the obligation:
(a) to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State;
(b) to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State;
(c) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy (order public)"
58. The above clause in the relevant agreement with Germany would indicate that, contrary to the assertions of Union of India, there is no absolute bar of secrecy. Instead the agreement specifically provides that the information may be disclosed in public court proceedings, which the instant proceedings are. The proceedings in this matter before this court, relate both to the issue of tax collection with respect to unaccounted monies deposited into foreign bank accounts, as well as with issues relating to the manner in which such monies were generated, which may include activities that are criminal in nature also. Comity of nations cannot be predicated upon clauses of secrecy that could hinder constitutional proceedings such as these, or criminal proceedings.
59. The claim of Union of India is that the phrase "public court proceedings", in the last sentence in Article 26(1) of the double taxation agreement only relates to proceedings relating to tax matters. The Union of India claims that such an understanding comports with how it is understood internationally. In this regard Union of India cites a few treatises. However, the Union of India did not provide any evidence that Germany specifically requested it to not reveal the details with respect to accounts in the Liechtenstein even in the context of proceedings before this court.
60. Article 31, "General Rule of Interpretation", of the Vienna Convention of the Law of Treaties, 1969 provides that a "treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose." While India is not a party to the Vienna Convention, it contains many principles of customary international law, and the principle of interpretation, of Article 31 of the Vienna Convention, provides a broad guideline as to what could be an appropriate manner of interpreting a treaty in the Indian context also.
61. This Court in Union of India v. Azadi Bachao Andolan, (2004)10 SCC 1 approvingly noted Frank Bennion's observations that a treaty is really an indirect enactment, instead of a substantive legislation, and that drafting of treaties is notoriously sloppy, whereby inconveniences obtain. In this regard this Court further noted the dictum of Lord Widgery, C.J. that the words "are to be given their general meaning, general to lawyer and layman alike.... The meaning of the diplomat rather than the lawyer." The broad principle of interpretation, with respect to treaties, and provisions therein, would be that ordinary meanings of words be given effect to, unless the context requires or otherwise. However, the fact that such treaties are drafted by diplomats, and not lawyers, leading to sloppiness in drafting also implies that care has to be taken to not render any word, phrase, or sentence redundant, especially where rendering of such word, phrase or sentence redundant would lead to a manifestly absurd situation, particularly from a constitutional perspective. The government cannot bind India in a manner that derogates from Constitutional provisions, values and imperatives.
62. The last sentence of Article 26(1) of the double taxation agreement with Germany, "[T]hey may disclose this information in public court proceedings or in judicial decisions," is revelatory in this regard. It stands out as an additional aspect or provision, and an exception, to the preceding portion of the said article. It is located after the specification that information shared between contracting parties may be revealed only to "persons or authorities (including courts and administrative bodies) involved in the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to taxes covered by this Agreement." Consequently, it has to be understood that the phrase "public court proceedings" specified in the last sentence in Article 26(1) of the double taxation agreement with Germany refers to court proceedings other than those in connection with tax assessment, enforcement, prosecution etc., with respect to tax matters. If it were otherwise, as argued by Union of India, then there would have been no need to have that last sentence in Article 26(1) of the double taxation agreement at all. The last sentence would become redundant if the interpretation pressed by Union of India is accepted. Thus, notwithstanding the alleged convention of interpreting the last sentence only as referring to proceedings in tax matters, the rubric of common law jurisprudence, and fealty to its principles, leads us inexorably to the conclusion that the language in this specific treaty, and under these circumstances cannot be interpreted in the manner sought by Union of India.
63. While we agree that the language could have been tighter, and may be deemed to be sloppy, to use Frank Bennion's characterization, negotiation of such treaties are conducted and secured at very high levels of government, with awareness of general principles of interpretation used in various jurisdictions. It is fairly well known, at least in Common Law jurisdictions, that legal instruments and statutes are interpreted in a manner whereby redundancy of expressions and phrases is sought to be avoided. Germany would have been well aware of it.
64. The redundancy that would have to be ascribed to the said last sentence of Article 26(1) of the double taxation agreement with Germany, if the position of Union of India were to be accepted, also leads to a manifest absurdity, in the context of the Indian Constitution. Such a redundancy would mean that constitutional imperatives themselves are to be set aside. Modern constitutionalism, to which Germany is a major contributor too, especially in terms of the basic structure doctrine, specifies that powers vested in any organ of the State have to be exercised within the four corners of the Constitution, and further that organs created by a constitution cannot change the identity of the constitution itself.
65. The basic structure of the Constitution cannot be amended even by the amending power of the legislature. Our Constitution guarantees the right, pursuant to Clause (1) of Article 32, to petition this Court on the ground that the rights guaranteed under Part III of the Constitution have been violated. This provision is a part of the basic structure of the Constitution. Clause (2) of Article 32 empowers this Court to issue "directions or orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, whichever may be appropriate for the enforcement of any of the rights conferred by" Part III. This is also a part of the basic structure of the Constitution.
66. In order that the right guaranteed by Clause (1) of Article 32 be meaningful, and particularly because such petitions seek the protection of fundamental rights, it is imperative that in such proceedings the petitioners are not denied the information necessary for them to properly articulate the case and be heard, especially where such information is in the possession of the State. To deny access to such information, without citing any constitutional principle or enumerated grounds of constitutional prohibition, would be to thwart the right granted by Clause (1) of Article 32.
67. Further, in as much as, by history and tradition of common law, judicial proceedings are substantively, though not necessarily fully, adversarial, both parties bear the responsibility of placing all the relevant information, analyses, and facts before this court as completely as possible. In most situations, it is the State which may have more comprehensive information that is relevant to the matters at hand in such proceedings. However, some agents of the State may perceive that because these proceedings are adversarial in nature, the duty and burden to furnish all the necessary information rests upon the Petitioners, and hence the State has no obligation to fully furnish such information. Some agents of the State may also seek to cast the events and facts in a light that is favourable to the government in the immediate context of the proceedings, even though such actions do not lead to rendering of complete justice in the task of protection of fundamental rights. To that extent, both the petitioners and this Court would be handicapped in proceedings under Clause (1) of Article 32.
68. It is necessary for us to note that the burden of asserting, and proving, by relevant evidence a claim in judicial proceedings would ordinarily be placed upon the proponent of such a claim; however, the burden of protection of fundamental rights is primarily the duty of the State. Consequently, unless constitutional grounds exist, the State may not act in a manner that hinders this Court from rendering complete justice in such proceedings. Withholding of information from the petitioners, or seeking to cast the relevant events and facts in a light favourable to the State in the context of the proceedings, even though ultimately detrimental to the essential task of protecting fundamental rights, would be destructive to the guarantee in Clause (1) of Article 32, and substantially eviscerate the capacity of this Court in exercising its powers contained in clause (2) of Article 32, and those traceable to other provisions of the Constitution and broader jurisprudence of constitutionalism, in upholding fundamental rights enshrined in Part III. In the task of upholding of fundamental rights, the State cannot be an adversary. The State has the duty, generally, to reveal all the facts and information in its possession to the Court, and also provide the same to the petitioners. This is so, because the petitioners would also then be enabled to bring to light facts and the law that may be relevant for the Court in rendering its decision. In proceedings such as those under Article 32, both the petitioner and the State, have to necessarily be the eyes and ears of the Court. Blinding the petitioner would substantially detract from the integrity of the process of judicial decision making in Article 32 proceedings, especially where the issue is of upholding of fundamental rights.
69. Furthermore, we hold that there is a special relationship between Clause (1) of Article 32 and Sub-Clause (a) of Clause (1) of Article 19, which guarantees citizens the freedom of speech and expression. The very genesis, and the normative desirability of such a freedom, lies in historical experiences of the entire humanity: unless accountable, the State would turn tyrannical. A proceeding under Clause (1) of Article 32, and invocation of the powers granted by Clause (2) of Article 32, is a primordial constitutional feature of ensuring such accountability. The very promise, and existence, of a constitutional democracy rests substantially on such proceedings.
70. Withholding of information from the petitioners by the State, thereby constraining their freedom of speech and expression before this Court, may be premised only on the exceptions carved out, in Clause (2) of Article 19, "in the interests of sovereignty and integrity of India, security of the State, friendly relations with foreign States, public order, decency or morality, or in relation to contempt of court, defamation or incitement to an offence" or by law that demarcate exceptions, provided that such a law comports with the enumerated grounds in Clause (2) of Article 19, or that may be provided for elsewhere in the Constitution.
71. It is now a well recognized proposition that we are increasingly being entwined in a global network of events and social action. Considerable care has to be exercised in this process, particularly where governments which come into being on account of a constitutive document, enter into treaties. The actions of governments can only be lawful when exercised within the four corners of constitutional permissibility. No treaty can be entered into, or interpreted, such that constitutional fealty is derogated from. The redundancy, that the Union of India presses, with respect to the last sentence of Article 26(1) of the double taxation agreement with Germany, necessarily transgresses upon the boundaries erected by our Constitution. It cannot be permitted.
72. We have perused the documents in question, and heard the arguments of Union of India with respect to the double taxation agreement with Germany as an obstacle to disclosure. We do not find merit in its arguments flowing from the provisions of double taxation agreement with Germany. However, one major constitutional issue, and concern remains. This is with regard to whether the names of individuals, and details of their bank accounts, with respect to whom there has been no completed investigations that reveal wrong doing and proceedings initiated, and there is no other credible information and evidence currently available with the Petitioners that there has been any wrong doing, may be disclosed to the Petitioners.
73. Right to privacy is an integral part of right to life. This is a cherished constitutional value, and it is important that human beings be allowed domains of freedom that are free of public scrutiny unless they act in an unlawful manner. We understand and appreciate the fact that the situation with respect to unaccounted monies is extremely grave. Nevertheless, as constitutional adjudicators we always have to be mindful of preserving the sanctity of constitutional values, and hasty steps that derogate from fundamental rights, whether urged by governments or private citizens, howsoever well meaning they may be, have to be necessarily very carefully scrutinised. The solution for the problem of abrogation of one zone of constitutional values cannot be the creation of another zone of abrogation of constitutional values. The rights of citizens, to effectively seek the protection of fundamental rights, under Clause (1) of Article 32 have to be balanced against the rights of citizens and persons under Article 21. The latter cannot be sacrificed on the anvil of fervid desire to find instantaneous solutions to systemic problems such as unaccounted monies, for it would lead to dangerous circumstances, in which vigilante investigations, inquisitions and rabble rousing, by masses of other citizens could become the order of the day. The right of citizens to petition this Court for upholding of fundamental rights is granted in order that citizens, inter alia, are ever vigilant about the functioning of the State in order to protect the constitutional project. That right cannot be extended to being inquisitors of fellow citizens. An inquisitorial order, where citizens' fundamental right to privacy is breached by fellow citizens is destructive of social order. The notion of fundamental rights, such as a right to privacy as part of right to life, is not merely that the State is enjoined from derogating from them. It also includes the responsibility of the State to uphold them against the actions of others in the society, even in the context of exercise of fundamental rights by those others.
74. An argument can be made that this Court can make exceptions under the peculiar circumstances of this case, wherein the State has acknowledged that it has not acted with the requisite speed and vigour in the case of large volumes of suspected unaccounted monies of certain individuals. There is an inherent danger in making exceptions to fundamental principles and rights on the fly. Those exceptions, bit by bit, would then eviscerate the content of the main right itself. Undesirable lapses in upholding of fundamental rights by the legislature, or the executive, can be rectified by assertion of constitutional principles by this Court. However, a decision by this Court that an exception could be carved out remains permanently as a part of judicial canon, and becomes a part of the constitutional interpretation itself. It can be used in the future in a manner and form that may far exceed what this Court intended or what the Constitutional text and values can bear. We are not proposing that Constitutions cannot be interpreted in a manner that allows the nation-state to tackle the problems it faces. The principle is that exceptions cannot be carved out willy-nilly, and without forethought as to the damage they may cause.
75. One of the chief dangers of making exceptions to principles that have become a part of constitutional law, through aeons of human experience, is that the logic, and ease of seeing exceptions, would become entrenched as a part of the constitutional order. Such logic would then lead to seeking exceptions, from protective walls of all fundamental rights, on grounds of expediency and claims that there are no solutions to problems that the society is confronting without the evisceration of fundamental rights. That same logic could then be used by the State in demanding exceptions to a slew of other fundamental rights, leading to violation of human rights of citizens on a massive scale.
76. It is indeed true that the information shared by Germany, with regard to certain bank accounts in Liechtenstein, also contains names of individuals who appear to be Indians. The Petitioners have also claimed that names of all the individuals have been made public by certain segments of the media. However, while some of the accounts, and the individuals holding those accounts, are claimed to have been investigated, others have not been. No conclusion can be drawn as to whether those who have not been investigated, or only partially investigated and proceedings not initiated have committed any wrong doing. There is no presumption that every account holder in banks of Liechtenstein has acted unlawfully. In these circumstances, it would be inappropriate for this Court to order the disclosure of such names, even in the context of proceedings under Clause (1) of Article 32.
77. The revelation of details of bank accounts of individuals, without establishment of prima facie grounds to accuse them of wrong doing, would be a violation of their rights to privacy. Details of bank accounts can be used by those who want to harass, or otherwise cause damage, to individuals. We cannot remain blind to such possibilities, and indeed experience reveals that public dissemination of banking details, or availability to unauthorized persons, has led to abuse. The mere fact that a citizen has a bank account in a bank located in a particular jurisdiction cannot be a ground for revelation of details of his or her account that the State has acquired. Innocent citizens, including those actively working towards the betterment of the society and the nation, could fall prey to the machinations of those who might wish to damage the prospects of smooth functioning of society. Whether the State itself can access details of citizens bank accounts is a separate matter. However, the State cannot compel citizens to reveal, or itself reveal details of their bank accounts to the public at large, either to receive benefits from the State or to facilitate investigations, and prosecutions of such individuals, unless the State itself has, through properly conducted investigations, within the four corners of constitutional permissibility, been able to establish prima facie grounds to accuse the individuals of wrong doing. It is only after the State has been able to arrive at a prima facie conclusion of wrong doing, based on material evidence, would the rights of others in the nation to be informed, enter the picture. In the event citizens, other persons and entities have credible information that a wrong doing could be associated with a bank account, it is needless to state that they have the right, and in fact the moral duty, to inform the State, and consequently the State would have the obligation to investigate the same, within the boundaries of constitutional permissibility. If the State fails to do so, the appropriate courts can always intervene.
78. The major problem, in the matters before us, has been the inaction of the State. This is so, both with regard to the specific instances of Hassan Ali Khan and the Tapurias, and also with respect to the issues regarding parallel economy, generation of black money etc. The failure is not of the Constitutional values or of the powers available to the State; the failure has been of human agency. The response cannot be the promotion of vigilantism, and thereby violate other constitutional values. The response has to necessarily be a more emphatic assertion of those values, both in terms of protection of an individual's right to privacy and also the protection of individual's right to petition this Court, under Clause (1) of Article 32, to protect fundamental rights from evisceration of content because of failures of the State. The balancing leads only to one conclusion: strengthening of the machinery of investigations, and vigil by broader citizenry in ensuring that the agents of State do not weaken such machinery.
79. In light of the above we order that :
(i) The Union of India shall forthwith disclose to the Petitioners all those documents and information which they have secured from Germany, in connection with the matters discussed above, subject to the conditions specified in (ii) below;
(ii) That the Union of India is exempted from revealing the names of those individuals who have accounts in banks of Liechtenstein, and revealed to it by Germany, with respect of who investigations/enquiries are still in progress and no information or evidence of wrongdoing is yet available;
(iii) That the names of those individuals with bank accounts in Liechtenstein, as revealed by Germany, with respect of whom investigations have been concluded, either partially or wholly, and show cause notices issued and proceedings initiated may be disclosed; and
(iv) That the Special Investigation Team, constituted pursuant to the orders of today by this Court, shall take over the matter of investigation of the individuals whose names have been disclosed by Germany as having accounts in banks in Liechtenstein, and expeditiously conduct the same. The Special Investigation Team shall review the concluded matters also in this regard to assess whether investigations have been thoroughly and properly conducted or not, and on coming to the conclusion that there is a need for further investigation shall proceed further in the matter. After conclusion of such investigations by the Special Investigation Team, the Respondents may disclose the names with regard to whom show cause notices have been issued and proceedings initiated.
80. Compliance reports shall be filed by Respondents, with respect of all the orders issued by this Court today. List for further directions in the week following the Independence Day, August 15, of 2011.
Ordered accordingly.
REPORTED IN
2011(3) R.C.R.(Criminal) 480 : 2011(4) Recent Apex Judgments (R.A.J.) 1:2011(3) R.C.R.(Civil) 643 


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Wednesday, 07 September 2011 16:50

THE PUNJAB COURTS ACT, 1918

THE PUNJAB COURTS ACT, 1918

Q.1.    The Punjab Courts Act, 1918 received the assent of the Lieutenant-Governor of the Punjab on:
(a)31st April, 1918
(b)30th May, 1918
(c)20th May, 1918
(d)25th Dec, 1918   
Ans. b
Q.2.    The Punjab Courts Act, 1918 received the assent of the Governor-General on:
(a)30th May, 1918
(b)12th May, 1918
(c)12th June, 1918
(d)30th June, 1918
Ans. c
Q.3.    The Punjab Courts Act, 1918 was first published in the official gazette in the month of:
(a)July, 1918
(b)August, 1918
(c)March, 1919
(d)January, 1919
Ans. a
Q.4.    The Punjab Courts Act, 1918 the Punjab was substituted by Haryana for the applicability in the State of Haryana by:
(a)Haryana Act, 16 of 1990
(b)Haryana Act, 16 of 1966
(c)Haryana Act, 16 of 1995
(d)Haryana Act, 16 of 1996
Ans. c

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Friday, 02 September 2011 14:00

Nirbhai Singh v. State of Punjab (P&H)(D.B.)

PUNJAB AND HARYANA HIGH COURT
(D.B.)

Before :- Adarsh Kumar Goel, ACJ. and Ajay Kumar Mittal, J.

C.W.P. No. 7392 of 2011 . D/d. 12.5. 2011 .


12.5. 2011 .

Nirbhai Singh - Petitioner

Versus

State of Punjab and others - Respondents

For the Petitioner :- Mr. M.K. Singla, Advocate.

For the Petitioners in connected cases. :- M/s. P.S. Khurana, V.K. Sandhir, S.S. Sidhu, Sukhjinder Singh, P.S. Sekhon, C.L. Premi, Naiya Gill, Onkar Rai, O.S. Batalwi, Jagmeet Singh, Sandeep Arora, Nandal Jindal, L.S. Sidhu, Vikram Singh, P.S. Mirpur, Umesh Kumar, B.S. Makar and Manjeet Singh, Advocates.

For the Respondent :- Mr. Rupinder Khosla, Addl. A.G. Punjab and Mr. Rajesh Bhardwaj, Addl. A.G. Punjab.

For the for the caveator in CWP No. 8249/ 2011 :- Mr. R.K. Garg, Advocate.

For the for Respondent No. 5 in CWP 8351/11 :- Mr. Balbir Singh, Advocate.

Cases Referred :

1. Arun Kumar Bose v. Mohd. Furkan Ansari, (1984)1 SCC 91.

2. Bar Council of Delhi v. The Bar Council of India, AIR 1975 Delhi 200.

3. Bhanumati v. State of Uttar Pradesh, (2010) 12 SCC 1.

4. Bindhya Charan Sinha v. State of WB, AIR 2004 Cal 27.

5. Chairman, Rly. Board v. C.R. Rangadhamaiah, 1997(3) S.C.T. 722 : (1997)6 SCC 623.

6. Dr. Bool Chand v. Chancellor, Kurukshetra University, AIR 1968 SC 292.

7. E.P. Royappa v. State of Tamil Nadu, AIR 1974 SC 555.

8. Harbilas Rai Bansal v. State of Punjab, 1995(2) R.C.R.(Rent) 672 : 1996(1) R.R.R. 69 : AIR 1996 SC 857(1).

9. Jagan Nath v. Jaswant Singh, AIR 1954 SC 210.

10. Jyoti Basu v. Debi Ghosal, 1985 R.R.R. 19 : (1982)1 SCC 691.

11. M/s. Shiv Shankar Industries v. State of Haryana, 2011 (3) RCR (Civil) 1 : CWP No. 5957 of 2010, D/d. 22.3. 2011 .

12. Maneka Gandhi v. Union of India, AIR 1978 SC 597

13. Mohan Chandra v. The ICA of India, AIR 1972 Delhi 9.

14. Mohan Lal Tripathi v. District Magistrate, Rai Bareilly, (1992)4 SCC 80.

15. N.P. Ponnuswami v. Returning Officer, Namakkal Constituency, AIR 1952 SC 64.

16. Rai Ramkrishna v. State of Bihar, AIR 1963 SC 1667

17. Ram Beti v. District Panchayat Raj Adhikar, 1998(1) R.C.R.(Civil) 309 : (1998)1 SCC 680.

18. State of Gujarat v. Mirzapur Moti Kureshi Kassab Jamat, (2005)8 SCC 534.

19. State of Gujarat v. Raman Lal Keshav Lal Soni, (1983)2 SCC 33.

20. Vijay v. State of Maharashtra, (2006)6 SCC 289.


JUDGMENT
Adarsh Kumar Goel, ACJ. - This petition seeks quashing of the Punjab Panchayati Raj (Amendment) Act, 2011 whereby Section 19 of the Punjab Panchayati Raj Act, 1994 (for short, "the Act") has been deleted which was notified on 21.4. 2011 with retrospective effect from 1.7.2010.

2. Case set out in the petition is that the Gram Panchayat Narike, Block Malerkotla, District Sangrur was one of the Panchayats constituted to which elections were held in the year 2008. Panches were elected directly and they elected a Sarpanch. On an application for holding a meeting to consider No Confidence Motion proposed against the Sarpanch, under section 19 of the Act as applicable, a meeting was convened for the purpose on 14.10.2010 and after consideration, No Confidence Motion was passed by six out of the nine members of the Panchayat. The Sarpanch, thus, stood removed from his office and alternative mechanism was put in place as per statutory provisions. On 14.12.2010, Ordinance No.9 of 2010 was issued by the Governor of Punjab deleting Section 19 of the Act, which was prospective. The Ordinance has now been replaced by the impugned Act notified on 21.4. 2011 which is retrospective from 1.7.2010. The Act is a short one and is reproduced below:-


"1. (1). This Act may be called the Punjab Panchayati Raj (Amendment) Act, 2011 .

(2) It shall come into force with effect from 1st July, 2010.
Omission of section 19 of Punjab Act 9 of 1994


2. In the Punjab Panchayati Raj Act, 1994, section 19 shall be omitted.

3. The Punjab Panchayati Raj (Amendment Ordinance, 2010 Punjab Ordinance No.9 of 2010) is hereby repealed."
3. Statement of objects and reasons for the impugned Act is as under :-


"1. The Sarpanches of a Gram Panchayat are elected by the Panches of the Panchayat and Section 19 of Punjab Panchayati Raj Act, 1994 empowers the Panches to remove them from the office of Sarpanches by passing a resolution of No Confidence against them after a period of two years.

2. The elections of Gram Panchayats were held in the year 2008 and since the statutory period of two years has been passed, a large number of applications from the Panches against their Sarpanches were received by the competent authority and by this the focus of the elected representatives of the people was shifted from development to the removal of their Sarpanches.

3. That due to the village factionalism, the Panches want to remove their Sarpanch to whom they have elected two years earlier.

4. That for the smooth functioning of a Gram Panchayat, the term of the Sarpanch should matched with the term of the Gram Panchayat whereas such present legal provision is encouraging the groupism in the village which is not good for the development of the villages.

5. Accordingly, the deletion of section 19 of Punjab Panchayati Raj Act, 1994 of the present Bill is being issued."
4. In support of challenge to the Amendment Act, it is submitted that having regard to the constitutional objective of local self Government at the panchayat level, it is necessary that Sarpanch should have confidence of majority electing him and should be removable by a No Confidence Motion. Scheme of No Confidence Motion is necessary not only for smooth functioning of Panchayat but is also consistent with the constitutional value of democracy. Under the Act, Chapter II deals with the panchayats, Chapter VI deals with Panchayat Samitis for the blocks and Chapter VII deals with Zila Parishads for the districts. Prior to the impugned amendment, Section 19 provided for No Confidence Motion against Sarpanch and there are corresponding provisions for No Confidence Motion against Chairman/Vice Chairman of Panchayat Samiti and Chairman/Vice Chairman of Zila Parishad while provision for No Confidence Motion for Panchayat Samitis and Zila Parishads, has been returned, provision for No Confidence Motion against Sarpanch has been deleted which is discriminatory and arbitrary. Provision for No Confidence Motion has to be implied as Sarpanch is elected by the majority of Panches under Section 13A and an authority competent to appoint has authority to remove as per General Clauses Act incorporating the principle of common law. Deletion of section 19 is against the object of grass root democracy of giving authority to people's elected representatives to appoint or remove a Sarpanch. Alternatively, it is submitted that deletion of section 19 and thereby taking away power of passing a No confidence Motion retrospectively from 1.7.2010 is arbitrary as it affects removal already lawfully effected prior to the Act i.e. on 14.10.2010 and taking over of the functions of the Sarpanch as per Section 87(1). Thus, retrospectivity affects vested rights arbitrarily. It has been stated by learned counsel for the parties that about 120 Sarpanches had been removed in similar manner by No Confidence Motion after 1.7.2010 and also before coming into force of the impugned Act and also before the issuance of Ordinance dated 14.10.2010. Some other No Confidence Motions were also pending. In some cases, fresh Sarpanches had been duly elected and notified.

5. Notice was issued and served on the respondents but no reply has been filed. It was stated that reply was not necessary as facts were not in dispute and only legal question was involved.

6. We have heard learned counsel for the parties.

7. On behalf of the State, the impugned Act has been justified on the ground that right to remove an elected representative has to be found in a statute and could not be exercised in absence thereof. The legislature was competent to legislate prospectively as well as retrospectively. Deletion of provision for No Confidence Motion was within the legislative competence. If legislature could make a provision for No Confidence Motion, it could delete the same. Requirement of a provision for No Confidence Motion was not a constitutional mandate but only creation of a statute. The deletion intends to achieve the object of smooth functioning of a panchayat and to avoid groupism in the village and to promote unhampered development. Even after deletion of provision for No Confidence Motion, a Sarpanch could be removed under sections 20 and 21. Section 20 provides for removal of Sarpanch by the Director for any misconduct specified therein while Section 21 provides for cessation from the office of Sarpanch on failure to deposit the amount as required under Section 216 for any loss caused to the Panchayat. Similarly, Section 5 provides for cessation of Sarpanch from the office for failure to hold two consecutive general meetings. Thus, deletion of provision for No Confidence Motion does not in any manner provide for arbitrary working of a Sarpanch. It being a matter of legislative policy, the choice of the legislature has to prevail.

8. The questions to be determined are as under :-


(I) Whether legislature is competent to delete a provision providing for No Confidence Motion?

(II) Whether deletion of the provision with retrospective effect could be held to be beyond the legislative competence or arbitrary?
Re: (I)

9. Main submission on behalf of the petitioner is that under the Scheme of the Constitution, panchayats are basic units of self governance and though initially, this mandate was manifested in Article 40 of the Constitution, by way of a Directive Principle, by 73rd Amendment in the year 1993, Part IX was added to the Constitution. Under Article 243B, constitution of a panchayat is mandatory. The amended provisions also provide for conferment of important powers and responsibilities on panchayats, for imposition of taxes for raising funds for the panchayats and for constitution of a Finance Commission to review the financial position. The Panchayat has to plan for economic development and social justice and implement schemes for such purposes as have been mentioned in Eleventh Schedule to the Constitution. No doubt, the manner of election of Sarpanch has been left to the State legislature, the Panches are to be directly elected under Article 243C. Under the State law, Sarpanch is elected by Panches. Reliance has been placed on following judgments :-

Ram Beti v. District Panchayat Raj Adhikar, 1998(1) R.C.R.(Civil) 309 : (1998) 1 SCC 680, para 6. To submit that provision for No Confidence Motion is consistent with the principles of democracy.

Bhanumati and others v. State of Uttar Pradesh, (2010) 12 SCC 1, paras 52 to 58, 66, 67. 

Bar Council of Delhi v. The Bar Council of India, AIR 1975 Delhi 200 Para 11  To submit that even in absence of a provision, an authority competent to appoint was competent to remove under the common law.

Bindhya Charan Sinha v. State of WB, AIR 2004 Cal 27, para 10  

Mohan Chandra v. The ICA of India, AIR 1972 Delhi 9, para 43  

Dr. Bool Chand v. Chancellor, Kurukshetra University, AIR 1968 SC 292, para 11 

E.P. Royappa v. State of Tamil Nadu, AIR 1974 SC 555  To submit that arbitrariness was a facet of Article 14 and a legislation could be questioned on the ground of arbitrariness and thus being violative of Article 14.

Maneka Gandhi v. Union of India, AIR 1978 SC 597,  

Harbilas Rai Bansal v. State of Punjab and another, 1995(2) R.C.R.(Rent) 672 : 1996(1) R.R.R. 69 : AIR 1996 SC 857(1)  To submit that even deletion of a provision so as to result in discrimination could be set aside to enforce Article 14.

Rai Ramkrishna and others v. State of Bihar, AIR 1963 SC 1667  To submit that even though legislature may have power to make a law retrospectively, the retrospectivity could be questioned as arbitrary.

State of Gujarat and another v. Raman Lal Keshav Lal Soni and others, (1983)2 SCC 33, 





10. On the other hand, submission on behalf of the State is that provision for No Confidence Motion is not a creature of the Constitution but of the statute and in such a situation, it is within the competence of the State Legislature under Entry 5 of List II to make a provision or to delete the provision on the subject. Learned counsel for the State mainly relied upon judgment of the Hon'ble Supreme Court in Mohan Lal Tripathi v. District Magistrate, Rai Bareilly and others, (1992)4 SCC 80 to submit that right of No Confidence Motion flows from a statute and the common law principle must remain stranger to the enacted election law. Reliance was also placed on judgment of the Hon'ble Supreme Court in Vijay v. State of Maharashtra and others, (2006)6 SCC 289 to submit that a legislation can be retrospective.

11. It will be appropriate to reproduce some of the observations on which emphasis has been laid during hearing.

In Mohan Lal Tripathi, it was observed :-


"2. Democracy is a concept, a political philosophy, an ideal practised by many nations culturally advanced and politically mature by resorting to governance by representatives of the people elected directly or indirectly. But electing representatives to govern is neither a `fundamental right' nor a `common law right' but a special right created by the statutes,(N.P. Ponnuswami v. Returning Officer, Namakkal Constituency, AIR 1952 SC 64; Jagan Nath v. Jaswant Singh AIR 1954 SC 210), or a `political right' or `privilege' and not a `natural', `absolute' or `vested right' (American Jurisprudence, 2d, Vol.63, p.771). `Concepts familiar to common law and equity must remain strangers to Election Law unless statutorily embodied.' (Jyoti Basu v. Debi Ghosal, 1985 R.R.R. 19 : (1982)1 SCC 691; Arun Kumar Bose v. Mohd. Furkan Ansari, (1984)1 SCC 91, Right to remove an elected representative, too, must stem out of the statute as `in the absence of a constitutional restriction it is within the power of a legislature to enact a law for the recall of officers' American Jurisprudence, 2d, Vol.63, p.238). Its existence or validity can be decided on the provision of the Act and not, as a matter of policy. In the American Political Dictionary (Jack C. Plano/Milton Greenberg), the right of recall is defined as, `a provision enabling voters to remove an elected official from office before his or her term expired'. American Jurisprudence explains it thus, `Recall is a procedure by which an elected officer may be removed at any time during his term or after a specified time by vote of the people at an election called for such purpose by a specified number of citizens' American Jurisprudence, 2d, Vol.63, p.770). It was urged that `recall gives dissatisfied electors the right to propose between elections that their representatives be removed and replaced by another more in accordance with popular will' (Modern Political Constitution, 8th Edn. By C.S. Strong) therefore the appellant could have been recalled by the same body, namely, the people who elected him. Urged Shri Sunil Gupta, learned counsel, that since, `A referendum involves a decision by the electorate without the intermediary of representatives and, therefore, exhibits form of direct democracy' (Dictionary of Political Thought by Roger Scrutton, 1982) the removal of the appellant by a vote of no-confidence by the Board which did not elect him was subversive of basic concept of democracy. Academically the submission appeared attractive but applied as a matter of law it appears to have little merit. None of the political theorists, on whom reliance was placed, have gone to suggest that an elected representative can be recalled, only, by the persons or body that elected him. Recall expresses the idea that a "public officer is indeed a `servant of the people' and can therefore be dismissed by them" (Dictionary of Political Science and Law by Rudolph Reimanson). In modern political set up direct popular check by recall of elected representative has been universally acknowledged in any civilised system. Efficacy of such a device can hardly admit of any doubt. But how it should be initiated, what should be the procedure, who should exercise it within ambit of constitutionally permissible limits falls in the domain of legislative power. `Under a constitutional provision authorizing municipalities of a certain population to frame a charter for their own government consistent with and subject to the Constitution and laws of the State, and a statutory provision that in certain municipalities the Mayor and members of the municipal council shall be elected at the time, in the manner, and for the term prescribed in the charter, a municipal corporation has authority to enact a recall provision' (American Jurisprudence, 2d, Vol.63, p.771). Therefore, the validity or otherwise of a no-confidence motion for removal of a President, would have to be examined on applicability of statutory provision and not on political philosophy. The Municipality Act provides in detail the provisions for election of President, his qualification, resignation, removal etc. Constitutional validity of these provisions was not challenged, and rightly, as they do not militate, either, against the concept of democracy or the method of electing or removing the representatives. The recall of an elected representative therefore, so long it is in accordance with law cannot be assailed on abstract notions of democracy.

xx xx xx xx xx

6. Another offshoot of the same submission was that when removal was by a smaller body the legislature in 1949 provided a safeguard that a Chairman elected by people removed by vote of no-confidence if re-elected could not be removed again by a vote of no-confidence. According to the learned counsel in absence of such safeguard the provision in Section 47-A, as it stands now, becomes arbitrary and in absence of clear language it should be held inapplicable to President elected by the electorate. The approach does not appear to be sound. Legislature's power to enact such provision is derived from Entry 5 of List II of VII Schedule which is couched in very wide terms. In absence of any challenge of legislative competence, the omission of the proviso to sub-section (5) of (sic of Section 47-A, as introduced by) Act 7 of 1949, by amendment since 1955 can neither be characterised as irrational nor arbitrary. Moreover whether a President should be elected by the people directly or by the Board was for the legislature to decide. These are matters of policy which cannot be examined by court. Legislature being the best judge of the needs of the people it is for the legislature to decide which system of electing representatives to the elective bodies and in what manner they should be removed would be best suitable for governance of the State. So long the policy is not vitiated by any mala fide or extraneous consideration the courts have neither jurisdiction nor are adequately furnished with material to adjudicate upon its validity or correctness."
In Bhanumati, it was observed:-


"48. The appellants have not challenged U.P. Act 20 of 1998 by which Section 15 of the 1961 Act was continued in amended version. Therefore, the continuance of no confidence provision has not been challenged what has been challenged is the reduction of the period from "two years" to "one year" and the requirement majority from "not less than two-thirds" to "more than half". It is thus clear that the statutory provision of no-confidence is not contrary to Part IX of the Constitution.
Ram Beti v. District Panchayat Raj Adhikar, 1998(1) R.C.R.(Civil) 309 : (1998) 1 SCC 680, para 6. To submit that provision for No Confidence Motion is consistent with the principles of democracy.

Bhanumati and others v. State of Uttar Pradesh, (2010) 12 SCC 1, paras 52 to 58, 66, 67. 

Bar Council of Delhi v. The Bar Council of India, AIR 1975 Delhi 200 Para 11  To submit that even in absence of a provision, an authority competent to appoint was competent to remove under the common law.

Bindhya Charan Sinha v. State of WB, AIR 2004 Cal 27, para 10  

Mohan Chandra v. The ICA of India, AIR 1972 Delhi 9, para 43  

Dr. Bool Chand v. Chancellor, Kurukshetra University, AIR 1968 SC 292, para 11 

E.P. Royappa v. State of Tamil Nadu, AIR 1974 SC 555  To submit that arbitrariness was a facet of Article 14 and a legislation could be questioned on the ground of arbitrariness and thus being violative of Article 14.

Maneka Gandhi v. Union of India, AIR 1978 SC 597,  

Harbilas Rai Bansal v. State of Punjab and another, 1995(2) R.C.R.(Rent) 672 : 1996(1) R.R.R. 69 : AIR 1996 SC 857(1)  To submit that even deletion of a provision so as to result in discrimination could be set aside to enforce Article 14.

Rai Ramkrishna and others v. State of Bihar, AIR 1963 SC 1667  To submit that even though legislature may have power to make a law retrospectively, the retrospectivity could be questioned as arbitrary.

State of Gujarat and another v. Raman Lal Keshav Lal Soni and others, (1983)2 SCC 33, 






xx xx xx xx xx

52. As noted above, the provision of no-confidence was a pre-Seventy-third Amendment statutory provision and that was continued even after the Seventy-third Amendment in keeping with mandate of Article 243-N. This continuance of the no-confidence provision, as noted above was not challenged by the appellants. This aspect has been noted by the High Court in the impugned judgment. The High Court noted :

"The original Act of 1961 provides a block period of 12 months for initiation of no confidence motion in reference to kshettra samiti/ panchayat, which was amended in the year 1965 by U.P. Act 16 of 1965 and the block period was enhanced to `two years' from `12 months'. Again in the year 1990 the block period was reduced as the words `two years' were substituted by words `one year' by U.P. Act 20 of 1990. In the year 1998 U.P. Act 20 of 1998 again amended Section 15 and the block period was again enhanced to `two years'. In the year 2007 again by U.P. Act 44 of 2007 the term `two years' was substituted by `one year' by virtue of which the block period of `two years' was reduced to `one year'."

xx xx xx xx xx

57. It has already been pointed out that the object and the reasons of Part IX are to lend status and dignity to Panchayati Raj institutions and to impart certainty, continuity and strength to them. The learned counsel for the appellant unfortunately, in his argument, missed the distinction between an individual and an institution. If a no-confidence motion is passed against the Chairperson of a panchayat, he/she ceases to be a Chairperson, but continues to be a member of the panchayat and the panchayat continues with a newly-elected Chairperson. Therefore, there is no institutional setback or impediment to the continuity or stability of the Panchayati Raj institutions.

58. These institutions must run on democratic principles. In democracy all persons heading public bodies can continue provided they enjoy the confidence of the persons who comprise such bodies. This is the essence of democratic republicanism. This explains why this provision of no-confidence motion was there in the Act of 1961 even prior to the Seventy-third Constitution Amendment and has been continued even thereafter. Similar provisions are there in different States in India.

xx xx xx xx xx

66. Democracy demands accountability and transparency in the activities of the Chairperson especially in view of the important functions entrusted with the Chairperson in the running of Panchayati Raj institutions. Such duties can be discharged by the Chairperson only if he/she enjoys the continuous confidence of the majority members in the panchayat. So any statutory provision to demonstrate that the Chairperson has lost the confidence of the majority is conducive to public interest and adds strength to such bodies of self-governance. Such a statutory provision cannot be called either unreasonable or ultra vires Part IX of the Constitution.

67. Any head of a democratic institution must be prepared to face the test of confidence. Neither the democratically elected Prime Minister of the country nor the Chief Minister of a State is immune from such a test of confidence under the Rules of Procedure framed under Articles 118 and 208 of the Constitution. Both the Prime Minister of India and Chief Ministers of several States heading the Council of Ministers at the Centre and in several States respectively have to adhere to the principles of collective responsibilities to their respective houses in accordance with Articles 75(3) and 164(2) of the Constitution.

xx xx xx xx xx

86. Reliance was also placed on the Constitution Bench judgment of this Court in State of Gujarat v. Mirzapur Moti Kureshi Kassab Jamat( 2005)8 SCC 534. Lahoti, C.J. speaking for the Bench laid down in SCC p. 562, para 39 of the Report that the legislature is in the best position to understand and appreciate the needs of the people as enjoined in the Constitution. The Court will interfere in legislative process only when the statute is clearly violative of the right conferred on a citizen under Part III or when the Act is beyond the legislative competence of the legislature. Of course the Court must always recognise the presumption in favour of the constitutionality of the statutes and the onus to prove its invalidity lies heavily on the party which assails it."
12. It is clear that under the scheme of the Constitution, panchayats are required to be constituted and its members are to be directly elected. The election of Chair person is left by the Constitution to the State legislature. A provision for No Confidence Motion has been held to be valid and within the legislative competence. There is, however, no provision in the Constitution compelling the State Legislature to incorporate a provision for No Confidence Motion. A legislation can be struck down by the Court only if the same is violative of any constitutional provision either on account of lack of legislative competence under Articles 245 or on account of violation of fundamental rights or otherwise. No doubt, the scope of Article 14 has been expanded to cover any arbitrary action - administrative or legislative, there is a presumption of validity of a legislation and also that the legislature correctly understands the needs of the people. If a choice of policy is available, the legislature may make such choice in absence of compulsion of incorporating a provision. Mere fact that a provision for No Confidence Motion may be valid, does not imply that absence of such a provision or deletion of an existent provision for No Confidence Motion would be beyond the legislative competence. Right of removing a Sarpanch by passing a No Confidence Motion cannot be recognized as fundamental right under Article 14 in view of Mohan Lal. Therein, it has been expressly held that right to remove an elected representative must stem out of a statute. Its existence or validity can be decided on the provisions of Act and not as a matter of policy. This being the position, to hold that No Confidence Motion provision cannot be deleted will be against the principles laid down in Mohan Lal. As regards observations in Bhanumati, the same are in the context of upholding a provision for No Confidence Motion. A judgment is an authority for the proposition it lays down and not what may logically appear to flow therefrom. Moreover, the said judgment cannot be held to have reversed the view taken in Mohan Lal holding that right of No Confidence Motion flows from a statute. Even if we find merit in the contention that No Confidence Motion is desirable, it may not be possible to give a direction for incorporation of such a provision or set aside deletion thereof by a legislation. Accordingly, we are unable to hold that the impugned Act to the extent it deletes the provision for No Confidence Motion, unconstitutional.

13. We may now come to the question of retrospectivity.

Re: (II)

14. It is well settled that a plenary legislature is competent to make law prospectively as well as retrospectively. At the same time, retrospective legislation though may not per se be beyond legislative competence, can be tested on the anvil of Article 14 and if having regard to a fact situation, it is found that retrospectivity is arbitrary, the same can be struck down. In a recent judgment in M/s. Shiv Shankar Industries v. The State of Haryana and others, 2011 (3) RCR (Civil) 1 : CWP No. 5957 of 2010, decided on 22.3. 2011 , this Court observed :-


"8. It is well settled that a legislature has power not only to legislate prospectively but also retrospectively. However, there are certain inherent limitations in making retrospective legislation. The limitations have been judicially recognized to give effect to fundamental right under Article 14. Retrospectivity is not permissible if it is unreasonable and arbitrary. It has been held that a legislature cannot legislate today with reference to a situation which obtained 20 years ago ignoring the march of events and constitutional rights accruing in the meanwhile. Whether or not retrospective amendment is arbitrary is to be seen in the light of facts and circumstances under which an amendment is made. (Ramanlal Keshav Lal Soni, AIR 1984 SC 161, Lohia Machines Limited, (1985) 2 SCC 197, C.R.Rangadhamaiah, 1997(3) S.C.T. 722 : (1997) 6 SCC 623 and Virender Singh Hooda) AIR 2005 SC 137...."
15. In Ramanlal Keshav Lal, it was observed :-


"52.... Today's equals cannot be made unequal by saying that they were unequal 20 years ago and we will restore that position by making a law today and making it retrospective. Constitutional rights, constitutional obligations and constitutional consequences cannot be tampered with that way. A law which if made today would be plainly invalid as offending constitutional provisions in the context of the existing situation cannot become valid by being made retrospective. Past virtue (constitutional) cannot be made to wipe out present vice (constitutional) by making retrospective laws. We are, therefore, firmly of the view that the Gujarat Panchayats (Third Amendment) Act, 1978 is unconstitutional, as it offends Articles 311 and 14 and is arbitrary and unreasonable...."
16. In Virender Singh Hooda, it was observed :-


"69...In considering the question as to whether the legislative power to amend a provision with retrospective operation has been reasonably exercised or not, it becomes relevant to enquire as to how the retrospective effect of the amendment operates.

70. In Chairman, Rly. Board v. C.R. Rangadhamaiah, (1997)6 SCC 623, the Constitution Bench while holding that the rule which operates in future so as to govern future rights of those already in service cannot be assailed on the ground of retroactivity as being violative of Articles 14 and 16 of the Constitution, observed that a rule which seeks to reverse from an anterior date a benefit which has been granted or availed of e.g. promotion or pay scale, can be assailed as being violative of Articles 14 and 16 of the Constitution to the extent it operates retrospectively. (emphasis supplied)
17. What is stated above is summing up of principles laid down in the judgments of the Hon'ble Supreme Court referred to therein and also in the judgments relied upon behalf of the petitioner.

18. Applying the above principles to the present case, we are of the view that Section 1(2) of the Act to bring into force the Amendment Act from 1.7.2010 is arbitrary. The effect of the amendment would be to nullify a lawfully passed No Confidence Motion and to remove a lawfully elected Sarpanch if in his place any other arrangement may have been put in place and operated for a period of more than six months. Only reason put forward to justify retrospectivity is the smooth functioning of the panchayats. The said reason cannot be held to be valid as a Sarpanch who had lost confidence of 2/3rd members and was removed and substituted by another arrangement in his place cannot be held entitled to be put back in the name of smooth functioning. Putting him back will infact obstruct the functioning. There is nothing to show on what basis it can be held that putting back Sarpanch who had lost confidence of motion of 2/3rd members will be a smooth functioning. Moreover, in Bhanumati, a similar contention was considered and rejected in para 52 of the judgment. Retrospectivity ignores the march of events which have gone by and arbitrarily affects rights which have been crystalised.

19. Accordingly, we partly allow this petition and declare Section 1 (2) of the impugned Act to be ultravires the Constitution. It is made clear that since the issue which has been dealt with may affect other similarly situated persons, this order will apply to all such cases.

Petition allowed.

REPORTED IN
2011(3) R.C.R.(Civil) 178

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