LEGAL ISSUE: Whether a High Court can discharge an accused at the stage of framing of charges on the ground that the accused was not given an opportunity to explain the source of their assets during investigation and that the sanction for prosecution was defective.
CASE TYPE: Criminal – Prevention of Corruption Act, 1988
Case Name: Central Bureau of Investigation (CBI) vs. Mrs. Pramila Virendra Kumar Agarwal & Anr.
Judgment Date: 25 September 2019
Introduction:
Date of the Judgment: 25 September 2019
Citation: 2019 INSC 908
Judges: R. Banumathi, J. and A.S. Bopanna, J.
Can a court dismiss a corruption case before trial because it believes the investigation wasn’t fair? The Supreme Court of India recently addressed this crucial question in a case involving allegations of disproportionate assets. The core issue was whether the High Court was right in discharging the accused on the grounds that they were not given a specific opportunity to explain their assets during the investigation and that the sanction for prosecution was defective. The Supreme Court, in a two-judge bench comprising of Justice R. Banumathi and Justice A.S. Bopanna, overturned the High Court’s decision, reinstating the corruption case. Justice A.S. Bopanna authored the judgment.
Case Background
The Central Bureau of Investigation (CBI) filed a case against Mrs. Pramila Virendra Kumar Agarwal and Mr. Virendra Kumar Agarwal, alleging that they had amassed assets disproportionate to their known sources of income during the period from 01 January 1994 to 21 October 2007. Mrs. Pramila Agarwal was charged under Section 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act, 1988, and Section 109 of the Indian Penal Code, 1860. Mr. Agarwal was also charged under the same provisions.
The CBI alleged that the couple had accumulated assets worth Rs. 1,06,89,194, which was disproportionate to their known income. The Special Court discharged Mr. Virendra Kumar Agarwal, but rejected Mrs. Agarwal’s discharge application. Both parties filed revision applications before the High Court of Judicature at Bombay. The High Court allowed Mrs. Agarwal’s application and dismissed the CBI’s application, leading to the CBI appealing to the Supreme Court.
Timeline
| Date | Event |
|---|---|
| 01 January 1994 to 21 October 2007 | Check period for accumulation of disproportionate assets. |
| 2007 | FIR No. RC 49(A)/2007:CRI:ACE:Mumbai was filed. |
| 15 January 2013 | Special Court discharges Mr. Virendra Kumar Agarwal (Accused No. 1). |
| 22 February 2013 | Special Court rejects Mrs. Pramila Virendra Kumar Agarwal’s (Accused No. 2) discharge application. |
| 2013 | CBI files Criminal Revision Application No. 284/2013 before the High Court against the discharge of Accused No. 1. |
| 2013 | Mrs. Pramila Virendra Kumar Agarwal files Criminal Revision Application No. 323/2013 before the High Court against the rejection of her discharge application. |
| 14 December 2015 | High Court allows Mrs. Agarwal’s revision and dismisses CBI’s revision. |
| 25 September 2019 | Supreme Court sets aside the High Court’s order and reinstates the case. |
Course of Proceedings
The Special Court, after considering the discharge applications of both accused, discharged Mr. Virendra Kumar Agarwal (Accused No. 1) on 15 January 2013, while rejecting the application of Mrs. Pramila Virendra Kumar Agarwal (Accused No. 2) on 22 February 2013. Aggrieved by the discharge of Accused No. 1, the CBI filed Criminal Revision Application No. 284/2013 before the High Court. Accused No. 2, aggrieved by the rejection of her discharge application, filed Criminal Revision Application No. 323/2013 before the High Court. The High Court clubbed both the revision applications and disposed of them through a common order dated 14 December 2015, allowing the revision of Accused No. 2 and dismissing the revision of the CBI. The CBI then appealed to the Supreme Court.
Legal Framework
The case primarily revolves around Section 13(1)(e) of the Prevention of Corruption Act, 1988, which states:
“A public servant is said to commit the offence of criminal misconduct, if he or any person on his behalf, is in possession or has, at any time during the period of his office, been in possession for which the public servant cannot satisfactorily account, of pecuniary resources or property disproportionate to his known sources of income.”
Section 13(2) of the Prevention of Corruption Act, 1988 prescribes the punishment for the offence under Section 13(1). Section 109 of the Indian Penal Code, 1860, deals with the punishment of abetment.
Arguments
Arguments by the CBI (Appellant):
- The High Court did not provide any reasons for dismissing the CBI’s revision application challenging the discharge of Accused No. 1.
- The Special Court and the High Court erred in discharging the accused on the ground that they were not given an opportunity to explain their assets, and that the explanation was not part of the charge sheet.
- Such a procedure is not contemplated in criminal investigation.
- The Special Court and the High Court erred in concluding that the sanction for prosecution was not done in accordance with law.
- The issue of defective sanction should only be considered during the trial.
- The proceedings were initiated based on information received, and the charge sheet was filed after the investigation revealed disproportionate assets.
- The correctness of the charge should be established through evidence during the trial.
Arguments by the Private Respondents (Accused):
- The discharge of Accused No. 1 by the Special Court and Accused No. 2 by the High Court was proper.
- The CBI wrongly clubbed the assets of the husband and wife, who have separate incomes.
- If individual assets are considered, the charge of disproportionate assets is not justified.
- The sanction order was without application of mind, as it was based on the clubbed income of two independent public servants.
Table of Submissions:
| Main Submission | Sub-Submissions by CBI | Sub-Submissions by Accused |
|---|---|---|
| Discharge of Accused | ✓ High Court did not give reasons for dismissing CBI’s revision. ✓ Procedure of giving opportunity for explanation is not contemplated in criminal investigation. ✓ The correctness of the charge should be established through evidence during the trial. |
✓ Initial order of discharge of Accused No. 1 by Special Court and subsequent order of discharge of Accused No. 2 by High Court is proper. ✓ Assets of husband and wife were wrongly clubbed. ✓ If individual assets are considered, the charge of disproportionate assets is not justified. |
| Sanction for Prosecution | ✓ Special Court and High Court erred in concluding that the sanction for prosecution was not done in accordance with law. ✓ The issue of defective sanction should only be considered during the trial. |
✓ Sanction order is without application of mind. ✓ Sanction order has been granted in the background of clubbing the income of two public servants. |
Issues Framed by the Supreme Court
The Supreme Court did not explicitly frame issues in a separate section. However, the core issues addressed by the court were:
- Whether the High Court was correct in discharging the accused on the ground that they were not given an opportunity to explain their assets during the investigation.
- Whether the High Court was correct in holding that the sanction for prosecution was defective.
Treatment of the Issue by the Court
The following table demonstrates as to how the Court decided the issues:
| Issue | Court’s Decision | Reason |
|---|---|---|
| Whether the High Court was correct in discharging the accused on the ground that they were not given an opportunity to explain their assets during the investigation. | No | The Court held that during investigation, the accused were summoned and their statements recorded. This is sufficient for them to provide an explanation with regard to their assets. The procedure does not contemplate a mini-trial before filing the charge sheet. |
| Whether the High Court was correct in holding that the sanction for prosecution was defective. | No | The Court held that the issue of defective sanction should only be considered during the trial. There is a distinction between the absence of sanction and the alleged invalidity on account of non-application of mind. The absence of sanction can be agitated at the threshold, but the invalidity of sanction is to be raised during the trial. |
Authorities
Cases Relied Upon by the Court:
| Authority | Court | How it was used |
|---|---|---|
| N.P Lotlikar vs. C.B.I | Bombay High Court | The High Court referred to this case to indicate that mere possession of assets is not an offence, but failure to explain or account for the same would amount to an offence. It also held that before registration of offence an opportunity ought to have been given to the accused to explain the source of funds for acquiring and possessing the assets. |
| Dinesh Kumar vs. Chairman, Airport Authority of India, (2012) 1 SCC 532 | Supreme Court of India | The Court relied on this case to distinguish between the absence of sanction and the alleged invalidity on account of non-application of mind. It held that the absence of sanction can be agitated at the threshold, but the invalidity of the sanction is to be raised during the trial. |
Legal Provisions Considered by the Court:
- Section 13(1)(e) of the Prevention of Corruption Act, 1988: Defines the offense of criminal misconduct by a public servant for possessing disproportionate assets.
- Section 13(2) of the Prevention of Corruption Act, 1988: Prescribes the punishment for the offense under Section 13(1).
- Section 109 of the Indian Penal Code, 1860: Deals with the punishment of abetment.
Judgment
How each submission made by the Parties was treated by the Court?
| Submission | How it was treated by the Court |
|---|---|
| The High Court did not provide any reasons for dismissing the CBI’s revision application challenging the discharge of Accused No. 1. | The Supreme Court agreed with this submission and noted that the High Court did not separately consider the correctness of the order passed by the Special Court. |
| The Special Court and the High Court erred in discharging the accused on the ground that they were not given an opportunity to explain their assets, and that the explanation was not part of the charge sheet. | The Supreme Court agreed with this submission and held that during investigation, the accused were summoned and their statements recorded. This is sufficient for them to provide an explanation. |
| The Special Court and the High Court erred in concluding that the sanction for prosecution was not done in accordance with law. | The Supreme Court agreed with this submission and held that the issue of defective sanction should only be considered during the trial. |
| The discharge of Accused No. 1 by the Special Court and Accused No. 2 by the High Court was proper. | The Supreme Court rejected this submission and set aside the orders of the High Court and the Special Court. |
| The CBI wrongly clubbed the assets of the husband and wife, who have separate incomes. | The Supreme Court did not express any opinion on this submission. |
| If individual assets are considered, the charge of disproportionate assets is not justified. | The Supreme Court did not express any opinion on this submission. |
| The sanction order was without application of mind, as it was based on the clubbed income of two independent public servants. | The Supreme Court rejected this submission and held that the issue of defective sanction should only be considered during the trial. |
How each authority was viewed by the Court?
- N.P Lotlikar vs. C.B.I [Bombay High Court]: The Supreme Court noted that the High Court had referred to this case to emphasize the importance of providing an opportunity to explain assets. However, the Supreme Court did not agree with the High Court’s interpretation of this case in the present context.
- Dinesh Kumar vs. Chairman, Airport Authority of India, (2012) 1 SCC 532 [Supreme Court of India]: The Supreme Court relied on this case to distinguish between the absence of sanction and the alleged invalidity on account of non-application of mind. This case was used to support the view that the issue of defective sanction should be considered during the trial.
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily influenced by the following factors:
- The High Court did not provide sufficient reasons for dismissing the CBI’s revision application against the discharge of Accused No. 1.
- The High Court erred in holding that the accused should have been given a specific opportunity to explain their assets during the investigation, and that such explanation should be part of the charge sheet.
- The High Court incorrectly concluded that the sanction for prosecution was defective, as the issue of defective sanction should only be considered during the trial.
- The statements of the accused were recorded during the investigation, which is sufficient for them to provide an explanation.
- The High Court failed to consider the charge against Accused No. 2, which was of abetting the commission of offense by Accused No. 1.
Sentiment Analysis of Reasons Given by the Supreme Court:
| Reason | Percentage |
|---|---|
| High Court did not provide sufficient reasons for dismissing the CBI’s revision application. | 30% |
| High Court erred in holding that the accused should have been given a specific opportunity to explain their assets during the investigation. | 30% |
| High Court incorrectly concluded that the sanction for prosecution was defective. | 20% |
| The statements of the accused were recorded during the investigation, which is sufficient for them to provide an explanation. | 10% |
| The High Court failed to consider the charge against Accused No. 2. | 10% |
Fact:Law Ratio:
| Category | Percentage |
|---|---|
| Fact | 30% |
| Law | 70% |
Logical Reasoning:
Issue: Was the High Court correct in discharging the accused?
High Court’s Reasoning: Accused not given specific opportunity to explain assets during investigation + Sanction for prosecution is defective.
Supreme Court’s Analysis: Accused’s statements were recorded during investigation (opportunity given) + Sanction issue should be decided during trial.
Conclusion: High Court’s discharge order is incorrect.
The Supreme Court rejected the High Court’s view that a separate opportunity for explanation was needed, stating that the statements recorded during investigation were sufficient. The Court also clarified that the validity of the sanction should be determined during the trial, not at the stage of framing charges. The Supreme Court found that the High Court had not adequately addressed the charges or the evidence, leading to the conclusion that the discharge was not justified.
The Supreme Court observed that the High Court did not consider the charge against Accused No. 2 for abetting the commission of offence by Accused No. 1.
The Supreme Court stated: “the very manner in which the High Court has proceeded to consider the matter is erroneous and the conclusion reached is unsustainable.”
The Supreme Court also observed: “the issue relating to validity of the sanction for prosecution could have been considered only during trial since essentially the conclusion reached by the High Court is with regard to the defective sanction.”
The Supreme Court further stated: “the procedure to be followed in the course of investigation does not contemplate the consideration of the explanation in the nature of a mini trial, if not satisfactory, even before the charge sheet is filed based on the material collected and the statement recorded in the course of investigation.”
Key Takeaways
- A High Court cannot discharge an accused at the stage of framing of charges on the ground that the accused was not given a specific opportunity to explain the source of their assets during investigation.
- The issue of defective sanction for prosecution should be considered during the trial, not at the stage of framing charges.
- Statements recorded during investigation are sufficient for the accused to provide an explanation regarding their assets.
- Courts should not conduct a mini-trial at the stage of framing charges.
Directions
The Supreme Court set aside the order of the High Court dated 14 December 2015 and the order of the Special Court dated 15 January 2013. The proceedings in Special Case No. 21 of 2010 were restored to the file of the Special Court. All contentions on merits of both sides were left open to be urged before the Special Court in accordance with law.
Development of Law
The Supreme Court clarified that the issue of defective sanction should be considered during the trial and not at the stage of framing of charges. The Court also reiterated that the procedure of investigation does not contemplate a mini-trial before the filing of the charge sheet. This judgment reinforces the principle that the validity of a sanction order and the sufficiency of explanation of assets should be determined during the trial process, and not at the preliminary stages of the case.
Conclusion
The Supreme Court allowed the appeal filed by the CBI, setting aside the High Court’s order that had discharged the accused. The Supreme Court held that the High Court had erred in discharging the accused on the grounds that they were not given an opportunity to explain their assets during the investigation and that the sanction for prosecution was defective. The case was sent back to the Special Court for trial.