Supreme Court Upholds Charges Under Prevention of Corruption Act in Goa Power Rebate Case: Mauvin Godinho vs. State of Goa (2018) INSC 21

Case Background

The case revolves around a series of notifications issued by the Government of Goa regarding rebates on power tariffs for industrial units. Initially, a notification dated September 30, 1991, granted a 25% rebate on power tariffs for industrial units using High Tension or Low Tension power supply for a period of five years. Later, on March 31, 1995, this notification was canceled without any stated reason. Subsequently, two more notifications were issued on May 15, 1996, and August 1, 1996, without the approval of the Cabinet. The notification dated May 15, 1996, introduced a new category of ‘Extra High Tension’ power supply, and the notification dated August 1, 1996, restored the 25% rebate, allegedly to benefit two specific companies. The key individuals involved include the then Minister of Power (Accused No. 1), the Chief Electrical Engineer (Accused No. 2), and officials of the two beneficiary companies (Accused Nos. 3, 4, 5, 6 and 7). A complaint was lodged alleging that these actions resulted in a loss of Rs. 4,52,77,856 to the Government of Goa.

Timeline

Course of Proceedings

The Special Judge, Panaji, framed charges against the accused under Sections 120-B, 409, 420, 465, 468, and 471 of the Indian Penal Code (IPC), and under Section 13(1)(d)(i) and 13(1)(d)(ii) read with Section 13(2) of the Prevention of Corruption Act, 1988. The accused appealed to the High Court of Bombay at Goa, which set aside the charges under the IPC, finding no evidence of cheating or criminal breach of trust. However, the High Court found sufficient prima facie material to frame charges under Section 13(1)(d)(i) and 13(1)(d)(ii) of the Prevention of Corruption Act, 1988, read with Section 120-B of the IPC. Aggrieved by this, the accused appealed to the Supreme Court.

Legal Framework

The case primarily involves the interpretation and application of the following legal provisions:

• Section 120-B of the Indian Penal Code (IPC): This section deals with the punishment for criminal conspiracy. It states,
  “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, where no express provision is made in this Code for the punishment of such a conspiracy, be punished in the same manner as if he had abetted such offence.”
• Section 13(1)(d)(i) of the Prevention of Corruption Act, 1988: This provision pertains to criminal misconduct by a public servant. It states that a public servant is said to commit the offence of criminal misconduct if he, “by corrupt or illegal means, obtains for himself or for any other person any valuable thing or pecuniary advantage.”
• Section 13(1)(d)(ii) of the Prevention of Corruption Act, 1988: This provision also pertains to criminal misconduct by a public servant. It states that a public servant is said to commit the offence of criminal misconduct if he, “by abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage.”

Arguments

Arguments on behalf of the Appellants:

• The appellants argued that the High Court failed to consider that the complaint was filed by a political opponent with malicious intent.
• They contended that the power rebate policy was already in place since 1991, and the creation of the ‘Extra High Tension’ category was to provide additional benefits to industrial consumers.
• The appellants relied on a previous order of the Supreme Court in Civil Appeal Nos. 3206-3217 of 1999, which dealt with the same notifications and held that the decision taken by the Minister was balanced.
• It was argued that the complaint had been closed earlier and was reopened for political reasons.
• The appellants asserted that mere suspicion cannot warrant the framing of charges.
• One of the appellants (Accused No. 2) argued that he had only followed instructions from his superiors in his official capacity and could not be considered a conspirator.
• They also argued that the accused had not received any personal benefit and that whatever amount was due had been paid.

Arguments on behalf of the State of Goa:

• The State argued that there was sufficient material to establish that the accused public servants had entered into a criminal conspiracy to provide wrongful gains to the accused companies.
• The State contended that the accused abused their positions and caused a significant loss to the public exchequer by illegally granting the 25% rebate.
• The State argued that the Minister (Accused No. 1) had prepared false documents to deceive the government and enable the companies to avail the rebate.
• The State maintained that the High Court had correctly concluded that there was sufficient prima facie material to frame charges under the Prevention of Corruption Act.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame specific issues but considered the following:

• Whether the High Court was correct in setting aside charges under the Indian Penal Code but upholding charges under the Prevention of Corruption Act.
• Whether there was sufficient prima facie material to frame charges against the accused under Section 13(1)(d)(i) and 13(1)(d)(ii) of the Prevention of Corruption Act, 1988 read with Section 120-B of the IPC.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Judgment

The Supreme Court upheld the High Court’s decision to frame charges against the accused under Section 13(1)(d)(i) and 13(1)(d)(ii) of the Prevention of Corruption Act, 1988, read with Section 120-B of the IPC. The Court found that there was sufficient prima facie material to suggest that the notifications were issued without Cabinet approval and in violation of rules, indicating a potential abuse of power. The Court clarified that at the stage of framing charges, a detailed examination of the merits of the case is not required.

How each authority was viewed by the Court?

• The Supreme Court did not find the previous order in Civil Appeal Nos. 3206-3217 of 1999* sufficient to quash the charges at the stage of framing charges.
• The Supreme Court did not find the reliance on MRF Limited vs. Manohar Parrikar & Others, (2010) 11 SCC 374* sufficient to quash the charges at the stage of framing charges.
• The Supreme Court did not find the reliance on Hira Lal Hari Lal Bhagwati Vs. CBI, New Delhi, (2003) 5 SCC 257* sufficient to quash the charges at the stage of framing charges.
• The Supreme Court relied on Sajjan Kumar v. CBI, (2010) 9 SCC 368*, State v. A. Arun Kumar, (2015) 2 SCC 417*, and State by the Inspector of Police, Chennai vs. S. Selvi and Ors., (2018) 1 SCALE 5* to reiterate the standard for framing charges, emphasizing the need for a prima facie case.

What weighed in the mind of the Court?

The Supreme Court’s decision to uphold the charges under the Prevention of Corruption Act was primarily influenced by the following factors:

• Violation of Rules: The Court noted that the notifications dated 15-5-1996 and 1-8-1996 were allegedly issued without the approval of the Cabinet, which is a violation of established rules and procedures.
• Abuse of Position: The Court emphasized that the accused, being public servants, allegedly abused their positions to facilitate undue benefits to private companies.
• Prima Facie Material: The Court found that there was sufficient prima facie material on record to suggest a criminal conspiracy and abuse of power, warranting the framing of charges under the Prevention of Corruption Act.
• Stage of Proceedings: The Court highlighted that at the stage of framing charges, a detailed examination of the merits of the case is not required, and the focus is on whether there is sufficient material to proceed with the trial.

Logical Reasoning:

The Court did not consider any alternative interpretations, as the matter was at the stage of framing charges. The Court emphasized that the focus was on whether there was sufficient material to proceed with the trial, and a detailed examination of the merits was not required at this stage.

The Supreme Court’s decision was based on the finding that there was sufficient prima facie material to suggest that the notifications were issued without Cabinet approval and in violation of rules, indicating a potential abuse of power. The Court clarified that at the stage of framing charges, a detailed examination of the merits of the case is not required.

The Court’s reasoning was based on the following points:

• The notifications dated 15-5-1996 and 1-8-1996 were allegedly issued without the approval of the Cabinet.
• The accused, being public servants, allegedly abused their positions to facilitate undue benefits to private companies.
• There was sufficient prima facie material on record to suggest a criminal conspiracy and abuse of power.
• At the stage of framing charges, a detailed examination of the merits of the case is not required.

The Court quoted the following from the judgment:

“Looking at the facts of the case in a holistic manner, we do not think it necessary to go into the aspect of thorough examination of merits of the case, particularly when the issue is still at the stage of framing of charges only.”

“There is no error in framing charges, as suggested by the High Court, when presumably the material on record obligated the Court to do so.”

“In light of the above discussion, we do not see any illegality in the impugned order. Therefore, we find no reason to interfere with the order passed by the High Court.”

There were no dissenting opinions in this case. The judgment was delivered by a two-judge bench comprising Justices N.V. Ramana and S. Abdul Nazeer.

Key Takeaways

• Public servants can be charged under the Prevention of Corruption Act for abusing their positions to grant undue benefits to private companies.
• Issuing notifications without proper approvals and in violation of rules can lead to charges of criminal misconduct.
• At the stage of framing charges, the focus is on whether there is sufficient prima facie material to proceed with the trial, and a detailed examination of the merits is not required.
• The Supreme Court upheld the High Court’s decision to frame charges under the Prevention of Corruption Act, emphasizing the need to proceed with the trial.

Directions

The Supreme Court granted liberty to the learned counsel for the appellants to place before the trial Court the material, judgments, and the earlier passed order of the Supreme Court which were referred to before the Supreme Court.

Development of Law

The ratio decidendi of this case is that at the stage of framing charges, the court needs to examine only if there is sufficient prima facie material to proceed with the trial. This case reinforces the principle that public servants can be held accountable for abusing their positions and causing loss to the public exchequer. There is no change in the previous position of law.

Conclusion

The Supreme Court upheld the High Court’s decision to frame charges against the accused under the Prevention of Corruption Act, finding sufficient prima facie material to suggest a criminal conspiracy and abuse of power. The Court emphasized that at the stage of framing charges, a detailed examination of the merits of the case is not required, and the focus is on whether there is sufficient material to proceed with the trial. This case highlights the importance of accountability for public servants and the need to adhere to established rules and procedures.

Category

Parent Category: Prevention of Corruption Act, 1988

Child Categories:

• Section 13(1)(d)(i), Prevention of Corruption Act, 1988
• Section 13(1)(d)(ii), Prevention of Corruption Act, 1988
• Criminal Misconduct
• Abuse of Power
• Public Servants
• Criminal Conspiracy

Parent Category: Indian Penal Code, 1860

Child Categories:

• Section 120-B, Indian Penal Code, 1860
• Criminal Conspiracy

Parent Category: Power Tariff Rebate

Child Categories:

• Industrial Units
• Government Notifications
• Cabinet Approval

FAQ

Q: What is the main issue in the Mauvin Godinho vs. State of Goa case?

A: The main issue is whether public servants can be charged under the Prevention of Corruption Act for allegedly misusing their positions to grant undue benefits to private companies through manipulated power tariff rebates.

Q: What did the High Court decide in this case?

A: The High Court set aside charges under the Indian Penal Code but upheld charges under Section 13(1)(d)(i) and 13(1)(d)(ii) of the Prevention of Corruption Act, 1988, finding sufficient prima facie material for these charges.

Q: What did the Supreme Court decide in this case?

A: The Supreme Court upheld the High Court’s decision, stating that there was sufficient prima facie material to frame charges under the Prevention of Corruption Act. The Court clarified that at the stage of framing charges, a detailed examination of the merits of the case is not required.

Q: What is the Prevention of Corruption Act, 1988?

A: The Prevention of Corruption Act, 1988, is an Indian law that aims to combat corruption among public servants. It specifies various forms of criminal misconduct and provides penalties for such offenses.

Q: What is Section 13(1)(d) of the Prevention of Corruption Act?

A: Section 13(1)(d) of the Prevention of Corruption Act, 1988, defines criminal misconduct by a public servant. It includes instances where a public servant obtains a valuable thing or pecuniary advantage through corrupt or illegal means or by abusing their position.

Q: What is the significance of “prima facie material” in this case?

A: “Prima facie material” refers to evidence that, on its face, is sufficient to suggest that an offense may have been committed. At the stage of framing charges, the court needs to determine if such material exists, without conducting a detailed trial.

Q: What are the practical implications of this judgment?

A: This judgment reinforces that public servants must adhere to established rules and procedures and that they can be held accountable for abusing their positions to provide undue benefits. It also clarifies the standard for framing charges under the Prevention of Corruption Act.