This petition has been filed praying to quash the final report SPE/CBI/ACB, Chennai, RC MA.1/2015 A 0023 and the resultant charge sheet in C.C.No.20 of 2017 on the file of the XIV Additional Special Court for CBI http://www.judis.nic.inCases, Chennai.
2. Gist of the Final Report is as follows:-
Feud between the families of N.Raghavulu Naidu and Dr.G.Gopalaswamy over the land measuring 7 grounds and 800 sq.ft., at Arumbakkam, Chennai has led to several litigation pending in Courts. In order to put pressure on Dr.G.Gopalaswamy to come to terms with N.Raghavulu Naidu, M.Manuneethi Cholan, who was Registrar of Companies, Chennai caused notice to M/s Prashanth Fertility and Research Centre Private Limited and M/s Accurate Foundations Private Limited, the companies, in which Dr.G.Gopalaswamy, his wife Smt.Geetha Haripriya and her mother Smt.Jamuna Chandrayya were major share holders. Investigation by the respondent indicates that a criminal conspiracy was hatched among the petitioner N.Raghavulu Naidu, and M.Manuneethi Cholan and pursuant to the said conspiracy, M.Manuneethi Cholan abused his position as Registrar of Companies, accepted illegal gratification of Rs.40 lakhs as motive and reward and threatened the family members of Dr.G.Gopalaswamy for settling the ongoing dispute with N.Raghavulu Naidu. For the said purpose, the petitioner N.Raghavulu Naidu has given the complaints dated 22.11.2013, 16.12.2013 to the Registrar of Companies (ROC) against M/s Prashanth Fertility and Research Centre Private Limited and M/s Accurate Foundations Private Limited alleging they have violated the foreign exchange law, had suppressed income and committed offence liable to be enquired by the Registrar of Companies. Based on the complaint of N.Raghavulu Naidu, M.Manuneethi Cholan started threatening Dr.G.Gopalaswamy and others for action under Section 447 of the Companies Act, 2013. For such abuse of his power, M.Manuneethi Cholan has
3. Pending investigation, M.Manuneethi Cholan was placed under suspension and he later died on 07.11.2016. Since N.Raghavulu Naidu the petitioner, M.Chithirai Vadivu, W/o M.Manuneethi Cholan, M.Ananthi Cholan, D/o M.Manuneethi Cholan and M.Adithya Cholan, S/o M.Manuneethi Cholan abetted the public servant to obtain gratification as motive or reward for showing favour to N.Raghavulu Naidu the petitioner and dis-favouring Dr.G.Gopalaswamy and his family members. Charge sheet has been laid against them for offences under Sections 120B r/w Section 12 of the Prevention of Corruption Act, 1988.
4. The learned Senior counsel appearing for the petitioner submitted that when the petitioner was asked to appear before the respondent during the investigation, he appeared before the Investigating Officer and explained about the friendship between him and late M.Manuneethi Cholan. The legal notice issued seeking specific performance of sale agreement, the payments made through Bank towards sale consideration, pursuant to the agreement, were properly explained. While so, ignoring the explanation and documents produced, the Investigating Officer has laid Final Report influenced by the defacto complainant, who has an ulterior motive in giving false complaint.
5. The learned Senior counsel appearing for the petitioner's submission is based on two fold. His first limb of argument is that the allegation that M.Manuneethi Cholan was abetted to do favour or dis-favour, itself is a misconceived allegation. The action taken by M.Manuneethi Cholan is based on the complaint given by the petitioner against Dr.G.Gopalaswamy and others for violation of the provision of Companies Act, 2013 and the other Special Act for economic offences. Giving a complaint and action on it is not an illegal act or abuse of position. It is an act done by public servant in the course of discharging his duty and what is expected from a public servant. In the final report, it is alleged that M.Manuneethi Cholan ought to have forwarded the complaint of the petitioner N.Raghavulu Naidu to Department of Revenue Intelligence and the Department of Enforcement to probe into Foreign Exchange Violation and should not have caused notice to take action under Section 447 of Companies Act, 2013. The said allegation is baseless and contrary to law. M.Manuneethi Cholan as Registrar of Companies is empowered to probe into complaint regarding any violation under the Companies Act, 2013. The petitioner N.Raghavulu Naidu and the deceased M.Manuneethi Cholan were friends for long time and the money transaction between the family members of M.Manuneethi Cholan and the petitioner is nothing to do with the official functioning of the deceased M.Manuneethi Cholan. The prosecution has misconceived the facts relating to the complaint given by the petitioner to the Registrar of Companies disclosing certain grave violations committed by Dr.G.Gopalaswamy, his wife Dr.Geetha Haripriya and their associates in respect of misappropriation of fund, diversion of fund, RBI violation, evasion of stamp duty, income tax and capital gains by the companies run by Dr.G.Gopalasamy and others to that of the money transaction through bank done by the petitioner in favour of his wife and children of M.Manuneethi Cholan. The explanation given by the petitioner, the circumstances under which the money was transferred and subsequent development of breach of oral agreement of sale and specific performance suit were all not considered by the Investigating Officer and not reflected in the final report.
6. The second limb of the argument submitted by the learned Senior Counsel appearing for the petitioner is that the public servant namely M.Manuneethi Cholan died on 07.11.2006 and therefore, the charge against him gets abated. The charge against the present petitioner is inseparable with that of the charge against the deceased public servant. Therefore, nothing survives in the final report to proceed against the petitioner.
7. Though in support of his submissions, few judgments were referred, much emphasis was made based on the Delhi High Court in Kartongen Kemi Och Forvaltning Ab v. State Through CBI reported in [Law Finder Doc Id # 217031], where the Court has observed that:
http://www.judis.nic.in “112. Thus, by no stretch of imagination these circumstances lead to even remote inference or suspicion about criminal misconduct by the public servants in abusing the official position as contemplated under Section 5(1)(d) of the Prevention of Corruption Act. It envisages that a public servant is said to commit the offence of criminal misconduct if he, by corrupt or illegal means or by otherwise abusing his position as a public servant obtains for himself or for any other person any valuable thing or pecuniary advantage. None of the ingredients are made out from the aforesaid circumstances even if these are assumed to be correct.
113. Subsequent to 1986, there is no material collected by the CBI in support of charge of abetment to corruption. Evidence collected by CBI subsequent to 1986 mainly confines to accounts of the petitioners, Chandha and Quattrocchi and the money paid to them by the Bofors and this by no stretch of imagination can be brought within the mischief or ambit of Section 5(1)(d) or 5(2) of the P.C.Act or Section 161/165A of Indian Penal Code. By the same analogy no charge of corruption can be established against S.K.Bhatnagar as there is no allegation that he being the participant in decision making process was given bribe or he influenced the decision as the whole materials is based on surmises and conjectives and flimsy propositions of law.
114. There is no allegation against Mr.Rajiv Gandhi that he either participated in the Price Negotiating Committee or he gave any opinion on the quality of the http://www.judis.nic.in Guns as well as price of the Guns. He only signed the file on the basis of the report of Price Negotiating Committee and against Mr.Bhatnagar there is no charge of having ascertained the quality by corrupt means. On the other hand, the case of the prosecution is that though the quality of Bofors was better but its price was more than Sofma.
115. By awarding a contract to one of the contenders whose goods had an edge over the others or say were equally good and were cheaper at the relevant time cannot be gone into for the purpose of charge of cheating quo the public servants. Period of conspiracy is from April 1985 to April, 1987. Prosecution has also relied upon this period while invoking the offence under Section 120B of Indian Penal Code.
116. Unless the nexus is complete between the public servants, A.B.Bofors and the commission agents, the charge of bribe or illegal gratification or misuse of official position under Section 5(1)(d) of the PC Act or charges of conspiracy of public servants with the petitioners to cheat the Government of India punishable under Section 120B and Section 420 of Indian Penal Code are difficult to stand.
117. Even on legal premise trial qua public servants cannot proceed as both the public servants viz. Mr.S.K.Bhatnagar and Mr.Rajiv Gandhi are dead and not in a position to defent themselves. That is basic criminal jurisprudence that the court cannot give findings against a person who is not in a position to defend himself. Legal presumption that every accused is innocent unless is proved to be guilty is also available in respect of public servants. So far as Quattrocchi and Ardbo are concerned, their case has already been segregated for the purpose of trial as one is absconding and other has not been repatriated. In the instant charge sheet public servants, AB Bofors, Win Chadha and Hindujas have been clubbed together. Win Chadha has also died and therefore, trial against him also cannot proceed. Even if we assume that Ardbo and Quattrocchi's trial has been segregated still the trial of public servants cannot proceed.
118. When the charges for the main offence of awarding a contract against illegal gratification and misconduct by abuse of official position and charge under Section 120-B/420 Indian Penal Code against public servants for having conspired with A.B. Bofors, Hindujas, Chadha and Quattrocchi to cheat the Government of India prove damp squib, charges of conspiracy with public servants to cheat the Government of India or abetting the public servants to commit offences under Section 5 (2) read with Section 5(1)(a) of the P.C.Act and offence under Section 161 Civil Procedure Code against petitioners and other commission agents viz., Quattrocchi and Win Chadha are rendered unsustainable. On all these aspects contentions of Mr.Ram Jethmalani and Mr.Kapil Sibal far outweigh those of Mr.Mukul Rohtagi.”
141 (i): To sum up following conclusions emerge from the aforesaid discussion-
(i) Charges for the offences punishable under Sections 120B/420 Indian Penal Code and Section 5(2) read with Section 5(1)(d) of Prevention of Corruption Act, 1947 and Section 165A read with Section 161 of Indian Penal Code against the petitioners for having entered into a criminal conspiracy with the public servants to cheat the Government of India and having abetted the public servants to commit criminal misconduct by abusing their official position and taken illegal gratification for awarding the contract are quashed.”
8. Per contra, the learned Special Public Prosecutor appearing for CBI cases submitted that M.Manuneethi Cholan a public servant, who as a Registrar of the Companies, has conspired with the present petitioner to threaten Dr.G.Gopalaswamy and his family members to settle score by abusing the official position. In the course of said conspiracy, the petitioner herein has paid Rs.40 lakhs into the bank account of the deceased M.Manuneethi Cholan, his wife, son and daughter. Corresponding to the date on which the payment was made, the progress has been made in the complaint given by the petitioner against Dr.G.Gopalaswamy. In excess of his power, in order to help the petitioner N.Raghavulu Naidu for reward he received, the said M.Manuneethi Cholan has caused notice to M/s Prashanth Fertility and Research Centre Private Limited and M/s Accurate Foundation Private Limited, the two companies held by Dr.G.Gopalasamy and his wife.
9. As far as the final report against this petitioner and another accused in respect of offence committed under Section 12 of the Prevention of Corruption Act, 1988 is a distinct offence relating to the conspiracy hatched by the petitioner along with the deceased public servant. Hence, the judgments cited by the petitioner where there is no material for prosecuting under Section 12 of the Prevention of Corruption Act, 1988 are not applicable to the facts of the present case. Since there is over whelming evidence indicating culpability of the petitioner, the present petition to quash is devoid of merits.
10. Referring the recent judgment of the Hon'ble Supreme Court in HCL Inforsystem Limited v. Central Bureau of Investigation reported in (2016) 9 SCC 281, the learned Special Public Prosecutor (CBI) submitted that merely because the public servant died, the offence in relation to the non-Government Servant in connection with conspiracy of abusing his position and receipt of illegal gratification could not vanish. From the final report, the offence under Section 12 of the Prevention of Corruption Act, 1988 has been made out. Since the said offence is separable, the final report cannot be quashed.
11. From the materials placed by the prosecution, which were collected during the course of investigation, the following facts come to light:- The deceased M.Manuneethi Cholan came to Chennai on transfer as a Registrar of Companies on 01.11.2013. The petitioner N.Raghavulu Naidu and the deceased M.Manuneethi Cholan were friends for long time. The petitioner N.Raghavulu Naidu is fighting against Dr.G.Gopalswamy, who is his one time associate. The property involved in the said dispute is a prime property in the heart of the city, which value runs to crores.
12. Initially, a complaint against M/s Prashanth Fertility and Research Centre and M/s Accurate Foundation Private Limited run by Dr.G.Gopalasamy and his wife was sent by one Tiger Ponnusamy alleging the FEMA violation. The said complaint was addressed to Union Minister and others including the Registrar of Companies. The Assistant Registrar of Company has taken the complaint for enquiry and later, it has been closed, since the complainant Tiger Ponnusamy disowned the complaint sent in his name.
13. On 28.10.2013, N.R.Hemalatha Sree, daughter of the petitioner has transferred Rs.10 lakhs into account of M.Chithiraivadivu, wife of M.Manuneethi Cholan, the deceased public servant, the date on which M.Manuneethi Cholan was transferred to Chennai from Coimbatore. On 23.11.2013, N.R.Hemalatha Sree, daughter of the petitioner has transferred Rs.15 lakhs into account of ChithiraiVadivu, wife of M.Manuneethi Cholan, the date on which the petitioner has lodged a complaint against M/s Prashanth Fertility and Research Centre Private Limited and M/s Accurate Foundation Private Limited alleging the scheme of evading crores of rupees of income tax involving Hawala money. On 16.12.2013, Rs.5lakhs has been credited into the account of Anandhi Cholan, D/o M.Manuneethi Cholan from the account of the petitioner. On the same day, the first accused/petitioner has given second/reminder complaint to the Registrar of Companies against M/s Prashanth Fertility and Research Centre Private Limited and M/s Accurate Foundation Limited. On 11.01.2014, Rs.5 lakhs has been transferred from the account of the petitioner into Housing Loan account of Chithirai Vadivu, http://www.judis.nic.inwife of M.Manuneethi Cholan. Meanwhile, on 02.01.2014, a letter was addressed to the Chartered Accountant of M/s Prashanth Fertility and M/s Accurate Foundations. On 02.01.2014, Manuneethi Cholan has written a letter to M/s Prashanth Fertility Research Centre Private Limitedand limited and the Chartered Accountant representing M/s Prakah Kochar & Co., informing that the letter of the Chartered Accountant in response to the complaint is not satisfactory and required more details with documentary prove. Meanwhile, explanation from M/s Prashanth Fertility and Research Centre Private Limited has also been called for in respect of the complaint given by the petitioner. The reply of M/s Prashanth Fertility and Research Centre Private Limited dated 02.01.2014 has been rejected by Manuneethi Cholan vide letter dated 20.06.2014, stating that reply furnished to the complaint of N.Raghavulu Naidu, Advocate is not satisfactory. Therefore, the details of loan taken from the bank are to be furnished within 7 days from the date of the letter.
14. While five money transactions through bank accounts has been identified by the investigation agencies that they are pertaining to illegal gratification received by the family members of the deceased M.Manuneethi Cholan, the defence of the petitioner is that these payments were made in pursuant to the oral sale agreement with Chithirai Vadivu. A copy of the Advocate notice dated 16.04.2016 sent to M.Chithirai Vadivu, W/o M.Manuneethi Cholan, on the instruction of N.R.Hemalatha Shree, D/o N.Raghavulu Naidu the petitioner herein has also been furnished along with http://www.judis.nic.inthe typed set of papers filed by the petitioner.
15. Even if the theory put forth by the petitioner that there was an oral agreement in respect of the landed property owned by Chithirai Vadivu, the wife of Manuneethi Cholan and the payments were made to Chithirai Vadivu was only in pursuant to that sale agreement, it could amount only for Rs.25 lakhs and justify two transactions alone. For the rest of the three transactions to the tune of Rs.15 lakhs, there is no explanation. Even the said explanation for the payment of Rs.25 lakhs alleging that there was agreement of sale between the daughter, son and wife of M.Manuneethi Cholan(the deceased public servant), absence of explanation for other payments only exposes the murky dealing between the public servant and the petitioner herein. One look at the Prevention of Corruption Act, 1988, while Section 7 starts with the expression 'whoever, being, or expecting to be a public servant, accepts or obtains'; Section 11 starts with the expression 'whoever, being a public servant, accepts or obtains'; Section 12 starts with the expression 'whoever abets any offence punishable under Section 7 or 11'. Thus, it is very clear that while for offence under Sections 7 and 11, the person must be a public servant or a person deceive the others into a belief that he is a public servant. To charge a person under Section 11, he must necessarily be a public servant. Whereas, to charge a person under Section 12, he need not be a public servant at all. It is suffice to show that he abetted a public servant to commit under Section 7 or 11.
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16. Here is the case that the prosecution has come out against a public servant's family members and the abettor. The prima facie material has been placed before the trial Court by way of final report that the money deposited in the name of the A2 to A4 are illegal gratification as reward for doing favour to the petitioner. The materials furnished by the petitioner herein to justify the deposit to the tune of Rs.25 lakhs does not prima facie indicate the said transaction to be a genuine transaction.
17. Under Section 20(2) of the Prevention of Corruption Act, 1988, there is a presumption clause against the accused, which could be drawn if in any trial of an offence punishable under Section 12 or under Clause (b) of Section 14, it is proved that any gratification other than legal remuneration or any valuable thing has been given or offered to be given or attempted to be given by an accused person, he shall be presumed to be guilty of the offence under Section 12 unless contrary is proved. While so, the defence and innocent pleaded by the petitioner herein is to be proved in the course of the trial.
18. When there is prima facie materials to show that the money has been received by A2 to A4 at the instance of the public servant and they were paid by A1 to get a favour of causing disservice to the defacto complainant by abuse of position, mere death of the public servant will not http://www.judis.nic.inexonerate the petitioner herein. The contention that the cause of action dies with the public servant is not applicable to the facts of the present case. The charges are not inseparable as pleaded. In the light of the alleged facts and evidences collected by CBI, unlike Section 7 or 11, Section 12 is an independent Section which applies to any person, who abets a public servant to commit any offence covered under Section 7 or 11. A conspiracy to commit offence in the nature of abetment whether the offence committed or not, if the person, who is abetted is a public servant, then the ingredient required to prosecute that person under Section 12 gets satisfied.
19. The materials found in the final report placed before the trial Court satisfies the required ingredient. Since the offence under Section 12 is an independent offence and separable from alleged offence committed by the deceased public servant, the final report cannot be quashed. Nothing warrants to interfere with the final report pursuant to SPE/CBI/ACB, Chennai, RC MA.1/2015 A 0023.
20. Hence, the Criminal Original Petition is dismissed.
Consequently, connected Miscellaneous Petition is closed.
12.09.2017 Index:yes/no Internet:yes Speaking order/Non Speaking order http://www.judis.nic.inari To The XIV Additional Special Judge for CBI Cases, Chennai.
The Public Prosecutor, High Court, Madras.
Dr.G.Jayachandran,J.
ari
Pre-delivery order made in Crl.O.P.No.10087 of 2017
12.09.2017