Sri. K. M. Narendrakumar Vs State of Karnataka

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Reserved on : 12.12.2024 Pronounced on : 10.01.2025

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 10^TH DAY OF JANUARY, 2025

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BEFORE

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THE HON'BLE MR. JUSTICE M. NAGAPRASANNA CRIMINAL PETITION No.9187 OF 2024

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BETWEEN:

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SRI K.M.NARENDRAKUMAR S/O MUNIYAPPA K., AGED ABOUT 53 YEARS OCC: SURVEYOR, KIADB PALACE ROAD, BENGALURU RESIDING AT NO.177 8^TH MAIN, CQAL LAYOUT SAHAKARA NAGAR BENGALURU - 560 092. ... PETITIONER (BY SRI SHIVAPRASAD M.SHANTANAGOUDAR, ADVOCATE)

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AND:

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STATE OF KARNATAKA BY LOKAYUKTA POLICE CITY DIVISION, BENGALURU REPRESENTED BY SPECIAL PUBLIC PROSECUTOR KARNATAKA HIGH COURT BUILDING KARNATAKA - 560 001.

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... RESPONDENT

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(BY SRI B.B.PATIL, SPL PP)

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THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C., PRAYING TO QUASH THE FIR IN CR.NO.69/2013 DATED 19.12.2013 REGISTERED BY THE RESPONDENT LOKAYUKTA POLICE FOR OFFENCE P/U/S/ 13(1)(e) R/W SEC.13(2) OF PC ACT (ANNEXURE A) CHARGE SHEET (ANNEXURE B) AND ORDER TAKING COGNIZANCE DATED 24.10.2016 (ANNEXURE C) FOR THE OFFENCE P/U/S/ 13(1)(e) R/W SEC.13(2) OF PC ACT AND ALL CRIMINAL PROCEEDINGS ARISING THEREFROM INITIATED AGAINST THE PETITIONER WHO IS THE SOLE ACCUSED IN SPL.C.NO.446/2016 PENDING ON THE FILE OF THE LEARNED LXXVIII ADDITIONAL CITY CIVIL AND SESSIONS JUDGE AND SPECIAL JUDGE (PC ACT) BENGALURU.

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THIS CRIMINAL PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 12.12.2024, COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING:-

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CORAM: THE HON'BLE MR JUSTICE M.NAGAPRASANNA

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CAV ORDER

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The petitioner is before this Court calling in question proceedings in Special Criminal Case No.446 of 2026 pending before the LXXVIII Additional City Civil & Sessions Judge & Special Judge (P.C. Act), Bengaluru arising out of crime in Crime No.69 of 2013 registered for offences punishable under Sections 13(1)(e) r/w 13(2) of the Prevention of Corruption Act, 1988 (‘the Act’ for short).

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Heard Sri Shivaprasad M. Shantanagoudar, learned counsel appearing for the petitioner and Sri B.B. Patil, learned Special Public Prosecutor appearing for the respondent.

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Facts, in brief, germane are as follows:-

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The petitioner is a Government servant working in the Department of Survey Settlement and Land Records as a Surveyor. It is alleged that the petitioner between 30-10-1996 and 20-12-2013 had amassed wealth disproportionate to the known source of income to the tune of ₹1,94,81,204/- which would be 71.53% more than the known source of income. On the said allegation a source report comes to be drawn up against the petitioner on 09-12-2013 and on 19-12-2013 the crime comes to be registered against the petitioner in Crime No.69 of 2013 for the aforesaid offences. A charge sheet also comes to be filed on 05-07-2016. The concerned Court takes cognizance of the offences under Sections 13(1)(e) r/w 13(2) of the Act and issues summons to the petitioner. After issuance of summons, the petitioner knocks

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at the doors of the concerned Court seeking his discharge from the array of accused. That is rejected.

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In the interregnum on the same set of facts as to whether there has been disproportionate assets in real time against the petitioner, a departmental inquiry was conducted. In the departmental inquiry all the assets and liabilities statements were taken note of. The properties declared were noticed, annual property returns were considered and the petitioner was exonerated of all the offences in terms of the order dated 09.11.2021. On all these grounds, the petitioner prefers a criminal revision petition in Cr.R.P.No.559 of 2020 challenging the order of dismissal of his discharge application.

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The petitioner then withdrawn the criminal revision petition and files the subject petition on the ground that it is completely covered by what the Apex Court in plethora of judgments, rendered that once a Government servant is exonerated in a departmental inquiry, on the same set of facts, the criminal proceedings must not be permitted to be continued. The criminal revision petition

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was permitted to be withdrawn, and the result is filing of the present petition.

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The learned counsel appearing for the petitioner Shivaprasad M. Shantanagoudar would vehemently contend that the issue projected before this Court need not detain this Court for long or delve deep into the matter. It is completely answered by judgments rendered by the Apex Court which are considered by this Court in W.P.No.7629 of 2024 in favour of those petitioners. He would submit that the petition deserves to be allowed on the aforesaid score.

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Per contra, the learned counsel appearing for the respondent Sri B.B. Patil would seek to refute the submissions on facts but he is not in a position to dispute the position of law followed by this Court which is following the judgments of the Apex Court on the issue. He would, nonetheless, seek dismissal of the petition.

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I have given my anxious consideration to the submissions made by the respective learned counsel and have perused the material on record.

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The afore-narrated facts are not in dispute. The proceedings against the petitioner were initiated for the aforequoted offences taking the check period as 30-10-1996 and 20-122013. It is the contention that the wife of the petitioner had received properties from her father in terms of a partition deed, not after the marriage but long before the marriage. After the marriage those properties come into the fold of the family. Notwithstanding every declaration made by the petitioner in the annual property returns and the wife to the Income-Tax Department, a source report comes to be drawn on a complaint by one C. Ramesh, brother of the wife of the petitioner who is fighting a battle for partition against his sister, the wife of the petitioner. Based upon the said imaginary projection, a crime is said to be registered against the petitioner in Crime No.216 of 2013 alleging amassing of wealth disproportionate to the known source of income. The concerned Court, after the prosecution, filing the charge sheet

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takes cognizance of the offence. The petitioner then files an application seeking his discharge. The discharge application comes to be rejected on 19-05-2020. The matter is pending consideration before the concerned Court.

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On the same set of facts another proceeding had emerged i.e., the Departmental Inquiry. The charge sheet in the Departmental Inquiry was based upon the same set of facts that the petitioner had amassed wealth disproportionate to the known source of income. The Inquiry Officer who enquires into the charge sheet holds the petitioner not guilty of the offence. The Disciplinary Authority later accepts the said finding of the Inquiry Officer and closes the proceedings against the petitioner. The closure happens after the discharge application was preferred and rejected by the concerned Court in the year 2020. Therefore, the present petition is preferred seeking quashment of entire proceedings. The issue whether a case that was not proved in a departmental enquiry could be closed on the criminal side need not detain this Court for long or delve deep into the matter. This Court, in the similar

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circumstances, in W.P.No.7629 of 2024 disposed on

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09-08-2024, holds as follows:

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“….

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The departmental inquiry is conducted on the preponderance of probability. In an inquiry where probabilities are preponderant, the petitioner is exonerated. Therefore, the respondent is not able to prove even by probabalizing that the petitioner has indulged in such acts. Therefore, if one gets exonerated, on such circumstance, these allegations can hardly be proved in a criminal trial, where it is to be proved beyond all reasonable doubt. Therefore, the findings of the Disciplinary Authority would undoubtedly enure to the benefit of the petitioner, to seek obliteration of criminal proceedings that are pending on the same set of facts. This view of mine is fortified by plethora of judgments rendered by the Apex Court.

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The Apex Court in the case of P.S. RAJYA v. STATE OF BIHAR¹ , holds as follows:

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“17. At the outset we may point out that the learned Counsel for the respondent could not but accept the position that the standard of proof required to establish the guilt in a criminal case is far higher than the standard of proof required to establish the guilt in the departmental proceedings. He also accepted that in the present case, the charge in the departmental proceedings and in the criminal proceedings is one and the same. He did not dispute the findings rendered in the departmental proceedings and the ultimate result of it. On these premises, if we proceed further then there is no difficulty in accepting the case of the appellant. For if the charge which is identical could not be established in a departmental proceedings and in view of the admitted discrepancies in the reports submitted by the valuers one wonders what is there further to proceed against the appellant in criminal proceedings. In this context, we can usefully extract certain relevant portions from the report of the Central Vigilance Commission on this aspect:

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1 (1996) 9 SCC 1

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“Neither the prosecution nor the defence has produced the author of various reports to confirm the valuation. The documents cited in the list of documents is a report signed by two engineers namely S/Shri S.N. Jha and D.N. Mukherjee whereas the document brought on record (Ex. S. 20) has been signed by three engineers. There is also difference in the estimated value of the property in the statement of imputation and the report. The document at Ex. S. 20 has been signed by three engineers and the property has been valued at Rs. 4, 85, 000 for the ground floor and Rs. 2, 55, 600 for the second floor. A total of this comes to Rs. 7, 40, 900 which is totally different from the figure of Rs. 7, 69, 800 indicated in the statement of imputation. None of the engineers who prepared the valuation report though cited as prosecution witnesses appeared during the course of enquiry. This supports the defence argument that the authenticity of this document is in serious doubts. It is a fact that the income tax authorities got this property evaluated by S/Shri S.N. Jha and Vasudev and as per this report at. pp., 50 to_63 they estimated the property at Rs. 4, 57, 600 including the cost of land Rs. 1, 82, 000 for ground and - -. mezzanine floor plus Rs. 2, 55, 600 for first floor and Rs. 20, 000 for cost of land. Thus both the engineers who prepared the valuation report for income tax purposes also prepared the report for the CBI and there is no indication in the subsequent report as to why there is a difference in the value of the property. A perusal of these two reports reveals that there is difference in the specification of the work. The valuation report prepared by Sri S.N. Jha for ground floor for income tax purposes clearly states that the structure was having “RCC pillars at places, brickwork in cement mortar, RCC lintel, 60 cm walls, 9 inch floor height, 17. 6, 8. 00, 8. 00 inch” but in the report for CBI which was also prepared by him the description is “RCC framed structure open verandah on three sides in the ground floor”. Similarly, for the first floor it is written in the report as “partly framed structure and partly load being walls, floor heights 3. 20 mm. Further Shri S.N. Jha on p. 54 of Ex. D. 1 had adopted a rate of Rs. 290 per sq. mtr. for ground floor and adding for extra height he had estimated ground floor including mezzanine floor at Rs. 2, 02, 600. But for the report at Ex. S. 20 the rate has been raised to 365 per sq. mtr. There is no explanation for this increase of rate by Rs. 75 per mtr. It is also observed that for the updating of the cost of index 5% was added to the rate of Rs. 290 as per p. 55 of Ex. D. 1 by Sri S.N. Jha but this has been raised to 97% as an escalation to the cost of index in Ex. S. 20 without explaining or giving the reasons therefor. It is surprising that same set of engineers have adopted different standard for evaluating the same

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property at different occasions. Obviously, either of the report is false and it was for the prosecution to suitably explain it. In the absence of it the only inference to be drawn is that report at Ex. S. 20 is not authentic. Since the same set of engineers have done the evaluation earlier and if subsequently they felt that there was some error in the earlier report, they should have explained detailed reasons either in the report itself or during the course of enquiry. Therefore, Ex. S. 20 is not reliable.”

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20. Moreover a perusal of Ex. S. 20 reveals that Shri Vasudev, Executive Engineer has recorded a note as follows:

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“Hence the valuation of Sri S.N. Jha was never superseded by any other estimates. As is confirmed from the records, his estimated figures were only accounted for by the ITO Bokaro.”

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Thus according to Shri Vasudev, who was the seniormost among the three CPWD engineers who prepared Ex. S. 20, the valuation of ground floor remains at Rs. 1, 82, 600 plus Rs. 20, 000 for the cost of land. The first floor as per Ex. S. 20 was estimated at Rs. 2, 55, 600 and a total of all this comes to Rs. 4, 57, 600 which is very near to the declaration of actuals to the income tax authority and also the estimated cost by the Bokaro Steel Township Engineer and the Government approved valuer.

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21. It is dear from the above discussions that though the document cited in Annexure III is a joint report of two engineers what has been brought on record is a document signed by three engineers, the same set of engineers who evaluated the property for income tax purposes, and there is a vast difference in the specifications and the rates adopted for calculating the cost in Ex. S. 20 have been increased without any explanation and none of these engineers were produced during the course of enquiry to clarify the position. Hence the authenticity of Ex. S. 20 is doubtful as claimed by the defence.

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22. It needs to be mentioned that the report at Ex. S. 20 has evaluated the ground floor at Rs. 4, 85, 300 and a note to the effect that 10% should be allowed for selfsupervision and procurement of material has also been recorded at the end. On this basis the net value of ground floor comes to Rs. 4, 36, 810 (Rs. 4, 85, 344-Rs. 48, 534). The first floor has been evaluated at Rs. 2, 55, 600 after allowing the allowance for self-supervision and a total of

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both items would come to Rs. 6, 62, 410. Thus, even the report at Ex. S. 20 does not support the prosecution case that as per the report of CPWD Engineers the property is valued at Rs. 7, 69, 800. As the property assessed by the income tax authority for Rs. 4. 67 lakhs and even the valuation given by the Bokaro Steel Township Engineer and the Government approved valuer are very near to this figure, the reasonable value of this property could only be taken as Rs. 4. 75 lakhs assessed by the Bokaro Township Engineer on detailed estimate basis.

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…. …. ….

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20. At the risk of repetition, we may state that the charge had not been proved and on that basis the appellant was cleared of departmental enquiry. In this connection, we may also usefully cite a decision of this Court in State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426. This Court after considering almost all earlier decisions has given guidelines relating to the exercise of the extraordinary power under Article 226 of the Constitution or the inherent powers under Section 482 of the Criminal Procedure Code for quashing an FIR or a complaint. This Court observed as follows: (SCC pp. 378-79, paras 102-3)

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“In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any Court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised:

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(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do

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not prima facie constitute any offence or make out a case against the accused.

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(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.

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(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.

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(4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non - cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.

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(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.

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(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the Act concerned (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the Act concerned, providing efficacious redress for the grievance of the aggrieved party.

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(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.”

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(Emphasis supplied)

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14. Later, the Apex Court though not referring to P.S. RAJYA held in identical lines in the case of RADHESHYAM

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KEJRIWAL V. STATE OF WEST BENGAL, reported in (2011) 3 SCC 581 , that standard of proof in a criminal case is much higher than that of adjudication in a departmental enquiry. If in a departmental inquiry, the Competent Authorities have failed to drive home the charge, it would be improper to permit criminal trial any further. This view of the Apex Court, in the aforesaid case, is reiterated in the later three Judge Bench in the case of ASHOO SURENDRANATH TEWARI V. CBI ,² wherein the Apex Court has held as follows:

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“8. A number of judgments have held that the standard of proof in a departmental proceeding, being based on preponderance of probability is somewhat lower than the standard of proof in a criminal proceeding where the case has to be proved beyond reasonable doubt. In P.S. Rajya v. State of Bihar [P.S. Rajya v. State of Bihar, (1996) 9 SCC 1 : 1996 SCC (Cri) 897], the question before the Court was posed as follows : (SCC pp. 2-3, para 3)

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“3. The short question that arises for our consideration in this appeal is whether the respondent is justified in pursuing the prosecution against the appellant under Section 5(2) read with Section 5(l)(e) of the Prevention of Corruption Act, 1947 notwithstanding the fact that on an identical charge the appellant was exonerated in the departmental proceedings in the light of a report submitted by the Central Vigilance Commission and concurred by the Union Public Service Commission.”

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9. This Court then went on to state: (P.S. Rajya case [P.S. Rajya v. State of Bihar, (1996) 9 SCC 1: 1996 SCC (Cri) 897], SCC p. 5, para 17)

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“17. At the outset we may point out that the learned Counsel for the respondent could not but accept the position that the standard of proof required to establish the guilt in a criminal case is far higher than the standard of proof required to establish the guilt in the departmental proceedings. He also accepted that in the present case, the charge in the departmental proceedings and in the criminal proceedings is one and the same. He did not dispute the findings rendered in the departmental proceedings and the ultimate result of it.”

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2 (2020) 9 SCC 636

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10. This being the case, the Court then held: (P.S. Rajya case [P.S. Rajya v. State of Bihar, (1996) 9 SCC 1 : 1996 SCC (Cri) 897], SCC p. 9, para 23)

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“23. Even though all these facts including the report of the Central Vigilance Commission were brought to the notice of the High Court, unfortunately, the High Court took a view [Prabhu Saran Rajya v. State of Bihar, Criminal Miscellaneous No. 5212 of 1992, order dated 3-81993 (Pat.)] that the issues raised had to be gone into in the final proceedings and the report of the Central Vigilance Commission, exonerating the appellant of the same charge in departmental proceedings would not conclude the criminal case against the appellant. We have already held that for the reasons given, on the peculiar facts of this case, the criminal proceedings initiated against the appellant cannot be pursued. Therefore, we do not agree with the view taken by the High Court as stated above. These are the reasons for our order dated 27- 3- 1996 for allowing the appeal and quashing the impugned criminal proceedings and giving consequential reliefs.”

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11. In Radheshyam Kejriwal v. State of W.B. [Radheshyam Kejriwal v. State of W.B., (2011) 3 SCC 581 : (2011) 2 SCC (Cri) 721], this Court held as follows : (SCC pp. 594-%, paras 26, 29 and 31)

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“26. We may observe that the standard of proof in a criminal case is much higher than that of the adjudication proceedings. The Enforcement Directorate has not been able to prove its case in the adjudication proceedings and the appellant has been exonerated on the same allegation. The appellant is facing trial in the criminal case. Therefore, in our opinion, the determination of facts in the adjudication proceedings cannot be said to be irrelevant in the criminal case. In B.N. Kashyap [B.N. Kashyap v. Crown, 1944 SCC OnLine Lah 46 : AIR 1945 Lah 23] the Full Bench had not considered the effect of a finding of fact in a civil case over the criminal cases and that will be evident from the following passage of the said judgment : (SCC OnLine Lah. : AIR p. 27)

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‘… I must, however, say that in answering the question, I have only referred to civil cases where the actions are in personam and not those where the proceedings or actions are in rem. Whether a finding of fact arrived at in such proceedings or actions would be relevant in criminal cases, it is unnecessary for me to decide in this case. When that question arises for determination, the provisions of Section 41 of the Evidence Act, will have to be carefully examined. ‘

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29. We do not have the slightest hesitation in accepting the broad submission of Mr. Malhotra that the finding in an adjudication proceeding is not binding in the proceeding for criminal prosecution. A person held liable to pay penalty in adjudication proceedings cannot necessarily be held guilty in a criminal trial. Adjudication proceedings are decided on the basis of preponderance of evidence of a little higher degree whereas in a criminal case the entire burden to prove beyond all reasonable doubt lies on the prosecution.

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31. It is trite that the standard of proof required in criminal proceedings is higher than that required before the Adjudicating Authority and in case the accused is exonerated before the Adjudicating Authority whether his prosecution on the same set of facts can be allowed or not is the precise question which falls for determination in this case.”

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12. After referring to various judgments, this Court then culled out the ratio of those decisions in para 38 as follow: (Radheshyam Kejriwal case [Radheshyam Kejriwal v. State of W.B., (2011) 3 SCC 581: (2011) 2 SCC (Cri) 721], SCC p. 598)

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“38. The ratio which can be culled out from these decisions can broadly be stated as follows:

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(i) Adjudication proceedings and criminal prosecution can be launched simultaneously;

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(ii) Decision in adjudication proceedings is not necessary before initiating criminal prosecution;

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(iii) Adjudication proceedings and criminal proceedings are independent in nature to each other;

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(iv) The finding against the person facing prosecution in the adjudication proceedings is not binding on the proceeding for criminal prosecution;

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(v) Adjudication proceedings by the Enforcement Directorate is not prosecution by a Competent Court of law to attract the provisions of Article 20(2) of the Constitution or Section 300 of the Criminal Procedure Code;

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(vi) The finding in the adjudication proceedings in favour of the person facing trial for identical violation will depend upon the nature of finding. If the exoneration in adjudication proceedings is on technical ground and not on merit, prosecution may continue; and

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(vii) In case of exoneration, however, on merits where the allegation is found to be not sustainable at all and the person held innocent criminal prosecution on the same set of facts and circumstances cannot be allowed to continue, the underlying principle being the higher standard of proof in criminal cases.”

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13. It finally concluded: (Radheshyam Kejriwal case [Radheshyam Kejriwal v. State of W.B., (2011) 3 SCC 581 : (2011) 2 SCC (Cri) 721], SCC p. 598, para 39)

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“39. In our opinion, therefore, the yardstick would be to Judge as to whether the allegation in the adjudication proceedings as well as the proceeding for prosecution is identical and the exoneration of the person concerned in the adjudication proceedings is on merits. In case it is found on merit that there is no contravention of the provisions of the Act in the adjudication proceedings, the trial of the person concerned shall be an abuse of the process of the Court.”

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15. Applying the aforesaid judgments to the facts of this case, it is clear that in view of the detailed CVC order dated 22-12-2011, the chances of conviction in a criminal trial involving the same facts appear to be bleak. We, therefore, set aside the judgment [Ashoo Surendranath Tewari v. CBI, 2014 SCC OnLine Bom 5042] of the High Court and that of the Special Judge and discharge the appellant from the offences under the Penal Code.”

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In the aforesaid judgments, in the case of P.S. RAJYA and ASHOO SURENDRANATH TEWARI supra , the Apex Court has clearly delineated that, if allegations in the departmental inquiry could not be proved on merit and the person is held to be innocent, criminal prosecution on the said facts cannot be permitted to be continued on the underlying principle of criminal trial needing higher standard of proof. Exoneration of the petitioner, in the departmental enquiry, is not on technicalities, but on merits, as there was no evidence against the petitioner to drive home the charge.

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Therefore, in terms of the law laid down by the Apex Court in the aforesaid judgments, in my considered view, the chances of the prosecution succeeding in the criminal trial being bleak, this Court cannot permit continuance of such criminal trial, any further.

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The learned counsel for the respondent would vehemently submit that the Apex Court, in a subsequent judgment, in the case of PUNEET SABHARWAL v. CBI³ , has not chosen to follow the judgment in the case of ASHOO SURENDRANATH TEWARI supra ). It is the contention that the case therein before the Apex Court was also concerning the Prevention of Corruption Act. The Apex Court holds that those judgments are not applicable to the facts of the case. The Apex Court observes as follows:

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“ 34. The appellants herein have placed reliance on the decisions of this Court in Radheyshyam Kejriwal (supra), Ashoo Surendranath Tewari (supra) and J. Sekar (supra) to argue that once there is an exoneration on merits in a civil adjudication, a criminal prosecution on the same set of facts and circumstances cannot be allowed to continue. In our opinion, none of the abovereferred decisions are applicable to the facts of the present case.

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35. In Radheshyam Kejriwal (supra), this Court was concerned with a fact situation where the Petitioner therein was being prosecuted under the Foreign Exchange Regulation Act, 1973 for payments made by him in Indian currency in exchange for foreign currency without any general or specific exemption from the Reserve Bank of India. The Enforcement Directorate had commenced both an adjudication proceeding and a prosecution under the provisions of the Foreign Exchange Regulation Act, 1973. It so transpired that the Adjudicating Officer found that no documentary evidence was available to prove the foundational factum of the Petitioner therein entering into the alleged transactions which fell foul of the Act and thereafter directed that the proceedings be dropped. The question which fell

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3 2024 SCC OnLine SC 324

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for the consideration before this Court was whether the result of this adjudication proceeding would lead to exoneration of the Petitioner in the criminal prosecution.

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36. In this background, this Court noticed that the adjudication proceedings under the Foreign Exchange Regulation Act, 1973 involved an adjudication on whether a person had committed a contravention of any provisions of the Act. It is in this context, that the Court went on to hold that where the allegation in an adjudication proceeding and proceeding for prosecution is identical and the exoneration in the former is on merits i.e. that there is no contravention of the provisions of the Act, then the trial of person concerned would be an abuse of process of the Court.

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37. The decision in Radheyshyam (supra) was in a fact situation where the adjudicatory and criminal proceedings were being commenced by the same authority in exercise of powers under the same Act. Further, as this Court had noted, the civil adjudication proceedings related to an adjudication as to whether there was contravention of provisions of the Act and the Rules thereunder, which had an impact on the prosecution under the Act. However, in the present case, the appellants herein are being prosecuted under the provisions of the Prevention of Corruption Act while they seek to rely on an exoneration under the Income Tax Act. The scope of adjudication in both of these proceedings are vastly different. The authority which conducted the income tax proceedings and the authority conducting the prosecution is completely different (CBI). The CBI was not and could not have been a party to the income tax proceeding. Given the said factual background, the decision in Radheyshyam (supra) is not applicable to the present case.

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38. In Ashoo Surendranath (supra), the Petitioner therein was working as a DGM at the Small Industries Development Bank of India while there was diversion of funds from the Bank. The allegation against the Petitioner therein was that he had shared the RTGS details for the account to which the amount was diverted, to another official who was the purported kingpin of the crime. The competent authority of the Bank had refused to

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provide a sanction for prosecution of the Petitioner therein, which was supported by the report of the Central Vigilance Commission. The question therefore posed before the Court was whether the report of the Central Vigilance Commission should lead to discharge of the Petitioner therein.

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39. In the above-mentioned factual background, this Court set-out the findings of the Central Vigilance Commission which had recorded that the e-mail sent by the Petitioner therein had clearly been sent to the principal accused for the purpose of verification since the latter was the officer for verification and that this showed that there was no role that the Petitioner played in perpetrating the offence. Thereafter, relying upon the decision in Radheyshyam (supra), the Court concluded that since the allegation has been found to be “not sustainable at all”, the criminal prosecution could not be continued.

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40. The decision in Ashoo Surendranath (supra) is not applicable to the present case because the decision in Ashoo Surendranath (supra) concerned a singular prosecution under the provisions of the Penal Code, 1860 where the sanctioning authority had, while denying sanction, recorded on merits that there was no evidence to support the prosecution case. In that context, the Court was of the opinion that a criminal proceeding could not be continued. However, in the present case, the charges were framed under the Prevention of Corruption Act, while the appellants seek to rely upon findings recorded by authorities under the Income Tax Act. The scope of adjudication in both the proceedings are markedly different and therefore the findings in the latter cannot be a ground for discharge of the Accused Persons in the former. The proceedings under the Income Tax Act and its evidentiary value remains a matter of trial and they cannot be considered as conclusive proof for discharge of an accused person.”

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(Emphasis supplied)

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The Apex Court observes that the facts situation in the case in PUNEET SABHARWAL supra were entirely different from

¶117

20

¶118

ASHOO SURENDRANATH TEWARI or RADHESHYAM supra . The case before the Apex Court was exoneration under the Income Tax Act and consequent exoneration of the petitioner in those proceedings. They were not disciplinary proceedings under the Rules. They were proceedings under the Income-Tax Act. Therefore, the Apex Court holds that there is vast difference between the prosecution under the Act and exoneration under the Income Tax Act. Therefore, the judgment so relied upon by the learned counsel for the respondent to contend that the judgments in the case of ASHOO SURENDRANATH TEWARI or RADHESHYAM supra cannot be pressed into service, it is noted only to be rejected, as the judgment of the Apex Court in the case of PUNEET SABHARWAL supra is distinguishable on facts, obtaining in the case at hand.”

¶119

Therefore, in the light of the preceding analysis and the judgment rendered by this Court as quoted supra , finding it extremely difficult to accept that criminal trial must be permitted to be continued against the petitioner, I deem it appropriate to obliterate the proceedings pending against the petitioner before the concerned Court.

¶120

For the aforesaid reasons, the following:

¶121

O R D E R

¶122

(i) Criminal Petition is allowed.

¶123

21

¶124

(ii) FIR in Crime No.69 of 2013 and proceedings in Special Criminal Case No.446 of 2016 pending before the LXXVIII Additional City Civil and Sessions Judge and Special Judge (PC Act), Bengaluru stand quashed.

¶125

SD/-

¶126

____________________ JUSTICE M.NAGAPRASANNA

¶127

Bkp CT:SS

Sri. K. M. Narendrakumar v. State of Karnataka

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Sri. K. M. Narendrakumar v. State of Karnataka

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