Supreme Court of India
CENTRAL BUREAU OF INVESTIGATIONversusK.M. SHARAN
- Citation
- 2008 INSC 229
- Decided
- 21 February 2008
- Disposal
- Disposed off
- Bench
- ASHOK BHAN
Holding
The Supreme Court held that the High Court was not justified in quashing the FIR/charge‑sheet because the ingredients of offences under Sections 120B and 193 IPC were made out, and the inherent power under s.482 must not be used to suppress a legitimate prosecution.
Summary
The Central Bureau of Investigation (CBI) investigated K.M. Sharan, former Vice‑Chairman of the Delhi Development Authority, and his son for alleged illegal gratification from DLF and for possessing cash of Rs.36 lakh recovered from the son’s residence. The CBI filed a charge‑sheet under IPC sections 120B (criminal conspiracy) read with 193 (false evidence) and the Prevention of Corruption Act. Sharan filed a petition under CrPC s.482 seeking quashing of the FIR and charge‑sheet; the Delhi High Court granted the quash. On appeal, the Supreme Court held that the High Court erred because the FIR and charge‑sheet, on their face, disclosed the ingredients of the offences, and the inherent power under s.482 must not be used to stifle a legitimate prosecution. Consequently, the quashing order was set aside and the case was remitted for trial. The Court reiterated that s.482 is to be exercised sparingly, only where the FIR does not prima facie disclose an offence or where there is a legal bar, none of which applied here.
Issues considered
- Whether the High Court was justified in exercising its inherent power under Section 482 of the CrPC to quash the FIR and charge‑sheet.
- Whether the allegations in the FIR and charge‑sheet, taken at face value, prima facie constitute offences under IPC sections 120B and 193.
- Scope and limits of the inherent jurisdiction of courts under Section 482 CrPC in criminal matters.
Legislation cited
- Code of Criminal Procedure, 1973s. 482
- Indian Penal Code, 1860s. 1208, s. 120B, s. 193
- Prevention of Corruption Act, 1988s. 13(2) read with 13(1)
Subjects
Inherent jurisdictionSection 482 CrPCQuashing FIRCriminal conspiracyFalse evidenceCorruptionAbuse of processJustice
Judgment
[2008) 3 S.C.R. 101
...
~-
CENTRAL BUREAU OF INVESTIGATION A
v.
K.M. SHARAN
(Criminal Appeal No. 351 of 2008)
FEBRUARY 21,2008
.. B
.J (ASHOK BHAN AND DALVEER BHANDARI, JJ.)
Code of Criminal Procedure, 1973 - s.482 - FIR /charge-
sheet for offences under /PC - Quashed by High Court - On
appeal, held: Ingredients of the offences charged under are
made out justifying registration of the case - Hence quashing c
of FIR/charge-sheet not correct- Penal Code, 1860- ss.1208
and 193.
s. 482 - Inherent power under- Scope and ambit of -
.,r Held: Inherent power under the provision, though wide, have
D
to be exercised sparingly and with great caution - It should
not be exercised to stifle legitimate prosecution- However, no
hard and fast rule can be laid down specifying the cases where
such power can be used.
A criminal case was registered against the E
respondent who was chairman of Delhi Development
Authority. It was alleged that he had shown undue favour
to a company in respect of a project on having obtained
<• or having agreed to obtain illegal gratification. During
search of the house of his son, huge cash amount was F
recovered. His son claimed the amount to be of the
respondent. Respondent tried to explain the receipt of the
amount. Appellant found inconsistencies in the stand
taken by the respondent and that of his son. After
investigation, respondent was charge-sheeted u/s.120B
r/w s.193 IPC. G
.... Respondent filed petition u/s.482 Cr.P.C., seeking
quashing of the FIR/Charge-sheet. High Court quashed.
the same. Hence the present appeal.
101 H
102 SUPREME COURT REPORTS (2008] 3 S.C.R.
..,
..
A Disposing of the appeal, the Court
HELD: 1.1. Inherent powers under Section 482
Cr.P.C. though wide, have to be exercised sparingly,
carefully and with great caution and only when such
exercise is justified by the tests specifically laid down in
B this section itself. Authority of the court exists for the ..
advancement of justice. If any abuse of the process '-
leading to injustice is brought to the notice of the court,
then the court would be justified in preventing injustice
by invoking inherent powers in absence of specific
c provisions in the Statute. [Para 18) [119-D]
1.2 The powers possessed by the High Court under
Section 482 Cr.P.C. are very wide and the very plentitude
of the power requires great caution in its exercise. The
court must be careful to see that its decision in exercise
D
of this power is based on sound principles. The inherent
power should not be exercised to stifle a legitimate
prosecution. The High Court should normally refrain from
giving a prima facie decision in a case where all the facts
are incomplete and hazy; more so when the evidence has
E not been collected and produced before the court and
the issues involved, whether factual or legal, are of such
magnitude that they cannot be seen in their true
perspective without sufficient material. Of course, no hard •
~
and fast rule can be laid down in regard to cases in which
F the High Court ought to exercise its extraordinary
jurisdiction of quashing the proceedings at any stage.
[Para 21) [120-D-G]
Janata Dal v. H. S. Choudhary and Ors. (1992) 4 SCC
305; Roy V.D. v. State of Kera/a (2000) 8 SCC 590; Zandu
G
Pharmaceutical Works Ltd. and Ors. v. Mohd. Sharaful Haque
and Anr. (2005) 1 SCC 122; Central Bureau of Investigation
v. Ravi Shankar Srivastava, /AS and Anr. (2006) 7 SCC 188 -
relied on.
H lnder Mohan Goswami and Anr. v. State of Uttarancha/
CENTRAL BUREAU OF INVESTIGATION v. 103
K.M. SHARAN
..-j·
and Ors. AIR 2008 SC 251 ; R.P. Kapur v. State of Punjab AIR A
. 1960 SC 866; State of Bihar and Anr. v. J.A.C. Saldanha and
Ors. (1980) 1 SCC 554; State of West Bengal ~nd Ors. v.
...' Swapan Kumar Guha and Ors. 1982 1 SCC 561 and State of
Haryana & Ors. v. Bhajan Lal and Ors. (1992) Supp.1 SCC
335 and Indian Oil Corporation v. NEPC India Ltd. and Ors. B
.. (2006) 6 sec 736 .... referred to .
.../
Connelly v. Director of Public Prosecutions 1964 AC
1254; Director of Prosecutions v. Humphrys 1977 AC 1-
referred to.
c
2.1 The High Court in its jurisdiction under section
482 Cr.P.C. was not called upon to embark upon the
enquiry whether the allegations in the FIR and the charge-
sheet were reliable or not and thereupon to render definite
finding about truthfulness or veracity of the allegations.
7' D
These are matters which can be examined only by the
concerned court after the entire material is produced
before it on a thorough investigation and evidence is led.
[Para 35] [127 -G]
2.2 The High Court ought to have critically examined E
whether the allegations made in the First Information
Report and the charge- sheet taken on their face value
and accepted in their entirety would prima facie constitute
..,' an offence for making out a case against the accused .
[Para 36] [128-A] F
2.3 On the basis of the averments and allegations
incorporated in the FIR and the charge-sheet, the High
Court was not justified in quashing the FIR/charge-sheet
while exercising its extraordinary jurisdiction under
section 482 Cr.P.C. to stifle a legitimate prosecution. On G
careful scrutiny and analysis of the allegations
incorporated in the FIR and the charge-sheet set out in
"" the preceding paragraphs of this. judgment, it is
abundantly clear that ingredients of Sections 193 and
12013 IPC are clearly made out in the instant case setting H
104 SUPREME COURT REPORTS [2008) 3 S.C.R.
..,
"
A out a cognizable offence justifying the registration of a
case and investigation thereon. [Paras 39 and 41)
[129·A·B]
State of Bihar v. Murad Ali Khan and Ors. (1988) 4 SCC
655 - relied on.
B .
State of Haryana and Ors. v. Bhajan Lal and Ors. (1992) "\.
Supp.1 SCC 335- held inapplicable.
Madhavrao Jiwajirao Scindia and Ors. v. Sambhajirao
Chandrojirao Angre and Ors. (1988) 1 SCC 692- referred to.
c
CRIMINAL APPELLATE JURISDICTION : Criminal
Appeal No. 351 of 2008.
From the Judgment and order dated 17/11/2006 of the
High Court of Delhi at New Delhi in Crl. M P No. 1802/2006.
D
Gopal Subramanium, A.S.G., P.K. Dey and P.
Parmeswaran for the Appellant.
Sushil Kumar, Chetan Sharma, Manish Vashisht and Ashok
Mathur for the Respondent.
E
The Judgment of the Court was delivered by
DALVEER BHANDARI, J. 1. Leave granted.
2. The Central Bureau of Investigation (for short 'CBI) has .
•
questioned the legality and propriety of the judgment and order
F dated 17 .11.2006 in Crl. MP No.1802/2006 delivered by the
High Court of Delhi by which it quashed the FIR and the charge-
sheet against the accused-respondent under sections 120B and
193 of the Indian Penal Code.
G 3. Brief facts which are necessary to dispose of this appeal
are recapitulated as under:-
A case (FIR RC No.AC3/2003, 0002) was registered
against the then Vice-Chairman of the Delhi Development
Authority and other senior officials of the DOA for entering into
H conspiracy with Dharmbir Khattar, Ajay Khanna, Ravinder Taneja,
CENTRAL BUREAU OF INVESTIGATION v. 105
K.M. SHARAN [DALVEER BHANDARI, J.]
_,.
.,•
G.R. Gogia and Mukesh Saini to give undue favour to M/s DLF A
Universal Limited, New Delhi in the matter of allowing 300 Floor
Area Ratio (FRA) in respect of one of the projects of DLF
Universal by charging rates much below the prevailing market
rates and obtained or agreed to obtain illegal gratification from
M/s DLF as quid pro quo. The total bribe amount was 1.10 B
~ crores. During the course of investigation and subsequent
.J search conducted at the residence of the respondent's son AM .
Sharan who was at that time Commissioner (Land Disposal,
DOA), certain papers/documents relating to assets acquired/
expenses incurred by him and his family members besides the c
cash amount of Rs.36 lacs were recovered and seized by the
Central Bureau of Investigation. Consequently, a fresh FIR
No.RC.AC.3/2003 A0003 was registered against AM. Sharan,
the son of the respondent.
4. During the investigation of the subsequent case D
" emanating from FIR No. RC.AC.3/2003 A0003, A.M. Sharan
claimed that the cash of about Rs.36 lacs recovered from his
residence belonged to his father, the respondent herein. On
enquiry from the father, the respondent K.M. Sharan took the
plea in writing that the amount recovered from the residence of E
.his son belonged to him which he had received as sale proceeds
of two properties, i.e., Plot No. 908 and House No. C-2/388,
Janak Puri, New Delhi. The respondent submitted that the cash
of Rs.4 lacs and 10 lacs received by him on 04.02.2003 and
¥ 06.03.2003 respectively from Vijay Gulati for the sale proceeds F
of Bahadurgarh plot and the cash amount of Rs.22 lacs was
received on 20.03.2003 as an advance from Harmanjeet Singh
.
and Anoop ·Singh for sale of Janak. Puri house in total
consideration of Rs.50 lacs.
5. The CBI found that there were several inconsistencies G
and irregularities in the stand taken by the respondent (written
plea) and the stand taken by his son, AM. Sharan with regard
to recovery of Rs.36 lacs from the residence of A.M. Sharan.
*' The CBI conducted investigation and after its completion,
charge-sheet was filed on 06.09.2005 in the Court of Special H
106 SUPREME COURT REPORTS [2008) 3 S.C.R.
A Judge, Patiala House Courts, New Delhi for offences under
sections 13(2) read with 13(1) of the Prevention of Corruption
Act, 1988 against AM. Sharan and also under section 120B
read with section 193 IPC against A.M. Sharan and the
respondent. The respondent filed Criminal Miscellaneous
B Petition No.1802 of 2006 under section 482 of the Code of
Criminal Procedure for quashing of the FIR/charge-sheet under .,
section 120B read with 193 IPC. The High Court by the
impugned judgment quashed FIR No.RC AC3/2003. According
to the CBI, the FIR/charge-sheet was erroneously quashed by
c the High Court.
6. According to the appellant CBI, the High Court did not
consider the material collected during investigation which
according to the appellant was sufficient to prove the charges.
According to the CBI, the High Court did not properly consider
D the entire material in proper perspective. According to the CBI,
the allegations levelled against the respondent were fully "" .
supported by documents and also sufficient to prove the case
during the trial. According to the CBI, the High Court has seriously
erred in quashing the FIR/charge-sheet at the very threshold
E without even ·giving an opportunity to the CBI to lead evidence
in the case.According to the appellant CBI, during investigation
it was revealed that the stand taken by the respondent with
regard to the recovery of Rs.36 lacs is totally false and untenable.
The documents which were supplied to the appellant CBI in
F support of the stand taken by the respondent were also found to
be false.
7. Mr. Gopal Subramanium, the learned Additional Solicitor
General, appearing for the appellant, in order to demonstrate
that in this case the ingredients of section 120B read with
G section 193 IPC are fully made out, has drawn our attention to
the charge-sheet in extenso. We deem it appropriate to
reproduce certain portions of the charge-sheet to evaluate
whether the ingredients of offence under section 120B read with
section 193 IPC are made out or not. It would not be appropriate
H to comment on the material collected by the CBI because the
CENTRAL BUREAU OF INVESTIGATION v. 107
~
'"'. K.M. SHARAN [DALVEER BHANDARI, J.]
evidence has yet not been adduced, but from the prime facie A
material on record, we would try to adjudge and evaluate whether
the High Court was justified in quashing the FIR and the charge-
sheet in this case. The relevant para nos. 3, 8 and 17 to 21 of
the charge-sheet read as under:
" "3. It was alleged in the FIR that accused Anand Mohan B
~ Sharan, while working in different capacities in Govt. of
Haryana and as Commissioner (Land Disposal), Delhi
Development Authority, New Delhi (while on deputation to
Govt. of India from 17.7.2001 to 28.3.2003) between the
period from 1990 to 27 .3.2003 by corrupt or illegal means c
or by abusing his official position as public servant acquired
assets in his own name or in the name of his family
members which are substantially disproportionate to his
known sources of income. It is also alleged that during the
period from 31.8.1990 to 27.3.2003, Shri Anand Mohan D
Sharan had a total income of around Rs.28.06 lacs from
all sources and his total expenditure during the said period .
was around. Rs.12.68 lacs. It was further alleged that as
against the likely savings of Rs.15.38 lacs approximately,
he ha.s been found in possession of assets totaling E
Rs.59.89 lacs approx. which are disproportionate to his
known sources of income to the extent of Rs.44.51 lacs,
which he could not satisfactorily account for.
J>
8. Investigation has further disclosed that till 22.8.1991
Shri Anand Mohan Sharan did not have any significant/ F
noticeable assets. It is also disclosed that Shri Anand
Mohan Sharan acquired a residential flat at HOPE
Apartments, Gurgaon and the payments for the same were
made during the period from 22.8.1991to14.12.1995. It
has also been disclosed that the said flat was allotted to G
accused Anand Mohan Sharan on 9.10.1995 and it is still
in his possession. It is further disclosed that in a short
spell of time accused Anand Mohan Sharan accumulated
substantial movable assets including Bank balances and
other investments. H
;.;:. ~,:.f1·:~t~-f~:~'.·
108 SUPREME COURT REPORTS [2008] 3 S.C.R.
., ..
•
A 17. ·1 nvestigation has further disclosed that during search
conducted in RC.AC.3/2003 A002 at the residence of
Shri Anand Mohan Sharan, cash of Rs.36, 14,970/- was
. recovered from two different places in the house, out of
which Rs.33 lacs in the form of 1000 currency notes of
B Rs.1000/- each, 4600 currency notes of Rs.500/- each ~
and balance 600 currency notes of Rs.100/- each were .\_
found inside a VIP sky bag, kept inside box type double
bed of master bedroom at 1st floor. The remaining cash
aggregating to Rs.3, 14,970/- was found/recovered from
c different steel almirahs, in the said house. •
18. During investigation ShriAnand Mohan Sharan claimed
that the amount of Rs.36 lakhs recovered from his
residence belonged to his father. On his part, Shri K.M.
Sharan, father of accused took the plea that the amount
D recovered from the residence of his son was received as
sale proceeds of two properties - (a) Plot No. 908, MIE,
Bahadurgarh and (b) House No. C-2/388, Janak Puri, New
Delhi. He contended that cash of Rs.4 lakhs and Rs.10
lakhs respectively were received by him on 4.2.2003 and
E 6.3.2003 from Shri Vijay Gulati at Bahadurgarh Plot and
an amount of Rs.22 lakhs was received on 20.3.2003
from Shri Harmanjeet Singh and Shri Anoop Singh as
advance for sale of Janakpuri House against a total
consideration of Rs.SO lakhs. He has also claimed that {
'
F since he had to proceed to Jaisalmer on 8.3.2003, he
kept the amount of Rs.14 lakhs received for Bahadurgarh
plot with his son Shri Anand Mohan Sharan. Further, he
also contended that he had fractured his leg at Jaisalmer
and had returned to Delhi on 12.3.2003. Under these
circumstances he had to stay at his son's house for a
G
couple of days and on 20.3.2003, the deal for sale of
Janakpuri house also materialized and consequent thereto,
he claimed to have kept the said amount of Rs.22 lakhs
also at his son's residence. He further claimed that it was
in view of his medical condition that he considered it
H
CENTRAL BUREAU OF INVESTIGATION v. 109
.,
. ~ K.M. SHARAN [DALVEER BHANDARI, J.)
prudent to keep cash received towards the above A
mentioned sale transactions at his son's house.
19. During the investigation, the plea taken by Shri K.M.
Sharan was found to be dubious anq incorrect, as a
number of inconsistencies wer.e found in the explanation
~
which rebut the explanation of Shri K. M. Sharan and B
_,, accused Shri Anand Mohan Sharan in tandem, regarding
recovery of Rs.36 lakhs. Such inconsistencies are listed
as under:-
(i) That the search was conducted in RC.AC.3/2003 A002 c
at the residence of Shri Anand Mohan Sharan on
27.03.2003. It is pertinent to mention that Shri K. M. Sharan,
father of Shri Anand Mohan Sharan, was not present at
the house of Shri Anand Mohan Sharan at the time of the
search when Rs.36 lacs were recovered from him. Further,
D
house search at C-2/388, Janakpuri, New Delhi of Shri K.
M. Sharan was also conducted on 28.3.2003, i.e. one day
after the search at the house of Shri Anand Mohan Sharan.
During the search, cash of Rs.75,000/- was also seized
from Shri K.M. Sharan's house. The plea of Shri K. M.
Sharan that Rs.36 lacs was kept by him at his son's house E
for safe keeping becomes untenable due to recovery of
substantial amount of cash from his own house too,
; subsequently.
(ii) That Shri Krishan Mohan Sharan was required to give F
his consent for lie detector test in the. context of his claim
regarding Rs.36 lakhs seized from the residence of Shri
Anand Mohan Sharan. However, Shri Krishan Mohan
Sharan expressed his unwillingness in writing citing
medical reasons. On the basis of Medical advice of Dr.
G
S.S. Bansal, Director, Metro Heart Institute, Faridabad in
whose hospital he was earlier admitted after the arrest of
Shri Anand Mohan Sharan in RC AC3/2003 A002.
lncidently, Shri K. M. Sharan was treated by Dr. S.S. Bansal
as a 'complimentary' patient during that time and no
H
110 SUPREME COURT REPORTS (2008] 3 S.C.R.
,.
"r
A payment was charged.
(iii) That the property no. C-2/388, Janakpuri, New Delhi
for the sale of which an amount of Rs.22 lacs was claimed
to have been received, was mortgaged to Bank of Baroda,
Navada Branch, New Delhi, in lieu of Bank guarantee for
B Rs.1 crore issued by the Bank on behalf of Mis Sharan ~
Distributors. The said Bank guarantee was issued on "-
27.8.2002 in lieu of a security deposit of Rs.1 crore on
behalf of M/s. Sharan Distributors against equitable
mortgage of property situated at C-2/388, Janakpuri, New
c Delhi. It is also disclosed that the borrower is morally under
obligation not to deal with the property in any manner,
whatsoever, without the written consent/approval of the
Bank. In view of this, Shri Krishan Mohan Sharan could
not have entered into an agreement to sell with Shri
D Harmanjeet Singh and Shri Anoop Singh, without the
"'
consent of the Bank. Investigation has also disclosed that
Shri Ved Prakash Aneja, Chartered Engineer, C-2/19,
Janakpuri who was deputed by the Bank to conduct
Valuation of the said property, C-2/388, Janakpuri, New
E Delhi at the time of issuing Bank guarantee, had valued
the same at Rs.1 crore 29 lakhs as per valuation report
dated 21.7.2001. It completely defies logic and
commonsense that this property valued at Rs.1 crore 29
lacs was being sold for a total consideration of Rs.50 lacs '\_
F to Shri Harmanjeet Singh and Shri Anoop Singh.
(iv) That, Shri Anoop Singh who purportedly financed Rs.12
lakhs out of Rs.22 lakhs for purchase of Janakpuri property,
while disclosing the source of this amount he claimed that
he and his family members received money amounting to
G Rs.10,60,000/- in 28 separate installments from August
2002 to March 2003 from his relatives settled in USA
through Western Union Money Transfer. It defies
commonsense and reasonable prudence that this money
never entered banking channels from August 2002 to
H March 2003 and was kept in the house by Shri Anoop
..,-f CENTRAL BUREAU OF INVESTIGATION v. 111
K:M. SHARAN [DALVEER BHANDARI, J.] ·
Singh, and was finally allegedly paid in cash to Shri K.M. A
Sharan.
(v) That, the stamp paper purchased for the purported
sale/purchase of House No.C-2/388, Janakpuri, New Delhi
• is shown to have been purchased on 20.03.2003 in the
record of Shri Devender Kumar, Stamp Vendor and entry B
-'
to this effect has been made in the last line of the page at
SI. No. 94304, which is in handwriting different from the
preceding and succeeding entries. Moreover, entry at SI.
Nos.94084,94147,94484,94592,94593,94775,94812,
94924, 94925, 94999, 95186, 95698, 95881, 97547, c
97913, 98095, 99427 and 98503 are deliberately left blank
being the last serial No. of the relevant pages. Further
SI.Nos. 71, 121, 122, 124 to 127, 130, 131, 142, 143,
145 to 147, 153, 154, 162, 163, 174 to 180, 188, 189,
193, 194, 197, 199,200,201, 203to207, 221, 222,225 D
to 229, 233, 239, 245 to 249 have been left blank to
· facilitate such false entries, as done in the instant case.
Moreover, as per practice, Stamp Papers are purchased
by the party who is purchasing any property whereas the
relevant stamp papers have been shown purchased in the E
name of Shri K.M. Sharan. Thus the credibility of the
agreement to sell is doubtful. During investigation, Shri
Devender Kumar, Stamp Vendor who sold Stamp Papers
for property no. C-2/388, Janakpuri, New Delhi on
20.3.2003, stated that some employee of an advocate F
had come to him and requested for back dated stamp
paper in the name of Shri K.M. Sharan, as the stamp
paper purchased earlier was purportedly lost. Accordingly,
he saw his register and found that entry at SI. No. 94304
was lying blank. So he made an entry regarding sale of
G
stamp paper to Shri K.M. Sharan· in that blank space
available in the date 20.3.2003 in his register, whereas it
was sold much later.
(vi) That, Shri Krishan Mohan Sharan has taken a plea
that amount of Rs.36 lakhs received by him for sale of two H
112 SUPREME COURT REPORTS [2008] 3 S.C.R.
...
...,_
A · properties could not be deposited in the Bank as he was
searching for a property for his daughter and tater on he
fractured his leg, due to which he could not visit the Bank.
But during investigation many Bank accounts of Shri K. M.
Sharan and his company were scrutinized, which show
B that during the relevant period, there were many debits as •
well as credit entries made in those accounts and that he '
had operated his Bank accounts through-~is employees.
(vii) That, Shri K.M. Sharan claimed that he hac;l kept Rs.4
lakhs in his house which w~s received by him on 4.2.2003
c towards advance for sale of plot at Bahadurgarh till
8.3.2003 instead of depositing the same at Bank of
Baroda located near his hQuse, where he had an account.
He has claimed that this amount was kept atAnand Mohan
Sharan's residence on 8.3.2003 i.e. more than one month
D later. He also claimed that part payment of Rs.10,00,000/
- received on 6.3.2003 in the same deal was also kept by
him at Anand Mohan Sharan's residence on 8.3.2003
instead of depositing the same in the aforesaid Bank
located near his house. These claims of Shri K. M. Sharan
E are devoid of any logic, and defy normal human prudence/
practice. ·
(viii) That, during investigation, Shri Vijay Gulati and Shri
Ajay Gulati who allegedly purchased the Bahadurgarh plot ;
have stated before independent witnesses, that the '
F currency notes of Rs.14 lacs paid by them to Shri K.M.
Sharan for the deal of Bahadurgarh plot were in the
denomination of Rs.100 and Rs.50/-. However, in the
currency notes of 36 lacs, which was seized from the
residence of Shri Anand Mohan Sharan, as
G aforementioned, the currency notes found in the
denomination of Rs.100/- add up to only Rs.60,000/-. It is
also disclosed that there are no currency notes in the
denominations of Rs.SOI- as rest of currency notes are in
the denominations of Rs.1000/- and Rs.500/-.
H
CENTRAL BUREAU OF INVESTIGATION v. 113
-( K.M. SHARAN [DALVEER BHANDARI, J.]
....
(ix) That Shri Vijay Gulati of Mis. Sunrex Fabrics made A
false and manipulated entries in the books of accounts of
Mis. Gulati & Co. and in the Account Book of M/s. Sunrex
and Co. to show availability of Rs.14 lakhs · in cash
purportedly paid to Shri K. M. Sharan. These manipulated
entries according to Shri Vijay Gulati were made at the B
behest of Shri K. M. Sharan after the aforementioned
recovery of Rs.36 lacs, to legitimate existence of Rs.14
lacs . In order to show r~ceipt/generation of Rs.14 lakhs in
Account Books of M/s. Gulati and Co., Shri Vijay Gulati
had also prepared false cash memos showing receipt/ c
generation of sales worth Rs.14 lacs by Mis. Gulati &Co.
and thereafter, the amount was shown transferred to the
account of M/s Sunrex & Co. However, the Ledger Book
of M/s Sunrex & Co.,. which indicates total transaction of
the company does not show receipts/generation of sales
0
worth Rs.14 lacs during the period 18.1.2003 to _3.3.2003.
Further whereas the sale proceeds of Mis Gulati & Co.
between August 2000 to January, 2003 (29 months) were
worth Rs.1,52,534/- purchased sales shown to have been
made between 18th January, 2003 and 3rd March, 2003
(44 days) were for Rs.13,83,106/-. This clearly indicates E
- an inconsistent pattern of purported business/sales of M/
s. Gulati & Co. through false cash memos, which were
prepared to show false sales.
20. Thus, the investigation has disclosed that Shri K. M. F
Sharan, in .order to save his son actively connived with
him to fabricate false evidence to legitimize the ill-gotten
amount of R·s.36 lakhs recovered as aforementioned from
.Shri Anand Mohan Shara n's residence. Shri Anand Mohan
Sharan failed to satisfactorily account for the source of G
acquisition of his numerous assets. During the course of
investigation, he has, in connivance with his falher come
up with certain dubious explanations and in support thereof
created certain fraudulently prepared documents showing
cash ·of Rs.36 lacs recovered from him as belonged to
H
114 SUPREME COURT REPORTS [2008] 3 S.C.R.
..
A Shri K. M. Sharan. Investigation by CBI into this aspect
has proved the aforementioned claims/explanations to be
false. It is also disclosed that Shri Anand Mohan Sharan
had entered into a criminal conspiracy with his father Shri
K.M. Sharan, in furtherance to which false evidence was
B created and submitted during the course of investigation ..
in th·e instant case. '
21 . The investigation has therefore established that the
said Shri Anand Mohan Sharan during the period
22.08.1991 to 27.03.2003 was in possession of assets
C which are disproportionate to his known sources of income
by Rs.45,70,560.38 (Rupees Forth five lacs, seventy
thousand, five hundred sixty and thirty eight paisa) which
he could not satisfactorily account for. Further, Shri Krishan
Mohan Sharan entered into criminal conspiracy with Shri
D Anand Mohan Sharan by intentionally fabricating false
evidence to legitimize the source of the aforementioned
cash of Rs.36,00,000/- seized during the house search of
Shri Anand Mohan Sharan. The aforesaid acts constitute
commission of offences punishable U/s 13(2) r/w 13(1 )(e)
E of PC Act, 1988 by Shri Anand Mohan Sharan and U/s
1208 r/w 193 l.P.C. by Shri Anand Mohan Sharan and
Shri Krishan Mohan Sharan and substantive offence
thereof."
8. In the light of abovementioned material, we are called
F upon to critically evaluate and examine the judgment of the High
Court. This exercise has been undertaken in order to arrive at
objective assessment whether the High Court was justified in
quashing the FIR and the charge-sheet in this·case.
G 9. In the impugned judgment, the High Court after giving
the basic facts of the case and recording of the submissions of
the parties has given its findings. The relevant portion of the
High Court'~ findings in the impugned judgment are set Ol;Jt in
the succeeding paragraphs:
H 'Therefore, according to the C.8.1., the plea of the petitioner
CENTRAL BUREAU OF INVESTIGATION v. 115
f
w
K.M. SHARAN [DALVEER BHANDARI, J.)
that he had kept the sale proceeds of the two properties A
at his son's residence was not a valid plea as nothing
prevented the petitioner to keep this amount as well as at
his son's house if he was so concerned about the safety
of his cash. I may say that Rs. 75,0001- is quite small
/.
amount in comparison to Rs. 36 lacs therefore, B
prosecuting the petitioner for this reason to my mind was
~J
not justifiable."
(emphasis supplied)
10. The High Court further observed as under:
c
"It is not the case of the C.B.I. that the petitioner is not the
owner ofthe properties nor is the case of the C.8.1., that
the vendees were bogus persons. Rather charge sheet
filed by the C.B.I. confirms the fact that during investigation,
Shri Vijay Gulati one of the prospective buyers of the
-,/.. D
property of the petitioner had admitted that he had paid a
part consideration towards the property to the petitioner
but the C.B.I. still made the petitioner an accused on the
ground that the denomination of currency notes described
by Vijay Gulati did not tally with the currency notes recovered
from the possession of the son of the petitioner. To my E
mind, this could not be the valid ground for implicating
the petitioner. "
(emphasis supplied)
·~
11. Regarding provisions of section 193 IPC, the High Court F
observed as under:
"17. Provisions of Section 193 of the Indian Penal Code
purposes of being used in any stage of judicial
proceedings. The entire investigation conducted by the
investigators indicates that they did not probe into the fact G
if written documents such as agreement to sell, receipt,
sale deed, post dated cheques were fabricated for the
purposes of being used at the stage of judicial
proceedings. On the contrary investigation conducted by
the investigators in this regard fortifies the fact that the H
116 SUPREME COURT REPORTS [2008] 3 S.C.R.
'
A transactions with regard to the sale of two immovable
properties of the petitioner actually did take place one
with Vijay Gulati and another with Harmanjeet Singh and
Anoop Singh and they had stated before the investigators
that part of the amount had actually passed to the petitioner
B towards the part sale price of the two properties, yet the
investigators suspected and merely on suspicion brought •
him in the dock. It shall be noteworthy to add here that the
prospective vendees having come to know that the
'"
properties which were to be purchased by them had
c become a subject matter of criminal case, they filed civil
suits in the High Court for cancellation of their agreements
and for refund of their amount. This is one of the strong
circumstances which favours the petitioner. The
investigators felt that even this was done at the behest of
the petitioner. If investigators were so sure about this then
D lr
what prevented them from bringing these two parties in
the criminal net as well. The prosecution appears to have
hooked the petitioner merely on suspicion. The prosecution
took note of the following.circumstances, such as currency
notes found from the son of the petitioner's house were in
E different denomination than what was described by the
vendees, that the petitioner could not have legally sold this
property without having sanctioned from the bank, that the
sum of Rs. 75,000/- was recovered from the house of the
~
petitioner and he could keep this amount with his son if he
F was so concerned about the safety of his cash amount,
that the petitioner had not deposited the said amount in
the bank, that the petitioner sold the property for Rs.50
lacs particularly when its value was more than one crore.
These reasons, according to my mind, were not valid
G reasons for prosecuting the petitioner."
(emphasis supplied)
~
12. On the basis of the aforementioned observations, the
High Court came to definite finding that no criminal liability can
H be fastened on the respondent herein (and the petitioner before
CENTRAL BUREAU OF INVESTIGATION v. 117
K.M. SHARAN [DALVEER BHANDARI, J.]
..
"(
the High Court). The High Court further observed a~ under: A
.
"18. No criminal liability can be fastened to the petitioner
who was not connected with the commission of main
'.
offence at all as co-conspirator nor Section 193 of Indian
Penal Code can be attracted against the petitioner. Even
,. otherwise if at all the version of the CBI is taken as correct B
.i then in that eventuality the Sub Registrar who executed
the sale deed claimed to be fabricated should have been
prosecuted and also the stamp vendor from whom the
judicial stamp papers for the ·purpose of executing the
sale deed and agreement to sell an ante dated should c
have been prosecuted as co-conspirators. The CBI in that
case should also have proceeded against the.vendees in
whose favour the agreement to sell and sale deed were
executed. The CBI did not do so because the CBI was not
-.J
sure whether the documents produced by the petitioner to D
show that the amount so recovered from the house of his
-son actually belonged to the petitioner it being the sale
proceed of the transaction of property."
The High Court observed that the CBI in this case should
have proceeded a~ainst the vendees in whose favour the E
agreement to sell was executed. According to the learned judge
of the High Court, the CBI did not do so because the CBI was
not sure whether doc1:1ments produced by the respondent herein
i to show that the amount so recovered from the house actually
belonged to the respondent's son. . F
13. In the impugned judgment, the High Court gave a clean
chit to the respondent. The High Court observed as under: ·
"What else weigh in my mind is that his son accused Anand
Mohan Sharan was given only one day to produce such 1,, G
documents. This Court wonders if documents referred to
above could be prepared overnight. However, these
documents also included the cheques paid by the vendee
towards the transaction of the property. While being
interrogated he had there and then stated that the amount H
118 SUPREME COURT REPORTS [2008] 3 S.C.R.
A so recovered from his house actually belonged to his father
which he had kept, he being alone and an old man and for
safety purpose he had kept that amount with him. He was
asked to bring proof in that regard next day which he
brought before the investigator in the form of an agreement
B to sell executed between his father and the vendees and
also the sale deed including the receipt and cheques which
were of prior date of the date of alleged· commission of
present offence. I am of the considered opinion that the
prosecution has no case against the petitioner he being
c not involved either in the commission of main offence or
for creating the offence of fabricating the document."
(emphasis supplied)
14. In the concluding paragraph, the High Court observed
that the respondent herein has been unnecessarily roped in a
D criminal case and it was a fit case where the court must exercise
its inherent power under section 482 Cr.P.C. to quash the FIR
No.RC.AC3/2003 A0003 dated 6.10.2003 registered against
the respondent.
E 15. We have heard Mr. Gopal Subramanium, the learned
Additional Solicitor General appearing for the.CBI and Mr. Sushi I
Kumar, Senior Advocate on behalf of the accused respondent
at length. We have also carefully perused the pleadings and the
documents placed on record. Now, it is our bounden duty to l
F examine whether on the facts and circumstances of this case
and on the basis of the material available on record, the High
Court was justified in quashing the FIR and the charge-sheet.
16. We deem it appropriate to recapitulate the legal
position which has been crystallized by a series of judgments
G of the English Courts and the Indian Courts by referring to some
of them.
Discussion of decided cases:
17. The scope and ambit of the powers of the High Court
H under section 482 Cr.P.C. have been elaborately dealt with by
CENTRAL BUREAU OF INVESTIGATION v. 119
K.M. SHARAN [DALVEER BHANDARI, J.]
.. ~-'(
a three judge Bench of this Court in the recent case of lnder A
Mohan Goswami & Anr. v. State of Uttaranchal & Ors. [AIR
2008 SC 251]. This Court held that every court has inherent
power to act ex debito justitiae to do real and substantial justice
· for the administration of which alone, the court exists, or to
prevent abuse of the process of the court. Inherent power of the B
.. court can be exercised in the following categories of cases:
·--' (i) to give effect to an order under the Code;
(ii) to prevent abuse of the process of court, and
(iii) to otherwise secure the ends of justice. c
18. Inherent powers under section 482 Cr.P.C. though wide
have to be exercised sparingly, carefully and with great caution
and only when such exercise is justified by the tests specifically
laid down in this section itself. Authority of the court exists for
D
the advancement of justice. If any abuse of the process leading
" to injustice is brought to the notice of the court, then the court
would be justified in preventing injustice by invoking inherent
powers in absence of specific provisions in the Statute.
19. Reference to the following cases would reveal that the E
...
, courts have consistently taken the view that they must use this
extraordinary power to prevent injustice and secure the ends of
justice. The English courts have also used inherent power to
I
achieve the same objective. It is generally agreed that the Crown
-r i. Court has inherent power to protect its process from abuse. In F.
Connelly v. Director of Public Prosecutions [1964] AC 1254,
Lord Devlin stated that where particular criminal proceedings
constitute an abuse of process, the court is empowered to refuse
to allow the indictment to proceed to trial. Lord Salmon in
Director of Public Prosecutions v. Humphrys [1977] AC 1
G
stressed the importance of the inherent power when he observed
that it is only if the prosecution amounts to an abuse of the
process of the court and is oppressive and vexatious that the
... judge has the power to intervene. He further mentioned that the
court's power to prevent such abuse is of great constitutional
H
120 SUPREME COURT REPORTS [2008] 3 S.C.R.
' .
A importance and should be zealously preserved.
20. In R.P. Kapur v. State of Punjab AIR 1960 SC 866,
this court summarized some categories of cases where inherent
power can and should be exercised to quash the proceedings: •.
•
B (i) where it manifestly appears that there. is a legal bar
against the institution or continuance of the •
proceedings;
(ii) where the allegations in the first information report or
complaint taken at their face value and accepted in
C their entirety do not constitute the offence alleged;
(iii) where the allegations constitute an offence, but there
is no legal evidence adduced or the evidence
adduced clearly or manifestly fails to prove the charge.
D 21. The powers possessed by the High Court under
section 482 of the Code are very wide and the very plenitude of
the power requires great caution in its exercise. The court must
be careful to see that its decision in exercise of this power is
based on sound principl~s. The inherent power should not be
E exercised to stifle a legitimate prosecution. The High Court
should normally refrain from giving a prima facie decision in a
case where all the facts are incomplete and hazy; m·ore so, when
the evidence has not been collected and produced before the
·court and the issues involved, whether factual or legal, are of
F such magnitude that they cannot be seen in their true perspective
without sufficient material. Of course, no hard and fast rule can
be laid down in regard to cases in which the High Court ought
to exercise its extraordinary jurisdiction of quashing the
proceedings at any stage.
G 22. This court in State of Karnataka v. L. Muniswamy &
Ors. (1977) 2 SCC 699 observed that the wholesome power
under section 482 Cr.P.C. entitles the High Court to quash a
proceeding when it comes to the conclusion that allowing the
proceeding to continue would be an abuse of the process of
H the court or that the ends of justice require that the proceeding
CENTRAL BUREAU OF INVESTIGATION v. 121
K.M. SHARAN [DALVEER BHANDARI, J.]
. +-
ought to be quashed. The High Courts have been invested with A
inherent powers, both in civil and criminal matters, to achieve a
salutary public purpose. A court proceeding ought not to be
permitted to degenerate into a weapon of harassment or
persecution. The court observed in this case that ends of justice
are higher than the ends of mere law though justice must be B
~ administered according to laws made by the legislature. This
-A case has been followed in a large number of subsequent cases
of this court and other courts.
23. This Court in StateofBihar&Anr. v. J.A.C. Sa/danha
& Ors. (1980) 1 SCC 554 at 574 has disapproved the exercise c
of the extra-ordinary power of the High Court in issuing a
prerogative writ quashing tlie prosecution solely on the basis of
the averments made in the affidavit in the following words:
"The High Court in exercise of the extraordinary jurisdiction
D
committed a grave error by making observations on
seriously disputed questions of facts taking its cue from
affidavits which in such a situation would hardly provide
any reliable material. In our opinion the High Court was
clearly in error in giving the direction virtually amounting to
a mandamus to close the case before the investigation is E
complete. We say no more."
24. The classic exposition of the law is found in State of
West Bengal & Ors. v. Swapan Kumar Guha & Ors. (1982)
'" 1 sec 561. In this case, Chandrachud, CJ in his concurring F
separate judgment has stated that "if the FIR does not disclose
the commission of a cognizable offence, the Court would be
justified in quashing the investigation on the basis of the
information as laid or received". Justice A.N. Sen who wrote
the main judgment in that case with which Chandrachud, CJ
G
and Varadarajan, J. agreed has laid the legal proposition as
follows:
"... the legal position is well-settled. The legal position
appears to be that if an offence is disclosed, the Court will
not normally interfere with an investigation into the case H
122 SUPREME COURT REPORTS [2008] 3 S.C.R.
"
A aind will permit investigation into the offence alleged to be
completed; if, however, the materials do not disclose an
offence, no investigation should normally be permitted ....
Once an offence is disclosed, an investigation into the
offence must necessarily follow in the interests of justice.
B If, however, no offence is disclosed, an investigation cannot
be permitted, as any investigation, in the absence of any ~
,._
offence being disclosed, will result in unnecessary
harassment to a party, whose liberty and property may be
put to jeopardy for nothing. The liberty and property of any
c individual are sacred and sacrosanct and the Court
zealously guards them and protects them. An investigation
is carried on for the purpose of gathering necessary
materials for establishing and proving an offence which is
disclosed. When an offence is disclosed, a proper
investigation in the interests of justice becomes necessary
D
to collect materials for establishing the offence, and for
bringing the offender to book. In the absence of a proper
investigation in a case where an offence is disclosed, the
offender may succeed in escaping from the consequences
and the offender may go unpunished to the detriment of
E the cause of justice and the society at large. Justice
requires that a person who commits an offence has to be
brought to book and must be punished for the same. If the
Court interferes with the proper investigation in a case
where an offence has been di$closed, the offence will go
F unpunished to the serious detriment of the welfare of the '
society and the cause of justice suffers. It is on the basis
of this principle that the Court normally does not interfere
with the investigation of a case where an offence has
been disclosed .... Whether an offence has been disclosed
G or not must necessarily depend on. the facts and
circumstances of each particular case .... If on a
consideration of the relevant materials, the Court is
satisfied that an offence is disclosed, the Court will normally
not interfere with the investigation into the offence and will
H generally allow the investigation into the offence to be
CENTRAL BUREAU OF INVESTIGATION v. 123
. K.M. SHARAN [DALVEER BHANDARI, J.]
.r
completed for collecting materials for proving the offence." A
25. This court in Madhavrao Jiwajirao Scindia & Ors. v.
Sambhajirao Chandrojirao Angre & Ors. (1988) 1 SCC 692
observed in para 7 as under:
"7. The legal position is well settled that when a prosecution B
• at the initial stage is asked to be quashed, the test to be
__,/
applied by the court is as to whether the uncontroverted
allegations as made prima facie establish the offence. It
is also for the court to take into consideration any special
features which appear in a particular case to consider c
whether it is expedient and in the interest of justice to
permit a prosecution to continue. This is so on the basis
that the court cannot be utilized for any oblique purpose
and where in the opinion of the court chances of an ultimate
conviction is bleak and, therefore, no useful purpose is
D
likely to be served by allowing a criminal prosecution to
continue, the court may while taking into consideration the
special facts of a case also quash the proceeding even
though it may be at a preliminary stage."
26. In State of Bihar v. Murad Ali Khan & Ors. (1988) 4 E
SCC 655, this Court observed that the jurisdiction Under Section
482 Cr.P.C. has to be exercised sparingly and with
circumspection. The High Court should not embark upon an
·~
enquiry whether the allegations in the complaint are likely to be
established by evidence or not. F
27. Mr. Sushil Kumar, the learned senior counsel appearing
for the respondent placed reliance on the case of State of
Haryana & Ors. v. Bhajan Lal & Ors. (1992) Supp. 1 SCC
335. He particularly laid stress on para 1 of the guideline in
which this court observed that allegations incorporated in the G
FIR or the complaint, even if are taken at their face value and
accepted in their entirety, would not prima-facie constitute any
..,, offence or make out a case against the accused. On analysis
of this case, in our opinion, it really does not support the case of
the respondent. The ratio of the judgment is clear that the H
124 SUPREME COURT REPORTS (2008] 3 S.C.R.
•
A extraordinary powers of the court under section 482 Cr.P.C. can
be exercised only in exceptional circumstances where all
allegations incorporated in the FIR or the complaint do not prime
facie constitute any offence or make out a case against the
accused.
B 28. In Bhajan Lal's case (supra}, this court in the backdrop
of interpretation of various relevant provisions of the Cr.P.C.
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 of the Constitution of India
C or the inherent powers under section 482 Cr.P.C. gave the
following categories of cases by way of illustration wherein such
power could be exercised either to prevent abuse of the process
of the court or otherwise to secure the ends of justice. This court
in the said judgment made it clear that it may not be possible to
D lay down any precise, clearly defined and sufficiently channelised
and inflexible guidelines or rigid formulae and to give an
exhaustive list to myriad kinds of cases wherein such power
should be exercised. According to this judgment, the High Court
would be justified in exercising its power in cases of following
E categories:-
"(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 not prima
facie constitute any offence or make out a case
F against the accused.
(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.
(3) Where the uncontroverted allegations made in the
FIR or complaint and the evidence collected in support
H of the same do not disclose the commission of any
CENTRAL BUREAU OF INVESTIGATION v. 125
K.M. SHARAN [DALVEER BHANDARI, J.]
. r
offence and make out a case against the accused. A
(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. B
~
--'. (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 c
proceeding against the accused.
(6) Where there is an express legal bar engrafted in any
of the provisions of the Code or the concerned Act
(under which a criminal proceeding is instituted) to
the institution and continuance of the proceedings D
and/or where there is a specific provision in the Code
or the concerned Act, providing efficacious redress
for the grievance of the aggrieved party.
(7) Where a criminal proceeding is manifestly attended
with ma/a fide and/or where the proceeding is E
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."
.,~
29. This court in Janata Dal v. H. S. Chowdhary & Ors. F
(1992) 4 sec 305 observed thus:
"132. The criminal courts are clothed with inherent power
to make such orders as may be necessary for the ends of
justice. Such power though unrestricted and undefined
should not be capriciously or arbitrarily exercised, but G
should be exercised in appropriate cases, ex debito
justitiae to do real and substantial justice for the
"" administration of which alone the courts exist. The powers
possessed by the High Court under section 482 of the
Code are very wide and the very plentitude of the power H
126 SUPREME COURT REPORTS [2008] 3 S.C.R.
.
A requires great caution in its exercise. Courts must be
careful to see that its decision in exercise of this power is
based on sound principles."
30. This court in Roy V.D. v. State of Kera/a (2000) 8
sec 590 observed thus:-
B ..
"18. It is well settled that the power under section 482
Cr.P.C has to be exercised by the High Court, inter alia,
to prevent abuse of the procf'ss of any court or otherwise
to secure the ends of justice. Where criminal proceedings
c are initiated based on illicit material collected on search
and arrest which are per se illegal and vitiate not only a
conviction and sentence based on such material but also
the trial itself, the proceedings cannot be allowed to ~o on
as it cannot but amount to abuse of the process of the
court; in such a case not quashing the proceedings would
D
perpetuate abuse of the process of the court resulting in
great hardship and injustice to the accused. In our opinion,
exercise of power under section 482 Cr.P.C. to quash
proceedings in a case like the one on hand, would indeed
secure the ends of justice."
E
31. This court in Zandu Pharmaceutical Works Ltd. &
Ors. v. Mohd. Sharafu/ Haque & Anr. (2005) 1 SCC 12~
observed thus:-
"It would be an abuse of process of the court to allow any
F action which would result in injustice and prevent promotion
of justice. In exercise of the powers, court would be justified
to quash any proceeding if it finds that initiation/continuance
of it amounts to abuse of the process of court or quashing
of these proceedings would otherwise serve the ends of
G justice. When no offence is disclosed by the complaint,
the court may examine the question of fact. When a
complaint is sought to be quashed, it is permissible to
look into the materials to assess what the complainant
has alleged and whether any offence is made out even if
H the allegations are accepted in toto."
CENTRAL BUREAU OF INVESTIGATION v. 127
. K.M. SHARAN [DALVEER BHANDARI, J.]
32. In Indian Oil Corporation v. NEPC India Ltd. & Ors. A
(2006) 6 sec 736, this court again cautioned about a gro.wing
tendency in business circles to convert purely civil disputes into
criminal cases. The court noticed the prevalent impression that
civil law remedies are time consuming and do not adequately
protect the interests of lenders/creditors. The court further B
observed that "any effort to settle civil disputes and claims, which
do not involve any criminal offence, by applying pressure through ·
criminal prosecution should be deprecated and discouraged."
33. This Court in the case of Central Bureau of
Investigation v. Ravi Shankar Srivastava, /AS & Anr. (2006) C
7 SCC 188 has reiterated the legal position. The Court observed
that the powers possessed by the High Court under Section
482 Cr.P.C. are very wide and the very plenitude of the power
requires great caution in its exercise. The Court must be careful
to see that the decision in exercise of this power is based on D
sound principles. The inherent power should not be exercised
to stifle a legitimate prosecution.
34. Now, the crucial question which arises for our
adjudication is whether the case of the respondent falls under '
any of the categories as enumerated in the celebrated case of E
Bhajan Lal (supra). On the basis of the material available on
record and the allegations levelled against the respondent in
the FIR and the charge-sheet, it cannot be conduded that no
ingredients of offence under section 120B read with section
193 IPC are present in the instant case. F
35. At this stage, the High Court in its jurisdiction under
section 482 Cr.P.C. was not called upon to embark upon the
enquiry whether the allegations in the FIR and the charge-sheet
were reliable or not and thereupon to render definite finding G
about truthfulness or veracity of the allegations. These are
matters which can be examined only by the concerned court
after the entire material is produced before it on a thorough
investigation and evidence is led.
36. In the impugned judgment, according to the settled legal H
128 SUPREME COURT REPORTS (2008) 3 S.C.R.
..
A position, the High Court ought to have critically examined whether
the allegations made in the First Information Report and the
B
charge-sheet taken on their face value and accepted in their
entirety would prima facie constitute an offence for making out
a case against the accused (respondent herein).
-
37. In order to examine and evaluate the allegations of the •
..._
FIR and the charge-sheet on this parameter, we deem it
imperative to set out sections 193 and 1208 of the Indian Penal
Code under which the FIR and charge-sheet have been filed.
c 38. Sections 193 and 1208 of the Indian Penal Code read
as under:-
"193. Punishment for false evidence.-Whoever
intentionally gives false evidence in any stage of a judicial
proceeding, or fabricates false evidence for the purpose
D of being used in any stage of a judicial proceeding, shall
be punished with imprisonment of either description for a
term which may extend to seven years, and shall also be
liable to fine,
and whoever intentionally gives or fabricates false evidence
E in any other case, shall be punished with imprisonment of
either description for a term which may extend to three
years, and shall also be liable to fine.
1208. Punishment of criminal conspiracy.-(1)
_,.
F 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.
G
(2) Whoever is a party to a criminal conspiracy other than
a criminal conspiracy to cor:imit an offence punishable as ·
aforesaid shall be punished with imprisonment of either
description for a term not exceeding six months, or with
H fine or with both."
CENTRAL BUREAU OF INVESTIGATION v. 129
. f- K.M. SHARAN [DALVEER BHANDARI, J]
39. On careful scrutiny and analysis of the allegations A
incorporated in the FIR and the charge-sheet set out in the
preceding paragraphs of this judgment, it is abundantly clear
that ingredients of sections 193 and 120B IPC are clearly made
• out in the instant case setting out a cognizable offence justifying
the registration of a case and investigation thereon. B
J 40. In our considered view, this case does not fall under
any of the categories of cases formulated in Bhajan Lal's case
(supra) relied upon by the respondent calling for exercise of
extraordinary jurisdiction or inherent powers of the court to quash
the FIR. c
41. It would not be appropriate to comment or express
any opinion on the truthfulness or veracity of the allegations
incorporated in the FIR or the charge-sheet because we would
not like the trial Court to be influenced by any of the findings of
D
this Court or the High Court in the trial of this case. All what we
can say without any hesitation is that on the basis of the
averments and allegations incorporated in the FIR and the
charge-sheet, the High Court was not justified in quashing the
FIR/charge-sheet while exercising its extraordinary jurisdiction
under section 482 of the Code of Criminal Procedure to stifle a E
legitimate prosecution.
42. We accordingly set aside the impugned judgment of
-~ the High Court. The appellant CBI would be at liberty to produce
the necessary material and evidence before the concerned court F
~
to establish the case of the prosecution against the respondent.
Similarly, the respondent should be afforded full opportunity to
establish his innocence. No further directions are necessary in
this appeal.
43. The appeal is accordingly allowed and disposed of. G
K.K.T. Appeal disposed of.
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