Holding

The Supreme Court held that the High Court was not justified in declaring the charge‑framing order vitiated by fraud and that the order was final and could not be reopened.

Summary

The State of Maharashtra charged Dr. Budhikota Subharao with leaking atomic energy secrets under the Atomic Energy Act and the Official Secrets Act. He was discharged because the State failed to obtain the sanction required under Section 197 of the Criminal Procedure Code. The accused then applied to have the charge sheet declared null and void, alleging that the panchnama was fabricated and that the State had concealed documents, thereby vitiating the proceedings by fraud. The Bombay High Court entertained the application and set aside the charge‑framing order. On appeal, the Supreme Court held that the charge‑framing order was final and could not be reopened, that the alleged fraud did not form part of the prosecution’s case, and that the accused had not pleaded or proved fraud as defined under Section 17 of the Contract Act and Section 44 of the Evidence Act. Consequently, the High Court’s order was set aside and the accused’s application dismissed.

Issues considered

Whether the High Court could set aside a charge‑framing order on the ground that it was obtained by fraud.
Whether an allegation of fraud can be raised after the charge‑framing order has become final.
Whether the facts alleged by the accused satisfy the legal definition of fraud under Section 17 of the Contract Act and Section 44 of the Evidence Act.
Whether the High Court had jurisdiction to entertain the revision application under the Criminal Procedure Code.

Legislation cited

Code of Criminal Procedure, 1973s. 197, s. 397
Indian Contract Act, 1872s. 17
Indian Evidence Act, 1872s. 44

Subjects

fraudcriminal procedurecharge framingrevisionSection 197 sanctionevidencevitiated proceedingsHigh Court jurisdictionatomic energy secretsofficial secrets

Judgment

STATE OF MAHARASHTRA A
v.
DR. BUDHIKOTA SUBHARAO

MARCH 16, 1993

(S. RATNAVEL PANDIAN AND R.M. SAHA!, JJ.] B

Criminal Procedure Code, 1973:

Section 397-High Court's jurisdiction-Proceedings when vitiated by
'fraud'.
c
Indian Evidence Act, 1872. Section 44-Legal proceedings-When
vitiated by 'fraud'.

Indian Contract Ac~ 1872. Section 17-'Fraud'-What is:-Effect on
legal proceedings.
D
Words and Phrases. 'Fraud'-Meaning of.

The respondent, an ex Naval Officer and Compnter Science
graduate was accused of leaking Atomic Energy Secrets and charged for
violating the provisions of the Atomic Energy Act, 1962 and the Official E
Secrets Act. 1923. Ultimately when he was discharged for failure of the
State to obtain the necessary sanction under Section 197 Cr. P.C., and the
State challenged the correctness of the order by way of revision, the

- respondent filed an application for the declaration that the charge sheet
be declared null and void. In para 3 thereof it was stated that the charges
were vitiated by fraud as the Panchnama dated May 30, 1988 was fabri- F
cated as it did not contain his signature and it was ante dated. It was
further averred that for three months even the copies of the remand
application filed by the police were denied to him, and that orders thereon
were not supplied to him, and that the complaint was in contradiction with
the statement of witnesses. The High Court allowed this application. G
In the State's appeal to this Court on the question whether the High
Court was justified in allowing the application filed by the respondent for
declaring that the charges framed by the Additional Sessions Jndge by bis
order dated 24/27th July, 1990 were null and void as. they were obtained by
fraud, practised by the state. H
329
330 SUPREME COURT REPORTS (1993] 2 S.C.R.

A Allowing the appeal, setting aside the order of the High Court dated
14th October, 1991, and dismissing the application of the accused for
declaring the order of the Additional Sessions Judge framing the charges
against him as vitiated by fraud, this Court, •'
'
HELD : 1. The High Court by its order passed on 25/26th March,
B 1991 in Criminal Writ Petition No. 966of1990 had specifically held that
the question of framing charge bad become final. It could not be, there-
fore, re-opened. The Division Bench had clearly held that it was not open
to go behind the order passed by the Single Judge on 3.4.1990 directing
that the charges being framed against the accused not only under Section
C 3 but under Section 5 as well. Nor can any exception be taken to the
finding of the Bench that the said order could not be said to have been
passed without jurisdiction in as much as the Single Judge had jurisdic-
l
tion to decide the revision application preferred under the provisions of
the Code. [332B-C]

D 2. The question of fraud raised by the accused was negatived by the, . t
Division Bench and it was held that it was not capable of being gone into
as it did not form part of the substratum of the case of the prosecution
and was not germane to the question of deciding as to whether he was
entitled to be discharged or not. [332D]

E 3. 'Fraud' is false representation by one who is aware that it was
-1'
untrue with an intention· ta mislead the other who may act upon it to bis ~

prejudice and to the advantage of the representor. It has been defined
I

F
statutorily in Section 17 of the Contract Act as including certain acts
committed with connivance or with intent to deceive another. In Ad·
ministrative Law it has· been extended to failure to disclose all relevant
and material facts which one bas a positive duty to disclose. [332G-H]
--
f

~
4. Even the most solemn proceedings stand vitiated if they are •
actuated by fraud. Such being the nature and consequence of it the law •
requires not only stri.ct pleading of it but strict proof as well. [333B] I
G
5. Facts which could be fished out from paragraphs averring
fraudulent submissions could not be said to be relevant for alleging fraud.
[334E] ·v
6. Legal submissions cannot be equated to misrepresentation. The
H pleadings in th• instant case .fall short of the legal requirements to estab-
STAIB v. DR. BUDHIKOTA [SAHA!, J.] 331

llsh fraud. Various sentences extracted from different judgments between A
the accussed and State in various proceedings could not give rise to an
inference either in law or fact that the State was guilty of fraud .
• [335H, 336A]'
In the instant case the averments in paragraphs 3 and 4 to 8 of the
application do.not establish fraud. No foundation giving rise to fraud was B
laid. It was complete misapprehension under which the accused was
labouring and it was indeed unfortunate that the Single Judge of the High
Court not only entertained the respondent's application but adopted a

-• course which amounted to reviewing and setting aside orders of his
predecessor without sufficient material and accepting the claim that all C
earlier judgments were liable to be ignored urider Section 44 of the
Evidence Act as the proceedings were vitiated by fraud. The Single Judge
not only committed an error of procedure but misapplied the law. [33.68]

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
m~~ D
From the Judgment and Order dated 14.10.1991 o( the Bombay High
Court in Cr!. Misc. Application No. 2260/91 in Cr!. Revision Application
No. 123 of 1991.

Altaf Ahmed, Addi. Solicitor General, B.R. Handa, Mrs. Maojula E
Rao, S.M. Jadhav, A.S. Bhasme and A.M. Khanwilkar for the Appellaot.

Dr. B. Subha Rao Respondent-in-person.

-!
j
The Judgment of the Court was delivered by

R.M. SAHAI, J. The short question thal arises for consideration in
this appeal is if the High Court was justified in allowing the application
F

filed by the accused for declaring that the charges framed by the Additional
Sessions Judge by order dated 24/27th July, 1990 were null and void as they
were obtained by fraud, practised by the State.
G
Merits or otherwise of the application, alleging fraud against the
State, apart, what has left us completely surprised is not so much the
entertaining of the application filed by the accused, for declaration that the
charges framed against him were nullity having been procured by fraud as
the procedure adopted by the learned Single Judge of granting the prayer H
332 SUPREME COURT REPORTS [1993] 2 S.C.R. ~
1,
A merely for failure of the State to file any reply by way of counter-affidavit ~-·~
than by recording any finding that the State was guilty of procuring the
order framing the charges by fraud. One of the objections raised by the
State was that since the High Court by its order passed on 25126th March
1991 in Criminal Writ Petition No. 966 of 1990 had specifically held that
B the question of framing charge had become final, therefore, it could not be _>,--
re-opened, cannot be said to be without substance as the Division Bench
had clearly held that it was not open to go behind the order passed by the
learned Single Judge on 3rd/4th April 1990 directing that the charges be
framed against the accused not only under Section 3 but under Section 5 ~

as well. Nor can any exception be taken to the finding of the Bench that
c the said order could not be said to have been passed without jurisdiction
in as much as the learned Single Judge had jurisdiction to decide the
revision application preferred under the provisions of the Code. Even the ~-
question of fraud raised by the accused was negatived by the Division
Bench and it was held that it was not capable of being gone into as it. did
' D not form part of the substratum of the case of the prosecution and was not
.. germane to the question of deciding as to whether he was entitled to_be
discharged or not.

However, it is not necessary to rest the decision on this ground as
the learned Single Judge having allowed the application as being vitiated
E ~
by fraud it appears necessary to examine if the pleading on fraud in the
application filed by the accused was sufficient in law to empower the High
Court to take cognizance of it and even if it was, did the accuse succeed
in proving it as even if the State did not file any counter-affidavit the
application could not be allowed unless it was found as a fact that the State -
F by its acts or omissions acted-deceitfully or it misled the court. 'Fraud' is
false representation by one who is aware that it was untrue with an
~
intention to mislead the other who may act upon. it to his prejudice and to
the advantage of the representor. It is defined in Oxford Dictionary as,
'using of false representations to obtain an unjust advantage or to injure
the rights or interests of another'. In Webster it is defined as, 'deception
G
in order to gain by another's loss; craft; trickery;· guile; any artifice or
deception practiced to cheat, deceive, or circumvent another to his injury'.
It has been defined statutorily in Section 17 of the Contract Act as '""<
including certain acts committed with connivance or with intent to deceive
another. In Administrative Law it has been extended to failure to disclose
H
.•
.··"'
STATE v. DR. BUDHIKOTA [SAHA!, J.] 333

-r- all relevant and material facts which one has a positive duty to disclose. It A
is thus understood as deliberate act or omission to mislead other to gain
undue advantage. 'It consists of some deceitful practice of wilful device.
resorted to with intent to deprive another of his right or in some manner
to do him an injury' (Black's Law Dictionary). Effect of fraud on any
proceeding, or transaction is that it becomes nullity. Even the most solemn
--;--"!( proceedings stand vitiated if they are actuated by fraud. Such being the
B
naiure and consequence of it the law requires not only strict pleading of it
but strict proof as well.

~
Did the averments in the application made out case of fraud ? Were
c
the statements of fact capable of giving rise to an inference in law that the
State was guilty of misleading the court ? From the charge-sheet it is clear
that it complied with the requirements of law and mentions not only the
-~
offence and the section but the particulars as to time, place and person.
Whether prosecution was possessed of sufficient evidence to prove each of
the charges is different matter, but they were framed on basis of documents D
seized from possession of the accused at the airport, search of 'his
residence, on the next day, interrogations of the accused and examination
..
of prosecution witnesses. In the connected appeal No. 276 of 1993 [Arising
o'ut of S.L.P. (Crl.) No. 986 of 1992] directed against the discharge of the
accused for failure to obtain sanction a very brief summary has been given
~ of various attempts made by the accused to get an order of discharge, on E
merits, without success. It is not. necessary to recount all that here. Ul-
timately \Vhen the accused was discharged for failure of the State to obtain

- sanction under Section 197 of the Criminal Procedure Code (in brief 'the
Code') and the State challenged the' co_rrectness of the order by way of
revision the accused filed the application for the declaration that the F
charge-sheet be declared null and void. In paragraph 3 of the application
»--- it was stated that the charges were vitiated by f~aud as the Punchnama
dated 30th May 1988 was fabricated as it did not contaio his signature and
it was ante-dated. It was further averred that three months even the copies
of the remand applic.ation filed by the police were denied to the applicant
and the orders thereon were not supplied to him. It was also claimed that G
the complaint was in contradiction with the statement of witnesses. May or
-->-· may not be so but that could be relevant when the merits were gone into.
It certainly, could not be taken as a ground for claimiog that the framing
of charge was fraudulent, especially, when these aspects had been thrashed
out once before the learned Single Judge who by his order dated 3rd/4th H
334 SUPREME COURT REPORTS [1993] 2 S.C.R.

A April 1990 held .that the charges against the accused were made out not
only under Section 3 but under Section 5 of the Act.

In the same paragraph the accused extracted certain observations
a
made by learned Single Judge, in one of the orders and claimed that they
furnished guidelines to distinguish between offences under Sections 3 and
B 5 of the O.S. Act. According to him if honest and fair answer to the
question, if any charge was made out, was given by the State it would have
exonerated the applicant but the State committed fraud· by keeping the

c
Trial Judge in the dark of real facts and induoed him to entertain erroneous
opinion and pass order on 24th July framing char~es against him. In
paragraphs 4 to 8 various sentences from one or the other judgment
-
rendered for or against the accused by different cmuts ,at one or the other
stage were extracted and it was claimed that the State either ~nowingly did
not place correct facts to substantiate those observ;ttions or deliberately
concealed. the truth and made fraudulent submissions inducing the· Trial
Judge thereby to frame the charges. Emphasis was laid on the submissions
D advanced by the State and it was stated that it was' result of fraudulent
submissions that the Trial court was induced to frame charges against the
accused. No foundation giving rise to fraud was laid. Facts which could be
fished out from paragraphs averring fraudulen~ submissions could not in
our opinion be said to be relevant for alleging fraud. For instance in
E paragrapl:i''4 it was stated,

"the· Ld. Addi. Session Judge was deceived by the

F
aforesaid fraudulent and false submission of the Respon- .
dent in February 1989 during the judicial proceedings and
the Ld. Addi. Session Judge was induced to believe that
-
the applicant was also. found and caught carrying books
on 30-5-1988 at the Sahar Airport Bombay which books,
as alleged by the Respondent, could not have come into
possession of the Applicant even in the ordinary course,
when the applicant was holding the office of the Captain
G ~f Navy. The respondent knew very well that in the record
of the Sessions Case no. 1084/88 there were no books as
alleged by the Respondent and moreover the disputed
documents were not deposited in tLe Sessions Court in
February 1989 when the Learned Addi. Session Judge was
H induced to believe the fraudulent submissions of the
STAIB v. DR. BUDHIKOTA [SAHA!, J.] 335

Respondent in February 1989. The above mentioned A
fraudulent submissi()ns _of the Respondent were clearly
·meant to deceive ftjie Se~ion Court in February 1989 and
to see that the applicant was not discharged under Section
227 Cr. P.C."

Similarly in paragraph 5 it was stated, B

"It is significant to note that in February 1989 the docu-
ments were not deposited in the Session Court though it
was mandatory under Section 209(c) Cr. P.C. to deposit
the documents in the Session Court after the Case was
committed to the Sessions on 22.9.1988 by the Ld
c
Magistrate. Thus in actual position, there were no docu-
ments in February 1989 for 'consideration' of the Ld.
Addi. Session Judge as prescribed under the provisions of
Sec. 227 Cr. P.C. and the Respondent took advantage of
that situation and intentionally made the aforesaid D
fraudulent submissions in Feb. 1989 during the judicial
proceedings before the Ld. Addi. Session Judge Shri Patel
and caused circumstances to induce the Ld. Session Judge
Shri Patel to entertain erroneous opinions and pass orders
resulting in miscarriage of justice". E
In paragraph 7 it was stated as under :-

"The Ld. Addi. Session Judge Shri Patel passed two orders

- dated 11-9-1989 and 11-10-1989 to compel the Respon-
dent to deposit the documents in the Session Court and
accordingly the Documents were deposited in the Session
F

Court only on 11-10-1989; which conclusively establishes
that in February 1989 when "Charges" were framed the
"Documents' were not with the .Session Court and the
fraudulent and false evidence advanced in February 1989
by the Respondent alone became the basis to ·frame
G
'Charges' in February 1989."

We must confess our inability to appreciate the worth of such aver- ·
ments to establish fraud. Legal submissions cannot be equated to mis-
representation. In our opinion the pleadings fell short of legal requirements H
336 SUPREME COURT REPORTS [1993) 2 S.C.R.

A to establish fraud. Various sentences extracted from different judgments
between the accused and State· in various proceedings could not give rise
to an inference either in law or fact that the state was guilty of fraud. Suffice
it to say that it was complete misapprehension unde~ which the accused
was labouring and it was indeed unfortunate that the High Court net only
B entertained such application but adopted a course which amounted to
reviewing and setting aside orders of his predecessor without sufficient
material and accept the claim that all earlier judgments were. liable to be
ignored under Section 44 of the Evidence Act as .the proceedings were
vitiated by fraud. We are constrained to say that the learned Judge not only

c
committed an error of procedure but misapplied the law.

In the result, this appeal succeeds and is allowed. The order dated
-
14th October 1991 in Criminal Miscellaneous Application No. 2260 of 1991
is set aside.and the application of the accused for declaring the order dated
24/27th February 1990 framing the charges against him as vitiated by fraud,
is dismissed.

N.V.K. Appeal allowed.

-