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Fraud under Section 23(1) of Senior Citizens Act Limited to Violation of Transferor’s Upkeep Condition, Cannot Extend to Civil Law Fraud: Karnataka High Court

Case title: Jayashankar and the Assistant Commissioner and Ors. 

Case no: Writ appeal No. 339 of 2023 (GM-RES)

Dated on: 24th April, 2024

Quorum: Hon’ble Justice Mr. N.V. Anjaria and Hon’ble Mr. Justice Krishna S Dixit.

Facts of the case: 
Under Section 4 of the Karnataka High Court Act, 1961 the writ appeal was directed against a judgement and order of a learned counsel dated on 03.03.2023 passed in a writ petition No. 12226 of 2020, dismissing the petition. There was an order passed under 23(1) of the maintenance and welfare of parents and senior citizens Act, 2007. The tribunal had declared that the registered gift deed dated 28.01.2014 was liable to be treated as cancelled as the transfer of property was void. The complainant K.V Nanjappa aged nearly hundred stated that the ancestral property is being partitioned but the complainant has retained one house, certain sites and 5acres of land. It was stated that the younger son of the complainant Jayashankar took the complainant to the Taluka office by misrepresentation saying that his presence is needed for a pension case and instead he got registered the document from the complainant in his favour. The complainant recently learned that his younger son Jayashankar had gotten the property registered without his knowledge. The complainant stated that he did not execute such gift deed to his son. The Tribunal declared that the registered Gift Deed dated 28.01.20214 to be cancelled as transfer of the property is void. The Original Petition was filed under Section 4 of the Karnataka High Court 1961 to set aside the Order dated 06.01.2014 passed by the President of the Maintenance and Welfare of Parents and Senior Citizens Tribunal. On Appeal, the Learned Single Judge observed that the Gift Deed was unequivocal and the property was gifted provided the Appellant took care of the father. The Petitioner was found to be not taking care and hence the condition of the Gift Deed was breached and the said finding by the Assistant Commissioner under the Maintenance and Welfare of Parents and Senior Citizens Act,2007 was based on the admission of the Appellant that his father is not residing with him. This Writ Appeal is filed under Section 4 of the Karnataka High Court Act, 1961, to set aside the impugned Order dated 03.03.2023 passed by the Learned Single Judge in WP 12226 of 2020.

Contentions of the appellant:

The single Judge overlooked the aspect that while providing the gift deed and transfer thereunder, the Competent Authority came to the conclusion that Gift Deed was acted upon by fraud. However, there was no evidence before the Authority that the Gift deed was executed by fraud. After death of the Complainant, it came to light that the father had executed a Will and that the Respondents were not happy with the Will and lodged Complaint under Section 379,420,447,448,465,468,471 and 506 of IPC. Apart from the same the Respondents also filed OS 70/2019 to declare the registered Will as null and void. All these material aspects were disregarded by the learned single Judge to confirm the judgment and order of the Tribunal.

Issues:

Whether the Competent Authority under the Maintenance and Welfare of Parents and Senior Citizens Act, 2007 has passed order by going beyond the purview of Section 23 (1) of the Act?

Legal provisions:

Section 23 (1) of the Maintenance and Welfare of Parents and Senior Citizens Act, 2007: Section 23 of the Maintenance and Welfare of Parents and Senior Citizens Act, 2007 empowers a senior citizen to approach the Maintenance Tribunal to declare a certain specific transfer of property, by way of gift or otherwise, after the commencement of the MWPSCA, as void, if in case the transfer of property was premised on the condition that the transferee shall provide for the basic amenities and physical needs of the transferor; and after the transfer got effected such transferee refused or failed to provide for such basic amenities and physical needs.

Section 379- Theft imprisonment for three years with fine or both.
Section 420- deals with act of cheating.
Section 447- criminal trespass.
Section 448- house trespass.
Section 465- punishment for forgery.
Section 468- forgery.
Section 471- using a forged document as genuine.
Section 506- punishment for criminal intimidation.

Courts analysis and judgement:

The Supreme Court in Sudhesh Chhikara Vs Ramti Devi held that for attracting Section 23(1) two conditions must be fulfilled (a) The transfer must have been made subject to the condition that the transferee shall provide the basic amenities and basic physical needs to the transferor and (b) The transferee refuses or fails to provide such amenities and physical needs to the transferor. If both the conditions are fulfilled then by legal fiction the transfer shall be deemed to have been made by fraud or coercion or undue influence and the transfer shall become voidable. The facts suggests that an obligation was there on the Appellant to take care of the Complainant father and on such condition the gift deed was executed. The said condition was breached, as per the finding of the Competent Authority and the learned single judge as well. The Appellant admitted that father was not residing with him. The Complainant had to stay at the elder son’s house. The condition of treating the Gift Deed void was satisfied and hence there is no error in the order of the single judge for confirming the Order of the Tribunal by treating the gift deed as cancelled. However, the Tribunal while ordering cancellation of the gift deed cast doubt on the execution of the Gift Deed for the reason that while executing Gift Deed the Complainant has put thumb impression on the document but at the time of filing the complaint, he has put his signature which creates serious doubts about the consent and knowledge of the Complaint with regard to execution of the Gift Deed. The aforesaid finding by the Tribunal is unwarranted and further the Tribunal has gone beyond the operational purview of Section 23 (1). The section treats the transfer of the property in a particular manner to be deemed to have been made by fraud or coercion upon breach of condition of taking care and providing basic amenities i.e; the idea of fraud or coercion in section 23 (1) is in reference to breach of condition I.e; providing basic amenities and physical needs to the senior citizen. The words fraud and coercion could not be enlarged to normal concept of fraud or coercion in civil law. To establish fraud, evidence is required to prove the facts of fraud. Tribunal is neither a civil court nor the power exercised by the Tribunal is under the provisions of the Civil Court. The powers granted under the Act is to provide effective recourse in law or maintenance and welfare of parents and senior citizens and to guarantee and recognize them their rights. The Tribunal misdirected itself in law in making observations on paragraph 13 of the Order by suggesting that the gift deed was fraudulently obtained from the complainant. The findings are beyond powers and jurisdiction of the Tribunal. Accordingly, the observations in paragraph 13 of the Order of Tribunal are not sustained and are set aside. The Judgment and order of the learned single judge is modified to the said extent and rest of the part is confirmed. Accordingly, the Writ appeal is dismissed subject to the observations and findings and modifications.

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Supreme Court Directs Implementation of Standard Operating Procedure for Filing Paper Books.

Case title: Anjumol V.A. and Ors V. Kerala Public Service Commission and Ors.

Case no: petition (s) for special leave to appeal (C) No. 13242/2021

Dated on: 16.04.24

Quorum: Hon’ble Mr. Justice J.K. Maheshwari and Hon’ble Mr. Justice Sanjay Karol.

Facts of the case:

The Petition(s) for Special Leave to Appeal (C) No. 13242/2021 is arising from final. Judgment and Order dated 04-06-2019 passed by the Hon’ble High Court of Kerala at Ernakulum) in OPKAT No. 62/2017.

Court’s  Analysis and Judgement 

The Hon’ble Supreme Court, while hearing the above case, has perceived various practical difficulties both on miscellaneous or non-miscellaneous days and some of them are as mentioned herein below:

(i) The Orders passed during the proceedings are not attached to the paper books;

(ii) In Service matters, the counsels for the Petitioner are not attaching the relevant Service Rules with Appendix in the SLP paper book or the same is not referred in the pleadings. The Rules, sometimes, are filed in piecemeal with Applications or with additional documents, due to which matters are postponed. This causes financial burden upon the parties and further results in delay in adjudication;

(iii) Counter Affidavits are sometimes attached to the main SLP paper book without flagging, inviting attention and sometimes as separate paper book which requires unnecessary search and wastage of time by the Judges;

(iv) Upon directions and after filing the convenience compilation, the same is not sent to the residential offices of the Judges either in hard copy or by way of email and even during the hearing;

(v) The IA number is not properly exhibited on its face. The Applications are not attached date wise, with paper books. This causes inconvenience to the Judges;

(vi) Other ancillary issues in various paper books is also causing difficulty in day to day court functioning.

In view of the above, the Secretary General and the Registry Officers, in particular the Registrar (Judicial) shall prepare a Standard Operating Procedure (SOP) for properly maintaining the SLP paper books and also to eliminate the difficulties mentioned above. The SOP is to be notified after seeking appropriate orders from the Hon’ble Chief Justice of India. The due compliance shall be made as expeditiously as possible for efficient functioning of the court. Learned counsel for the parties were heard the hearing is concluded. The Learned State Counsel and the Counsels for Respondents are granted two weeks’ time to file affidavit clarifying how many persons have been appointed along with their qualifications and the status of the Petitioners in the present Special Leave petition.

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Bail Refused to Defendant Charged Under UAPA for Supporting ISIS Ideology and Organizing Illegal Weapons: Delhi High Court

Case title: Jamsheed Zahoor Paul v. State of NCT of Delhi

Case no: CRL.A. 51/2024

Dated on: 24th April, 2024

Quorum: Hon’ble Mr Justice Suresh Kumar Kait and Hon’ble Mr. Justice Manoj Jain

Facts of the case:

Special Cell (New Delhi Range), Lodhi Colony received information that two persons i.e. Parvaiz Rashid Lone and Jamsheed Zahoor Paul (appellant herein) were radicalized youths of Jammu & Kashmir, having allegiance to banned terrorist organization ISIS/SI/DAESH. As per intelligence inputs, they had procured arms and ammunition from UP for their cadres for executing some terrorist act in Jammu & Kashmir and would come at Netaji Subhash Park, near Lal Quila (Red Fort), Delhi on 07.09.2018 to proceed to Kashmir. Both the aforesaid named suspects were found moving towards Lal Qila. Search of the appellant yielded recovery of one pistol, containing five live cartridges in its magazine. From the possession of Parvaiz Rashid Lone (A-1) also, one pistol was recovered. These were seized. The police tracked them. They were found to be juvenile in conflict with law (JCL) and, therefore, separate report was prepared against them, which was filed before concerned Juvenile Justice Board (JJB). During investigation, both the accused divulged that they were propagating ideology of terrorist outfit ISIS in India and were in touch with another ISIS militant, namely, Abdullah Basith. Though, initially, FIR had been registered for commission of offence under Section 25 Arms Act, after detailed investigation and on the basis of the incriminating material collected during investigation, penal provisions of Section 18 & 20 of Unlawful Activities (Prevention) Act (UAPA) were added. Both the accused were accordingly charge-sheeted for commission of offences under Section 25 Arms Act and for Sections 18 & 20 of UAPA. Main charge-sheet was submitted on 28.02.2019. Appellant had earlier also moved one application seeking bail which was dismissed and it was withdrawn on 06.06.2019. He moved another bail application which, too, was dismissed on 01.05.2020, feeling aggrieved, he preferred Criminal Appeal 345/2021 which was, however, not pressed and resultantly, the same was dismissed by this court on 31.01.2022 charges were framed on 25.04.2022. It was thereafter only that the appellant moved another bail application which also did not find favour and was dismissed by the learned trial court. When Appellant was interrogated, he revealed names of various cadres of ISIS (J&KModule) with whom he was in touch through social media, Black Berry Messenger (BBM) and Facebook etc. Some of such cadres of ISIS had already been shot dead in encounter. The mobile phones, recovered from both the accused, were sent to CERT-In for retrieval of data and its forensic analysis. Such analysis indicated that they both were not only involved in procuring sophisticated weapons for banned terrorist organization but also shared information about the movement of Army to other terrorists in Kashmir. Role, involvement and complicity of the appellant also stood exposed whose profile picture on BBM contained four terrorists, two of whom carrying AK-47 Rifles.

Contentions of the appellant:

According, to the learned counsel for appellant, allegations on record, even if those are taken on their face value, do not show commission of any offence under Section 18 & 20 of UAPA and at best, without admitting anything, it can be said to be a case of recovery of arms. It is contended that though the charges have been ascertained by the learned Trial Court and these have not been assailed so far, it is still legally permissible for the appellant to seek bail and to demonstrate that the bar provided under Section 43D (5) of UAPA does not stand attracted. There is no material to show that appellant had indulged into any unlawful or terrorist act, much less attribution of any overt act on his part. The entire case of prosecution is dependent upon the disclosure statements of the accused persons and these statements have no evidentiary value, being inadmissible in law. There is nothing to indicate that any message or BBM chat retrieved from the electronic device of the appellant had any potential to indicate that he was in contact with any terrorist. Appellant could not be branded as “terrorist‟ or a “person involved in terrorist act” merely on the basis of the recovery of a pistol and, therefore, invocation of draconian provision of UAPA is totally mis-founded and unwarranted. There is nothing to indicate that the appellant was a member of ISIS or their purported fronts. There is nothing to suggest that he was radicalized and was associated or was otherwise furthering the activities of ISIS. Merely because there was some BBM Chat retrieved from the electronic devise of his co-accused, appellant could not have been held to be a co-conspirator. Mere framing of charge does not create any embargo against grant of bail as the consideration for framing the charge is different from the one required for grant of bail. At the stage of consideration of bail, Court is merely required to undertake surface-level analysis of probative value of the evidence in order to satisfy test of “prima facie true” and if such analysis is carried out, it would clearly go on to show that there is no admissible evidence on record indicating commission of offences under Section 18 & 20 of UAPA. Appellant has undergone incarceration for more than five and half years and the trial is not likely to conclude any time soon and, therefore, his fundamental right as enshrined under Article 21 of the Constitution of India has been seriously jeopardized, entitling him to be released on bail on that count alone.

Contention of the respondent:

There are serious allegations against the appellant and the learned Trial Court has already come to a definite conclusion that there is a prima facie case against him for offences under Section 18 & 20 UAPA. According to the respondents, there are following clearcut allegations and if all these allegations are read conjunctively, it would clearly reveal his complicity qua offences under Section 18 & 20 UAPA. One loaded pistol was recovered from his possession and he disclosed that he had purchased the same from four juveniles. Such fact was found to be correct as the police was able to reach those juveniles and they were apprehended and admitted that weapons in question had been sold by them to the accused persons, in lieu of money. Appellant was found in possession of two electronic devices and when the data was retrieved, it was found that he was found using Black Berry Messenger for communicating with his associates. His BBM ID was deciphered and the profile picture of Black Berry Messenger depicted four terrorists holding AK47 rifles and pistols in their hands. Appellant and his co-accused had procured illicit arms and had come to Delhi together and were to leave for Kashmir together in furtherance of their conspiracy. BBM chats retrieved from the electronic devices from his co-accused clearly suggested that there was incriminating communication of precarious nature between him and Adil Thokar. Appellant had, on the directions of Omar @ Umar Iban Nazir, met one Abdullah Basith. Such Abdullah Basith was later arrested by NIA and the fact of there being a meeting between them was confirmed and substantiated by NIA. Motive of such meeting was to procure weapons for terrorist activity and the record of Shaka Guest House confirmed his such visit. appellant with his co-accused not only conspired to commit terrorist act but also procured weapons and in pursuit of their abominable objective for perpetuating terror, they both, on the direction of Adil Thokar and Umar Iban Nazir, arranged weapons through JCLs and came to Delhi via flight and even sent the images of recovered pistol to their handlers through BBM. The BBM chats from the electronic device of his coaccused clearly indicated that he was even discussing about the movement of Army in Kashmir which clearly exposes their nefarious design.

Legal Provisions:

Section 18 & 20 of UAPA- Punishment for Organizing Terrorist Camps-Anyone who engages in conspiracies, preparations, or attempts to organize a terrorist camp or provides encouragement, advice, or instigation for such activities shall be subject to imprisonment. The term of imprisonment shall not be less than five years, but it may extend to life imprisonment. Additionally, a fine may also be imposed. Punishment for Being a Member of a Terrorist Gang or Organization If an individual knowingly becomes a member of a terrorist gang, organization, or supports such entities, they shall be liable for punishment. The imprisonment term shall not be less than five years, but it may extend to life imprisonment. Furthermore, they may also be fined. Section 43D(5) of UAPA- makes it virtually hard to grant a bail.Section 10 of Evidence Act- pertains to the admissibility of evidence in cases involving conspiracy.

Issue:

  1. Whether in view of the fact that charges have already been framed and such charges have not been challenged by the appellant, whether bail plea can be considered and whether the court can go on to opine that there are no reasonable grounds for believing the accusation to be prima facie true?
  2. What should be the level of scrutiny for believing the same? Whether the appellant has been able to show that there is no prima facie case against him? Whether despite such statutory bar being in place and when prima facie is found to be made out, bail can still be granted in order to safeguard his fundamental rights.

Court analysis and Judgement:

The Hon’ble Supreme Court in Gurwinder Singh vs. State of Punjab & Anr. 2024 SCC On-Line SC 109, the impact of Section 43D (5) of UAPA was delineated and it was observed that the conventional idea in bail jurisprudence – bail is the rule and jail is the exception – does not find any place in UAPA. It further observed that exercise of general power to grant bail under UAPA is severely restrictive in scope. It went on to hold that in view of said statutory bar contained under Section 43D (5) of UAPA, if the
offences fall under Chapter IV and/or Chapter VI of UAPA and there are reasonable grounds for believing that the accusation is prima facie true, bail must be rejected as a rule. Gurwinder Singh (supra) also discussed National Investigation Agency v. Zahoor Ahmad Shah Watali: 2019 SCC On-Line SC 461 which lays down elaborate guidelines about the approach that the Courts must partake in, while considering bail application under UAPA. In context of the meaning attributable to “prima facie true‟, it observed that material collected by the investigating agency, on the face of it, must show the complicity of the accused in relation to the offence and must be good and sufficient to establish a given fact or chain of facts constituting the stated offence, unless rebutted or contradicted by other evidence. It also observed that at the stage of giving reasons for grant or rejection of bail, the elaborate examination or dissection of evidence was not required and the Court is merely expected to record a finding on the basis of broad probabilities. Thus, once charges are framed, it can be easily assumed that there is a very strong suspicion against the accused. Therefore, in such a situation, the task of any such accused becomes much more onerous and challenging as it is never going to be easy for anyone to satisfy that the same set of material, which compelled the court to frame charges on the basis of strong prima facie case, would persuade it to hold to the contrary, by declaring that such accusation was not prima facie true. Be that as it may, there can never be any restriction or embargo on moving application seeking bail. Such unfettered right remains available as long as the proceedings are alive. Moreover, in view of specific observations made in National Investigation Agency v. Zahoor Ahmad Shah Watali (supra) as elaborated in Gurwinder Singh (supra), Court can always consider such bail application, even after framing of charges, the rider being the onus on accused would be much more rigorous in such a situation. The first two facets stand answered accordingly. As per allegations appearing on record and facts and circumstances placed before the court, the appellant was continuously in touch with his co-accused, travelling with him and arranging weapons. He was in touch with militants as well and met one of them in Delhi. Conspiracy, as the cliché goes, is hatched in secrecy and very rarely, there would be any visible evidence suggesting clear-cut conspiracy. On most of the occasions, conspiracy has to be inferred by connecting dots from bunch of circumstances. Moreover, Section 10 of Evidence Act cannot be kept aside which visualizes such type of situation and makes the actions and the statements of coconspirator to be relevant as against the others. Such action or statement can even be used for proving the existence of conspiracy. Thus, at this stage, appellant does not seem to be in any position to wriggle out of the statutory bar contained in proviso of Section 43D (5) of UAPA as there are clear-cut allegations which go on to indicate that accusation against him is prima facie true. This observation is based on broad probabilities and surface analysis of material collected by respondent. Each case has to be evaluated in the backdrop of its factual background. Moreover, in view of our forgoing discussion and material on record, the appellant seems part of conspiracy and when a full-fledged trial is already underway, we would refrain from embarking upon a mini-trial to dissect each circumstance, threadbare. The appellant was in touch with cadres of ISIS which is sufficient to give insight of his culpable mind. In Arup Bhuyan v. State of Assam, (2023) 8 SCC 745, it has been observed that mere membership of banned organization is also sufficient to incriminate, without there being any overt act. Moreover, the factum of connection and association with any banned outfit has to be inferred from the attendant circumstances and the activities of the person concerned. There will never be a tangible piece of evidence or any kind of documentary proof in this regard, particularly once any such organization is banned. Learned counsel for the appellant has prayed that accused has already undergone incarceration for more than 5 ½ years and trial is not likely to conclude in near future. It is argued that he was just 19 years of age when he was arrested and at that time, he was at an important threshold of his educational and professional career. It is argued that though case is already at the stage of trial and the prosecution has examined nine out of cited twenty-seven witnesses, there is no likelihood of case getting disposed of in near future and, therefore, on the strength of Union of India v. K.A. Najeeb, (2021) 3 SCC 713, it is prayed that despite the aforesaid statutory bar, Constitution Court can always grant bail so that the right of speedy trial and that of life and liberty do not stand defeated.
Thus, as per K.A. Najeeb (supra), despite the above statutory restriction contained in UAPA, the Constitutional Courts can consider grant of bail on the ground of violation of Part-III of the Constitution. However, in the case in hand, the maximum sentence provided under Section 18 & 20 UAPA is imprisonment for life and there is nothing which may indicate that prosecution is acting in a manner which is detrimental to his fundamental rights as provided under Part-III of the Constitution of India. Trial Court Record does not suggest any deliberate attempt on the part of prosecution to slow down the trial and, therefore, at this juncture, merely because of the above incarceration period, the accused does not become entitled to bail. The learned trial court has already observed that it, being already conscious about such fundamental right of the accused, was taking up the matter diligently by giving shortest possible dates. Therefore, there is no further requirement of passing any further direction in this regard. 

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Accused presumed to be innocent unless proved to be guilty- burden lies on the prosecution: SC

Case title: C. Bala Malleshwar Rao, G Chandrashekhar, Syed Anwar Hussain, G. Damodar, K.L. Rama
Rao, V. Satyanarayana.
Case No: Criminal appeal No.729 of 2007, Criminal Appeal No.737 OF 2007, Criminal Appeal No.793 OF
2007, Criminal Appeal No.828 OF 2007, Criminal Appeal No.850 OF 2007.
Dated on: 16th April,2024.
Quorum: Hon’ble Sri Justice K. Surender.
Facts of the case:
The Registrar of Osmania University addressed a letter dated 03.12.1993 in the form of complaint to the Director General, Anti -Corruption Bureau alleging that: there was large scale embezzlement in payment of over time allowances contrary to the financial rules and procedure; Printing material purchased by Director-A1 along with other employees resulted in misappropriation of funds; Purchase of press equipment by A1 along with other employees deliberately without usage to gain illegally. Accordingly, the case was registered on 01.01.1994 and investigation was taken up. During 1990-91 to 1992-93, A1 issued self-cheques amounting to Rs.28,99,343.43ps. The said cheques were encashed by A2 and A4. The said amount meant for overtime allowances to the employees were disbursed to an extent of Rs.11,13,339.59 ps and misappropriated the balance of Rs.17,86,003.84 ps punishable under Section 13(1) (c ) and 13(2) of Prevention of Corruption Act. A1, for the very same orders issued self-cheques and third-party cheques to an extent of Rs.54,71,964.18ps to A2, A3, A7 to A11, who have encashed the cheques. It was shown that printing material worth Rs.36,55,560/- was purchased. However, the remaining amount of Rs.18,16,404-18 ps was not accounted, punishable under Section 13(1)(c)and Section 34 of IPC. A1 has issued self-cheques amounting to Rs.5,08,502.50ps and A2, A5 and A6 encashed the said cheques. An amount of Rs.25,470/- was given for private orders and the remaining amount of Rs.4,83,032.50 ps was misappropriated, punishable under Section 13(1)(c) of Section 34 of IPC. A1, A3 to A5 and A7 to A11 have entered into criminal conspiracy while discharging their duties and misappropriated the amounts to an extent of Rs,17,86,003.84 PS, Rs.18,16,404.18 PS, Rs.1,18,10,000.26ps and Rs.4,83,032.50 PS for purchase of printing material, punishable under Section 409 A1, A3 to A5 and A7 to A11 have falsified accounts willfully with an intention to defraud the institution and caused wrongful loss to the printing press, Osmania University, Hyderabad to an extent of Rs,17,86,003.84 PS, Rs.18,16,404.18 PS, Rs.1,18,10,000.26ps and Rs.4,83,032.50 PS, punishable under Section 477-A 120-B The ACB, during the course of investigation, having collected documents and examining witnesses filed charge sheet for the offences under Sections 13(1)(c ) r/w 13(2) Section 13(1)(d)(1) & (ii) r/w 13 (2) of the Prevention of Corruption Act, under Section 409 r/w 120-B IPC and Section 477A r/w Section 120-B IPC. Learned Special Judge convicted A3 to A5 and A7 to A11 and sentenced to undergo rigorous imprisonment for a period of one year each under Sections 13(1) (c), 13(1)(d) (1) & (ii) r/w 13(2) of the Prevention of Corruption Act, 1988 r/w 34 IPC, Section 409 r/w 120-B IPC, Section 277-A r/w 120-B IPC. Aggrieved by the conviction recorded by the Principal Special Judge, City Civil Court at Hyderabad vide judgment in C.C.No.17 of 2000 dated 15.06.2007 for the offences punishable under Sections 13(1)(c ) r/w 13(2) Section 13(1)(d)(i) & (ii) r/w 13 (2) of the Prevention of Corruption Act, under Section 409 r/w 120-B IPC and Section 477A r/w Section 120-B IPC, these Criminal Appeals are filed.
Contentions of the appellant:
The learned Special Judge has relied heavily on the enquiry conducted by P.W.2 against A1, A3 and A4 and the enquiry report Exs.P15, 16 and 17 respectively. The findings in the enquiry report were made without examining the witnesses. The documents Exs.P1 to P14, P22 to P247 which are overtime bills, cash books, bank statements, cheques and registers were all marked through P.W.1, who was Assistant Registrar, Osmania University. Merely marking the said documents cannot form basis for the Court to rely upon the gist of all the documents. The prosecution ought to have exhibited before the Court as to how the misappropriation was done by the appellants herein. Enquiry was conducted only against A1 to A4 and there is no enquiry against any of the other accused. Merely on the basis of conclusions drawn in the enquiry, all the accused were convicted. It was A1 who had the cheque power, drawing and disbursing power and responsible for the accounts of the Osmania University press. It was A1 who had informed and acknowledged that the amounts received were in fact paid to the persons who had executed job work which are the outside agencies. Learned counsel for A5 and A7 submits that enquiry was not conducted against A5 and A7. That itself reflects that even the department did not have any doubt about the alleged involvement of A5 and A7. It was specifically stated by investigating officer that A3 to A11 were not concerned with purchase of printing material. Learned counsel appearing for A4 argued that A4 was not entrusted with any amounts and whatever amounts were asked to be disbursed by A1, was disbursed. The allegation that A4 was maintaining overtime allowance register and other record were not proved by the prosecution. The Learned Special Judge had relied on the alleged confession of A4 before the enquiry officer/P.W.2 that he had withdrawn amount and was also maintaining the records pertaining to overtime allowances, which formed basis for conviction, which is incorrect.
Contentions of the respondent:
It is not in dispute that amounts were entrusted to A1 as the Director for the purpose of disbursing overtime allowances and also purchase of stationery and other material. The amounts that were withdrawn by A1, who had the power to disburse amounts and make payments for purchase of stationery, has to account for the same. In the absence of giving details of payments made after withdrawing the amounts, would clearly reflect that A1 along with other accused have misappropriated the amounts that were entrusted to them. The entire documents that were collected during the course of investigation and examined by PWs.1
to 4 during enquiry that was conducted against A1 to A4 can be looked into by the criminal Court for the purpose of adjudicating upon the criminal acts committed by these public servants. In the said circumstances, learned Special Judge was right in convicting the accused.
Legal provisions:
Sections 13(1) (c) of the Prevention of Corruption Act: states that a public servant is guilty of an offence if he dishonestly converts property for his public use. Section 13(2) of the Prevention of Corruption Act: any public servant who commits a misconduct will be sent for a rigorous punishment for a year. Section 13(1)(d) (1) & (ii) of the Prevention of Corruption Act: obtaining pecuniary advantage by corrupt means. Section 409 IPC: criminal breach by a servant or the banker. Section 120-B IPC: being a part of a criminal offence with death penalty or imprisonment. Section 477A IPC: falsification of accounts. 
Issue:
Whether the statements that were prepared on the basis of the documents available in the department can form basis to infer misappropriation and falsification of accounts, without there being any independent witnesses examined to support the allegation of drawing or
disbursing amounts in the names of individuals and Firms, or that such persons have not received amounts; Whether such statements prepared on the basis of enormous documents that were examined by witnesses can form basis to conclude guilt in the absence of proving each and every document before the Court below; Whether the learned Special Judge was right in invoking Section 106 of Indian Evidence Act on the basis of statements prepared by P.Ws.1 to 7 to convict the accused on the ground that the accused failed to discharge burden shifted on to them.
Courts judgement and analysis:
Appellants have totally denied the allegations leveled against them regarding any kind of misappropriation. Not a single witness is examined by the investigating agency to show that amounts were drawn, or cheques issued in favor of an individual or a firm and such amounts were not paid. Learned Special Judge believed the version of the prosecution witnesses regarding statements that were prepared and concluded that under Section 106 of Indian Evidence Act, the burden is on the accused to explain regarding the amounts that were withdrawn as such withdrawals and usage was to the exclusive knowledge of the accused. It is not in dispute and admitted that. The entire basis of P.W.2 finding A1, A3 and A4 guilty of the charges of misappropriation are the statements that were prepared under Exs.P1 and P35. The Court and the Investigating 30 Officer/P. W 8 heavily relied on Exs.P15 to P19 enquiry reports of P.W.2. The accused denied execution of any of the documents that were placed by the prosecution to show entrustment of the funds to them by A1.
Departmental enquiry conducted by any enquiry officer, who is appointed will conduct enquiry on the basis of preponderance of probabilities and inferences or conclusions will be drawn on the basis of the evidence that is placed before him and/or collected. However, in criminal cases, the principle of proof is beyond reasonable doubt, contrary to the procedure followed in the departmental enquiry. The Hon’ble Supreme Court in the case of Balvir Singh v. State of Uttarakhand held that when the prosecution has offered evidence which can be believed by the Court and convincing regarding the accused guilt beyond reasonable doubt, then the burden shifts on to the accused to present evidence regarding the facts peculiarly which are within the knowledge of the accused. The approach of the learned Special Judge in shifting the burden on to the accused to explain the opinion and inferences drawn during departmental enquiry is incorrect and it does not fall within the purview of Section 106 of Indian Evidence Act to draw adverse inference against accused and convict the accused. In view of above discussion, in the absence of any proof and direct evidence against the accused apart from the inferences drawn by P.Ws.1 to 3 and P.W.38, on the basis of the record found in the office, there cannot be any conviction for the offences alleged. The factum of entrustment to the appellants herein are assumptions on the basis of the withdrawals from Banks and payments made by A1 through cheques. Admittedly, self cheques were drawn and signed by A1. Not a single bank
witness is examined to show that at any point of time, self-cheques or the cheques of others were encased in the bank by any of these appellants.
The prosecution ought to have produced witnesses from the Bank to prove that cheques signed by A1 were withdrawn by the appellants herein. In the absence of any such proof, the question of these appellants abetting A1 in committing alleged misappropriation of the funds entrusted to A1 would not arise. The Hon’ble Supreme Court in the case of R. Sai Bharathi v. J. Jayalalitha held that entrustment has to be proved for establishing an offence of criminal misappropriation. The case is one of circumstantial evidence. The burden is on the prosecution to prove the circumstances of the case by admissible and legal evidence. All such circumstances cumulatively should form a complete chain pointing unerringly towards the guilt of the accused. The Hon’ble Supreme Court in the case of State of Uttar Pradesh v.  Suhasi, Haricharan v. State of Rajasthan held that where if there are missing links in the chain of evidence adduced by the prosecution, benefit of doubt should go to the accused.
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Judgement reviewed by- Parvathy P.V

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Interim relief cannot be seeked for an International Arbitration Case: SC

Case title: Ilwohnibrand Co. Ltd. V. Mahakali Food Pvt.Ltd and Ors.

Case no: Arbitration case No.of 2023

Dated on: 3rd April, 2024

Quorum: Hon’ble Justice Sushrut Arvind Dharmadikhari  and Hon’ble Shri Justice Devnarayan Mishra

Facts of the Case:

The petitioner had business relationship with the respondent no.1 to 3. A sale contract was entered into between the petitioner and the respondents on 18.09.2019 for supply of 2014 MT ‘ Full-Fat Soya Grits’. However, respondents committed a breach of contract wherein there was neither the quantity supplied according to the contract nor the quality. Even for the sub-standard material supplied by the respondent, the authorities conducted raid and sealed the premises of the petitioner. Petitioner notified the respondent about the breach. Respondent though admitted the supply of substandard quality under the contract and promised to compensate the petitioner but no such compensation was ever paid. Another contract was entered into between the petitioner and the respondent wherein respondent insisted for enhanced rate and issued proforma invoice and payment was duly made by the petitioner. However, respondent again committed breach of contract by not supplying the material as per the timeline mandated in the contract and in fact only supplied goods worth $1,42,500 despite receiving advance payment of $375,000 and thereafter respondent did not make any supply and stopped answering the calls. Again, with malicious intent, respondents communicated that it shall pay the balance amount to the petitioner, but no heed has been paid. Efforts to resolve the dispute failed since the respondent did not want to and stopped making communication with the petitioner. Since, the contract between parties provides for resolution of dispute by way of arbitration to be conducted in India, the petitioner filed petition under the Section 9 (1)(i) of the Conciliation Act of 1996 before the Commercial Court which was dismissed for want of jurisdiction with liberty to the petitioner to approach appropriate forum. Hence, the present petition had been filed. Shri Aniket Naik, appointed as Amicus Curiae submitted that petitioner has already approached the Commercial Court under Section 9 of the Act of 1996 seeking interim protection. However, learned Commercial Court dismissed the application filed by the petitioner holding the same as not maintainable for want of jurisdiction as the matter pertains to international commercial arbitration and not domestic arbitration.

Contentions of the Appellant:

Learned counsel for the petitioner submitted that evidence of breach committed by the respondent are available and, therefore, an order of interim protection securing the amount involved in the arbitration is required to be passed since despite sending several reminders, respondent kept making false promises, but neither exported the balance shipment nor compensate for the delivery of sub-standard quality of products thereby putting the petitioner to suffer irreparable loss. In terms of section 2(e) and (f) of the act of 1996, the petition can by heard by this court being the jurisdictional court and the present arbitration being an international commercial arbitration. In an identical situation the apex court , in S.D. Containers V. Mold Tek Packaging Ltd., had remanded the case to the court to be tried under its original civil jurisdiction where the court held that while invoking its powers under clause (9) of the letter patent read with rule 1(8) of chapter IV of the rules of the exercise its extra ordinary civil jurisdiction. Hence, the petition which is made under Section9 of the Act 1996 is exclusively triable by this court, therefore, the present petition to be deleted from the category of  the arbitration case and be listed under  the relevant category before appropriate single bench.

Contentions of the Amicus Curiae:

Petitioner has already approached the commercial court under Section 9 of the Act of 1996 seeking interim protection. But the court dismissed saying that the same is not maintainable as it pertains to international arbitration. Thereafter,

Petitioner has preferred the present application under section 9 (2)(1)(f) of the act of 1996 which is not maintainable in the view the fact that as per the Chapter 2 Rule 3 of Rules, 2008 an application under section 11 of the act of 1996 shall be registered as arbitration case which deals with the appointment of the arbitrator.  Court to sub-rule 8 Rule 10 Chapter 2, of the High Court rules 2008 which says that these cases can be considered as a  Miscellaneous Civil Case and also to be registered as a Miscellaneous Civil Case if they do not fall under the ambit of the first seven clauses which is not interlocutory to any proceedings. It is submitted that petitioner can very well file Miscellaneous Civil Case in terms of sub-rule 8 of Rule 10 of Chapter 2 of Rules of 2008, which can be entertained and appropriate orders can be passed.

Legal Provisions:

Section 9 of the Arbitration and Conciliation Act-  Seeking interim reliefs before, or during the arbitral proceedings, or at any time after the passing of the award but before it is enforced.

Section 11 of the Arbitration and Conciliation Act- Appointment of the arbitrator.

Sub-rule 8 of Rule 10 of Chapter 2 of the High Court of Madhya Pradesh rules of 2008- Filing miscellaneous civil cases.

Issues:

Whether the petitioner is entitled to seek interim measure of protection and securing the amount involved in the arbitration   under section 9 of Arbitration act 1996 and section 10 of the commercial courts act,2015?

Courts Judgement and Analysis:-

The present petition itself is not maintainable on twin grounds:

(i) Firstly , the petitioner resorting to the liberty granted by the Commercial Court has filed present petition under Section 9 r/W Section 2(1)(f) of the Act of 1996 seeking interim protection before this Court which cannot be entertained by this Court.

(ii) Secondly, as rightly pointed out by Amicus Curiae, in terms of Chapter 2 Rule 3 of the Rules of 2008, an application Section 11 of the Act of 1996 shall be registered as an arbitration case which deals with appointment of Arbitrator which is not the case herein.

In the considered opinion of this Court, looking to the nature of case and the relief as sought for by the petitioner, the same does not fall within the category of an Arbitration Case. Rather the same ought to have been filed as a Miscellaneous Civil case falling within the ambit and scope of any other application of civil nature, not falling under any of the specified categories in terms of sub-rule 8 of Rule 10 of Chapter 2 of Rules of 2008. In view of the above   discussion, its hereby rejected. Accordingly, the present petition is hereby dismissed with liberty to the petitioner to file miscellaneous civil case in terms of sub-rule 8 of Rules of 2008.

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Judgement Reviewed By- Parvathy P.V.

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