Criminal Prosecution On Same Allegations Cannot Continue If Exoneration In Departmental Proceedings Is On Merits: SC

In a latest, landmark and laudable judgment titled Ashoo Surendranath Tiwari vs Deputy Superintendent Of Police, EOW, CBI & Anr. in Criminal Appeal No. 575 of 2020 (arising out of SLP (Crl.) No. 5422 of 2015), the Supreme Court has held explicitly, effectively and elegantly that in a case of exoneration in departmental proceedings on merits and where the allegation is found to be not sustainable at all and the person is held innocent then criminal prosecution on the same set of facts and circumstances cannot be allowed to continue. The three Judge Bench headed by Justice RF Nariman observed clearly, categorically and cogently that standard of proof in a departmental proceeding being based on preponderance of probability is somewhat lower than the standard of proof in a criminal proceeding where the case has to be proved beyond reasonable doubt. Very rightly so!

To start with, the ball is set rolling in para 2 of this notable judgment authored by Justice RF Nariman for himself, Justice Navin Sinha and Justice Indira Banerjee wherein it is observed that, “We have heard Mr Subhash Jha, learned counsel appearing for the appellant and Mr Vikramjit Banerjee, learned ASG appearing on behalf of the respondent.”

While narrating the facts of the case, it is then stated in para 3 that, “This case arises out of an FIR that was registered on 09.12.2009 as regards a MSME Receivable Finance Scheme operated by the Small Industries Development Bank of India (SIDBI). It was found that since some vendors were complaining of delay in getting their payments, SIDBI in consultation with Tata Motors Limited, advised the vendors of Tata Motors Limited to furnish RTGS details for remittance of funds. It was found that for making payments in RTGS for various purchases made by Tata Motors Limited from one Ranflex India Pvt. Ltd. (hereinafter referred to as “vendor”), 12 payments amounting to Rs. 1,64,17,551/- (Rupees one crore sixty four lakhs seventeen thousand five hundred fifty one only) were made through RTGS by SIDBI in the vendor’s account with Federal Bank, Thriupporur. Ultimately, SIDBI was informed by the vendor that it has an account with Central Bank, Bangalore and not with Federal Bank, Thriupporur. On account of this diversion of funds, an FIR was lodged in which a number of accused persons were arrested. We are concerned with the role of the appellant who is Accused no. 9 in the aforesaid FIR.”

While continuing in the same vein, it is then brought out in para 4 that, “A charge-sheet was then filed on 26.07.2011 in the Court of Special Judge, CBI cases in which it was alleged that the appellant had received an email on 25.05.2009 containing the RTGS details for the account with Federal Bank, Thrippour, which he then forwarded to Accused No. 5 (Muthukumar) who is said to be the kingpin involved in this crime and is since absconding. Apparently, based on Muthukumar’s approval, the appellant then signed various cheques which were forwarded to other accounts.”

To be sure, it is then further brought out in para 5 that, “By an order dated 27.06.2012 passed by the learned Special Judge, CBI (ACB), Pune, it was found that since no sanction was taken under the Prevention of Corruption Act, offences under that Act cannot, therefore, be proceeded with against this accused and he was discharged to that extent. So far as sanction under Section 197 of the Cr.P.C. is concerned, the Special Judge came to the conclusion that there was no need for sanction in the facts of this case. Finding that there was a prima facie case made out against the appellant, the Special Judge refused to discharge the appellant from the offences under the IPC.”

Briefly stated, it is then disclosed in para 6 that, “By the impugned judgment dated 11.07.2014, the High Court agreed with the learned Special Judge that there was no need for sanction under Section 197 Cr.P.C. The High Court then considered an Order of the Central Vigilance Commission (CVC) dated 22.12.2011 which went into the facts of the case in great detail and concurrent with the Competent Authority that on merit no sanction ought to be accorded and no offence under the Penal Code was in fact made out.” It is further pointed out in this same para that though this report was heavily relied upon before the High Court, the High Court had brushed it aside.

Needless to say, it is then further pointed out in this same para 6 that, “A reading of this Report shows that, at the highest, the appellant may be negligent without any criminal culpability. In fact, the positive finding of the CVC that the appellant appears to be a victim of Muthukumar’s plot is of some importance.”

Most significantly, the key point that is then mentioned in para 7 is that, “A number of judgments have held that the standard of proof in a departmental proceeding, being based on preponderance of probability is somewhat lower than the standard of proof in a criminal proceeding where the case has to be proved beyond reasonable doubt.” The relevant case law cited in para 7 first is that of P.S. Rajya vs State of Bihar, (1996) 9 SCC 1. The other relevant case law cited is that of Radheshyam Kejriwal vs State of West Bengal and Another (2011) 3 SCC 581. It is then pointed out that, “After referring to various judgments, this Court then culled out the ratio of those decisions in paragraph 38 as follows:-

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

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

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

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

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

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

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

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

Finally, the last important point made in para 7 is that it is pointed out in simple and straight language that, “From our point of view, para 38(vii) is important and if the High Court had bothered to apply this parameter, then on a reading of the CVC report on the same facts, the appellant should have been exonerated.”

Now regarding this latest, landmark and laudable judgment, it is then held in the last relevant para 8 that, “Applying the aforesaid judgments to the facts of this case, it is clear that in view of the detailed CVC order dated 22.12.2011, the chances of conviction in a criminal trial involving the same facts appear to be bleak. We, therefore, set aside the judgment of the High Court and that of the Special Judge and discharge the appellant from the offences under the Penal Code.”

To conclude, the three-Judge Bench of the Apex Court set aside the judgment of the High Court and that of the Special Judge and gave reasons also which we have already discussed above citing the relevant case laws. Para 38(vii) is very important and sums up the essence of this latest ruling which has been discussed threadbare already above! There can be no denying or disputing it!

Sanjeev Sirohi

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