Full Judgment Text
2024 INSC 284
Reportable
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
Criminal Appeal No._________ of 2024
(@ Special Leave Petition (Crl.) No. 2772 of 2023)
Vipin Sahni and another … Appellants
Versus
Central Bureau of Investigation … Respondent
J U D G M E N T
SANJAY KUMAR, J
1. Leave granted.
2. Exercising power under Section 239 Cr.P.C, the learned Special
Judicial Magistrate, CBI Court, Ghaziabad, discharged the appellants
Signature Not Verified
Digitally signed by
Nirmala Negi
Date: 2024.04.08
16:36:55 IST
Reason:
herein of a charge under Sections 420 and 120B IPC, vide order dated
31.08.2019 in Case No. 456 of 2012 arising out of RC-219 2011 (E) 0016
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registered on the file of Police Station CBI, EO-1, New Delhi. Aggrieved
thereby, the Central Bureau of Investigation (for short, ‘CBI’) approached
the High Court of Judicature at Allahabad, under Section 482 Cr.P.C, by
way of Application U/S 482 No. 11426 of 2021. By order dated 20.01.2023
passed therein, the High Court set aside the discharge order and directed
the learned Magistrate to proceed with the case against the appellants.
Assailing the said order, they are before this Court.
3. The appellants had established Sunshine Educational and
Development Society, NOIDA, Uttar Pradesh, and registered it under the
Societies Registration Act in the year 2004. The aims and objectives of this
Society, inter alia , included propagation of technical education. Appellant
No. 1 was the Chairman of the said Society while his wife, viz., appellant
No. 2, was its Secretary. In September, 2006, the Society acquired 4.90
acres of land in Greater NOIDA, Uttar Pradesh, on a 90-year lease from
Greater Noida Industrial Development Authority, Gautambudh Nagar, Uttar
Pradesh, for setting up educational institutions. The Society filed
application dated 22.01.2007 seeking approval of the All India Council for
Technical Education (AICTE) to establish ‘Business School of Delhi’,
offering a Post-Graduate Diploma Course in Business Management
(PGDM), in an extent of one acre out of the leased land. In the application,
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the Society disclosed that a loan of ₹5.75 Crore had been availed by it from
Corporation Bank and that the outstanding loan stood at above ₹3 Crore. It
also disclosed, in response to clause 6(v), that a loan/mortgage had been
raised against the land, by ticking the ‘Yes’ box. However, in the tabular
form in the first page, against the query – ‘Mortgaged with Bank - Yes/No’,
the answer was stated as ‘No’. There was, thus, an apparent contradiction
in the application itself. In any event, approval was accorded by the AICTE
on 17.08.2007 to start the ‘Business School of Delhi’.
4. Thereafter, the Society submitted another application to the AICTE
on 27.10.2007 seeking to establish ‘Business School for Women’, offering
PGDM course. A day later, on 28.10.2007, the Society filed yet another
application seeking approval from the AICTE to start a third institute,
named ‘International Business School of Delhi’. The first and third
applications were moved on behalf of the Society by appellant No. 1, being
its Chairman, while the second application was filed by appellant No. 2, as
its Secretary. In the two later applications, the Society failed to mention that
the leased land was mortgaged but it disclosed the fact that it had already
been granted approval in the year 2007 to operate another institute from
the same premises. By proceedings dated 29.05.2008, the AICTE granted
approval for starting the ‘Business School for Women’ in an extent of 0.8
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acres out of the said land. On 19.06.2008, the AICTE accorded approval to
commence the ‘International Business School of Delhi’ in the leased land.
5. While so, it appears that an anonymous complaint was made to
the Chief Vigilance Commissioner alleging that officials of the AICTE had
shown undue favour to the Society. On the strength thereof, the Chief
Vigilance Commissioner referred the matter to the CBI for investigation. In
the first instance, the Regional Officer of the CBI at Kanpur addressed
letter dated 24.07.2011 to the Station-in-charge, Police Station Greater
NOIDA, to register a case for investigation but the District Police of
Gautambudh Nagar, Uttar Pradesh, opined that the complaint did not justify
registering of a FIR and/or proceeding with investigation as no cognizable
offence was made out.
6. However, on 30.11.2011, Case Crime No. 219 2011 (E) 0016 was
registered on the file of PS CBI, EO-1, New Delhi, under Sections 420 and
120B IPC along with Section 13(2) read with Section 13(1)(d) of the
Prevention of Corruption Act, 1988. This FIR was registered against the
appellants and unnamed officials of the AICTE, alleging that the appellants
had obtained approval by deceitful means from the AICTE, in violation of
Section 4.2(iii) of the AICTE Approval Process 2006. As per this provision,
the land approved for starting an educational institution ought not to be
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encumbered. After completion of the investigation, Charge Sheet No. 11 of
2012 was filed by the CBI for offences under Sections 420 and 120B IPC,
naming only the appellants as the accused. No official of the AICTE was
charged with criminality in granting approval to the Society’s institutions.
7. Aggrieved by their arraignment, the appellants approached the
High Court at Allahabad under Section 482 Cr.P.C, vide Application U/S
482 No. 37398 of 2012, seeking quashing of the criminal proceedings
against them. By order dated 14.02.2013, the High Court accepted their
plea and quashed the said proceedings. However, upon the CBI
approaching this Court in Criminal Appeal No. 239 of 2015, by order dated
05.02.2018 passed therein, this Court set aside the order dated 14.02.2013
but made it clear that the Trial Court would be at liberty to go into the merits
of the issue raised at the stage of framing of charges. Thereafter, on
02.07.2018, the Trial Court granted bail to the appellants.
On 25.09.2018, the appellants moved an application for discharge
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before the learned Special Judicial Magistrate, CBI Court, Ghaziabad, but
the learned Magistrate rejected their plea by order dated 15.02.2019 and
directed the matter to be listed for framing of charges. The appellants,
thereupon, preferred Criminal Revision No. 101 of 2019 before the learned
Additional Sessions Judge, Ghaziabad, under Section 397 Cr.P.C. The
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revision was allowed by the learned Additional Sessions Judge, vide order
dated 29.05.2019, whereby the order passed by the learned Magistrate
was set aside and the matter was remanded for hearing afresh, in the light
of the observations made in the revisional order. In consequence, the
learned Magistrate reheard the case and passed order dated 31.08.2019,
discharging the appellants from the alleged offence under Sections 420
and 120B IPC. Nearly one and a half years after the passing of this
discharge order, i.e., on 21.02.2021, the CBI filed a petition under Section
482 Cr.P.C assailing it before the High Court at Allahabad. The petition was
taken on file as Application U/S 482 No. 11426 of 2021 and the High Court
allowed the same by way of the impugned order, leading to the present
appeal.
9. Before we proceed to examine the case on merits, we may first
take note of relevant legal provisions. Section 415 IPC defines ‘Cheating’
and it reads thus: -
‘415. Cheating.-
Whoever, by deceiving any person, fraudulently or dishonestly induces the
person so deceived to deliver any property to any person, or to consent that any
person shall retain any property, or intentionally induces the person so deceived
to do or omit to do anything which he would not do or omit if he were not so
deceived, and which act or omission causes or is likely to cause damage or harm
to that person in body, mind, reputation or property, is said to “cheat”.
Explanation .- A dishonest concealment of facts is a deception within the meaning
of this section.’
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Section 420 IPC, the provision we are concerned with presently,
reads as under: -
‘ 420. Cheating and dishonestly inducing delivery of property. -
Whoever cheats and thereby dishonestly induces the person deceived to deliver
any property to any person, or to make, alter or destroy the whole or any part of a
valuable security, or anything which is signed or sealed, and which is capable of
being converted into a valuable security, shall be punished with imprisonment of
either description for a term which may extend to seven years, and shall also be
liable to fine.’
Sections 120A IPC and 120B IPC read thus: -
‘ 120A. Definition of criminal conspiracy .-
When two or more persons agree to do, or cause to be done,
(1) an illegal act, or
(2) an act which is not illegal by illegal means, such an agreement
is designated a criminal conspiracy:
Provided that no agreement except an agreement to commit an
offence shall amount to a criminal conspiracy unless some act besides
the agreement is done by one or more parties to such agreement in
pursuance thereof.’
‘120B. Punishment of criminal conspiracy. -
(1) 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.
(2) Whoever is a party to a criminal conspiracy other than a criminal
conspiracy to commit an offence punishable as aforesaid shall be
punished with imprisonment of either description for a term not exceeding
six months, or with fine or with both.]’
10. The sine qua non to make out an offence under Section 420 IPC,
insofar as the present case is concerned, is an act on the part of the
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appellants to ‘cheat and thereby dishonestly induce the person so
deceived, viz., the AICTE, to deliver any property’. Therefore, the
appellants, while applying for and on behalf of the Society, should have
either suppressed material information or projected incorrect information so
as to induce the AICTE, by such dishonest means, to grant approval for its
educational institutions. Further, as no official of the AICTE has been
implicated in the offence, as per the charge sheet, the alleged ‘criminal
conspiracy’ under Section 120B IPC would also be attributable to the
appellants only.
11. Viewed in this light, we may note that the first application dated
22.01.2007 submitted by appellant No. 1 for starting ‘Business School of
Delhi’ clearly mentioned the fact that a part of the leased land admeasuring
about 5 acres was to be used for setting up this institution and that a term
loan of ₹5.75 crore had been raised from the Corporation Bank. The
repayable outstanding loan was also shown as above ₹3 crore. Clause 6 of
the application dealt with ‘Land’ and it was stated thereunder that the
government’s leased land of about 5 acres was intended to be used for
establishing the college. Clause 6(v) of the application and the Society’s
response thereto are extracted hereunder.
‘(v) Any loans/mortgage raised against the titles of the land
Yes
No’
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12. Further, as already noted, the AICTE deemed it fit to grant
approval on 17.08.2007 to start this institution. This was despite the
AICTE’s ‘Approval Process 2006’ providing that the land should have been
registered in the name of the applicant’s society/trust on or before the date
of submission of the proposal, free from any encumbrances. However, no
official of the AICTE has been implicated in any wrongdoing.
13. Coming to the Society’s second application for the ‘Business
School for Women’, the same extent of 5 acres was shown against clause
6 but there was non-disclosure of the mortgage of the land to secure the
outstanding bank loan. Under clause 6(v), the society failed to state that a
loan/mortgage had been raised against the title of the land and
tick-marked ‘No’ instead of ‘Yes’. Similarly, the application for starting the
‘International Business School of Delhi’ also mentioned the same extent of
5 acres of land but again, clause 6(v) contained incorrect information as
against the question whether any loan/mortgage had been raised against
the title of the land. The word ‘No’ was tick-marked instead of ‘Yes’.
14. These are the actions which formed the foundation for the CBI’s
case against the appellants. As already stated hereinbefore, it was not the
AICTE that claimed that it was deceived and dishonestly induced to grant
approval owing to suppression of material information by the appellants
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acting on behalf of the Society. It was a third party who chose to remain
anonymous that initiated the investigation. Further, by not implicating any
official of the AICTE in the charge sheet and by dropping the provisions of
the Prevention of Corruption Act, 1988, the CBI found that the AICTE’s
officials were not complicit at all and they were given a clean chit.
15. At this stage we may note that, though the appellants were initially
successful in getting the proceedings quashed by the High Court, this Court
reversed the said order but left it open to the Trial Court to examine the
issue raised, on merits, at the time of framing of charges. It is pursuant to
the liberty granted by this Court that the learned Special Judicial
Magistrate, CBI Court, chose to exercise power under Section 239 Cr.P.C
and discharged the appellants. The validity of that exercise was called in
question before the High Court, which ultimately held against the
appellants.
Significantly, the High Court was not inclined to accept the
16.
preliminary objection raised by the appellants to the effect that the CBI
ought to have filed a revision under Section 397 Cr.P.C against the
discharge order and could not maintain a petition under Section 482 Cr.P.C.
In this regard, the High Court observed that it could always treat a petition
filed under Section 482 Cr.P.C as a revision under Section 397 Cr.P.C and,
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therefore, the appellants’ objection had no substance. On merits, the High
Court opined that the appellants had deliberately withheld relevant
information knowing fully well that if the land was encumbered in any
manner, approval for setting up the educational institutions there would be
declined. Holding so, the High Court set aside the discharge order.
17. We are, however, of the considered opinion that the finding of the
High Court as to deliberate withholding of information by the appellants
cannot be accepted on the given facts. It is a matter of record that the first
application dated 22.01.2007 filed by appellant No. 1 on behalf of the
Society disclosed that a bank loan was still outstanding and that the subject
land of nearly 5 acres had been mortgaged to secure the loan. This was
followed by scrutiny and verification by the officials of the AICTE, including
a spot inspection, following which, approval for starting the ‘Business
School of Delhi’ was accorded on 17.08.2007. No wrongdoing has been
attributed to the officials of the AICTE in that regard. It was only the later
application dated 27.10.2007 for the ‘Business School for Women’ and the
application dated 28.10.2007 for the ‘International Business School of
Delhi’ that did not state correct information with regard to the outstanding
bank loan and the mortgage of the land in connection therewith. However,
all three applications mentioned the extent of nearly 5 acres and the AICTE
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could not be said to be in ignorance of the fact that the said land was under
an encumbrance at the time the applications were made. Notably, both the
later applications mentioned the fact that an institution was already granted
approval in 2007 to operate from the same premises. This was obviously in
reference to the ‘Business School of Delhi’ and the application for the same
did disclose the subsistence of the loan and the encumbrance on the land.
18. That apart, it was not even the case of the AICTE that it was under
any illusions, whereby it was dishonestly induced to grant approval for
establishment of the colleges in question. The only party who can speak of
being ‘dishonestly induced to do or not do something’ is that party itself and
when the AICTE made no such complaint, it was not for others to insinuate
that the AICTE was dishonestly induced to do something.
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19. In Ram Jas v. State of U.P. , the ingredients required to constitute
an offence of cheating were succinctly summed up thus: -
‘ ( i ) there should be fraudulent or dishonest inducement of a
person by deceiving him;
( ii ) ( a ) the person so deceived should be induced to deliver any
property to any person, or to consent that any person shall retain
any property; or
( b ) the person so deceived should be intentionally induced
to do or omit to do anything which he would not do or omit if he
were not so deceived; and
( iii ) in cases covered by ( ii ) ( b ), the act or omission should be
one which causes or is likely to cause damage or harm to the
person induced in body, mind, reputation or property.’
1
(1970) 2 SCC 740
12
2
20. In V.P.Shrivastava vs. Indian Explosives Limited and others ,
this Court observed that in order to constitute an offence of cheating, it
must be shown that the accused had a fraudulent or dishonest intention at
the time of making the representation or promise and such a culpable
intention should be there at the time of entering into the agreement. On
facts, it was found that the party alleged to have been cheated was fully
conscious of the situation at the time it decided to enter into the contract
and there was no dishonest inducement.
21. In the case on hand, there was disclosure of the fact that the
subject land was mortgaged to secure the bank loan but despite the same,
the AICTE granted approval for the ‘Business School of Delhi’ and it never
complained that it was under any misinformation in that regard. Thus, the
essential requisite to make out an offence of cheating is lacking. Mere
carelessness on the part of the appellants in filling up the second and third
applications and a part of the first application also cannot be taken to be
motivated by deliberate deception, on the admitted factual position, so as to
invite criminal charges.
22. Further, there is no evidence of the appellants consciously
agreeing or conspiring to deliberately furnish false information to the AICTE
so as to garner its approval for their colleges. As already noted, appellant
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(2010) 10 SCC 361
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No.1 filed the first application, divulging the relevant details of the bank loan
and the mortgage over the leased land, but he failed to do so in the third
application filed by him. Appellant No.2 filed the second application with the
same non-disclosure but there is no evidence whatsoever of the appellants
resorting to deception in that regard willfully and in connivance with each
other. Therefore, the charge under Section 120B IPC also does not
withstand judicial scrutiny.
23. As regards the objection raised by the appellants as to the
maintainability of the CBI’s petition filed before the High Court under
Section 482 Cr.P.C., we may note that, as per Article 131 in the Schedule to
the Limitation Act, 1963, the limitation period for filing a criminal revision
under Section 397 Cr.P.C, be it before the High Court or the Sessions
Court, is 90 days. However, there is no limitation prescribed for invocation
of the inherent powers of the High Court under Section 482 Cr.P.C. and it
can be at any time. It is a matter of record that when the learned Special
Magistrate, CBI Court, dismissed the appellants’ discharge petition in the
first instance, they had filed a revision before the Sessions Court under
Section 397 Cr.P.C. and the matter was remanded for hearing afresh.
However, the CBI did not choose to adopt this course when the appellants’
discharge petition was allowed by the learned Special Magistrate in the
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second round. Long after the expiry of the limitation period of 90 days, the
CBI filed a petition before the High Court at Allahabad under Section 482
Cr.P.C. This was obviously to get over the hurdle of the limitation for filing of
a revision under Section 397 Cr.P.C. In this regard, useful reference may
be made to the decision of this Court in Mohit alias Sonu and another vs.
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State of U.P. and another , wherein it was observed thus:
‘28. So far as the inherent power of the High Court as contained in Section 482
CrPC is concerned, the law in this regard is set at rest by this Court in a catena of
decisions. However, we would like to reiterate that when an order, not
interlocutory in nature, can be assailed in the High Court in revisional jurisdiction,
then there should be a bar in invoking the inherent jurisdiction of the High Court.
In other words, inherent power of the Court can be exercised when there is no
remedy provided in the Code of Criminal Procedure for redressal of the
grievance. It is well settled that the inherent power of the Court can ordinarily be
exercised when there is no express provision in the Code under which order
impugned can be challenged.
29. Courts possess inherent power in other statute also like the Code of Civil
Procedure (CPC), Section 151 whereof deals with such power. Section 151 CPC
reads:
“ 151. Saving of inherent powers of court .—Nothing in this Code shall be
deemed to limit or otherwise affect the inherent power of the court to make such
orders as may be necessary for the ends of justice or to prevent abuse of the
process of the court.”
30. This Court in Padam Sen v. State of U.P. [AIR 1961 SC 218 : (1961) 1 Cri LJ
322] regarding inherent power of the Court under Section 151 CPC observed:
(AIR p. 219, para 8)
“ 8. … The inherent powers of the court are in addition to the powers specifically
conferred on the court by the Code. They are complementary to those powers
and therefore it must be held that the Court is free to exercise them for the
purposes mentioned in Section 151 of the Code when the exercise of those
3
(2013) 7 SCC 789
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powers is not in any way in conflict with what has been expressly provided in the
Code or against the intentions of the legislature. It is also well recognised that the
inherent power is not to be exercised in a manner which will be contrary to or
different from the procedure expressly provided in the Code.”
31. In a Constitution Bench decision rendered in Manohar Lal Chopra v. Seth
Hiralal [AIR 1962 SC 527] , this Court held that: (AIR p. 537, para 43)
“ 43. … The inherent jurisdiction of the court to make orders ex debito justitiae is
undoubtedly affirmed by Section 151 of the Code, but [inherent] jurisdiction
cannot be exercised so as to nullify the provisions of the Code of Civil Procedure.
Where the Code of Civil Procedure deals expressly with a particular matter, the
provision should normally be regarded as exhaustive.”
32. The intention of the legislature enacting the Code of Criminal Procedure and
the Code of Civil Procedure vis-à-vis the law laid down by this Court it can safely
be concluded that when there is a specific remedy provided by way of appeal or
revision the inherent power under Section 482 CrPC or Section 151 CPC cannot
and should not be resorted to. ’
24. In the light of the above edict, it was not open to the CBI to blithely
ignore the statutory remedy available to it under Section 397 Cr.P.C and
thereafter resort to filing of an application under Section 482 Cr.P.C.
25. We may also note that in the event a revision is lawfully instituted
before the High Court but the same is thereafter found to be not
maintainable on some other ground, it would be open to the High Court to
treat the same as a petition filed under Section 482 Cr.P.C in order to do
justice in that case. However, the reverse analogy may not apply in all
cases and it would not be open to the High Court to blindly convert or treat
a petition filed under Section 482 Cr.P.C as one filed under Section 397
Cr.P.C., without reference to other issues, including limitation. When the
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specific remedy of revision was available to the CBI, it could not have
ignored the same and filed a petition under Section 482 Cr.P.C. We,
therefore, find in favour of the appellants even on this count.
26. On the above analysis we are of the opinion that the learned
Magistrate was fully justified in exercising power under Section 239 Cr.P.C.
and discharging the appellants from criminal proceedings in relation to
Case No. 456 of 2012. The High Court adopted a rather technical approach
and practically concluded that the appellants were guilty of deliberately
withholding relevant information so as to secure the approvals by deceitful
means. This finding of the High Court is not supported by the admitted
facts, which indicate disclosure of the mortgage at the outset when the first
application was made and, therefore, there is no possibility of inferring that
the appellants conspired in terms of Section 120A IPC to commit an illegal
act of suppression so as to secure the approvals. Further, the AICTE itself
never claimed that it was dishonestly induced to grant such approvals and
that essential link is altogether missing, whereby any such criminal charge
of cheating can be sustained against the appellants. The impugned order
dated 20.01.2023 passed by the Allahabad High Court in Application U/S
482 Cr.P.C No. 11426 of 2021 is, therefore, set aside and the order of
discharge passed by the learned Special Judicial Magistrate, CBI Court,
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Ghaziabad, in Case No. 456 of 2012 is restored. In consequence, the
appellants shall stand discharged of the alleged offence under Sections
420 and 120B IPC in Case Crime No. 219 of 2011 (E) 0016.
The criminal appeal is allowed accordingly.
Pending applications shall stand closed.
………………………..,J
(ANIRUDDHA BOSE)
………………………..,J
(SANJAY KUMAR)
April 8 2024;
New Delhi.
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