HITESH V. SHAH vs UNION OF INDIA THROUGH THE DIRECTORATE OF ENFORCEMENT

2026:JHHC:15244


IN THE HIGH COURT OF JHARKHAND AT RANCHI

Cr. RevisionNo.214 of 2026
-----
Hitesh V. Shah, aged about 55 years, son of Vasantlal Shamaldas Shah,
resident of Flat No. 208, Swapnalok Apartment, 60 EVK Sampath Road,
Vepery, PO: Vepery, PS: Vepery, District Chennai 600007 (Tamil Nadu)
… … Petitioner
Versus
Union of India through the Directorate of Enforcement … Respondent
With
Cr. Revision No. 440 of 2026

Hitesh V. Shah, aged about 55 years, son of Vasantlal Shamaldas Shah,
th
resident of Flat No. 1002, Tower V, 10 Floor, Ceebros One 74, 174
Satyadev Avenue Extension, MRC Nagar, Main Road, Raja
Annamalaipuram, PO and PS:Vepery, Chennai-600028, Tamil Nadu.
… … Petitioner
Versus
Union of India through the Directorate of Enforcement
… … Respondent
------
CORAM: HON’BLE MR. JUSTICE SUJIT NARAYAN PRASAD
-------
For the Petitioner(s) : Mr. Indrajit Sinha, Advocate;
Mr. Sneh Singh, Advocate;
Mr. Ajay Kumar Sah, Advocate
[In both cases]
For the Respondent(s) : Mr. Amit Kumar Das, Advocate
[In both cases]
------
th th
C.A.V. on:29 April, 2026 Pronounced on:13 May, 2026

1. Since both these criminal revisions are interlinked and, as such, both
are heard together and being disposed of by a common order.
2. Both of these Criminal Revision petitions have been filed under
sections 438 & 442 of Bhartiya Nagarik Suraksha Sanhita, 2023.
Criminal Revision No.214 of 2026 is directed against the order dated
3.
06.08.2025 passed by the learned Additional Judicial Commissioner-1
cum Special Judge, PML Act, Ranchi by which discharge petition was
filed by the petitioner under section 227 Cr.P.C. in connection with
ECIR Case No. 07 of 2023 in ECIR/RNZO/04/2021, registered for the
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offence under section 3 punishable under section 4 of Prevention of
Money Laundering Act, 2002(in short PMLA,2002) has been rejected.
4. Criminal Revision No. 440 of 2026 is directed against the order dated
25.03.2026passed by the learned Additional Judicial Commissioner-1
cum Special Judge, PML Act, Ranchi in connection with ECIR Case No.
07 of 2023 in ECIR/RNZO/04/2021 registered for the offence under
sections 3 and 4 of the Prevention of Money Laundering Act, 2002,
whereby and whereunder, the charges have been framed against the
petitioner.
Factual Matrix :
5. The brief facts of the case as per the pleadings made in the instant
petitions which require to be enumerated herein, read as under:
(i) An FIR was registered by the CBI-ACB, Ranchi bearing
No. RC 08(A)/17-R dated 30.10.2017 under section 120B of
IPC, 1860, and sections 7 and 12 of the Prevention of
Corruption Act, 1988 against Upendra Nath Mandal, the
then Senior Manager Meteorological Wing, MECON India
Ltd., Ranchi, M/s Zeal India Chemicals Ranchi (represented
through its partners Shri Ajay Jalan) and M/s Shiv Machine
Tools, Chennai (represented through its partner Sri Hitesh
V. Shah).
(ii) After investigation, a charge sheet No. 14 of 2020 dated
27.11.2020 was filed by CBI-ACB against Shri U.N.
Mandal, Shri Ajay Jalan and Shri Hitesh V. Shah for
commission of offences punishable under section 120B of
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IPC read with section 13(2) r/w section 13(1)(d) of the
Prevention of Corruption Act and substantive offences
thereof, before the learned Court of Special Judge, CBI
cases, Ranchi.
(iii) Further a supplementary charge-sheet bearing No. 2 of
2021 dated 28.4.2021 was filed against Shri Mintu Naskar
under section 120B of IPC read with section 13(2) r/w
section 13(1)(d) of the Prevention of Corruption Act. Since
section 120B of IPC read with section 13(2) r/w section
13(1)(d) of the Prevention of Corruption Act are scheduled
offence under the Prevention of Money Laundering Act,
investigation was initiated under PMLA against the
aforementioned persons after recording ECIR no.
ECIR/RNZO/04/2021 dated 28.03.2021 which was later on
numbered as ECIR case No. 7 of 2023.
(iv) It is further alleged in the FIR that Upendra Nath
Mandal while being posted and functioning as Senior
Manager, Metallurgical Wing, MECON India, entered into
criminal conspiracy with two firms, namely, M/s Zeal India
Chemicals and M/s Shiv Machine Tools and in furtherance
thereof accepted illegal gratification from the above two
firms amounting to around Rs. 1,65,45,000/- through
banking transactions. It has been further alleged that
Upendra Nath Mandal had received the alleged amount in
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various accounts existing either in his name or in the name
of his relatives / friends.
(v) The CBI charge sheet No.14 of 2020 reveals that
Upendra Nath Mandal while being posted and functioning
as senior manager during the period 2013 to 2016 prepared
the Technical Specification (TS) and Tender Appraisal
Report (TAR) for Durgapur Steel Plant Project Medium
Structure Mill Laboratory Facilities (package No.
MSM/EXPN/07) having tender No. DSP/PROJ-
PUR/EXPN/MSM-07/308 and Bokaro Steel Plant Cold
Rolling Mill (CRM-III) Project tender No.
T&C(M)/320/036C/SPG/314. He was responsible to pass
the drawing design of machines submitted by M/s Zeal
India Chemicals and M/s Shiv Machine Tools.
(vi) It is allegedly further established that Ajay Jalan, partner
of M/s Zeal India Chemical along with 3 consortium
partners and Hitesh V. Shah, partner of M/s Shiv Machine
Tools, along with 2 consortium partners participated and got
selected in Durgapur Steel Plant Project Medium Structure
Mill Laboratory Facilities and Bokaro Steel Plant Cold
rolling Mill (CRM-III) Project respectively in which
MECON India Ltd. was appointed consultant.
(vii) The learned Special Judge PML Act, Ranchi vide order
dated 23.11.2023 took cognizance of offence under section
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3 punishable under section 4 of the PML Act, 2002 against
the petitioner and other accused persons.
(viii) Subsequent to filing of said ECIR/ prosecution
Complaint dated 11.10.2023 , cognizance of offences
defined under Section 3 of PMLAct, 2002 and punishable
under Section 4 of the said Act has been taken against the
petitioner.
(ix) Thereafter, the petitioner filed a discharge petition
praying for discharge as there was no sufficient ground for
proceeding against the petitioner under Section 3 of the
PMLA, 2002 and punishable under Section 4 of the Act,
2002.
(x) It is the case of the petitioner that the learned Special
Judge, PML Act, Ranchi without appreciating the materials
available on record, has rejected the discharge petition
preferred by the petitioner vide order dated 06.08.2025 and
vide order dated 25.03.2026 has framed the charge for the
offence under Section 3 of the PMLA punishable under
Section 4 of the PMLA against the petitioner.
(xi) Being aggrieved with the aforesaid orders dated
06.08.2025and 25.03.2026 the instant revision applications
have been preferred by the present petitioner.
Arguments advanced on behalf of the petitioner:
(i) The learned counsel appearing on behalf of the petitioner has
submitted that entire genesis of the case against the applicant lies
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in the allegation that illegal gratification was paid to Upendra Nath
Mandal for getting the contract at Bokaro Steel Plant for providing
laboratory facility in connection with tender no. T & C
(M)/320/036C/SPG/314. However, there is no material to prove
the same either with the CBI-ACB or the Directorate of
Enforcement (hereinafter referred to as ‘ED’). The allegation is
made on assumptions, completely rejecting the explanations
tendered by the applicant. The ED failed to appreciate that the
applicant is not a public servant and has erred in arriving at
conclusion that Upendra Nath Mandal single handedly offered
favour/help to the applicant.
(ii) The petitioner states that the prosecution has squarely
failed to bring on record any material to connect the petitioner
with any property that may have been derived or obtained directly
or indirectly as a result of criminal activity relating to any
scheduled offence.
(iii) It is further submitted that if Bokaro Steel Plant or
MECON would have observed any discrepancies in the tendering
process or the bid, the committee would have canceled the tender
and invite fresh bids. Finalization of bids could not have been
based on the decision of one person that is Upendra Nath Mandal
as alleged. The applicant cooperated with the investigation and his
statement was recorded under section 50 of PMLA , 2002 wherein
he denied all the allegations leveled against him. No payment far
less illegal gratification was given by the applicant to the accused
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Upendra Nath Mandal for allotment of tender project of Bokaro
Steel Plant in favourof M/s Shiv Machine Tools.
(iv) It is further submitted that the entire tender was
processed as per guidelines laid in the tender document/bid
document. The Tender Appraisal Report (TAR) was also prepared
after following extant practices by the consultant MECON Ltd. It
is beyond imagination that only one person would be responsible
for the preparation of TAR and he favoured the applicant enabling
him to get the contract. The entire allegations are void of material
truth and are absurd and improbable.
(v) It is further submitted that the said Upendra Nath Mandal
informed the applicant about the miserable conditions of his
relatives and need for some loan to meet their educational and
medical need. In order to avoid continuing requests for loan, the
applicant thought it apt to meet the loan payment through staff and
distant relatives. The entire loan amount of about over Rs. 20 Lakh
was supported with promissory notes issued in favour of the
staff/relative and was duly repaid by relatives of Upendra Nath
Mandal with interest. The payments were made through banking
channels and amount received back were deposited in bank
accounts. The payment through banking channel cannot be bribe
as alleged.
(vi) It has been further contended that the ED has refused to take
note of the explanation tendered by the applicant with regard to
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the loan and its repayment on frivolous grounds like the applicant
has failed to produce travel records. It is vital to point out that the
loan amount of Rs. 12.895 lacs taken by the relatives of the co-
accused U.N. Mandal from the employees of the applicant's firm
were mostly returned before registration of PE-01(A)/2016-R,
dated 09.12.2016 and even the remaining 3.5 lacs was paid before
the registration of the FIR dated 30.10.2017. Absence of travel
records cannot be ground enough for bracketing the transactions as
being connected to the offence of money laundering. The ED has
suppressed the fact that during the search conducted by CBI-ACB
on 31.10.2017, 2 original blank (security) cheques were seized
bearing nos. 482758 & 482759 (SBI cheques) which were signed
and given by Mr. Manvendra Nath Mandal as security towards the
loan taken by him from the applicant. The applicant was forced to
collect the loan /amount in cash in absence of the cheques that
were seized during the search. This alone proves the fact that the
applicant had given loan to the relatives and friends of the
Upendra Nath Mandal. Majority of the loan availed by the
relatives and friends of Upendra Nath Mandal were repaid before
initiation of the Preliminary Enquiry by CBI on 09.12.2016. The
repayment of loans started following the complaints regarding the
financial irregularities of Upendra Nath Mandal. Such contention
has no force as the PE was registered on 09.12.2016 and the first
communication to appear before CBI was received by the accused
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only on 23.02.2017. The applicant had no knowledge of any
enquiry being conducted.
(vii)It has been further stated that entire allegation that the
applicant had paid illegal gratification to Upendra Nath Mandla
through Mintu Naskar is also misplaced. The applicant had in fact
entered into a business transaction with M/s Naskar Ceramics,
whose proprietor is Mintu Naskar for purchase of machines being
Pelletiser Machine, Die Face Cutter and 40mm Twin Screw
Excruder Machine and had paid Rs. 70 lakh for the same.
(viii) It is further stated that ED has based its allegations on the
predicate offence being RC-08(A)/2017-R which itself is tainted
with flaws of investigation. The applicant has not conspired with
any public servant in commission of any illegal activity. No goods
were overpriced and that any allegation regarding overpricing is
not supported with any cogent material to prove the same. The
reports of Central Institute of Mining and Fuel Research (CIMFR),
which aims to provide R&D inputs for the entire coal energy chain
in compassing exploration, mining and utilization cannot be relied
upon as the same is not competent to deal with the job which was
assigned to the applicant, i.e., to say not related to the Steel
industry at all. The applicant has been proceeded against simply
on the basis of assumptions and surmises, and by overlooking the
stringent and higher standard of responsibility that has been casted
over the officials of the Investigating Agency before proceeding
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against any person. Thus, there must be more of a 'reason to
believe' rather than mere assumptions that the offences alleged
against the applicant have actually been committed by him.
(viii) A perusal of the entire PC and the statements of witnesses
and accused persons make it aptly clear that the applicant is not
involved in any criminal activity relatable to the schedule offence
from the commission of which any proceeds of crime was
generated and the same was ever dealt with by the applicant. Thus,
there is no material to show that the applicant ever paid any illegal
gratification.
(ix) It is vital to point out that the loan amount of Rs. 12.895 lacs
taken by the relatives of the co-accused U.N. Mandal from the
employees of the petitioner's firm were mostly returned before the
registration of PE-01(A)/2016-R, dated 09.12.2016. Even, the
remaining 3.5 lacs was paid before the registration of the FIR
dated 30.10.2017. It is respectfully submitted that absence of
travel records cannot be ground enough for bracketing the
transactions as being connected to the offence of money
laundering.
(x) The applicant states and submits that the ED's contention that
the repayment of loans started following the complaints regarding
the financial irregularities of Upendra Nath Mandal. Such
contention has no force as the PE was registered on 09.12.2016
and the first communication to appear before CBI was received by
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the accused only on 23.02.2017. The petitioner (even other
accused) had no knowledge of any enquiry being conducted.
(xi)It has been further stated that the entire prosecution initiated
against the applicant is without jurisdiction and thus bad in law.
There is no supporting material that the applicant has committed
any offence of money laundering.
Arguments advanced on behalf of the Respondent-ED:
7 . It is submitted that investigation conducted under the Prevention of
Money Laundering Act (PMLA), 2002 has clearly established the direct
and active involvement of the accused Petitioner, Shri Hitesh V. Shah, in
the commission of offence of money laundering. The material collected
during investigation demonstrates his role in the generation of illicit
funds, their concealment, and their subsequent projection as untainted
property.
8 . The offence originates from the criminal conspiracy relating to
manipulation of the Bokaro Steel Plant tender process, wherein the
Petitioner, representing M/s Shiv Machine Tools, generated and paid
Proceeds of Crime (POC) amounting to Rs. 94.42 Lakhs as illegal
gratification to the co-accused public servant, Shri U.N. Mandal.
9 . After making the said payment, the petitioner knowingly engaged in a
series of structured financial transactions aimed at concealing the true
origin of the funds and integrating them into the financial system. A
significant component of this arrangement was the routing of Rs. 70
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Lakhs through Mintu Naskar. The said transfer was projected as an
"advance payment" for heavy machinery from M/s Naskar Ceramics.
However, investigation revealed that the invoice relied upon was
backdated to 14.12.2016, subsequent to the initiation of the CBI's
Preliminary Enquiry, and that the said entity did not possess the business
capacity to undertake such a transaction.
10 .The laundering process was further carried out through the device of
so-called "friendly loans." The petitioner caused funds to be routed
through the bank accounts of his employees and relatives and thereafter
disbursed as purported loans to the immediate relatives of Shri U.N.
Mandal, including Smt. Sova Gayen and Shri Manabendra Nath Mandal.
This structuring was undertaken to avoid a direct financial trail between
the bribe giver and the recipient. Additionally, the petitioner participated
in depositing unaccounted cash, including a sum of Rs. 4,14,000/-
deposited into the bank account of Smt. Binny Kumari, acting on the
instructions of the co-accused.
11 . During the course of investigation, the petitioner was confronted
with the financial trail and documentary material. However, he failed to
discharge the burden placed upon him under Section 24 of the PMLA.
No credible or verifiable explanation was furnished regarding the
transaction with M/s Naskar Ceramics or the nature of the alleged loan
disbursements.
12 . In light of the above facts, it is established that Shri Hitesh V. Shah
knowingly and directly involved himself in the acquisition, possession,
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concealment, layering and projection of Proceeds of Crime amounting to
Rs. 94.42 Lakhs as untainted property. The said acts squarely fall within
the scope of Section 3 of the PMLA, 2002 and render him liable for
punishment under Section 4 of the Act.
13 . Learned counsel for the Opposite Party-ED, on the aforesaid
grounds, has submitted that it is, therefore, not a fit case where the
impugned orders to be interfered with.
Analysis:
14. This Court has heard the learned counsel for the parties at
length and has also gone through the finding recorded by the learned trial
Court in the impugned orders as also the counter affidavit.
15. In the background of the factual aspect as referred hereinabove
in the preceding paragraphs, the issues which require consideration are
that:
(i) Whether the orders dated 06.08.2025 and 25.03.2026 by which
the application for discharge filed by the petitioner has been
dismissed and charges have been framed respectively, can be said
to suffer from an error?
(ii) Whether on the basis of the evidence which has been collected
in course of investigation, prima facie case against the petitioner is
made out or not?
16. Since both the issues are interlinked as such, they are taken up
together.
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17. This Court, before appreciating the argument advanced on
behalf of the parties deems it fit and proper to discuss herein some of the
provisions of law as contained under the Act, 2002 with its object and
intent.
18. The Act 2002 was enacted to address the urgent need to have a
comprehensive legislation inter alia for preventing money-laundering,
attachment of proceeds of crime, adjudication and confiscation thereof
including vesting of it in the Central Government, setting up of agencies
and mechanisms for coordinating measures for combating money
laundering and also to prosecute the persons indulging in the process or
activity connected with the proceeds of crime.
19. It is, thus, evident that Act 2002 was enacted in order to answer
the urgent requirement to have a comprehensive legislation inter alia for
preventing money-laundering, attachment of proceeds of crime,
adjudication and confiscation thereof for combating money-laundering
and also to prosecute the persons indulging in the process or activity
connected with the proceeds of crime.
20. It needs to refer herein the definition of “proceeds of crime” as
provided under Section 2(1)(u) of the Act, 2002 which reads as under:
“2 (1) (u) “proceeds of crime” means any property derived or
obtained, directly or indirectly, by any person as a result of criminal
activity relating to a scheduled offence or the value of any such
property 3[or where such property is taken or held outside the
country, then the property equivalent in value held within the country]
4[or abroad]; [Explanation.—For the removal of doubts, it is hereby
clarified that "proceeds of crime" include property not only derived or
obtained from the scheduled offence but also any property which may
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directly or indirectly be derived or obtained as a result of any
criminal activity relatable to the scheduled offence;]”
21. It is evident from the aforesaid provision that “proceeds of
crime” means any property derived or obtained, directly or indirectly, by
any person as a result of criminal activity relating to a scheduled offence
or the value of any such property or where such property is taken or held
outside the country, then the property equivalent in value held within the
country or abroad.
22. In the explanation it has been referred that for removal of
doubts, it is hereby clarified that "proceeds of crime" include property
not only derived or obtained from the scheduled offence but also any
property which may directly or indirectly be derived or obtained as a
result of any criminal activity relatable to the scheduled offence. The
aforesaid explanation has been inserted in the statute book by way of Act
23 of 2019. It is, thus, evident that the reason for giving explanation
under Section 2(1)(u) is by way of clarification to the effect that whether
as per the substantive provision of Section 2(1)(u), the property derived
or obtained, directly or indirectly, by any person as a result of criminal
activity relating to a scheduled offence or the value of any such property
or where such property is taken or held outside the country but by way of
explanation the proceeds of crime has been given broader implication by
including property not only derived or obtained from the scheduled
offence but also any property which may directly or indirectly be derived
or obtained as a result of any criminal activity relatable to the scheduled
offence.
23. The “property” has been defined under Section 2(1)(v) which
means any property or assets of every description, whether corporeal or
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incorporeal, movable or immovable, tangible or intangible and includes
deeds and instruments evidencing title to, or interest in, such property or
assets, wherever located.
24. The schedule has been defined under Section 2(1)(x) which
means schedule to the Prevention of Money Laundering Act, 2002. The
“scheduled offence” has been defined under Section 2(1)(y) which reads
as under: “2(y) “scheduled offence” means— (i) the offences specified
under Part A of the Schedule; or (ii) the offences specified under Part B
of the Schedule if the total value involved in such offences is [one crore
rupees] or more; or (iii) the offences specified under Part C of the
Schedule.”
25. It is evident that the “scheduled offence” means the offences
specified under Part A of the Schedule; or the offences specified under
Part B of the Schedule if the total value involved in such offences is [one
crore rupees] or more; or the offences specified under Part C of the
Schedule.
26. The offence of money laundering has been defined under
Section 3 of the Act, 2002, which reads as under:
“3. Offence of money-laundering.—Whosoever directly or indirectly
attempts to indulge or knowingly assists or knowingly is a party or is
actually involved in any process or activity connected with the
[proceeds of crime including its concealment, possession, acquisition
or use and projecting or claiming] it as untainted property shall be
guilty of offence of money-laundering. [Explanation.— For the
removal of doubts, it is hereby clarified that,— (i) a person shall be
guilty of offence of money-laundering if such person is found to have
directly or indirectly attempted to indulge or knowingly assisted or
knowingly is a party or is actually involved in one or more of the
following processes or activities connected with proceeds of crime,
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namely:— (a) concealment; or (b) possession; or (c) acquisition; or
(d) use; or (e) projecting as untainted property; or (f) claiming as
untainted property, in any manner whatsoever; (ii) the process or
activity connected with proceeds of crime is a continuing activity and
continues till such time a person is directly or indirectly enjoying the
proceeds of crime by its concealment or possession or acquisition or
use or projecting it as untainted property or claiming it as untainted
property in any manner whatsoever.]”
27. It is evident from the aforesaid provision that “offence of
money laundering” means whosoever directly or indirectly attempts to
indulge or knowingly assists or knowingly is a party or is actually
involved in any process or activity connected with the proceeds of crime
including its concealment, possession, acquisition or use and projecting
or claiming it as untainted property shall be guilty of offence of money-
laundering.
28. It is further evident that the process or activity connected with
proceeds of crime is a continuing activity and continues till such time a
person is directly or indirectly enjoying the proceeds of crime by its
concealment or possession or acquisition or use or projecting it as
untainted property or claiming it as untainted property in any manner
whatsoever.
29. The punishment for money laundering has been provided under
Section 4 of the Act, 2002.
30. The various provisions of the Act, 2002 along with
interpretation of the definition of “proceeds of crime” has been dealt
with by the Hon’ble Apex Court in the case of Vijay Madanlal
Choudhary and Ors. Vs. Union of India and Ors., (2022) SCC OnLine
SC 929 wherein the Bench comprising of three Hon’ble Judges of the
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Hon’ble Supreme Court has decided the issue by taking into
consideration the object and intent of the Act, 2002.
31. It is evident that the purposes and objects of the 2002 Act for
which it has been enacted, is not limited to punishment for offence of
money laundering, but also to provide measures for prevention of money
laundering. It is also to provide for attachment of proceeds of crime,
which are likely to be concealed, transferred or dealt with in any manner
which may result in frustrating any proceeding relating to confiscation of
such proceeds under the 2002 Act. This Act is also to compel the
banking companies, financial institutions and intermediaries to maintain
records of the transactions, to furnish information of such transactions
within the prescribed time in terms of Chapter IV of the 2002 Act.
32. The predicate offence has been considered in the aforesaid
judgment wherein by taking into consideration the explanation as
inserted by way of Act 23 of 2019 under the definition of the “proceeds
of crime” as contained under Section 2(1)(u), whereby and whereunder,
it has been clarified for the purpose of removal of doubts that, the
"proceeds of crime" include property not only derived or obtained from
the scheduled offence but also any property which may directly or
indirectly be derived or obtained as a result of any criminal activity
relatable to the scheduled offence, meaning thereby, the words “any
property which may directly or indirectly be derived or obtained as a
result of any criminal activity relatable to the scheduled offence” will
come under the fold of the proceeds of crime.
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33. In the judgment rendered by the Hon’ble Apex Court in Vijay
Madanlal Choudhary and Ors. Vs. Union of India and Ors. (supra) it
has been held that the Authority under the 2002 Act, is to prosecute a
person for offence of money-laundering only if it has reason to believe,
which is required to be recorded in writing that the person is in
possession of “proceeds of crime”. Only if that belief is further
supported by tangible and credible evidence indicative of involvement of
the person concerned in any process or activity connected with the
proceeds of crime, action under the Act can be taken forward for
attachment and confiscation of proceeds of crime and until vesting
thereof in the Central Government, such process initiated would be a
standalone process.
34. Now, after having discussed the judgments passed by the
Hon’ble Apex Court on the issue of various provisions of the Act, 2002,
this Court, is proceeding to discuss the principle governing discharge and
framing of charge.
35. Section 250 of Bharatiya Nagarik Suraksha Sanhita, 2023
(‘BNSS’ for brevity) provides for discharge in sessions cases, which
reads as follows:
“250.Discharge (1) The accused may prefer an application for
discharge within a period of sixty days from the date of commitment of
the case under section 232 (BNSS). (2) If, upon consideration of the
record of the case and the documents submitted therewith, and after
hearing the submissions of the accused and the prosecution in this
behalf, the Judge considers that there is not sufficient ground for
proceeding against the accused, he shall discharge the accused and
record his reasons for doing so.”
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36. Section 227 of Code of Criminal Procedure (‘CrPC’ for brevity)
contemplates discharge by the Court of Session. The trial Judge is
required to discharge the accused if the Judge considers that there is no
sufficient ground for proceeding against the accused. Section 250(2)
BNSS corresponds to section 227 CrPC. Section 250(1) BNSS stipulates
a time limit of 60 days from the date of committal of the case within
which an application for discharge should be filed by the accused.
37. Section 239 CrPC provides for discharge of accused in warrant
cases instituted upon a police report. The power under section 239
Cr.P.C. is exercisable when Magistrate considers the charge against the
accused to be groundless. Section 262(2) BNSS is similar to section 239
CrPC but section 262 BNSS provides an opportunity to the learned
Magistrate to examine the accused either physically or through audio –
video electronic means. Section 262(1) BNSS stipulates a time limit of
60 days from the date of supply of documents under section 230 BNSS
within which an application should for discharge should be filed by the
accused.
38. Section 245 Cr.P.C. deals with warrant cases instituted
otherwise than on a police report. Section 245 CrPC corresponds to
section 268 of BNSS. The power under section 245 (1) Cr.P.C. is
exercisable when the Magistrate considers that no case against the
accused has been made out which, if unrebutted would warrant his
conviction. The Magistrate has the power of discharging the accused at
any previous stage of the case under section 245 (2) Cr.P.C. Sections 227
and 239 Cr.P.C. provide for discharge before the recording of evidence
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on the basis of the police report, the documents sent along with it and
examination of the accused after giving an opportunity to the parties to
be heard. But the stage of discharge under section 245 Cr.P.C., on the
other hand, is reached only after the evidence referred in section 244 is
taken. Despite the difference in the language of the provisions of
sections 227, 239 and 245 Cr.P.C. and whichever provision may be
applicable, the Court is required to see, at the time of framing of charge,
that there is a prima facie case for proceeding against the accused. The
main intention of granting a chance to the accused of making
submissions as envisaged under sections 227 or 239 of Cr.P.C. is to
assist the Court to determine whether it is required to proceed to conduct
the trial.
39. The issue of discharge was the subject matter before the
Hon'ble Supreme Court in the case of State of Tamilnadu, by Inspector
of Police in Vigilance and Anti-Corruption v. N. Suresh Rajan, (2014)
11 SCC 709, wherein, at paragraphs no.29, 32.4, 33 and 34, the Hon'ble
Apex Court has observed as under:—
“29. We have bestowed our consideration to the rival submissions and
the submissions made by Mr. Ranjit Kumar commend us. True it is
that at the time of consideration of the applications for discharge, the
court cannot act as a mouthpiece of the prosecution or act as a post
office and may sift evidence in order to find out whether or not the
allegations made are groundless so as to pass an order of discharge.
It is trite that at the stage of consideration of an application for
discharge, the court has to proceed with an assumption that the
materials brought on record by the prosecution are true and evaluate
the said materials and documents with a view to find out whether the
facts emerging therefrom taken at their face value disclose the
existence of all the ingredients constituting the alleged offence. At this
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stage, probative value of the materials has to be gone into and the
court is not expected to go deep into the matter and hold that the
materials would not warrant a conviction. In our opinion, what needs
to be considered is whether there is a ground for presuming that the
offence has been committed and not whether a ground for convicting
the accused has been made out. To put it differently, if the court thinks
that the accused might have committed the offence on the basis of the
materials on record on its probative value, it can frame the charge;
though for conviction, the court has to come to the conclusion that the
accused has committed the offence. The law does not permit a mini
trial at this stage.
32.4. While passing the impugned orders [N. Suresh Rajan v.
Inspector of Police, Criminal Revision Case (MD) No. 528 22 of 2009,
order dated 10-12-2010 (Mad)], [State v. K. Ponmudi, (2007) 1 Mad
LJ (Cri) 100], the court has not sifted the materials for the purpose of
finding out whether or not there is sufficient ground for proceeding
against the accused but whether that would warrant a conviction. We
are of the opinion that this was not the stage where the court should
have appraised the evidence and discharged the accused as if it was
passing an order of acquittal. Further, defect in investigation itself
cannot be a ground for discharge. In our opinion, the order impugned
[N. Suresh Rajan v. Inspector of Police, Criminal Revision Case (MD)
No. 528 of 2009, order dated 10-12-2010 (Mad)] suffers from grave
error and calls for rectification.
33. Any observation made by us in this judgment is for the purpose of
disposal of these appeals and shall have no bearing on the trial. The
surviving respondents are directed to appear before the respective
courts on 3-2-2014. The Court shall proceed with the trial from the
stage of charge in accordance with law and make endeavour to
dispose of the same expeditiously.
34. In the result, we allow these appeals and set aside the order of
discharge with the aforesaid observations.
40. It is further settled position of law that defence on merit is not
to be considered at the time of stage of framing of charge and that cannot
be a ground of discharge. A reference may be made to the judgment as
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rendered by the Hon'ble Apex Court in State of Rajasthan v. Ashok
Kumar Kashyap, (2021) 11 SCC 191 . For ready reference, paragraph no.
11 of the said judgment is being quoted hereinbelow: —
“11. While considering the legality of the impugned judgment [Ashok
Kumar Kashyap v. State of Rajasthan, 2018 SCC OnLine Raj 3468]
and order passed by the High Court, the law on the subject and few
decisions of this Court are required to be referred to.
11.1. In P. Vijayan [P. Vijayan v. State of Kerala, (2010) 2 SCC 398 :
(2010) 1 SCC (Cri) 1488], this Court had an occasion to consider
Section 227 CrPC What is required to be considered at the time of
framing of the charge and/or considering the discharge application
has been considered elaborately in the said decision. It is observed
and held that at the stage of Section 227, the Judge has merely to sift
the evidence in order to find out whether or not there is sufficient
ground for proceeding against the accused. It is observed that in other
words, the sufficiency of grounds would take within its fold the nature
of the evidence recorded by the police or the documents produced
before the court which ex facie disclose that there are suspicious
circumstances against the accused so as to frame a charge against
him. It is further observed that if the Judge comes to a conclusion that
there is sufficient ground to proceed, he will frame a charge under
Section 228 CrPC, if not, he will discharge the accused. It is further
observed that while exercising its judicial mind to the facts of the case
in order to determine whether a case for trial has been made out by
the prosecution, it is not necessary for the court to enter into the pros
and cons of the matter or into a weighing and balancing of evidence
and probabilities which is really the function of the court, after the
trial starts.
11.2. In the recent decision of this Court in M.R. Hiremath [State of
Karnataka v. M.R. Hiremath, (2019) 7 SCC 515 : (2019) 3 SCC (Cri)
109 : (2019) 2 SCC (L&S) 380], one of us (D.Y. Chandrachud, J.)
speaking for the Bench has observed and held in para 25 as under :
(SCC p. 526) “25. The High Court [M.R. Hiremath v. State, 2017 SCC
OnLine Kar 4970] ought to have been cognizant of the fact that the
trial court was dealing with an application for discharge under the
provisions of Section 239 CrPC. The parameters which govern the
23

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exercise of this jurisdiction have found expression in several decisions
of this Court. It is a settled principle of law that at the stage of
considering an application for discharge the court must proceed on
the assumption that the material which has been brought on the
record by the prosecution is true and evaluate the material in order to
determine whether the facts emerging from the material, taken on its
face value, disclose the existence of the ingredients necessary to
constitute the offence. In State of T.N. v. N. Suresh Rajan [State of
T.N. v. N. Suresh Rajan, (2014) 11 SCC 709 : (2014) 3 SCC (Cri) 529
: (2014) 2 SCC (L&S) 721], adverting to the earlier decisions on the
subject, this Court held : (SCC pp. 721-22, para 29)
‘29. … At this stage, probative value of the materials has to be gone
into and the court is not expected to go deep into the matter and hold
that the materials would not warrant a conviction. In our opinion,
what needs to be considered is whether there is a ground for
presuming that the offence has been committed and not whether a
ground for convicting the accused has been made out. To put it
differently, if the court thinks that the accused might have committed
the offence on the basis of the materials on record on its probative
value, it can frame the charge; though for conviction, the court has to
come to the conclusion that the accused has committed the offence.
The law does not permit a mini trial at this stage.”
41. Further, it is pertinent to mention here that power to discharge
an accused was designed to prevent harassment to an innocent person by
the arduous trial or the ordeal of prosecution. How that intention is to be
achieved is reasonably clear in the section itself. The power has been
entrusted to the Sessions Judge who brings to bear his knowledge and
experience in criminal trials. Besides, he has the assistance of counsel for
the accused and Public Prosecutor. He is required to hear both sides
before framing any charge against the accused or for discharging him. If
the Sessions Judge after hearing the parties frames a charge and also
makes an order in support thereof, the law must be allowed to take its
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own course. Self-restraint on the part of the High Court should be the
rule unless there is a glaring injustice which stares the court in the face.
The opinion on any matter may differ depending upon the person who
views it. There may be as many opinions on a particular matter as there
are courts but it is no ground for the High Court to interdict the trial. It
would be better for the High Court to allow the trial to proceed.
Reference in this regard may be taken from the judgment as rendered by
the Hon'ble Apex Court in Stree Atyachar Virodhi Parishad v. Dilip
Nathumal Chordia, (1989) 1 SCC 715.
42. Further, the difference between the approach with which the
Court should examine the matter in the discharge has been explained by
the Hon'ble Supreme Court in Amit Kapoor v. Ramesh Chander, (2012)
9 SCC 460 , in the following words: —
“17. Framing of a charge is an exercise of jurisdiction by the trial
court in terms of Section 228 of the Code, unless the accused is
discharged under Section 227 of the Code. Under both these
provisions, the court is required to consider the “record of the case”
and documents submitted therewith and, after hearing the parties,
may either discharge the accused or where it appears to the court and
in its opinion there is ground for presuming that the accused has
committed an offence, it shall frame the charge. Once the facts and
ingredients of the Section exists, then the court would be right in
presuming that there is ground to proceed against the accused and
frame the charge accordingly. This presumption is not a presumption
of law as such. The satisfaction of the court in relation to the existence
of constituents of an offence and the facts leading to that offence is a
sine qua non for exercise of such jurisdiction. It may even be weaker
than a prima facie case. There is a fine distinction between the
language of Sections 227 and 228 of the Code. Section 227 is the
expression of a definite opinion and judgment of the Court while
Section 228 is tentative. Thus, to say that at the stage of framing of
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charge, the Court should form an opinion that the accused is certainly
guilty of committing an offence, is an approach which is
impermissible in terms of Section 228 of the Code.
30. We have already noticed that the legislature in its wisdom has
used the expression “there is ground for presuming that the accused
has committed an offence”.
43. This has an inbuilt element of presumption once the ingredients
of an offence with reference to the allegations made are satisfied, the
Court would not doubt the case of the prosecution unduly and extend its
jurisdiction to quash the charge in haste. The Hon’ble Apex Court in
State of Maharashtra v. Som Nath Thapa (1996) 4 SCC 659 referred to
the meaning of the word “presume” while relying upon Black's Law
Dictionary. It was defined to mean “to believe or accept upon probable
evidence”; “to take as proved until evidence to the contrary is
forthcoming”. In other words, the truth of the matter has to come out
when the prosecution evidence is led, the witnesses are cross-examined
by the defence, the incriminating material and evidence is put to the
accused in terms of Section 313 of the Code and then the accused is
provided an opportunity to lead defence, if any. It is only upon
completion of such steps that the trial concludes with the court forming
its final opinion and delivering its judgment. Merely because there was a
civil transaction between the parties would not by itself alter the status of
the allegations constituting the criminal offence.”
44. Thus, it is evident that the law regarding the approach to be
adopted by the Court while considering an application for discharge of
the accused person the Court has to form a definite opinion, upon
consideration of the record of the case and the documents submitted
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therewith, that there is not sufficient ground for proceeding against the
accused.
45. The Hon'ble Apex Court has further dealt with the proper basis
for framing of charge in the case of Onkar Nath Mishra v. State (NCT
of Delhi) wherein, at paragraphs 11, 12 and 14, it has been held as under:
“11. It is trite that at the stage of framing of charge the court is
required to evaluate the material and documents on record with a
view to finding out if the facts emerging therefrom, taken at their face
value, disclosed the existence of all the ingredients constituting the
alleged offence. At that stage, the court is not expected to go deep into
the probative value of the material on record. What needs to be
considered is whether there is a ground for presuming that the offence
has been committed and not a ground for convicting the accused has
been made out. At that stage, even strong suspicion founded on
material which leads the court to form a presumptive opinion as to the
existence of the factual ingredients constituting the offence alleged
would justify the framing of charge against the accused in respect of
the commission of that offence.
12. In State of Karnataka v. L. Muniswamy [(1977) 2 SCC 699 : 1977
SCC (Cri) 404], a three-Judge Bench of this Court had observed that
at the stage of framing the charge, the Court has to apply its mind to
the question whether or not there is any ground for presuming the
commission of the offence by the accused. As framing of charge affects
a person's liberty substantially, need for proper consideration of
material warranting such order was emphasised.
14. In a later decision in State of M.P. v. Mohanlal Soni [(2000) 6
SCC 338 : 2000 SCC (Cri) 1110] this Court, referring to several
previous decisions held that : (SCC p. 342, para 7)
“7. The crystallised judicial view is that at the stage of framing
charge, the court has to prima facie consider whether there is
sufficient ground for proceeding against the accused. The court is not
required to appreciate evidence to conclude whether the materials
produced are sufficient or not for convicting the accused.”
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The Hon'ble Apex Court in the case of Palwinder Singh v. Balvinder
Singh, (2009) 2 SCC (Cri) 850 has been pleased to hold that charges
can also be framed on the basis of strong suspicion. Marshaling and
appreciation of the evidence is not in the domain of the court at that
point of time. 52. In the judgment passed by the Hon'ble Supreme
court in the case of Sajjan Kumar v. CBI, reported in (2010) 9 SCC
368, the Hon'ble Supreme Court has considered the scope of Sections
227 and 228 CrPC. The principles which emerged therefrom have
been taken note of in para 21 as under:
“21. On consideration of the authorities about the scope of Sections
227 and 228 of the Code, the following principles emerge: (i) The
Judge while considering the question of framing the charges under
Section 227 CrPC has the undoubted power to sift and weigh the
evidence for the limited purpose of finding out whether or not a prima
facie case against the accused has been made out. The test to
determine prima facie case would depend upon the facts of each case.
(ii) Where the materials placed before the court disclose grave
suspicion against the accused which has not been properly explained,
the court will be fully justified in framing a charge and proceeding
with the trial.
(iii) The court cannot act merely as a post office or a mouthpiece of
the prosecution but has to consider the broad probabilities of the case,
the total effect of the evidence and the documents produced before the
court, any basic infirmities, etc. However, at this stage, there cannot
be a roving enquiry into the pros and cons of the matter and weigh the
evidence as if he was conducting a trial.
(iv) If on the basis of the material on record, the court could form an
opinion that the accused might have committed offence, it can frame
the charge, though for conviction the conclusion is required to be
proved beyond reasonable doubt that the accused has committed the
offence.
(v) At the time of framing of the charges, the probative value of the
material on record cannot be gone into but before framing a charge
the court must apply its judicial mind on the material placed on
record and must be satisfied that the commission of offence by the
accused was possible.
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(vi) At the stage of Sections 227 and 228, the court is required to
evaluate the material and documents on record with a view to find out
if the facts emerging therefrom taken at their face value disclose the
existence of all the ingredients constituting the alleged offence. For
this limited purpose, sift the evidence as it cannot be expected even at
that initial stage to accept all that the prosecution states as gospel
truth even if it is opposed to common sense or the broad probabilities
of the case.
(vii) If two views are possible and one of them gives rise to suspicion
only, as distinguished from grave suspicion, the trial Judge will be
empowered to discharge the accused and at this stage, he is not to see
whether the trial will end in conviction or acquittal.
46. In the judgment passed by the Hon'ble Supreme court in the
case of M.E. Shivalingamurthy v. CBI, reported in (2020) 2 SCC 768 ,
the above principles have been reiterated in para 17, 18, 28 to 31 and the
Hon'ble supreme court has explained as to how the matters of grave
suspicion are to be dealt with. The aforesaid paragraphs are being quoted
as under:
“17. This is an area covered by a large body of case law. We refer to
a recent judgment which has referred to the earlier decisions viz. P.
Vijayan v. State of Kerala and discern the following principles:
17.1. If two views are possible and one of them gives rise to suspicion
only as distinguished from grave suspicion, the trial Judge would be
empowered to discharge the accused.
17.2. The trial Judge is not a mere post office to frame the charge at
the instance of the prosecution.
17.3. The Judge has merely to sift the evidence in order to find out
whether or not there is sufficient ground for proceeding. Evidence
would consist of the statements recorded by the police or the
documents produced before the Court.
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17.4. If the evidence, which the Prosecutor proposes to adduce to
prove the guilt of the accused, even if fully accepted before it is
challenged in cross-examination or rebutted by the defence evidence,
if any, “cannot show that the accused committed offence, then, there
will be no sufficient ground for proceeding with the trial”.
17.5. It is open to the accused to explain away the materials giving
rise to the grave suspicion.
17.6. The court has to consider the broad probabilities, the total effect
of the evidence and the documents produced before the court, any
basic infirmities appearing in the case and so on. This, however,
would not entitle the court to make a roving inquiry into the pros and
cons.
17.7. At the time of framing of the charges, the probative value of the
material on record cannot be gone into, and the material brought on
record by the prosecution, has to be accepted as true.
17.8. There must exist some materials for entertaining the strong
suspicion which can form the basis for drawing up a charge and
refusing to discharge the accused.
18. The defence of the accused is not to be looked into at the stage
when the accused seeks to be discharged under Section 227 CrPC (see
State of J&K v. Sudershan Chakkar). The expression, “the record of
the case”, used in Section 227 CrPC, is to be understood as the
documents and the articles, if any, produced by the prosecution. The
Code does not give any right to the accused to produce any document
at the stage of framing of the charge. At the stage of framing of the
charge, the submission of the accused is to be confined to the material
produced by the police (see State of Orissa v. Debendra Nath Padhi).
28. It is here that again it becomes necessary that we remind
ourselves of the contours of the jurisdiction under Section 227 CrPC.
The principle established is to take the materials produced by the
prosecution, both in the form of oral statements and also documentary
material, and act upon it without it been subjected to questioning
through cross-examination and everything assumed in favour of the
prosecution, if a scenario emerges where no offence, as alleged, is
made out against the accused, it, undoubtedly, would ensure to the
30

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benefit of the accused warranting the trial court to discharge the
accused.
29. It is not open to the accused to rely on the material by way of
defence and persuade the court to discharge him.
30. However, what is the meaning of the expression “materials on the
basis of which grave suspicion is aroused in the mind of the court's”,
which is not explained away? Can the accused explain away the
material only with reference to the materials produced by the
prosecution? Can the accused rely upon material which he chooses to
produce at the stage?
31. In view of the decisions of this Court that the accused can only
rely on the materials which are produced by the prosecution, it must
be understood that the grave suspicion, if it is established on the
materials, should be explained away only in terms of the materials
made available by the prosecution. No doubt, the accused may appeal
to the broad probabilities to the case to persuade the court to
discharge him.”
47. It has been further held in the case of Asim Shariff v. National
Investigation Agency, (2019) 7 SCC 148 , that mini trial is not expected
by the trial court for the purpose of marshalling the evidence on record at
the time of framing of charge, wherein, it has been held at paragraph
no.18 of the said judgment as under:—
“18. Taking note of the exposition of law on the subject laid down by
this Court, it is settled that the Judge while considering the question of
framing charge under Section 227 CrPC in sessions cases (which is
akin to Section 239 CrPC pertaining to warrant cases) has the
undoubted power to sift and weigh the evidence for the limited
purpose of finding out whether or not a prima facie case against the
accused has been made out; where the material placed before the
court discloses grave suspicion against the accused which has not
been properly explained, the court will be fully justified in framing the
charge; by and large if two views are possible and one of them giving
rise to suspicion only, as distinguished from grave suspicion against
31

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the accused, the trial Judge will be justified in discharging him. It is
thus clear that while examining the discharge application filed under
Section 227 CrPC, it is expected from the trial Judge to exercise its
judicial mind to determine as to whether a case for trial has been
made out or not. It is true that in such proceedings, the court is not
supposed to hold a mini trial by marshalling the evidence on record.”
48. In the case of Asim Shariff v. NIA, (supra), it has been held by
the Hon’ble Apex Court that the words ‘not sufficient ground for
proceeding against the accused’ clearly show that the Judge is not a mere
post office to frame the charge at the behest of the prosecution, but has to
exercise his judicial mind to the facts of the case in order to determine
whether a case for trial has been made out by the prosecution. In
assessing this fact, it is not necessary for the court to enter into the pros
and cons of the matter or into a weighing and balancing of evidence and
probabilities which is really his function after the trial starts. At the stage
of Section 227, the Judge has merely to sift the evidence in order to find
out whether or not there is sufficient ground for proceeding against the
accused. The sufficiency of ground would take within its fold the nature
of the evidence recorded by the police or the documents produced before
the court which ex facie disclose that there are suspicious circumstances
against the accused so as to frame a charge against him.

49. Thus, from aforesaid legal propositions it can be safely inferred
that if, upon consideration of the record of the case and the documents
submitted therewith, and after hearing the submissions of the accused
and the prosecution in this behalf, the Judge considers that there is no
sufficient ground for proceeding against the accused, he shall discharge
the accused and record his reasons for doing so and if, after such
32

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consideration and hearing as aforesaid, the Judge is of the opinion that
there is ground for presuming that the accused has committed an offence,
the trial Court shall frame the charge. However, the defence of the
accused cannot be looked into at the stage of discharge. The accused has
no right to produce any document at that stage. The application for
discharge has to be considered on the premise that the materials brought
on record by the prosecution are true.
50. Thus, at the time of considering an application for discharge,
the Court is required to consider the limited extent to find out whether
there is prima facie evidence against the accused to believe that he has
committed any offence as alleged by the prosecution; if prima facie
evidence is available against the accused, then there cannot be an order
of discharge.
51. Therefore, the stage of discharge is a stage prior to framing of
the charge and once the Court rejects the discharge application, it would
proceed to framing of charge. At the stage of discharge, the Judge has
merely to sift and weigh the evidence in order to find out whether or not
there is sufficient ground for proceeding against the accused and in other
words, the sufficiency of grounds would take within its fold the nature of
the evidence recorded by the prosecution or the documents produced
before the court which ex facie disclose that there are suspicious
circumstances against the accused so as to frame the charge against him
and after that if the Judge comes to a conclusion that there is sufficient
ground to proceed, he will frame a charge and, if not, he will discharge
the accused.
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52. While exercising its judicial mind to the facts of the case in
order to determine whether a case for trial has been made out by the
prosecution, it is not necessary for the Court to enter into the pros and
cons of the matter or into a weighing and balancing of evidence and
probabilities which is really the function of the court, after the trial starts.
53. It is considered view that at this stage of the instant case, the
Court was only required to consider whether a prima facie case has been
made out or not and whether the accused is required to be further tried or
not because at the stage of framing of the charge and / or considering the
discharge application, the mini trial is not permissible.
54. It requires to refer herein that the purpose of framing a charge
is to provide the accused with detailed information about the allegations
against him. Framing of proper charge is one of the basic requirements
of a fair trial. Charge is of great significance in a criminal trial as it helps
not only the accused in knowing the accusation against him but also
helps him in the preparation of his defence.
55. In a criminal trial the charge is the foundation of the accusation
and every care must be taken to see that it is not only properly framed.
At the initial stage of framing a charge, the truth, veracity and effect of
the evidence which the prosecution proposes to adduce are not to be
considered meticulously.
56. It is settled position of law that the accused is entitled in law to
know with precision what is the law on which they are put to trial.
Charges are framed against the accused only when the Court finds that
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the accused is not entitled to discharge under the relevant provision of
CrPC/BNSS.
57. In Sessions case the Court shall frame a charge in writing
against the accused when the Court is of the opinion that there is ground
for presuming that the accused has committed an offence as can be seen
from Section 252 of the BNSS. In warrant cases, a charge shall be
framed when a prima facie case has been made out against the accused
as is evident from sections 263 and 269 of BNSS.
58. The Hon’ble Supreme Court of India in State of Maharastra vs.
Som Nath Thapa, (1996) 4 SCC 659 has been pleased to hold that if the
Court were to think that the accused might have committed the offence,
it can frame the charge, though for conviction the conclusion is required
to be that the accused had committed the offence. It was further held that
at the stage of framing of charge the Court cannot look into the probative
value of the materials on record.
59. Further, while considering the question of framing a charge, the
Court has the undoubted power to sift and weigh the materials for the
limited purpose for finding out whether or not a prima facie case against
the accused has been made out. In exercising the power, the Court cannot
act merely as a post office or a mouthpiece of the prosecution.
60. The test to determine a prima facie case against the accused
would naturally depend on the facts of each case and it is difficult to lay
down the rule of universal application and if the material placed before
the Court discloses grave suspicion against the accused which has not
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been properly explained, the Court will be fully justified in framing the
charge and proceeding with the trial.
61. In Kanti Bhadra Shah vs. State of West Bengal, (2000) 1 SCC
722 , the Hon’ble Supreme Court held that whenever the trial Court
decides to frame charges, it is not necessary to record reasons or to do
discuss evidence in detail.
62. In State of Andhra Pradesh vs. Golconda Linga Swamy,
(2004) 6 SCC 522 , the Hon’ble Supreme Court held that at the stage of
framing of charge, evidence cannot be gone into meticulously. It was
held that it is immaterial whether the case is based on direct or
circumstantial evidence and a charge can be framed if there are materials
showing possibility about commission of the offence by the accused as
against certainty.
63. It needs to refer herein that Sections 215 and 464 CrPC ensure
that technicalities do not defeat justice. Both the sections lay that
irregularity or error in framing a charge is not fatal unless the accused is
able to show that prejudice is caused to him as result of such irregularity
or omission. The object of section 238 BNSS is to prevent failure of
justice on account of irregularity in framing of charge.
64. In judging a question of prejudice, as of guilt, the Court must
act with a broad vision and look to the substance and not to the
technicalities, and its main concern should be to see whether the accused
had a fair trial, whether he knew what he was being tried for, whether the
main facts sought to be established against him were explained to him
36

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fairly and clearly and whether he was a full and fair chance to defend
himself.
65. In State of Uttar Pradesh vs. Paras Nathi Singh, 2009 INSC
669, the Hon’ble Supreme Court after considering the language of
Section 464 Cr.P.C. held that the burden is on the accused to show that a
failure of justice has been occasioned on account of error, omission or
irregularity of the charge.
66. Thus, framing of charge is not a mere empty formality. Every
endeavour must be made in a criminal trial to ensure that appropriate
charge is framed against the accused. Even though mere omission, error
or irregularity in framing charges does not ipso facto vitiate trial, the
accused should be made fully aware of the specific accusations against
him in order to defend himself properly. Apart from safeguarding the
interests of the accused, framing of proper charge also ensures that the
interests of the victims and the society at large are safeguarded and no
guilty person goes unpunished only on account of error in framing the
charge.
67. The Hon’ble Supreme Court of India in Dipakbhai
Jagdhishchandra Patel vs. State of Gujarat, (2009) 16 SCC 547 has
been pleased to hold that:
“21. At the stage of framing the charge in accordance with the
principles which have been laid down by this Court, what the Court is
expected to do is, it does not act as a mere post office. The Court must
indeed sift the material before it. The material to be sifted would be
the material which is produced and relied upon by the prosecution.
The sifting of material before the Court is not to be meticulous in the
sense that Court dons the mantle of the trial Judge hearing arguments
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after the entire evidence has been adduced after a full fledged trial
and the question is not whether the prosecution has made out the case
for the conviction of the accused. All that is required is, the Court
must be satisfied that with the materials available, a case is made our
for the accused to stand trial. A strong suspicion suffices. However, a
strong suspicion must be founded on some material.”
68. Thus, from the aforesaid judicial pronouncements, it is evident
that at the stage of framing charges, trial court is not to examine and
assess in detail the material placed on record by the prosecution nor is it
for the court to consider the sufficiency of the materials to establish the
offence alleged against the accused persons. Marshalling of facts and
appreciation of evidence at the time of framing of charge is not in the
domain of the court. Charge can be framed even on the basis of strong
suspicion founded upon materials before the court which leads the court
to form a presumptive opinion as to the existence of the factual
ingredients constituting the offence alleged against the accused.
69. It needs to refer herein that ingredients of offences should be
seen in the material produced before the court for framing of charges and
duty of court at the stage of framing of charges is to see whether the
ingredients of offences are available in the material produced before the
court. Contradictions in the statements of witnesses or sufficiency or
truthfulness of the material placed before the court cannot be examined
at the stage of framing of the charge. For this limited purpose, the court
may sift the evidence. Court has to consider material only with a view to
find out if there is ground for presuming that the accused has committed
an offense and not for the purpose of arriving at a definite conclusion.
“Presume‟ means if on the basis of materials on record, court can come
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to the conclusion that commission of the offense is a probable
consequence, then a case for framing of charge exists.
70. Thus, it is well settled that at the time of framing of charge,
meticulous examination of evidence is not required, however the
evidence can be sifted or weighed at least for the purpose of recording a
satisfaction that a prima facie case is made out for framing charge to
proceed in the case. Further the trial Court is not required to discuss the
evidence for the purpose of conducting a trial but the discussion of the
materials on record is required to reflect the application of judicial mind
for finding that a prima-facie case is made out against the petitioner.
71. It is settled connotation of law that at the stage of framing of
charge, the probable defence of the accused is not to be considered and
the materials, which are relevant for consideration, are the allegations
made in the First Information Report/complaint, the statement of the
witnesses recorded in course of investigation, the documents on which
the prosecution relies and the report of investigation submitted by the
prosecuting agency. The probative value of the defence is to be tested at
the stage of trial and not at the stage of framing of charge and at the stage
of framing of charge minute scrutiny of the evidence is not to be made
and even on a very strong suspicion, charges can be framed.
72. Further, it is settled position of law that at the stage of framing
the charge, the trial Court is not required to meticulously examine and
marshal the material available on record as to whether there is sufficient
material against the accused which would ultimately result in conviction.
The Court is prima facie required to consider whether there is sufficient
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material against the accused to presume the commission of the offence.
Even strong suspicion about commission of offence is sufficient for
framing the charge, the guilt or innocence of the accused has to be
determined at the time of conclusion of the trial after evidence is
adduced and not at the stage of framing the charge and, therefore, at the
stage of framing the charge, the Court is not required to undertake an
elaborate inquiry for the purpose of sifting and weighing the material.
73. Recently, the Full Bench of the Hon'ble Apex Court in the case
of Ghulam Hassan Beigh v. Mohd. Maqbool Magrey, (2022) 12 SCC
657 has elaborately discussed the issue of framing of charge and has held
at paragraph-27 which reads as under:
“ 27. Thus from the aforesaid, it is evident that the trial court is
enjoined with the duty to apply its mind at the time of framing of
charge and should not act as a mere post office. The endorsement on
the charge-sheet presented by the police as it is without applying its
mind and without recording brief reasons in support of its opinion is
not countenanced by law. However, the material which is required to
be evaluated by the court at the time of framing charge should be the
material which is produced and relied upon by the prosecution. The
sifting of such material is not to be so meticulous as would render the
exercise a mini trial to find out the guilt or otherwise of the accused.
All that is required at this stage is that the court must be satisfied that
the evidence collected by the prosecution is sufficient to presume that
the accused has committed an offence. Even a strong suspicion would
suffice. Undoubtedly, apart from the material that is placed before the
court by the prosecution in the shape of final report in terms of
Section 173 CrPC, the court may also rely upon any other evidence or
material which is of sterling quality and has direct bearing on the
charge laid before it by the prosecution.”
74. Thus, from aforesaid legal propositions it can be safely inferred
that if, upon consideration of the record of the case and the documents
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submitted therewith, and after hearing the submissions of the accused
and the prosecution in this behalf, the Judge considers that there is no
sufficient ground for proceeding against the accused, he shall discharge
the accused and record his reasons for doing so and if, after such
consideration and hearing as aforesaid, the Judge is of the opinion that
there is ground for presuming that the accused has committed an offence,
the trial Court shall frame the charge.
75. Therefore, the stage of discharge is a stage prior to framing of
the charge and once the Court rejects the discharge application, it would
proceed for framing of charge. At the stage of discharge, the Judge has
merely to sift and weigh the evidence in order to find out whether or not
there is sufficient ground for proceeding against the accused and in other
words, the sufficiency of grounds would take within its fold the nature of
the evidence recorded by the prosecution or the documents produced
before the court which ex facie disclose that there are suspicious
circumstances against the accused so as to frame the charge against him
and after that if the Judge comes to a conclusion that there is sufficient
ground to proceed, he will frame a charge and, if not, he will discharge
the accused.
76. While exercising its judicial mind to the facts of the case in
order to determine whether a case for trial has been made out by the
prosecution, it is not necessary for the Court to enter into the pros and
cons of the matter or into a weighing and balancing of evidence and
probabilities which is really the function of the court, after the trial starts.
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77. It is the considered view that at this stage of the instant case, the
Court was only required to consider whether a prima facie case has been
made out or not and whether the accused is required to be further tried or
not because at the stage of framing of the charge and / or considering the
discharge application, the mini trial is not permissible.
78. In the backdrop of aforesaid case laws and judicial deduction,
this Court is now proceeding to examine the fact so as to come to the
conclusion, “as to whether the evidence which has been collected in
course of investigation and has been brought on record, as would be
available in the impugned order prima facie case against the petitioner is
made out or not?”
79. The learned counsel for the petitioner has contended that the
petitioner has been prosecuted on the basis of assumptions and surmises,
and the officials of the Investigating Agency has totally overlooked the
principle that there must be 'reason to believe' rather than mere
assumptions that the offences alleged against the petitioner have actually
been committed by him and further the learned Special Judge, PML Act,
Ranchi has failed to appreciate that the prosecution has not produced
material which would show that the petitioner has, in any manner, dealt
with "proceeds of crime".
80. Per contra, the learned counsel for ED has contended by
referring to the various paragraphs of the ECIR that that orders
impugned in these Cr. Revisions are refusal of the prayer of discharge
and subsequently framing of charge and both the orders cannot be said to
suffer from an error since ample materials are available based upon
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which it cannot be said that no prima facie case is available against the
petitioner leading to discharge of the petitioner rather all these aspects
are to be adjudicated in course of the trial.
81. In order to appreciate the contention of the learned counsel for
the parties, this Court has gone through the various paragraphs of the
ECIR which has been annexed with the instant petition being Cr.
Revision, for ready reference, the various paragraphs of the said ECIR
are being quoted as under:
Movable property
That from the scrutiny of different bank accounts, Documents
received from Additional Registrar of Assurances, Kolkata, Income
Tax Authorities, LIC, submissions made by related persons, and
investigation under the provisions of PMLA, 2002, the above
properties (Movable & Immovable) were found to be
derived/obtained out of proceeds of crime generated by Upendra
Nath Mandal and subsequently the same was layered with an
intention to use and project it as untainted property. Movable
property (vehicle) of the value of Rs. 3,71,848/- and immovable
property as the value of Rs. 1,25,00,000/- totaling Rs. 1,28,71,848/-
were provisionally attached vide Provisional Attachment Order No.
01/2022 dated 22.04.2022 u/s 5(1) of PMLA, 2002. Subsequently,
Original Complaint No. 1742/2022 dated 19.05.2022 was also filed
before the Ld. Adjudicating Authority (PMLA), New Delhi u/s 5(5)
of the PMLA, 2002 for confirmation of the Provisional Attachment
Order No. No. 01/2022 dated 22.04.2022. The Ld. Adjudicating
Authority vide its Order dated 13.10.2022 confirmed the aforesaid
Provisional Attachment Order.
Further, during the PMLA investigation, it was found that Rs.
8,00,055/-was transferred from the account of Central Bank of
India bearing number 3171853699 of Zeal India Chemicals to the
account of Niranjan Krishna Gayen bearing number
424201010008499 (Father-in-Law of U.N. Mandal) on 12.06.2013
and Rs. 8,00,055/- was transferred from account of Central Bank of
India bearing number 3171853699 of Zeal India Chemicals to the
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account of Shobha Gayen bearing number 424210110013825
(Mother-in-Law of U.N. Mandal) on 12.06.2013 and then Rs
15,08,000/- was transferred from the account of Mr. Niranjan
Krishna Goven to the account of Mr. Subir Kumar Gupta on
14.06.2013 and the fund was transferred to Subir Kumar Gupta,
totaling to Rs. 15,08,000/-, from whom a constructed house with
land, 05 cottah land (approx.), Where a two storey Building
situated over 3 cottah 4 chatak land (approx.) consisting of 1083
Sq.Ft. in the ground floor, 356 Sq.Ft in the first floor at Mouaza
West Ichapore, Anwarpur, Parganas, PS Barasaat, Barasat
Muncipality, North 24 Paganas, West Bengal, was purchased by
U.N. Mandal in the name of his wife Mrs. Supriti Mandal for a
total consideration of Rs 26,23,000/- (deed bearing No. 4416/2013,
dated 05/07/2013). Further Jayant Kumar Das, son-in-law of Subir
Kumar Gupta, in his statement u/s 50 of PMLA, stated that on the
instruction of U. N. Mandal, an amount of Rs. 2,08,000/- was
credited in his State Bank of India Account from the account of
Shagul Ameedh which was originally sourced from Shiv Machine
Tools, Partner - Hitesh V Shah to which Jayant Kumar Das
withdrew in cash. The said amount was used for renovation of this
house which was purchased by U.N. Mandal from Subir Kr Gupta.
The said property was purchased at a total consideration of Rs
26.23 lakhs, out of which Rs 15.08 lakhs was paid directly from the
Proceeds of crime as discussed above and the remaining amount as
stated by U.N.Mandal was paid in cash and source of which could
not be explained with documentary evidences. Thus, the said
property was found to be acquired from Proceeds of crime.
Further, the said property was transferred by Smt. Supriti Mandal
to Mintu Naskar vide sale deed no 5261/2019 on 30.08.2019 to
claim the amount of Rs 70 lakhs which was received from Mintu
Naskar (which was received by him from M/s Shiv Machine Tools)
in FY 2015-16 & 2016-17 as untainted. Thus, the "sale" of such
property acquired from proceeds by U.N. Mandal to Mintu Naskar
was nothing but asham transaction to show the illegal gratification
as untainted received by U.N. Mandal from M/s Shiv Machine tools
through Mintu Naskar, the whole money trail and the matter is
discussed in detail in paras below. Thus, the said property was not
only acquired from the proceeds of crime but also used for the
commission of an offence under the PMLA as defined u/s 2(1)(v) of
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PMLA, 2002. Thus, the said property was found to be acquired
from Proceeds of crime and used in the commissioning of the
offence of Money laundering and thus attached vide PAO No.
7/2023 dated 10/10/2023 u/s 5(1) of PMLA, 2002.
6.1.2 Sh. Mintu Naskar (Accused No. 6) in his statement recorded
u/s 50 of PMLA, 2002 has inter-alia stated that:-
(i) That he has established a proprietorship firm Naskar Ceramic
in the year 2000, which manufactures ceramic products and
"mechanical heat-treatment instruments"; That he knew U.N.
Mandal as a friend of his father and Smt. Supriti Mandal as wife of
Shri Upendra Nath Mandal; That he knew M/s Shiv Machine Tools
as a customer and he had done some transactions with M/s Shiv
Machine Tools and supplied material to M/s Shiv Machine Tools;
That he had transferred in total Rs. 70 Lakhs (Rs 5 lakh in FY
2015-16 & Rs 65 lakhs in FY 2016-17) in the bank account of
Upendra Nath Mandal after receiving the said amount from the
account of M/s Shiv Machine Tools to whom he supplied
goods/equipments i.e. 40 mm Twin Screw Extruder Machine,
Pelletizer Machine and Die Face Cutter vide purchase order no.
6503 dated 07.04.2016; That he had transferred said amount i.e.
Rs.70,00,000/- to the account of UN Mandal for the purpose of
purchasing Residential Plot with Building from Mrs. Supriti
Mandal, wife of U N Mandal;
(ii) That he has acquired three certificates one is "The Central
Sales Tax (Registration and Turnover) Rules, 1957, FORM-B"
dated 06/03/2006, The West Bengal Value Added Tax Rules, 2005
Form-3" dated 06/03/2006 and One document has been issued by
Howrah Municipal Corporation, on 14/07/2021 for manufacturing
of items such as Twin Screw Extruder Machine, Pelletizer Machine
and Die Face Cutter., however, after examination of these
documents, it is found that Naskar Ceramics, prop concern of
Mintu Naskar is registered as Manufacturer of Ceramics and
refractories and not of any machine which he has sold to M/s Shiv
Machine Tools, Chennai; That he could not be able to produce
paper related to corresponding purchase of raw material Twin
Screw Extruder Machine, Pelletizer Machine and Die Face Cutter
sold to M/s Shiv Machine Tools. Ledger account of all Purchase &
Sale, Ledger account of M/s Shiv Machine Tools, Chennai, List of
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Sundry Creditors, Debtors was obtained. He was asked to explain
why the land of Rs. 70,00,000/- was shown as asset in the balance
sheet of the Naskar Ceramics and at the same year U.N. Mandal
have also been shown as sundry creditor as on 31/03/2016 for Rs.
65 lakhs, as per definition of sundry creditor "a person who gives
goods or services to the business in credit or does not receive the
payment immediately from the business and is liable to receive the
payment from the business in future is called a Sundry Creditor",
by this definition U.N. Mandal can't be consider a Sundry Creditor
and hence it is an afterthought defence, secondly the land was in
the name of Supriti Mandal and thus transferring the amount in the
account of U.N. Mandal can't be justify as seller of land. He has
also shown that land of Rs 70 lakh as asset in the asset side of
Balance sheet of M/s Naskar Ceramics for F.Y. 2015-16, whereas
the land was actually purchased in FY 2019-20. Hence, Mintu
Naskar has failed to substantiate the money given to U. N. Mandal
which was originally sourced from M/s Shiv Machine Tools.
That his Proprietorship firm M/s Naskar Ceramic has never sold
any good/machinery to M/s Shiv Machine Tools, Chennai earlier or
after the sale of these goods worth Rs. 70 Lakhs in 2016; That M/s
Naskar Ceramic has never sold the aforesaid goods to any
firm/company/individual that he sold to M/s Shiv Machine Tools,
Chennai, in any year prior or after F.Y. 2016-17; That he never
contacted M/s Shiv Machine Tools, Chennai; That Hitesh V shah
contacted him directly over phone regarding purchase of
equipments; That M/s Naskar Ceramic has never been in the list of
approved vendor of MECON Ltd; That M/s Naskar Ceramic has
never sold any goods/equipments to any company/firm/individuals
through MECON Ltd; That they had never contacted each other
through e-mail or other means, apart from discussion over phone
before quotation sent on 05.04.2016 through e-mail however, he
has not submitted copy of the e-mail: That Quotation date issued by
Naskar Ceramic to Shiv Machine Tools was 05.04.2016 and the
purchase order date was 07.04.2016; That Hitesh V Shah
transferred Rs. 5,00,000/- on 14.03.2016 in advance in his bank
account without having any proper communication & as stated M/s
Shiv Machine Tools never purchased any goods from M/s Naskar
Ceramic before; That he was asked to provide the details of
equipment/goods along with details of purchasers from whom he
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has taken 100% invoice value/full payment in advance before the
sale of any goods to them, however, he has not submitted such
details. Hence, from the above discussion, it is established that all
the theory of Mintu Naskar is nothing but a concocted story to
camouflage the gratification given by M/s Shiv Machine
Tools/Hitesh V. Shah to U. N. Mandal through Mintu Naskar.
6/1.4 Hitesh V Shah s/o Late Sh. Vasant Lal Shamaldas Shah in
his statements dated 14.03.2022, 02.08.2023, 03.08.2023,
08.08.2023, 09.08.2023 & 10.08.2023 recorded u/s 50 of PMLA,
2002 has inter-alia stated the following facts: -
(i) That he is running M/s Shiv Machine Tools as CEO and
proprietary pattern after the demise of his father in 1997; That his
wife Smt. Parul Shah is another partner in the said partnership
firm M/s Shiv Machine Tools. However, she is dormant partner and
all the business operations as well as bank accounts of the firm are
handled by him only; That his company alongwith M/s Thermo
Fisher Scientific India Pvt Ltd and M/s Chennai Metco Pvt Ltd
have formed the consortium and BID for the tender
T&C(M)/B320/036C/SPG/314 dated 03.09.2014 of Bokaro Steel
Plant (BSL);
(ii) That he did not make any cash dealings in the account of Binny
Kumari. However, Bibhuti Prasad Amar told that Owner of M/s
Shiv Machine Tools made cash deposit of Rs. 4,14,000/- into bank
account of Binny Kumari on instruction of U. N. Mandal. Hence,
the claim of U. N. Mandal is wrong.
(iii) That transactions from M/s Shiv Machine Tools amounting to
Rs. 70 lakhs with Shri Mintu Naskar pertains to purchase of
machinery vide purchase order No. 6503 dated 07.04.2016 &
Invoice No. NCC/12 dated 14.12.2016; That Submission of the
documents by Hitesh V Shah relating to purchase of machineries
(Pelletiser Machine, Die Face Cutter & 40 mm twin screw extruder
machine) from M/s Naskar Ceramics, Howrah (WB), it is noticed
from TCI freight challan that the said machineries were delivered
to his firm-M/s Shiv Machine Tools in the month of January, 2017
and bill for the same were raised in December, 2016 to which
Hitesh V Shah however, the whole payment was already made six
months before (approx.). The reason was asked from Hitesh V Shah
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however he did not give any satisfactorily explanation. That his
submission of documents i.e. Ledger summary of M/s Naskar
Ceramics & bank account statement show that he has given Rs.
5,00,000/- to Mintu Naskar (Prop of M/s Naskar Ceramic) on
14.03.2016, however he has not shown M/s Naskar Ceramic as
Sundry Debtor in the Balance sheet for the respective year. Hence,
he could not substantiated Rs. 70 Lakhs paid to Mintu Naskar after
having been given ample opportunities.
(iv) That on considering the miserable condition of the relatives of
U.N. Mandal for educational and medical purpose, as informed to
him by Mr. U.N. Mandal in the year 2015 and 2016 but he could
not give satisfactory explanation and failed to substantiate the
amount given to U. N. Mandal & his relatives.
(v)That he has received back in total Rs. 4,87,500/- in cash from
Manabendra Nath Mandal & Rs. 2,40,000/-in cash from
Pushpendu Sekhar Mandal (relatives of U. N. Mandal) in respect of
loan given to them however, he has not provided cash book for the
relevant financial year highlighting the entries of these relevant
cash; That he instructed his relative - Suresh J. Shah to collect the
aforesaid cash from Manabendra Nath Mandal (relative of U.N.
Mandall from Erode, Tamil Nadu however, he has not submitted
evidence of any journey performed by Suresh Shah; That he was
asked through whom his employee received the cash from
Pushpendu Sekhar Mandal as he is resident of West Bengal to
which Hitesh V Shah stated that he had received the intimation
from U. N. Mandal about the readiness of the loan repayment from
Mr. Pushpendu Sekhar Mondal and he deputed his staff Mr. Anil
Praveen Adhyaru to go to Kolkata, West Bengal and collect the
money from Mr. Pushpendu Sekhar Mondal. However, he did not
provide evidence of any journey performed by Anil Praveen
Adhvaru. That he was asked why he instructed his employee &
relative to collect cash from relative of U.N. Mandal whereas they
could directly deposit the cash into account of his
employee/relative or him to which Hitesh V Shah did not give any
satisfactory explanation. Hence, all the theories of Hitesh V Shah is
just an afterthought defence.
10. Specific role of the accused in the commission of offence of
money laundering by directly or by indirectly attempts to indulge
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or knowingly assist or knowingly is a party or is involved in
concealment/possession/acquisition or use in projecting or
claiming Proceeds of Crime as untainted property under Section
3 of PMLA, 2002.
Hitesh V Shah (Accused No.-4)
(a) Hitesh V Shah through M/s Shiv Machine Tools paid illegal
gratification to the tune of Rs. 94.42 Lakhs to Upendra Nath
Mandal, the then Senior Manager, Metallurgical Wing, MECON
Ltd, Ranchi in favour of allotment of tender project of Bokaro Steel
Plant to M/s Shiv Machine Tools.
(b) Hitesh V Shah paid illegal gratification to U. N. Mandal
however, he told that he had given the part amount to relatives of
U. N. Mandal as loan on interest for educational and medical
purpose. In this way, he has not directly paid money to U. N.
Mandal, however, he routed the same through the account of his
relatives to to claim the same as untainted transactions. Hitesh V
Shah had partly paid illegal gratification (Rs. 70,00,000/-) to U. N.
Mandal through Mintu Naskar and claiming the same as untainted
as discussed in above paras.
(c) Hitesh V Shah had partly paid illegal gratification (Rs.
4,14,000/-) in cash to the account of Binny Kumari on instruction
of U. N. Mandal as discussed in above paras.
(d) Hitesh V Shah, in spite of having given the illegal gratification,
tried to conceal the real facts during the proceedings of
investigation and claiming the same as untainted. Hence, he is
directly indulged, knowingly assisted and is actually involved in the
activities connected with the offence of money laundering, as
defined u/s 3 of PMLA, 2002. He has committed the offence of
Money Laundering as defined under section 3 of PMLA and is,
therefore, liable to be punished under section 4 of PMLA, 2002.
82. It is evident from the aforesaid paragraphs of the prosecution
complaint that the offence originates from the criminal conspiracy
relating to manipulation of the Bokaro Steel Plant tender process,
wherein the Petitioner, representing M/s Shiv Machine Tools, generated
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and paid Proceeds of Crime (PoC) amounting to Rs. 94.42 Lakhs as
illegal gratification to the co-accused public servant, Shri U.N. Mandal.
83. It has been alleged that after making the said payment, the
Petitioner knowingly engaged in a series of structured financial
transactions aimed at concealing the true origin of the funds and
integrating them into the financial system. A significant component of
this arrangement was the routing of Rs. 70 Lakhs through Mintu Naskar.
The said transfer was projected as an "advance payment" for heavy
machinery from M/s Naskar Ceramics. However, from prosecution
complaint, it revealed that the invoice relied upon was backdated to
14.12.2016, subsequent to the initiation of the CBI's Preliminary
Enquiry, and that the said entity did not possess the business capacity to
undertake such a transaction.
84. It has come in the complaint that the laundering process was
further carried out through the device of so-called "friendly loans." The
Petitioner caused funds to be routed through the bank accounts of his
employees and relatives and thereafter disbursed as purported loans to
the immediate relatives of Shri U.N. Mandal, including Smt. Sova Gayen
and Shri Manabendra Nath Mandal. This structuring was undertaken to
avoid a direct financial trail between the bribe giver and the recipient.
Additionally, the Petitioner participated in depositing unaccounted cash,
including a sum of Rs. 4,14,000/- deposited into the bank account of
Smt. Binny Kumari, acting on the instructions of the co-accused. It has
been alleged that no credible or verifiable explanation was furnished
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regarding the transaction with M/s Naskar Ceramics or the nature of the
alleged loan disbursements.
85. From the several paragraphs of the prosecution complaint it is
evident that the financial trail, supported by certified bank account
statements of M/s Shiv Machine Tools and intermediary entities,
demonstrates how illegal gratification was generated and subsequently
layered through a transaction which, upon examination of VAT returns,
absence of production records, and timing of invoice, has been found to
be sham or colourable device for routing funds. This includes routing Rs.
70 Lakhs through M/s Naskar Ceramics under the guise of a machinery
advance and channeling funds to the relatives of co-accused Shri U.N.
Mandal as "friendly loans." These transactions are corroborated by
statements recorded under Section 50 of the PMLA.
86. It requires to refer herein that the statement of the Petitioner
was also recorded under Section 50 of the Prevention of Money
Laundering Act, 2002, and that the Prosecution Complaint dated
11.10.2023 sets out his specific role in the offence. However, the
averments are denied to the extent that the Petitioner seeks to portray his
bare denials as proof of innocence or to characterize his conduct as
genuine cooperation. A mere denial during examination cannot override
the documentary material collected during investigation.
87. Thus, the material on record prima facie indicates that the
Petitioner was involved in the generation of Rs. 94.42 Lakhs, and also
involved in the routing and structuring of such funds through
intermediary entities and accounts. The CBI Charge Sheet No. 14/2020
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indicates he existence of a criminal conspiracy under Section 120B IPC
between the petitioner and Shri U.N. Mandal.
88. Thus, prima facie it appears that for the purposes of the PMLA,
the petitioner acted as the generator and layerer of the Proceeds of
Crime.The acts of transferring, layering and projecting funds as
legitimate transactions fall within the scope of "process or activity
connected with Proceeds of Crime" under Section 3 of the PMLA, 2002.
Accordingly, sufficient grounds exist for proceeding against the
Petitioner under Section 3 punishable under Section 4 of the Act.
89. Thus, prima facie it appears that Shri Hitesh V. Shah
knowingly and directly involved himself in the acquisition, possession,
concealment, layering, and projection of Proceeds of Crime amounting
to Rs. 94.42 Lakhs as untainted property.
90. The learned counsel for the petitioner has stated that from
perusal of the entire Prosecution Complaint and the documents attached
it is aptly clear that the petitioner is not involved in any criminal activity
relatable to the schedule offence from the commission of which any
proceeds of crime was generated and the same was ever dealt with by the
petitioner.
91. But from the discussion made hereinabove in the preceding
paragraphs it has surfaced during investigation that the Petitioner caused
funds to be routed through the bank accounts of his employees and
relatives and thereafter disbursed as purported loans to the immediate
relatives of Shri U.N. Mandal, including Smt. Sova Gayen and Shri
Manabendra Nath Mandal. This structuring was undertaken to avoid a
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direct financial trail between the bribe giver and the recipient.
Additionally, the Petitioner participated in depositing unaccounted cash,
including a sum of Rs. 4,14,000/- deposited into the bank account of
Smt. Binny Kumari, acting on the instructions of the co-accused.
92. Thus, the contention of the learned counsel for the appellant is
contrary to the documented banking records, which trace the movement
and integration of funds into the attached properties. Further, at the stage
of Section 227 Cr.P.C., the Court is only required to ascertain whether
sufficient grounds exist to proceed.
93. Further, the Act 2002 is independent and concern the process or
activity connected with Proceeds of Crime. Whether the tender
underwent scrutiny at multiple levels, whether the contract was executed,
or whether milestone payments were released does not legitimize the
payment of Rs. 94.42 Lakhs allegedly made as illegal gratification.
94. It is apparent from record that the prosecution case is not based
merely on procedural aspects of the tender process, but on the
documented financial trail establishing the generation and laundering of
bribe money. The material indicates that the petitioner paid illegal
gratification to secure favourable Technical Appraisal Reports (TAR)
and thereafter engaged in layering through fabricated invoices and a
transaction which, upon examination of VAT returns, absence of
production records, and timing of invoice, has been found to be
colourable device for routing funds.
95. Thus, on the basis of discussion made hereinabove this Court is
of the considered view that the contention of the learned counsel for the
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petitioner that the petitioner is not involved in any criminal activity
relatable to the schedule offence from the commission of which any
proceeds of crime was generated and the same was ever dealt with by the
petitioner is not fit to be accepted.
96. It needs to refer herein that this Court finds that the provisions
of the PMLA are attracted to any person who is directly or indirectly
involved in the concealment, possession, use, projection, or claiming of
proceeds of crime as untainted property. Herein the material collected
during investigation prima facie establishes such involvement.
97. The requisite mens rea under Section 3 of the PMLA is
apparent from the routing pattern, timing of transactions, and the
deliberate structuring of funds through intermediary entities. These
circumstances, taken cumulatively, indicate conscious participation in
the process or activity connected with the proceeds of crime, thereby
satisfying the statutory ingredients of the offence.
98. So far, the issue of lack of jurisdiction is concerned it is evident
that the alleged scheduled offence was registered at Ranchi. The alleged
criminal conspiracy to manipulate the MECON tender was executed at
Ranchi. The core criminal conspiracy to manipulate the tenders of
MECON Ltd. was conceived and executed at Ranchi by the co-accused
public servant, thereby firmly establishing the territorial jurisdiction of
the Special Court (PMLA) at Ranchi. The Proceeds of Crime arose from
the said scheduled offence and since the offence under Section 3 of the
PMLA is a continuing offence, therefore, the Special Court (PMLA) at
Ranchi is the competent forum and have requisite jurisdiction to hear the
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matter. Therefore, the contentions regarding lack of territorial
jurisdiction and absence of "Proceeds of Crime" (PoC) are legally
untenable and without merit.
99. The further contention of the learned counsel for the petitioner
that no property was physically seized from the Petitioner, or that the
CBI did not quantify his personal illicit enrichment, is misplaced reason
being that the prosecution is not confined to mere possession of final
assets; rather, the Petitioner is being prosecuted under Section 3 of the
PMLA as the main person who generated and layered a sum of ₹94.42
lakhs as illegal gratification. The investigation under the PMLA is
independent in nature, and the successful tracing of these funds to their
ultimate integration into the attached properties of the co accused fully
supports and validates the prosecution case.
100. The Petitioner’s attempt to portray his money-laundering
activities as legitimate business or personal transactions is untenable and
contrary to the material on record. The prosecution complaint prima
facie disproves the claim of bona fide business. It reveals that the
Petitioner deliberately routed a sum of ₹70 lakhs as a purported 100%
advance for heavy machinery to M/s Naskar Ceramics, a tile vendor with
an annual turnover of less than ₹20 lakhs. In order to create a statutory
cover before the tax/VAT authorities, the Petitioner relied upon Invoice
No. NCC/12, which was conspicuously fabricated on 14.12.2016,
exactly five days after the CBI registered its Preliminary Enquiry on
09.12.2016.
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101. Likewise, the so-called “friendly loans” were nothing but bogus
layering transactions, wherein the Petitioner used his own employees,
namely Shri Suresh J. Shah and Shri Anil Adhyaru, to extend unsecured
proxy loans to unrelated family members of the public servant, namely
Smt. Sova Gayen and Shri Manabendra Nath Mandal. These
circumstances, taken cumulatively, establish deliberate structuring and
conscious involvement in the laundering of proceeds of crime.
102. Thus, Routing bribe money through banking channels by
employing proxy accounts and backdated waybills does not confer
legitimacy upon such transactions; rather, it epitomizes the very essence
of money laundering. The alleged deliberate use of formal financial
instruments and fabricated documentation to disguise illicit origins
underscores conscious involvement in the laundering process and
squarely attracts the mischief contemplated under Section 3 of the
PMLA.
103. Further it requires to refer the Petitioner's reliance on the multi-
tier scrutiny and internal committee approvals relating to the Bokaro
Steel Plant tender is not fit to be relied reason being that from
prosecution complaint prima facie it is evident that Rs. 94.42 Lakhs was
paid by the Petitioner in order to secure favourable Technical Appraisal
Reports (TAR), therefore, the existence of procedural formalities or
committee approvals does not dilute or negate the independent offence of
laundering the bribe money paid to manipulate that very process.
104. So far admissibility of the statement recorded under Section 50
of the Act 2002 is concerned it requires to refer herein that the three
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Judge Bench of the Hon’ble Apex Court in the case of Rohit Tandon vs.
Directorate of Enforcement, (2018) 11 SCC 46 held that the statements
of witnesses recorded by Prosecution – ED are admissible in evidence in
view of Section 50. Such statements may make out a formidable case
about the involvement of the accused in the commission of the offence
of money laundering. For ready reference the relevant paragraph is being
quoted as under:
“31. Suffice it to observe that the appellant has not succeeded in
persuading us about the inapplicability of the threshold stipulation
under Section 45 of the Act. In the facts of the present case, we are in
agreement with the view taken by the Sessions Court and by the High
Court. We have independently examined the materials relied upon by
the prosecution and also noted the inexplicable silence or reluctance
of the appellant in disclosing the source from where such huge value
of demonetised currency and also new currency has been acquired by
him. The prosecution is relying on statements of 26 witnesses/accused
already recorded, out of which 7 were considered by the Delhi High
Court. These statements are admissible in evidence, in view of Section
50 of the 2002 Act. The same makes out a formidable case about the
involvement of the appellant in commission of a serious offence of
money laundering. It is, therefore, not possible for us to record
satisfaction that there are reasonable grounds for believing that the
appellant is not guilty of such offence. Further, the courts below have
justly adverted to the antecedents of the appellant for considering the
prayer for bail and concluded that it is not possible to hold that the
appellant is not likely to commit any offence ascribable to the 2002
Act while on bail. Since the threshold stipulation predicated in Section
45 has not been overcome, the question of considering the efficacy of
other points urged by the appellant to persuade the Court to favour
the appellant with the relief of regular bail will be of no avail. In
otherwords, the fact that the investigation in the predicate offence
instituted in terms of FIR No. 205/2016 or that the investigation qua
the appellant in the complaint CC No. 700 of 2017 is completed; and
that the proceeds of crime are already in possession of the
investigating agency and provisional attachment order in relation
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thereto passed on 13-2-2017 has been confirmed; or that charge-sheet
has been filed in FIR No. 205/2016 against the appellant without his
arrest; that the appellant has been lodged in judicial custody since 2-
1-2017 and has not been interrogated or examined by the
Enforcement Directorate thereafter; all these will be of no
consequence.
105. The Hon’ble Supreme Court in Abhishek Banerjee & Anr. v.
Enforcement Directorate, (2024) 9 SCC 22 has again made similar
observations:
"21. ...Section 160 which falls under Ch. XII empowers the police
officer making an investigation under the said chapter to require any
person to attend within the limits of his own or adjoining station who,
from the information given or otherwise appears to be acquainted
with the facts and circumstances of the case, whereas, the process
envisaged by Section 50 PMLA is in the nature of an inquiry against
the proceeds of crime and is not "investigation" in strict sense of the
term for initiating prosecution; and the authorities referred to in
Section 48 PMLA are not the police officers as held in Vijay Madanlal
[Vijay Madanlal Choudhary v. Union of India, (2023) 12 SCC 1] .
22. It has been specifically laid down in the said decision that the
statements recorded by the authorities under Section 50 PMLA are not
hit by Article 20(3) or Article 21 of the Constitution, rather such
statements recorded by the authority in the course of inquiry are
deemed to be the judicial proceedings in terms of Section 50(4), and
are admissible in evidence, whereas the statements made by any
person to a police officer in the course of an investigation under Ch.
XII of the Code could not be used for any purpose, except for the
purpose stated in the proviso to Section 162 of the Code. In view of
such glaring inconsistencies between Section 50 PMLA and Sections
160/161CrPC, the provisions of Section would prevail in terms of
Section 71 read with Section 65 thereof."
106. In light of the foregoing judicial pronouncements, it is evident
that statements recorded under Section 50 of the PMLA hold evidentiary
value and are admissible in legal proceedings. The Hon’ble Supreme
Court, while emphasizing the legal sanctity of such statements, observed
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that they constitute valid material upon which reliance can be placed to
sustain allegations under the PMLA.
107. In the aforesaid judgment, the Hon’ble Supreme Court also
reaffirmed the admissibility of Section 50 of the PMLA distinguishing
them from statements recorded under the CrPC. The Court underscored
that such statements, being recorded during an inquiry rather than an
investigation, are not subject to the restrictions under Article 20(3) and
Article 21 of the Constitution. Instead, they are deemed to be judicial
proceedings under Section 50(4) of the PMLA and, therefore, admissible
as evidence in proceedings under the PMLA. The Hon’ble Apex Court
further clarified that the provisions of Section 50 of the PMLA having an
overriding effect by virtue of Sections 65 and 71 of the PMLA prevail
over the procedural safeguards under the CrPC.
108. In the case of Tarun Kumar v. Assistant Director 2023 INSC
1006 the Hon’ble Apex Court while relying upon the ratio rendered by
the three judge Bench of the Hon’ble Apex Court in the case of Rohit
Tandon (supra) has observed thatthe statements of witnesses/ accused
are admissible in evidence in view of Section 50 of the said Act and such
statements may make out a formidable case about the involvement of the
accused in the commission of a serious offence of money laundering. For
ready reference the relevant paragraph of the aforesaid judgment is being
quoted as under:
“14. The first and foremost contention raised by learned Senior
Counsel Mr. Luthra would be that the appellant was not named in the
FIR nor in first three prosecution/supplementary complaints and has
been implicated only on the basis of the statements of witnesses
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recorded pursuant to the summons issued under Section 50 of the
PML Act, without there being any material in support thereof.
15.In our opinion, there is hardly any merit in the said submission of
Mr. Luthra. In Rohit Tandon vs. Directorate of Enforcement (2018) 11
SCC 46, a three Judge Bench has categorically observed that the
statements of witnesses/ accused are admissible in evidence in view
of Section 50 of the said Act and such statements may make out a
formidable case about the involvement of the accused in the
commission of a serious offence of money laundering. Further, as
held in Vijay Madanlal (supra), the offence of money laundering
under Section 3 of the Act is an independent offence regarding the
process or activity connected with the proceeds of crime which had
been derived or obtained as a result of criminal activity relating to or
in relation to a scheduled offence. The offence of money laundering
is not dependent or linked to the date on which the scheduled
offence or predicate offence has been committed. The relevant date
is the date on which the person indulges in the process or activity
connected with the proceeds of crime. Thus, the involvement of the
person in any of the criminal activities like concealment, possession,
acquisition, use of proceeds of crime as much as projecting it as
untainted property or claiming it to be so, would constitute the offence
of money laundering under Section 3 of the Act."
109. Accordingly, this Court is of the considered view that
statements recorded under Section 50 of the PMLA are admissible in
evidence and can be relied upon to establish culpability in money
laundering cases.
110. From prosecution complaint it is evident that in instant case
such statements which have been recorded under Section 50 is only
corroborate the primary and unimpeachable documentary evidence in the
form of bank trails.
111. In the catena of judgments, the Hon'ble Supreme Court has
clearly held that officers under the PMLA are not police officers, and
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statements recorded under Section 50 are legally admissible in evidence.
In any event, such statements in the present matter only corroborate the
primary and unimpeachable documentary evidence in the form of bank
trails.
112. Further it is evident from impugned order that in the present
case, the Petitioner has produced no sterling and unimpeachable
material. His explanations rest upon demonstrably relied upon
documents, including Invoice No. NCC/12 dated 14.12.2016, which the
Learned Special Court has found to be prima facie backdated and
structured subsequent to registration of the Preliminary Enquiry dated
09.12.2016.
113. Further, at the stage of recording statements during enquiry, it
cannot be construed as an investigation for prosecution. The process
envisaged under Section 50 of PMLA is in the nature of an inquiry
against the proceeds of crime and it is not an investigation and the
authorities who are recording the statements are not police officers and
therefore, these statements can be relied upon as admissible piece of
evidence before the Court. The summons proceedings and recording of
statements under PMLA are given the status of judicial proceedings
under Section 50(4) of PMLA. When such is the sweep of Section 50 of
PMLA, the statements that have been recorded by the respondent and
which have been relied upon in the complaint must be taken to be an
important material implicating the petitioner.
114. Further, the legal presumption under Section 24(a) of the Act
2002, would apply when the person is charged with the offence of
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money-laundering and his direct or indirect involvement in any process
or activity connected with the proceeds of crime, is established. The
existence of proceeds of crime is, therefore, a foundational fact, to be
established by the prosecution, including the involvement of the person
in any process or activity connected therewith. Once these foundational
facts are established by the prosecution, the onus must then shift on the
person facing charge of offence of money- laundering to rebut the legal
presumption that the proceeds of crime are not involved in money-
laundering, by producing evidence which is within personal knowledge
of the accused.
115. Further, the argument that there was no criminal intent (mens
rea) is not tenable because the at this stage criminal intent (mens rea)
cannot be appreciated and the same can be appreciated in the full blown
trial by leading the evidences by the parties.
116. Thus, entire gamut of discussion is like that the prosecution
case is not based merely on procedural aspects of the tender process, but
on the documented financial trail establishing the generation and
laundering of bribe money. The material indicates that the petitioner paid
illegal gratification to secure favourable Technical Appraisal Reports
(TAR) and thereafter engaged in layering through fabricated invoices
and a transaction which, upon examination of VAT returns, absence of
production records, and timing of invoice, has been found to be
colourable device for routing funds.
117. At this juncture, it needs to refer herein that the Hon’ble Apex
Court in the case of Pradeep Nirankarnath Sharma Versus Directorate
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of Enforcement and Another, 2025 SCC OnLine SC 560 has observed
that as established in multiple judicial pronouncements, cases involving
economic offences necessitate a thorough trial to unearth the complete
chain of events, financial transactions, and culpability of the accused,
therefore the material submitted by the respondent, coupled with the
broad legislative framework of the PMLA, indicates the necessity of
allowing the trial to proceed and not discharging the appellant at the
nascent stage of charge framing and discharging the appellant at this
stage would be premature and contrary to the principles governing the
prosecution in money laundering cases, for ready reference the relevant
paragraphs are being quoted as under:
“30. The PMLA was enacted with the primary objective of preventing
money laundering and confiscating the proceeds of crime, thereby
ensuring that such illicit funds do not undermine the financial system.
Money laundering has far-reaching consequences, not only in terms of
individual acts of corruption but also in causing significant loss to the
public exchequer. The laundering of proceeds of crime results in a
significant loss to the economy, disrupts lawful financial transactions,
and erodes public trust in the system. The alleged offences in the
present case have a direct bearing on the economy, as illicit financial
transactions deprive the state of legitimate revenue, distort market
integrity, and contribute to economic instability. Such acts, when
committed by persons in positions of power, erode public confidence
in governance and lead to systemic vulnerabilities within financial
institutions.
31. The illegal diversion and layering of funds have a cascading
effect, leading to revenue losses for the state and depriving legitimate
sectors of investment and financial resources. It is settled law that in
cases involving serious economic offences, judicial intervention at a
preliminary stage must be exercised with caution, and proceedings
should not be quashed in the absence of compelling legal grounds.
The respondent has rightly argued that in cases involving allegations
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of such magnitude, a trial is imperative to establish the full extent of
wrongdoing and to ensure accountability.
32. The PMLA was enacted to combat the menace of money
laundering and to curb the use of proceeds of crime in the formal
economy. Given the evolving complexity of financial crimes, courts
must adopt a strict approach in matters concerning economic offences
to ensure that perpetrators do not exploit procedural loopholes to
evade justice.
33. The present case involves grave and serious allegations of
financial misconduct, misuse of position, and involvement in
transactions constituting money laundering. The appellant seeks an
end to the proceedings at a preliminary stage, effectively preventing
the full adjudication of facts and evidence before the competent forum.
However, as established in multiple judicial pronouncements, cases
involving economic offences necessitate a thorough trial to unearth
the complete chain of events, financial transactions, and culpability of
the accused.
34. The material submitted by the respondent, coupled with the broad
legislative framework of the PMLA, indicates the necessity of allowing
the trial to proceed and not discharging the appellant at the nascent
stage of charge framing. The argument that the proceedings are
unwarranted is devoid of substance in light of the statutory objectives,
the continuing nature of the offence, and the significant financial
implications arising from the alleged acts. Discharging the appellant
at this stage would be premature and contrary to the principles
governing the prosecution in money laundering cases.”
118. Thus, from perusal of case record, statements of witnesses,
materials available on record and in view of law laid down by the
Hon’ble Apex Court as referred hereinabove, this Court is of the
considered view that prima-facie sufficient materials are available on
record for framing of charge against the present petitioner.

119. It needs to refer herein that the Hon’ble Apex Court in the case
of Munna Devi v. State of Rajasthan, (2001) 9 SCC 631 has observed
that the revisional power under the Code of Criminal Procedure cannot
be exercised in a routine and casual manner. While exercising such
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powers the High Court has no authority to appreciate the evidence in the
manner as the trial and the appellate courts are required to do. Revisional
powers could be exercised only when it is shown that there is a legal bar
against the continuance of the criminal proceedings or the framing of
charge or the facts as stated in the first information report even if they
are taken at the face value and accepted in their entirety do not constitute
the offence for which the accused has been charged.
120. Thus, it is evident that the revisional power can only be
exercised to correct patent error of law or procedure which would
occasion unfairness, if it is not corrected. The revisional power cannot be
compared with the appellate power. A Revisional Court cannot
undertake meticulous examination of the material on record as it is
undertaken by the trial court or the appellate court. This power can only
be exercised if there is any legal bar to the continuance of the
proceedings or if the facts as stated in the charge-sheet are taken to be
true on their face value and accepted in their entirety do not constitute
the offence for which the accused has been charged.
121. The Hon’ble Apex Court in the case of Asian Resurfacing of
Road Agency (P) Ltd. v. CBI, (2018) 16 SCC 299 has held that
interference in the order framing charges or refusing to discharge is
called for in the rarest of the rare cases only to correct the patent error of
jurisdiction.
122. The Hon’ble Apex Court in the case of State of Tamil Nadu v.
R. Soundirarasu, and Ors. , (2023) 6 SCC 768 has held at paragraphs-81
to 83 as under:
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“81. The High Court has acted completely beyond the settled
parameters, as discussed above, which govern the power to discharge
the accused from the prosecution. The High Court could be said to
have donned the role of a chartered accountant. This is exactly what
this Court observed in Thommandru Hannah Vijayalakshmi [CBI v.
Thommandru Hannah Vijayalakshmi, (2021) 18 SCC 135]. The High
Court has completely ignored that it was not at the stage of trial or
considering an appeal against a verdict in a trial. The High Court has
enquired into the materials produced by the accused persons,
compared with the information compiled by the investigating agency
and pronounced a verdict saying that the explanation offered by the
accused persons deserves to be accepted applying the doctrine of
preponderance of probability. This entire exercise has been justified
on account of the investigating officer not taking into consideration
the explanation offered by the public servant and also not taking into
consideration the lawful acquired assets of the wife of the public
servant i.e. Respondent 2 herein.
82. By accepting the entire evidence put forward by the accused
persons applying the doctrine of preponderance of probability, the
case put up by the prosecution cannot be termed as “groundless”. As
observed by this Court in C.S.D. Swami [C.S.D. Swami v. State, AIR
1960 SC 7] that the accused might have made statements before the
investigating officer as to his alleged sources of income, but the same,
strictly, would not be evidence in the case. 83. Section 13(1)(e) of the
1988 Act makes a departure from the principle of criminal
jurisprudence that the burden will always lie on the prosecution to
prove the ingredients of the offences charged and never shifts on the
accused to disprove the charge framed against him. The legal effect of
Section 13(1)(e) is that it is for the prosecution to establish that the
accused was in possession of properties disproportionate to his known
sources of income but the term “known sources of income” would
mean the sources known to the prosecution and not the sources known
to the accused and within the knowledge of the accused. It is for the
accused to account satisfactorily for the money/assets in his hands.
The onus in this regard is on the accused to give satisfactory
explanation. The accused cannot make an attempt to discharge this
onus upon him at the stage of Section 239CrPC. At the stage of
Section 239CrPC, the court has to only look into the prima facie case
and decide whether the case put up by the prosecution is groundless.”
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123. It requires to refer herein that the ambit and scope of exercise of
power of discharge, are fairly well settled which has been elaborately
discussed in the preceding paragraphs and as per settled proposition of
law, no comprehensive assessment of the materials or meticulous
consideration of the possible defence need to be undertaken at this stage
nor any exercise of weighing materials in golden scales is to be
undertaken at this stage. The only deliberation at the stage of discharge is
“as to whether prima facie case was made out or not and whether the
accused is required to be further tried or not”.
124. Further, it is well settled that the revisional power cannot be
parallelled with appellate power. The Revisional Court cannot undertake
meticulous examination of the material on record as is undertaken by the
Trial Court or the Appellate Court.
125. It is evident from the impugned orders that the learned Special
Court, PMLA, Ranchi, upon due consideration of the active and
conscious role of the petitioner and after perusal of the record has
applied the settled principles laid down by the Hon’ble Apex Court and
confined its consideration to examining whether the material on record
gives rise to "grave suspicion." Upon such examination, the Ld. Special
Court observed that the certified bank account statements clearly trace
the layering of Rs. 94.42 Lakhs, and that the Petitioner relied upon
documents whose timing and surrounding circumstances, as noted in the
impugned order, clearly indicate fabrication, including Invoice No.
NCC/12.
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126. Further it is apparent that the Ld. Court has properly
appreciated that the "defence documents" produced by the Petitioner
which appears to be self-serving and constitute the very instruments used
for concealment and commission of the offence. The rejection of such
fabricated material at the threshold does not amount to non-application
of mind; rather, it reflects a sound judicial approach and a conscious
refusal to conduct a mini-trial for entertaining defence. This approach is
in absolute conformity with the settled position of law as discussed and
referred hereinabove in the preceding paragraph. Furthermore, the Ld.
Special Court has recorded a clear and categorical finding of fact that the
Petitioner did not directly pay money to Shri U.N. Mandal, but
specifically routed the same through the accounts of relatives to falsely
claim the transactions as untainted.
127. Hence, on the basis of discussion made hereinabove and taking
into consideration the settled position of law as discussed and referred
hereinabove and further taking into consideration the ratio of the
judgment rendered by the Hon’ble Apex Court in the case of Pradeep
Nirankarnath Sharma Versus Directorate of Enforcement and
Another (supra) , this court is of the considered view that there is no
illegality in the impugned orders dated 06.08.2025 and 25.03.2026
passed by the learned learned Additional Judicial Commissioner-1 cum
Special Judge, PML ActRanchi, in connection with ECIR Case No. 07 of
2023 in ECIR/RNZO/04/2021.
128. Accordingly, this Court do not find any justifiable reason to
interfere with the impugned orders dated 03.12.2024 and 07.12.2024.
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129. In view thereof, the instant criminal revision petitions are
hereby, dismissed.
130. Pending Interlocutory Applications, if any, also stand disposed
of.
131. It is made clear that any observations made herein are prima-
facie for consideration of issue involved in the instant revision petitions
and view expressed herein shall not be construed as an expression on the
merits of the case. The learned Trial Court shall proceed with the matter
uninfluenced by any observations made by this Court and shall decide
the case strictly in accordance with law.

(Sujit Narayan Prasad, J.)
Jharkhand High Court
Dated:13 /05/2026
KNR/ AFR

Uploaded On:16.5.2026
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