Najmi Waziri, J
1. This petition under Article 226 & 227 of the Constitution of India read with Section 482 Cr.P.C. challenges the order on charge as well as the
charges framed under Section 13(2) read with Section 13 (1)(e) of the Prevention of Corruption Act, 2018 (PC Act) in RC No. 74(A)/95/DLI. The
petitioners contend that there is no direct substantive evidence against R.C. Sabharwal, the father/ public servant. His assets stand duly proven
through settled income tax returns. The ITRs of various entities and individuals linked to the petitioners would show taxes paid on all the income and
the assessment stands completed. These tax returns filed much prior to the registration of the case, and money belonging to other accused cannot be
fastened on the accused. Reliance is placed upon DSP Chennai vs K Insbasagaran (2006) 1 SCC 42 0and State of Andhra Pradesh vs J.
Satyanarayan JT 2000 (10) SC 430. Further reliance is placed upon Gapadibai vs State of Madhya Pradesh (1980) 2 SCC 327 to assert that in order
to prove benami transactions evidence must be led to show that (i) accused paid consideration; (ii) he had custody of the sale deed; (iii) he was in
possession of the property; and (iv) the motive of the transaction. It is argued that there was no material to show that the properties of various entities
such as M/s Morni Devi Brij Lal Trust, M/s PUS Properties, M/s Sahil Properties and M/s Morni Merchants Ltd. were benami properties of the
petitioners, or that consideration was paid for the said properties. It is argued that the CBI failed to take into account income of M/s Morni Merchants
Ltd which had earned Rs.30.84 lacs through special bearer bonds. It is argued that no benefit of encashment was ever availed by petitioners or any of
his family members nor were any properties purchased from encashment of the said bonds by the petitioners. The value of property bearing no. 513,
Hemkunt Tower, Nehru Place by Smt. Sushma Suri to Smt. Savitri Devi on 01.03.1995, much prior to the end of the check period/investigation period,
was not taken into account. It is argued that there is an over-valuation of Rs.74.50 lacs regarding the New Friends Colony property. If the aforesaid
amounts are deducted from the alleged disproportionate assets there will clearly be no case for the prosecution. Furthermore, no link or substantial
evidence is shown, of the petitioners having come into possession of any monies by indulging in any criminal misconduct.
2. What is to be seen at this stage is whether a case is made out for trial on the basis of the documents presented. The learned Trial Court having
considered the chargesheet, statements of witnesses recorded under Section 161 of the Code of Criminal Procedure, 1973, and other documents
opined that there is grave suspicion arose from the material placed before the Court of the involvement of petitioner R.C. Sabharwal and Puneet
Sabharwal for the offences of which they have been charged under Sections 13(1)(e) and 13(2) of the Prevention of Corruption Act, 1988 and
Section 109 of the Indian Penal Code, 1860.
3. The case against R.C.Sabharwal is that he was found in possession of the total assets worth Rs.3,10,58,324/- for the check period beginning from
20.08.1968 till 23.08.1995. The assets which were disproportionate to his known sources of the income were Rs.2,05,63,641/-. His wife's salary during
the said period was Rs.8,72,249.42. He himself earned a salary of Rs.10,00,042/- for the period in question. As per the chargesheet, the unexplained
amount was 166% of the known sources of income. The learned Trial Court had considered the following aspects apropos the charge of
disproportionate assets:
.......wherein it was alleged that accused R.C. Sabharwal had amazed huge assets which is disproportionate to his known source income.
The assets acquired by him are either in his name of in the name of his family members, the assets include two flat bearing No.5A and 5B,
White House, Bhagwan Pass Road, New Delhi each costing to Rs.36 lacs in the year 1991, residential house at Masjid Moth, double storied
house at Plot No. 2/6080, Dev Nagar, Karol Bagh, New Delhi, petrol pump on land measuring 8888/9 Sq Yards at Garh Mukteshwar, 5.5
acres of land at Suitanpur Villate in the name of his son Punit Sabharwal and Sumeet Sabharwal, six bighas land purchased at village
Indergarhi, Ghaziabad, UP, 14 biswas and 5 bishwami of agricultural land at Indergarh, Ghaziabad UP, 2 bighas agricultural land at
village Indergarhi and a parking space at G-72, Cannaught Place and one Maruti car. It is also alleged that accused R.C. Sabharwal is
also in possession of various costly electronic equipment, gadgets and huge bank account in his name or in the name of his family members.
2. During investigation it was revealed that father of accused R.C. Sabharwal was running petrol pump before partition at Rawalpindi and
after partition family fled away from Pakistan to Delhi who expired in 1973. The accused R.C. Sabharwal was born in the year 1940 and
graduated from Delhi University in the year 1967 and he was appointed as Architecture Assistant in 1968. He was married to Smt. Usha, a
medical graduate on 02.06.69 and he has two sons Shri Puneet Sabharwal and Sumeet Sabharwal. The son Sumeet Sabharwal is in USA
and Puneet Sabharwal is running business since 1991.
3. During investigation searches were conducted and it was revealed that accused R.C. Sabharwal has total income from salary as well as
other sources amounting to Rs. 10,00,042/-and Usha Sabharwal wife of accused obtained total salary of Rs.8,72,249.42/-. Accused R.C.
Sabharwal received a sum of Rs.3,08,856/- from M/s Morni Enterprises. The accused had income of Rs.24,89,087/- from M/s Morni
Merchants, accused Puneet Sabharwal joined the said business on 12.10.88. It is also alleged that accused had income of Rs.89,653/- from
M/s Sahib Properties. Income of Rs.3,08,197/- from Paroo Properties. Accused had also earned Rs.13,61,062/- from SPK Enterprises and a
sum of Rs.42,43,505/- from Morni Davi Brij Lal Trust. During investigation it is also revealed that firm M/s PUS Properties was started by
Smt. R. Mehta and accused Puneet Sabharwal who resigned and replaced by Shri Sumeet Sabharwal, Shakuntia Sahni and Sushma Suri
and they earned income of Rs.87,593/-. Accused R.C. Sabharwal had rental income of Rs. 13,31,448/- from house No. 7, Masjid Moth, New
Delhi and Rs.8310/- from insurance policies and accused R.C. Sabharwal and his wife earned Rs. 1,98,972/- towards interest. It is also
alleged that accused earned rental income of Rs.62,890/- from BPC Pump at Garh Muktheshwar. Thus total income of accused R.C.
Sabharwal and his family was Rs.1,23,18,091/-.
4. According to case of prosecution check period in this case has been taken from the date when accused R.C. Sabharwal joined as
Architecture Assistant in NDMC i.e. 20.08.1969 to the date of search i.e. 23.08.95. The total expenditure of accused during the check
period comes out to Rs. 8,23,108/-.
5. It is alleged that during investigation it was revealed that accused R.C. Sabharwal invested huge amount for acquiring movable
properties and total movable assets worth Rs.4,25,450/- were acquired by him either in his name or in the name of his family members. Apart
from the same accused was having various accounts and balance in the accounts, in his name or in the name of his family members
including sister, the bank balance in various accounts as on 23.08.95 was Rs.82,63,417/-.
6. It is alleged that during inspection it is revealed that accused R.C. Sabharwal acquired 24 immovable assets to the tune of
Rs.2,27,94,907/- either in his name or in the name of his family members and sister during the check period. Accused R.C. Sabharwal
acquired assets disproportionate to his known source income for which he could not satisfactorily account for. He was a party to criminal
conspiracy with his son Puneet Sabharwal, who had received 79 lacs through encashment of Special Bearer Bonds and he facilitated
commission of offence as conspirator and in furtherance to the said criminal conspiracy assets were acquired by him in the names of Morni
Devi Brij Lai Trust, Morni Merchants and other firms in which sole beneficiary was his son accused Puneet Sabharwal. The accused was
found in possession of total assets of Rs.3,10,58,324/- for the check period w.e.f. 20.08.1968 to 23.08.1995 and assets worth
Rs.2,05,63,341/-were disproportionate to his known source of income.
4. The learned Senior Counsel for the petitioners has contends that no case could be made out against the son â€" Puneet Sabharwal, because the
check period started from August, 1968 and he was born only on 03.09.1970 and attained the age of majority in 1991. The court would note that this
obviously, is an error because as per his date of birth, Puneet Sabharwal would have attained the age of majority on 02.09.1988. Furthermore, there
are allegations and reliance is made on statements of 7 prosecution witnesses to establish complicity or abetting his father in procuring and facilitating
illicit monies. Evidently seven years of the investigation period pertain to his having attained the age of majority. The prosecution’s case is that the
monies came into his account through dubious sources or that he or a Trust were beneficiaries of monies coming illegitimately, the same gives rise for
suspicion, warranting a trial, on the basis of the records adduced with the chargesheet.
5. Another argument is raised that the monies which came into the accounts of the various Trusts such as Morni Devi Brij Lal Trust could not be
looked into under the scheme of Special Bearer Bonds issued under The Special Bearer Bonds (Immunities and Exemptions) Act, 1981. However,
according to the prosecution, the unaccounted for income is 166% of the known sources of income. The amounts, according to Charge No. 1, is that
the petitioner R.C. Sabharwal was found in possession of assets to the tune of Rs.3,10,58,324/- as against his income and that of his family members'
income, to the tune of Rs. 1,23,18,091/- and expenditure of Rs. 18,23,108/- and that he was found in possession of total assets to the tune of
Rs.2,05,63,341/-, which were disproportionate to his known sources of income.
6. The learned counsel for the CBI contends that the protection under section 3 of the Special Bearer Bonds (Immunities and Exemptions) Act, 1981
(‘the Act’ for short) is not absolute apropos monies which may have been derived through illegitimate means or relating to any offence under
Chapter IX and XVII of the IPC and the Prevention of Corruption Act, 1988 (P.C. Act) or any offence which is tenable under any law which is
similar to offence punishable either under these Chapters of the IPC or the P.C. Act. He relies upon under section 3(2) of the Act which reads as
under:
(2) Nothing in sub- section (1) shall apply in relation to prosecution for any offence punishable under Chapter IX or Chapter XVII of the
Indian Penal Code (45 of 1860 ), the Prevention of Corruption Act, 1947 (2 of 1947 ) or any offence which is punishable under any other
law and which is similar to an offence punishable under either of those Chapters or under that Act or for the purpose of enforcement of any
civil liability. Explanation.-- For the purposes of this sub-section,"" civil liability"" does not include liability by way of tax under any law for
the time being in force.
7. He further refutes the petitioner’s contention that, at best, only four transactions would come under the scanner for trial in the present
proceedings, is untenable because ITAT’s order, relied upon by the petitioner, is of subsequent date i.e. 31.08.2007 whereas the material available
before the CBI pertains to the period prior thereto i.e. for the period ending 1995. The order on charge was framed on 21.02.2006, therefore, a
subsequent document would not be of any assistance to the petitioner. He relies upon the principle that Income Tax Returns are only with respect to
such monies, as may be taxble under the said Act. It does not examine the source or the manner in which the monies were brought into the hands of
the assessee as envisaged under section 13(1)(e) of the PC Act. The test of legitimacy of the money would be the jurisdiction of the investigating
agency under the latter Act. He relies upon the dicta of the Supreme Court in State of Karnataka v. J. Jayualalitha, (2017) 6 SCC 263 as well as in
Vishwanath Chaturvedi (3) v. Union of India (2007) 4 SCC 380 which held inter alia “It was observed that the Income Tax Department was
concerned only with the source of income and whether the tax was paid or not and, therefore, only an independent agency or CBI could, on court
direction, determine the question of disproportionate assets.â€
8. In State of Karnataka v. J. Jayalalitha, (2017) 6 SCC 263 it was held as under:
“….187. It was exposited that there was nothing in law which prevented the Income Tax Officer in an appropriate case from taxing both
the cash credit, the source and nature of which was not satisfactorily explained, and the business income estimated by him under Section 13
of the Income Tax Act, 1922, after rejecting the books of accounts of the assessee as unreliable. It was propounded as well that where there
was unexplained cash credit, it was open to the Income Tax Officer to hold that it is the income of the assessee and no further burden lies
on the Income Tax Officer to show that that income is from any particular source and that it was for the assessee to prove that even if the
cash credit represented income, it was an income from a source which had already been taxed.
190. The decision is to convey that though the IT returns and the orders passed in the IT proceedings in the instant case recorded the
income of the accused concerned as disclosed in their returns, in view of the charge levelled against them, such returns and the orders in
the IT proceedings would not by themselves establish that such income had been from lawful source as contemplated in the Explanation to
Section 13(1)(e) of the PC Act, 1988 and that independent evidence would be required to account for the same.
191. Though considerable exchanges had been made in course of the arguments, centring around Section 43 of the Evidence Act, 1872, we
are of the comprehension that those need not be expatiated in details. Suffice it to state that even assuming that the income tax returns, the
proceedings in connection therewith and the decisions rendered therein are relevant and admissible in evidence as well, nothing as such,
turns thereon definitively as those do not furnish any guarantee or authentication of the lawfulness of the source(s) of income, the pith of
the charge levelled against the respondents. It is the plea of the defence that the income tax returns and orders, while proved by the accused
persons had not been objected to by the prosecution and further it (prosecution) as well had called in evidence the income tax
returns/orders and thus, it cannot object to the admissibility of the records produced by the defence. To reiterate, even if such returns and
orders are admissible, the probative value would depend on the nature of the information furnished, the findings recorded in the orders and
having a bearing on the charge levelled. In any view of the matter, however, such returns and orders would not ipso facto either
conclusively prove or disprove the charge and can at best be pieces of evidence which have to be evaluated along with the other materials
on record. Noticeably, none of the respondents has been examined on oath in the case in hand. Further, the income tax returns relied upon
by the defence as well as the orders passed in the proceedings pertaining thereto have been filed/passed after the charge-sheet had been
submitted. Significantly, there is a charge of conspiracy and abetment against the accused persons. In the overall perspective therefore
neither the income tax returns nor the orders passed in the proceedings relatable thereto, either definitively attest the lawfulness of the
sources of income of the accused persons or are of any avail to them to satisfactorily account the disproportionateness of their pecuniary
resources and properties as mandated by Section 13(1)(e) of the Act…..
……
196. This Court ruled that the fact that the accused, other than the two Ministers, had been assessed to income tax and had paid income tax
could not have been relied upon to discharge the accused persons in view of the allegation made by the prosecution that there was no
separate income to amass such huge property. It was underlined that the property in the name of the income tax assessee itself cannot be a
ground to hold that it actually belongs to such an assessee and that if this proposition was accepted, it would lead to disastrous
consequences. This Court reflected that in such an eventuality it will give opportunities to the corrupt public servant to amass property in
the name of known person, pay income tax on their behalf and then be out from the mischief of law.
543. While observing that mere declaration of property in the income tax returns does not ipso facto connote that the same had been
acquired from the known lawful sources of income, the trial court held the view that the prosecution could successfully establish that the
respondents and their firms/companies, who posed to be income tax assessees, had no independent or real source of income and that it was
the finance of A-1 that was really in circulation and thus it could prove beyond reasonable doubt that the only source of money, the
acquisition of large assets was that of hers….â€
9. The CBI further contends that (i) merits of the matter would best be tested in a trial during which the petitioner would be given due opportunity in
law to defend himself, and (ii) such appreciation would be possible only after the evidence has been led. Reliance is placed upon the dicta of the
Supreme Court in Sunil Kumar Loharia vs. Sumeet Ganpatrao Bachewar & Anr., Crl. Appeal No. 1051 of 2018 decided on 23.08.2018. It is argued
that complicity of the co-accused is otherwise made out on the basis of the material available and deposition of the witnesses, recorded during the
investigation.
10. The petitioner submits that there is nothing specific, whatsoever, about abetment by the son during the entire period. In law, he could not possibly
be an abettor to a crime under the provisions of the Prevention of Corruption Act, while the son was a minor. An unsubstantiated statement to the
effect that the father had amassed wealth disproportionate to his known source of income or otherwise by illegal means would not by itself be
sufficient to impute criminality against son or abetment by son to indulge in illegal activities. Additionally, he submits that the father has two sons one
of whom lives in UK. Since he is similarly placed to the petitioner, he too could be said to be beneficiary of the encashment of the Special Bearer
Bonds which was put into the account of M/s. Morni Merchants Ltd. The said son has not been arrayed as an abettor in the present proceedings. He
submits that at best prosecution against amassing wealth through illegal means may well lie against the petitioner but such sins, if any, cannot be visited
for the son. Detailed Assessment Orders examining 37 properties, which was far in excess of few properties arrayed in the RC with respect to the
son, have been passed for the relevant period i.e. up to the financial year 1996-98 by the CIT who had assessed the son’s returns by an order
dated 12.01.2001 looking into the source of income of the monies into the account of the assessee, his son and found the same to be in order. All CIT
orders were affirmed by the ITAT in 2017. He submits that said proceedings took into account the complaints made by the CBI apropos illegal
enrichment by the father. Reference is made to the definition of the abetment under section 107 of the IPC which reads as under:
107. Abetment of a thing.â€"A person abets the doing of a thing, whoâ€
(First) â€" Instigates any person to do that thing; or
(Secondly) â€"Engages with one or more other person or persons in any conspiracy for the doing of that thing, if an act or illegal omission
takes place in pursuance of that conspiracy, and in order to the doing of that thing; or
(Thirdly) â€" Intentionally aids, by any act or illegal omission, the doing of that thing. Explanation 1.â€"A person who, by wilful
misrepresentation, or by wilful concealment of a material fact which he is bound to disclose, voluntarily causes or procures, or attempts to
cause or procure, a thing to be done, is said to instigate the doing of that thing. Illustration A, a public officer, is authorized by a warrant
from a Court of Justice to apprehend Z. B, knowing that fact and also that C is not Z, wilfully represents to A that C is Z, and thereby
intentionally causes A to apprehend C. Here B abets by instigation the apprehension of C. Explanation 2.â€"Whoever, either prior to or at
the time of the commission of an act, does anything in order to facilitate the commission of that act, and thereby facilitate the commission
thereof, is said to aid the doing of that act.â€
11. The petitioner insists that there is no material to make out any charge for abetment for illegal gratification by the petitioners. He relies upon the
following judgements:
(1) Sh. Ram & Ors. v. State of Uttar Pradesh Criminal Appeal Nos. 142 & 205 of 1973 decided on 06.11.1974;
(2) K.C. Builders and Ors. v. The Assistant Commissioner of Income Tax (2004) 2 SCC 731;
(3) Kedari Lal v. State of Madhya Pradesh and Ors. (2015) 14 SCC 505;
(4) State of Madhya Pradesh v. Mohanlal Soni (2017) 6 SCC 628;
(5) D.S.P., Chennai v. K. Inbasgaran (2006) 1 SCC 420
(6) State of Maharashtra v. Pollonji Darabshaw Daruwalla 1987 (Supp) SCC 379;
(7) Mohd. Mumtaz v. Nandini Satpathy and Ors. (1987) 1 SCC 279;
12. The Court would note that each of the aforesaid cases dealt with appeals either against conviction or acquittals and not on framing charge. The
learned counsel for the CBI submits that allegations against the accused would be made out during trial. He submits that statement of witnesses, in
particular, of Anit Mehta to the effect that he had assisted Puneet Sabharwal in filing of returns and monies for purchase of properties were paid from
the account of Mr. Puneet Sabharwal. It is argued that in the Income Tax proceedings, the CBI was not a party. It was only a complainant. The CBI
relies upon the P. Nallammal vs State (1999) 6 SCC 559 to contend that trial could be done of not only the offence punishable under the PC Act but
also of conspiracy, attempt or abatement of such an offence. In the process private individuals too could be prosecuted on the ground that they have
abetted or conspired with in the criminal misconduct by a public servant. The legitimacy of the source of the income is, therefore, under examination.
13. That being the position, what element of the monies came into the account of the accused i.e. the father and the son respectively, or whether the
latter was a beneficiary of the alleged transactions through or by his father, remains unexplained. Simply because for a large part of the period of
investigation, the son was a minor, would not by itself be a reason to disregard the fact that at least for seven years of the investigation period he was
a major. In the circumstances, there appears to be material for the trial to be conducted.
14. Furthermore, as noted hereinabove, s.3(2) of the Special Bearer Bonds Act makes the benefits of the said Act inapplicable to the PC Act or
similar offences. The prosecution seeks to rely upon documents, upon statements of witness viz. Anit Mehta, Ashok Grover, Ramnivas, Sushil
Salhotra, Vijay Kumar Lalla and Surender Malik. Reliance is also placed upon the decision of the Supreme Court inS tate of Karnataka vs Jayalalitha
(2017) 6 SCC 263 to contend that income tax assessment orders are apropos tax liability on income, they do not necessarily attest to the lawfulness of
the sources of the income. The latter is the subject matter of the investigation. According to the CBI, some income tax related orders relied upon by
the petitioners, are of a date after the filing the chargesheet, therefore they would be of no relevance. What is to be seen at this stage is whether there
is a strong suspicion that the accused has committed the offence. From the preceding discussion, an answer emanates in the affirmative.
15. In view of the above, the Court finds no reason to interfere with the order on charge dated 21.02.2006 and the framing of charge dated
28.02.2006.
16. The petitions are without merits and stand dismissed alongwith pending applications.
