hc26 Mukti Kanta Mishra vs Republic Of India on 24 September, 2021

Orissa High Court

Mukti Kanta Mishra vs Republic Of India on 24 September, 2021

AFR

HIGH COURT OF ORISSA, CUTTACK

CRLMC No.126 of 2021

(In the matter of application under Section 482 of the Criminal

Procedure Code)

Mukti Kanta Mishra … Petitioner

Versus

Republic of India … Opposite Party

For Petitioner : M/s. Aditya Kumar Mohapatra,

B.R. Sahoo & S.J. Mohanty, Advocates

For Opposite Party: Mr. Sarthak Nayak,

Advocate for CBI

PRESENT

THE HONOURABLE SHRI JUSTICE S.K. PANIGRAHI

Date of Hearing: 27.08.2021 Date of judgment: 24.09.2021

S. K. Panigrahi, J.

1. The Petitioner has approached this Court invoking its inherent powers under Section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as “the Code”) seeking quashing of First Information Report, being FIR No.RC-10(A)/2020- (RC0152020A0010), dated 29.12.2020, registered at Police Station CBI/SPE, ACB, Bhubaneswar, for offences punishable u/s 120-B IPC and Sections 7A, 8 and 9 of the Prevention of Corruption Act, 1988 and the proceeding emanating therefrom.

// 2 //

2. The Centurion School of Rural Enterprise Management Trust is said to be a Trust registered under Indian Trust Act, 1882 operating since 24.08.2007. The said Trust is running Educational Institutions. The Petitioner is a founder trustee of Centurion School of Rural Enterprise Management Trust (hereinafter referred to as “Trust”) since its inception. He is an accomplished academician who is associated with four Australian Universities as an Adjunct Professor and his current legal status is that of an Australian citizen. The day-to-day affairs of Centurion Institute of Technology are managed by a Management Committee constituted by the Trust under its “First

Indian Kanoon – http://indiankanoon.org/doc/19201868/ 1

Mukti Kanta Mishra vs Republic Of India on 24 September, 2021

Statute of the Centurion University of Technology and Management, Orissa” dated 19th October, 2011. The said statute delineates the function of various persons holding different positions in the University.

• Learned Counsel for the Petitioner Shri Aditya Kumar Mohapatra has contended that the present Petitioner is not a member of the Management Committee and as such he exercises no active or direct control over the day-to-day affairs or management of the Institute. It is submitted that it is for the said reason a Chief Financial Officer (in short “CFO”) namely, one Himansu Sekhar Kabi and one Chief Executive Officer (in short “CEO”) namely Vineet Chhatwal were appointed by the University in the Management Committee, who looked after the financial and // 3 // administrative work pertaining to the University and its allied organizations.

• He submits that a perusal of the documents on record reveal that the CEO was the topmost functionary in the Management Committee. His responsibilities specifically included:

i. Overseeing the handling of finance and accounts including raising funds, ii. Setting

up of a consultancy vertical upon mutually agreed terms iii. Upgrading the training, placement and alumni cells of the Institutes under the Trust iv. Reviewing and leading the admissions department, among others.

The CFO was positioned right below the CEO in the hierarchy of the Management Committee and his responsibilities included:

1. Ensuring that a record of all financial transaction and matters is maintained as required by the various applicable acts and statutes. The same was including but not limited to disbursing payments, keeping accounts of receipts and utilizing funds.

1. Ensuring compliance with all the applicable laws and standards such as tax implications and GAAP.

1. Act as an advisor to the Trustees, the Vice Chancellor and the CEO on matters such as fund-raising working capital management, managing costs and overall financial strategy, among others.

5. It has been submitted by the learned Counsel for the Petitioner that in terms of the charter of the University, the Petitioner’s role in the management of the Trust has always been to merely oversee the broad plans and policies of the Trust. He personally never // 4 // played an active role in the management of the Trust or its constituent institutes. The duties and responsibilities of the Petitioner in the Trust are delineated in the First Statute of the Centurion University of Technology and Management, Orissa dated 19th October 2011 under Chapter II which reads as follows;

“Chapter II – The Officers, their Powers & Duties:

Indian Kanoon – http://indiankanoon.org/doc/19201868/ 2

Mukti Kanta Mishra vs Republic Of India on 24 September, 2021

12. (1) The Chairman of the Trust shall be the President as referred to in section 14 (1)

of the Act.

(2) The President in addition to the powers conferred by the Act under section 14 (4)

shall have following powers.

(i) He shall be responsible to implement the policies determined by the Board to give

effect to provisions of the Act.

• He shall liaison with the Government, other Universities and organizations for effectively carrying out the objects of the University.

• He can call for any paper or information relating to the affairs of the University.

On the basis of the information so received, if he is satisfied that any order,

proceeding, or decision taken by any authority of the University is not in conformity

with the Act, Statutes, he may place such order, proceeding, or decision before the

Board of Governor for review of such order proceeding or decision in conformity with

the provision of the Act, or the Statutes. Decision of the Board shall be final.”

• It has been submitted that the Trustees have always placed the highest degree of trust in their CEO and CFO for efficient running of the Trust and its constituent Institutes. Betraying such trust, around the beginning of January, the CEO and CFO conspired to abuse the trust and free rein given to them to further their own // 5 // illegal gain and purely for personal benefits. It is submitted that a vital and telling indicator of the same is the email dated 23.01.2020 wherein the CEO in a sternly worded email instructed the subordinates in the Accounts Department of the Institute that all payment advices be sent only to the CFO and that nobody should directly forward the same to the Trustees. In fact, the Trustees were not marked a copy of the email and thus began a conspiracy to siphon of funds of the University and commit such other bungling.

• It is submitted by Shri Mohapatra that it has been empathetically reiterated by the Trustees that when payment requests for sums greater than 5 Lakhs is made, the same has to be approved by the Trustees. The aforesaid fact was not indicative of the day-to-day involvement of the Trustees but rather when large sums were involved, it was considered prudent on their part to be made aware of the same. Therefore, the CEO’s instructions to the subordinates completely bypassed, the simple request of the Trustees to be kept in the know. Furthermore, it has been submitted that almost immediately upon assuming office, the CFO revamped the entire Finance team under the guise of bringing more capable people on board. The then incumbent consultant was replaced with one Mr. Amit Mulick, who acted in cohorts with // 6 // the CEO and CFO in their mala fide actions and plans to dupe the money of the institution.

• Shri Mohapatra, further, proffered that in the impugned allegations in the FIR have been made for offences punishable under Section 120-B IPC and Sections 7A, 8 and 9 of the Prevention of Corruption Act, 1988. The choice of offences mentioned in the FIR itself is a testimony of non-application of mind and reveals the pressure under which authorities have desperately

Indian Kanoon – http://indiankanoon.org/doc/19201868/ 3

Mukti Kanta Mishra vs Republic Of India on 24 September, 2021

attempted to make out a case against the Petitioner when there exists none. Though the intrinsic involvement of the CFO is clearly framed in the F.I.R., but interestingly neither he is named as accused or cited as a witness for the best reasons known to C.B.I. However, the F.I.R. has been registered under Sections 7-A, 8 and 9 of the Prevention of Corruption Act, 1988 (as amended in 2018) along with Section 120-B of I.P.C. A bare reading of the F.I.R. itself does not make out a prima facie case against the petitioner.

• Per Contra Mr. Sarthak Nayak, learned Counsel for the Opposite Party submitted that accused-Ashutosh Padhy is a close associate of the Petitioner-Trustee was very much present at the spot wherefrom cash of Rs.10.00 lakh kept in the bag has been seized and his very presence with the other accused persons namely, A.B. Kar and P. Acharya, the GST Official-in-Charge of the GST // 7 // Audit of CIT is enough to say that prima facie case against this Petitioner for the offences for which the case has been registered stands. He submitted that the accused-Ashutosh Padhy being an employee of the University under the instructions from the Petitioner, in order to settle the GST issues, was there as the bribe giver. He further submitted that, at the spot, the conversation of this Petitioner with accused-Ashutosh Padhy implicates the Petitioner. He submitted that as per the source of information, accused-A.B. Kar, Superintendent, the leader of the team had given an information to the concerned accounts section of the Institute about the violation with respect to GST Laws and during audit verification, he had pointed out all those for which there was a move from the Institute for resolution of the issues, so that huge demand towards GST and penalty would be avoided and for that the bribe was demanded and accused-Ashutosh Padhy was present at the spot as the giver of the said bribe under the instruction of this Petitioner-Trustee. He thus submitted that a prima facie case against the petitioner is made out and no interference in the present case is warranted.

1. Heard learned Counsel for the parties. Perused the materials on record. The genesis of the present controversy is in the notice No.V(2)3/Audit/Misc./Gr-07/GST/BBSR/2020/7840A dated 03.09.2020, which the Institute received from Shri A.B. Kar // 8 // (Gr.07), GST & Central Excise, Bhubaneswar Circle, Audit Commissionerate, Bhubaneswar office for conducting an audit for the financial year 2017-2018. The relevant part of the notice is reproduced below:

“Whereas it has been decided to undertake audit of your books of account and

records for the financial year 2017- 2018 in accordance with the provisions of section

65 of CGST Act, 2017 read with Rule 101 of CGST Rules, 2017. I propose to conduct

the said audit at your place of business during the 4th Week of September, 2020″.

11. It is the prosecution’s case that while conducting an Audit of the University, sometime around the third week of December, 2020 one Mr. A.B. Kar and his team informed the CFO, Mr. Himansu Sekhar Kabi that there were certain violations of the GST Act in the accounts of the Institute not only for the period of 2017-2018 but also the years 2015-2016 and 2016-2017. Further, it is the prosecution’s case that once the members of the audit party had informed the management of the University, the CFO and the GST consultant started discussions with the officials to resolve the issues. It is also the prosecution’s case that Shri A.B Kar Superintendent GST has demanded undue advantage/ bribe of 10 lakhs from the CFO and the GST consultant of the University to settle the

Indian Kanoon – http://indiankanoon.org/doc/19201868/ 4

Mukti Kanta Mishra vs Republic Of India on 24 September, 2021

GST issue at a very less amount of tax and not to raise the serious violation matters. It is stated that the CFO // 9 // and the GST consultant, thereafter, informed the said issue to the Trustees thorough one Shri Ashutosh Padhy, Senior Manager (Accounts) of the Institute about the demand of bribe of 10 lakhs by the said Superintendent. It is after the communication of such information, allegedly, that the said Shri Ashutosh Padhy had been instructed by the Trustees to pay the demanded bribe amount of 10 lakhs to Shri A.B Kar, Superintendent in order to get the GST issues resolved in favour of the Institute.

1. The other facet of the matter to be borne in mind, at this juncture, is that upon receiving information from the Senior Manager of Accounts, vide his email dated 18.12.2020, certain unauthorized and fraudulent transactions were being made by the CFO who had defalcated large sums of money from the University accounts allegedly in connivance with the CEO, the Trust engaged one M/s. Daspattnaik & Co, Chartered Accountants to conduct an investigative special audit of the accounts of the Trust to uncover the same. It is stated that during the investigation it was observed that the CFO had made dubious payments to the tune of Rs.57,75,398/- to M/s Shree Ventures. The emails received requisitioning release of funds to deserving suppliers/service providers were tampered to insert the name of M/s Shree Ventures, with whom no contract existed in the first place. The laid down procedure for online fund transfer was not // 10 // observed since no such documentation was made available to verify as to who had requisitioned the fund and who had verified the details. Furthermore, it has also surfaced during the investigation that the CFO had made another payment to the tune of Rs.23,10,000/- to M/s. Sai Sanu Enterprises without any supporting authorizations from an appropriate authority and beyond his financial delegation. Similar to the previous modus operandi, the emails receiving requisitioning release of funds to deserving suppliers/service providers were tampered with to insert the name of M/s Sai Sanu Enterprises, absence of a contract. Other similar irregularities have been observed with regard to one M/s. Slack Technologies Ltd. In such a way, a total of Rs.84,95,938/- has been siphoned, misused and misappropriated by the CFO in connivance with the CEO for his unlawful and personal gain, causing loss and by cheating the organization which has occasioned the registration of the FIR in P.S. Jatni bearing FIR No.0017, dated 08.01.2021. It is thus noted that it was this Accountant who has played a central role in the event that have been transpired leading to the present controversy. On the one hand the allegation of the prosecution is that he is the bribe giver in the instant case, whereas, in the complaint lodged by the University itself reflects that it was the // 11 // accountant who had acted as the whistle blower in relation to the misappropriation committed by the CFO.

1. It is further submitted that the Petitioner has not been residing in India since 31.10.2020, when he flew back to Melbourne, Australia soon after Australia allowed its citizens to come back to the country and as such the present petitioner has remained absent during the Audit process. Learned Counsel for the Petitioner has also drawn the attention of this Court to an order passed by a coordinate Bench of this Court vide it’s order dated 04.03.2021 in ABLAPL No.1132 of 2021 which was pleased to grant anticipatory bail to the Petitioner in FIR No.RC- 10A/2020-BBS (RC05520220A0010), CBI/SPE, SCB, Bhubaneswar giving rise to RC Case No.10A/2020 in the Court of learned Special Judge, CBI Court No.1, Bhubaneswar having been satisfied about the antecedent of the Petitioner and the materials on record.

Indian Kanoon – http://indiankanoon.org/doc/19201868/ 5

Mukti Kanta Mishra vs Republic Of India on 24 September, 2021

1. It is posited, in this backdrop, the present proceedings ought to be construed by the court. The Trustees had trusted the Management Committee to take all necessary action in correcting their past laxity, if at all. Thus, when the present FIR came to be registered the Trustees could well relate to the fact that the accused persons i.e. the CEO, CFO and the GST Consultant had // 12 // employed the diversionary tactics in order to throw the Management off the trail. With such a background of the matter, the present FIR was lodged against M/s. Centurion Institute of Technology, officials of the GST & Central Excise, Bhubaneswar Circle, Audit Commissionerate, Bhubaneswar and officials of said Centurion Institute of Technology, Jatani, Odisha for alleged offences u/s 120-B IPC, Sections 7 – A , 8 & 9 o f t h e P r e v e n t i o n o f C o r r u p t i o n A c t , 1 9 8 8 v i d e F I R N o . R C – 1 0 ( A ) / 2 0 2 0 – (RC0152020A0010), dated 29.12.2020.

1. It is further contended by the learned Counsel for the Petitioner that a plain reading of the aforementioned Sections carves out an offence only when a ‘person’ or ‘persons’ associated with such commercial organisation” gives or promises to give any undue advantage to a public servant. In the instant case, no offence can be said to be made out against the Petitioner as he had not even the slightest inkling of the events that were unfolding in India. The Petitioner put blind faith in his CEO and CFO and presumed that they would heed his advice and clear all the statutory dues with the Authorities upon receipt of the final amount that was due. The Petitioner had no knowledge that his trusted men were planning to use any underhanded or backdoor methods to settle the dues payable.

// 13 //

16. Before adverting to the facts of the case, it is apposite to refer first to the law applicable to the present case. The scope of exercise of power under Article 226 of the Constitution and Section 482 of the Code and the categories of cases where the High Court may exercise its power under it especially with respect to cognizable offences to prevent abuse of the process of any Court or otherwise to secure the ends of justice have been laid down by the Hon’ble Supreme Court in the case of State of Haryana v. Ch. Bhajan Lal1 wherein the Hon’ble Court has made it clear that while it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae, it still attempted to provide an exhaustive list to myriad kinds of cases wherein such power should be exercised in the interest of Justice, the grounds as laid down therein, specifically sought to be relied upon by the Petitioner are as follows;

“(1) Where the allegations made in the First Information Report or the complaint,

even if they are taken at their face value and accepted in their entirety do not prima

facie constitute any offence or make out a case against the accused. …

(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused. … (5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no AIR 1992 SC 604 // 14 // prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused. … (7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite

Indian Kanoon – http://indiankanoon.org/doc/19201868/ 6

Mukti Kanta Mishra vs Republic Of India on 24 September, 2021

him due to private and personal grudge.”

It has been contended on behalf of the Petitioner that from a perusal of the existing facts of the case, it can clearly be seen that absolutely no offence can be made out against the Petitioner and the feeble attempt to rope in the Petitioner in an attempt to sully his good name, provides more than enough reason to quash the captioned FIR. Furthermore, given the fact that the Petitioner had no role to play in the event that transpired, nor did he has any knowledge of the same, it is absurd and inherently improbable that sufficient ground for proceeding against the Petitioner exists.

1. It is a settled principle that the power to interdict a proceeding either at the threshold or an intermediate stage of the trial is a power which inheres in a High Court, under Section 482 of the Cr.P.C., on the broad principle that in the event the allegations made in the FIR or the charge-sheet, as may be, prima facie do not disclose a triable offence, there can be no reason as to why the accused should be made to suffer the agony of a legal proceeding that more often than not gets protracted. A prosecution which is bound to become lame or a sham ought to // 15 // be interdicted in the interest of justice lest the continuance thereof will amount to an abuse of the process of the law.

1. In the case of Bhajanlal (supra), the Hon’ble Apex Court has held that an FIR can be quashed at the initial stage where the allegations made, even if taken at their face value and accepted in its entirety, do not prima facie constitute any offence or make out a case against the accused. It has further been held that where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge, quashing of such a proceeding even at the initial stage would be justified. In a similar vein in the case of Rishipal Singh v. State of Uttar Pradesh2, the Hon’ble Supreme Court held that the High Court in exercise of its inherent power under Section 482 Cr.P.C., should not allow a vexatious complaint to continue, which would be a pure abuse of the process of law and the same ought to be interdicted at the threshold.

1. Section 7 of the Act deals with the offences relating to public servant. The contours of the Act and the specific provisions, i.e., 7, 9 and 13 and their interplay demonstrate that to prosecute any public servant for the offence of bribery, the condition precedent (2014) 7 SCC 215 // 16 // of invoking Section 7 of the Act is to prove that he has made a demand. In other words, without the proof of demand, there can be no conviction under Section 7.

• The aforesaid view is no longer res integra. The same has been crystallized by a multitude of judicial pronouncements of the Hon’ble Supreme Court. In the case of C.M. Girish Babu v. Central Bureau of Investigation3 it has been held that the mere recovery by itself cannot prove the charge of the prosecution against the accused in the absence of any evidence to prove payment of bribe or to show that the accused voluntarily accepted the money knowing it to be bribe. The relevant passages from the aforesaid decision are as follows;

“…….16. The crucial question would be whether the appellant had demanded any

amount as gratification to show any official favour and whether the said amount was

Indian Kanoon – http://indiankanoon.org/doc/19201868/ 7

Mukti Kanta Mishra vs Republic Of India on 24 September, 2021

paid by PW 10 and received by the appellant as consideration for showing such

official favour…..

……..18. In Suraj Mal v. State (Delhi Admn.) [(1979) 4 SCC 725 : 1980 SCC (Cri) 159]

this Court took the view that (at SCC p. 727, para 2) mere recovery of tainted money divorced from the circumstances under which it is paid is not sufficient to convict the accused when the substantive evidence in the case is not reliable. The mere recovery by itself cannot prove the charge of the prosecution against the accused, in the absence of any evidence to prove payment of bribe or to show that the accused voluntarily accepted the money knowing it to be bribe.”

(2009) 3 SCC 779 : (2009) 2 SCC (Cri) 1 // 17 //

21. Further, reliance has been placed on C. M. Girish Babu’s case (supra) in the case of V. Sejappa v. State4. While dealing with a similar “trap case” the Hon’ble Apex Court has held that mere receipt of amount by the accused is not sufficient to fasten the guilt to the accused, in the absence of any evidence with regard to demand and acceptance of the amount as illegal gratification. The Hon’ble Court held therein as under;

“”20. In State of Kerala v. C.P. Rao [State of Kerala v. C.P. Rao, (2011) 6 SCC 450 : (2011) 2 SCC (Cri) 1010 : (2011) 2 SCC (L&S) 714] , it was held that mere recovery of tainted money is not sufficient to convict the accused and there has to be corroboration of the testimony of the complainant regarding the demand of bribe.

21. While dealing with the contention that it is not enough that some currency notes were handed over to the public servant to make it illegal gratification and that the prosecution has a further duty to prove that what was paid was an illegal gratification, reference can be made to the following observation in Mukut Bihari v. State of Rajasthan [Mukut Bihari v. State of Rajasthan, (2012) 11 SCC 642 : (2013) 1 SCC (Cri) 1089 : (2013) 1 SCC (L&S) 136] , wherein it was held as under : (SCC pp. 645-46, para 11) “11. The law on the issue is well settled that demand of illegal gratification is sine qua non for constituting an offence under the 1988 Act. Mere recovery of tainted money is not sufficient to convict the accused, when the substantive evidence in the case is not reliable, unless there is evidence to prove payment of bribe or to show that the money was taken voluntarily as bribe. Mere receipt of amount by the accused is not sufficient to fasten the guilt, in the absence of any evidence with regard to demand and acceptance of the amount as illegal gratification, but the burden rests on the accused to displace the statutory presumption raised under (2016) 12 SCC 150: (2017) 3 SCC (Cri) 699 // 18 // Section 20 of the 1988 Act, by bringing on record evidence, either direct or circumstantial, to establish with reasonable probability, that the money was accepted by him, other than as a motive or reward as referred to in Section 7 of the 1988 Act. While invoking the provisions of Section 20 of the Act, the court is required to consider the explanation offered by the accused, if any, only on the touchstone of preponderance of probability and not on the touchstone of proof beyond all reasonable doubt. However, before the accused is called upon to explain as to how the amount in question was found in his possession, the foundational facts must be established by the prosecution. The complainant is an interested and partisan witness concerned with the success

Indian Kanoon – http://indiankanoon.org/doc/19201868/ 8

Mukti Kanta Mishra vs Republic Of India on 24 September, 2021

of the trap and his evidence must be tested in the same way as that of any other interested witness and in a proper case the court may look for independent corroboration before convicting the accused person.””

22. In B. Jayaraj v State of AP5 the Hon’ble Supreme Court has succinctly resonated the view that the demand of illegal gratification is in fact the sina qua non to constitute the said offence and mere recovery of currency notes cannot constitute the offence under Section 7 unless it is prove beyond all reasonable doubt that the accused voluntarily accepted the money knowing it to be a bribe.

“…….7. Insofar as the offence under Section 7 is concerned, it is a settled position in

law that demand of illegal gratification is sine qua non to constitute the said offence

and mere recovery of currency notes cannot constitute the offence under Section 7

unless it is proved beyond all reasonable doubt that the accused voluntarily accepted

the money knowing it to be a bribe. The above position has been succinctly laid down

in several judgments of this Court. By way of illustration reference may be made to

the decision in C.M. Sharma v. State of (2014) 13 SCC 55 : (2014) 5 SCC (Cri) 543 //

19 // A.P. [(2010) 15 SCC 1 : (2013) 2 SCC (Cri) 89] and C.M. Girish Babu v. CBI [(2009) 3 SCC 779 : (2009) 2 SCC (Cri) 1] .”

Further, it was held that;

“…….9. Insofar as the presumption permissible to be drawn under Section 20 of the

Act is concerned, such presumption can only be in respect of the offence under Section 7 and not the offences under Sections 13(1)(d)(i) and (ii) of the Act. In any event, it is only on proof of acceptance of illegal gratification that presumption can be drawn under Section 20 of the Act that such gratification was received for doing or forbearing to do any official act. Proof of acceptance of illegal gratification can follow only if there is proof of demand. As the same is lacking in the present case the primary facts on the basis of which the legal presumption under Section 20 can be drawn are wholly absent.”

23. In State of Kerela v CP Rao6 it has been held that in the absence of any evidence to prove payment of bribe or to show that the accused voluntarily accepted the money knowing it to be bribe conviction cannot be sustained. The Hon’ble Apex Court has held therein as follows;

“10. In C.M. Girish Babu v. CBI [(2009) 3 SCC 779 : (2009) 2 SCC (Cri) 1] , this Court while dealing with the case under the Prevention of Corruption Act, 1988, by referring to its previous decision in Suraj Mal v. State (Delhi Admn.) [(1979) 4 SCC 725 : 1980 SCC (Cri) 159] held that mere recovery of tainted money, divorced from the circumstances under which it is paid, is not sufficient to convict the accused when the substantive evidence in the case is not reliable. The mere recovery by itself cannot prove the charge of the prosecution against the accused. In the absence of any evidence to prove payment of bribe or to show that the accused voluntarily accepted the money knowing it to be bribe, conviction cannot be sustained. (See SCC para 18.)

Indian Kanoon – http://indiankanoon.org/doc/19201868/ 9

Mukti Kanta Mishra vs Republic Of India on 24 September, 2021

(2011) 6 SCC 450 : (2011) 2 SCC (Cri) 1010 : (2011) 2 SCC (L&S) 714 // 20 //

11. In a subsequent decision of this Court also under the Prevention of Corruption Act, in A. Subair v. State of Kerala (2009) 6 SCC 587 : (2009) 3 SCC (Cri) 85 this Court made certain pertinent observations about the necessity of the presence of the complainant in a bribery case. The relevant observations have been made in paras 18-19 which are quoted below: (SCC p. 592) “18. The High Court held that since the Special Judge made attempts to secure the presence of the complainant and those attempts failed because he was not available in India, there was justification for non-examination of the complainant.

19. We find it difficult to countenance the approach of the High Court. In the absence of semblance of explanation by the investigating officer for the non-examination of the complainant, it was not open to the courts below to find out their own reason for not tendering the complainant in evidence. It has, therefore, to be held that the best evidence to prove the demand was not made available before the court.”

12. Those observations quoted above are clearly applicable in this case. In the context of those observations, this Court in SCC para 28 of A.

Subair [(2009) 6 SCC 587 : (2009) 3 SCC (Cri) 85] made it clear that the prosecution has to prove the charge beyond reasonable doubt like any other criminal offence and the accused should be considered innocent till it is proved to the contrary by proper proof of demand and acceptance of illegal gratification, which is the vital ingredient to secure the conviction in a bribery case. In view of the aforesaid settled principles of law, we find it difficult to take a view different from the one taken by the High Court.””

• Thus, the entire conspectus of the body of case law on the subject makes it unambiguously clear that the condition precedent demand of the bribe amount in question must be established. There is no automatic or default presumption in law // 21 // that the alleged recovery made from an accused is in furtherance of the design towards advancing or palming off a bribe.

• Insofar as the question of a person being held guilty of the offence under Section 13 of the Act, it is necessary that the prosecution must prove that the public servant was acting with the dishonest intention. The Hon’ble Supreme Court has held in a number of cases that in cases where it is shown that a public servant has acted rashly and negligently, however, nothing proves dishonest intention on his part then they cannot be prosecuted under Section 13.

• In the case of C.K. Jaffer Sharief v. State7 the Hon’ble Supreme Court has held that “dishonest intention” is the core ingredient of the offence under Section 13 (1) (d) as is expressly implicit in the words employed therein, i.e., corrupt or illegal means and abuse of position as a public servant. The Hon’ble Supreme Court has held as follows;

“16. A fundamental principle of criminal jurisprudence with regard to the liability of

an accused which may have application to the present case is to be found in the work

Indian Kanoon – http://indiankanoon.org/doc/19201868/ 10

Mukti Kanta Mishra vs Republic Of India on 24 September, 2021

Criminal Law by K.D. Gaur. The relevant passage from the above work may be extracted below:

“Criminal guilt would attach to a man for violations of criminal law. However, the rule is not absolute and is subject to limitations indicated in the Latin maxim, actus non facitreum, nisi mens sit rea. It signifies that there can be no crime without a guilty mind. To make a person criminally accountable, it must be proved that an act, which is forbidden by law, has been caused by his (2013) 1 SCC 205 : (2013) 2 SCC (Cri) 482 // 22 // conduct, and that the conduct was accompanied by a legally blameworthy attitude of mind. Thus, there are two components of every crime, a physical element and a mental element, usually called actusreus and mens rea respectively.

1. It has already been noticed that the appellant besides working as the Minister of Railways was the head of the two public sector undertakings in question at the relevant time. It also appears from the materials on record that the four persons while in London had assisted the appellant in performing certain tasks connected with the discharge of duties as a Minister. It is difficult to visualise as to how in the light of the above facts, demonstrated by the materials revealed in the course of investigation, the appellant can be construed to have adopted corrupt or illegal means or to have abused his position as a public servant to obtain any valuable thing or pecuniary advantage either for himself or for any of the aforesaid four persons. If the statements of the witnesses examined under Section 161 CrPC show that the aforesaid four persons had performed certain tasks to assist the Minister in the discharge of his public duties, however insignificant such tasks may have been, no question of obtaining any pecuniary advantage by any corrupt or illegal means or by abuse of the position of the appellant as a public servant can arise. As a Minister it was for the appellant to decide on the number and identity of the officials and supporting staff who should accompany him to London if it was anticipated that he would be required to perform his official duties while in London. If in the process, the rules or norms applicable were violated or the decision taken shows an extravagant display of redundance it is the conduct and action of the appellant which may have been improper or contrary to departmental norms. But to say that the same was actuated by a dishonest intention to obtain an undue pecuniary advantage will not be correct. That dishonest intention is the gist of the offence under Section 13(1)(d) is implicit in the words used i.e. corrupt or illegal means and abuse of position as a public servant. A similar view has also been expressed by this Court in M. Narayanan Nambiar v. State of Kerala [AIR 1963 SC 1116 : (1963) 2 Cri LJ 186 : 1963 Supp (2) SCR 724] while considering the provisions of Section 5 of the 1947 Act.

1. If the totality of the materials on record indicates the above position, we do not find any reason to allow the // 23 // prosecution to continue against the appellant. Such continuance, in our view, would be an abuse of process of court and therefore it will be the plain duty of the Court to interdict the same.”

27. A general argument made by the prosecution is that a general presumption under Section 20 of the Act against the public servant is that he has accepted or agreed to accept bribe, unless the contrary is proved by him. Thus, the burden of proof is on the accused public servant to prove his innocence. However, while making such a submission, the fallacy is that the presumption under Section 20 can be invoked against the accused only if, the investigating agency prima facie satisfies

Indian Kanoon – http://indiankanoon.org/doc/19201868/ 11

Mukti Kanta Mishra vs Republic Of India on 24 September, 2021

the court that the essential ingredients or the uncontroverted foundational facts unerringly point towards the presence of an act of bribery in a particular case. It is only in such cases, when the prosecution is able to specifically establish the proof of demand by the public servant which he has voluntarily demanded and accepted for doling out an undue advantage only then, can Section 20 be invoked against the accused public servant in question. In the case of State of Maharashtra v. Dnyneshwar Laxman Rao Wankhede8 while interpreting Section 20 of the Act and the presumption attached thereunder, the Hon’ble Apex Court has held that even before the accused is called upon to explain as to how the amount in question was found in his possession, the (2009) 15 SCC 200 : (2010) 2 SCC (Cri) 385 // 24 // foundational facts upon which the case can stand must first be established by the prosecution. The relevant ratio of the aforesaid decision reads thus;

“16. Indisputably, the demand of illegal gratification is a sine qua non for constitution

of an offence under the provisions of the Act. For arriving at the conclusion as to whether all the ingredients of an offence viz. demand, acceptance and recovery of the amount of illegal gratification have been satisfied or not, the court must take into consideration the facts and circumstances brought on the record in their entirety. For the said purpose, indisputably, the presumptive evidence, as is laid down in Section 20 of the Act, must also be taken into consideration but then in respect thereof, it is trite, the standard of burden of proof on the accused vis-à-vis the standard of burden of proof on the prosecution would differ. Before, however, the accused is called upon to explain as to how the amount in question was found in his possession, the foundational facts must be established by the prosecution. Even while invoking the provisions of Section 20 of the Act, the court is required to consider the explanation offered by the accused, if any, only on the touchstone of preponderance of probability and not on the touchstone of proof beyond all reasonable doubt.”

28. The Apex Court in Satvir Singh v. State of Delhi9, relying upon its earlier decision in K.S. Panduranga v. State of Karnataka10, has held that the demand and acceptance of the amount of illegal gratification by the accused is a condition precedent to constitute an offence, the relevant paragraph in this regard from the abovesaid decision is extracted hereunder:

“39. Keeping in view that the demand and acceptance of the amount as illegal gratification is a condition precedent (2014) 13 SCC 143 : (2014) 5 SCC (Cri) 619 (2013) 3 SCC 721 : (2013) 2 SCC (Cri) 257 : (2013) 1 SCC (L&S) 791 // 25 // for constituting an offence under the Act, it is to be noted that there is a statutory presumption under Section 20 of the Act which can be dislodged by the accused by bringing on record some evidence, either direct or circumstantial, that money was accepted other than for the motive or the reward as stipulated under Section 7 of the Act. When some explanation is offered, the court is obliged to consider the explanation under Section 20 of the Act and the consideration of the explanation has to be on the touchstone of preponderance of probability. It is not to be proven beyond all reasonable doubt. In the case at hand, we are disposed to think that the explanation offered by the accused does not deserve any acceptance and, accordingly, we find that the finding recorded on that score by the learned trial Judge and the stamp of approval given to the same by the High Court cannot be faulted.”

Indian Kanoon – http://indiankanoon.org/doc/19201868/ 12

Mukti Kanta Mishra vs Republic Of India on 24 September, 2021

• It is thus to be borne in mind that the “standard of proof” as required for the explanation offered by the accused for this particular purpose, even at the stage of trial, has been held to be the yardstick of preponderance of probability and not that of the higher/stricter standard of beyond reasonable doubt.

• The learned Counsel for the Petitioner Shri Mohapatra has also placed reliance upon the case of Banarsi Dass [Banarsi Dass v. State of Haryana11, wherein it was held that;

“24. In M.K. Harshan v. State of Kerala [(1996) 11 SCC 720 : 1997 SCC (Cri) 283] this Court in somewhat similar circumstances, where the tainted money was kept in the drawer of the accused who denied the same and said that it was put in the drawer without his knowledge, held as under :

‘8. … It is in this context the courts have cautioned that as a rule of prudence, some corroboration is necessary. In all such type of cases of bribery, two aspects are important.

(2010) 4 SCC 450 : (2010) 2 SCC (Cri) 864 // 26 // Firstly, there must be a demand

and secondly, there must be acceptance in the sense that the accused has obtained

the illegal gratification. Mere demand by itself is not sufficient to establish the

offence. Therefore, the other aspect, namely, acceptance is very important and when

the accused has come forward with a plea that the currency notes were put in the

drawer without his knowledge, then there must be clinching evidence to show that it

was with the tacit approval of the accused that the money had been put in the drawer

as an illegal gratification.”

The abovesaid paragraph from the abovementioned case would go to show that there must be clinching evidence coupled with the tacit approval of the accused that money was paid as a bribe for the commission or omission of an act. In the aforesaid case, it was held that as the contents of the bag were not within the knowledge of the accused, therefore, the relevant aspect of the case that the appellant has accepted the illegal gratification as required under Section 7 of the Act is not proved by the prosecution by adducing cogent evidence in this regard.

31. In fact, the principle of presumption has been lucidly enunciated in the case of State of A.P. v. C. Uma Maheswara Rao12, wherein the Hon’ble Supreme Court has held that;

“12. Before proceeding further, we may point out that the expressions “may presume”

and “shall presume” are defined in Section 4 of the Indian Evidence Act, 1872 (in short “the Evidence Act”). The presumptions falling under the former category are compendiously known as “factual (2004) 4 SCC 399 : 2004 SCC (Cri) 1276 // 27 // presumptions” or “discretionary presumptions” and those falling under the latter as “legal presumptions” or “compulsory presumptions”. When the expression “shall be presumed” is employed in Section 20(1) of the Act, it must have the same import of compulsion.

Indian Kanoon – http://indiankanoon.org/doc/19201868/ 13

Mukti Kanta Mishra vs Republic Of India on 24 September, 2021

1. When the sub-section deals with legal presumption, it is to be understood as in terrorem i.e. in tone of a command that it has to be presumed that the accused accepted the gratification as a motive or reward for doing or forbearing to do any official act, etc. if the condition envisaged in the former part of the section is satisfied. The only condition for drawing such a legal presumption under Section 20 is that during trial it should be proved that the accused has accepted or agreed to accept any gratification. The section does not say that the said condition should be satisfied through direct evidence. Its only requirement is that it must be proved that the accused has accepted or agreed to accept gratification. Direct evidence is one of the modes through which a fact can be proved. But that is not the only mode envisaged in the Evidence Act. (See M. Narsinga Rao v. State of A.P. [(2001) 1 SCC 691 : 2001 SCC (Cri) 258] )

1. Proof of the fact depends upon the degree of probability of its having existed. The standard required for reaching the supposition is that of a prudent man acting in any important matter concerning him. Fletcher Moulton, L.J. in Hawkins v. Powells Tillery Steam Coal Co. Ltd. [(1911) 1 KB 988] observed as follows:

“Proof does not mean proof to rigid mathematical demonstration, because that is impossible; it must mean such evidence as would induce a reasonable man to come to a particular conclusion.”

15. The said observation has stood the test of time and can now be followed as the standard of proof. In reaching the conclusion the court can use the process of inferences to be drawn from facts produced or proved. Such inferences are akin to presumptions in law. Law gives absolute discretion to the court to presume the existence of any fact which it thinks is likely to have happened. In that process the court may have regard to common course of natural events, human conduct, public or private business vis-à-vis the facts of the particular case. The discretion is clearly envisaged in Section 114 of the Evidence Act.

// 28 //

1. Presumption is an inference of a certain fact drawn from other proved facts. While inferring the existence of a fact from another, the court is only applying a process of intelligent reasoning which the mind of a prudent man would do under similar circumstances. Presumption is not the final conclusion to be drawn from other facts. But it could as well be final if it remains undisturbed later. Presumption in law of evidence is a rule indicating the stage of shifting the burden of proof. From a certain fact or facts the court can draw an inference and that would remain until such inference is either disproved or dispelled.

1. For the purpose of reaching one conclusion the court can rely on a factual presumption. Unless the presumption is disproved or dispelled or rebutted the court can treat the presumption as tantamounting to proof. However, as a caution of prudence we have to observe that it may be unsafe to use that presumption to draw yet another discretionary presumption unless there is a statutory compulsion. This Court has indicated so in Suresh Budharmal Kalani v. State of Maharashtra [(1998) 7 SCC 337 : 1998 SCC (Cri) 1625] : (SCC p. 339, para 5) “A presumption can be drawn only from facts — and not from other presumptions — by a process of probable and logical reasoning.”

Indian Kanoon – http://indiankanoon.org/doc/19201868/ 14

Mukti Kanta Mishra vs Republic Of India on 24 September, 2021

32. The principle relating to the nature and exercise of power under Section 482 of the Cr.P.C. has now, by and large, been crystallized by the Hon’ble Supreme Court in the case of Shakson Belthissor v. State of Kerala13, relying upon its earlier judgment in the case of Indian Oil Corpn. v. NEPC India Ltd.14 which has been observed as under;

“12. The principles relating to exercise of jurisdiction under Section 482 of the Code

of Criminal Procedure to quash complaints and criminal proceedings have been

stated and (2009) 14 SCC 466 : (2010) 1 SCC (Cri) 1412 (2006) 6 SCC 736 : (2006) 3

SCC (Cri) 188 // 29 // reiterated by this Court in several decisions. To mention a

few–Madhavrao Jiwajirao Scindia v. Sambhajirao Chandrojirao Angre [(1988) 1 SCC

692 : 1988 SCC (Cri) 234] , State of Haryana v. Bhajan Lal [1992 Supp (1) SCC 335 :

1992 SCC (Cri) 426] , Rupan Deol Bajaj v. Kanwar Pal Singh Gill [(1995) 6 SCC 194 :

1995 SCC (Cri) 1059], CBI v. Duncans Agro Industries Ltd. [(1996) 5 SCC 591 : 1996

SCC (Cri) 1045] , State of Bihar v. Rajendra Agrawalla [(1996) 8 SCC 164 : 1996 SCC

(Cri) 628], Rajesh Bajaj v. State NCT of Delhi [(1999) 3 SCC 259 : 1999 SCC (Cri)

401], Medchl Chemicals & Pharma (P) Ltd. v. Biological E. Ltd. [(2000) 3 SCC 269 :

2000 SCC (Cri) 615] , Hridaya Ranjan Prasad Verma v. State of Bihar [(2000) 4 SCC

168 : 2000 SCC (Cri) 786] , M.

Krishnan v. Vijay Singh [(2001) 8 SCC 645 : 2002 SCC (Cri) 19] and Zandu Pharmaceutical Works Ltd. v. Mohd. Sharaful Haque [(2005) 1 SCC 122 : 2005 SCC (Cri) 283] . The principles, relevant to our purpose are:

(i) A complaint can be quashed where the allegations made in the complaint, even if they are taken at their face value and accepted in their entirety, do not prima facie constitute any offence or make out the case alleged against the accused.

For this purpose, the complaint has to be examined as a whole, but without examining the merits of the allegations. Neither a detailed inquiry nor a meticulous analysis of the material nor an assessment of the reliability or genuineness of the allegations in the complaint, is warranted while examining prayer for quashing of a complaint.

• A complaint may also be quashed where it is a clear abuse of the process of the court, as when the criminal proceeding is found to have been initiated with mala fides/malice for wreaking vengeance or to cause harm, or where the allegations are absurd and inherently improbable.

• The power to quash shall not, however, be used to stifle or scuttle a legitimate prosecution. The power should be used sparingly and with abundant caution.

• The complaint is not required to verbatim reproduce the legal ingredients of the offence alleged. If the necessary // 30 // factual foundation is laid in the complaint, merely on the ground that a few ingredients have not been stated in detail, the proceedings should not be quashed. Quashing of the complaint is warranted only where the complaint is so bereft of even the basic facts which are absolutely necessary for making out the offence.

Indian Kanoon – http://indiankanoon.org/doc/19201868/ 15

Mukti Kanta Mishra vs Republic Of India on 24 September, 2021

(v) A given set of facts may make out: (a) purely a civil wrong; or (b) purely a criminal offence; or (c) a civil wrong as also a criminal offence. A commercial transaction or a contractual dispute, apart from furnishing a cause of action for seeking remedy in civil law, may also involve a criminal offence. As the nature and scope of a civil proceeding are different from a criminal proceeding, the mere fact that the complaint relates to a commercial transaction or breach of contract, for which a civil remedy is available or has been availed, is not by itself a ground to quash the criminal proceedings. The test is whether the allegations in the complaint disclose a criminal offence or not.”

33. In a similar vein, in the case of M.N. Ojha v. Alok Kumar Srivastav15, it has been held that High Courts cannot refuse to exercise its jurisdiction if the interest of justice so required where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no fair minded and informed observer can ever reach a just and proper conclusion as to the existence of sufficient grounds for proceeding. In such cases, refusal to exercise the jurisdiction may equally result in injustice more particularly in cases where the complainant sets the criminal law in motion with a view to exert pressure or to malicious prosecute or harass the persons arrayed as accused in the complaint.

(2009) 9 SCC 682 : (2010) 1 SCC (Cri) 101 : 2009 // 31 //

• The interception of telephonic communication is an important tool for the law enforcement and intelligence agencies for obtaining conviction of the accused from the Courts. It is within the court of law that the evidentiary value of the taped conversation has come under scrutiny in several cases. One of the most noteworthy of such cases is the RM Malkani v. State of Maharashtra16. This case revolved around the question of admissibility of taped telephonic conversation for the purpose of conviction of the accused. The Hon’ble Apex Court in this case has held that such evidence was admissible as evidence. The Hon’ble Supreme Court in the Malkani case (supra) pointed out that in several cases such as N Sri Rama Reddy etc v. Shri W Giri17 and S. Pratap Singh v. The State of Punjab18, the conversation or dialogue recorded on a tape-recording machine had been accepted as admissible evidence in the sense that it is Res Gestae as contemplated under Section 8 of the Evidence Act. However, the said principle will apply only when the other circumstantial evidence proves unerringly towards the guilt of the accused. The word of caution consistently given in such matters is that the same cannot be the sole ground on which an accused can be proceeded against. For the purposes of the instant case, it (1973) 1 SCC 471 : AIR 1973 SC 157 (1970) 2 SCC 340 : AIR 1971 SC 1162 AIR 1964 SC 72 // 32 // has to be borne in mind that although it is not a case of interception of telephonic communication per se, however, the prosecution seeks to rely on the fact that there was allegedly a telephonic call that took place between the Accountant Ashutosh Padhy and the Petitioner herein. The said Telephonic conversation can not be the basis for implicating the present petitioner.

• With the above legal position in mind, the controversy at hand may now be adverted to. The learned counsel for the petitioner has taken me through the “First Statute” of the Centurion University of Technology and Management dated 19.10.2011. A bare perusal of the same reveals that the trust had in fact set up a detailed mechanism under the said statute to administer and govern the affairs of the University and the Institutes thereunder. The same delineates various functions and

Indian Kanoon – http://indiankanoon.org/doc/19201868/ 16

Mukti Kanta Mishra vs Republic Of India on 24 September, 2021

duties that ascribed to different persons thereunder. Insofar as the duties and responsibilities of the founding trustees are concerned, it is seen that their role under the very statute under which it functions purely advisory in nature and there is not even the remotest indication that the trustees exercise an active/day to day control over the management of the Institutes functioning under the University in question. On the contrary, the role of the CEO specifically includes the overseeing of the finance and accounts including raising funds. The CFO who was positioned right below // 33 // the CEO in the management whose primary duty is to maintain a record of all financial transactions and ensure compliances as required by various statutes. The CFO’s role also includes ensuring compliance with the applicable tax laws and keeping the tax matters in order. Additionally, one GST consultant by the said CFO has also been appointed to specifically take care of compliances made under the GST Act. Thus, an overall bird’s eye view of the matter indicates that the role of the founding trustees including the Petitioner herein is not in the nature of day-to-day control over the affairs of the University/Institute. The specific role with regard to the GST compliances has, in fact, been assigned to the CEO and CFO who, in turn, have engaged a GST consultant to assist them in the matter.

• The records further revealed that vide letter dated 3.9.2020 the accused Mr. A.B. Kar for the first time issued a letter to the University saying that a decision had been taken to undertake audit of the books of account for the financial year 2017-2018 in accordance with Section 65 of the CGST Act, 2017 read with Rule 101 of the CST Rules 2017 and the same was proposed to be conducted during the fourth week of September. Further, sometime during the third week of December 2020, the said accused allegedly informed the CFO that there were violations of the GST Act not only for the period 2017-2018 but also for the // 34 // years 2015-2016 and 2016-2017. A perusal of the statement under Section 161 of the Cr.P.C. of the CEO as well as the CFO reveals that during the audit process that was undertaken in the premises of the institute, it was the CFO and the GST consultant who were acting on behalf of the institute by producing records et cetera and were in constant touch with the GST officials/accused persons. It is also forthcoming from their statements that the demand of bribe was made by the accused to the CFO who had been corresponding with the GST consultant all along and was regularly in touch with the said accused persons. During the whole process, the presence or involvement of the petitioner is conspicuously absent, on the contrary, the CFO in his own statement under Section 161 of the Cr.P.C has himself admitted that he and the GST consultant had all along been corresponding with the GST officials/accused persons. This very fact veritably points to the fact that the day-to-day and active control over the audit process was exercised by the CFO and that at no stage had the name of the trustees or the present petitioner come up.

• The allegation that has been made by the CFO which is in tandem with the prosecution’s version is that it was in fact the trustee/the present petitioner who was keen to pay a bribe and that it was the petitioner who had instructed the Accountant to go to the alleged spot of recovery to handover the bribe amount. This // 35 // allegation apart, there is no other allegation which can connect the present petitioner to the present prosecution, save and except, a telephone call that had been made through WhatsApp by the Accountant to the petitioner while the Accountant was in the custody of the opposite party which will be dealt with herein separately. It is also pertinent to note that the Institute/University has, in fact, lodged an FIR on 8.01.2021 against the CFO namely Mr. Himanshu Kabi on an allegation that he has siphoned of a sum of about Rs.1 crore. The allegation against the

Indian Kanoon – http://indiankanoon.org/doc/19201868/ 17

Mukti Kanta Mishra vs Republic Of India on 24 September, 2021

CFO made therein relates to offences covering tampering of official documents, preparing forged documents and fraudulently raising demands for making payments by suppressing material facts by abusing his official position and breaching trust placed on him by the University/Institute. The said FIR thus deals with the dubious antecedents of the CFO and delineates the sums of money which have been misappropriated by the CFO for this unlawful personal gain by causing loss to the organization. Allegations of altering and forging official documents of the Trust are also forthcoming from the said complaint. It is thus seen, that the CFO who was placed at the helm of affairs insofar as the financial matters relating to the organization are concerned, he has been defrauding the University by all means possible only in order to unlawfully enrich himself from the same.

// 36 //

• The learned Counsel for the Opposite Party has placed heavy reliance on B. Noha v. State of Kerala19, to contend that once there is an acceptance there would be no burden of proof on the prosecution to establish the demand and as a corollary the bribe amount has been accepted. Such facts automatically establish the factum of demand. He also submits that the petitioner is wrongly presuming that he will be charge sheeted and till the time a person has actually been charge sheeted, the invocation of Section 482 of the Cr.P.C. will not be maintainable. During the course of arguments, learned Counsel for the Opposite Party sought permission of the Court to place before it a sealed cover report with regard to the progress made in the investigation. The contents of the sealed cover have been perused by this Court. From a perusal of the materials placed before this Court nothing was forthcoming to show or indicate towards the complicity of the petitioner herein. As has been discussed above, the standard of proof for the purposes of the present proceeding expected from the defense is that of a preponderance of probability which is in contradistinction with the standard requirement of proof beyond reasonable doubt. In fact, the report of the Central Forensic Science Laboratory (CFSL) also does not indicate that a case is made out against the petitioner and the same is rather vague in (2006) 12 SCC 277 : (2007) 1 SCC (Cri) 711 // 37 // its finding. In fact, without adverting to details, it is sufficient to state that the prosecution in its examination has relied upon five sample exhibits all of which have returned with a definite inconclusive finding. Thus, the main contention regarding the alleged phone call made by the accused Accountant to the present Petitioner is weak link in the present case to entangle the petitioner herein under the sealed cover mechanism.

• Another telling aspect of the matter is that the CEO’s statement under Section 161 of the Cr.P.C. further belies the prosecution story. He states that the GST affairs were entirely the responsibility of the CFO and he had nothing to do with the audit whatsoever. He also states that the Accountant does not work for the University and he has never met him. He also states that certain suspicious transactions authorized by the CFO were discovered on 18.12.2020 by the Deputy Registrar (Finance) which were then reported to the trustees. However, the trustees conveyed their faith in the CFO and in the meantime asked the CEO to conduct an internal audit in the matter. He further reveals that pursuant to this unsavoury episode, his service as CEO has also been dispensed with by the management. Thus, this episode indicates two important facts that (a) the Accountant is an outsider and has nothing to do with the University and he has never met him (b) the CFO was under a scanner of suspicion // 38 // in financial affairs of the University in the eyes of the management.

Indian Kanoon – http://indiankanoon.org/doc/19201868/ 18

Mukti Kanta Mishra vs Republic Of India on 24 September, 2021

• The learned Counsel for the petitioner has strenuously contended before this Court that the entire story relating to the present “trap case” based on “source information” as laid out by the prosecution is inherently improbable in the sense that it would not inspire the confidence of a prudent man. He further contended that even on said date the audit proceedings were still underway and only three “observation reports” for the three financial years in question have been submitted till date. The aggregate GST demand in those observation reports is around 4.5 lakh. In that premise, the question of a demand of 10 lakh when the tentative tax incidence is admittedly less than half (about 4.5 lakhs) appears to be inherently improbable. He further submits that even at the stage of audit it is very difficult to comprehend any actual tax demand on two counts. Namely, (a) the trust being a charitable trust is broadly exempt from of rigours of GST tax laws applicable to it and the exemptions granted thereunder. Specifically, the institute being a NSDC partner, it is stood completely exempted from the purview of the GST laws save and except certain “ancillary activities” relating to transport and catering et cetera. (b) Secondly, even assuming that the organization is entirely amenable to the tax laws, the audit // 39 // process itself is at a very nascent stage where the organization would get umpteen opportunities to respond to any Tax demands being made. Since the tax demand had not even been crystallized, the question of bribing to diminish the tax demand or to pay a corresponding bribe to that effect is inherently improbable and contrary to the common-sensical approach of a prudent man. This submission merits some consideration by this Court. The learned Counsel for the petitioner has, at the outset, submitted that he does not intend to stand in the way of free and fair investigation. But, he objects to malicious prosecution of a person who has nothing to do with the case at hand and has only been dragged into the present case as an act of wreaking vengeance upon him since he had unearthed the illegalities committed by the CEO and the CFO and had insisted their removal.

• The contention of the petitioner that the Audit process is still ongoing which finds credence from the letter dated 10.05.2021 where large number of documents have been requisitioned for the various assessment years namely 2016-17, 2017-18 and 2018-19, which clearly indicates that the audit process is far from over. The learned counsel for the petitioner has also apprised that the Coordinate Bench of this Court has been pleased to enlarge the present petitioner on anticipatory bail vide order dated // 40 // 04.03.2021 in ABLPL No.1132 of 2021 and appreciated the fact that the prosecution’s version was inherently improbable.

• The email dated 23.01.2020 also buttresses the submissions made by the Petitioner. The said email reveals that the mail by the CEO to the Accounts Department had a very clear instruction that if they bypass the CFO then the consequence will follow. The said e-mail also contained instruction that no payment request should go to the founders/trustees without the CFO’s clearance. The said email is a pointer to the intention of the CEO/CFO to keep the trustees out of the ongoing affairs of the University. That being the case, it is not hard to fathom as to why the present situation has arisen where the CFO has not only siphoned of large sums of money and defalcated them through various Companies without the knowledge of the trustees. It seems that an attempt has been made to foist the present case on the petitioner trustee by cooking up a vague and absurd story. As has been discussed hereinabove, it is also revealed that the Accountant as per the statement of the CEO was not an employee of the University. The CEO being the nerve centre in the management of the University was best suited to recognize whether the Accountant was an employee of the University

Indian Kanoon – http://indiankanoon.org/doc/19201868/ 19

Mukti Kanta Mishra vs Republic Of India on 24 September, 2021

or not. That being the case, it seems that the Accountant is a stranger to the University and the fact that an allegation has been made that the present petitioner // 41 // trustee had conspired with this unknown stranger to the University to bribe GST officials for the ongoing audit process seems inherently improbable and absurd.

• With the aforesaid discussion, this Court comes to the irresistible conclusion that the criminal proceedings in the present case are not warranted. As a sequitur it flows that the proceedings against the Petitioner herein be quashed and the same are hereby quashed accordingly, insofar as the role of the present Petitioner is concerned.

• It is however, clarified that the Trial Court will proceed with the trial against the other accused persons uninfluenced by any of the observations made hereinabove. Ordered accordingly. The CRLMC is accordingly disposed of.

(S.K.Panigrahi) Judge Orissa High Court, Cuttack The 24th day of September, 2021/AKK/LB/AKP

Indian Kanoon – http://indiankanoon.org/doc/19201868/ 20