Case title: Puneet Sabharwal Vs CBI and R.C. Sabharwal Vs CBI
Case no.: SLP (Criminal) No. 2044 OF 2021
Decision on: March 19th, 2024
Quoram: Justice Vikram Nath and Justice K.V. Viswanathan
Facts of the case
R.C. Sabharwal, an Additional Chief Architect at NDMC, owned assets disproportionate to his known sources of income. It was alleged that he was party to criminal conspiracy wherein, he amassed assets disproportionate to his income, with his son, Puneet Sabharwal who allegedly received Rs. 79 lakhs through encashment of Special Bearer Bonds and abetted the commission of the offence as a conspirator. This act contributed to the crime, as R.C. Sabharwal managed to purchase properties in the name of entities such as the M/s Morni Devi Brij Lal Trust and M/s Morni Merchants, among others which affirmed Puneet Sabharwal as the sole beneficiary. While Puneet Sabharwal was charged under Section 109 IPC read with Section 13(1)(e) and 13(2) of the Prevention of Corruption Act, 1988, the charge against appellant R.C. Sabharwal was under Section 13(1)(e) read with 13(2) of the Prevention of Corruption Act, 1988.
The appellants approached the Delhi High Court to dismiss the charges against them. The Court dismissed the petitions based on the following reasons. (i) Puneet Sabharwal being a minor, would not by itself be a reason to disregard the fact that he was a major for 7 long years of investigation; (ii) Immunities under S. 3(2) of Special Bearer Bonds (Immunities and Exemptions) Act, 1981 do not cover charges framed under the PCA; (iii) In State of Karnataka v. Selvi J. Jayalalitha & Ors., the Supreme Court held that IT orders are apropos tax liability on income and would not mandatorily establish the lawfulness of the sources of income and thereby, the Court upheld the charges framed against the appellants. The matter was preferred before the Apex Court challenging the decision of High Court.
Issue – Whether the Courts were justified in refusing to quash the charges against the appellants?
Legal Provisions
The appellants were convicted under Section 120B IPC and Section 109 IPC read with Section 13(1)(e) and 13(2) of the Prevention of Corruption Act, 1988.
Section 13 of PCA – This provision deals with the Criminal Misconduct by a Public Servant.
Contentions of the Appellant
The Counsel for Puneet Sabharwal submitted that the Court has erred in discarding the fact that he was minor and endorsing the allegation solely on account of being named as a beneficiary in the trust deed of M/s Morni Devi Brij Lal Trust. It was contended that the criminal proceedings were saddled against appellant merely by virtue of being his father’s son. Moreover, the Court has ignored the exoneration of the appellant’s father by the ITAT. The Counsel for R.C. Sabharwal heavily relied on the ITAT order, asserting that he was not the owner of entities whose properties were wrongly added to his income. They quoted several authorities and contended that where there is exoneration on merits in a civil adjudication, criminal prosecution on the same set of facts and circumstances cannot be allowed to continue since the underlying principle is that the standard of proof in criminal cases is higher.
Contentions of the Respondents
The Counsel submitted that at the stage of framing the charges, the availability of relevant material would suffice and the Court is not required to ascertain probative value of the evidence for convicting the accused. It was contended that the criminal prosecution does not depend upon the order of ITAT and hence, the same cannot be effectuated to nullify the order of framing charges by a criminal court. He also relied on various authorities and asserted that the findings of the IT authorities are not binding on a criminal court to readily accept the legality of the source of income.
Court’s Analysis and Judgement
The Court upon perusal of the submissions and evidence presented noted that the appellants have not made out a case for interference with the order on framing of charges. The Court observed that the decision in Selvi Jayalalitha would be fully applicable, as it examined in detail about previous rulings which laid down that the IT Returns and the Orders passed in IT Proceedings are not conclusive proof as mentioned under S.13 of Prevention of Corruption Act. The income tax returns/orders may at best be admissible as evidence, but the probative value of the same would depend on the nature of the information furnished and findings recorded. Hence, the same would not ipso facto either conclusively prove or disprove a charge.
The Court thereby held that the probative value of the Orders of the IT Authorities, including the Order of the ITAT and the subsequent Assessment Orders, are not conclusive proof which can be relied upon for discharge of the accused persons. In view of the same it upheld the decision of the High Court.
The Court, further refused accept the argument of the appellants that when there is an exoneration on merits in a civil adjudication, a criminal prosecution on the same set of facts and circumstances would not be permitted. Therefore, dismissing the appeal, the Court directed the trial to be concluded expeditiously considering its pendency for nearly 25 years.
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Judgement Reviewed by – Keerthi K
