State of J & K vs Zafarullah and Others

This revision petition has been presented by the State through SSP Vigilance Organisation, Kashmir for setting aside the order of discharge

passed by the Special Judge, Anti Corruption Kashmir (the trial court) in case FIR No. 10 of 93 P/s VOK in criminal file No. 28B of 1997 State

v. Gazanfer All Beigh and others.

A charge sheet under Sections 5(1(c)(d) r/w Section 5(2) PC Act 2006, 167A, 467,468,471,201 r/w 120B RPC was filed by the Vigilance

Organisation Kashmir (VOK) against 61 accused persons before the trial court. The matter related to the misappropriation of about Rs. 8 Crore

of government money allegedly by the accused persons shown in the charge.

On filing the charge sheet against the accused the trial court heard the prosecution as well as the defence on the charge and discharge of the

accused and on consideration of the material on record came to the conclusion that there were no grounds to proceed against accused Zafarullah

(A8), Bashir Ahmad Mir (A18) Molvi Nasir Ali (A20) Abdul Gani Gadyari ( A 21) G.M. Makroo (A22 )Abdul Majid Gangoo (A34) and Uraj

Singh (A61). The court therefore discharged these accused persons under these offences.

Aggrieved by the said order of discharge the State has filed the present petition under Section 561A Cr.P.C. (and alternatively a criminal

revision) on the ground that the trial court has appreciated and evaluated the material and evidence on record in a manner as if the trial court was

conducting the trial of the case. According to the petitioner, the impugned order is based on the opinion of the trial court by referring to documents

and by interpreting them in a manner which is not only prejudicial to the prosecution but to the public interest also. The powers, jurisdiction,

functioning and responsibilities of the officers, according to the petitioners, from Director down to Block Development Officer and Junior Engineer

have been evaluated by the Investigating Agency and that the trial court's order of discharge is not supported by any material or evidence on the

record. The prosecution has further submitted that the case against the accused who have been discharged was of conspiracy and the charge of

conspiracy is mostly deductible from the available circumstantial evidence and inferences of conspiracy in law are to be drawn from the said

circumstantial evidence.

In a case of conspiracy discharging the accused works a serious blow to the prosecution case. The State on these grounds has prayed for setting

aside the impugned order.

Heard. Considered the trial court's record. In the year 1989 a scheme known as Jawahar Rozgar Yojna (JRY) with huge financial involvement

was implemented to create infrastructure facilities in rural areas and to eliminate rural poverty. The modus operandi to achieve the object of the

scheme was to get the execution of approved works done through unemployed villagers. Funds were earmarked for the scheme and a mechanism

was provided for monitoring and supervision for the implementation of the scheme. The scheme was started with much zeal but with the passage of

time it could not be completed within the time frame fixed. At the end of financial year 199192 it was found that as many as 496 Jawahar Rozgar

Yojana works were still incomplete involving an amount of Rs.111.61 lacs. The matter was examined by the government and it was decided that

no new works under the scheme would be taken up in the financial year 199293 and the funds released will be utilized for completing the pending

works of 199192. Under the government orders an amount of Rs.99.01 lacs was released by Administrative Department to Assistant

Commissioner Development Anantnag who already had Rs. 9.65 lacs at his disposal as savings for completion of spill over works. Thus, the total

amount of Rs.108.76 lacs were available at the disposal of Assistant Commissioner Development, Anantnag (A5) who had to distribute it amongst

Block Development Officers of the district for completion of the work. Block Development Officer, Khorvipora (Al) on 06.08.1992 reported that

as many as 51 works under the scheme were still incomplete in his block for which an amount of Rs.9.50 lacs were required. It is alleged that

Assistant Commissioner Development, Anantnag (A5) fraudulently allotted an amount of Rs. 110.027 lacs to Al while as, as per the prosecution,

no funds beyond Rs.108.76 lacs could be released during the financial year 199293 under the scheme. It was further alleged that the Assistant

Commissioner Development had no authority to allot so much amount to one block alone. There were other irregularities and illegalities also. Huge

funds were made available by Assistant Commissioner Development for the scheme which ultimately resulted in misappropriation of the amount to

the tune of Rs.8 Crore. When these criminal acts became known the Investigating Agency of VOK swung into action. Cases were registered and

after thorough probe in the matter charge sheet was filed against the accused before the trial court.

The charge, as put forth by the prosecution before the trial court, against accused Zafarullah (A8) was that at the relevant time he was posted as

District Panchayat Officer. He is alleged to have allotted Rs. 1.20 lacs to block Khoveripora under the scheme without any competence and

budgetary support. This allocation of funds to the said block, where mostly the misappropriation has occurred, is taken by the prosecution as a

circumstance from which they want the court to infer that the accused was in conspiracy with other accused persons particularly Al and A5 to

misappropriate the funds as according to the prosecution the allocation facilitated Al to misappropriate the funds. The trial court has considered the

matter at length and found that from the material on record A8 cannot be prima facie said to be part of the criminal conspiracy to swindle State

exchequer merely because he made funds available to Al. Due reasons and sufficient grounds have been given by the trial court in this behalf. There

was a demand of 5.04 lacs by Al against which A8 allotted only Rs.1.20 lacs through three allotment orders No. 69899 dated 26.3.1993

(Rs.0.45 lacs), order No.70001 dated 26.3.1992 (Rs.0.40 lacs) and order No.74344 dated 29.3.1993 (Rs.0.35 lacs). These funds have been

allotted on account of pay of daily wagers as also on account of plantation charges for the year 199293. The trial court has rightly pointed out that

there is not allegation that daily wagers were not engaged for watch and ward and maintenance of plantation areas by different panchayats of

Khoveripora in connection with aforestration programme for the year 199293 or that no payments were made on account of such engagements.

From the facts and circumstances of the case I find that the allegations on this count against A8 are groundless and that there is no ground to

proceed against him on the basis of such material when the material even does not disclose any direct involvement of A8 in the act.

Allegations against Bashir Ahmad Mir (A18) are that he alongwith A19 allotted more funds than were requisitioned by A5 under nonplan

sector, thus, enabling A5 to distribute the allotted funds amongst Block Development Officers and facilitate the achievement of the ultimate object

of conspiracy. It is also alleged that the accused has shown Rs. 5.75 lacs as additionality in the annual review of Development Work Report to the

Administrative department. The trial court has on the material on record found that there was nothing on record to show that the accused had

allotted more funds than what was requisitioned and that only an amount of Rs. 72.59 lacs was allotted by the accused while as there was a

demand of Rs.87.03 lacs. The trial court has in this behalf observed as under:

It is contended that the prosecution claim that two accused had together allotted an amount of Rs.72.59 lacs as against total liability of Rs.62.87

lacs was factually incorrect and belied by the material collected by the investigating agency. The contention of learned defence counsel finds

support from the stand of investigating agency in cases other than FIR 10 registered Blockwise in connection with Anantnag scam as also material

available on the present case file. In case FIR 14 on page 6 of the charge sheet on the basis of record seized during investigation the liabilities

under Nonplan sector projected by the Asstt. Commissioner Development Anantnag are shown to be Rs.87.03 lacs thus the prosecution case that

the accused together made funds available to accused No.5 in excess of demand is belied by the record. If prosecution case is to be believed the

accused made an allotment of Rs.28.20 lacs and 44.39 lacs totaling Rs.72.59 lacs as against a demend of Rs. 87.03 lacs. The allegation that the

funds allotted by two accused to accused No.5 constituted l/3rd of total funds available to the accused for distribution to various districts of

Kashmir Division and this must per se be taken as indicative of a favour to accused No. 5 and a stepping in achieving objects of the conspiracy

does not sound convincing, as the allotments are expected to be made on need basis and cannot ordinarily be uniform in respect of various districts

of the Division. The record seized from DRDK office on the other hand reveals that the funds allotted i.e. Rs.72.59 lacs are not disproportionate to

the liabilities both on account of spillover and current works, as projected by ACD, Anantnag. There is no material to show that such allotments

were uneven or out of balance when compared with other districts. The record as a matter of fact speaks otherwise.

In respect of this accused also I find that the trial court has given sufficient grounds for not believing the prosecution at this stage. The material on

record which has been very carefully and properly scanned by the trial court prima facie does not show the involvement of the accused in the

commission of alleged offence nor it suggest that there was any conspiracy between this accused and accused 1&5. On going through the material

submitted by the prosecution before the trial court it appears that there being no grounds at all to proceed against the accused, the trial court has

taken a correct view of the case.

The prosecution has alleged that accused Molvi Nisar Ali (A20) during his posting as Assistant Commissioner Development, Anantnag from

1990 to May accorded administrative approval to some works beyond Approved Action Plan of 199192 thus creating unwarranted liability and

resultant loss to the State exchequer. The trial court has in this behalf observed as under:

The charge sheet however does not detail the works in Block Khoveripora, which even though not figuring in Aproved Action Plan of 199192

were nonetheless approved by the accused for execution.

The record available on file also does not cone to the rescue of the prosecution in this regard. Apart from this the departure of accused from

District Anantnag and time frame of alleged conspiracy warrant attention. It is admitted case of the prosecution that the accused was relieved of his

duties as Assistant Commissioner Development Anantnag almost at the beginning of financial year 199293. The time frame of alleged conspiracy

discernible from record and discussed above begins sometime later in the financial year 199293 when all the EDO's of District Anantnag had fairly

good idea that they shall be asked to restrict their operations to the spillover works of financial year 199192. The accused obviously had no role to

play in the/Rural Development Department Anantnag when the conspiracy was conceived and acted upon. Even if the accused is presumed to

have in the year 199192 authorities a few works beyond the Approved Action Plan and thus added up the liabilities on state exchequer, for such

assumption it may be reiterated either details or any material is available, still the accused cannot be prima facie held to be part of the conspiracy

hatched by the accused. The accused might have committed irregularities while posted as ACD Anantnag in the year 199192 and such

irregularities may even be actionable or subject the accused to penal consequences but the irregularities nonetheless fall outside scope ad ambit of

present case. The material on record, in the circumstances does not raise a strong suspicion regarding involvement of accused in the alleged

conspiracy which is the minimum requirement that law insists upon for framing the charge.

It is the prosecution case that the accused was relieved of his charge as Assistant Commissioner Development Anantnag at the beginning of

financial year 199293 while as the time frame of alleged conspiracy begins somewhere later in the financial year 199293. The trial court has, on the

basis of material on file, rightly found that the accused had no role to play in the matter during the period when the conspiracy was allegedly

conceived and acted upon. From the record one finds that there are no grounds on the basis of which the accused can be charge sheeted under the

offences alleged against him.

Accused Abdul Gani Gadyari (A21) was at the relevant time working as Deputy Director A&T Kashmir. It is alleged that he by authorizing

excessive flow of cash to District Treasury Anantnag and other treasuries of the district facilitated withdrawal of cash by accused from the

treasuries on account of fraudulent bills which resulted into the misappropriation of Government money. It is alleged that the accused had been

asked by Additional Chief Secretary Finance to supervise and monitor flow of cash to treasuries located in Kashmir province and during this

period he made more cash available to treasuries of District Anantnag than what was actually required. The trial court has dealt with the allegations

against the accused in detail and on the basis of statement of Sh. Jalil Ahmad Khan the then Additional Chief Secretary Finance has found that the

accused had no mechanism to know the exact amount to be made available to a district during a financial year. The trial court has observed as

under:

It hardly needs to be emphasized that the flow of cash to treasuries is different from allotment of funds to controlling officers and Drawing and

Disbursing officers. The cash flow neither authorities the drawing and disbursing officers to draw money from the treasuries beyond budgetary

allocations or on the basis of fraudulent bills nor does entitle the treasury officers to make any payments beyond the budgetary allocations, the

record of which is required to be kept in the4 budget control register in every treasury. Learned counsel for the accused has disputed the

prosecution claim that cash flow attributed to the two accused exceeded the demands. A reference has been made to the documents relied upon

by the prosecution figuring in seizure memo No.39. Before going to the documents it will be worthwhile to skim through the statement of Shri Jalil

Ahmad Khan, the then Addl. Chief Secretary Finance (PW 29) heavily banked upon by the prosecution. Mr. Khan is claimed to have stated that

neither he as Additional Chief Secretary Finance nor accused 34 and 21 as Director and Dy. Director Accounts and Treasuries have any

mechanism to know exact amount to be made available to a district during a financial year and that ever since deficit financing and cash crunch was

experienced in the state a large proportion of amounts used to be released in the last part of financial year. The witness is also claimed to have

stated that amounts in shape of allotments and packages from Central Government also used to be received in last part of the financial year and

due to this reason cash flow increased in the last part of the year as per requisition received from the treasury officers. That the real control on the

payment is to be exercised by District Administration i.e. DDC, ACD, etc. the witness is also claimed to have admitted that the accused No.21

was authorised by the witness to operate the bank account of Finance Secretary at Residency Road, Srinagar during year 199293;because of cash

crunch. The witness is also claimed to have stated that the cash moment used to be effected on the requisitions received by telephone or wireless

and that such a practice was not an irregularity; that as finance department has no districtwise information of the allocations, the finance department

cannot control cash movement in a district and in a number of planned schemes the administrative department makes funds available directly to the

district authorities even without information to their own officers. The witness is claimed to have owned the circular attributed to accused No. 34

regarding priority in payments and stated the same to have been issued by the accused under his approval. Statement of PW Ghulam Mohammad

Sheikh Treasury Officer, Sadder Treasury, Srinagar is in the same vein. Th3e two witnesses, even when their statements are taken on face value,

give almost a clean chit to the mode and manner of functioning in the Directorate and Dy. Directorate of Accounts and Treasuries in connection

with cash movement.

The prosecution evidence as also the facts and circumstances in which the accused is placed it is clear that there is absolutely no evidence even

prima facie on record to infer that the accused has in any way entered into any conspiracy in the commission of offence committed by accused 1

and 5. The trial court has rightly pointed out that the accused received a requisition for money transfer of Rs. 23.73 Crores from DTO Anantnag

alone which was followed by few requisitions aggregating to an amount of Rs. 2900 lacs form D.T.C. Anantnag. This was in addition to requests

for MTs. received from individual Treasury Officers namely D.H. Pora, Qazigund and Kulgam. The aggregate cash flow as also cash flow relating

to Treasury Anantnag has not been disproportionate to the actual demands. The trial court is also right in observing that the cash movement

authorized by accused21 was not in particular meant for payment under JRY and Non Plan Sector only but MTs (money transfers) were meant to

cater all the requirements viz salaries etc. of the departments of the district.

The prosecution could not show as to how the allocations made by the accused was connecting the accused, prima facie with the offence with

which he is charged at this stage.

In respect of G.M. Makroo (A22) it is alleged that he forwarded a requisition for allotment of cash to the amount of Rs. 14.19 crores to the

treasuries of District Anantnag for the month of March, 1993 without ascertaining treasury wise claim. There, however, is no material to

substantiate the charge prima facie. The record shows that the accused has on 06.03.1993 made requisition for a cash of Rs. 23.73 crores after

detailing the requirements of all the treasuries. The accused has made a due requisition in accordance with the requirement and there is nothing on

file to suggest that the act of the accused, which he has performed in the discharge of official duties, was in any way in furtherance to any

conspiracy. Other allegations against the accused also appear to be groundless. Absence of accused on 24.3.1993, which allegedly was on a

medical ground, is taken by the prosecution as a circumstance against the accused. I could find no ground in the same, rather it is a circumstance

which goes in favour of the accused. If he was in any way involved in the conspiracy to commit the act, with other accused persons, he would not

have left the office at such a critical juncture but would have remained careful to see that the act of misappropriation was completed in furtherance

of the conspiracy. Finding of the trial court, on the accused is, therefore, in order and needs no interference.

I could find no prima facie evidence on record against accused Abdul Majid Gangoo (A34), who at the relevant time was Director A&T

Kashmir. Mere fact that a person was heading a department from where other accused persons withdrew money, in furtherance of the conspiracy,

does not make head of the department liable for the act until his involvement is established, though prima facie, at this stage. There are no grounds

to even presume his involvement on participation in the conspiracy. Hence I do not find any ground to take a different view from the one taken by

the trial court against the accused.

Similarly in respect of accused Urj Singh (A61) I find the findings of the trial court based on the material on record which do not require any

interference.

It was vehemently submitted by Mr. Rathore, learned Additional Advocate General that the trial court has while discharging the accused

virtually discussed the evidence of the prosecution on file as if it was conducting the trial. He would argue that the powers of the court to scrutinize

the material at the preliminary stage are very limited. The court has to proceed with the trial if there is material on file against the accused. It is being

further argued that there is sufficient evidence on file, submitted by the prosecution, which point out the involvement of the accused in the

commission of offence, as the accused have entered into a conspiracy with the principal accused and have felicitated the accused, by their acts of

omission and commission, to commit the offences. Learned Counsel appearing for the State has referred to various passages of the impugned

order and submitted that the trial court has exceeded its jurisdiction by taking the view that there was no material on file against the accused.

Courts power to appreciate and discuss the case at the charge/discharge stage are no doubt very limited. The court however has not to act like

a post office and proceed with the trial in all cases the basis of, on whatever material is placed on file by the prosecution. Where two views are

possible, the one which favours the prosecution is to be adopted at this stage but the two views are possible only when there is material on file in

support of the two views on file. Where there is absolutely no evidence against the accused and the prosecution relies on inferences and

presumption arising out of circumstantial evidence, it cannot be said that the court is powerless to scan the material to see as to whether there are

grounds to proceed with the trial.

In State of Bihar v. Ramesh Singh, AIR 1977 SC 2018 the Supreme Court while dealing with the scope of Sections 227 and 228 Code of

Criminal Procedure laid down that if the evidence which the Prosecutor proposes to adduce to prove the guilt of the accused even if fully accepted

cannot show that the accused committed the offence, then there will be no sufficient ground for proceeding with the trial. The Court held:

Under S. 226 of the Code while opening the case for the prosecution the prosecutor has got to describe the charge against the accused and

state by what evidence he proposes to prove the guilt of the accused. Thereafter comes at the initial stage the duty of the Court to consider the

record of the case and the documents submitted therewith and to hear the submissions of the accused and the prosecution in that behalf. The Judge

has to pass thereafter an order either under S. 227 or S. 228 of the Code. If ""the Judge considers that there is not sufficient ground for proceeding

against the accused, he shall discharge the accused and record his reasons for so doing"", so enjoined by S. 227. If, on the other hand, ""the Judge is

of opinion that there is ground for presuming that the accused has committed an offence which.

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(b) in exclusively triable by the Court, he shall frame in writing a charge against the accused"", as provided in S. 228. Reading the two provisions

together in juxtaposition, as they have got to be, it would be clear that at the beginning and the initial stage of the trial the truth, veracity and effect

of the evidence which the Prosecutor proposes to adduce are not to be meticulously judged. Nor is any weight to be attached to the probable

defence of the accused. It is not obligatory for the Judge at that stage of the trial to consider in any detail and weigh in a sensitive balance whether

the facts, if proved, would be incompatible with the innocence of the accused or not. The standard of test and judgment which is to be finally

applied before recording a finding regarding the guilt or otherwise of the accused is not exactly to be applied at the stage of deciding the matter

under S. 227 or S. 228 of the Code. At that stage the Court is not to see whether there is sufficient ground for conviction of the accused or

whether the trial is sure to end in his conviction. Strong suspicion against the accused, if the matter remains in the region of suspicion, cannot take

the place of proof of his guilt at the conclusion of the trial. But at the initial stage if there is a strong suspicion which leads the Court to think that

there is ground for presuming that the accused has committed an offence then it is not open to the Court to say that there is no sufficient ground for

proceeding against the accused. The presumption of the guilt of the accused which is to be drawn at the initial stage is not in the sense of the law

governing the trial of criminal cases in France where the accused is presumed to be guilty unless the contrary is proved, But it is only for the

purpose of deciding prima facie whether the Court should proceed with the trial or not. If the evidence which the Prosecutor proposes to adduce

to prove the guilt of the accused even if fully accepted before it is challenged in crossexamination or rebutted by the defence evidence, if any,

cannot show that the accused committed the offence, then there will be no sufficient ground for proceeding with the trial. An exhaustive list of the

circumstances to indicate as to what will lead to one conclusion or the other is neither possible nor advisable. We may just illustrate the difference

of the law by one more example. If the scales of pan as to the guilt or innocence of the accused are something like even at the conclusion of the

trial, then, on the theory of benefit of doubt the case is to end in his acquittal. But if, on the other hand, it is so at the initial stage of making an order

under S. 227 or S. 228, then in such a situation ordinarily and generally the order which will have to be made will be one under S. 228 and not

under S. 227.

In Union of India v. Prafulla Kumar Samal, AIR 1979 SC 366 the Apex Court laid down the following principles required to be followed

while considering a case for framing charge against an accused or to discharging the accused:

(1) That the Judge while considering the question of framing the charges under Section 227 of the Code has the undoubted power to sift and

weigh the evidence for the limited purpose of finding out whether or not a prima facie case against the accused has been made out;

(2) Where the materials placed before the Court disclose grave suspicion against the accused which has not been properly explained the Court will

be fully justified in framing a charge and proceeding with the trial.

(3) The test of determine a prima facie case would naturally depend upon the facts of each case and it is difficult to lay down a rule of universal

application. By and large however if two views are equally possible and the Judge is satisfied that the evidence produced before him while giving

rise to some suspicion but not grave suspicion against the accused, he will be fully within his right to discharge the accused.

(3) That in exercising his jurisdiction under Section 227 of the Code the Judge which under the present Code is a senior and experienced Court

cannot act merely as a PostOffice or a mouthpiece of the prosecution, but has to consider the broad probabilities of the case, the total effect of the

evidence and the documents produced before the Court, any basic infirmities appearing in the case and so on. This however does not mean that

the Judge should make a roving enquiry into the pros and cons of the matter and weigh the evidence as if he was conducting a trial"".

In Niranjan Singh Karam Singh Punjabi, Advocate v. Jitendra Bhimraj Bijja, AIR 1990 SC 1962, the Supreme Court held:

... it seems well settled that at the Sections 227228 stage the Court is required to evaluate the material and documents on record with a view to

finding out if the facts emerging there from taken at their face value disclose the existence of all the ingredients constituting the alleged offence. The

Court may for this limited purpose sift the evidence as it cannot be expected even at that initial stage to accept all that the prosecution states as

gospel truth even if it is opposed to common sense or the broad probabilities of the case"".

In State of M.P. v. S.B. Johari, AIR 2000 SC 665 it was held:

It is settled law that at the stage of framing the charge, the Court has to prima facie consider whether there is sufficient ground for proceeding

against the accused. The Court is not required to appreciate the evidence and arrive at the conclusion that the materials produced are sufficient or

not for convicting the accused. If the Court is satisfied that a prima facie case is made out for proceeding further then a charge has to be framed.

The charge can be quashed if the evidence which the prosecutor proposes to adduce to prove the guilt of the accused, even if fully accepted

before it is challenged by crossexamination or rebutted by defence evidence, if any, cannot show that accused committed the particular offence. In

such case there would be no sufficient ground for proceeding with the trial.

In the present case there is no direct evidence on file against the respondentaccused. Prosecution has based its case on circumstantial evidence

but the evidence is such that it does not prima facie connect the accused with the offence. The allegations leveled against the accused are

groundless. On the basis of mere presumptions no charge can be framed against the accused.

From the material on record I could not find any circumstance on the basis of which the trial court could have proceeded with the trial. The trial

court's order impugned in the present petition is therefore well reasoned and needs no interference. Order accordingly.