C. Madhavan vs CBI

“CHARGE - VIII

That, during the period May 2013 to September 2013, A-8 Dr Anil Kumar while working as a Public Servant in the capacity as Asst. Commissioner of Customs, Cochin International Airport Ltd (CIAL), Nedumbassery, by corrupt or illegal means or by abusing his official position as Public Servant entered into criminal conspiracy with the other accused persons and in pursuance there of A-8 obtained illegal gratification from A-4 in the form of Rs.5 lakhs, a 42" LED TV, Treadmill, Rado Watch, Camera, Sunglass, etc and A-8 accepted an Innova car for the marriage of A-8 free of cost, in contravention to the existing Customs Rules & Regulations for facilitating the smuggling of 56 kilogram gold worth about Rs 17.86 Crores by the accused persons as narrated in Charge 1 as above, thereby A-8 Dr Anil Kumar committing Criminal Misconduct punishable U/s.13(2) sec. 13 (1) (d) of the Prevention of Corruption Act, 1988.

CHARGE - IX

That, during the period May 2013 to September 2013, A-8 Dr Anil Kumar while working as a Public Servant in the capacity as Asst. Commissioner of Customs, Cochin International Airport Ltd (CIAL), Nedumbassery, demanded and accepted illegal gratification other than legal remuneration in the form of Rs.5 lakhs, a 42" LED TV, Treadmill, Rado Watch, Camera, Sunglass, etc marriage of A-8 free of cost, as a motive or reward for showing favours to the accused persons in contravention to the existing Customs Rules & Regulations and in connivance with other accused persons facilitated the smuggling of 56 kilogram gold worth about Rs 17.86 Crores by them as narrated in Charge -1 above. Thus, A-8 Dr Anil Kumar committed offence punishable U/s.7 of the Prevention of Corruption Act, 1988.

CHARGE X

That, during the period May 2013 to September 2013, A-8 Dr Anil Kumar while working as a Public Servant in the capacity as Asst.Commissioner of Customs, Cochin International Airport Ltd (CIAL), Nedumbassery, cheated Govt. of India by abusing his official position as Public Servant in conspiracy with private accused persons acting as smugglers of gold. A-8 by accepting illegal gratification from A-4 in the form of an Rs.5 lakhs, a 42" LED TV, Treadmill, Rado Watch, Camera, Sunglass, etc and A-8 accepted an Innova car for the marriage of A-8 free of cost, in contravention to the existing Customs Rules & Regulations and facilitated the smooth passage of the smugglers and smuggled 56 kilogram gold worth about Rs 17.86 Crores through Customs area without customs clearance, by the accused persons as narrated in Charge 1 above and thus caused wrongful loss to the tune of about Rs 1.83 Crores @ 10% Custom duty on Rs 17.86 Crores plus 3% cess, to the Govt. of India i.e the amount of customs duty evaded and thus caused equivalent wrongful gain to themselves. Dr Anil Kumar, thus cheated Govt. of India committing offence punishable U/s. 420 of the Indian Penal Code.”

“CHARGE - II

That, during the period May 2013 to September 2013, A-1, Shri C. Madhavan while working as a public servant in his capacity as Deputy Commissioner of Customs in charge of Air Cargo section of Cochin International Airport Ltd (CIAL), having the additional charge of Air Intelligence of the Passenger section, by corrupt or illegal means or by abusing his official position as Public Servant conspiracy with the other accused persons and in pursuance thereof A-1 obtained illegal gratification from A-4 in the form of a 42" LED TV and dinner set on 20.06.2013, in contravention to the existing Customs Rules & Regulations for facilitating the smuggling of 56 kilogram gold worth about approximately Rs.17.86 Crores, by the accused persons as narrated in Charge – 1 as above and thereby, Shri.C.Madhavan (A-1) committing Criminal Misconduct punishable U/s.13(2) r/w sec.13 (1) (d) of the Prevention of Corruption Act, 1988.C

CHARGE - III

That, during the period May 2013 to September 2013, A-1. Shri C. Madhavan while working as a public servant in his capacity as Deputy Commissioner of Customs in charge of Air Cargo section of Cochin International Airport Ltd (CIAL), having the additional charge of Air Intelligence of the Passenger section, demanded and accepted illegal gratification other than legal remuneration in the form a 42" LED TV and dinner set on 20.06.2013 as a motive or reward for showing favours to the accused persons in contravention to the existing Customs Rules & Regulations and in connivance with other accused persons facilitated the smuggling of 56 kilogram gold worth about Rs 17.86 Crores by them as narrated in Charge 1 as above. Thus, Shri C. Madhavan (A-1) committed offence punishable U/s.7 of the Prevention of Corruption Act, 1988.

CHARGE IV

That, during the period May 2013 to September 2013, A-1, Shri C Madhavan while working as a public servant in his capacity as Deputy Commissioner of Customs in charge of Air Cargo section of Cochin International Airport Ltd (CIAL), having the additional charge of Air Intelligence of the Passenger section cheated Govt. of India by abusing his official position as Public Servant in conspiracy with private accused pet sons acting as smugglers of gold. A-1 by accepting illegal gratification from A-4 in the form of a 42" LED TV and dinner set on 20.06.2013, in contravention to the existing Customs Rules & Regulations and facilitated the smooth passage of the smugglers and the smuggled 56 kilogram gold worth about Rs 17.86 Crores through Customs area without customs clearance, by the accused persons as narrated in Charge 1 above and thus caused wrongful loss to the tune of about Rs 1.83 Crores @ 10% Custom duty on Rs 17.86 Crores plus 3% cess, to the Govt. of India is the amount of customs duty evaded and Shri C Madhavan, thus cheated Govt. of India commiting offence punishable U/s. 420 of the Indian Penal Code.”

“CHARGE – XVIII

That, during the period May 2013 to September 2013, A-11, Shri Ahmed Suhail being a private person involved in smuggling activities between Dubai and India, cheated Govt. of India in conspiracy with other accused persons, private and Public Servants and in pursuance to the conspiracy as narrated in charge 1, A-11 assisted A-4, Shri Faiz in smuggling gold from Dubai to India and along with A-7, Smt. Asifa smuggled at least 04 Kg of gold worth about Rs. 01.27 Crores on 20.08.2013, which was liable to be confiscated by the Customs authorities and thus caused wrongful loss to the tune of about Rs 12 lakhs @ 10% Custom duty on Rs 01.27 Crores plus 3% cess, to the Govt. of India ile the amount of customs duty evaded and thereby an equivalent wrongful gain to themselves. A-11, Shri Ahmed Suhail, thus committed offence punishable U/s. 420 of the Indian Penal Code.”

“6.

While assailing the separate orders passed against the same revision petitioner, a legal question has been raised by the learned counsel for the revision petitioner, based on the three Bench decision of the Supreme Court reported in Radheshyam Kejriwal v. State of West Bengal and Another [2011 KHC 4144], with reference to paragraph Nos. 16, 19, 21, 23 and 24, contending that exoneration of the revision petitioner in departmental proceedings, in a case, where the allegations in the departmental proceedings as well as in the criminal proceedings are identical, the criminal case on the same facts is liable to be quashed. Another three Bench decision of the Supreme Court in Ashoo Surendranth Tewari v. Deputy Superintendent of Police, EOW, CBI and Another reported in [2020 KHC 6539] also relied on the said point. In fact in both these decisions, the Apex Court considered the earlier two Bench decision of the Apex Court in P.S. Rajya v. State of Bihar reported in [1997 KHC 202 : (1996) 9 SCC 1] and discussed the same in paragraph No. 7 of the judgment in Ashoo Surendranth Tewari's case (supra) and held as under:-

“7.

A number of judgments have held that the standard of proof in a departmental proceeding, being based on preponderance of probability is somewhat lower than the standard of proof in a criminal proceeding where the case has to be proved beyond reasonable doubt. In P.S. Rajya vs. State of Bihar, (1996) 9 SCC 1, the question before the Court was posed as follows:-

“3.

The short question that arises for our consideration in this appeal is whether the respondent is justified in pursuing the prosecution against the appellant under S. 5(2) read with S. 5(1) (e) of the Prevention of Corruption Act, 1947 notwithstanding the fact that on an identical charge the appellant was exonerated in the departmental proceedings in the light of a report submitted by the Central Vigilance Commission and concurred by the Union Public Service Commission.”

This Court then went on to state:

“17.

At the outset we may point out that the learned counsel for the respondent could not but accept the position that the standard of proof required to establish the guilt in a criminal case is far higher than the standard of proof required to establish the guilt in the departmental proceedings. He also accepted that in the present case, the charge in the departmental proceedings and in the criminal proceedings is one and the same. He did not dispute the findings rendered in the departmental proceedings and the ultimate result of it.” This being the case, the Court then held:

“23.

Even though all these facts including the Report of the Central Vigilance Commission were brought to the notice of the High Court, unfortunately, the High Court took a view that the issues raised had to be gone into in the final proceedings and the Report of the Central Vigilance Commission, exonerating the appellant of the same charge in departmental proceedings would not conclude the criminal case against the appellant. We have already held that for the reasons given, on the peculiar facts of this case, the criminal proceedings initiated against the appellant cannot be pursued. Therefore, we do not agree with the view taken by the High Court as stated above. These are the reasons for our order dated 27-3-1996 for allowing the appeal and quashing the impugned criminal proceedings and giving consequential reliefs.”

“26.

We may observe that the standard of proof in a criminal case is much higher than that of the adjudication proceedings. The Enforcement Directorate has not been able to prove its case in the adjudication proceedings and the appellant has been exonerated on the same allegation. The appellant is facing trial in the criminal case. Therefore, in our opinion, the determination of facts in the adjudication proceedings cannot be said to be irrelevant in the criminal case. In B.N. Kashyap [AIR 1945 Lah 23] the Full Bench had not considered the effect of a finding of fact in a civil case over the criminal cases and that will be evident from the following passage of the said judgment: (AIR p. 27) “… I must, however, say that in answering the question, I have only referred to civil cases where the actions are in personam and not those where the proceedings or actions are in rem. Whether a finding of fact arrived at in such proceedings or actions would be relevant in criminal cases, it is unnecessary for me to decide in this case. When that question arises for determination, the provisions of Section 41 of the Evidence Act, will have to be carefully examined.”

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29.

We do not have the slightest hesitation in accepting the broad submission of Mr Malhotra that the finding in an adjudication proceeding is not binding in the proceeding for criminal prosecution. A person held liable to pay penalty in adjudication proceedings cannot necessarily be held guilty in a criminal trial. Adjudication proceedings are decided on the basis of preponderance of evidence of a little higher degree whereas in a criminal case the entire burden to prove beyond all reasonable doubt lies on the prosecution.

xxx xxx xxx

31.

It is trite that the standard of proof required in criminal proceedings is higher than that required before the adjudicating authority and in case the accused is exonerated before the adjudicating authority whether his prosecution on the same set of facts can be allowed or not is the precise question which falls for determination in this case.”

“38.

The ratio which can be culled out from these decisions can broadly be stated as follows:

(i)

Adjudication proceedings and criminal prosecution can be launched simultaneously;

(ii)

Decision in adjudication proceedings is not necessary before initiating criminal prosecution;

(iii)

Adjudication proceedings and criminal proceedings are independent in nature to each other;

(iv)

The finding against the person facing prosecution in the adjudication proceedings is not binding on the proceeding for criminal prosecution;

(v)

Adjudication proceedings by the Enforcement Directorate is not prosecution by a competent court of law to attract the provisions of Article 20(2) of the Constitution or S.300 of the Code of Criminal Procedure;

(vi)

The finding in the adjudication proceedings in favour of the person facing trial for identical violation will depend upon the nature of finding. If the exoneration in adjudication proceedings is on technical ground and not on merit, prosecution may continue; and

(vii)

In case of exoneration, however, on merits where the allegation is found to be not sustainable at all and the person held innocent, criminal prosecution on the same set of facts and circumstances cannot be allowed to continue, the underlying principle being the higher standard of proof in criminal cases.” It finally concluded:

“39.

In our opinion, therefore, the yardstick would be to judge as to whether the allegation in the adjudication proceedings as well as the proceeding for prosecution is identical and the exoneration of the person concerned in the adjudication proceedings is on merits. In case it is found on merit that there is no contravention of the provisions of the Act in the adjudication proceedings, the trial of the person concerned shall be an abuse of the process of the court.”

“12.

The reference too was answered in Ajay Kumar Tyagi, (2012) 9 SCC 685. A two-Judge Bench decision of this Court in P.S Rajya v. State of Bihar (1996) 9 SC 1 was referred to wherein the criminal prosecution was quashed when the departmental proceedings concluded in exoneration. In P.S. Rajya (1996) 9 SCC 1 , the allegation was of possession of assets disproportionate to the source of income. The Central Vigilance Commission dealt with the charge and in its elaborate report concluded that the valuation report on which CBI placed reliance is of doubtful nature. The Court on facts found that the value given as a base for the chargesheet was not the value given in the reports subsequently given by the valuers. The decision in P.S. Rajya(1996) 9 SCC 1 relying on State of Haryana v. Bhajan Lal 1992 Supp (1) SCC 335; the water shed decision in invocation of the inherent powers under Section 482 of the Code of Criminal Procedure, 1973 for quashing criminal prosecution, held that the prosecution in that case should be quashed for more than one reason as laid down in Bhajan Lal. Ajay Kumar Tyagi 1992 Supp (1) SCC 335 categorically held that the quashing of criminal proceedings in P.S. Rajya (1996) 9 SCC 1 was not merely on account of the exoneration in the disciplinary proceedings. Referring to a number of decisions, it was held so in paragraphs 24 & 25 which are extracted hereunder:

“24.

Therefore, in our opinion, the High Court quashed the prosecution on total misreading of the judgment in P.S. Rajya case (1996) 9 SCC 1. In fact, there are precedents, to which we have referred to above, that speak eloquently a contrary view i.e. exoneration in departmental proceeding ipso facto would not lead to exoneration or acquittal in a criminal case. On principle also, this view commends us. It is well settled that the standard of proof in a department proceeding is lower than that of criminal prosecution. It is equally well settled that the departmental proceeding or for that matter criminal cases have to be decided only on the basis of evidence adduced therein. Truthfulness of the evidence in the criminal case can be judged only after the evidence is adduced therein and the criminal case cannot be rejected on the basis of the evidence in the departmental proceeding or the report of the inquiry officer based on those evidence.

25.

We are, therefore, of the opinion that the exoneration in the departmental proceeding ipso facto would not result in the quashing of the criminal prosecution. We hasten to add, however, that if the prosecution against an accused is solely based on a finding in a proceeding and that finding is set aside by the superior authority in the hierarchy, the very foundation goes and the prosecution may be quashed. But that principle will not apply in the case of the departmental proceeding as the criminal trial and the departmental proceeding are held by two different entities. Further, they are not in the same hierarchy.”

13.

We are of the opinion that in the present case the distinction as brought out in Ajay Kumar Tyagi (2012) 9 SCC 685 squarely applies and the ratio decidendi therein is not regulated by the ratio of the earlier judgment in Radheshyam Kejriwal (2011) 3 SCC 581. In Radheshyam Kejriwal (2011) 3 SCC 581, the adjudication proceedings and the prosecution were both by the very same entity, the Enforcement Directorate under the FERA. In Ajay Kumar Tyagi (2012) 9 SCC 685, the allegation was of a demand and acceptance of bribe in which a trap was laid, and the prosecution was commenced and continued by the ACB while the departmental proceedings were by the Delhi Jal Board under which the delinquent employee worked. Identical is the fact in this case where the ACB laid the trap, commenced and continued the criminal proceedings, at the behest of the appellant, while the department carried on with the enquiry. The findings in the enquiry report also do not persuade us to quash the criminal proceedings as we would presently notice.

14.

At the outset, we cannot but reiterate that the enquiry report in disciplinary proceedings is not conclusive of the guilt or otherwise of the delinquent employee, which finding is in the exclusive domain of the disciplinary authority. The enquiry officer is appointed only as a convenient measure to bring on record the allegations against the delinquent employee and the proof thereof and to ensure an opportunity to the delinquent employee to contest and defend the same by cross-examination of the witnesses proffered by the department and even production of further evidence, in defense. The enquiry officer, strictly speaking, merely records the evidence and the finding entered on the basis of the evidence led at the enquiry does not have any bearing on the final decision of the disciplinary authority. The disciplinary authority takes the ultimate call as to whether to concur with the findings of the enquiry authority or to differ therefrom. On a decision being taken to differ from the findings in the enquiry report as to the guilt of the delinquent employee, if it is in favour of the delinquent employee nothing more needs to be done since the enquiry stands closed exonerating the employee of the charges levelled. If the decision is to concur with the finding of guilt by the Enquiry Officer, then a show-cause is issued with the copy of the Enquiry Report. However, while differing from the finding of exoneration in the enquiry report, necessarily the disciplinary authority will not only have to issue a show-cause against the delinquent employee, with a copy of the Enquiry Report, but the show- cause notice also has to specifically bring to attention of the delinquent, the aspects on which the disciplinary authority proposes to differ, based on the facts discovered in the enquiry so as to afford the delinquent employee an opportunity to proffer his defense to the same.”

“ 18. I have considered the submissions made by other side. It is relevant to mention that the prosecution has obtained sanction under section 19(1)(c) of PC Act to prosecute the accused Nos. 1, 3, 5 and 6 and the sanction orders has been produced as documents Nos.80 to 83 along with final report. Absolutely there is no objection raised by the accused against the said sanction orders. The fact that accused 1 and 3 were acquitted in the disciplinary proceedings is not at all a sufficient ground to discharge accused No.1 and 3. The statement of Cws. 16 to 19 show that there are entries in the account books of the establishment of the 2^nd accused to show that illegal gratification has been paid to the accused Nos.3, 5 and 6 in the form of money and also in the form of gold coins. The writings of the 2^nd accused and CWs.16 to 19 in the account books were compared by the expert with their specimen writing and detailed opinion has been given by the expert. The report is produced by the prosecution as document No.70 along with final report. Moreover, the account books of the 2^nd accused, which are produced as document Nos.31, 32, 33, 34 and 35, also show that there are entries regarding payment of illegal gratification to accused Nos.3, 5 and 6. Moreover, as stated earlier, gold coins were seized from the house of the 3^rd accused and the corresponding invoices issued by the Tanishq show room at Kochi was seized from the 2^nd accused. The entries in the books of accounts are specific that the illegal gratification in money has been given to accused Nos.3, 5 and 6 and also that the gold coins of 200 grams were given to the 3^rd accused. I am not inclined to discard these materials as unreliable at this stage. The bank account statement in respect of bank accounts were also seized during investigation and produced before the Court. The Manager of the Tanishq show room, Ernakulam was also cited as a prosecution witness to prove the sale of gold coin in favour of the 2^nd accused. It is to be taken note that in cases of criminal conspiracy, the agreement between the conspirators cannot be generally be directly proved, but can only be inferred from the facts and circumstances proved in the cases on hand. So, the prosecution has to be given an opportunity to lead evidence in that regard. The available materials show that there was dishonest intention on part of all the accused to cheat the Railway and to cause unlawful loss to the Railway and wrongful gain for the accused. The payment and receipt of illegal gratification, as alleged is also prima facie established. Hence, from the available materials on record, I am of the considered view that the prosecution has succeeded in establishing the prosecution case against all the accused, so as to frame a formal charge against them. I am also satisfied that the available materials before the court are sufficient to presume that all the accused have committed the offences alleged against them and absolutely there are no materials to hold that the charge against them is groundless. Therefore, I am of the view that separate charge is to be framed against all the accused. Resultantly, discharge applications filed by the accused Nos.1, 3, 5 and 6 as Crl. M.P Nos. 990/2015, 623/2015, 330/2017 and 528/2023 are liable to be dismissed. Points are answered accordingly.

“16.

I have considered the submissions made by other side. It is relevant to mention that the prosecution has obtained sanction under section 19(1) (c) of PC Act to prosecute the accused Nos.1, 2 and 4 and the sanction orders has been produced as documents Nos.51 to 53 along with final report. Absolutely there is no objection raised by the accused against the said sanction orders. The fact that accused 1 and 2 were acquitted in the disciplinary proceedings is not at all a sufficient ground to discharge accused Nos.1 and 2. The statement of the approver clinchingly establishes payment of illegal gratification of ₹.4,00,000/- to the first accused on 02/12/2007 and ₹.10,000/- to the accused No.4 through the bank account of his wife. I am not inclined to discard the statement of the approver at this stage. It is also relevant that the approver has given statement before the JFCM-I, Ernakulam and also before the CJM, Ernakulam in that regard. It is to be taken note that in cases of criminal conspiracy, the agreement between the conspirators cannot be generally be directly proved, but can only be inferred from the facts and circumstances proved in the cases on hand. So, the prosecution has to be given an opportunity to lead evidence in that regard. The available materials show that there was dishonest intention on part of all the accused to cheat the Railway and to cause unlawful loss to the Railway and wrongful gain for the accused. The payment and receipt of illegal gratification, as alleged is also prima facie established. Hence, from the available materials on record, I am of the considered view that the prosecution has succeeded in establishing the prosecution case against all the accused, so as to frame a formal charge against them. I am also satisfied that the available materials before the Court are sufficient to presume that all the accused have committed the offences alleged against them and absolutely there are no materials to hold that the charge against them is groundless. Therefore, I am of the view that separate charge is to be framed against all the accused. Resultantly, discharge applications filed by the accused Nos. 1, 2 and 4 as Crl. M.P Nos. 622/2015, 204/2016 and 532/2023 are liable to be dismissed. Points are answered accordingly.”

(i)

Adjudication proceedings and criminal prosecution can be launched simultaneously;

(ii)

Decision in adjudication proceedings is not necessary before initiating criminal prosecution;

(iii)

Adjudication proceedings and criminal proceedings are independent in nature to each other;

(iv)

The finding against the person facing prosecution in the adjudication proceedings is not binding on the proceeding for criminal prosecution;

(v)

Adjudication proceedings by the Enforcement Directorate is not prosecution by a competent court of law to attract the provisions of Article 20(2) of the Constitution or S.300 of the Code of Criminal Procedure;

(vi)

The finding in the adjudication proceedings in favour of the person facing trial for identical violation will depend upon the nature of finding.

(vii)

Exoneration in departmental proceeding ipso facto would not lead to exoneration or acquittal in a criminal case.

(viii)

The standard of proof in a department proceeding is lower than that of criminal prosecution.

(ix)

The departmental proceeding or for that matter criminal cases have to be decided only on the basis of evidence adduced therein.

(x)

Truthfulness of the evidence in the criminal case can be judged only after the evidence is adduced therein and the criminal case cannot be rejected on the basis of the evidence in the departmental proceeding or the report of the inquiry officer based on those evidence.

(xi)

The exoneration in the departmental proceeding ipso facto would not result in the quashing of the criminal prosecution. However, that if the prosecution against an accused is solely based on a finding in a proceeding and that finding is set aside by the superior authority in the hierarchy, the very foundation goes and the prosecution may be quashed. But that principle will not apply in the case of the departmental proceeding as the criminal trial and the departmental proceeding are held by two different entities. Further, they are not in the same hierarchy.”

(xii)

The enquiry report in disciplinary proceedings is not conclusive of the guilt or otherwise of the delinquent employee, which finding is in the exclusive domain of the disciplinary authority.”