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Judgment
The petitioners in both these petitions have been charged by the court of learned Special Judge, Anti-Corruption, Jammu (for short ‘the trial court’), vide order dated 31.10.2023, for the commission of offences punishable under Section 5(1)(d) read with Section 5(2) of the Prevention of Corruption Act, Svt. 2006, and Sections 409, 468, 471 and 120-B of the Ranbir Penal Code, in the case titled “State through Police Station, Anti-Corruption Bureau, Jammu Vs. Dr. Hemla Aggarwal and Others”.
Aggrieved by the order dated 31.10.2023, the petitioners, namely Sunil Malik and Dr. Hemla Aggarwal, have assailed the same by filing two separate petitions.
CRM(M) No. 992/2023.
The impugned order has been assailed by the petitioner, Sunil Malik, inter alia, on the following grounds:-
That the Investigating Agency has nowhere alleged in the charge-sheet that the fake invoices/bills were prepared by the petitioner. Despite the absence of any such allegation in the charge-sheet, the learned trial Court travelled beyond the material placed on record by the prosecution and returned a finding that the alleged fake invoices/bills were prepared by the petitioner.
That the learned trial Court, in paragraph-8 of the impugned order, has erred in observing that the Company itself has no mens rea and, therefore, cannot be arrayed as an accused, since the acts attributed to the petitioner cannot make the Company criminally liable and the said acts were not committed in the discharge of the routine activities of the Company but constituted separate criminal acts of the petitioner. However, the charge-sheet in the instant case has been filed in respect of the alleged purchase transactions pertaining to M/s Sun Broadcast Equipments Pvt. Ltd.
That the learned trial Court has erred in law in holding that the affairs of the Company, at the relevant point of time, were managed by the petitioner, but at the same time failed to extend the benefit of the fact, that the Company itself had not been arrayed as an accused, to the petitioner.
That the learned trial Court exonerated the Company despite the fact that an amount of Rs. 5,24,060/- had been received in the bank account of M/s Sun Broadcast Equipments Pvt. Ltd., maintained with J&K Bank, Rajinder Palace, Delhi, which was the Company's bank account.
That M/s Sun Broadcast Equipments Pvt. Ltd. has been engaged in the business of sale and purchase of computers since its inception; however, the learned trial Court has erred in holding that the transaction in question was not carried out by the Company in the discharge of its routine business activities.
That the petitioner, Sunil Malik, was a Director of M/s Sun Broadcast Equipments Pvt. Ltd., and, therefore, it was incumbent upon the prosecution to array the Company as an accused, without which the petitioner, being its Director, could not have been arraigned as an accused in the instant case.
That, in the instant case, the officers of the Vigilance Organization, Jammu, visited Govt. SPMR College of Commerce, Jammu, on 01.12.2012 and took possession of the iMac computer from the College without any authorization. It appears that a document titled 'Proceedings in Verification No. 12' was prepared by the said officers. However, the record supplied by the prosecution does not disclose the date on which the said computer was returned. Further, no effort was made to seal the said computer at the time, it was taken into possession.
That, on 19.03.2014, Inspector-Davinder Singh again visited the Govt. SPMR College of Commerce, Jammu and, without preparing any seizure memo or sealing the said device, took the iMac computer to the office of the Vigilance Organization, Jammu, purportedly for examination by an expert. Thus, according to the petitioner, it is evident that, prior to the registration of the FIR, the computer/software was taken into possession from the College premises without following the prescribed procedure, and the said computer was tampered with by the investigating agency, as is evident from the report of the Forensic Science Laboratory. The report of the CFSL, Hyderabad, dated 22.12.2016, allegedly reveals that the iMac computer had been switched on and tampered with on 01.12.2012 and 19.03.2014, and further indicates that the "root file" of the computer was modified on 19.03.2014.
That the learned trial Court has erred in law in placing undue reliance on the reply dated 17.02.2017 submitted by the petitioner to the questionnaire and in treating the same as an admission on the part of the petitioner.
CRM(M) No. 1053/2023
The impugned order has been assailed by the petitioner, Hemla Aggarwal, inter alia, on the following grounds:-
That the tendering process was not required to be followed, as the purchases were made through the All India Distributor of the iMac system and software, in accordance with the practice prevailing in the Higher Education Department. It is submitted that the petitioner had submitted a proposal for the purchase of the iMac system and software to the Director, Colleges, Higher Education Department, on 11.07.2009, as well as to the UGC, and had informed the Director, Colleges, Higher Education Department, about the purchases made after verification of the supplies by a technical expert from Doordarshan and after duly taking the items into stock. It is, therefore, contended that no guidelines were violated by the petitioner.
That the prosecution has concocted a fanciful story by alleging that the petitioner had been in possession of the equipment since 2008 and had purchased the same while she was posted at Government Women College, Gandhi Nagar, Jammu, however, the CFSL, Hyderabad report dated 22.12.2016 demonstrates that the said allegation is misconceived, false and baseless.
That another allegation levelled against the petitioner is that the iMac system was not handed over by her to anyone. However, it is contended that the petitioner served as Principal, Govt. SPMR College of Commerce, Jammu only from June 2009 to May 2010. If the system had not been handed over to the College authorities, it is inconceivable as to how, during Preliminary Verification No. 12 of 2010, the system along with the software was examined by the experts and recovered from SPMR College itself, and not from the possession of the petitioner.
Submissions;
Mr. Pranav Kohli, learned Senior Advocate appearing for the petitioner in CRM(M) No. 992/2023, argued that the Investigating Officer has failed to array the Company as an accused. According to the learned Senior Counsel, since the alleged amount was transferred to the bank account of the Company, the petitioner could not have been prosecuted in the absence of the Company being impleaded as an accused. He further submitted that the report of the CFSL, Hyderabad, clearly exonerates the petitioner, inasmuch as the expert has opined that the software installed in the computer was genuine. It was also argued that, although the iMac system was formally seized on 15.12.2014 in terms of the seizure memo, it had, prior thereto, been taken away by the officers of the Vigilance Organization during the course of the preliminary verification. Therefore, according to the learned Senior Counsel, the possibility of tampering by the investigating agency cannot be ruled out. Learned Senior Counsel further contended that the petitioner could not have been arrayed as an accused or charge-sheeted for a transaction undertaken by the Company in the ordinary course of its business without the Company itself being arraigned as an accused. In support of contentions, reliance has been placed upon Sunil Bharti Mittal v. Central Bureau of Investigation, (2015) 4 SCC 609; Aneeta Hada v. Godfather Travels and Tours Pvt. Ltd., (2012) 5 SCC 661; Shiv Kumar Jatia v. State (NCT of Delhi), (2019) 17 SCC 193; Maksud Saiyed v. State of Gujarat, (2008) 5 SCC 668; Sharad Kumar Sanghi v. Sangita Rane, (2015) 12 SCC 781; Sandeep Singh v. Nisar Ahmad Dar (JKHC); Ashish Damija v. State of J&K (JKHC); and Reema Arora and Others v. Department of Agriculture (JKHC).
Learned Senior Counsel also contended that mere suspicion cannot take the place of legal proof. In support of this submission, reliance has been placed upon State of Uttar Pradesh v. A.K. Gaba & Ors., 2026 SCC OnLine SC 967; Ram Sharan Chaturvedi v. State of Madhya Pradesh, (2022) 16 SCC 166; and Central Bureau of Investigation, Hyderabad v. K. Narayana Rao, (2012) 9 SCC 512. With regard to the alleged breach in the chain of custody, reliance was placed upon Prakash Nishad v. State of Maharashtra, (2023) 16 SCC 357; Pooranmal v. State of Rajasthan, 2026 SCC OnLine SC 344; and Mehtab v. State of Uttarakhand, 2026 SCC OnLine SC 988.
Mr. Anil Sethi, learned counsel appearing for the petitioner, Dr. Hemla Aggarwal, adopted the arguments advanced by Mr. Pranav Kohli, learned Senior Advocate appearing on behalf of petitioner-Sunil Malik.
Per contra, Mr. Raman Sharma, learned AAG, argued that the impugned order has been rightly passed by the learned trial Court. He submitted that Kapil Sood, who was examined by the Investigating Officer, had categorically stated that the Company profile had been manipulated by accused Sunil Malik on the letterhead of the Company for vested interests. He further argued that the iMac system was already in the possession of petitioner Dr. Hemla Aggarwal, wherein certain data pertaining to Government Women College, Gandhi Nagar, Jammu, was found to have been uploaded on 08.02.2009, when Microsoft Windows XP was installed on the system. According to the learned AAG, during February 2009, petitioner Dr. Hemla Aggarwal was posted at Government Women College, Gandhi Nagar, Jammu, whereas the product in question was allegedly purchased in the month of July, 2009.
Learned AAG further drew the attention of this Court to the data extracted by the CFSL, Hyderabad, to contend that two operating systems had been installed on the iMac system, one being the Apple operating system and the other Microsoft Windows. He further submitted that the CFSL report specifically records that, on the basis of the details available therein, it was not possible to determine the genuineness of the software application. He further referred to the various documents/data extracted from the computer in question to assert that the computer was already with the petitioner-Hemla Aggarwal and with the connivance of the petitioner-Sunil Malik and others, the said computer was later shown to have purchased in July,2009.
Heard learned counsel appearing for the parties and perused the record.
Facts:
The allegations, as levelled in the charge-sheet, are that a preliminary verification was conducted by the Vigilance Organization to inquire into the allegations regarding purchases made by petitioner Dr. Hemla Aggarwal, the then Principal, Govt. SPMR College of Commerce, Jammu, at exorbitant rates. The verification allegedly revealed that Prof. Hemla Aggarwal had shown the purchase of software for the iMac system, namely Final Cut Plug-in, Edius 4 Canopus and Adobe Master Collection CS3, for amounts of Rs. 78,000/-, Rs. 46,800/- and Rs. 1,40,400/-, respectively.
During the course of verification, it was allegedly found that the aforesaid software had neither been requisitioned nor were found loaded in the iMac system. Moreover, three CDs (Compact Discs) containing the software, namely Final Cut Plug-in, Edius 4 Canopus and Adobe Master Collection CS3, were also not found available. The verification further revealed that Shri Jagdish Kumar, Senior Assistant, then posted as Storekeeper in Govt. SPMR College of Commerce, Jammu, had received the bills pertaining to the iMac system and its accessories from the petitioner, Dr. Hemla Aggarwal, and entered the same in the Stock Register, which was duly attested by the petitioner. It was further alleged that the bills were entered in the stock register without the iMac system having been physically received and that the stock was received only after two months, without verifying the genuineness of the software purchased for the iMac system.
According to the prosecution, the verification disclosed that the aforesaid software/CDs had neither been requisitioned for purchase nor were they required. Nevertheless, the software/CDs were shown to have been purchased in original for an amount of Rs. 2,65,200/- and entered in the Stock Register of the College, whereas pirated CDs had allegedly been installed in the iMac system, thereby causing a loss of Rs. 2,65,200/- to the State exchequer. It is alleged that, while the purchase itself amounted to wasteful expenditure, it also resulted in a corresponding loss to the State exchequer.
On the basis of the aforesaid allegations, it was concluded that the acts of commission and omission on the part of Prof. Hemla Aggarwal, Principal, Govt. SPMR College of Commerce, Jammu, and Shri Jagdish Kumar, the then Storekeeper of the said College, prima facie disclosed the commission of offences punishable under Section 5(1)(d) and 5(2) of the J&K Prevention of Corruption Act, Svt. 2006, read with Section 120-B RPC. Consequently, FIR No. 23/2014 came to be registered at Police Station, Vigilance Organization, Jammu, under the aforesaid provisions, and investigation of the case was taken up.
During the course of investigation, it was allegedly found that petitioner Dr. Hemla Aggarwal, by abusing her official position, deliberately and intentionally bypassed the codal procedures governing the purchase of the iMac system. It is alleged that, despite being aware that the Purchase Committees of the College had declined to verify the purchase and that the hardware/software was already in her possession, she, with mala fide intent, processed and passed the bills relating to the purchase of the system and software. Further investigation revealed that the supply order was placed with a firm, which was not authorized to sell the products in question. It is further alleged that Dr. Hemla Aggarwal sought the services of a technical expert from the Director, Doordarshan, Jammu, vide communication dated 31.07.2009. According to the prosecution, the fact that the said communication addressed prior to the meetings of the two College Committees indicates that the exercise was merely an afterthought intended to legitimize the procedure adopted by her and her co-conspirators while effecting the bogus purchases.
It is further alleged that Dr. Hemla Aggarwal never handed over the physical possession of the iMac system along with the installed software to Prof. Meenu Bala, Head of the Department of Computers. She is also alleged to have made payment of Rs. 5,24,060/- by way of demand draft, which was credited to Account No. 0206020100000074 of M/s Sun Broadcast Equipments Pvt. Ltd., maintained with J&K Bank, Rajinder Palace Branch, Delhi, towards the purchase of hardware and software which, according to the prosecution, was already in her possession.
The investigation further revealed that, in connivance with Jagdish Kumar, the then Storekeeper, she caused fraudulent entries relating to the hardware and software to be made in the General Stock Register of the College, which entries were duly attested by her. Subsequently, on her directions, Jagdish Kumar cancelled those entries and made fresh entries in the UGC Stock Register, which too were attested by Dr. Hemla Aggarwal. However, the corresponding entries in the bills were allegedly not corrected or altered. It is further alleged that Dr. Hemla Aggarwal, in conspiracy with Rajinder Raina, Engineering Assistant, Doordarshan Kendra, Jammu, procured a certificate from him certifying the hardware and software, and utilized the said certificate for releasing payment to the vendor. According to the prosecution, both Dr. Hemla Aggarwal and Rajinder Raina affixed the stamp of Assistant Engineer, Doordarshan, Jammu, on the certificate, although Rajinder Raina was merely an Engineering Assistant (Non-Gazetted) and was not authorized to authenticate documents by using such a stamp.
The investigation also revealed that Dr. Hemla Aggarwal, in conspiracy with accused Sunil Malik, proprietor of M/s Sun Broadcast Equipments Pvt. Ltd., caused payment to be made to the said firm despite there being no valid supply order for the iMac system. It is alleged that the proprietor of M/s Sun Broadcast Equipments Pvt. Ltd. prepared fake bills and received an amount of Rs. 5,24,060/- from the Principal, Government SPMR College of Commerce, Jammu, through a demand draft credited to Account No. 0206020100000074, maintained with J&K Bank, Rajinder Palace Branch, Delhi, on 14.08.2009.
It is further alleged that M/s Sun Broadcast Equipments Pvt. Ltd. was neither an authorized distributor, dealer, technical service provider nor an agent of Apple (Mac) as on 23.07.2009, the date on which the bills were raised. The firm subsequently produced bills showing procurement from another concern, namely M/s Audio Video Centre, New Delhi, and an amount of Rs. 5,05,440/- was debited from the account of M/s Sun Broadcast Equipments Pvt. Ltd. towards the delivery of the system and software.
According to the prosecution, accused Vinay Kumar Thakur, proprietor of M/s Audio Video Centre, New Delhi, was also an active participant in the alleged criminal conspiracy, inasmuch as Shri Sanjeev Arora, an employee of his firm and technical expert (who had died in a road accident in August 2008), had uploaded the software on the iMac Gfx Workstation. It is alleged that the system contained a user account in the name "sanjeevarora", the company name "AVC SYSTEMS", and the e-mail address "[email protected]". The prosecution further relies upon the reply furnished by accused Vinay Kumar Thakur to a questionnaire, wherein he allegedly admitted that Shri Sanjeev Arora had supplied the products to M/s Sun Broadcast Equipments Pvt. Ltd., though no payment had been received from the said firm during his lifetime, and that the billing in respect thereof was carried out subsequently in July 2009.
Accordingly, after the conclusion of the investigation, charge sheet was filed against the petitioners and other accused i.e. Jia Lal, then Accounts Assistant at Govt. SPMR College of Commerce, Jammu, Jagdish Kumar then Storekeeper at Govt. SPMR College of Commerce, Jammu, Rajinder Raina, then Engineering Assistant, Doordarshan Kendra, Jammu, Sunil Malik-petitioner herein, Proprietor Ms/ Sun Broadcast Equipments Pvt. Ltd., Vinay Kumar Thakur, Proprietor M/s Audio Video Centre, Delhi and Bhavnish Sachdeva then Sr. Manager with M/s Sun Broadcast Equipments Pvt. Ltd.
Appreciation:
The principal contention advanced on behalf of petitioner Sunil Malik is that he was never the proprietor of M/s Sun Broadcast Equipments Pvt. Ltd., as the said entity is a private limited company in which he was merely one of the Directors. It is contended that the Investigating Agency, by placing reliance on the statement of PW-Kapil Sood, incorrectly described the petitioner as the proprietor of M/s Sun Broadcast Equipments Pvt. Ltd. It is further submitted that the Investigating Officer himself appears to have been uncertain about the status of the entity, as, at some places in the charge-sheet, M/s Sun Broadcast Equipments Pvt. Ltd. has been described as a ‘firm’, whereas at other places it has been referred to as a ‘company’.
It needs to be noted that, in paragraph 31(iv)(d) of the petition, the petitioner has specifically pleaded that the transaction in question was undertaken entirely by M/s Sun Broadcast Equipments Pvt. Ltd. in the ordinary course of its business and that the payment was also received in the bank account of the said company. Further, in Ground (Q) of the petition, the petitioner has categorically asserted that he was a “Director” of the company and not its “Proprietor”.
In Sunil Bharti Mittal Vs. CBI, [(2015) 4 SCC 609], Hon’ble Supreme Court of India has held that an individual who has perpetrated the commission of an offence on behalf of a company can be made an accused, along with the company, if there is sufficient evidence of his active role coupled with criminal intent and other situation in which he can be implicated is in those cases where the statutory regime itself attracts the doctrine of vicarious liability by specifically incorporating such provision.
A perusal of the impugned order reveals that the learned trial Court has taken note of the statement of the prosecution witness, namely, Kapil Sood, recorded under Section 161 Cr.P.C., wherein he stated that the company profile was never issued by the Company and was manipulated on the letterhead of the Company by accused Sunil Malik, who was one of its Directors, to serve vested interests. He further stated that the Company had never received the supply order dated 17.07.2009 purportedly issued by the Principal, Government SPMR College of Commerce, Jammu. According to the witness, the sales were directly arranged and handled by Shri Bhavnish Sachdeva, the then Sales Manager, and accused Sunil Malik, who was then a Director of the Company. He also stated that, at the relevant point of time, M/s Sun Broadcast Equipments Pvt. Ltd. had two Directors, namely, Sunil Malik and Manju Malik, who was inactive Director. Placing reliance upon the aforesaid statement, the learned trial Court formed a prima-facie opinion that Sunil Malik and Bhavnish Sachdeva had committed the alleged illegal acts.
The Investigating Officer, in the charge-sheet, has stated that an amount of Rs. 5,24,060/- was debited from the account of the Principal, Government SPMR College of Commerce, Jammu, by way of a demand draft, which was credited to Account No. 0206020100000074, maintained with J&K Bank, Rajinder Palace Branch, Delhi. According to the Investigating Officer, M/s Sun Broadcast Equipments Pvt. Ltd. was the proprietary concern of petitioner Sunil Malik. However, the consistent stand of the petitioner is that the said entity was not his proprietary concern but a private limited company in which he was one of the Directors. Even according to the statement of Kapil Sood, Sunil Malik and his wife, Manju Malik, were the only two Directors of M/s Sun Broadcast Equipments Pvt. Ltd. at the relevant point of time.
The investigation suffers from a fundamental legal infirmity, inasmuch as the Investigating Officer mechanically accepted the statement of Kapil Sood to impute liability upon petitioner Sunil Malik for allegedly fabricating bills in the name of the Company in collusion with co-accused persons. Simultaneously, the Investigating Officer arrived at the contradictory finding that the Company harbored no criminal intent and that the petitioner Sunil Malik is the proprietor of M/s Sun Broadcast Equipments Pvt. Ltd. Such a finding demonstrates either a patent ignorance of, or a conscious failure to adhere to, the fundamental tenets of corporate jurisprudence, which establish that a private limited company possesses a separate legal personality and cannot be treated as an individual’s proprietary concern. The Investigating Officer made no endeavor to ascertain the status of Account No. 0206020100000074, maintained with J&K Bank, Rajinder Palace Branch, Delhi. The submission of the learned Senior Counsel for the petitioner merits acceptance that the expression "Private Limited" is not used in the case of a proprietorship concern. Consequently, the description "M/s Sun Broadcast Equipments Pvt. Ltd." prima facie indicates that the account was maintained in the name of a private limited company and not in the name of a proprietorship concern.
In these circumstances, the learned trial Court ought to have directed further investigation to ascertain the true status of Account No. 0206020100000074, maintained with J&K Bank, Rajinder Palace Branch, Delhi, and, in particular, whether the said account belonged to M/s Sun Broadcast Equipments Pvt. Ltd. as a company or a proprietary concern of petitioner Sunil Malik.
There are serious allegations against the petitioner Dr. Hemla Aggarwal that, in connivance with the other accused, she procured fake bills in respect of products which were allegedly already in her possession since February 2009, when she was serving in Government Women College, Gandhi Nagar, Jammu. The data extracted by the CFSL, Hyderabad, prima facie indicates that the Windows XP software was loaded in the system on 08.02.2009 with the registered user reflected as ‘GCW Gandhi Nagar’. It is further alleged that the Adobe set-up was uploaded on 08.02.2009, whereas the invoice relating to the Adobe Master Collection, amounting to Rs. 1,40,000/-, is dated 23.07.2009. According to the prosecution, these circumstances support the allegation that the petitioner had procured bills in respect of a system which was already in her possession. It is further alleged that she acted in connivance not only with the Accountant and the Storekeeper of the College, but also with Rajinder Raina, Engineering Assistant, Doordarshan Kendra, Jammu, to manipulate the records so as to project that she had entered into a genuine transaction with petitioner Sunil Malik for the purchase of the hardware and software.
Under these circumstances it cannot be said that no offence is made out against the petitioner- Dr. Hemla Aggarwal and the petitioner-Sunil Malik.
It was next contended that the computer system had been tampered with, inasmuch as it was first taken into possession by the officers of the Vigilance Organization during the course of verification on 01.12.2012 from SPMR College of Commerce, Jammu, whereas it was formally seized only on 15.12.2014, after it was again taken from the Storekeeper of the College on 19.03.2014. However, these circumstances, by themselves, cannot aid the case of the petitioners for discharge in view of the documentary evidence as well as the report of CFSL, Hyderabad, which, prima facie, supports the prosecution case that the system was already in the possession of petitioner Dr. Hemla Aggarwal and that she, in connivance with the co-accused, procured fake bills by misusing her official position. Accordingly, this contention is devoid of merit. In any event, the issue pertains to the appreciation of evidence on the merits of the case and can appropriately be examined only during the course of trial and upon its conclusion.
It was next contended on behalf of the petitioners that the report of the CFSL, Hyderabad, unequivocally demonstrates that the operating system and software were genuine. However, the selfsame report records that it was not possible to conclusively determine the genuineness of the underlying software application. Notably, the report reveals that the Windows operating system was installed on 08.02.2009, bearing the registered User ID 'GCW Gandhi Nagar', and that the Adobe software was likewise installed on the same date, notwithstanding the fact that the latter was ostensibly purchased only in the month of July 2009. In these circumstances, the petitioners can derive no mileage from the CFSL report to contend that no prima facie case is made out against them. It is a well-settled principle of criminal jurisprudence that, at the stage of framing charges or considering a plea for discharge, the Court is not required to undertake a detailed or meticulous appreciation of the evidence. The settled legal position in this regard has been reiterated by the Hon'ble Supreme Court in Union of India v. Prafulla Kumar Samal, (1979) 3 SCC 4, State of Bihar v. Ramesh Singh, (1977) 4 SCC 39, and Sajjan Kumar v. CBI, (2010) 9 SCC 368.
This Court has already arrived at the conclusion that the learned trial Court ought to have directed further investigation, as the Investigating Officer failed to collect any evidence to ascertain whether the account into which the amount was transferred by SPMR College of Commerce, Jammu was maintained in the name of a proprietary concern or in the name of M/s Sun Broadcast Equipments Pvt. Ltd., a company. The true status of the said bank account is a material aspect of the matter and requires proper investigation. It is well settled that, where there is ambiguity or an apparent lacuna in the prosecution evidence on a material issue, the Court is empowered to direct further investigation in the interest of justice. In “H.N. Rishbud v. State (Delhi Admn.), (1954) 2 SCC 934”, Hon’ble the Supreme Court of India has observed as under:
“14.It does not follow, however, that the invalidity of the investigation is to be completely ignored by the court during trial. When the breach of such a mandatory provision is brought to the knowledge of the court at a sufficiently early stage, the court, while not declining cognizance, will have to take the necessary steps to get the illegality cured and the defect rectified, by ordering such reinvestigation as the circumstances of an individual case may call for. Such a course is not altogether outside the contemplation of the scheme of the Code as appears from Section 202 under which a Magistrate taking cognizance on a complaint can order investigation by the police. Nor can it be said that the adoption of such a course is outside the scope of the inherent powers of the Special Judge, who for purposes of procedure at the trial is virtually in the position of a Magistrate trying a warrant case. When the attention of the court is called to such an illegality at a very early stage it would not be fair to the accused not to obviate the prejudice that may have been caused thereby, by appropriate orders, at that stage but to leave him to the ultimate remedy of waiting till the conclusion of the trial and of discharging the somewhat difficult burden under Section 537 CrPC of making out that such an error has in fact occasioned a failure of justice. It is relevant in this context to observe that even if the trial had proceeded to conclusion and the accused had to make out that there was in fact a failure of justice as the result of such an error, the Explanation to Section 537 CrPC indicates that the fact of the objection having been raised at an early stage of the proceeding is a pertinent factor. To ignore the breach in such a situation when brought to the notice of the Court would be virtually to make a dead letter of the peremptory provision which has been enacted on grounds of public policy for the benefit of such an accused. It is true that the peremptory provision itself allows an officer of a lower rank to make the investigation if permitted by the Magistrate. But this is not any indication by the legislature that an investigation by an officer of a lower rank without such permission cannot be said to cause prejudice. When a Magistrate is approached for granting such permission he is expected to satisfy himself that there are good and sufficient reasons for authorising an officer of a lower rank to conduct the investigation. The granting of such permission is not to be treated by a Magistrate as a mere matter of routine but it is an exercise of his judicial discretion having regard to the policy underlying it. In our opinion, therefore, when such a breach is brought to the notice of the court at an early stage of the trial the court have to consider the nature and extent of the violation and pass appropriate orders for such reinvestigation as may be called for, wholly or partly, and by such officer as it considers appropriate with reference to the requirements of Section 5-A of the Act. It is in the light of the above considerations that the validity or otherwise of the objection as to the violation of Section 5(4) of the Act has to be decided and the course to be adopted in these proceedings, determined.”
In “Vinubhai Haribhai Malaviya v. State of Gujarat, (2019) 17 SCC 1”, Hon’ble the Apex Court has observed as under:
“18.It is clear that a fair trial must kick off only after an investigation is itself fair and just. The ultimate aim of all investigation and inquiry, whether by the police or by the Magistrate, is to ensure that those who have actually committed a crime are correctly booked, and those who have not are not arraigned to stand trial. That this is the minimal procedural requirement that is the fundamental requirement of Article 21 of the Constitution of India cannot be doubted. It is the hovering omnipresence of Article 21 over CrPC that must needs inform the interpretation of all the provisions of CrPC, so as to ensure that Article 21 is followed both in letter and in spirit.”
This court is of the view that the learned Trial Court has failed to appreciate that the prosecution's narrative is foundationally flawed regarding the status of the bank account. Notwithstanding the Investigating Officer’s explicit statement that the account stood in the name of M/s Sun Broadcast Equipments Pvt. Ltd., the court below proceeded without verifying its legal character. In law, a bank account held by a private limited company belongs to the corporate body and not to any individual officer. The petitioner, Sunil Malik, has unswervingly asserted that the account is corporate property. Should this contention be established, any criminal liability attributed thereto would require the corporate entity itself to be arraigned as a co-accused especially since its directorship was restricted solely to the petitioner and his wife, Manju Malik, during the period in question.
In Devendra Nath Singh v. State of Bihar, (2023) 1 SCC 48, the Hon’ble Apex Court has held as under:
“45.For what has been noticed hereinbefore, we could reasonably cull out the principles for application to the present case as follows:
45.1.The scheme of the Code of Criminal Procedure, 1973 is to ensure a fair trial and that would commence only after a fair and just investigation. The ultimate aim of every investigation and inquiry, whether by the police or by the Magistrate, is to ensure that the actual perpetrators of the crime are correctly booked and the innocents are not arraigned to stand trial.
45.2.The powers of the Magistrate to ensure proper investigation in terms of Section 156CrPC have been recognised, which, in turn, include the power to order further investigation in terms of Section 173(8)CrPC after receiving the report of investigation. Whether further investigation should or should not be ordered is within the discretion of the Magistrate, which is to be exercised on the facts of each case and in accordance with law.
45.3.Even when the basic power to direct further investigation in a case where a charge-sheet has been filed is with the Magistrate, and is to be exercised subject to the limitations of Section 173(8)CrPC, in an appropriate case, where the High Court feels that the investigation is not in the proper direction and to do complete justice where the facts of the case so demand, the inherent powers under Section 482CrPC could be exercised to direct further investigation or even reinvestigation. The provisions of Section 173(8)CrPC do not limit or affect such powers of the High Court to pass an order under Section 482CrPC for further investigation or reinvestigation, if the High Court is satisfied that such a course is necessary to secure the ends of justice.
45.4.Even when the wide powers of the High Court in terms of Section 482CrPC are recognised for ordering further investigation or reinvestigation, such powers are to be exercised sparingly, with circumspection, and in exceptional cases.
45.5.The powers under Section 482CrPC are not unlimited or untrammelled and are essentially for the purpose of real and substantial justice. While exercising such powers, the High Court cannot issue directions so as to be impinging upon the power and jurisdiction of other authorities. For example, the High Court cannot issue directions to the State to take advice of the State Public Prosecutor as to under what provision of law a person is to be charged and tried when ordering further investigation or reinvestigation; and it cannot issue directions to investigate the case only from a particular angle. In exercise of such inherent powers in extraordinary circumstances, the High Court cannot specifically direct that as a result of further investigation or reinvestigation, a particular person has to be prosecuted.
Accordingly, this Court is of the considered view that the present case is a fit one for the exercise of its inherent jurisdiction under Section 528/482 Cr.P.C. to direct further investigation for the purpose of determining the true status of Account No. 0206020100000074, maintained with J&K Bank, Rajinder Palace Branch, Delhi. If, upon such investigation, it is found that the said account belongs to M/s Sun Broadcast Equipments Pvt. Ltd., then the investigating agency shall take appropriate steps, in accordance with law. On the other hand, if it is found that the said account belongs to petitioner Sunil Malik in his individual capacity, the trial against him shall proceed in accordance with law.
Accordingly, while declining the relief of quashing the order dated 31.10.2023 sought by the petitioners, these petitions are disposed of in the following terms: -
The Investigating Officer shall conduct further investigation to ascertain the true status of Account No. 0206020100000074, maintained with J&K Bank, Rajinder Palace Branch, Delhi, into which an amount of Rs. 5,24,060/- was credited.
In the event it is found that the aforesaid account belongs to a company, namely M/s Sun Broadcast Equipments Pvt. Ltd., the Investigating Officer, shall proceed in accordance with law.
In the event it is found that the aforesaid account belongs to petitioner Sunil Malik in his individual capacity, the learned trial Court shall proceed with the trial in accordance with law.
Till the completion of the further investigation, the proceedings before the learned trial Court shall remain stayed. The Investigating Officer shall conclude further investigation as expeditiously as possible, preferably within a period of three months from the date of receipt of a copy of this order and any further extension, if required, the IO shall approach the learned trial court for necessary orders.