Vijaya Rajagopala vs CBI

Madhu Jain, J.

The present petition under Section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as the ‘CrPC’) assails two orders passed by the learned Principal District and Sessions Judge-cum-Special Judge (PC Act) (CBI), Rouse Avenue District Courts, New Delhi, in SC No.03/2019 titled “CBI v. Ashok Kumar Chawla & Anr”.

The first challenge is to the order dated 07.09.2022, whereby the learned Trial Court modified its earlier direction dated 02.03.2020 for production of the Satisfaction Note, Authorization Warrant and Panchnama relating to the search undertaken by the Income Tax Department. The second challenge is to the order dated 11.10.2023 dismissing the Petitioner’s application under Section 311 CrPC seeking recall and further cross-examination of PW-15, Y.K. Batra.

The prosecution case has its genesis in information received by the Income Tax Department regarding alleged income tax evasion by Ashok Chawla. The information was processed by the Investigation Wing and search and seizure operations were undertaken on 31.08.1995 at different premises connected with Ashok Chawla and his associates.

During the course of the searches, information was allegedly received regarding a garage situated at C - 517, Defence Colony, New Delhi. An authorization under Section 132 of the Income Tax Act, 1961 (hereinafter referred to as the ‘IT Act’) was thereafter issued in respect of the said premises. During the search of the garage, certain documents relating to the Ministry of Defence, which were stated to be classified as “Secret” and “Confidential”, were allegedly recovered.

The said documents were thereafter forwarded to the Ministry of Defence. On the basis of a complaint made by the Ministry, RC No.6(S)/96/SACB-I was registered by the CBI on 30.08.1996. Upon completion of investigation and after authorization by the Central Government, a complaint was filed for offences under Section 120B of the Indian Penal Code, 1860 (hereinafter referred to as the ‘IPC’) read with Section 3(1)(c) of the Official Secrets Act, 1923 (hereinafter referred to as the ‘1923 Act’) and the substantive offence thereunder.

After recording pre-charge evidence, charges were framed against Ashok Chawla and the present Petitioner on 12.10.2012. Post-charge evidence thereafter commenced.

PW-15 Y.K. Batra, who was posted as Deputy Director (Investigation), Unit-VI, Income Tax Department at the relevant time, was examined on 22.07.2016 and cross examined on 19.12.2016. During his examination, he identified the authorization under Section 132 of the IT Act, already exhibited as Ex.PW-5/A, and identified his signatures thereon. He stated that the authorization pertained to the search of the premises of Ashok Chawla and the Petitioner at C - 517, Defence Colony Garage, New Delhi.

PW - 3 D. Roy Choudhary was subsequently recalled and further cross examined on 15.02.2020 and 24.02.2020. During such cross examination, PW- 3 stated, inter alia, that a Satisfaction Note had been prepared by him and routed through PW-15 Y.K. Batra to P.K. Kashyap, the then Director (Investigation), Income Tax Department. He further stated that the first Authorization Warrant had been issued on the basis of the Satisfaction Note and that the Satisfaction Note was retained in a separate confidential file.

On the basis of the said deposition, the defence sought production of the Satisfaction Note and the Authorization Warrant. On 18.02.2020, the learned Trial Court observed that the relevance and necessity of the said documents stood established, though the application was deferred for want of complete particulars of the concerned record. After the requisite particulars were furnished, the application under Section 91 CrPC was allowed on 02.03.2020 and summons were directed to be issued for production of the record.

PW - 3, however, expired before further cross examination could take place. The Income Tax Department thereafter placed its submissions before the learned Trial Court and relied upon the common judgment dated 11.04.2017 of a Division Bench of this Court in Anuj Chawla v. Commissioner of Income Tax, New Delhi & connected matters, 2017:DHC:1920-DB. The batch included Ashok Chawla & Ors. v. Director of Income Tax & Ors., W.P.(C) 4299/2007, in which the validity of the warrant and the search proceedings had been specifically challenged.

By the impugned order dated 07.09.2022, the learned Trial Court noticed that the aforesaid judgment had not been brought to its notice when the earlier direction for production of the documents was passed. Taking into account the findings returned by the Division Bench concerning the search, the learned Trial Court held that production of the Satisfaction Note, Authorization Warrant and Panchnama for reopening the validity of the search was no longer required. The order dated 02.03.2020 was modified to that extent.

The Petitioner thereafter moved an application under Section 311 CrPC on 10.08.2023 seeking recall of PW-15 Y.K. Batra. The case set up in the application was that when PW-15 had earlier been examined, the defence was unaware of PW-3’s subsequent disclosure that the Satisfaction Note had been routed through PW-15. It was, therefore, prayed that PW-15 be recalled so that he could be confronted with the Satisfaction Note and further questioned in relation thereto.

The application was dismissed by the learned Trial Court on 11.10.2023. The learned Trial Court held, inter alia, that the Satisfaction Note was not a part of the record, its production had already been declined by the order dated 07.09.2022, and, in the absence of the document itself, its confrontation with PW-15 was not possible. The learned Trial Court also noticed that PW-15 had already been examined and cross examined.

Learned counsel for the Petitioner submits that the orders dated 18.02.2020 and 02.03.2020, directing production of the Satisfaction Note and the Authorization Warrant, were never challenged by the CBI and had attained finality. It is contended that the learned Trial Court had no jurisdiction to review the order passed by its predecessor and that the order dated 07.09.2022, though described as a modification, in substance amounts to a review.

It is further submitted that PW - 3’s subsequent cross examination disclosed for the first time that the Satisfaction Note had been prepared and routed through PW-15. The documents were, therefore, necessary to examine whether the conditions preceding issuance of the first Authorization Warrant had been fulfilled. According to learned counsel, if the foundation of the initial searches is shown to be doubtful, the subsequent search at C -517, Defence Colony would also require scrutiny.

Learned counsel seeks to distinguish the judgment dated 11.04.2017 by contending that the Division Bench principally dealt with the allegation that the search was motivated at the instance of certain persons, whereas the Petitioner in the present criminal trial questions compliance with the procedure preceding issuance of the Authorization Warrants.

It is also urged that findings returned in income tax proceedings cannot determine the Petitioner’s criminal liability, where the prosecution is required to establish its case beyond reasonable doubt. The Petitioner does not seek to reopen the income tax assessment, but seeks an opportunity to test the legality and genesis of the search from which the present prosecution arose.

Learned counsel further submits that the Income Tax Department was not a party to the criminal trial and, having been summoned only for production of documents, could not assume the role of a contesting party. It is also contended that the CBI itself had, on earlier dates, proceeded on the footing that the summoned documents were relevant.

Insofar as Section 311 CrPC is concerned, it is submitted that the application was moved before conclusion of the evidence of the Investigating Officer (‘IO’) and the Petitioner cannot be faulted for the time taken by the Court in deciding it. The principal submission is that PW-15 ought to be confronted with the fact subsequently disclosed by PW-3, namely, that the Satisfaction Note had been routed through him.

In support of the prayer under Sections 91 and 311 CrPC, learned counsel has relied upon Satbir Singh v. State of Haryana & Ors., 2023 INSC 786; Varsha Garg v. State of Madhya Pradesh & Ors., Criminal Appeal No.1021/2022, and Shyam Manohar Saxena v. CBI & Ors., 2019:DHC:3091.

Reliance has also been placed upon Chairman-cum-Managing Director, Coal India Ltd. & Ors. v. Ananta Saha & Ors., (2011) 5 SCC 142, in support of the maxim sublato fundamento cadit opus; A-One Granites v. State of U.P. & Ors., (2001) 3 SCC 537, to submit that a question which was not consciously determined in an earlier decision cannot be treated as concluded, and Union of India & Ors. v. M/s Agarwal Iron Industries, (2014) 15 SCC 215, in relation to judicial scrutiny of the reasons underlying an authorization under Section 132 of the IT Act.

Learned Special Public Prosecutor (‘SPP’) for the CBI opposes the petition. He submits that the Satisfaction Note and the first Authorization Warrant are not documents relied upon by the CBI to prove the offences charged. The prosecution case rests, inter alia, upon the alleged recovery of classified documents from the premises stated to be in possession of the accused.

Learned SPP further submits that PW-15 has already been subjected to detailed cross examination regarding the preliminary inquiry, source information, the Defence Colony premises, authorization of the search and the circumstances in which the search at C - 517 was undertaken. The Satisfaction Note itself does not form part of the prosecution record and PW-15 had not deposed to its contents in his examination-in-chief.

Learned SPP places reliance upon the Explanation to Section 132(1) of the IT Act and submits that the reasons to believe recorded by the income tax authority are not required to be disclosed to any person or authority. Reliance in this regard is placed upon Principal Director of Income Tax (Investigation) & Ors. v. Laljibhai Kanjibhai Mandalia, 2022 SCC OnLine SC 872.

Learned SPP submits that the legality of the same search and seizure operations had already been examined by a Division Bench of this Court in the judgment dated 11.04.2017. The documents, material and file notings forming the basis of the warrant had been produced in sealed cover before the Division Bench. The learned Trial Court, therefore, rightly concluded that the documents were no longer required merely to reopen the same challenge.

On Section 91 CrPC, reliance is placed upon State of Orissa v. Debendra Nath Padhi, (2005) 1 SCC 568, to contend that necessity or desirability of the document is the first requirement for exercise of the power. The CBI also relies upon Pooran Mal v. Director of Inspection (Investigation), (1974) 1 SCC 345.

This Court has heard learned counsel for the Petitioner and learned SPP for the CBI and has perused the record.

In the present petition, two questions arise for consideration. First, whether the learned Trial Court was justified in passing the order dated 07.09.2022 and declining further production of the documents earlier summoned under Section 91 CrPC. Second, whether the order dated 11.10.2023 declining to recall PW-15 under Section 311 CrPC warrants interference by this Court in exercise of its jurisdiction under Section 482 CrPC.

Section 91 CrPC is conditioned by the requirement that production of the document or thing must be considered “necessary or desirable” for the purposes of the investigation, inquiry, trial or other proceeding. In State of Orissa v. Debendra Nath Padhi (supra), the Supreme Court held:

Thus, an order under Section 91 CrPC does not turn merely on the existence or availability of a document. The Court must be satisfied that compelling its production serves a necessary or desirable purpose in the proceeding.

When the orders dated 18.02.2020 and 02.03.2020 were passed, the learned Trial Court proceeded upon the subsequent disclosure made by PW -3 regarding the Satisfaction Note and the first Authorization Warrant. At that stage, the judgment dated 11.04.2017 of the Division Bench had admittedly not been brought to the notice of the learned Trial Court.

The scope of the judgment dated 11.04.2017 is, therefore, important. The said judgment arose out of the search and seizure operations conducted in 1995. W.P.(C) 4299/2007, forming part of the batch, specifically questioned the validity of the warrant and the search proceedings. In paragraph 20 of the judgment, the Division Bench recorded:

The judgment, therefore, cannot be read as dealing merely with an allegation that the raid was motivated. The material forming the basis of the warrant had been produced before the Division Bench and the Court consciously undertook examination of the justification for the search.

Equally important is the fact that the Division Bench separately dealt with the procedural objections concerning the search at C - 517, Defence Colony. These included the timing at which one of the panch witnesses reached the premises, the allegation of forcible entry despite the keys being available with the Petitioner, the alleged opportunity for planting documents, the presence of witnesses during the search and the requirements of Rule 112(6) of the Income Tax Rules. After considering the said objections, the Division Bench observed as under:

The contention of the Petitioner that the judgment dated 11.04.2017 was confined only to the motive behind the search, and did not examine the manner in which the search was undertaken, is thus not borne out from the judgment itself.

The reliance upon A-One Granites (supra) does not alter this conclusion. The said decision reiterates the principle that a point which was not consciously considered and was passed sub silentio cannot be treated as a binding determination of that issue. In the present case, however, the validity of the warrant and the search was expressly in issue before the Division Bench, the material underlying the warrant was produced before it, and the procedural objections concerning the Defence Colony search were separately considered.

At the same time, the judgment dated 11.04.2017 cannot be treated as determining the criminal liability of the Petitioner. It does not do so. The prosecution would still have to establish the offences charged against the Petitioner in accordance with law and to the standard applicable to a criminal trial.

The relevance of the judgment dated 11.04.2017 for the present purpose is narrower. It bears directly upon whether compulsory production of the Satisfaction Note, first Authorization Warrant and connected record continued to be “necessary or desirable” under Section 91 CrPC for the stated purpose of questioning the legality of the same search.

Once the challenge to the warrant and search had already undergone judicial scrutiny before a Division Bench of this Court on the basis of the material and file notings underlying the warrant, and objections concerning the manner of the Defence Colony search had also been examined, the learned Trial Court was justified in reassessing whether production of the same or connected record continued to serve a necessary purpose in the criminal trial.

The Petitioner, however, contends that the learned Trial Court could not have revisited the order dated 02.03.2020 since the said order had not been challenged by the CBI. This submission also does not persuade this Court.

In Sethuraman v. Rajamanickam, (2009) 5 SCC 153, the Supreme Court held that orders on applications under Sections 91 and 311 CrPC, which do not decide anything finally, are interlocutory in nature. The said decision arose in the context of the bar contained in Section 397(2) CrPC. The principle is relevant here only to the limited extent that an order directing or refusing production under Section 91 is not a final adjudication of the substantive rights of the parties.

The orders dated 18.02.2020 and 02.03.2020 were procedural directions compelling production of documents. They did not determine any ingredient of the offence, the admissibility or effect of the alleged recovery, or any defence of the accused. Their operative foundation was the then existing assessment that production of the documents was necessary. The order dated 07.09.2022 cannot, therefore, be equated with a substantive review of a judgment or final order. The learned Trial Court reconsidered the continuing necessity of a procedural production direction after a prior Division Bench adjudication, which had not been brought to its notice earlier, was placed before it.

Section 91 itself requires the Court to consider whether production is necessary or desirable for the proceeding. An earlier direction to produce a document cannot compel the Court to insist upon its production even after material directly bearing upon its continuing necessity is brought to its notice.

The fact that the CBI did not challenge the earlier production order does not alter the position. Non challenge to a procedural direction cannot convert it into a final adjudication that the document must necessarily be produced irrespective of later or previously unnoticed material bearing upon its requirement.

The contention regarding the Income Tax Department having no locus is also without merit. The documents were sought from the Income Tax Department. If the Department considered that the record was confidential or that its production implicated a statutory restriction, nothing prevented it from placing the relevant legal position before the learned Trial Court. The Court remained the sole authority to decide whether production should be compelled.

The decision in Principal Director of Income Tax (Investigation) v. Laljibhai Kanjibhai Mandalia (supra) further explains the nature of the satisfaction contemplated by Section 132 of the IT Act. The Supreme Court, while summarising the principles governing judicial review of an authorization under Section 132, observed:

Thus, Laljibhai (supra) does not hold that a constitutional court is disabled from examining the foundational record when the validity of an authorization is directly challenged. Rather, it recognises limited judicial scrutiny of the formation of the belief while excluding examination of the sufficiency or adequacy of the reasons and negativing a general right to disclosure.

The decision in Union of India v. M/s Agarwal Iron Industries (supra), relied upon by the Petitioner, is consistent with the same position. The Supreme Court held that the Court could examine the relevant confidential file to see whether reasons had been recorded and whether the authorization met the requirement of law.

In the present case, however, the material and file notings forming the basis of the warrant had already been placed before and considered by the Division Bench in the proceedings culminating in the judgment dated 11.04.2017. Agarwal Iron Industries (supra) cannot, therefore, be read as requiring the learned Trial Court, while considering necessity of production under Section 91 CrPC, to once again call for the same foundational material merely for re-examining the legality of the search.

This Court, therefore, finds no jurisdictional error in the conclusion of the learned Trial Court that continued production of the Satisfaction Note, Authorization Warrant and Panchnama for the stated purpose was not required. The order dated 07.09.2022 calls for no interference.

Section 311 CrPC undoubtedly confers wide power upon a criminal court to summon, recall or re-examine a witness at any stage. The width of the power, however, does not make recall automatic. The controlling requirement is whether the evidence sought to be obtained is essential to the just decision of the case. In State (NCT of Delhi) v. Shiv Kumar Yadav, (2016) 2 SCC 402, the Supreme Court held:

The decisive question, therefore, is not merely whether some further questions can be asked of PW-15. It is whether recalling PW-15 is essential for a purpose which survives and is capable of materially assisting the just decision of the case.

The application under Section 311 CrPC makes the object of the proposed recall clear. The Petitioner specifically pleaded that the Satisfaction Note earlier summoned by the Court was required to be put to PW - 15 and that he should be recalled for cross examination concerning that document and the fact that it had allegedly been routed through him.

By the time the application came to be decided, however, the Satisfaction Note was not a part of the record and its production had been declined by the order dated 07.09.2022. The principal purpose stated in the application - confronting PW-15 with the Satisfaction Note was, therefore, no longer capable of being achieved.

This is also not a case where PW-15 was discharged without being questioned on the circumstances surrounding the search and authorization. His cross examination dated 19.12.2016 demonstrates otherwise. PW-15 was questioned regarding the source information concerning Ashok Chawla, the preliminary inquiry conducted upon such information, the businesses and properties looked into during the inquiry, the authority competent to issue search warrants and the information available regarding C - 517, Defence Colony.

He was specifically questioned regarding the ownership and possession of the Defence Colony premises. He stated that, during the course of the searches, information was received from one of the search parties that documents relating to defence deals were lying at the garage at C - 517, Defence Colony, whereafter a warrant of authorization was issued by him for search of the said premises.

The allegation of planting was also specifically put to PW - 15. He denied the suggestion that the documents relating to defence deals had been planted at the premises in connivance with Income Tax officials. Ex. PW-5/A was again shown to him during cross examination and he was questioned regarding the circumstances of its issuance as well as his interaction with PW-3 prior thereto.

The areas relating to the preliminary inquiry, information concerning C-517, authorization of the search and the allegation that the recovery was planted were, therefore, not matters on which the defence had been denied an opportunity of cross examination.

The decisions relied upon by the Petitioner on Section 311 CrPC do not compel a different result. In Satbir Singh (supra), recall was permitted because a relevant factual issue arose only after the subsequent examination of the CFSL expert. The Supreme Court specifically found that, at the time of the witness’s initial deposition, there had been no occasion to bring those later-emerging facts before the Court.

The present case stands differently. It is true that PW - 3 subsequently stated that the Satisfaction Note had been routed through PW - 15. However, the Section 311 application itself sought to use that subsequent disclosure for confronting PW-15 with the Satisfaction Note. Once production of the Satisfaction Note stood declined, the principal evidentiary object for which recall was sought did not survive. In Varsha Garg (supra), the Supreme Court reiterated that:

Shyam Manohar Saxena (supra) is also distinguishable. In that case, the documents sought were found to be relevant to the just decision of the case and the accused had earlier been expressly granted liberty to summon the record and witnesses at the stage of defence evidence. The subsequent application could not, therefore, have been rejected merely as belated. No comparable circumstance exists in the present case.

The principle in Godrej Pacific Tech. Ltd. v. Computer Joint India Ltd., (2008) 11 SCC 108, that the power under Section 311 is intended to enable the Court to obtain evidence essential for a just decision, is unexceptionable. It does not, however, mean that a witness already examined must be recalled whenever another witness subsequently refers to a fact connected with him. Essentiality remains the governing test.

The reliance upon the maxim sublato fundamento cadit opus also does not advance the Petitioner’s case. The argument proceeds on the premise that the foundational search itself has been declared invalid or rendered legally unsustainable. That premise does not exist here. The challenge to the warrant and search proceedings was examined in W.P.(C) 4299/2007 and rejected by the Division Bench.

This Court also does not consider it necessary to sustain the impugned order primarily on the ground of delay or on the finding that the application was intended to prolong the trial. Even if the Petitioner’s explanation regarding the timing of the application is accepted, the statutory requirement remains that the proposed further examination must be essential to the just decision of the case.

That requirement is not satisfied. The document with which PW-15 was proposed to be confronted is not on record and its production stands declined. At the same time, PW-15 has already undergone substantial cross examination on the preliminary inquiry, authorization, the Defence Colony premises, the manner in which information concerning the said premises was received and the allegation of planting. No independent purpose, divorced from the proposed confrontation with the Satisfaction Note, has been shown which makes a further round of examination of PW-15 essential to the just decision of the case.

The learned Trial Court, therefore, committed neither patent illegality nor jurisdictional error in dismissing the application under Section 311 CrPC. The order dated 11.10.2023 also calls for no interference under Section 482 CrPC.

For the foregoing reasons, this Court finds no ground to interfere with the orders dated 07.09.2022 and 11.10.2023 passed by the learned Principal District and Sessions Judge-cum-Special Judge (PC Act) (CBI), Rouse Avenue District Courts, New Delhi.

The petition is, accordingly, dismissed. Pending application(s), if any, also stand disposed of. Interim order, if any, stands vacated.

It is clarified that the observations made herein are confined to the present petition and shall not be construed as an expression on the merits of the case. The learned Trial Court shall proceed in accordance with law.