Case: State, Cbi Vs. Sashi Balasubramnian

however, notice that in R.K. Garg etc. v. Union of India and Others [(1981) 4 SCC 675] , it was held that only because exemption had been granted in relation to purchase of bearer bonds, the same would not mean that the offender shall stand immuned from other offences also. Bhagwati, J. speaking for the majority opined : ".....It will be seen that the immunities granted under Section 3, sub-section (1) are very limited in scope. They do not protect the holder of Special Bearer Bonds from any inquiry or investigation into concealed income which could have been made if he had not subscribed to or acquired Special Bearer Bonds. There is no immunity from taxation given to the black money which may be invested in Special Bearer Bonds. That money remains subject to tax with all consequential penalties, if it can be discovered independently of the fact of subscription to or acquisition of Special Bearer Bonds. The only protection given by Section 3, sub- section (1) is that the fact of subscription to or acquisition of Special Bearer Bonds shall be ignored altogether and shall not be relied upon as evidence showing possession of undisclosed money. This provision relegates the Revenue to the position as if Special Bearer Bonds had not been purchased at all. If without taking into account the fact of subscription to or acquisition of Special Bearer Bonds and totally ignoring it as if it were non-existent, any inquiry or investigation into concealed income could be carried out and such income detected and unearthed, it would be open to the Revenue to do so and it would be no answer for the assessee to say that this money has been invested by him in Special Bearer Bonds and it is therefore exempt from tax or that he is on that account not liable to prosecution and penalty for concealment of such income. This is the main difference between the impugned Act and the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1965. Under the latter Act, where gold is acquired by a person out of his undisclosed income, which is the same thing as black money, and such gold is tendered by him as subscription for the National Defence Gold Bonds, 1980, the income invested in such gold is exempted from tax, but where Special Bearer Bonds are purchased out of undisclosed income under the impugned Act, the income invested in the Special Bearer Bonds is not exempt from tax and if independently of the fact of purchase of the Special Bearer Bonds and ignoring them altogether, such income can be detected, it would be subject to tax. The entire machinery of the taxation laws for inquiry and investigation into concealed income is thus left untouched and no protection is granted to a person in respect of his concealed income merely because he has invested such income in Special Bearer Bonds. It is therefore incorrect to say that as soon as any person purchases Special Bearer Bonds, he is immunised against the processes of taxation laws. Here there is no amnesty granted in respect of any part of the concealed income even though it be invested in Special Bearer Bonds. The whole object of the impugned Act is to induce those having black money to convert it into white money by making it available to the State for productive purposes, without granting in return any immunity in respect of such black money, if it could be detected through the ordinary processes of taxation laws without taking into account the fact of purchase of Special Bearer Bonds...." 47. We may at this stage deal with another contention viz. that if in the connected matter where other public servants were parties, no appeal having been filed from the judgment of the High Court by the C.B.I., this appeal would be maintainable. This aspect of the matter has been considered by a three-Judge Bench of this Court in Government of West Bengal v. Tarun K. Roy and Others [(2004) 1 SCC 347], wherein it was categorically stated: "....Non-filing of an appeal, in any event, would not be a ground for refusing to consider a matter on its own merits. (See State of Maharashtra v. Digambar.) 29. In State of Bihar v. Ramdeo Yadav wherein this Court noticed Debdas Kumar1 by holding: (SCC p. 494, para 4) "4. Shri B.B. Singh, the learned counsel for the appellants, contended that though an appeal against the earlier order of the High Court has not been filed, since larger public interest is involved in the interpretation given by the High Court following its earlier judgment, the matter requires consideration by this Court. We find force in this contention. In the similar circumstances, this Court in State of Maharashtra v. Digambar and in State of W.B. vs. Debdas Kumar had held that though an appeal was not filed against an earlier order, when public interest is involved in interpretation of law, the Court is entitled to go into the question." 48. [See also Union of India vs. Pramod Gupta (Dead) by Lrs. and others - (2005) 12 SCC 1 ] 49. In this case also public interest is involved as interpretation of the provisions of the Act were in question. Yet again there cannot be any equality in illegality.50. [See Secretary, State of Karnataka and others vs. Umadevi (3) and others [(2006) 4 SCC 1] 51. We, therefore, are of the opinion that the impugned judgment cannot be sustained. It is set aside accordingly.52. The High Court, however, did not go into the merit of the matter. It proceeded on the basis that the continuation of the prosecution as against Respondents was unsustainable in law. Although prosecution as against Respondents herein may be held to be not maintainable, in our opinion, they are entitled to contend that even if the materials brought on records are given face value and taken to be correct in their entirety, no case has been made out as against them.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]29. In any view of the matter, an immunity is granted only in respect of offences purported to have been committed under direct tax enactment or indirect tax enactment, but by no stretch of imagination, the same would be granted in respect of offences under the Prevention of Corruption Act. A person may commit several offences under different Acts; immunity granted in relation to one Act would not mean that immunity granted would automatically extend to others. By way of example , we may notice that a person may be prosecuted for commission of an offence in relation to property under the Indian Penal Code as also under another Act, say for example, the Prevention of Corruption Act. Whereas charges under the Prevention of Corruption Act may fail, no sanction having been accorded therefor, the charges under the Penal Code would not.30. The High Court has not held that the offences alleged against Respondents are so inextricably connected that it cannot be separated so much so that in the event if it be held that private parties cannot be proceeded with at all, the case against public servants, would invariably fail. We, thus, as at present advised, do not intend to delve deep into the said question. However, to be fair to learned counsel, we may notice the decisions cited at the bar.31. Reliance placed by Mr. Singhvi on Devarapalli Lakshminarayana Reddy and Others v. V. Narayana Reddy and Others [(1976) 3 SCC 252]  has no application to the facts and circumstances of the present case. The question which arose for consideration therein was required to be determined in the context of the provisions of Sections 200 and 202 of the 1898 CodeSections 200 and 202 of the 1973 Code. The question was as to whether cognizance is taken before issuance of process or not.Institution of a prosecution and institution of a complaint case in a criminal court stand on different footings. Whereas summons to an accused in a complaint case can be issued only upon taking cognizance of the offence, the same would not mean in a case where first information report has been lodged resulting in initiation of investigation or where it has been referred to police or other authorities for enquiry; even then a prosecution may not be held to have been initiated at that stage.33. What transpires from the said decision is that whereas before cognizance is taken, application of mind on the part of the court is imperative, taking action of some other kind would not mean that cognizance has been taken. In some cases, even after lodging of the F.I.R., a preliminary enquiry which may not be an investigation into the crime, may be initiated.We may at this stage deal with another contention viz. that if in the connected matter where other public servants were parties, no appeal having been filed from the judgment of the High Court by the C.B.I., this appeal would be maintainable. This aspect of the matter has been considered by aBench of this Court in Government of West Bengal v. Tarun K. Roy and Others [(2004) 1 SCCIn this case also public interest is involved as interpretation of the provisions of the Act were in question. Yet again there cannot be any equality in illegality.50. [See Secretary, State of Karnataka and others vs. Umadevi (3) and others [(2006) 4 SCC 1] 51. We, therefore, are of the opinion that the impugned judgment cannot be sustained. It is set aside accordingly.52. The High Court, however, did not go into the merit of the matter. It proceeded on the basis that the continuation of the prosecution as against Respondents was unsustainable in law. Although prosecution as against Respondents herein may be held to be not maintainable, in our opinion, they are entitled to contend that even if the materials brought on records are given face value and taken to be correct in their entirety, no case has been made out as against them.