Summarize the following court judgment. nal Appeals Nos. 176 of 1959 and 40 of 1960. Appeals by special leave from the judgment and order dated August 26	 1959	 of the Bombay High Court	 in Cr. A. No. 1638 of 1958. A. section R. Chari	 J. B. Dadachanji	 O. C. Mathur and Ravinder Narain	 for the appellant (in Cr. A. No. 176 of 59). Erenny Parekh and K. R. Choudhri	 for the appellant (in Cr. A. No. 40 of 60). Jai Gopal Sethi	 R. L. Mehta and R. H. Dhebar	 for the respondents. April 24. The Judgment of the Court was delivered by GAJENDRAGADKAR	 J. A criminal conspirac. to which	 according to the prosecution	 M.G. Agarwal 407 M. K. Kulkarni and N. Laxminarayan	 hereafter called accused Nos. 1	 2 and 3 respectively	 were parties between December	 1954	 and June 1955	 at Bombay	 has given rise to the criminal proceedings from which the two present appeals arise. At the relevant time	 the three accused persons were attached to the office of the Income tax Officer	 Ward No. A III in Greater Bombay. Accused No. I was designated as the First Income tax Officer	 and accused Nos. 2 and 3 worked under him as second and third Assessment Clerks respectively. The main charge against these persons was that during the relevant period	 they had entered into a criminal conspiracy by agreeing to do or cause to be done illegal acts	 by corrupt and illegal means and by abusing their position as public servants to obtain for themselves pecuniary advantage in the form of income tax refund orders and this criminal object was achieved by issuing the said refund orders in the names of persons who either did not exist or were not assessees entitled to such refunds. The prosecution case was that after the said refund orders were thus fraudulently issued	 they were fraudulently cashed and illegally misappropriates. The ten persons in whose names these refund orders were fraudulently issued were G.M. Thomas	 P.N. Swamy	 K. section Patel	 section R. Bhandarkar	 section P. Jani	 D. M. Joshi	 C. B. Kharkar	 Ramnath Gupta	 V. M. Desai and K. V. Rao. It appears that twenty five bogus vouchers were issued in respect of these ten fictitious cases ; eleven accounts were fraudulently opened in different Banks in Bombay and misappropriation to the extent of Es. 54	000/ has thereby been committed. That	 in. substance	 is the main charge which was levelled against the three accused persons. Nine other subsidiary charges were also framed against them. Charges 2	 3 and 4 wore in respect of the income tax refund order issued on 408 the 7th January	 1955	 in favour of Mr. G. M. Thomas. The prosecution alleged that by their several acts in respect of the issuance of this refund order	 the three accused persons had committed offences under sections 467 and 471 read with	 section 34 I.P.C.	 as well as section 5(2) of the Prevention of Corruption Act read with section 5(1)(d) of the said Act and a. 34 of 'the Indian Penal Code. Similarly	 charges 5	 6	 and 7 were framed under the same sections respectively in regard to the income tax refund order issued in favour of Mr. G. M. Thomas on the 2nd April	 1955. In regard to the income tax refund order issued in favour of Mr. section R. Bhandarkar on 2nd April	 1955	 charges	 8	 9 and 10 were framed under the said respective	 sections. That is how the case against the three	 accused persons under ten charges was tried by the Special Judge 	 Greater Bombay. It would thus be seen that	 in substance	 the prosecution case if; that in order to carry out the criminal object of the conspiracy	 the three accused	 persons adopted a very clever and ingenious modus operandi in defrauding the public treasury. They" decided to take adequate steps to issue income tax refund orders in the names of non existing persons and to misappropriate the amounts by encashing the said refund certificates issued in pursuance of the said refund orders. In furtherance of the conspiracy and in furtherance of the common intention of all the conspirators	 steps were taken to forge the signatures of the said fictitious persons as claimants wherever necessary	 to prepare some of the supporting documents and to deal with the cases as though they were cases of genuine assessees submitting a return and making a claim for refund. It is by adopting this clever device that all the accused persons have succeeded in misappropriating such a large amount as Re. 54	000/ . 409 It appears that when a return 'or refund application is received in the Income tax Office	 first goes to the assessment refund clerk who	 in ue course	 puts it up for orders before the Incometax Officer. In ordinary course	 the Income tax Officer sends a notice to the assessee	 examines him and the accounts produced by him to see if the return is correct. That done	 an assessment order is passed by the Income tax Officer. Thereafter	 a form known as I.T. 30 form is prepared. This form contains several columns which	 when filled in	 give details about the income tax payable by the assessee the tax paid by him	 the refund ordered by the income tax Officer or the collection demanded by aim. After this form is duly filled	 it is sent to another clerk for preparing the refund order. At that stage	 the refund order is prepared and the said order together with the demand and collection register and I.T. form 30 are sent back to the Income tax Officer who examines the record and signs the refund order and the I.T. form 30 and himself makes or causes to be made an entry in the demand and collection register. At this time	 he also cancels the refund certificates	 such as dividend warrants. The Income tax Officer also receives the advice memo prepared by the refund clerk and signs it. The said memo is sent to the Reserve Bank and the refund order is sent to the assessee. After the refund voucher is cashed by the Reserve Bank	 the advice memo is received back in the Income tax Office. It is thereafter that an entry is made in the Daily Refund Register. The prosecution case is that the conspirators purported to adopt all steps which they deemed necessary to carry out their criminal object in order formally to comply with the procedure prescribed by the department in making refund orders. At this stage	 it is relevant to state briefly how	 according to the prosecution	 the fraud of the 410 conspirators was discovered. In April ' 1955	 Mr. Sundararajan who was then the Commissioner of Income tax	 Bombay City received a report that many irregularities were being committed in respect of refund orders issued by A III Ward. On receiving this report	 he told Mr. Gharpure who was the Inspecting Assistant Commissioner of Income tax	 A Range	 to carry out an inspection of the work of accused No. 1. He	 however	 cautioned Mr. Gharpure to carry out his assignment as if he was making an inspection in the normal course in order that no suspicion should arise in the mind of accused No. 1. Mr. Gharpure accordingly made inspection and submitted his report on the 6th 	Tune	 1955. It is common ground that Mr. Gharpure was not able to discover any fraud. On the 10th June	 1955	 Mr. Sundararajan asked Mr. Gharpure to produce before him all the refund books kept in A III Ward. They were accordingly produced before him. On examining these books	 Mr. Sundararajan found certain sus picious features. He came across one counter foil of the refund order in the Dame of G. M. Thomas and he noticed that the relevant postal acknowledgment did not bear any postal stamp and presented a clean and fresh appearance. That appeared to Mr. Sundararajan to be suspicious. He also found that a number of refunds were made in round figures which was very unusual. The files showed that on the back of the counter foils the postal acknowledgments were not stuck up nor were advice notes stuck up. His suspicions having been raised by these unusual features of the files	 Mr. Sundararajan conducted a further scrutiny of the six counter foil books particularly to find out whether the refund orders were in respect of round figures and he found that such refund orders had been passed	 in the names of Messrs G. M. Thomas	 K. section Patel	 P. N. Swamy	 D. N. Joshi and S	 R. Bhandarkar. 411 After the refund orders were encashed they we 're sent to the Accountant General 's Office by the Reserve Bank and so	 Mr. Sundararajan thought that he could got them from the said office. All this happened in the evening of the 10th June	 1955. On the 11th June	 1955	 which was a Saturday	 Mr. Sundararajan called for the income tax files of some of the persons named above including G. M. Thomas and K. section Patel along with the files of twenty other regular assessees. The files of the twenty regular assessees were submitted to him but not of the ten fictitious persons. On enquiry he was told that those files were not available. ' The non production of the said files confirmed his suspicion that something irregular must have happened in respect of them. That is why he sent for accused No. 1 at 2 p. m. but he was not in his office. He came at 3 p. m. Mr. Sundararajan showed him the relevant counter foils and examined him. The statement made by accused No. I was duly recorded by Mr. Sundararajan. As a result of the enquiry made by him	 Mr. Sundararajan was satisfied that the three accused persons had fraudulently brought into existence several documents as a result of which a large amount had been misappropriated	 and so	 he requested the Central Board of Revenue to suspend accused No. 1. At that stage	 Mr. Sundararajan naturally wanted to search the office of A III Ward	 but he could not carry out the search since he was told that the key of the A III Ward Office had been taken way by accused No. 3. He then left instructions with the police guard of his office that nobody should be allowed to enter the room of A III Ward without his permission. Next day	 he attended his office but he found that no person in A III Ward had gone to work. Before he left the office	 he got the office of A III Ward sealed and 412 left word with the Inspector on duty that if any person came to work in that office thereafter	 it should be reported to him. After Mr. Sundararajan reached home	 he received a telephone message that accused No. 3 had come to A III Ward Office with the keys. Mr. Sundararajan directed the Inspector to take charge of the keys from accused No. 3 and ask him to attend office the next day. Next day was a Monday (13 6 1955). On that day	 Mr. Sundararajan accompanied by certain other officers went to the office of A IlI Ward	 opened the seal and the lock and after going inside	 attached six registers. He also made a search for the assessment records of the ten persons in question but he did not find them. He then transferred accused No. 1 to an unimportant charge and instructed the Banks that no withdrawals should be allowed from any of the eleven accounts	 since the said accounts appeared to him to be suspicious. He then sent for accused No. 3 and examined him. He also sent for accused No. 2 but he was not available since he had gone on leave. He directed one of his inspectors to enquire whether the said ten persons were real persons or were merely fictitious Dames. All this happened on the 13th June	 1955. On the 14th June	 1955	 Mr. Sundararajan went to A III Ward Office along with accused No. 3. He wanted to search for the missing papers	 viz.	 the assessment record of the ten persons in question. Accused No. 3 waited for some time and then opened accused No. 2 's table and took out some papers. A list of these papers was made and they were taken in charge. This list has been signed by Mr. Sundararajan and the officers who accompanied him as well as by accused No. 3. Thereafter	 accused Nos. 2 & 3 were suspended and as a result 413 of the investigation which followed	 all the three accused persons were put up for their trial before the learned Special Judge for Greater Bombay on the charges already indicated. Before the learned trial Judge	 accused No. 3 pleaded guilt to all the charges framed against him	 whereas accused Nos. 1 and 2 denied that they had anything to do with the alleged commission of the offences charged. The prosecution sought to prove its case against all the three persons by producing before the learned trial Judge the relevant documents including the files kept in A III Ward office	 and it examined four witnesses from the department for the purpose of showing the procedure that is followed in passing assessment orders and granting refunds and with the object of showing that the conspiracy could not have succeeded without the active assistance and co operation of accused No. 1. These witnesses are Sundararajan	 P. W. 1	 Nagwekar	 P. W. 2	 Subramanian	 P.W. 5 and Downak	 P. W. 21. It also. examined Das Gupta	 P. W. 26	 to prove the handwriting of the accused persons. Eleven other witnesses were examined to prove the identity of accused Nos. 2 and 3 in respect of the steps taken by them to open accounts in different banks in order to encash the refund vouchers issued in pursuance of the refund orders passed by accused No. 1. The learned trial Judge held that the evidence accused by the prosecution did not establish beyond a reasonable doubt 'the existence of the criminal conspiracy between the three accused. He was not inclined to hold that the ten alleged persons were non existent. Even so	 he proceeded to deal with the case on the basis that the ten persons were non assesses and yet the refund orders had been passed in their favour. According to the 414 learned trial Judge	 accused No. I may have innocently signed the	 relevant documents without looking to them in a hurry to dispose of cases	 placing confidence in his staff; and so	 it would be difficult to hold that he was a member of the conspiracy. The utmost	 said the learned Judge	 that can be argued against him is that he was negligent. That is how he acquitted accused No. 1 of the principal charge of conspiracy under section 120 B &.ad as a result	 the other charges as well. In regard to accused No. 2	 the learned Judge was likewise not satisfied that the evidence adduced by the prosecution to prove his signatures on the relevant documents established the fact that he had signed those documents and he was not impressed by the other evidence led before him to show that he assisted accused No. 3 in the matter of encashing the refund vouchers. On these findings	 accused No. 2 was acquitted of all the charges framed against him. Since accused No. 3 had pleaded guilty to the charges	 the learned Judge convicted him under sections 47 1	 of the I. P.C. and section 5 (2) of the Prevention of Corruption Act and sentenced him to different terms of imprisonment which were ordered to run concurrently. 	 He	 however	 acquitted accused No. 3 so far as the charge of conspiracy was concerned and he acquitted accused Nos. 1 and 2 of all the offences. Against the order of acquittal passed by the learned Judge in favour of accused Nos. 1 and 2	 the State of Maharashtra preferred an appeal in the Bombay High Co art and this appeal succeeded. The High Court has found that the learned trial Judge a misdirected himself by assuming that accused No. I had pleaded that he had negligently signed the relevant documents and passed the relevant orders in a hurry	 placing confidence in his staff. The High Court has pointed out that far from pleading negligence	 accused No. 1 had definitely stated 415 in his written statement filed in the trial Court that before he directed the issue of refund in the ten cases	 be had examined the files containing the supporting documents and had satisfied himself that it was proper to allow the refund in each one of those cases. This position was conceded by the learned Advocate who appeared for accused No. 1 in the High Court. The High Court then examined the question as to whether the ten assessees were existing persons or were fictitious names and it came to the. conclusion that the ten names given for the eleven accounts in which refund orders were passed were fictitious names. The High Court then examined the circumstantial evidence on which the prosecution relied in support and proof of its main charge of conspiracy between the three accused persons and it came to the conclusion that the said charge had been proved against all the three accused persons beyond a reasonable doubt. That is how the High Court partially allowed the appeal preferred by the State and convicted all the three accused persons under section 120 B of the Indian Penal Code. It also convicted accused No. 2 of the offences under sections 467	 471	 I. P. C.	 and section 5(2) of the Prevention of Corruption Act. In regard to the other offences charged	 the order of acquittal was confirmed. Having convicted accused Nos. 1 & 2 under section 120 B	 the High Court has sentenced each one of them to suffer rigorous imprisonment for 18 months for the said offence. Accused No. 2 has also been directed to suffer R.I. for 18 months in respect of each of the offences under sections 467	 471	 I. P. C. and section 5 (2) of the Prevention of Corruption Act. These sentences are ordered to run concurrently with the sentence ordered under section 120 B. It is against this order of conviction and sentence passed by the High Court in appeal that accused Nos. 1 	 2 have come to this Court by special leave by their appeals Nos. 176 of 1959 and 40 of 1960. 416 Since the impugned order of conviction and sentence was passed against the appellants by the High Court in exercise of its powers under section 423 of the Criminal Procedure Code while hearing 'an appeal against their acquittal	 the first question which calls for our decision relates to the extent of the High Court 's powers in interfering with orders of acquittal in appeal. This question has been discussed and considered in several judicial decisions both by the privy Council and this Court. In dealing with the different aspects of the problem raised by the construction of section 423	 emphasis has sometimes shifted from one aspect to the other and that is likely to create a doubt. about the true scope and effect of the relevant provisions contained in section 423. Therefore	 we propose to deal with that point and state the position very briefly. Section 423 (1) prescribes the powers of the appellate Court in disposing of appeals preferred before it and clauses (a) and (b) deal with appeals against acquittals and appeals against convictions respectively. There is no doubt that the power conferred by clause (a) which deals with an appeal against an order of acquittal is as wide as the power conferred by clause (b) which deals with an appeal against an order of conviction	 and so	 it is obvious that the High Court 's powers in dealing with criminal appeals are equally wide whether the appeal in question is one against acquittal or against conviction. That is one aspect of the question. The other aspect of the question centres round the approach which the High Court adopts in dealing with appeals against orders of acquittal. In dealing with such appeals	 the High Court ;naturally bears in mind the presumption of innocence in favour of an accused person and cannot lose sight of the fact that the said presumption is strengthened by the order of acquittal passed in his favour by the trial Court and so	 the fact that the accused person is 417 entitled to the benefit of a reasonable doubt will always be present in the mind of the High Court when it deals with the merits of the case. As an appellate Court the High Court is generally slow in disturbing the finding of fact recorded by the trial Court	 particularly when the said finding is based on an appreciation of oral evidence because the trial Court has the advantage of watching the demeanour of the witnesses who have given evidence. Thus	 though the powers of the High Court in dealing with an appeal against acquittal are as wide as those which it has in dealing with an appeal against conviction	 in dealing with the former class of appeals	 its approach is governed by the overriding consideration flowing from the presumption of innocence. Sometimes	 the width of the power is emphasized	 while on other occasions	 the necessity to adopt a cautious approach in dealing with appeals against acquittals is emphasised	 and the emphasis is expressed in different words or phrases used from time to time. But the true legal position is that however circumspect and cautious the approach of the High Court may be in dealing with appeals against acquittals	 it is undoubtedly entitled to reach its own conclusions upon the evidence adduced by the prosecution in respect of the guilt or innocence of the accused. this position has been clarified by the Privy Council in Sheo Swarup vs The	 King Emperor (1) and Nur Mohammad vs Emperor In some of the earlier decisions of this Court	 however	 in emphasizing the importance of adopting a cautious approach in dealing with appeals against acquittals	 it was observed that the presumption of innocence is reinforced by the order of acquittal and so	 "the findings of the trial Court which had the advantage of seeing the witnesses and hearing their evidence can be reversed only for (1) (1934) L.R. 61 1. A. 398. (2) A.I.R. 1945 P.C. 151	 418 very substantial and compelling reasons": vide Surajpal Singh vs The State (1). Similarly in Ajmer Singh vs State of Punjab (2)	 it was observed that the interference of the High Court in an appeal against the order of acquittal would be justified only if there are "very substantial and compelling reasons to do so. ') In some other decisions	 it has been stated that an order of acquittal can be reversed only for "good and sufficiently cogent reasons" or for "strong reasons". In appreciating the effect of these observations	 it must be remembered that these observations were not intended to lay down a rigid or inflexible rule which should govern the decision of the High Court in appeals against acquittals. They were not intended	 and should not be read to have intended to introduce an additional condition in clause (a) of section 423 (1) of the Code. All that the said observations are intended to em phasise is that the approach of the High Court in dealing with an appeal against acquittal ought to be cautious because as Lord Russell observed in the case of Shoo Swarup	 the presumption of innocence in favour of the accused "is not certainly weakened by the fact that he has been acquitted at his trial." Therefore	 the test suggested by the expression "substantial and compelling reasons" should not be construed as a formula which has to be rigidly applied in every case. That is the effect of the recent decisions of this Court	 for instance	 in Sanwat Singh vs State of Rajasthan (2)	 and Harbans Singh vs The State of Punjab (4); and so	 it is not necessary that before reversing a judgment of acquittal	 the High Court must necessarily characterise the findings recorded therein as perverse. Therefore	 the question which we have to ask ourselves in the present appeals is whether on the material produced by the prosecution	 the High Court was justified in reaching the conclusion that the (1) ; 	 201. (2) ; (3) ; (4) (1962) Supp. I.S.C.R 104. 419 prosecution case against the appellants had been proved beyond a reason able doubt	 and that the contrary view taken by the trial Court was	 erroneous. In answering this question	 we would	 no doubt	 consider the salient and broad features of the evidence in order to appreciate the grievance made by the appellants against the conclusions of the High Court. But under article 136 we would ordinarily be reluctant to interfere with the finding of fact recorded by the High Court particularly where the said findings are based on appreciation of oral evidence. There is another point of law which must be considered before dealing with the evidence in this case. The prosecution case against accused No. 1 rests on circumstantial evidence. The main charge of conspiracy under section 120 B is sought to be established by the alleged conduct of the conspirators and so far as accused No. 1 is concerned	 that rests on circumstantial evidence alone. It is a well established rule in criminal jurisprudence that circumstantial evidence can be reasonably made the basis of an accused person 's conviction if it is of such a character that it is wholly inconsistent with the innocence of the accused and is consistent only with his guilt. If the circumstances proved in the case are consistent either with the innocence of the accused or with his guilt	 then the accused is entitled to the benefit of doubt. There is no doubt or dispute about this position. But in applying this principle	 it is necessary to distinguish between facts which may be called primary or basic on the one hand and inference of facts to be drawn from them on the other. In regard to the proof of basic or primary facts the Court has to judge the evidence in the ordinary way	 and in the appreciation of evidence in respect of the proof of these basic or primary facts there is no scope for the application 420 of the doctrine of benefit of doubt. The Court considers the evidence and decides whether that evidences proves a particular fact or not. When it is held that a certain fact is proved	 the question arises whether that fact leads to the inference of guilt of the accused person or not	 and in dealing with this aspect of the problem	 the doctrine of benefit of doubt would apply and an inference of guilt can be drawn only if the proved fact is wholly inconsistent with the innocence of the accused and is consistent only with his guilt. It is in the light of this legal position that the evidence in the present case has to be appreciated. The Court then considered the evidence and the findings of the High Court and dismissed the appeals. Appeals dismissed.

Appellant Agarwal was an Income Tax Officer and appellant Kulkarni	 a clerk under him. They were put up for trial along with another clerk of the Department on several charge the principal charge being that they had entered into a criminal conspiracy to obtain for themselves pecuniary advantage in the form of income tax refund orders in the name of fictitious persons and had thereby fraudulently mis appropriated a large amount of Government money. The trial judge held that the prosecution had failed to establish criminal conspiracy and acquitted the appellants of the charge under section 120B and the second appellant of all other charges under the Indian Penal ( ode but while acquitting the third person also under section 120B		 convicted him of other offends as he had pleaded guilty. The State appealed against this order of acquittal. The High Court allowed the appeal in part and convicted all the accused persons under section 120B of the Code and the second appellant also under the other charges. Held	 that there was no doubt that the powers of the High Court under section 423 (1) (a) of the Code of Criminal Procedure in dealing with an order of acquittal were as wide as those under section 423 (1) (b) in respect of orders of conviction; ' but in dealing with an appeal against acquittal that Court had to bear in mind the fact that the initial presumption of innocence in favour of the accused person is strengthened by the order of acquittal; But however cautious or circumspect the court might be	 it was	 nevertheless	 free to arrive at its own conclusions as to the guilt or innocence of the accused on the evidence adduced before it by the prosecution; Sheo Swarup vs King Emperor 	 934) L. R. 61 I. A. 398 and Nur Mohammad vs Emperor	 A.I.R. 1945 P. C. 151.	 referred to. 406 Observations made on ' this point in certain decided cases of this Court were not intended to lay down a rigid or inflexible rule that should govern all such appeals and it is not necessary that the High Court must characterise the findings as perverse	 before it can reverse a judgment of acquittal. Surajpal Singh vs The State	 ; and Ajmer Singh vs State	 of Punjab	 ; 	 considered. Sanwat Singh v	 State of Rajasthan; 	 and Harbans Singh vs State of Punjab	 [1962]_"Supp. 1 section C. R. 104 referred to. It was settled law that a conviction can be reasonably founded on circumstantial evidence if it is wholly inconsistent with the innocence of the accused and Consistent only with his guilt. If the circumstances proved are consistent either with innocence or guilt	 the accused person is entitled to the benefit of doubt. But in applying this principle a distinction must be made between primary facts ' which have to be proved in the ordinary way and the inference of guilt to be drawn therefrom. It is in connection with the latter aspect of the problem that the doctrine of benefit of doubt can apply ; and an inference of guilt can be drawn only if the proved facts are wholly inconsistent with innocence	 and consistent only with guilt.