l

CENTRAL BUREAU OF INVESTIGATION A

v.

V.C. SHUKLA AND ORS.

MARCH 2, 1998

[M.K. MUKHERJEE, S.P. KURDUKAR AND K.T. THOMAS, JJ] B

Evidence Act, I 872 :

Section 34-lngredients

of-Two parts of the Section-Explanation

of-

"Entries in books of account regularly kept in course of business"-C

Meaning and import of-Held: Ordinary, natural and grammatical meaning

has

to be given when neither the context nor any principle of construction

requires their restrictive meaning-Interpretation

of Statutes.

Section

34-Jain hawala diaries-Entries in-Held : Admissible under

S. 34-But file containing loose sheets of paper cannot be termed as "book" D

t and entries therein not admissible under S.34.

Section 34-Books of account "regularly kept"-Meaning of-Held :

Whether a book

of accounts regularly kept or not depends on the nature of

occupation-System of accounting and contemporaneity in making entries E

may differ-It is not necessary that an entry must be made at or about the

time

of transactions-Further, the system in which the books are regularly

kept affects their probative value and not

of

their· admissibility as a relevant

fact under S.34.

Section 34-Rationale of-Entries in book of account-Probative value F

of-"Such statements shall not alone be sufficient evidence to charge any

person

with liability"-Meaning

of-Held: Entries though relevant are only

corroborative evident-Independent evidence regatding the trustworthiness

of those entries necessary to [IX liability-In the circumstance of the case,

entries made in the Jain hawala diaries though admissible under

S.34,

truthjitlness thereof not proved by independent evidence. G

Section 34-"Book "-Meaning of-Held : Spiral notebook/spiral pads

are "books" but not loose sheets.

Section IO-Co-conspirator-Statements, acts or writing of-Against

the other-Admissiblity of-Conditions

for-Held : A reasonable ground H

1153

1154 SUPREME COURT REPORTS [1998] I S.C.R.

A must be there to believe about conspiracy to commit an offence or actionable

wrong-Entries

in .Jain notebooks-There is no evidence to show existence

of any conspiracy between the .fains and the persons referred to in the

notebook-Hence,

S.10 not applicable-Penal Code, 1860.

Sections 17 to 21-Admission and confession-Distinction between-

B Held: Statement. oral or documentary, made by an accused as admission may

be proved against

him but not against others who are being jointly tried

with

him unless it amounts to a confession-Assuming that the entries in account

books are admissions made

in .Jain. notebooks, such entries may be proved

only against the .fains-Moreover, prosecution case regarding conspiracy

C between .fains and others cannot stand as there is no prima facie case

against the others

as being parties to such conspiracy since in a conspiracy

there must be

two parties-Therefore, the statements cannot be proved as

admission of the .fains of such conspiracy.

D

Prevention of Corruption Act, 1947 : Section 12.

Abatment by aiding-Held: Act so aided should have been committed- {

Persons referred to in .Jain diaries did not commit any offence under S. 7-

Hence, the question of the .fains' committing the offence under S.12 does not

arise-Penal Code, 1860, S.17(iii) Expln. 2.

E Words and Phrases :

"Account", "books of account" "business" and "regularly kept"­

Meaning of-In the context of S.34 of the Evidence Act. 1872.

"Admission" and "confession"-Meaning of-In the context of Ss. 17

F to 21 of the Evidence Act, 1872.

The appellant-Central Bureau of Investigation (CBI), in 'the course of

the search of the premises of one J.K Jain, recovered, besides other articles

and documents, two diaries, two small notebooks and two files containing

details

of receipts of various amounts from different sources recorded in

G abbreviated forms of digits and initials and details of payments of various

persons

recorded in similar fashion. Preliminary investigation taken up by

the CBI to decode and comprehend those entries revealed payments amounting

to Rs. 65.47 crores, out of which 53.5 crores had been illegally transferred

from abroad through hawala channels, during the years 1988 to 1991 to its

H persons including politicians, some of whom were members of either House

I

l

C.B.I. v. V.C. SHUKLA ll55

of Parliament during the relevant period, officials of Government and Public A

Sector Undertakings, and friends of S.K Jain, B.R Jain and N.K Jain who

were three brothers carrying on different businesses. H further revealed

that the Jain brothers and J.K. Jain, who was their employee, had acted a

middleman in the

award of certain hig projects in the power sector of the

Government of

India to different bidders; that they had official dealings with B

politicians and public servants whose names were recorded in the diaries and

the files; and

that some of them bad accepted illegal gratification other then

legal remuneration from the Jains as a reward for giving them and the

companies they own, and manage various contracts.

On such relcvation the

CBI registered a case on 4-3-1995 under Section 7 and 12 of the Prevention

of Corruption Act, 1947 and Section 56 read with Section 8(1) of the Foreign C

Exchange Regulation Act, 1973 against the Jains, some public servants and

others and on completion of investigation filed charge-sheets against the

Jain brothers and various government servants and politicians including

Shri V.C Shukla and Shri L.K Advani, the then Members of Parliament.

The common allegations made in two of the above charge-sheets (from D

t which these appeals stem) are that during the years 1988 to 1991 the Jains

entered into a criminal cons11iracy among themselves, the object of which

was to receive unaccounted money and to disburse the same to their companies,

friends, close relatives

and other persons including public servants and

political leaders

of India. In pursuance of the said, S.K Jain lobbied with E

various public servants and Government organisations in the power and steel

sectors

of the Government of India to persuade them to award contracts to

different foreign bidders with the

motive of getting illegal kick backs from

them. During the aforesaid period the Jain brothers received Rs. 59,12,685,

major portion of which came from foreign countries, hawa/a channels as

kickbacks from the foreign bidders of certain projects of 11owcr sector F

_,_ undertakings and the balance from within the country. An account of receipts

and disbursements of the monies was maintained by J.K Jain in the diaries

and files recovered from his house

and the Jain brothers authenticated the

same.

One of two notebooks (MR 71/91) was, according to the prosecution,

the main mother book. Page 1

of the book began with the heading

"A!C given

upto 3h1 January on 31-1-1998" and then followed serially numbered entries G

of various figures multiplied by some other figures on the left hand column

and the product thereof on the next column for each month commencing from

January,

1990 to A11ril, 1991. The overleaf (o) of the page contained similar

entries for the period from April,

1988 to December, 1989 and it ended with

the words "2.77 we have to

receive". In the subsequent pages, the book H

1156 SUPREME COURT REPORTS [1998] l S.C.R.

A recorded monthly recei)ltS of monies/funds from inconsJ>icuous Jlerson/

entities during

the Jleriod commencing from the months of February 1988

to A)lril 1991 maintained on '2 columns' basis. The left-hand column

re)lresented the recei)lts and the right hand column disbursements. In

the

column of recei)lts the source was indicated in abbreviated from on the left

B

of the figure reJ>resenting the sum received. On the right side of the said

figures a number was mentioned which co-related with the serial

number of

~

<

the account of receivers recorded on )!ages 1 and l(o) of the diary for the

Jleriod subsequent to 31-1-1988. The names of the Jlayees had also been

recorded in abbreviated form, alJlhabets

or words. The entires, however, did

not give any indication of any sale, 1mrchase

or trading and showed only

c

recei)ltS of money from a set of Jlersons and entities on one side and )layment~

to another set of Jlersons and entities on the other, both reckoned and ke)lt

monthly. As regards the actual amounts received and disbursed it

aJ>Jleared

that the figures were in lakhs. The book further indicated that it was from

time of time shown to some persons and they

)lUt their signatures in token

D

thereof.

The

other book (MR 68/91) contained, inter, alia, entries relating to

'!.

cash and received and disbursed in the months of February, March and A)lril

1991 recorded in similar fashion as in MR 71/91 (some or all of which

corres)lond with the entries

in MR 71.91 for those months); exJlenses incurred

E

in the month of March 91; and 'Jlolitical ex)lenses on 26-4-1991' with names

of a

number of Jlersons mentioned thereunder through their initials or

surnames and various amounts shown against their res)lective names in only

figures running u)lto

2

)Joints after decimal. The other entries in this book

seemed to be wholly unconnected to the entries earlier referred to. The two

small S)liral Jlads(MR 69/71 and MR 70/91) also contained some entries

F relating to similar recei)lt and disbursement on certain days and certain

months during the above )leriod-all written in a similar fashion. In some of .l

the loose sheets of 1iaJ>ers contained in the files (MR 71/91 and MR 72/91

accounts of money received and disbursed in one )!articular moutn or J>eriod

covering a number of months were written.

G

The S)lecial Judge took cognisance UJlon the above two charge sheets

and issued Jlrocesses against the resJ>ondents. The S)lecial Judge rejected

various contentions of the

resJ>ondents and Jlassed se)larate Orders deciding

}-

to frame charges and try the res)londents. Assailing the above order/charges

the resJlondents moved the High Court through )letitions filed under Section

H

482 of the Criminal Procedure Code, 1973, which were allowed by a common

)..

~.

C.B.I. v. V.C. SHUKLA 1157

order and the proceedings of the above two cases were quashed and the A

respondents were discharged. Hence this appeal.

On behalf of the appellant it was contended that the entire edifice of

the prosecution case was built

on the diaries and files for that matter the

entires made there-in recovered from J.K. Jain, that the entries

in the

documents would

be admissible under

Section 34, IO and 17 of the Evidence B

Act, 1872; that it being a settled principle of law that statements in account

books of a person are 'admissions' and can be used against him even though

those statements were never communicated to any

other person; that the

entries would

be admissible as admission. of J.K, Jain, who made them; and

that they would be admissible against the Jain brothers also as they were C

made under their authority as would be evident from their endorsements/

signatures appearing against/below some

of those entries.

On behalf of the respondents it was contended that the nature and

character of the documents inhibited their admissibility under all the above

Sections.

Dismissing the appeal, this

Court

D

HELD: I.

It is manifest from Section 34 of the Evidence Act, 1872 that

while its first

part speaks of relevancy of the entry as evidence, the second

part speaks, in negative way, of its evidentiary value for charging a person E

with a liability. To make an entry relevant under

Section 34 it must be shown

that it has been make

in a book, that book is a book of account and that book

of account has been regularly kept in the course of business. Even if the

above requirements are

fulfilled and the entry becomes admissible as relevant

evidence, still, the statement made therein shall not alone be sufficient

evidence to charge any person with liability. It will, therefore, be necessary F

;. to first ascertain whether the entries in the documents, in the present case,

fulfil the requirements of the above Section so as to be admissible in evidence

and if this question

is answered in the affirmative then only its probative

value need be assessed.

11I72-E-FJ

2.1. The words 'account' 'books of account' 'business' and 'regularly G

kept' appearing in Section 34 are of general import. Necessarily, therefore,

such words must receive a general construction unless

there is something

in the Act itself, such as the subject matter with which the Act is dealing,

or the context in which the words are used, to show the intention of the

Legislature

that they must be given a restrictive meaning.

[1175-H; 1176-AJ H

1158 SUPREME COURT REPORTS [1998] I S.C.R.

A 2.2. The Act lays down the rules of evidence to be applied and followed

in all judicial proceedings in

or before any court including some

Courts­

martial. Keeping in view the purpose for which the Act was brought into the

statute book and its sweep, the words appearing in Section

34 have got to

be given their ordinary, natural and grammatical meaning, more so, when

B neither the context nor any principle of construction requires their restrictive

meaning.

(1176-B)

2.3. 'Book' ordinarily means a collection of

sheet~; of paper or other

materia~ blank, written, printed fastened or bound togei her so as to form a

material whole. Loose sheets

or scraps of paper cannot

be termed as 'book'

for they can be easily detached and replaced. Therefore, the two spiral

C notebooks (MR 68/91 MR 71/91) and the two spiral pads (MR 69/91 and MR 70/91) are "books" within the meaning of Section 34, but not the loose

sheets of papers contained

in the two files (MR 72/91 and MR 73/91).

(1172-G;

1173-D)

D

Mukundram v. Dayaram, AIR (1914) Nag 44, apprnved.

3. It has been rightly observed in Mukundram 's case that "book of

account" involves "either addition or subtraction or both of these operations

of arithmetic. A book which contains successive entires of items may be a

good memorandum book; but until those entries are

totalled or balanced, or

both, as the case may be, there is no reckoning and no account. In the

E making of totals and striking of balances from time t,~ time lies the chief

safeguard under which books of account have been distinguished from other

private records as capable of containing substantiv~ evidence on which reliance

may be placed." It must, therefore, be held that MR 71/91 is a "book of

account" as it records monetary transactions duly recorded. [1176-E-G)

F Mukundram v. Dayaram, AIR (1914) Nag 44, approved.

4. The word "business" is one of wide import and it means an activity

carried on continuously and systematically

by a person by the application of

his labour

or skill with a view to earning an income. The activities of the

Jain

brothers, as sought to be projected by the prosecution now on the basis

G of the 'lllaterials collected during investigation, would, therefore, be

"business" for they were being carried on continuo1asly in an organised

manner, with a set purpose to augment their own resources.

MR

71191 is,

therefore, a book

of account kept in the course of business. [1177-C)

Narain Swadesh Weaving Mills v. The

Commissioner of Excess Profits

H Tax, [1955) l SCR 952, followed.

C.B.I. v. V.C. SHUKLA 1159

Mazagaon Dock ltd. v. The Commissioner of Income Tax and Excess A

,,t Profits Tax, (1959) SCR 848 and Barendra Prasad Ray v. ITO (1981) 2 Sec

693, relied on.

Black's law Dictionary (Sixth Edition), Words and Phrases, Permanent

Edition,

Volume lA and Wigmore:

On Evidence, referred to.

5. To ascertain whether ii book of account has been regularly, kept, the

nature of occupation

is an eminent factor for wcighment.

Thi\, test of regularity

of keeping accounts

by a shopkeeper who has daily transactions cannot be

B

the same as that of a broker in real estates. Not only their systems of

maintaining books of account will will differ but also the yardstick of

contemporaneity in making entries therein.

It is not possible to accept the C

respondent's contention that an entry mush necessarily be made in the book

of acccount at

or about the time the related transaction takes

1J1acc so as to

enable the book

to pass the test of 'regularly kept'. The rule fixed no precise

time and each case must depend upon its own circumstances.

It must,

therefore, be held that MR.71/91 has been irregularly and systematically

D

maintained. Whether the system in which the book has been maintained

guarantees its correctness

or trustworthiness is a question of its probative

value and not of its admissibility as a relevant fact

under

Section 34. The

other three books, namely MR 68/91, MR 69/91 and MR 70/91 would not,

ho"l'l-ever, come within the purview of the above Section, for, even though some

of the monetary transactions entered therein appear to be related to those E

in MR 71/91, they (the three book~) cannot be said to be book of account

regularly kept. (1179-A-D]

Ramchand Pitambhardar v. Emperor 19 Jndian Cases 534. Kesheo Rao

v. Genesh, Am (1926); Nag

407, Kunjamma v. Govinda Kurukka/, (1960)

KLT 184 and Hira/al Mahabir Pershed v. Mutsaddilal Jugal Kishore, (1967) F

.J.. 1 ILR P& H 435, approved.

American Jurisprudence, Proof of Facts, (Volume 34, Second Series)

Article 1550, referred to.

6.1. The rationale behind admissibility of parties' books of account as

G

evidence is that the

1·egularity of habit, the difficulty of falsification and the

.e.. fair certainty of ultimate detection give them in a sufficient degree a

probability

of trustworthiness.

Since, however, an element of self interest

and partisanship of the entrant to make a person-behind whose back and

without whose knowledge the entry is made-liable cannot be ruled out,

the H

1160 SUPREME COURT REPORTS (1998] l S.C.R

A additional safeguard of insistence upon other independent evidence to fasten

him with such liability, has been prO\·ided for in Section 34 by incorporating

the words 'such statements shall not alone be

sufficient to charge any person

with

liability'.11180-E-F]

6.2. It is not, therefore, enough merely to prove that the books hm·e

B been regularly kept in the course of business and the entries therein are

correct. It is further incumbent upon the person rel)ing upon those entries

to prove that they were in accordance with facts. Such entries though relevant

were only corroborative evidence and it is to be shown further by some

independent evidence that the entries represent hone•t and real transactions

C and that monies were paid in accordance with those entries. [1182-E-G]

6.3. Even correct and authentic entries in books of account cannot

without independent evidence of their trustworthiness, fix a liability upon a

person. Keeping in view the above principles, even if it is assumed

that the

entries made in

MR 71/91 are correct and the entires in the other books

,

D and loose sheets (which have already been found to be not admissible in

evidence under Section 34) are admissible under Section 9 of the Act to

support

an inferred about the formers' correctness still those entires

lvould

not be sufficient to charge Shri Advani and Sbri Shukla with the accusations

levelled against them for there is not an iota of independent evidence in

support thereof. (1182-0; 1183-A]

E

Hir/iial Mahabir v. Mustaddi/al Jugal Kishore, (1967) 1 ILR P&ll

435, Charz.dradar v. Gauhati Bank, [1967] 1 SCR 898; Yesuvadiyan v. Subbri

Naicker, AIR (1919) Mad 132; Beni v. Bisan Dayal, AIR (1925) and Nag 445

and Hira Lal v. Ram Rakha, AIR (1953) Pepsu 113, approved.

F Wigmore on Evidence Article 1546, referred to.

7. The statements, acts or writings of one co-conspirator as against

the

other are admissible when there is a reasonable ground to believe that

they have conspired together to commit an offence or actionable

wrong. The

entries

in the Jain notebooks do not show existence of any conspiracy

G between the Jains and the persons referred to in the notebooks. Hence

Section

10 of the Evidence Act is not applicable. (1183-E]

Sardul Singh v. State of Bombay, AIR (1957) SC 747 and Bhagwan

Swarup

v. State of Maharashtra, AIR (1965)

SC 682, relied on.

4

H 8.1. On a combined reading of Sections 17 to 21 of the Evidence Act

it is manifest

that an oral or documentary statement made by a party or bis

l

~

C.B.l. v. V.C .. SHUKLA 1161

authoiised agent, suggesting any inference as to any fact in issue or relevant A

fact may be proved against a JJarty to the Jlroceedings or his authoiised agent

as 'admission' but, aJlati from exceptional cases (as contained in Section 21),

such a statement cannot be proved by or on their behalf. On this point the

distinction between 'admission' and 'confession' needs to be apJlreciated.

[1186-B-CJ B

8.2.

Only voluntary and direct acknowledgement of guilt is a confession

but when a confession falls short

of actual admission of guilt it may

nevertheless be used

as evidence against the

person who made it or his

authoiised agent as an 'admission' un!ler Section 21. "A statement made by

an accused person, if it is an admission, is admissible in evidence under

Section 21 of the Evidence Act, unless the statement amounts to a confession C

and was made to a person in authority in consequence of some imJJroper

inducemenf, threat

or promise, or was made to

Police Officer, or was made

at a time when the accused was in custody of a Police Officer. If a statement

was made

by the accused in the circumstances just mentioned its admissibility

would depend upon the determination of

the question whether it does not

amount to a confession.

If it amount to a confession, it will be inadmissible

under

Section 21 of the Act as an admission, provided that it suggest an

inference as to a fact which is in issue in, or relevant to, the case and was

not made

to a

Police Officer in the course of an investigation under Chapter

XIV of the Criminal Procedure Code, 1973. Secondly , a statement made by

D

an accused person in admissible against others who are being jointly tried E

with him only if the statement amounts to a confession. Where the statement

falls short

of a confession, it is admissible only against its maker as an

admission and not against

those who are being jointly tried with him.

(1187-B-FJ

Pakala Narayanna v. Emperor, AIR (1939) PC 47, approved.

Palvinder Kaur v. State of Punjab, (1953) SCR 94; Om Prakash v. State

of U.P., AIR (1960) SC 409 and Veera Ibrahim v. State of Maharashtra,

(1976) 3 SCR 692, referred to.

F

9.1. Even if the contentions of the appellant are accepted the entries,

(which

are 'statements' as held by this Court in Bhogilal Chunilal and G

hereinafter

will be so referred to), being 'admissions'-and not 'confession'-

cannot be used as against Shri Advani or Shri Shukla. However, as against

the Jains the statement may be proved as admissions under Section 18 read

with Section 21 of the Act provided they relate to 'any fact in issue or

relevant fact'. What will be 'facts in issue' or 'relevant facts' in a criminal H

1162 SUPREME COURT REPORTS (1998) I S.C.R

A trial will depend upon, and will be delineated by, the nature.of accusations

made

or charges levelled against the person indicted. [1188-G-H)

9.2. The prosecution sought to

prove that there were two separate

conspiracies, in both of \Vhich the .Jains together figured as the common

party and Shri Advani or Shri Shukla, as the other. Since it had already been

B found that the prosecution had not been able to make out aprimafacie case

to prove that Shri Advani and Shri Shukla were parties to such conspiracies,

the charges of conspiracy, as framed/sought to be framed, cannot stljnd also

against the Jains, for the simple reason

that in a conspiracy there must be two parties. Resultantly, the statements cannot be prowd as admissions of -'

C the Jains of such conspiracy. The case the prosecution intended to project

now was not

that there was a conspiracy amongst the Jains to offer illegal

gratification to

Shri Advani and Shri Shukla and that pursuant thereto the

latter accepted the same. It is not, therefore, necessary to dilate on the

question whether,

if such was the case of the prosecution, and the statements

D

could be proved against the .Jains as their admissions. (1189-D-F]

!

Bhogilal Chunilal Panday v. State of Bombay, (1959]

"Supp. 1 SCR

J 10, referred to.

10.1. For a person to be guilty under Section 12 of the Prevention of

Corruption Act, 1947 it is not necessary that the offences mentioned therein

E should have been committed pursuant to the abetment Since-'abetment' has

not bee1ulefined under the P.C. Act its exhamtive definition in Section 107

. of Indian Penal Code, 1860 has to be referred to. As per that Section a

person abets

the doing of a thing when he does any

of the acts mentioned .

in its three clauses. For understanding the scope of the word "aid" in the

F third dause it would be advantageous to sec Explanation 2 in Section 107

IPC. It is thus clear that under the third clause when a person abets by

aiding, the act

so aided should have been committed in order to make such

. aiding

an offence. In other words, unlike the first two clauses the third

clause applies to a case where the offence if committed. [1190-A-E]

/

G 10.2. Since in the instant case the prosecution intended to prove the

abatment of

the Jains by aiding (and not by any act falling under the first two clauses of Section 107 IPC) and it has earlier been found that no prima

facie case has been made out against Shri Advani and Shri Shukla of their

having committed the offence under Section 7 of the P.C. Act, the question

.

of the Jains' committing the offence under

Section 12-and for matter, their

H admission in respect thereof-does not arise. [1190-F)

•

I

C.B.I. v. V.C. SHUKLA [M.K. MUKHERJEE, J.] 1163

CRIMINAL APPELLATE rnRISIDCTON : Civil Appeal Nos. 247-A

256 of 1998.

From the Judgment and Order dated 8.4.97 of the Delhi High Court in

Cr!. A. Nos. 124, 166-67, 256-57. 265, 328-31 of 1996.

Altaf Ahmed, Additional Solicitor General, P. Parmeshwaran and A. B

-< Mariarputham for the Appellants.

Ram Jethmalani, Arnn Jaitley, D.D. Tahkur, Kapil Sibal, R.K. Anand,

Mrs. Rakhi Ray, Ms. Bina Gupta, Harjinder Sing, R.N. Joshi, Navin, Harish

Gulati, H.S. Bhullar, Pawan Narang, S.K. Saxena, Ms. Rashmi Kathpalia, S.P.

Sharma, Arnn Birbal, Vineet Kumar and Jayant Bhushan, for the Respondents. C

The Judgment of the Court was delivered by

M.K. MUKHERJEE, J. Leave granted. On May, 3, 1991 the Central

Bureau

of Investigation

(CBI), New Delhi, searched the premises of J.K. Jain

at G-36, Saket, New Delhi to work out an information received while D

investigating RC Case No. 5(S)/91 SIU (B)/CBI/New Delhi. In course of the

search they recovered, besides other articles and documents, two diaries, two

small note books and two files containing details

of receipts of various

amounts from different sources recorded in abbreviated forms

of digits and

initials and details

of payments to various persons recorded in similar fashion. E

Preliminary investigation taken up by the CBI to decode and comprehend

those entries revealed payments amounting to

Rs. 65.47 crores, out of which

53.5 crores had been illegally transferred from abroad through hawala channels,

during the years 1988

to 1991 to 115 persons including politicians, some of

whom were members of either Houses of parliament during the relevant

period, officials

of government and

Public Sector Undertakings, and friends F

of S.K. Jain, B. R. Jain, and N.K. Jain, who are three brothers carrying on

different businesses. It further revealed that the Jain brothers and J.K. Jain,

who

is their employee, had acted as middlemen in the award of certain big

projects in the power sector

of the Government of India to different bidders;

that they had official dealings with politicians and public servants whose

names were recorded in the diaries and the files; and that some

of them had G

accepted illegal gratification other than legal remuneration from Jains as a

reward for giving them and

tl1e companies they own and manage various

contracts.

On such revelation the CBI registered a case on march 4, 1995

under Sections 7 and 12 of the Prevention of Corruption Act, 1988 and

Section 56 read with Section 8(1) of the Foreign Exchange Regulation Act, H

1164 SUPREME COURT REPORTS [1998) l S.C.R

A 1973 against the Jains, some public servants and others being RC No. l(A)/

95 ACU (VI) and on completion of investigation filed 34 charge-sheets

(challans) in the Court of the Special Judge, New Delhi against various

politicians, Government servants and Jains.

In one of the above

charge­

sheets (C.S. No. 4 dated 16.1.1996) Shri Lal Krishna Advani, who at the

B material time was a Member of the Parlian1en~ and the Jains figure as accused

and in another (C. S. No. 8 dated 23.1.1996), Shri V.C. Shukla, also a Member

of Parliament, along with the Jains.

The common allegations made in the above two charge-sheets (from

which these appeals stem) are that during the years 1988 to 1991 Jains entered

C into a criminal conspiracy among themselves, the object of which was to

receive unaccounted money

and to disburse the same to their companies,

friends, close

relatiyes and other persons including public servants and

political leaders

of India. In pursuance of the said conspiracy

_S.K. Jain

lobbied with various public servants and Government organisations in the

power and steel sectors of the Government of India to persuade them to

D award contracts to different foreign bidders with the motive of getting illegal

kickbacks from them. During the aforesaid period the Jain brothers received

Rs. 59, 12, II, 685, major portion of which came from foreign countries through

hawala channels as kickbacks from the foreign bidders of certain projects of

power sector undertakings and the balance from within the country. An

E account of receipts and disbursements of the monies was maintained by J.K.

Jain

in the diaries and files recovered from his house and Jain brothers

authenticated

the same.

As against

Shri Advani the specific allegation in the charge-sheet (in

which he arid fains figure as accused) is that he received a sum of Rs. 25 lacs

from fains during his tenure as a Member of the Parliament, (besides a sum

F

of Rs. 35 lacs which was received by him while he was not a Member of the Parliament). In the other charge-sheet (filed against Shri Shukla and fains) it

is alleged that during the period 1988 to 1991, while Shri Shukla \vas a Member

of the Parliament and for some time a Cabinet Minister of the Central Government

he received Rs. 39 lacs (approximately) from Jains.

G

According to CBI the materials collected during investigation clearly

disclosed that Jains were

in the habit of making payments to influential public

servants

and political leaders of high status expecting official favours from

thent and the above payments were made to Shri Shukla and Shri Advani with

that oblique motive. Thereby, the CBI averred, the above persons (the

H respondents in these appeals) committed offences under Section 120B I.P.C.

...

..

I

i.

C.B.I. v. V.C. SHUKLA [M.K. MUKHERJEE, J.] 1165

and Section 13(2) read with Section 13(1) (d), 7 & 12 of the Prevention of A

Corruption Act, 1988.

The special Judge took cognisance upon the above two charge-sheets

and issued processes against the respondents. After entering appearance

t11ey agitated various grounds (to which we will refer at tl1e appropriate stage)

to contend that there was no material whatsoever

to frame charges against B

t11em. The Special Judge, however, the rejected all those contentions and

passed separate orders deciding

to frame charges and try the respondents.

Pursuant to tl1e order passed in Case No. 15 of 1996 (arising out of C.S. No.

8 dated 23. LI 996) the following charges were framed against Shri Shukla:-

"Firstly, that you, V.C. Shukla, during the period from Feb. 90 to Jan. c

91 at Delhi agreed with other co-accused S.K. Jain, N.K. Jain, B. R

Jain, and J. K. Jain to do an illegal act, to wit, to obtain pecuniary

advantage from the said Jains by abusing your official position as a

public servant being Member

of

Parliament during the said period and

also be Minister

of External Affairs from

21.11.90 to Jan. 91 and in

D

Ii'"

pursuance of the said agreement, you obtained the pecuniary

advantage and accepted

Rs. 38, 85,834/-as gratification other than

legal remuneration from the said Jains for a general favour

to them

from you and you, thereby, committed an offence punishable

U/s 120

-B !PC r/w Sec. 7, 12 and 13(2) r/w 13(l)(d) of the Prevention of

Corruption Act, 1988 and within the cognizance of this Court. E

Secondly, that you during the aforesaid period at the aforesaid place

in your aforesaid capacity being a public servant,· accepted a sum of

Rs. 38,85,834 from the above said co-accused persons, namely S.K.

Jain, N.K. Jain, B. R. Jain and J.K. Jain as gratification other than legal

F

remuneration for showing general favour to them and you, thereby,

committed an offence punishable U/s 7

of the Prevention of Corruption

Act, 1988 and within the cognizance

of

tl1is Court.

Thirdly, that you during the aforesaid period and at the aforesaid

place, in your aforesaid capacity being a public servant obtained

G

pecuniary advantage amounting to Rs. 38,85,834/-from the co-accused

persons namely,

S.K. Jain, B. R. Jain, N.K. Jain and J.K. Jain by

..... ""

abusing ycur position as a public servant and also without any public

interest and you, thereby committed an offence punishable U/s 13(2)

r/w Section 13(l)(d)

of the

Prevention of Corruption Act, 1988 and

within the cognizance

of this

Court." H

1166 SUPREME COURT REPORTS [1998] 1 S.C.R.

A The charges framed against S.K. Jain, in that case read as under:"

B

"Firstly, that you, S.K. Jain, during the period from Feb. 90 to Jan. 91

at Delhi, agreed with other co-accused V.C. Shukla, N. K. Jain, B. R.

Jain and J.K. Jain to do an illegal act, to wit, to make payment of Rs.

38,85,834/-to said Sh. V.C. Shukla, as a gratification other than legal

remuneration

as a motive or reward for getting general favour from

said

V. C. Shukla who was holding the post of a Member of Parlian)ent

during t11e said period and also was Minister for El>temal Affairs

during the period from 21.11.90 to Jan. 91 and in pursuance of the said

agreement, the pecuniary advantage was obtained by said V. C. Shukla

C by abusing his official position and without any public interest and

the payment was made by you as, aforesaid, gratification and you,

t11ereby, committed an offence punishable U/s 120-b IPC r/w Sec. 7,

12, 13(2) r/w 13(l)(d) of the Prevention of Corruption Act, 1988 and

D

E

F

G

H

within the cognizance of this Court.

Secondly, that you, S.K. Jain during the aforesaid period and at the

aforesaid place abetted the

commission of offence punishable

U/s 7

of the P. C. Act, 1988 by offering bribe of Rs. 38,85,834 to said V. C.

Shukla, who was a public servant during the relevant period as a

Member of Parliament and also as a minister of External Affairs during

the period from 21.11.90 to Jan. 91 for getting general favour from him

and you, thereby committed an offence punishable U/s 12 of the

Prevention of Corruption Act, 1988 and within the cognizance of this

Court."

Similar charges wen: also framed against the other Jains.

1n the other case (c.c. No. 17 of 1996), in which Shri Advani figure as

an accused with fains no formal charge was franled (as by then the respondents

had moveu the High Court), but the special Judge decided to frame charges

against them in similar lines as would be evident from the order dated September

6, 1996, the relevant portion of which reads as under:

"So, after going through the entire material available on record, i.e.

charge-sheet statements of

the witnesses recorded U/s 161

Cr.P.C.,

documents placed on record prima facie, it cannot be said tl1at the

allegations

made against all these accused are groundless or

tl1at

t11ere is no sufficient ground for proceeding against all the accused.

Prima facie, it is clear that there are sufficient grounds for framing of

(

C.B.I. v. V.C. SHUKLA [M.K. MUKHERJEE, J.] 1167

charges against all these accused. Accordingly, I hereby order that A

the charges against all these accused. Accordingly, I hereby order

that the charges for offences Vis 120B IPC and Sections 7, 12, 13(2)

r/w 13(1)

(d) of the

P. C. Act, 1988 be framed against all the accused

namely, L.K. Adavani, S.K. Jain, J.K. Jain, B.R . Jain and N.K. Jain.

Further Charges for offence U/s. 7 and 13(2) read with 13(l)(d) of B

P.C. Act, 1988 be framed against accused L.K. Advani.

Further charges for offence U/s

12 of P.C. Act, 1988 be framed

against accused

S.K. Jain, J.K. Jain, B.R. Jain and N. K. Jain."

Assailing the above order/charges the respondents moved the High C

court through petitions filed under Section 482 CR. P. C., which were allowed

by a common order and the proceedings

of the above two cases were quashed

and the respondents were discharged. The above order

of the High Court is

under challenge in these appeals at the instance of the CBI.

From the above resume of facts it is manifest that the entire edifice

of D

the prosecution case

is built on the diaries and files -and for that matter the

entries made therein -recovered from

J. K. Jain. While the appellant claimed

that the entries in the documents would be admissible under

Sections 34,10

and

17 of the Evidence Act, ('Act' for short) the respondents contended that

the nature and character

of the documents inhibited their admissibility under E

all the above Sections. Needless to say, to delve into and decide this debatable

point it will be necessary at this stage to look into the documents; the two

spiral note books (marked MR 68/91

·and MR 71/91), two small spiral pads

(MR 69/91 and MR 70/91) and two files, each containing some loose sheets

of papers (MR 72/91 and MR 73/91). Since according to the prosecution MR

71/91 is the main (mother) book we frrst take the same for scrutiny. Page I F

of the book begins with the heading "NC given upto 31st January on

31.1.1998;" and then follows serially numbered entries of various figures

multiplied by 'some other figures on the left hand column and the product

thereof on the next column for each month commencing from January, 1990

to April, 1991. The overleaf

('o' for short) of the page contains similar entries G

for the period from April, 1988 to December, 1989 and it ends with the words

"2. 77" we have to receive. In the subsequent pages the book records monthly

receipts

of monies/funds from inconspicuous persons/entities during the

period commencing from the month

of February, 1988 to April 1991 maintained

on '2 columns' basis. The left hand column represents the receipts and the

right hand column disbursements. In the column

of receipts the source is H

1168 SUPREME COURT REPORTS [1998] 1 S.C.R.

A indicated in abbreviated form on the left of the figure representing the sum

received. On the right side of the said figures a number is mentioned which

co-relates

witl1 the serial number of tl1e account of receivers recorded on

pages 1 and

l(o)

oftlrn diary for tl1e period subsequent to 31.1.1988. So far

as the names of the payees are concerned the same have also been recorded

in abbreviated fonr., alphabets or words. The entries, however, do not give

B any indication of any sale, purchase or trading and show only receipts of

money from a set of persons and entities on one side and payments to

another set

of persons and entities on

the other, botll reckoned and kept

montl1ly. As regards the actual amounts received and disbursed we notice

that the figures which have been mentioned briefly against tl1e respective

C names are not suffixed witll any symbol, volume or unit so as to specifically

indicate whetl1er

tl1ey are in lakhs, tl1ousands or any otl1er denomination. It

is noticed

tliat in most of the entries the figures against transactions extend

to 2 places after decimal which seem to suggest that

tl1e figures in money

column may

be in t11ousands, but then in some of

the months, namely, 11/

D

88, 6/89, 10/90, 2/91, 3/91, 4/91, figures extend to 5 places after decimal point

in money column. This gives

an impression that

the figures are in lakhs; and

this impression gains ground from

ot11er transactions. For example, at page

9

of tl1e book in the transactions relating to the month of

September 80, a

figure

of

32,000 prefixed by (sterling pound symbol) indicates that it is 32,000

sterling pounds and the same has been multiplied by Rs. 40/-per pound

E which was possibly tlle conversion rate of pound according to Indian currency

at that time) and the total has been indicated at 12.80 as against the product

of Rs. 12,80,000. That necessarily means that the 2 places after decimal

denotes

tl1at

the figures are in lakhs. The book further indicates that it was

from time

to time shown to some persons and they put their signatures in

token thereof.

F

The other book (M.R. 68/91) contains, inter alia, entries relating to cash

and fund received and disbursed in

the montl1s of February, March and April

1991 recorded in similar fashion as in M.R. 71191 (some or all of which

correspond

witl1

the entries in J\1R 71/91 for those montl1s); ell.'J)enses incurred

G in the month of March 91; and 'political expenses as on 26.4.91' with names

of a number of persons mentioned thereunder tlrrough their initials or surnames

and various amounts shown against their respective names

in only figures

running upto 2 points after decimal. The other entries in this book

seem to

be wholly uncollllected to

the entries earlier referred to. The two small spiral

pads (M.R. 69/71 and M.R. 70/91) also contain some entries relating to similar

H receipt and disbursement on certain days and in certain months during tlle

C.B.I. v. V.C. SHUKLA [M.K. MUKHERJEE, J.] 1169

above period -all written in similar fashion. So far as the two files containing A·

some loose sheets of paper are concerned ( M. R. 72/91 and 71/91) we notice

that

in some of these papers accounts of money received and disbursed in

one particular month or a period covering a number

of months are written.

While arguing their case for framing

of charges against the respondents

it was contended on behalf

of the appellant before the Trial

Court that having B

regard to the fact that the documents unmistakably showed that accounts of

business regarding receipt and payment of money during the period 1988 to

1991 were regularly maintained those documents would be admissible under

Section 34 of the Act. Relying upon the statements of some of the witnesses

recorded during investigation and report

of the handwriting

ex1Jert that the C

entries in the documents were in the hand writing of J.K. Jain, and that the

three Jain brothers had signed those documents in token of their authenticity,

it was contended that entries therein would

be admissible also under

Section

10 of the Act to prove that pursuant to a conspiracy hatched up by the Jains

to obtain favours from politicians and other public servants payments were

made to them from moneys received through hawala transactions. Section 17 D

\- and 21 were also pressed into service to contend that the entries would be

'admission

of the Jains of such payments.

In refuting the above contentions it was submitted on behalf

of the

respondents that since those documents were not books of accounts nor

E

were they maintained in regular course of business they would not be relevant

under

Section 34. It was next submitted that even it was assumed that those

documents were relevant and admissible under Section 34 they could be, in

view of the plain language

of that

Section, used only as corroborative evidence,

but in absence

of any independent evidence to prove the payments alleged

therein the documents were

of no avail to the prosecution. The admissibility F

of the documents under

Section 10 was resisted by the respondents contending

that there was not an iota

of material to show even, prima fade, that there

was a conspiracy.

Similar was the contention regarding applicability of Sections

17 and 21 in absence of any material to prove 'admission' of Jains. In support

of their respective contentions they relied upon some decisions of this Court G

as also of different High Courts.

From the order of the trial Court we find that though it noted all the

contentions

of the parties and quoted in extenso from the judgments relied

on

by them it left the question regarding admissibility of the documents under

Section 34 unanswered with the following observation:-" H

A

B

1170 SUPREME COURT REPORTS (1998] l S.C.R

"All the above cited case laws U/s 34 and otber sections of Indian

Evidence

Act pertain to tbe stage where in tbose cases entire evidence

bas been recorded

and tbe trial was concluded. There is not even a

single judgment which

has been referred to above which pertains to

the stage of charge. In the instant case, tbe case is at tbe stage of

charge.

So these case laws are not applicable to the facts and

cin:umstances of the present case, at tbis stage."

Then, proceeding on the assumption that those documents did not come

witbin tbe purview

of Section 34, the trial court posed tbe question as to their

evidentiary value (without first going into tbe question whetber tbe documents

C were admissible in evidence) and held that being 'documents' under Section

3

of the Act they

could be proved during trial under Sections 61 and 62

thereof. The trial Court then referred to tbe various entries in tbe diaries and

after correlating tbem came

to the conclusion that a prima facie case bad been

made out against the respondents. However, tbe appellant's contention that

the entries

ll)ade in the diaries were also admissible under Sections 17 and 21

D as against the Jains did not find favour with the trial court as, according to

it, prima facie there

was no admission on behalf of tbe accused. As regards

tbe admissibility

of the entries in tbe documents under Section

10, the trial

Court did not record any specific finding.

In setting aside the order of tbe Trial Court, tbe High Court accepted

E the contention of the respondents that the documents were not admissible

F

G

H

in evidence under

Section 34 with tbe following words:

"An account presupposes tbe existence of two persons such as a

seller and a purchaser, creditor and debtor. Admittedly, the alleged

diaries in the present case are not records

of tbe entries arising out

of a contract. They do not contain tbe debts and credits. They can

at tbe most be described

as a memorandum kept by a person for bis

own benefit which

will enable him to look into the same whenever tbe

need arises to

do for his future purpose. Admittedly tbe said diaries

were not being maintained on day-to

day basis in he course of

business. There is no mention of tbe dates on which tbe alleged

payment were

made. In fact tbe entries there in are on monthly basis.

Even tbe names

of tbe persons whom tbe alleged payments were made

do not find a mention in full. They have been shown in abreviated

form.

Only certain 'letters' have been written l!gainst their names

which are within the knowledge

of only the scribe of tbe said diaries

as to what they stand for and whom tbey refer

to."

>-.

C.B.I. v. V.C. SHUKLA [M.K. MUKHERJEE, J.) ll71

After having held that the documents were neither books of account A

nor kept in the regular course of business the High Court observed that even

if they were admissible under Section 34, they were not, in view of the plain

language

of the Section , sufficient enough to fasten the liability on the head

of a person, against whom they were sought to be used. As, according to

the High Court, the prosecution conceded that besides the alleged entries

in

B

the diaries and the loose sheets there was no other evidence it observed that

-...:.

the entires would not further the case of the prosecution. As regards the

admissibility

of the documents under Section

10 the High Court held that the

materials collected during investigation did not raise a reasonable ground to

believe that a conspiracy existed, far less, that the respondents were parties

thereto and, therefore, those documents would not

be admissible under Section c

10 also. The High Court next took up the question as to whether those

documents could

be admitted under Section 17 and

observel} that the

admissions,

if any, therein could be used against Jains only and

jlot against

Shri Adavani and Shri Shukla.

The High Court, however, observed that the

production and proof

of the documents by themselves would not furnish

D

evidence of the truth of their contents and that during investigation C.B.I. did

not examine any witness

or collect materials to prove the same. With the

above findings and observations, the High Court arrived

at the following

conclusion:-"Jn the present case there is no evidence against the petitioners

except the diaries, note books and the loose sheet with regard to the

E

alleged payments (vide MR Nos. 68/91, 72/91 and 73/91). The said

evidence is

of such a nature which cannot be

convened into a legal

evidence against the petitioners, in view

of my above discussion.

There is

no evidence in the instant case with regard to the monies F

which are alleged to have been, received by Jains for the pmpose of

disbursement. There is no evidence with regard to the disbursement

of the amount . Then there is no evidence with regard to the fact to

prove prima facie that the petitioners i.e. Shri

L.K. Advani and Shri V.C. Shukla accepted the alleged amounts as a motive or reward for

G

showing favour or disfavour to any person and that the said favours

_....

and disfavours were shown in the discharge of their duties as public

"'

servants as contemplated by S. 7 of the Act (Prevention of Corruption

Act, 1988). Thus the court will have to

preSUIIle all the above facts

in the absence of any evidence in connection therewith to frame

charges against the petitioners.

H

1172 SUPREME COURT REPORTS [1998] l S.C.R.

A To appreciate the contentions raised before us by the learned counsel

for the parties it will

be necessary at this stage to refer to the material

provisions

of

the Act. Section 3 declares that a fact is relevant to another

when it is connected with the other in :my

of the ways referred to in the

provisions

of the Act relating to the relevancy of facts; and those provisions

are

to be found in Sections 6 to 55 appearing in

Chapter II. Section 5, with

B which Chapter II opens, expressly provides tliat evidence may be given in any

suit

or proceeding of the existence or non-existence of every fact in issue and

the facts declared relevant in the aforesaid sections, and

of no ot11ers. Section

34

of t11e Act reads as under:-

c

"Entries in books of account when relevant -Entries in book of

account, regularly kept in t11e course of business, are relevant whenever

they refer to a matter into which the court has to inquire,

but such

statements shall not alone

be sufficient evidence to charge any person

with

liability."

D From a plain reading of the Section it is manifest that to make an entry

relevant t11ereunder it must

be shown that it has been made in a book, that

book is a book of account and that book of account has been regularly kept

in the course

of business. From the above Section it is also manifest that even

if the above requirements are fulfilled and the entry becomes admissible as

relevant evidence, still, the statement made

t11erein shall not alone be sufficient

E evidence to charge any person with liability. It is thus seen that while the first

part of the section speaks of the relevancy of t11e entry as evidence, the

second

part speaks, in a negative way, of its evidentiary value for charging

a person

wit11 a liability. It will, therefore, be necessary for us to first ascertain

whet11er the entries in the documents, with which we are concerned, fulfil the

F requirements of the above section so as to be admissible in evidence and if

this question is answered in the affirmative then only its probative value need

be assessed.

'Book' ordinarily means a collection

of sheets of paper or other material,

blank, written,

or printed, fastened or bound together so as to form a material

G whole. Loose sheets or scraps of paper cannot be termed as 'book' for they

can

be easily detached and replaced. In dealing with the work 'book' appearing

in Section

34 in Mukundram v. Dayaram AIR (1914) Nagpur 44, a decision

on which both sides have placed reliance, the

Court observed:-

"In its ordinary sense it signifies a collection of sheets of paper

H bound together in a manner which cannot be disturbed or altered

C.B.I. v. V.C. SHUKLA [M.K. MUKHERJEE, J.) ll73

,A

except by tearing apart. The binding is of a kind which is not intended A

to the moveable in the sense of being undone and put together again.

A collection

of papers in a portfolio, or clip, or strung together on a

piece

of twine which is intended to be untied at will,

woul~ not, in

ordinary English, be called a book. ............................................................. .!

think the term "book" in S.34 aforesaid may properly be taken to

B

signify, ordinarily, a collection of sheets of paper bound together with

the intention that such binding shall be permanent and the papers

used collectively in one volume. It is easier however to say what is

not a book for the purposes

of

S.34, and I have no hesitation in

holding that unbound sheets

of paper in whatever quantity, though

filled

up with one continuous account, are not a book of account c

within the purview of

S.34."

I

We must observe that the aforesaid approach is in accord with good reasoning

and we are in full agreement with it. Applying the above tests it must be held

that the two spiral note books (MR 68/91 and MR 71191) and the two spiral

Jr pads (MR 69/91 and MR 70/91) are "books" within the meaning of Section D

34, but not the loose sheets of papers contained in the two files (MR 72/91

and MR 73/91).

The next question is whether the above. books fulfil the other

requirements

of

Section 34 so as to be admissible in evidence. Mr. Altaf

E

Ahmed, the learned Additional Solicitor General, appearing for the appellant

<.

submitted that the interpretation of the High Court that the expressions

"books of account" and "business" appearing in the above section refer and

relate to only such business as may exist between two persons such as a

seller and purchaser, creditor and debtor, is anomalous for such a truncated

~

J.

view would disable law from dealing with illicit business and situations F

connected therewith, such as the case in hand, where a conspiracy was

hatched

up to receive money through hawala channels and other sources

and

to distribute it as bribes to politicians to influence favorable decisions

from them. According to

Mr. Altaf Ahmed, the

ex'Pression "business" under

Section 34 should receive the widest possible meaning and should be under

G

stood and construed to mean and include all such efforts of people, which,

by varied methods

of

dealing with each other are designed to improve their

individual economic conditions and satisfy their desires. He submitted that

any book

in which monetary transactions are recorded

and reckoned would

answer the description

of 'book of account' within the meaning of the aforesaid

section. Relying upon the dictionary meanings

of the above two words, H

1174 SUPREME COURT REPORTS [1998] l S.C.R.

A namely, 'business' and 'account' and the interpretations given to those

words by various Courts oflaw, he submitted that the book (MR 71/91) and

the connected documents would clearly prove that they were books

of account

maintained in respect

of the illegal business that the Jain were carrying. His

last contention

on this aspect of

d1e matter was that the transactions contained

in MR 71/91 and the connected documents were

an inherently credible record

B of the business in question and the books were maintained

witl1 such regularity

as was compatible witl1 the nature of tl1e business the Jain brothers were

carrying and consequently those books would be admissible in evidence

under Section 34.

C Mr. Sibal, the learned counsel for the Jains, did not dispute that the

spiral note books and the small pads are 'books' within the meaning of

Section 34. He, however, strongly disputed the admissibility of those books

in evidence under the aforesaid section

on the ground that they were neither

books

of account nor they were regularly kept in tl1e course of business. He

submitted

tl1at at best it could be said that those books were memoranda kept

D by a person for his own benefit. According to Mr. Sibal, in business parlance

'account' means a formal statement

of money transactions between parties

arising out of contractual or fiduciary relationship.

Since the books in question

did not reflect any such relationship and,

on the contrary, only contained

entries of monies received from one set

of persons and payment

tl1ereof to

E another set of persons it could not be said, by any stretch of imagination tllat

they were books of account, argued Mr. Sibal. He next contended that even

if it was assumed for argument's sake tl1at the above books were books of

account relating to a business still they would not be admfssible under

Section 34 as they were not regularly kept. It was urged by him tl1at the words

'regularly kept' mean that the entries in the books were contemporaneously

F made at the time the transactions took place but a cursory glance of

tl1e books

would show tl1at tl1e entries were made therein long after the purported

transactions took place. In support

of his contentions he also relied upon the

dictionary meanings of the words 'account' and 'regularly kept'.

G The word 'account' has been defined

in Words and Phrases, PermarJ.ent

Edition, Volume IA at pages 336 to 338 to mean (i) a claim or demarJ.d by one

person against anotl1er creating a debtor-creditor relation; (ii) a fomml statement

in detail

of

trarJ.sactions between two parties arising out of contracts or some

fiduciary relation.

At page 343 of the same book the word has also been

defined

to

mearJ. the preparation of record or statement of transactions or the

H like; a statement arJ.d explanation of one's administration or conduct in money

C.B.I. v. V.C. SHUKLA [M.K. MUKHERJEE, J.] 1175

affairs; a statement of record of financial transactions, a reckoning or A

computation; a registry of pecuniary transactions or a reckoning of money

transactions' a written or printed statement

of business dealing or debts and

credits; or a certain class

of them. It is thus seen that while the former

definitions give the word 'account' a restrictive meaning the latter give it a

comprehensive meaning. Similarly

is the above word defined, both respectively

~ an expensively, in Black's Law Dictionary (Sixth Edition) to mean's detailed B

statement of the mutual demands in the nature of debit and credit between

parties arising out

of contracts or some fiduciary relation. A statement in

writing,

of debits and credits, or of receipts and payments; a list of items of

debits and credits, with their respective dates. A statement of pecuniary

transactions; a record or course

of business dealings between parties; a list C

of statement of monetary transactions, such as payments, losses, sales,

debits, credits, accounts payable, accounts receivable, etc., in most cases

showing a balance or result

of comparison between items of an opposite

nature.'

Mr. Altaf Aluned relied upon

tl_le wider definition of the word 'account' D

as mentioned above to conned that,MR 71/91 fulfills the requirements of

'account' as it records a statement of monetary transactions -such as receipts

and payments -duly reckoned.

Mr.

Sibal on the other hand urged that

business accounts must necessarily mean only those accounts which record

transactions between two parties, arising out

of a contract or some fiduciary E

relations (a meaning accepted by the High Court). He submitted, relying upon

the definition

of 'memorandum' as appearing in 'words and

Phrases', that MR

71/91 could at best be described as a memorandum of some transactions kept

by a person for his own benefit to look into same

if and when the occasion

would arise.

From the above definitions

of 'account' it is evident that if it has to

be narrowly construed to mean a formal statement of transactions between

F

two parties including debtor-creditor relation and arising out of contract, or

some fiduciary relations undoubtedly the book MR 71/91 would not come

within the purview

of

Section 34. Conversely, if the word 'account' is to be G

given wider meaning to include a record of financial transactions properly

_.. reckoned the above book would attract the definition of 'book of account'.

It cannot be gainsaid that the words 'account', 'books

of account',

'business' and 'regularly kept' appearing in

Section 34 are of general import.

necessarily, therefore, such words must receive a general construction unless

H

1176 SUPREME COURT REPORTS [1998] l S.C.R

A there is something in the Act itself, such as the subject matter with which the

Act is dealing, or the context in which the words are used, to show the

intention of

the legislature that they must be given a restrictive meaning.

Indl)bitably, the Act lays down tl1e rules of evidence to be applied and

followed

in all judicial proceedings in or before any

Court including some

B Courts -martial. Keeping in view the purpose for which the Act was brought

into the statute book and its sweep, the words appearing in Section 34 have

got to be given their ordinary, natural and grammatical meaning, more so,

when neither the context nor any principle of construction requires their

restrictive

meaning. While on this point we may refer to

Section 209 of tl1e

C Companies Act, 1956 which expressly lays down what 'books of account' to

be maintained thereunder must contain and, therefore, the general meaning of

tl1e above words under the Act may not be applicable tl1ere.

InMukundram (supra) after dealing with the word 'book' (to which we

have earlier referred) the Court proceeded to consider what is meant by a

D 'book of account' under Section 34 and stated as under:

E

F

"To account is to reckon, and I an unable to conceive any accounting

which

does not involve either addition or subtraction or both of these

operations of

aritl1metic. A book which contains successive entries of

items may be a good memorandum book; hut until those entries are

totalled or balanced, or both, as the case may

be, there is no

reckoning and

no account. In tl1e making of totals and striking of

balances

from time to time lies the chief safeguard under which books

of account have been

distin.guished from other private records as

capable of containing substantive evidence on which reliance may be

placed."

(emphasis supplied)

We have no hesitation in adopting the reasoning adumbrated in tl1e

above observations. The underlined portion of tl1e above passage supports

G the contention of Mr. Altaf Ahmed and rebuts that of mr. Sibal that Mr 71/

91 is only a memorandum, for the entries made therein are totalled and

balanced.

We are, therefore, of 1he opinion that MR 71/91 is a 'book of

account'

as it records monetary transactions duly reckoned. Coming now to the word ' business' , we need not search for its

H meaning in Black's Law Dictionary, or Words and Phrases for this Court has

C.B.I. v. V.C. SHUKLA [M.K. MUKHERJEE, J.] 1177

dealt with the word in a number of cases. In Narain Swade sh Weaving Mills A

v. The Commissioner of Excess profits Tax, [1955] I SCR 952, a five Judge

bench of this Court held that the word 'business' connotes some real,

substantial and systematic or organised course

of activity or conduct with a

set purpose: and

t11e above interpretation was quoted with approval in

A1azagaon Dock Ltd. v. The Commissioner of Income Tax and Excess

Profits B

Tax, (1959] SCR 848. Again in Barendra Prasad Ray v. /. T.O., (1981] 2 SCC

693, this court observed that the word 'business' is one of wide import and

it means

an activity carried on continuously and systematically by a person

by the application

of his labour or skill with a view to earning an income. The

activities

of the Jain brothers, as sought to be projected by the prosecution

now on the basis

of t11e materials collected during investigation (detailed C

earlier) would, therefore, be 'business' for t11ey were being carried on

continuously in an organised manner, with a set purpose (be it illegal)

to

augment their own resources. MR. 71/91 is, t11erefore, a book of account kept

in the course

of business.

That brings

us to t11e question whether it was 'regularly

kept' so as to D

,>- satisfy t11e last requirement of Section 34 to be admissible in evidence as a

relevant fact.

Mr. Altaf Ahamed submitted that

tlie above question has got

to be answered keeping in view the nature of business the Jain brothers were

carrying on and that when MR

71/91 is scanned in that perspective it is

obvious that it was regularly kept. In refuting t11e above contentions Mr.

Sibal E

relied upon $ 1550 of American Jurisprudence, Proof of Facts (Volume 34,

Second Series) wherein it has been observed that not merely regularity is

required; the entry must have been fairly 'Contemporaneous

wit11 t11e

transaction

entered. he also referred to $ 1526 of the same book which reads as under:

·'The entry should have been made at or near t11c time of the trJnsaction F

recorded -not merely because this is necessary in order to assure a

fairly accurate recollection

of t11e of the matter, but because any

trustworthy habit

of making regular business records will ordinarily

involve

t11e making of the record contemporaneously. The rule fixes

no precise time' each case must depend on its own

circumstances."

G

(emphasis supplied)

Mr. Sibal submitted that from a cursory glance of MR 71/91. It would

be apparent that the entries

t11erein were not contemporaneously made; and,

on the contrary,

iliey were made montlily which necessarily meant that those

entries were made long after the dates the purported transactions

of receipt H

1178 SUPREME COURT REPORTS [1998] 1 S.C.R.

A and disbursement took place.

What

is meant by the words 'regularly kept' in

Section 34 came up for

consideration before different high Courts; and we may profitable refer to

some of those decisions cited at the Bar. In Ramchand Pitembhardar v.

Emperor, [19 Indian cases 534] it has been observed that the books are

B 'regularly kept in the course of business' if they are kept in pursuance of

some continuous and uniform practice

in the current routine of the business

of the particular person

to whom they belong. In Kesheo Rao v. Ganesh, AIR

( 1926) Nagpur

407, the court interpreted the above words as under:

c

D

E

"The regularity of which S.34 speaks cannot possibly mean that there

is not mistake in the accounts, as that would make the section a dead

letter;

no accounts could be admitted in evidence till they had been

proved to

be absolutely correct, which is in itself an impossible task

and

also cannot be begun till they have been admitted in evidence.

Regularly or systematically

means that the accounts are kept according

to a set of rules or a system, whether the accountant has followed the

rules or system closely or

not. Nor is there anything in the section

that says

the system must

be: an elaborate or reliable one. Both those

matters,

the degree of excellence of the system and the closeness with

which it

has been followed, affect the weight of the evidence of an

entry, not it's admissibility. The roughest memoranda of accounts kept

generally according

to the most elementary system, though often

departing

from its, are admissible in evidence, but would of course

have

no

weight."

The view expressed by the Kerala High Court in Kunjamma v. Govinda

Kurukkal, (1960) Kerala Law Times 184 in this regard is that the words

F 'regularly kept' do not necessarily mean kept in a technically correct manner

for

no particular set of rule or system of keeping accounts is prescribed under

A.

Section 34 of the Evidence Act and even memoranda of account kept by petty

shopkeepers are admissible if they are authentic ....... While dealing with the

same question the Punjab & Haryana High

Court observe in Hiralal Mahabir

G Pershad v. Mutsaddila/ Juga/ Kishore, (1967) I I.L.R P &: H 435, that the

entries should not be a recital of past transactions but an account of

transactions as they occur, of course, not necessarily to be made exactly at

the time of occurrence

and it is sufficient if they are made within a reasonable

time when the memory could be considered recent.

H In our considered opinion to ascertain whether a book of account has

C.B.I. v. V.C. SHUKLA [M.K. MUKHERJEE, J.] 1179

been regularly kept the nature of occupation is an eminent factor for weighment. A

The test of regularity of keeping accounts by a shopkeeper who has dally

transactions cannot be the same as that

of a broker in real estates. Not only

their systems

of maintaining books of account will differ but also the yardstick

of contemporaneity in making entries therein. We are, therefore, unable to

subscribe

to the view of Mr. Sibal that an entry must necessarily be made in B

the book of account at or about the time the related transaction takes place

so as to enable the book to a pass the test of 'regularly kept'. Indeed tl1e

above Section($ 1526) expressly lays down (emphasised earlier) that the rule

fixed no precise time and each case must depend upon its own circumstances.

Applying the above tests and

tl1e principles consistently laid down by tl1e

different High

Court s(referred to above ) we find that Mr 71/91 has been C

regularly and systematically maintained. Whether the system in which the

book has been maintained guarantees its correctness

or trustworthiness is a

question

of its probative value and not of its admissibility as a relevant fact

under Section

34. The other three books, namely MR 68/91, MR 69/91 and MR

70/91 would not however come within the purview of tl1e above Section, for,

even .though some

of the emonctary transactions entered therein appear to

be related to those in MR 71/91, they (the three books ) cannot be said to

be books of account regularly kept. We need not, however, at this stage

consider whether the entries in these three books

will be relevant under any

otl1er provisions

of

Chapter II of the Act.

Now that we have found (in disagreement with

the High

Court) that

entries in MR 71/91 would

be admissible under Section 34 of the Act we have

to next ascertain tl1ere probative value.

Mr. Altaf Ahmed took great pains to

decode and analyse the entries in the above book and, correlating

them witl1

the entries in the other three books and in some of the loose sheets found

D

E

in the files, submitted that the intrinsic evidence furnished by their internal F

corroboration and inter-dependence unmistakably demonstrated their

authenticity and trustworthiness. According to Mr. Altaf Ahmed the entries

reflect such periodicity and regularity

as

was ~ompatible with the modus

operandi

of tl1e business of Jain brothers of com1pting public servants

including Members

of

Parliament and Ministers in order to influence tl!eir G

decisions and seek tl1eir favours for promotion of tl1eir (Jain brothers')

economic interests. Besides, he submitted, the external independent

corroboration of those entries as required under Section 34 was also available

to the prosecution from the statements made

by

Shri Jacob Mathai, Danial P.

Ranibal and P. Ghoshal and Ejaj Ihni during investigation, in that, they have

admitted receipts

of the payments as shown against them in MR. 71/91. While H

1180 SUPREME COURT REPORTS [1998] l S.C.R.

A on this point, he made a particular reference to those entries in MR 71/91

which, according to him if corresponded with the entries in tl1e other books

and the enclose sheets would prove the payments

to Shri Advani and

Sim.

Shukla. As regards the proof of aut11orship of the entries he drew our attention

to the statements of P..man Jain, A.V. Pathak and D.K. Guha who have stated

B that the entries were made by J.K. Jain and that the Jain Brothers had put their

signatures against some of

tl1ese entries in token of verification thereof. He

also drew our attention to the written opinion given by

tlle hand writing

expert in tl!is regard.

In response Mr. Sibal submitted tllat t11e evidence tl!at has been collected

C during investigation only shows tl1at the entries were made by J. K. Jain and

tllat tl!e Jain brotl!ers had put c<!rtain signatures against some of tllose

entries, tllat tl!ere is to evidence whatsoever to prove tllat monies were

actually paid by tl!e fains and received by the payees as shown in tlle entries,

witllout proof of which no case, even prima facic, could be said to have been

made out against

any of

tllem. According to Mr. Sibal and Mr. Jethmalani,

D learned Counsel for Shri Advani by mere proof of a document tlle trutl! of

the contents tllereof is to proved and independent evidence for tl!at purpose

is required. In absence of any such evidence, they contended, no liability can

be foisted under Section 34.

E The rationale behind admissibility of parties' books of account as

evidence is tl1at tl1e regularity of habit, tl1e difficulty of falsification and tl1e

fair certainty of ultimate detection give tl1em in a sufficient degree a probability

of trustworthiness (wigmore on evidence$ 1546). Since, however, an element

of self interest and partisanship of tl1e entrant to make a person -behind

whose back and witl1out whose knowledge tl1e entry is made -liable cannot

F be ruled out tl!e additional safeguard of insistence upon oilier independent

evidence

to fasten him with such liability, has been provided for in

Section

34 by incorporating the words such statements shall not alone be sufficient

to charge any person witl1 liability.

G The probative value of t11e liability created by an entry in books of

account came up for consideration in Chandradhar v. Gauhati Bank [1967]

I SCR 898. T11at case arose out of a suit filed by Gauhati Bank against

Chandradhar (tl1e appellant tl1erein) for recovery of a loan of Rs. 40,000.

In defence he contended, inter alia, tllat no loan was taken. To

H substantiate tl1eir claim tl1e Bank solely relied upon certified copy of tl1e

.l,

~-

-.

-

C.B.L v. V.C. SHUKLA [M.K. MUKHERJEE, J.] 1181

accounts maintained by them under Section 4 of the Bankers' Book Evidence A

Act, 1891 and contended that certified copies became prima facie evidence of

the existence of the original entries in the accounts and were admissible to

prove the payment of loan given. The suit was decreed by the trial Court and

the appeal preferred against it was dismissed by the High Court. In setting

aside the decree this Court observed that in the face of the positive case made B

out by Chandradhar that he did not ever borrow any sum from the Bank, the

---< Bank had to prove that fact of such payment and could not rely on mere

entries in the books

of account even if they were regularily kept in the course

of business in view of the clear language of Section 34 of the Act. This

Court

further observed that where the entries were not admitted it was the duty of

....

""'·

the Bank, if it relied on such entries to charge any person with liability, to C

produce evidence in support of the entries to show that the money was

advanced as indicated therein and thereafter the entries would be

of use as

corroborative evidence.

The same question came

up for consideration before different High

Court on a number of occasions but to eschew prolixity we would confine our D

attention to some of the judgements on which Mr. Sibal relied. In Yesuvadiyan

v. Subba Naicker, AIR (1919). Madras 132, one of the learned Judges

constituting the Bench had this to say:

"S.34, Evidence Act, lays down that the entries in books of account,

regularly kept in the course

of business are relevant, but such a

statement will not alone be sufficient

to charge any person with

liability. That merely means that the plaintiff cannot obtain a decree

E

by merely proving the existence of certain entries in his books of

account even though those books are shown to be kept in the regular

course

of business. He will have to show further by some independent F

evidence that the entires represent real and honest transactions and

that the moneys were paid in accordance with those entries. The

legislature however does not require any particular form or kind

of

evidence in addition to entries in books of account, and I take it that

any relevant facts which can be treated as evidence within the meaning

of the Evidence Act would be sufficient corroboration of the evidence G

furnished by entries in books of account if

true."

--< While concurring with the above observations the other learned Judge

stated as under:

"If no other evidence besides the accounts were given, however H

1182 ' SUPREME COURT REPORTS (1998] 1 S.C.R.

A strongly those accounts may be supported by the probabilities, and

however strong may be the evidence as

to the honesty of those who

kept them, such consideration could not alone with reference to

S.34, Evidence Act, be the basis of a

decree."

B

(emphasis supplied)

In

Beni v. Bisan Dayal, AIR (1925) Nagpur 445 it was observed that

entries in books

of account are not by themselves sufficient to charge any

person with liability, the reason being that a man cannot

be allowed to make

evidence for himself by what he chooses to write in his own books behind

the back

of the parties. There must be independent evidence of the transaction

C to which the entries relate and in absence of such evidence no relief can be

given to the party who relies upon such entries to support his claim against

another.

In Hira Lal v .. Ram Rakha, AIR (1953)

Pcpsu 113 the High Court,

while negativing a contention that it having been proved that the books

of

account were regularly kept in the ordinary course of business and that, ' D therefore, all entries therein should be considered to be relevant and to have

been proved, said that the rule as laid down in Section 34 of the Act that

entries in the books

of account regularly kept in the course of business are

relevant whenever they refer to a matter in which the court has to enquire was

subject to the salient proviso that such entries shall not alone be sufficient

evidence to charge any person with liability.

It is not, therefore, enough

E merely to prove that the books have been regularly kept in the course of

business

and the entries therein are correct. It is further incumbent upon the

person relying upon those entries to prove that the \Vere in accordance \Vith

. facts.

F

G

The evidentiary value of entries relevant under Section 34 was also

considered in

Hirala/ Mahabir Pershad, (supra) l.D. Dua, J. (as he then was)

speaking for the Court observed that such entries though relevant were only

corroborative evidence and it is to be

shmm further by some independent

evidence that the entries represent honest and re.ll transactions and that

monies were paid in accordance with those entries.

A conspectus

of the above decisions makes it evident that even correct

and authentic entries in books of account cannot without independent evidence

of their trustworthiness, fix a liability upon a person. Keeping in

view the

above principles, even

if we proceed on the assumption that the entries made

•

in MR 71/91 are correct and the entries in the other books and loose sheets

H (which we have already found to be not admissible in evidence under Section

•

C.B.I. v. V.C. SHUKLA [M.K. MUKHERJEE, J.] 1183

34) are admissible under Section 9 of the Act to support an inference about A

the fom1ers' correctness still those entries would not be sufficient to charge

Shri Advani and Shri Shukla with the accusations levelled against them for

there is not an iota

of independent evidence in support thereof. In that view

of the matter we need not discuss, deieve into or decide upon the contention

raised by

Mr. Altaf Ahmed in this regard.

Suffice it to say that the statements B

of the for witnesses, who have admitted receipts of the payments as shown

against them

in MR 71/91, can at best be proof of reliability of the entries so

far they are concerned and not others. In other words,

the statements of the

above witnesses cannot

be independent evidence under

Section 34 as against

the above two respondents. So far as Shri Advani is concerned Section 34

would not come in aid

of the prosecution for another reason also. According

C

to the prosecution case itself his name finds place only in one of the loose

sheets (sheet No. 8) and

not in MR 71/91. Resultantly, in view of our earlier

discussion,

Section 34 cannot at all be pressed into service against him.

Following conclusion

of our discussion on

Section 34 of the Act we

may now

tum to the principle and scope of

Section 10 of the Act and its D

f applicability to the entries in question. This section reads as under:-

"Things said or done by conspirator in reference to common design.

Where there is reasonable ground to believe that two or more persons

have conspired together to commit an offence

or an actionable wrong,

any thing said, done

or written by any one of such persons in E

reference to their common intention, after the time when such intention

was firs t entertained by any one

of them, is a relevant fact as against

each

of the persons believed to be so conspiring, as well for the

purpose

of proving the existence of the conspiracy as for the purpose

of showing that any such person was a party to

it."

In dealing with this Section in Sardul Singh v. State of Bombay, AIR (1957)

SC 747, this court observed that it is recognised on well established authority

that the principle underlining the reception

of evidence of the statements, acts

F

and writings of one co-conspirator as against the other is on the theory of

agency. Ordinarily, a person cannot be made responsible for the acts of others G

unless they have been instigated

by him or done with his knowledge or

consent. This section provides an exception to that rule, by laying down that

-'. an overt act committed by any one of the conspirators is sufficient, (on the

general principles

of agency) to make it the act of all. But then, the opening

of words of the

Section makes in abundantly clear that such concept of

agency can be availed of, only after the Court is satisfied that there is H

~~~~~~~~~~~~~~~~~""""."~~~~~~~~~~~~~~~~~--:;,~

1184 SUPREME COURT REPORTS (1998) l S.C.R

A reasonable ground to believe that they have conspired to commit an offence

or an actionable wrong. In other words, only when such a reasonable ground

exists, any thing sai~ done or \vrittcn by any one of them in reference to their

common intention thereafter is relevant against the others, not only for the

propose

of proving the existence of the conspiracy but also

fa~ proving the

B existence of the conspiracy but also for proving that the other person was

a party to it. lnBhagwan Swarupv. State of.aharashtra, AIR (1965) SC 682,

this court analysed the section as follows:-

c

D

"(!) There shall be a prima fade evidence affording a reasonable

ground for a Court to believe that two

or more persons are members

of a conspiracy: (2) if the said condition is fulfilled, anything said,

done or written by any one of them in reference to their common

intention will be evidence against the other; (3) anything said, done

or written by him should have been said, done or written by him after

the intention was formed by any one

of them;

(4) it would also be

relevant for the said purpose against another who entered the

conspiracy whether it was said , done

or written before the entered

the conspiracy

or after the left it; and (5) it can only be used against

a co-conspirator and not in his

favour."

In the light of the above principles we may now consider the arguments

E canvassed by Mr. Altaf Ahmed to make the entries in the books and the loose

sheets admissible under the above section as relevant evidence. He subntitted

that the materials collected during investigation and placed on record clearly

establish the existence

of a general conspiracy amongst Jains to promote

their

econontic interest by corrupting public servants. He next contended that the

materials further disclosed that in order to accomplish the design of the

F general conspiracy, a number of separate conspiracies with similar purpose

had been hatched

up between Jains and different public servants.

At the outset we may point out that no charge was framed against the

Jains from having entered into a criminal /conspiracy amongst themselves

(even though such was the allegation in the charge sheet). We need not,

G therefore, consider the materials collected during investigation from. that

perspective. Indeed, according

to the charges of conspiracy all the respondents

were parties thereto and the conspiracy existed for the period from February,

1990 to January, 1991. Therefore we have to ascertain whether there is prima

fade evidence affording a reasonable ground for us to believe about its such

H existence.

-·-"'

•

'

C.B.I. v. V.C. SHUKLA [M.K. MUKHERJEf, J.] 1185

To persuade us to give an affirmative answer to the above question Mr. A

Altaf Ahmed drew our attention to the statements of Jacob Mathai (L.W. 4),

Dr. PK Magu (L.W. 14), V\jay Kumar Verma (L.W. 15), Bharat Singh (L.W. 16)

C. D.D Reddy (L.W. 17), S.R. Choudhary (L.W. 18), Ram Prasad (L.W. 19), H.

P. Guha Roy (L.W. 20) and Narendra Singh (L.W. 21). On perusal of their

statements we find that some

of them are irrelevant to the charges of conspiracy

with which we are now concerned while others, to the

ex1ent they can be B

translated into legally admissible evidence, only indicate that Shri Shukla was

known to the Jain brothers and had gone to their residence on formal occasions.

The above statements cannot be made a reasonable ground to believe that

all

of them have conspired together.

So far as Shri Advani is concerned, we

find that no one has even spoke about him in their statements. Since the first C

requirement of Section I 0 is not fulfilled the entries in the documents cannot

be pressed into service under its latter

part

Lastly, comes t11e questions whether tl1e entries are 'admissions' within

the meaning

of

Section 17 of the Act so as to be admissible as relevant

evidence under Section 21; and if so, as against whom can the entries be D

prove. In Section 17 admission has been defended to be a statement, oral or

documentary, which suggests any inference as to any fact

in issue or relevant

fact and which is made

by any of the persons, and under the circumstances,

mentioned

in the

subsequent Sections (Sections 18 to 21). Section 18, so far

as it is relevant for our present purposes, provides that statements made by E

partly to the proceeding or by an agent to any such party, whom the Court

regards under the circumstances of the case, has expressly or impliedly

authorised

by him to make them are admissions.

Section 21 reads as under:

Proof of admissions against persons making them, and by or on their

behalf -Admissions are relevant and may be proved as against the F

person who makes tl1em, or his representative in interest; but they

cannot

be proved by or on behalf of the person who makes them or

by his representative in interest except in the following cases:-

(1) An admission may be proved by or on behalf of the person

making it, when

it is of such a nature, that if the person making G

it were dead, it would be relevant as between third persons

under

Section 32.

(2) An admission may be proved by or on behalf of the person

making it, when it consists

of a statement of the existence of any

state

of mind or body, relevant or in issue, made at or about the H

1186

A

SUPREME COURT REPORTS [1998] 1 S.C.R.

time when such state of mind or body existed, and is accompanied

by conduct rendering its falsehood improbable.

(3) An admission may be proved by or on behalf of the person

making it,

if it is relevant otherwise than as an

admission."

B From a combined reading of the above Sections it is manifest that an oral or

documentary statement made by a party or his authorised agent, suggesting

any inference as to any fact in issue or relevant fact may

be proved against

a party the proceeding

or his authorised agent as 'admission' but, apart form

exceptional cases (as contained in

Section 21 ), such a statement cannot be

proved by or on their behalf. While on this point the distinction between

C 'admission' .and 'concession' needs to be appreciated. In absence of any

definition

of 'confession' in the Act judicial opinion, as to its exact meaning,

was

not unanimous until the judicial

Committee made an authoritative

pronouncement about the same

inPaka/a Narayana v. Emperor, AIR (1939)

Privy

Council 47 with these words:-

D

E

F

G

" .... a confession must either admit in terms the offence, or at any rate

substantially all the facts which constitutes the offence.

An admission

of a gravely incriminating fact, even a conclusively incriminating fact,

is

not of itself a confession, eg. An admission that the accused is the

owner

of an was in recent possession of the knife or revolver which

caused a death with no explanation

of any other man's possession.

Some confusion appears to have been caused by the definition of

confession in Art 22 of the Stephen's "Digest of the Law of Evidence"

as 'an admission made at any time by a person charged with a crime

stating

or suggestin the inference: that he committed that crime'. lf the

surrounding articles are examined it will be apprarrent that the learned

author, after dealing with admissions generally, is applying himself to

admissions in criminal cases, and for this purpose defines confessions

so as to cover all such admissions, in order to have a general term

for use

in the three following articles, confession secured by

inducement, made upon oath, made under a promise of secrecy. The

definition is not contained in the Evidence Act, 1872, and in that Act

it would not be consistent with the natural use of language to construe

confession as a statement by an accused 'suggesting the inference

that he committed the

crime".

The above statement of law has been approved and consistently followed by

H this Court. Palvinder Kaurv. State of Punjab, [1953] SCR 94, Om Parkash

•

C.B.I. v. V.C. SHUKLA [M.K. MUKHERJEE, J.] 1187

v. State ofU.P., AIR (1960) SC 409 and Veera Ibrahim v. State of Maharashtra, A

[1976] 3 SCR 692.

It is thus seen that only voluntary and direct acknowledgement of guilt

is a confession but when a confession falls short of actual admission guilt

it may nevertheless be used as evidence against the person

who made it or -< his authorised agent as an 'admission' under section 21. The law in this B

regard has been clearly -and in our considered view correctly -explained in

Monir' s law

of Evidence (New Edition at pages

205 and 206), on which Mr.

Jethmalani relied to bring home his contention that even if the entries are

treated as 'admission'

of Jains still they cannot be used against

Shri Advani.

The relevant passage reads as under:-

C

"The distinction between admissions and confessions is of

considerable importance for two reasons. Firstly, a statement made by

an accused person,

if it is an admission, is admissible in evidence

under Section

21 of the evidence Act, unless the Statement amounts

to a confession and was made to a person in authority in consequence D

of some improper inducement, threat or promise, or was made to police

officer, or was made at a time when the accused was in custody

of

a police officer. If a statement was made by the accused in the

circumstance just mentioned its admissibility will depend upon the

determination

of the question whether it does not amount to a

confession. It will be inadmissible, but

if it does not amount to a E

confession, it. will be admissible under Section 21 of the Act as an

admission, provided that it suggests an inference as

to a fact which

is in issue in, or relevant to, the case and was not made to a police

officer in the course

of an investigation under

Chapter XIV of the

Code of Criminal Procedure. Secondly, a statement made by an accused F

person is admissible against others who are being jointly tried with

him only

if the statement amounts to a confession. Where the statement

falls short

of a confession, it is admissible only against its maker as

an admission

and not against those who are being jointly tried with

him.

111erefore, from the point of view of Section

30 of the Evidence

Act also the distinction between and admission and a confession is

G

of fundamental

importance."

(emphasis supplied)

In the light of the preceding discussion we proceed to consider the -

validity of the arguments canvassed by Shri Altaf Ahmed in this regard. Mr. H

1188 SUPREME COURT REPORTS [1998] l S.C.R.

A Altaf Ahmed urged that it being a settled principle of law that statements in

account books of a person are 'admissions' and can be used against him even

though those statements

were never communicated to any other person, the

entries would be admissible as admission of J.K. Jain, who made them that

apart,

he contended, they would

hie admissible against Jain brothers also as

they were made under their authority as would be evident from their

B endorsements/signatures appearing against/below some of those entries. In

support of his first contention he relied upon the following passage from the

judgment of his Court in Bhpgilal Chunilal Pandya v. State of Bombay,

[1959] Supp. 1 SCR 310:

c

D

E

F

"The first group of sections in the Act in which the word ' statement

'occurs, are Ss. 17 to 21, which deal with admissions. Section 17

defines tl1e word 'admission', Ss. 18 to 21 lay down what statements

are admissions, and

s. 21 deals

witll tlle proof of admissions against

persons

making them. TI1e words used in

Ss. 18 to 21 in this connection

are 'statements made by.'.

It is not disputed that statements made by

persons may be used as admissions against them even though

tlley

may not have been communicated to any other person. For example.

statements

in the account books of a person showing tl1at he was

indebted to another person are admissions which can be used against

him even though these statements were never communicated

to any

other person. Illustration (b) of s.21 also shows

tllat tl1e word

'statement'

used in these sections does not necessarily imply that

they must

have been communicated to any other person. In tl1e

Illustration in question entries made in the book kept by a ship's

captain

in tl1e ordinary 1:ourse of business are called statements,

tllough these entries are not communicated to any other person. An

examination, therefore, of tl1ese sections show tllat in this part of tlle

Act the word 'statement' has been used in its primary meaning namely,

'something that is stated' communication

is not necessary in order

tl1at it may be a

statement.".

G Even if we are to accept the above contentions of Mr. Altaf Ahmed tlle

entries, [which are statements' as held by tllis Court in Bhogilal Chunilal,

(supra) and hereinafter will be so referred to], being 'admissions' -and not

'confession' -cannot be used as against Shri Advani or Shri Shukla. However,

as against Jains the statements may be proved as admissions under Section

18 read witll Section 21 of tlle Act provided they relate to ' any fact in issue

H or relevant fact.' Needless to say, what will be 'facts in issue' or 'relevant

)-

-f.

A_

;(

--;

= t

-<

~

C.B.I. v. V.C. SHUKLA [M.K. MUKHERJEE, J.] ll89

facts' in a criminal trial will depend upon, and will be delineated by, the nature A

of accusations made or charges levelled against the person indicated. In the

two cases with which were are concerned in these appeals, the gravamen

of

the charges which were framed against Jains in one of them (quoted earlier)

and were

to be framed in the other pursuant to the order of the trial

Court

(quoted earlier) is that they entered into two separate agreements; one with

B

Shri Shukla and the other with Shti Advaui, in tern1s of which they were to

make certain payments to them as a gratification other than legal remuneration

as a motive or reward for getting their favour while they were 'public servants'

and in pursuance

of the said agreements payments were actually made to

them. Thereby the Jains committed the offence of conspiracy under

Section

120B of the Indian Penal code; and under Section 12 of the Prevention of c

Corruption Act, 1988 (P.C. Act for short), in that, they abetted the commission

of offences under Section 7 of the Act by Shri Shukla and Shri Advani.

It is thus seen that

tl1e prosecution sought to prove that there were two

separate conspiracies, in both

of which Jains together figured as the common

party and

Shri Advani or Shri Shukla, as the oilier . Since we have already D

found that the prosecution has not been able to made out a prima facie case

to prove that Shri Advani and Shri shukla were parties to such conspiracies,

tlle charges of conspiracy, as framed/sought to be framed, cannot stand also

against the Jains, for the simple reason

tl1at in a conspiracy there must be two

parties. Resultantly , the statements cannot be proved

as admission of Jains

E

of such conspiracy. We hasten to

~dd that the case the prosecution intended

to project now was not that there was a conspiracy amongst the Jains to offer

illegal gratification

to

Shri Advani and Shri Shukla and that pursuant thereto

the latter accepted the same. We need not, therefore, dilate

of the question

whetl1er,

if such was the case of the prosecution, the statements could be

proved against the Jains

as their admission. F

Thus said we may now turn our attention to

Section 12 oftl1e P. C. Act.

That Section reads ~s under:-

"Punishment for abetment of offences defined in sections 7 or I I.

Whoever abets any offence punishable under Section 7 or section 11 G

whether or not that offence is committed in consequence of that

abetment, shall be punishable with imprisonment for a term which

shall be not less than six montlls but which may extend to five years

and shall also be liable to fine."

Undoubtedly for a person to be guilty thereunder it is not necessary H

1190 SUPREME COURT REPORTS [1998] 1 S.C.R

-

A that the offenct'os mentioned therein should have been committed prusuant to

the abetment. Since 'abetment' has not been defined under the P.C. Act we

~ -

may profitably refer to its exhaustive definition in Section 107 of the Indian

Penal Code. As per that Section a person abets the doing of a thing when

he does any of the acts mentioned in the following three clauses;

B 0) instigates any person to do that thing, or

')<._

(ri) engages with one ot more other person or persons in any

conspiracy for the doing of that thing ........ , or

.

(tii) intentionally aids, by any act or illegal omission, the doing of '

c that things. r-

'

So far as the first two clauses are concerned it is not necessary that the

,_

offence instigated should have been committed. For under standing the scope

of the word "aid" in the third clause it would be advantageous to see

Explanation 2 in Section 107 I.P.C. which reads thus:

D •

"Whoever, either prior to or the time of the commission of an act, does

4· ~

any thing in order to facilitate the commission of that act, and thereby

facilitates the commission thereof, is said to aid the doing of that act."

It is thus clear that under the third clause when a person abets by aiding, the

E

act so aided should have been committed in order to make such aiding an

offence. In other words, unlike the first two clauses the third clause applies

to a case where the offence is committed.

....

•

Since in the instant case the prosecution intended to prove the abetment

of a fains by aiding (and not by any act falling under the first two clauses

F adverted to above ) and since we have earlier found that no prima facie case

has been made out against Shri Advani and Shri Shukla of their having

"-

committed the offence under Section 7 of the P. C. Act, tlje question of fains'

~.

committing the offence under Section 12 and, for that matter, their admission

in respect thereof -does not arise. Incidentally, we may mention that the

G

abetment by conspiracy would not also arise here in view of our earlier

discussion.

~

Before we conclude it need be mentioned that another question of

considerable importance that came up for consideration in these appeals was

whether members of parliament come within the definition of 'public servant'

H

in the P.C. Act so as to make the respondents liable for prosecution for

C.B.l. v. V.C. SHUKLA (M.K. MUKHERJEE, J.] 1191

alleged commission of offences there under. We did not deem it necessary to A

go into that question as we found, proceeding on the assumption that they

could be

so prosecuted, that no prima facie case was made out against any

of the respondents to justify the changes that were framed against the Jains

and

Shri Shukla (in one case); and were to be framed against Jains and Shri

Advani (in the other) pursuant to the order of the trial Court. Accordingly, B

we dismiss these appeals keeping this question of law open .

v.s.s. Appeal dismissed.