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PETITIONER:

MICHAEL MACHADO & ANR.

Vs.

RESPONDENT:

CENTRAL BUREAU OF INVESTIGATION & ANR.

DATE OF JUDGMENT: 17/02/2000

BENCH:

K.T. Thomas & A.P. Misra

JUDGMENT:

THOMAS, J.

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When the trial in a criminal case against four accused

persons proceeded to the penultimate stage (after examining

54 witnesses by then) the Metropolitan Magistrate, before

whom the case was being tried, ordered two more persons to

be arrayed as accused. If the order of the Magistrate is to

sustain, the proceedings in respect of the newly added

persons are to be re-commenced afresh, which means that the

entire massive evidence thus far collected and the time

which the court has thus far spent for recording the

evidence of such a large number of witnesses, besides the

cost involved for all concerned to reach up to the present

stage, would all become, for all practical purposes, a waste

a colossal waste. Is it so very necessary at this belated

stage to bring such two more additions to the array of the

accused at the cost of such a de novo trial?

When the persons, against whom the Metropolitan

Magistrate passed the order, challenged it before the High

Court of Bombay a learned single judge of the High Court

felt it unnecessary to interfere on the premise that the

affected persons can approach the trial court and pray for

discharging them from the case. Aggrieved by the said order

of the learned single judge the concerned persons have filed

this petition for special leave to appeal. Leave is

granted.

The background in which the Metropolitan Magistrate

passed the order against the appellants can now be shown

with more details. First appellant was Chief Manager of the

Malad Branch of the Corporation Bank at Mumbai, and the

second appellant was Chief Manager of the Wadala Branch

(Mumbai). A complaint was lodged with the police by the

Deputy Manager of the Bank with the allegations that a huge

amount, more than half a crore of rupees, had been defrauded

by certain persons and the Bank was put to great loss to the

above extent. An FIR was registered on its basis for

certain offences and after completion of the investigation

the police laid two charge-sheets before the said

Metropolitan Magistrate arraigning 4 persons as accused for

offences under Section 120-B, 420, 467, 468 and 471 of the

Indian Penal Code. The Central Bureau of Investigation

which conducted the investigation and laid the charge-sheet

has stated in the final report that the 4 accused along with

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certain other persons secured loans from the bank to the

tune of more than half a crore of rupees in the names of

existing as well as non-existing persons from three branches

of the Corporation Bank (Malad and Wadala Branches at Mumbai

and Library Branch at Ahmedabad) on the strength of bogus

share certificates purported to have been issued from

various companies. The CBI has further stated that the

materials collected by them are insufficient to show the

involvement of three officers of the Bank (including the two

appellants) in the perpetration of the said crime. However

the CBI has recommended to the Bank for initiating

departmental actions against those officers.

The Metropolitan Magistrate, after perusing the said

charge-sheet filed against 4 accused persons, felt that the

CBI was shielding the appellants from prosecution and hence

he sought the explanation from the CBI regarding that

aspect. After considering the explanation offered by the

CBI officials learned Magistrate felt that the investigating

officer has committed the offence under Section 219 of the

Indian Penal Code (making a report corruptly or maliciously,

knowing that it is contrary to law), and issued notice to

him. But at the same time learned Magistrate decided to

implead the appellants as additional accused in the criminal

cases. That order of the Magistrate was challenged by the

concerned investigating officer and the High Court quashed

that order, but made an observation that it is open to the

Magistrate to consider at the appropriate stage whether any

action is necessary under 319 of the Code of Criminal

Procedure (for short the Code). Following is what the

High Court has then observed:

As far as the present case is concerned, there is

absolutely no material in evidence so far to proceed against

those 2 bank officers. The learned counsel for the

petitioner submitted that there may be some material against

them to proceed departmentally, but nothing is presently on

record of the Court. He further stated that in case such

material or evidence comes before the court the court can

pass order under Section 319 to join them as accused.

The trial which commenced as against the 4 accused

persons progressed substantially. Until 49 witness were

examined by the prosecution the trial Magistrate had no

reason to feel the necessity to implead the appellants. But

when evidence of the remaining 3 witnesses was recorded it

appeared to the Magistrate that appellants are also involved

in the crime. So he passed the order on 16.10.1999, the

relevant portion of which reads thus:

After perusal of the evidence of Mrs. Sathe, Dayanand

Hejmadi and Naushad, similarly after going through Ex.16, I

am satisfied that there is sufficient evidence against

Branch Manager Mr. N. Ramamurthy as well as Branch Manager

Mr. Michael Machado as alleged in present case along with

other accused persons. The evidence on record is sufficient

to show that they were also party to the conspiracy,

cheating and forgery of valuable security.

It was the said order which the appellants challenged

before the High Court. While dismissing that challenge

learned Single Judge of the High Court has, inter alia,

observed thus: In my opinion, it would be improper to

interfere with the exercise of his jurisdiction u/s 319(1).

The sufficiency of the material placed before him cannot be

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gone into by the High Court unless it is a case of no

evidence at all. No doubt Mr. Jha argued hat in the

evidence of the three witnesses nothing has come on record

as against the present petitioners but as pointed out by Mr.

Mehta, there is some indication that the petitioners could

be concerned with the case though I am making it clear that

I am not giving any final opinion on this point. All I wish

to say is that this certainly is not a case where this Court

in its power u/s 482 of the Criminal Procedure Code will

interfere with the discretionary power of the learned

magistrate passed u/s 319(1) of the Cr.P.C.

In this context we may point out that even according to

the trial magistrate the first 49 witnesses did not utter a

single word against any of them; last witnesses disclosed

their role. We have perused the evidence of the aforesaid

three witnesses. No doubt there is a reference in their

evidence to the role played by the appellants, but such

reference is insufficient to make out a case of criminal

conspiracy under Section 120B of the IPC against the

appellants. The reason for the CBI to refrain from making

the appellants as accused along with the other arraigned

persons, has been stated that the evidence as against the

appellants was too inadequate to send them as accused before

a court of law. Following is the stand adopted by the CBI

in that regard:

However, after investigation the petitioners were not

charge-sheeted by the CBI but CBI recommended for initiation

of regular departmental action for major penalty against the

2 petitioners. That as provided under CBI Crime Manual the

case investigated by the CBI are referred to the Ministry or

Departments concerned for taking regular departmental action

against the public servants under the disciplinary rules

instead of launching prosecution in the court of law under

the following circumstances: -

(a) When in opinion of CBI there is inadequate evidence

for a successful criminal prosecution but there is good

evidence for departmental action.

(b) When the charges established by the enquiry are

breaches of departmental rules or misconduct not strictly

amounting to criminal offences under the law.

(c) When the departmental action is preferable to

prosecution for some other important reasons.

Hence the CBI has chosen to recommend departmental

proceedings against the appellants, instead of arraigning

them as accused along with the four persons. We are not now

concerned with the wisdom with which CBI has chosen the

aforesaid course. We are only to see whether the action of

the magistrate in joining the appellants as additional

accused at that belated stage is legally sustainable.

Powers under Section 319 of the Code can be invoked in

appropriate situations. This section is extracted below:

319. Power to proceed against other persons appearing

to be guilty of offence.- (1) Where, in the course of any

inquiry into, or trial of, an offence, it appears from the

evidence that any person not being the accused has committed

any offence for which such person could be tried with the

accused, the Court may proceed against such person for the

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offence which he appears to have committed.

(2) Where such person is not attending the Court, he may

be arrested or summoned, as the circumstances of the case

may require, for the purpose aforesaid.

(3) Any person attending the Court, although not under

arrest or upon a summons, may be detained by such Court for

the purpose of the inquiry into, or trial of, the offence

which he appears to have committed.

(4) Where the Court proceeds against any person under

sub-section (1) then-

(a) the proceedings in respect of such person shall be

commenced afresh, and witnesses re-heard;

(b) subject to the provisions of clause (a), the case

may proceed as if such person had been an accused person

when the Court took cognizance of the offence upon which the

inquiry or trial was commenced.

The basic requirements for invoking the above section is

that it should appear to the court from the evidence

collected during trial or in the inquiry that some other

person, who is not arraigned as an accused in that case, has

committed an offence for which that person could be tried

together with the accused already arraigned. It is not

enough that the court entertained some doubt, from the

evidence, about the involvement of another person in the

offence. In other words, the court must have reasonable

satisfaction from the evidence already collected regarding

two aspects. First is that the other person has committed

an offence. Second is that for such offence that other

person could as well be tried along with the already

arraigned accused.

But even then, what is conferred on the court is only a

discretion as could be discerned from the words the court

may proceed against such person. The discretionary power

so conferred should be exercised only to achieve criminal

justice. It is not that the court should turn against

another person whenever it comes across evidence connecting

that another person also with the offence. A judicial

exercise is called for, keeping a conspectus of the case,

including the stage at which the trial has proceeded already

and the quantum of evidence collected till then, and also

the amount of time which the court had spent for collecting

such evidence. It must be remembered that there is no

compelling duty on the court to proceed against other

persons.

In Municipal Corporation of Delhi vs. Ram Kishan

Rohtagi & ors. {1983 (1) SCC 1} this Court has struck a

note of caution, while considering whether prosecution can

produce evidence to satisfy the court that other accused

against whom proceedings have been quashed or those who have

not been arrayed as accused, have also committed an offence

in order to enable the court to take cognizance against them

and try them along with the other accused. This was how

learned Judges then cautioned:

But we would hasten to add that this is really an

extraordinary power which is conferred on the court and

should be used very sparingly and only if compelling reasons

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exist for taking cognizance against the other person against

whom action has not been taken.

The court while deciding whether to invoke the power

under Section 319 of the Code, must address itself about the

other constraints imposed by the first limb of sub- section

(4), that proceedings in respect of newly added persons

shall be commenced afresh and the witnesses re- examined.

The whole proceedings must be re-commenced from the

beginning of the trial, summon the witnesses once again and

examine them and cross-examine them in order to reach the

stage where it had reached earlier. If the witnesses

already examined are quite a large in number the court must

seriously consider whether the objects sought to be achieved

by such exercise is worth wasting the whole labour already

undertaken. Unless the court is hopeful that there is

reasonable prospect of the case as against the newly brought

accused ending in conviction of the offence concerned we

would say that the court should refrain from adopting such a

course of action.

In the present case, as pointed out above, the

prosecution has already examined quite a large number of

witnesses and they were cross-examined by the defence. The

Metropolitan Magistrate felt the need to start afresh only

because next three witnesses disclosed something against the

appellants. They are:

(1) Mrs. Anuradha Anand Sathe, a Clerk- cum-Cashier of

Malad Branch of the Corporation Bank.

(2) Dayanand Hejmadi, an officer in the saving Accounts

Department of the Bank.

(3)Naushad Ali, Special Assistant attached to the same

Branch.

The statements of those three witnesses were placed

before us. No doubt the statements may create some

suspicion against the appellants. But suspicion is not

sufficient to hold that there is reasonable prospect of

convicting the appellants of the offence of criminal

conspiracy.

We strongly feel that a situation has not reached as to

waste the whole massive evidence already collected by the

trial court thus far, against the 4 accused arraigned in the

case. Hence the order of the trial court in exercise of

Section 319 of the Code has to be interfered with for

enabling the trial to proceed to its normal culmination.

We, therefore, allow this appeal and set aside the

impugned judgment of the High Court as well as the order of

the Metropolitan Magistrate under challenge. We direct him

to proceed with the trial with the existing accused

arraigned before the court.