Evaluation of pleadings – without pleadings – with out evidence – when the other side denied a suggestion it can not be argued that is a fact pleaded as such it was posed as suggestion form to the other side -

Evaluation of pleadings – without pleadings – with out evidence – when the other side denied a suggestion it can not be argued that is a fact pleaded as such it was posed as suggestion form to the other side -

"The Property as stated earlier, would, at best be the property acquired in the joint venture, but for which, sufficient evidence is not there.

According to the plaintiff, he joined service in the Police Department in 1972.

Earlier to 1972 he was not having any earnings, as could be seen from the evidence.

If really the plaintiff had earnings earlier 1972, he would have produced some document or would have spoken about it.

On the other hand, in the course of cross-examination, as referred to earlier, the plaintiff has stated that he is not having any document to show that he had source of income prior to 1972.

Of course, in the course of cross-examination of DW1, the learned counsel for the plaintiff had posed a suggestion to DW1 that earlier to 1972 the plaintiff was working at Galaxy Theatre.

With reference to the said suggestion, DW1 has denied the same in unequivocal terms.

The plaintiff, if really had an employment with the Galaxy Theatre earlier to 1972, he would not have lost sight of to mention that such an important event in his life before Court.

But, in the course of his examination-in-chief PW1 has not even whispered a word about it.

Therefore, the contention of the plaintiff's Advocate that his client was working at Galaxy Theatre prior to 1972, to augment the funds fall to the ground."

Apex court - Thangamma & Ors vs Sethumadhavan 

MERE SUGESSTIONS CAN NOT FILL THE PLEADINGS AND EVIDENCE

Section 130 of the Companies Act for re­opening of the books of accounts and re­casting the financial statements of the Infrastructure Leasing & Financial Services Limited; IL&FS Financial Services Limited and IL&FS Transportation Networks Limited for the last five years, viz. from Financial Year 2012­13 to the Financial Year 2017­18

1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3747 OF 2019
Hari Sankaran ... Appellant
Versus
Union of India & Others ... Respondents
J U D G M E N T
M.R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the impugned Order
dated 31.01.2019 passed by the National Company Law Appellate
Tribunal, New Delhi in Company Appeal (AT) No. 29 of 2019 by
which  the   learned   Appellate   Tribunal   has   dismissed  the   said
appeal   preferred   by   the   appellant   herein   –   Ex­Director   of
respondent No. 2 – Infrastructure Leasing & Financial Services
Limited (hereinafter referred to as ‘the IL&FS’) and has confirmed
the   order   passed   by   the   National   Company   Law   Tribunal,
Mumbai Bench (hereinafter referred to as ‘the learned Tribunal’)
dated 01.01.2019 by which the learned Tribunal allowed the said
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application preferred by the Central Government under Section
130(1) & (2) of the Companies Act, 2013 (hereinafter referred to
as the ‘Companies Act’) and has permitted re­casting and reopening   of   the   accounts   of   IL&FS,   IL&FS   Financial   Services
Limited   (hereinafter   referred   to   as   the   “IFIN”)   and   IL&FS
Transportation   Networks   Limited   (hereinafter   referred   as   the
“ITNL”) for the last five years, the original appellant has preferred
the present appeal.
2. The facts leading to the present appeal in nutshell are as
under:
That respondent No. 2 – IL&FS is a company incorporated
under the provisions of the Companies Act, 1956.  That the said
company IL&FS has 348 group companies, including IFIN and
ITNL.   That the said IL&FS is a core investment company and
systemically   important   Non­Banking   Finance   Company   duly
approved under the Reserve Bank of India Act, 1931.   The said
company was promoted by the Central Bank of India, HDFC Ltd.,
the Union Trust of India.   That the said company is holding
prominent infrastructure development  and finance companies.
Over the years, it had inducted institutional shareholders.  That
the   said   IL&FS,   during   the   financial   year   2017­18   had   169
3
companies, out of which, 24 companies are direct subsidiaries,
135 companies are indirect subsidiaries, 6 companies are joint
ventures and 4 companies are associate companies.     That the
appellant   herein   claims   to   be   the   Vice­President/Director   of
IL&FS who has been suspended as the Director of IL&FS and its
group companies.
2.1 That on 01.10.2018, the Central Government through the
Ministry of Corporate Affairs filed a petition before the learned
Appellate Tribunal under Sections 241 and 242 of the Companies
Act alleging inter alia, mismanagement by the Board of IL&FS
and that the affairs of IL&FS were being conducted in a manner
prejudicial   to   public   interest.     That   the   Central   Government
prayed for the following reliefs:
1. That the existing Board of Directors of Respondent No. 1
company, comprising of R2 to R8, be suspended with
immediate effect and 10 (Ten) persons be appointed as
directors in terms of provisions of Section 242(2)(k) of the
Act, to manage the affairs of R1 company and its group
companies through their nominees, and such directors
any report and function under the Hon’ble Tribunal on
such matters as it may direct:
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2. That the Board of Directors appointed by the Hon’ble
Tribunal in terms of 242(2)(k) of the Act be authorized to
replace such number of directors of subsidiaries, joint
ventures and associate companies as may be required to
make the R1 and its group companies as going concern.
2.2 That it was found that the management of IL&FS and other
group company/companies were responsible for negligence and
incompetence,   and   had   falsely   presented   a   rosy   financial
statement.     To unearth the irregularities committed by IL&FS
and   its   companies,   the   provisions   of   Section   212(1)(c)   of   the
Companies Act were invoked for investigation into the affairs of
the company.   The investigation was to be carried out by the
Serious Fraud Investigation Office (hereinafter referred to as ‘the
SFIO’) in exercise of powers under Section 212 of the Companies
Act.    The SFIO submitted an interim report dated 30.11.2018 to
the Central Government placing on record that the affairs in
respect of IL&FS group Companies were mis­managed, and that
the   manner   in   which   the   affairs   of   the   company   were   being
conducted was against the public interest.   The said report shall
be referred to hereinbelow.   
5
It appears that the Registrar of Companies also conducted
an enquiry under Section 206 of the Companies Act, and prima
facie   concluded   that   mis­management   and   compromise   in
corporate   governance   norms   and   risk   management   has   been
perpetuated   on   IL&FS   and   its   group   companies   by
indiscriminately   raising   long   term   and   short   terms
loans/borrowings   through   Public   Sector   Banks   and   financial
institutions.   It was also observed that IL&FS company has been
presenting   a   rosy   picture   by   camouflaging   its   financial
statements,  and concealing and suppressing severe mismatch
between its cash flows and payment obligations, total lack of
liquidity and adverse financial ratios.   It was also found that
IL&FS company has first defaulted on commercial paper and
then   on   short   term   borrowings   i.e.   inter   corporate   deposits,
negative cash flows in operating activities etc.   It was further
observed that the consolidated balance­sheet of IL&FS company
indicated the extremely precarious financial position, and was
virtually in deep red.     It was found that intangible assets of
approximately Rs.18,540 crores as on 31.03.2017, has increased
to   approximately   Rs.20,004   crores   as   on   31.03.2018,   thus
6
creating a serious doubt about the correctness of the financial
statements.   A Report dated 03.12.2018 was submitted by the
Institute of Chartered Accountants of India (“ICAI”) which has
been placed on the record of the Tribunal.
2.3 In   this   background,   the   Union   of   India   approached   the
learned Tribunal for reliefs under Sections 241 and 242 of the
Companies Act. 
2.4 Thereafter, by a detailed and reasoned order, the learned
Tribunal vide Order dated 01.10.2018 allowed the said prayers
and suspended the Board of Directors of IL&FS, and appointed
the newly constituted Board to conduct the business as per the
Memorandum and Articles of the companies.   That the learned
Tribunal issued the following directions:
“On   the   basis   of   the   foregoing   discussions   and   after
considering the facts of the case, a narrated in the Petition
filed by the Union of India, this Bench is of the considered
view that it is judicious to invoke the jurisdiction prescribed
under Section 241(2) of the Companies Act, 2013 and the
Tribunal is of the opinion that as per Section 242(1) of the
Companies Act, 2013, the affairs of the IL&FS were being
conducted in a manner prejudicial to public interest. The
Interim prayer of suspending the present Board of Directors
7
and reconstitution of the new Board of Directors is hereby
allowed. At present, by an additional affidavit only 6 names
(supra) of Board members have proposed by the Union of
India.
Further directed that the present Board of Directors be
suspended   with   immediate   effect.   The   six   Directors   as
reproduced   supra   shall   take   over   the   R1   company
immediately. Newly constituted Board shall hold a meeting
on or before 8th October, 2018 and conduct business as per
the Memorandum and Articles of Association of the company
and the provisions of the Companies Act, 2013. Liberty is
granted to the Board of Directors to select a Chairman among
themselves. Thereafter, report the roadmap to NCLT, Mumbai
Bench at the earliest possible not later than the next date of
hearing.   The   suspended   directors   hence   forth   shall   not
represent the R1 company as a Director and shall also not
exercise any powers as a director in any manner before any
authority as well.
As a consequence of “Admission” of the Petition, issue
notice to intimate next date of hearing. The Petition is to
serve   copy   of   this   order   along   with   Petition   to   all   the
Respondents. The Respondents in turn may file their reply by
15th October, 2018, only after serving copy to the petitioner.
The Petitioner can file rejoinder, if deem fit, by 30th October,
2018.”
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2.5 That thereafter the Union of India through the Ministry of
Corporate Affairs approached the learned Tribunal under Section
130(1) of the Companies Act seeking permission for re­opening of
the   books   of   accounts   and   re­casting   thereof,   including   the
financial statements of IL&FS, IL&FS Financial Services Limited
and IL&FS Transportation Networks Limited for the last five years
viz. from Financial Year 2012­2013 to Financial Year 2017­2018.
The   learned   Tribunal   issued   notices   to   the   Income   Tax
Authorities, SEBI, and any other statutory regulatory body or
authority, or other persons concerned.     The learned Tribunal
directed the Central Government to serve the notices upon the
said parties. 
At this stage, it is required to be noted that the aforesaid
three companies through their new board of directors appeared
through their counsel before the learned Tribunal at the time of
hearing of the aforesaid application under Section 130 of the
Companies   Act.       That,   thereafter,   after   hearing   the   counsel
appearing   on   behalf   of   the   respective   parties,   including   the
learned counsel appearing on behalf of the erstwhile directors,
who   opposed   the   application   filed   under   Section   130   of   the
9
Companies   Act,   the   learned   Tribunal   vide   its   Order   dated
01.01.2019 allowed the application filed under Section 130 of the
Companies Act, and permitted the said application for re­opening
the books of accounts, and re­casting the financial statements of
the aforesaid three companies for the last five years viz. from
Financial Year 2012­2013 to Financial Year 2017­2018. 
2.6 Feeling aggrieved and dissatisfied with the order passed on
the application under Section 130 of the Companies Act by the
learned   Tribunal   dated   01.01.2019,   permitting   the   re­opening
and re­casting of the financial statements of the aforesaid three
companies for the last five years viz. from Financial Year 2012­
2013 to Financial Year 2017­2018, the appellant herein who is a
suspended Director of IL&FS alone preferred an appeal before the
learned Appellate Tribunal.   That by the impugned judgment and
order,   the   learned  Appellate   Tribunal   has   dismissed   the   said
appeal.
3. Feeling   aggrieved   and   dissatisfied   with   the   impugned
judgment and order passed by the learned Appellate Tribunal
dismissing the said appeal, and confirming the order passed by
the learned Tribunal dated 01.01.2019 allowing the application
10
under Section 130 of the Companies Act, the original appellant
i.e.   the   suspended   Director/erstwhile   Director   of   IL&FS   has
preferred the present appeal. 
4.  With the consent of the learned Senior Counsel appearing
on   behalf   of   the   respective   parties,   and   in   the   facts   and
circumstances of the case, we have heard the application for
vacating the interim Order along with the main Appeal finally. 
5. Shri Dhruv Mehta, learned senior counsel has appeared on
behalf of the appellant and Shri Maninder Singh, learned Senior
Counsel has appeared on behalf of the Union of India as well as
the other contesting respondents. 
6. Shri Dhruv Mehta, learned Senior Counsel appearing on
behalf   of   the   appellant   has   vehemently   submitted   that   the
impugned   order   passed   by   the   learned   Appellate   Tribunal
dismissing the said appeal and confirming the order passed by
the learned Tribunal allowing the application under Section 130
of the Companies Act is absolutely illegal and bad in law.
6.1   Mr.   Dhruv   Mehta,   learned   Senior   Counsel   appearing   on
behalf of the appellant has submitted that the order passed by
the learned Tribunal allowing the application under Section 130
of the Companies Act is absolutely illegal and as such contrary to
11
the provisions of Section 130 of the Companies Act.   It is further
submitted by Mr. Dhruv Mehta that as such the pre­conditions
before passing the order under Section 130 of the Companies Act
for re­opening and re­casting the statements of account of the
company, namely (i) the relevant earlier accounts were prepared
in a fraudulent manner; or (ii) the affairs of the company were
mismanaged during the relevant period, casting a doubt on the
reliability of financial statements, have not been satisfied. 
6.2 Mr.   Dhruv   Mehta,   learned   Senior   Counsel   appearing   on
behalf of the appellant has submitted that as such there is no
specific finding given by the learned Tribunal while allowing the
application under Section 130 of the Companies Act that either
the   relevant   earlier   accounts   were   prepared   in   a   fraudulent
manner, or the affairs of the company were mismanaged, during
the relevant period casting a doubt on the reliability of financial
statements.   It is submitted that in the absence of any specific
finding   by   the   learned   Tribunal   on   the   aforesaid,   it   was   not
permissible for the learned Tribunal to pass the order under
Section 130 of the Companies Act permitting re­opening of the
books of accounts and re­casting of financial statements of the
company/companies.   
12
6.3 It is further submitted that, on the contrary, there is a
specific finding/observation by the learned Tribunal in the order
under Section 130 of the Companies Act itself that the accounts
were not prepared in a fraudulent manner.  It is submitted that
the conditions precedent for invoking the powers under Section
130 of the Companies Act were not satisfied, and the learned
Tribunal was not justified in passing the impugned order under
Section 130 of the Companies Act.  It is further submitted that
therefore the learned Appellate Tribunal ought to have quashed
and set aside the order passed by the learned Tribunal. 
6.4  It is further submitted by Shri Dhruv Mehta learned Senior
Counsel that, even otherwise, the order passed by the learned
Tribunal is in breach of natural justice inasmuch as sufficient
opportunity   was   not   given   to   the   appellant   by   the   learned
Tribunal   before   passing   the   order   under   Section   130   of   the
Companies   Act.       It   is   submitted   that   the   notice   on   the
application under Section 130 of the Companies Act was issued
on 27.12.2018 and the impugned order came to be passed on
01.01.2019.     It   is   submitted   that   even   though   the   appellant
sought time to file the reply, the Tribunal without granting any
further   time   to   the   appellant   to   file   the   reply,   passed   the
13
impugned order.  It is submitted that as per the amended Section
130 of the Companies Act, before passing the order under Section
130 of the Companies Act, not only the Income Tax Authorities
and other authorities were required to be heard, even the “other
persons concerned”, including the Directors/Ex­Directors of the
company were required to be heard.   It is submitted that the
order passed by the learned Tribunal was in violation of the
principles of natural justice, therefore the same was required to
be quashed and set aside by the learned Appellate Tribunal.
It is further submitted that though the aforesaid submission
was made before the learned Appellate Tribunal, and the learned
Appellate Tribunal accepted that the order passed by the learned
Tribunal is in breach of the principles of natural justice, the
learned Appellate Tribunal dismissed the appeal.   It is submitted
that, therefore, in the facts and circumstances of the case, the
learned Appellate Tribunal  ought  to  have set aside the order
passed by the learned Tribunal and ought to have remanded the
matter  to   the  learned  Tribunal  for  fresh  decision  after  giving
opportunity of hearing to the appellant.   In support of the above
submissions   and   request,   Shri   Dhruv   Mehta,   learned   senior
counsel appearing on behalf of the appellant has heavily relied
14
upon the decisions of this Court in the case of Mannalal Khetan
v.  Kedar  Nath  Khetan  (1977) 2 SCC 424 and in the case of
Swadeshi  Cotton  Mills  v.  Union  of   India  (1981) 1 SCC 664.
Relying upon the above decisions of this Court, it is submitted
that when the Statute provides that things are required to be
done in a particular manner, it ought to have been done in the
same manner as provided under the Statute.  It is submitted that
in the present case as the Statute specifically provides that before
passing the order under Section 130 of the Companies Act, an
opportunity   is   to   be   given   to   all   concerned   and   that   two
conditions, as referred to hereinabove, are to be satisfied, the
same are required to be followed and complied with.
6.5 It is further submitted by Shri Dhruv Mehta, learned Senior
Counsel   appearing   on   behalf   of   the   appellant   that,   even
otherwise, there is no specific finding by the learned Tribunal
with respect to the mismanagement by the erstwhile Directors.
So far as the reliance placed upon the observations made in the
earlier order dated 01.10.2018 is concerned, it is submitted that
the order dated 01.10.2018 passed under Sections 241/242 of
the Companies Act cannot be said to be the final order.     It is
15
submitted   that   it   is   an   interim   order/report   to   which   the
appellant has already submitted the objections, which are yet to
be considered.  It is submitted that, therefore, condition No. (ii) of
Section 130(1) of the Companies Act is not satisfied.   
6.6 It is submitted that therefore, as the condition precedent
while invoking the powers under Section 130 of the Companies
Act are not being met, the learned Tribunal ought not to have
and   could   not   have   invoked   and   applied   Section   130   of   the
Companies Act.   In support of his above submission, Shri Dhruv
Mehta,   learned   Senior   Counsel   appearing   on   behalf   of   the
appellant has relied upon the decision of this Court in the case of
Calcutta Discount Company v. Income Tax Officer AIR 1961
SC 372.
6.7 It   is   further   submitted   by   the   learned   Senior   Counsel
appearing on behalf of the appellant that all the three different
provisions, namely Section 130, Sections 211/212 and Sections
241/242 of the Companies Act, operate in the different fields and
in different situations and as such they are in different chapters
and   therefore  the   observations   made   while  passing  the   order
16
under one provision cannot be made applicable to while passing
the order under different provisions. 
6.8 Shri Dhruv Mehta, learned Senior Counsel appearing on
behalf   of   the   appellant   has   further   submitted   that   what   is
required to be considered is the relevant material at the time
when the learned Tribunal passed the order under Section 130 of
the Companies Act.  It is submitted that the respondents cannot
support the order passed by the learned Tribunal under Section
130   of   the   Companies   Act   relying   upon   the   subsequent
developments/events.     In support of his above submission, he
has heavily relied upon the decisions of this Court in the cases of
Mohinder   Singh   Gill   v.   Chief   Election   Commissioner,   New
Delhi (1978) 1 SCC 405 and T.P. Senkumar v. Union of India
(2017) 6 SCC 801. It is submitted that the decision of this Court
in   the   case   of  Chairman,   All   India   Railway   Recruitment
Board v. K. Shyam Kumar (2010) 6 SCC 614 relied upon by the
learned Counsel appearing on behalf of the Union of India shall
not be applicable to the facts of the case on hand.  It is submitted
that in the case of  K.  Shyam  Kumar  (supra), this Court was
considering   the   administrative   decision/order   and   while
17
considering   such   administrative   order/decision,   this   Court
observed that the subsequent events/reports can be considered
while   considering   the   legality   and   validity   of   the   original
action/order in the public interest.   
6.9 Shri Dhruv Mehta, learned Senior Counsel appearing on
behalf of the appellant has  further submitted that, therefore,
neither the condition precedent provided in Section 130(1) of the
Companies   Act   has   been   complied   with/satisfied,   nor   even
Section 130(2) of the Companies Act has been complied with, and
it   is   in   violation   of   the   provisions   of   Section   130(1)   of   the
Companies Act, and as sufficient opportunity was not given to
the appellant, therefore, is in violation of the principles of natural
justice.  It is prayed that the present appeal be allowed and the
order passed by the learned Tribunal allowing the application
under Section 130 of the Act be set aside.
6.10 It is further submitted by Shri Dhruv Mehta, learned Senior
Counsel appearing on behalf of the appellant that so far as the
impugned   order   passed   by   the   learned   Appellate   Tribunal   is
concerned, it is submitted that none of the submissions/ground
raised on behalf of the appellant have been dealt with and/or
18
considered by the Appellate Tribunal.   It is submitted that the
learned   Appellate   Tribunal   was   considering/deciding   the
statutory appeal and therefore the learned Appellate Tribunal
was supposed to deal with the grounds raised on behalf of the
appellant.     It is submitted that though the plea of violation of
principles of natural justice was specifically pleaded and even the
learned   Appellate   Tribunal   also   observed   that   there   may   be
violation of principles of natural justice, in that case, the learned
Appellate Tribunal ought to have remanded the matter to the
learned Tribunal.     It is submitted that the learned Appellate
Tribunal ought to have appreciated that in view of the violation of
principles of natural justice, it has caused great prejudice to the
appellant.     It is submitted that as observed and held by this
Court in the case of Swadeshi Cotton Mills (supra), when the
principles   of   natural   justice   are   prescribed   by   the   statutory
provision, no prejudice is required to be shown for invoking the
ground of violation of principles of natural justice.
6.11 it is further submitted by learned Counsel appearing on
behalf   of   the   appellant   that   the   impugned   orders   have   far
reaching   consequences.     It   is   submitted   that   the   books   of
19
accounts once re­opened and re­casted are deemed to be final
under the provisions of Section 130(2) of the Companies Act.   
6.12 Making the above submissions and relying upon the above
decisions, it is prayed to quash and set aside the impugned order
passed   by   the   learned   Tribunal,   confirmed   by   the   learned
Appellate Tribunal.
7. The present appeal is vehemently opposed by Shri Maninder
Singh, learned Senior Counsel appearing on behalf of the Union
of India.
7.1 It is vehemently submitted by the learned Senior Counsel
appearing on behalf of the Union of India that the impugned
order passed by the learned Tribunal, confirmed by the learned
Appellate Tribunal do not suffer from any vice of illegality.   It is
submitted that the order passed by the learned Tribunal under
Section 130 of the Companies Act is absolutely in the larger
public interest and absolutely in consonance with the provisions
of Section 130 of the Companies Act. 
7.2 It   is   further   submitted   by   the   learned   senior   Counsel
appearing on behalf of the Union of India that there are very
serious   allegations   of   preparing   the   earlier   accounts   in   a
20
fraudulent   manner,   and   also   with   respect   to   the   mismanagement of the affairs of the company during the relevant
period.   It is submitted that, in the present case, after having
satisfied that there are serious allegations against IL&FS group of
companies, the Department of Economic Affairs took a conscious
decision   to   approach   the   NCLT   under   Section   242   of   the
Companies Act to order re­constitution of the Board of Directors.
It  is   submitted   that   by  a   detailed   order   and   considering   the
material on record, and having been  prima facie  satisfied with
respect to the allegations of mismanagement and relating to the
affairs of IL&FS group of companies, the learned Tribunal passed
an   order   dated   01.10.2018   suspending   the   earlier
Directors/Board of Directors of the companies and appointed a
new Board of Directors.  It is submitted that even the Ministry of
Corporate   Affairs,   Government   of   India   in   exercise   of   powers
under Section 212 of the Companies Act had issued an order
directing to conduct investigation into the affairs of IL&FS group
of   companies.     It   is   submitted   that   SFIO   constituted   under
Section  212 of  the Act  has  already commenced  a specialized
investigation into the affairs of IL&FS group of companies.   It is
submitted that the appellant has been arrested on 02.04.2019,
21
and   is   presently   in   judicial   custody.     It   is   submitted   that
thereafter   when   the   Union   of   India   through   the   Ministry   of
Corporate Affairs submitted an application before the learned
Tribunal to re­open the books of accounts and to re­cast the
financial statements of the three main companies for the last five
years and thereafter considering the investigation reports and
having been satisfied that the conditions precedent for invoking
the powers exercised under Section 130 of the Companies Act are
satisfied/complied   with,   thereafter   when   the   learned   Tribunal
has passed the order, the same cannot be said to be illegal.  It is
submitted that all the requirements under Section 130 of the
Companies Act have been complied with/satisfied.
7.3 It   is   further   submitted   that   the   order   dated   01.10.2018
passed   under   Sections   241/242   of   the   Companies   Act   has
attained finality inasmuch as the same is not challenged till date.
It is submitted that therefore the same can be considered by
passing an order under Section 130 of the Companies Act also.
7.4   It   is   further   submitted   by   the   learned   Senior   Counsel
appearing   on   behalf   of   the  Union   of   India  that  all   the   three
provisions,   namely   Sections   211/212,   Sections   241/242   and
22
Section 130 of the Companies Act are required to be considered
and read conjointly.   It is submitted that while considering the
one   provision   and/or   while   passing   the   order   under   one
provision,   it   is   required   to   be   seen   that   the   effect   of   the
order/orders passed in other provisions do not become nugatory
and/or   ineffective.       It   is   submitted   that   therefore   if   all   the
aforesaid three provisions are considered and read conjointly, in
that case, it can be said that the order passed under Section 130
of the Companies Act would be in the aid of the investigation
going on by the SFIO under Section 212 of the Companies Act
and   the   same   shall   be   in   the   larger   public   interest.     It   is
submitted that, in the present case, Justice D. K. Jain, a former
Judge   of   this   Court,   has   been   appointed   to   supervise   the
resolution process of IL&FS group of companies.  It is submitted
that the re­opening of the books of accounts and re­casting the
financial  statements  of  the   aforesaid  three  companies  is  very
much required and necessary, since the same shall be in the
larger public interest, to find out the real truth. 
7.5 It   is   further   submitted   by   the   learned   Senior   Counsel
appearing   on   behalf   of   the   Union   of   India   that   the   powers
23
conferred   under   Section   130   of   the   Companies   Act   are   less
stringent   than   the   powers   conferred   under   Sections   241/242
and/or Sections 211/212 of the Companies Act.  It is submitted
that while exercising powers under Section 130 of the Companies
Act,   there   may   not   be   any   final   conclusion/opinion   that   the
relevant earlier accounts are prepared in a fraudulent manner or
the affairs of the company were mismanaged during the relevant
period.   It is submitted that if, on the basis of the material on
record, the learned Tribunal is satisfied on either of the aforesaid
two eventualities, it is always open to the Tribunal to pass the
order   to   re­open   the   books   of   accounts   and   to   re­cast   the
financial statements of the company. 
It is  further submitted  that,  in   the  present  case, before
passing   the   order   under   Section   130   of   the   Companies   Act
notices were issued under the first proviso to Section 130 of the
Companies   Act.     It   is   submitted   that   SEBI   appeared   and
submitted that it had no objection to the accounts and financial
statement of respondent Nos. 2 to 4, which are listed companies,
being re­opened and re­casted.
24
It is submitted that, as observed by the Tribunal in the
impugned   order,   the   erstwhile   directors   had   opposed   the
application under Section 130 of the Companies Act, that after
hearing all parties, the impugned order has been passed by the
learned Tribunal.   It is submitted that therefore the impugned
order passed by the learned Tribunal cannot be said to be in
violation of the principles of natural justice as alleged.
7.6 Relying upon the subsequent interim investigation reports
by the RBI, it is submitted that the impugned order passed by
the learned Tribunal under Section 130 of the Companies Act is
not required to be interfered with.   It is submitted that mere
perusal of the report of the RBI dated 22.3.2019 demonstrates
and   establishes   beyond   any   doubt   about   the   complete
correctness, validity and legality of the order under Section 130
of the Act.    In support of his submission, the learned counsel
has relied upon and requested to consider the subsequent event
also, more particularly the report of the RIB dated 22.03.2019.
The learned counsel appearing on behalf of the Union of India
has heavily relied upon the decision of this Court in the case of
25
K.  Shyam Kumar  (supra) in support of the prayer to consider
the subsequent Report of RBI also. 
7.7 Making the above submissions, it is prayed to dismiss the
present appeal, more particularly, considering the larger public
interest as, in the present case, thousands of crores of the public
money is involved. 
8. We have heard the learned counsel for the respective parties
at length and perused the written submissions filed by them.
At   the   outset,   it   is   required   to   be   noted   that   by   the
impugned order and in exercise of powers under Section 130 of
the Companies Act, the learned Tribunal has allowed the said
application   preferred   by   the   Central   Government   and   has
directed/permitted re­opening of the books of accounts and recasting   the   financial   statements   of     IL&FS   and   other   two
companies for the last 5 years, viz., F.Y 2012­2013 to 2017­2018.
The order passed by the learned Tribunal has been affirmed by
the learned Appellate Tribunal.   Therefore, the short question
which is posed for consideration before this Court, whether in the
facts and circumstances of the case, can it be said that the order
26
passed   by   the   learned   Tribunal   is   illegal   and/or   contrary   to
Section 130 of the Companies Act?
8.1 While considering the aforesaid question/issue, few facts
and   the   relevant   provisions   of   the   Companies   Act   which   are
relevant for determining/considering the legality and validity of
the  order  passed  by  the  learned  Tribunal  are  required to   be
referred to and considered, which are as under:
Section   211   of   the   Companies   Act   provides   for
establishment of Serious Fraud Investigation Office to investigate
frauds relating to a company.  Section 212 of the Companies Act
provides   for   investigation   into   affairs   of   company   by   SFIO.
Section 212 of the Companies Act provides that if the Central
Government is of the opinion that it is necessary to investigate
into the affairs of a company by SFIO....in the public interest; or
on a request made by any department of the Central Government
or   a   State   Government.     In   the   present   case,   the   Central
Government has already constituted SFIO and has also ordered
investigation   into   the   affairs   of   IL&FS   and   other   group   of
companies and the investigation by the SFIO is under progress.
It is also required to be noted that SFIO had also submitted its
27
preliminary report.   In the preliminary SFIO report, there are
specific findings with respect to mismanagement of the affairs of
the   aforesaid   companies,   and   also   with   respect   to   preparing
fraudulent accounts.  At this stage, it is also required to be noted
that ICAI had also conducted an enquiry into the accounts for
the past five years, and in the preliminary report, the ICAI has
mentioned   that   “accounts   for   the   post   five   years   have   been
prepared in a fraudulent and negligent manner by the erstwhile
auditors”.  That the Registrar of Companies had also conducted
an enquiry under Section 206 of the Companies Act and prima
facie  concluded   that   mismanagement   and   compromise   in
corporate   governance   norms   and   risk   management   has   been
perpetuated   on   IL&FS   and   its   group   companies   by
indiscriminately   raising   long   term   and   short   term
loans/borrowings   through   public   sector   banks   and   financial
institutions.   Considering the fact that thousands of crores of
public money is involved, and in the public interest, the Central
Government has thought it fit to handover the investigation with
respect to the affairs of IL&FS and other group companies to
SFIO.
28
8.1.1  Sub­section (2) of Section 241 of the Companies Act
provides that if the Central Government is of the opinion that the
affairs   of   the   company   are   being   conducted   in   a   manner
prejudicial to public interest, it may itself apply to the Tribunal
for an appropriate order  under Chapter XVI, more particularly
the   order   under   Section   242   of   the   Companies   Act.     In   the
present   case,   the   Central   Government   had   approached   the
learned Tribunal under Section 241 of the Companies Act and for
an appropriate order to suspend the existing Board of Directors
of the Companies and to appoint new Directors in terms of the
provisions of Section 242(2)(k) of the Companies Act, to manage
the affairs of IL&FS and group companies.   That by an order
dated 01.10.2018, the learned Tribunal, in exercise of powers
under Section 242(2) of the Companies Act, has suspended the
Board of Directors of IL&FS and has further passed an order for
reconstitution of the new Board of Directors.   Six persons are
appointed as Directors as Board members.  While issuing such
directions, the learned Tribunal has specifically observed that the
learned Tribunal is satisfied that the affairs of the IL&FS were
being   conducted   in   a   manner   prejudicial   to   public   interest.
Thus, pursuant to the said order dated 01.10.2018, the erstwhile
29
Board Members/Directors of the IL&FS are suspended, and new
Directors are appointed as Board Members and the new Board of
Directors   are   conducting   the   affairs   of   the   IL&FS   and   group
companies.   It is further ordered that the suspended Directors
henceforth shall not represent the IL&FS company as Directors,
and shall also not exercise any power as Directors in any manner
before any authority as well.   The appellant herein is the Vice
President and suspended Director of the company, who alone has
challenged the impugned order passed by the learned Tribunal
passed under Section 130 of the Companies Act.
8.2 In between there is one another development.  Pursuant to
the order passed by the NCLAT, a former Judge of this Court –
Hon’ble Justice (Retd.) D.K. Jain has been appointed to supervise
the operation of the “Resolution Process” of the IL&FS group
companies.   Considering the aforesaid facts and circumstances
and in the larger public interest and having found on the basis of
the   reports/preliminary   reports   of   SFIO,   ICAI   and   ROC   and
having observed and found that the relevant earlier accounts of
IL&FS   and   other   group   companies,   named   hereinabove,   were
prepared in a fraudulent manner and the affairs of the company
30
were mismanaged during the relevant period, casting a doubt on
the   reliability   of   the   financial   statements,   the   Union   of
India/Central   Government   considered   it   fit   to   submit   an
application before the learned Tribunal under Section 130 of the
Companies Act.   After issuing notice to all concerned including
the Central Government, Income Tax Authorities, SEBI, other
Statutory Regulatory Body and even to the erstwhile Directors of
IL&FS and other two companies, by the impugned order, the
learned Tribunal has permitted/directed the Central Government
to re­open the books of accounts and to recast the financial
statements   of   IL&FS   and   other   two   companies,   named
hereinabove, of last 5 years.
8.3 Considering   the   aforesaid   facts   and   circumstances,   the
legality and validity of the impugned order passed by the learned
Tribunal passed under Section 130 of the Act, confirmed by the
learned Appellate Tribunal is required to be considered.
9. On going through the order passed by the learned Tribunal
passed under Section 130 of the Act, it appears that the learned
Tribunal is conscious of the relevant provisions of the Act, more
particularly   Section   130   of   the   Companies   Act   and   more
31
particularly   the   conditions   precedent   to   be   complied
with/satisfied while directing/permitting re­opening of the books
of accounts  and re­casting of the  financial statements of the
company.  From the order passed by the learned Tribunal under
Section 130 of the Companies Act, it appears that the learned
Tribunal has considered the preliminary report submitted by the
ICAI   and   SFIO   and   the   observations   made   in   the   aforesaid
reports/preliminary reports.  That thereafter having satisfied that
the conditions precedent for invoking powers under Section 130
of the   Companies Act, stated in Section 130 (i) OR (ii) of the
Companies Act are satisfied, thereafter the learned Tribunal has
passed an order allowing the application under Section 130 of the
Companies Act for re­opening the books of accounts and recasting   the   financial   statements   of   IL&FS   and   other   two
companies, viz, for the last 5 years.
10. While   assailing   the   order   passed   by   the   Tribunal   under
Section 130 of the Act, it is vehemently submitted on behalf of
the   appellant,   who   as   such   is   a   suspended   director   of   the
company that there is no specific finding recorded by the learned
Tribunal that (i) the relevant earlier accounts were prepared in a
32
fraudulent   manner;   and   (ii)   the   affairs   of   the   company   were
mismanaged during the relevant period casting a doubt on the
reliability of the financial statements.  It is the case on behalf of
the appellant that in the order dated 01.01.2019 passed under
Section   130   of   the   Companies   Act,   learned   Tribunal   has
specifically   given   a   finding   that   the   alleged   accounts   of   the
companies cannot be said to have been prepared in a fraudulent
manner.  However, it is required to be noted that the aforesaid
observations by the Tribunal are required to be considered in the
context for which the observations are made.  It appears that the
said observations are made with respect to role of the auditors.  It
is to be noted that in the same para, the learned Tribunal has
specifically observed that in the earlier order dated 01.10.2018, it
is observed that the affairs of the company were mismanaged
during the relevant period and that the affairs of the company
and subsidiary companies were being mismanaged during the
relevant period, as contemplated under Sub­Section (1) and (2).
At this stage, it is required to be noted that as per Section 130 of
the   Act,   the   Tribunal   may   pass   an   order   of   re­opening   of
accounts if the Tribunal is of the opinion that (i) the relevant
earlier accounts were prepared in a fraudulent manner;  OR  (ii)
33
the affairs of the company were mismanaged during the relevant
period   casting   a   doubt   on   the   reliability   of   the   financial
statements.   Therefore, the word used is “OR”.   Therefore, if
either of the conditions precedent is satisfied, the Tribunal would
be justified in passing the order under Section 130 of the Act.
Considering   the   order   passed   by   the   Tribunal   passed   under
Section 130 of the Companies Act, it appears that the learned
Tribunal has passed the order on being satisfied with respect to
the second part of Section 130 of the Companies Act. It is also
required to be noted that the learned Tribunal has also taken
note of the preliminary report submitted by the ICAI with respect
to   the   earlier   accounts   were   being   prepared   in   a   fraudulent
manner.  On a fair reading of Section 130 of the Companies Act,
if the Tribunal is satisfied that either of the conditions precedent
is satisfied, the Tribunal would be justified in passing the order
under Section 130 of the Companies Act.
11. Considering   the   facts   narrated   hereinabove   and   the
preliminary   reports   of   SFIO   and   ICAI   which   came   to   be
considered by the learned Tribunal and considering the specific
observations made by the learned Tribunal while passing the
34
order   under   Section   241/242   of   the   Companies   Act   and
considering the fact that the Central Government has entrusted
the investigation of the affairs of the company to SFIO in exercise
of powers under Section 242 of the Companies Act, it cannot be
said that the conditions precedent while invoking the powers
under Section 130 of the Act are not satisfied.  We are more than
satisfied that in the facts and circumstances of the case, narrated
hereinabove, and also in the larger public interest and when
thousands of crores of public money is involved, the Tribunal is
justified in allowing the application under Section 130 of the
Companies Act, which was submitted by the Central Government
as provided under Section 130 of the Companies Act.
12. Now so far as the submission on behalf of the appellant that
all the three provisions, viz., Section 130, Sections 211/212 and
Sections   241/242   operate   in   different   fields   and   in   different
circumstances   and   they   are   in   the   different   Chapters   and
therefore any observation made while passing the order/orders
with respect to a particular provision may not be considered
while passing the order under relevant provisions is concerned, it
is required to be noted that all the three provisions are required
35
to   be   considered   conjointly.     While   passing   an   order   in   a
particular provision, the endeavour should be to see that the
order/orders passed under other provisions of the Companies Act
are given effect to, and/or in furtherance of the order/orders
passed under other Sections.  Therefore, the observations made
while passing order under Section 241/242 of the Companies Act
can be said to be relevant observations for passing the order
under Section 130 of the Companies Act.   At this stage, it is
required to be noted that even otherwise in the order passed by
the Tribunal under Section 130 of the Companies Act, there is a
specific observation made by the learned Tribunal with respect to
mismanagement of the affairs of the company, and even with
respect to the relevant earlier accounts prepared in a fraudulent
manner.
13. It is next contended on behalf of the appellant that proviso
to Section 130 of the Act has not been complied with and that the
order passed by the learned Tribunal passed under Section 130
of the Act is in violation of the principle of natural justice. At the
outset, it is required to be noted that while passing he order
under Section 130 of the Companies Act, the learned counsel
36
appearing   on   behalf   of   the   erstwhile   directors   appeared   and
opposed the application under Section 130 of the Companies Act.
Therefore,   the   learned   counsel   appearing   on   behalf   of   the
erstwhile   directors   was   heard   before   passing   he   order   under
Section 130 of the Companies Act.  Therefore, it can be said that
there is a compliance/substantial compliance of the principle of
natural justice to be followed.  It is required to be noted that as
per proviso to Section 130 of the Companies Act before passing
the order under Section 130 of the Act, the Tribunal is required
to   issue   notice   to   the   Central   Government,   Income   Tax
Authorities,   SEBI   or   any   other   statutory   regulatory   body   or
authorities concerned or any “other person concerned” and is
required   to   take   into   consideration  the   representation,  if   any
made.   The “other person concerned” is as such not defined.
Who can be said to be “other person concerned”, that question is
kept open.   At this stage, it is required to be noted that while
passing the order under Section 130 of the Act, there shall be
reopening of the books of accounts and re­casting of the financial
statements of the company and therefore the Board of Directors
of the company may make a grievance.  The erstwhile directors
cannot represent the company as they are suspended pursuant
37
to the earlier order passed under Section 242 of the Companies
Act.  Be that as it may, even otherwise in the present case and as
observed   hereinabove   the   erstwhile   directors   of   the   company
represented before the Tribunal and they opposed the application
under   Section   130   of   the   Act.   Therefore,   in   the   facts   and
circumstances   of   the   case,   it   cannot   be   said   that   the   order
passed   by   the   learned   Tribunal   is   per   se   in   violation   of   the
principle of natural justice as alleged.
14. The submission by learned Counsel appearing on behalf of
the appellant that in the impugned order passed by the learned
Appellate   Tribunal,   the   learned   Appellate   Tribunal   has
specifically   observed   that   there   is   a   violation   of   principle   of
natural   justice   and   therefore   the   learned   Appellate   Tribunal
ought to have remanded the matter to the Tribunal is concerned,
on considering/fair reading of the impugned order passed by the
learned Appellate Tribunal, as such, there is no specific finding
by the learned Appellate Tribunal that there is a violation of
principle  of   natural   justice.  What   is   observed  by  the   learned
Appellate Tribunal is that “even if it is accepted that the appellant
on receipt of notice wanted to file reply” cannot be considered as
38
a specific finding given that the order passed by the Tribunal was
in violation of principle of natural justice.
15. Now insofar as the submission on behalf of the appellant
that the order dated 01.10.2018 passed under Section 241/242
of the Companies Act is an interim order and the same is not a
final order suspending the directors and the erstwhile board of
directors of the company, and therefore the observations made in
the   order   dated   01.10.2018   cannot   be   considered,   has   no
substance.  It is required to be noted that as on today the order
dated   01.10.2018   suspending   the   erstwhile   directors   of   the
company   including   the   appellant   stands   and   remains   in
operation.  The same is not challenged by way of an appeal before
an appropriate appellate Tribunal/Court.
16. Now so far as the submission on behalf of the appellant that
the impugned order passed by the learned Appellate Tribunal is a
non­speaking and non­reasoned order and the grounds urged
before the learned Appellate Tribunal have not been dealt with by
the learned Appellate Tribunal and therefore the prayer to set
aside the order is concerned, in view of our specific findings
39
recorded hereinabove on the legality and validity of the order
passed   by   the   learned   Tribunal   under   Section   130   of   the
Companies Act, we do not propose to remand the matter to the
learned Appellate Tribunal.  It is true that the learned Appellate
Tribunal could have passed a reasoned/speaking order. But in
the   facts   and   circumstances   of   the   case   and   our   findings
recorded hereinabove  and  as observed hereinabove, the  order
passed by the Tribunal under Section 130 of the Companies Act
does not suffer from any illegality and the same is passed in the
larger public interest, we have considered the order passed by the
learned Tribunal under Section 130 of the Companies Act on
merits.
17. In   view   of   the   aforesaid   findings   recorded   by   us,   the
decisions relied upon by the learned counsel appearing on behalf
of the appellant shall not be applicable to the facts of the case on
hand.  There cannot be any dispute to the proposition of law laid
down by this Court in the aforesaid decisions relied upon by the
learned counsel appearing on behalf of the appellant.  However,
in the light of the aforesaid findings recorded by us, none of the
40
decisions relied upon by the learned counsel appearing on behalf
of the appellant shall be applicable to the facts of the case on
hand.
18. Now so far as reliance placed upon the subsequent report of
the RBI and the objection by the learned counsel appearing on
behalf of the appellant to rely upon the subsequent report and
the reliance placed upon the decision of this Court in the case of
Mohinder   Singh   (supra)  is   concerned,   as   the   impugned   order
passed by the learned Tribunal is in the larger public interest,
this Court can take note of the subsequent development/report.
However, at the same time, the same shall be in support of the
order under challenge. Even otherwise, it is required to be noted
and  as observed hereinabove,  independent  to  the  subsequent
report of the RBI, there is a specific finding with respect to the
mismanagement   and   the   fraudulent   accounts.   Therefore
subsequent Report of the RBI Report can be taken note of, while
upholding   the   order   passed   by   the   learned   Tribunal   under
Section 130 of the Companies Act. As observed hereinabove, a
larger public interest has been involved and reopening of the
41
books of accounts and recasting of financial statements of the
aforesaid companies is required to be carried out in the larger
public   interest,   to   find   out   the   real   truth,   and   as   observed
hereinabove both the conditions precedent while invoking power
under Section 130 of the Companies Act are satisfied/complied
with, therefore in the facts and circumstances of the case, we are
of the opinion that the order passed by the learned Tribunal
passed under Section 130 of the Companies Act, confirmed by
the learned Appellate Tribunal, is not required to be interfered
with.
19. In view of the above and for the reasons stated above, we
see   no   reason   to   interfere   with   the   impugned   order   dated
01.01.2019 passed by the learned Tribunal under Section 130 of
the Companies Act for re­opening of the books of accounts and
re­casting the financial statements of the Infrastructure Leasing
& Financial Services Limited; IL&FS Financial Services Limited
and   IL&FS Transportation Networks Limited for the last five
years, viz. from Financial Year 2012­13 to the Financial Year
2017­18, which came to be confirmed by the learned Appellate
42
Court   vide   impugned   judgment   and   order   dated   31.01.2019.
Consequently,   the   present   appeal   fails   and   deserves   to   be
dismissed and is accordingly dismissed.   
All connected IAs are also disposed of.
...................................J
[INDU MALHOTRA]
..................................J.
[M. R. SHAH]
NEW DELHI,
JUNE 4, 2019

Therefore, identification by Tara Singh (PW-1) and Varun Singh (PW-4) of the appellant- Guman Singh as one of the perpetrators who had fired on Shiv Charan and Babu Singh (PW-3) is unreliable and should not be accepted without substantial corroboration and supporting material/evidence to establish involvement of the appellantGuman Singh. On the aspect of corroboration, prosecution relies upon the FSL report, exhibit P-48, opining that barrel residue examination of ‘8mm/.315’ country-made pistol (W/1) had revealed that pistol had been fired, but, definite time of its last firing could not be ascertained. The FSL report also opines that it was not possible to link definitely the ‘8mm/.315’ Soft Round nose Copper Jacketted Bullet ‘B/1’ from packet ‘D 1’ with the country-made pistol (W/1) from packet ‘E’ due to lack of sufficient evidence.Thus, the bullet ‘B/1’ recovered from the body of Babu Singh (PW3) would not be matched with the country-made pistol. The bullets recovered from the body of deceased Shiv Charan were not sentfor ballistic examination and comparison. This is surprising as bullets were certainly recovered from the body of the deceased Shiv Charan and no explanation is forthcoming why these bullets were not sent for ballistic examination.

NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELATE JURISDICTION
CRIMINAL APPEAL NO. 1475 OF 2017
GUMAN SINGH ….. APPELLANT(S)
VERSUS
STATE OF RAJASTHAN ….. RESPONDENT(S)
J U D G M E N T
SANJIV KHANNA, J.
The appellant, Guman Singh impugns judgment dated
10.03.2017 passed by the Division Bench of the High Court of
Judicature for Rajasthan at Jaipur, which confirms his conviction
under Section 302 of the Indian Penal Code (“IPC”, for short) for
murder of Shiv Charan and under Section 307 read with Section
34 IPC for attempt to murder Babu Singh. Appellant stands
sentenced under Section 302 IPC to life imprisonment and fine of
Rs. 10,000/- and in default of payment of fine to serve additional
rigorous imprisonment for one year and for an offence under
Section 307 IPC to rigorous imprisonment of 10 years with fine of
Rs. 1,000/- and in default of payment, an additional rigorous
imprisonment of one year.
Criminal Appeal No. 1475 of 2017 Page 1
2. The conviction arises out of FIR No. 464/2009 registered on
30.08.2009 at 8.20 p.m. in Police Station Hindaun City, DistrictKarauli, Rajasthan and the consequent charge-sheet filed against
the present appellant, i.e. Guman Singh, and Jagdish Singh,
Satvir Singh and Shyam Singh. Jagdish Singh was acquitted by
the Additional Sessions Judge, Hindaun City, Karauli, Rajasthan
vide judgment dated 07.06.2013 and Shyam Singh and Satvir
Singh have been acquitted in the impugned judgment of the High
Court.
3. The primary issue/question raised before us relates to veracity
and truthfulness of the testimonies of Tara Singh (PW-1) and
Varun Singh (PW-4), son and nephew of the deceased Shiv
Charan. Tara Singh (PW-1) and Varun Singh (PW-4) have
deposed that they along with Shivendra Singh were on a
motorcycle on their way from Hindaun to Village Banki. The
deceased Shiv Charan and the injured Babu Singh were on
another motorcycle a few steps ahead of them. Near Chauve ka
bandh, another motorcycle with the present appellant Guman
Singh and Satvir Singh s/o Ramoli and Shyam Singh s/o Ummed
Singh, residents of Village Banki, appeared from behind and came
parallel to the motorcycle driven by the deceased Shiv Charan.
One of the riders from the third motorcycle had then fired a shot
Criminal Appeal No. 1475 of 2017 Page 2
that had hit Babu Singh on his side and back. The motorcycle
skidded and Shiv Charan and Babu Singh fell down. Guman
Singh had then fired at the chest of Shiv Charan. Satvir Singh
and Shyam Singh too had fired at Shiv Charan. Guman Singh,
Satvir Singh and Shyam Singh had also fired shots at Tara Singh
(PW-1) and Varun Singh (PW-4) who had managed to escape by
running towards the Hindaun City to save their lives. They had,
from STD booth near Chungi, informed their relatives about the
occurrence. On seeing a police vehicle, they drove along with
police to the place of occurrence.
4. However, this version as to their presence at the place of
occurrence and being eye-witnesses to the firing by Guman Singh
is a suspect and in grave doubt, in view of the testimony of Gulam
Navi (PW-7) the Investigating Officer and SHO Police Station
Hindaun City, who has deposed that on 30.08.2009 at around 5.30
p.m. information was received from an unknown person that
someone had been fired upon by another near Chauve ke bandh.
PW-7 on reaching the spot along with other police officials found
Babu Singh lying in an injured condition. Shiv Charan had already
died. One motorcycle was lying at the spot. On directions of
Gulam Navi (PW-7), the deceased Shiv Charan and Babu Singh
were taken to the hospital. Gulam Navi (PW-7) has not deposed
Criminal Appeal No. 1475 of 2017 Page 3
and accepted presence of Tara Singh (PW-1) and Varun Singh
(PW-4) at the spot at 5.30. p.m. on 30.8.2009. As per PW-7, his
first meeting with Tara Singh (PW-1) was at the hospital at around
8.20 p.m., when a written complaint was given to him by Tara
Singh (PW-1). Upon receipt of the written complaint, steps were
taken for registration of the FIR. Similarly, Babulal Bhaskar (PW10) Sub-Inspector, has deposed that on 30.08.2009 at 5.30 p.m.
he had left the police station and had reached the hospital at
around 5.55 p.m. Around 8.20 p.m., he had initiated the
proceedings after preparing the panchnama etc. In his crossexamination, PW-10 had testified that till 8.20 p.m. none of the
witnesses had disclosed and named the attacker(s) and they had
also not indicated as to the type of weapon used in the offence.
5. On reading testimonies of Gulam Navi (PW-7) and Babulal
Bhaskar (PW-10), we find that their versions contradict the version
given by Tara Singh (PW-1) and Varun Singh (PW-4) as to their
presence at the place of occurrence and their claim that they were
following the deceased Shiv Charan and the injured Babu Singh
on another motorcycle. Their presence is highly doubtful and their
eye-witness account apparently conjured, as they were not found
at the spot when Gulam Navi (PW-7) the SHO and Investigating
Officer had recached Chauve ke bandh at around 5.30 p.m. on
Criminal Appeal No. 1475 of 2017 Page 4
30.08.2009. Gulam Navi (PW-7) in his cross-examination also had
accepted as correct that the informant Tara Singh (PW-1) was not
present at the place of the occurrence till the time Babu Singh was
sent to hospital. Between 5.30 p.m. to 8.20 p.m., PW-7 was not
informed and told as to who had fired upon Shiv Charan. First
conversation between Tara Singh (PW-1) and Varun Singh (PW-4)
and Gulam Navi (PW-7) was in the hospital at about 8.20 p.m.,
nearly 3 hours after the occurrence, and both had then for the first
time projected themselves as eye witnesses. The assertion and
claim of Tara Singh (PW-1) and Varun Singh (PW-4) of being eyewitnesses to the incident was clearly on second thoughts and after
due deliberation.
6. Statements of Tara Singh (PW-1) and Varun Singh (PW-4), under
Section 161 of the Code of Criminal Procedure, 1973 (“the Code”,
for short), were recorded by the SHO and the Investigating Officer
Gulam Navi (PW-7) three days after the date of occurrence on
03.09.2009. This delay is substantial and assumes some
importance as it has been alleged that the FIR has been back
dated and was never sent to the Magistrate as required vide
Section 157 of the Code.
Criminal Appeal No. 1475 of 2017 Page 5
7. While the aforesaid contention as recorded in paragraph 6 may
not by itself be significant, but testimony of Babu Singh (PW-3) is.
Babu Singh, it is stated, had returned from Jaipur on 3.09.2009
and thereupon his statement under Section 161 of the Code was
recorded. Pertinently, Babu Singh (PW-3) in his examination-inchief had turned hostile and did not name the appellant and three
others who were charge-sheeted. Babu Singh’s presence on the
spot cannot be doubted, as he was the only injured witness. Babu
Singh (PW-3) did not depose as to the presence of Tara Singh
(PW-1) and Varun Singh (PW-4) on another motorcycle or that
they were following them. He had stated that he was fired from
behind and thereafter, had become unconscious and had fallen
down. On regaining consciousness, he had noticed police
personnel and a person holding camera. Thereafter, he was taken
to the hospital. He did not know who had fired at him. Babu
Singh (PW-3) was certainly conscious when he was brought to the
hospital because he had also signed the Medical Examination
Report / MLC. Babu Singh (PW-3) did not depose as to the
presence of the present appellant nor did he identify any of the
assailants.
8. In view of the testimonies of Babu Singh (PW-3) and Gulam Navi
(PW-7), there is a clear contradiction and direct conflict between
Criminal Appeal No. 1475 of 2017 Page 6
the version given by them and Tara Singh (PW-1) and Varun
Singh (PW-4), who assert and claim their presence and being
eye-witnesses to the occurrence. We would for reasons stated
above rely on the version given by Babu Singh (PW-3), Gulam
Navi (PW-7) and Babu Lal Bhaskar (PW-10). Therefore,
identification by Tara Singh (PW-1) and Varun Singh (PW-4) of the
appellant- Guman Singh as one of the perpetrators who had fired
on Shiv Charan and Babu Singh (PW-3) is unreliable and should
not be accepted without substantial corroboration and supporting
material/evidence to establish involvement of the appellantGuman Singh.
9. On the aspect of corroboration, prosecution relies upon the FSL
report, exhibit P-48, opining that barrel residue examination of
‘8mm/.315’ country-made pistol (W/1) had revealed that pistol had
been fired, but, definite time of its last firing could not be
ascertained. The FSL report also opines that it was not possible
to link definitely the ‘8mm/.315’ Soft Round nose Copper
Jacketted Bullet ‘B/1’ from packet ‘D 1’ with the country-made
pistol (W/1) from packet ‘E’ due to lack of sufficient evidence.
Thus, the bullet ‘B/1’ recovered from the body of Babu Singh (PW3) would not be matched with the country-made pistol. The bullets
recovered from the body of deceased Shiv Charan were not sent
Criminal Appeal No. 1475 of 2017 Page 7
for ballistic examination and comparison. This is surprising as
bullets were certainly recovered from the body of the deceased
Shiv Charan and no explanation is forthcoming why these bullets
were not sent for ballistic examination. Prosecution however relies
on the finding in the FSL report that the hole on the shirt worn by
Babu Singh appeared to have been caused by a copper jacketted
bullet. In the factual matrix and the evidence established and
proved, the aforesaid opinion on the hole in the shirt and the bullet
is rather a weak evidence that would not be sufficient to implicate
and corroborate the involvement the present appellant.
10. In Sunil Kumar v. State (Govt. of NCT of Delhi) (2003) 11 SCC
367, this Court had graded witnesses into genus of wholly reliable,
wholly unreliable, neither wholly reliable nor wholly unreliable and
had dealt with the consequences that flow from the testimonies
from each of these categories. In the present case, the
testimonies of Tara Singh (PW-1) and Varun Singh (PW-4) have to
be held to be in the second category as wholly unreliable. Even if
we treat their testimonies as falling in the third genus where the
Court has to treat the same with circumspection and look for
corroboration in material particulars by reliable evidence/
testimony, direct or circumstantial, the case of the prosecution
would fail, for there is nothing to support and show the
Criminal Appeal No. 1475 of 2017 Page 8
involvement of the appellant in the crime other than the unreliable
attribution by Tara Singh (PW-1) and Varun Singh (PW-4). The
prosecution, therefore, has to fail as it has failed to prove that the
evidence has a ring of truth, is cogent, credible and trustworthy so
as to establish the charge beyond reasonable doubt.
11. As noticed above, the charge-sheet in the present case was filed
against present appellant Guman Singh and three others namely
Jagdish Singh, Shyam Singh and Satvir Singh. Jagdish Singh
was acquitted by the trial court and Shyam Singh and Satvir Singh
have been acquitted by the impugned judgment of the Division
Bench of the High Court.
12. In view of the discussion, we would accept the present appeal and
set aside the conviction of Guman Singh, who should be set free
forthwith unless he is required to be detained in any other case in
accordance with law.
......................................J.
[INDIRA BANERJEE]
......................................J.
[SANJIV KHANNA]
NEW DELHI;
MAY 24, 2019.
Criminal Appeal No. 1475 of 2017 Page 9