The Hon’ble Apex Court in the case of Common Cause vs. Union of India, Interlocutory Application Nos. 3 and 4 of 2017 in Writ Petition (Civil) No. 505 of 2015, has held that entries in loose sheets are irrelevant, as such inadmissible as evidence under section 34 of the Indian Evidence Act.
It has been further held that even if books of account are regularly maintained in a business, the entries shall not alone suffice to charge a person with any liability. The person relying on such entries has to prove that the entries are in accordance with facts.
The judgment was passed by the bench comprising of J. Arun Mishra and J. Amitava Roy on January 11, 2017.
Backgrounds of filing of the Writ petition- Loose sheets are inadmissible as evidence:
The writ petition has been filed by the Common Cause that was a registered Society and others for issuance of a writ in order to set aside the appointment made by the Union of India, of Respondent No.2 Mr. K.V. Chaudhary as Central Vigilance Commissioner and Mr. T.M. Bhasin as Vigilance Commissioner on many grounds as stated in the said Writ petition.
In I.A. No.3/2016 it was pointed out that, Central Bureau of Investigation conducted a raid at the premises of Aditya Birla group industries in as many as four cities on 15.10.2013 and another raid by the Income Tax Department on the following day.
The raid by the C.B.I. led to recovery of some documents and unaccounted cash of Rs.25 crores.
It was submitted that C.B.I. had transferred the said documents to the Income Tax Department. The laptop of Mr. Shubhendu Amitabh, Group Executive President was also seized in the said raid.
An E-mail sent on 16.11.2012 having an entry was observed in the said laptop referring to political functionaries.
When Mr. Amitabh was questioned about the deals, he stated that those were personal notes and they did not relate to any political functionary.
Department Presented the report citing Hawala Transaction- During investigation, officials of the Birla Group admitted that huge cash were retained by the Group through hawala. The Income Tax Department prepared a detailed report on such transactions. Some extracts of such a report was filed as Annexure.
A direction was issued by the Hon’ble Court to the CBI on 12.10.2015 to inquire into the matter, though they might not be related to the Coal Block Allocation cases.
The CBI failed to not taken any effective action. It was argued that the CBI was trying to shield the influential personalities related to the documents seized. It was alleged that Respondent No.2 has tried to shield the offenders.
The Income Tax Department raided Sahara India Group offices in Delhi and Noida on 22.11.2014 and seized some documents and cash amounting to Rs.135 crores.
Some documents were filed in the form of printouts of the Excel sheet showing cash receipt amounting to more than Rs.115 crores and cash outflow amounting to more than Rs.113 crores during a period of 10 months.
It was held that cash was transferred to many public figures. Copies of said pages were filed as Annexure. The pages were also filed that contained the actual payments made to top political leaders of the country.
It is also averred that complaints to CBI, CBDT, Enforcement Directorate, etc. were made but without avail.
However, the Income Tax Settlement Commission gave immunity to the Sahara Group of Companies by an order dated 11.11.2016 filed along with I.A. No.4. 6. I.A. No.4 by the petitioner after the direction given by the Court to substantiate the documents filed.
Details were provided in connection with Aditya Birla Group that cash of Rs.25 crores was not accounted for in the regular books of accounts and it was further stated that Mr. Anand Saxena told the Department that he was responsible for handling the cash transactions and he received Rs.50, 00,000/- from local Hawala operators.
However, he stated that he was not aware about the payment to anybody and he could not say to whom the unaccounted money was actually paid.
Some E-mails having different dates were placed on record. It was further submitted that during the search, it was revealed that the proposed payment of Rs.7.5 crores were made during the period 9.1.2012 and 2.2.2012 with respect to projects of the Aditya Birla Group that were sanctioned by the Ministry of Environment and Forest.
It was further averred that documents of Sahara made out a case of cognizable offense and the role played by respondent No.2 should be looked into.
The explanation given to the Department for the Sahara Group by Mr. Sachin Pawar that the act was done to implicate Mr. Dogra and to get him punished is unworthy of credence.
However, the stand of department was ignored and the Settlement Commission accepted the case made out by assessee and acquitted Sahara from criminal and civil liability even after receiving a letter from the counsel of the common cause that an application was supposed to be filed before this Court on the said issue.
The learned counsels for the parties were heard at length. It was submitted by Shri Shanti Bhushan and Mr. Prashant Bhushan, learned senior counsel for the petitioners that it was a fit case for directing investigation into the material seized in the raids conducted at the premises of the Birla and Sahara Group of Companies.
It was submitted that it cannot be said that payments have been made. However, a prima facie case was made out to direct investigation based on materials obtained in the raids.
It has been argued that the order passed by the Settlement Commission was not accordance with law and was in fact self contradictory.
Arguments of the parties:
Shri Shanti Bhushan, learned senior counsel has also submitted that in the case of C.B.I. versus V.C. Shukla 1998 (3) SCC 410, the highest Court of the country has provided the principle relating to admissibility of material involved therein after the completion of investigation.
The allegations found in the materials collected indicated commission of cognizable offence. Relying on the decision in Lalita Kumari versus State of U.P. 2014(2) SCC 1, it was urged that it is the duty of the Court to direct investigation to check authenticity of the documents seized in an investigation.
Shri Mukul Rohatgi, the learned counsel for India and Mr. Tushar Mehta submitted that the material in connection with Sahara Group based on which investigation was asked for, have been found by the Settlement Commission in proceedings under Section 245D of the Act was doubtful.
Documents filed by Parties were not in form of Account Books but loose papers- authenticity could not be relied upon by Court
The documents filed by the Birla and Sahara Group were not in the form of account books maintained normally in a business. They were loose papers and their authenticity, were not found to be reliable having no evidentiary value by the authorities.
Reliance was placed on the decision of this Court in C.B.I. versus V.C. Shukla (supra). It was submitted that any unscrupulous person can easily make any entry against anybody’s name on any loose sheet of paper. There being no further corroborative material regarding the payment, no case was made out to direct an investigation.
The judgment:
Considering the aforesaid principles that were laid down, it was held by the Apex Court that the material in question were not sufficient to constitute offenses to direct an investigation therein.
The complaint should show sufficient ground and commission of offense based on which a case is registered.
The materials in question were irrelevant and legally inadmissible under Section 34 of the Evidence Act and considering the explanation given by the Birla Group and Sahara Group; it was held opinion that it would not be legally justified to direct investigation, keeping in view the decision of Bhajan Lal andV.C. Shukla (supra).
In view of the above, no merit was found in the Interlocutory Application. The applications were thus dismissed.
Related Read- Longer time taken by Department does not deny assessee right to interest on refund