# A. JA YARAM AND ANR. ETC. ETC v. STATE OF ANDHRA PRADESH BY CBI

- **Citation:** [1995] Supp. 2 S.C.R. 75
- **Court:** Supreme Court of India
- **Decided:** 1995-07-13
- **Case number:** Criminal Appeal No. -,.: 310 of 1989
- **Bench:** G.N. Ray, Faizan Uddin
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/a-ja-yaram-and-anr-etc-etc-v-state-of-andhra-pradesh-by-cbi-13194
- **Pages:** 31

## Headnote

Indian .Penal Code,
186~Section 420A-Convictions for offences
under-Appeal against-Appreciation of evidence--Fertiliser scandal in
transporting imported fertilisers from ports of arrival to government
godowns--Prosecution case that fertilisers imported not delivered-Circumstantial evidence--Facts established must rnle out any likelihood of innocence of accused-Want of convicing and unimpeachable evidence against
government officials-Govemment officials acquitted on benefit of doubt-Orders of conviction against dealers held legally sustainable.
Evidence Act, 1872-Section :r-circumstantial evidence-conviction
based on-Facts established must mle out any likelihood .of innocence of
accused.
Criminal proceedings instituted against the appellants, being the
officers of the State Government and dealers of fertilizers, related to an
alleged scandal of transporting imported fertilizers from the ports of
arrival to different destinations. Prosecution case that large scale fraud
had been committed by a large number of government officials in conspiracy with the dealers in fertilizers who were entrusted to take the
fertilizers from the port to various government godowns as such fertilizers
had not been transported to the destination but the goods were sold at
some intermediate places and the dealers made a false claim of transportation charges and A3 who was the Agricultural Assistant Officer and
consignee of the goods made a false entry in the stock register to the effect
A
B
c
D
E
F
that the fertilizers were received at the place of destination and on the
basis of certificate used by A3 since endorsed by A.23, the District AgriculG
tural Officer about actual transportation of the fertilizers through shortest
route, the claim of the dealer was allowed by the Government, there being
conspiracy and connivance between A-2, A-3 and A-1 to defraud the
Government. The State police was entrusted with the enquiry. As the
enquiry appearing to be tardy, the CBI made enquiries and charge sheets H
75
76
SUPREME COURT REPORTS [1995] SUPP. 2 S.C.R.
A
were filed. The Special Judge for Fertilizers and charge sheets were filed.
B
The Special Judge for Fertilizers Transport Cases (AP) acquitted all the
accused in the criminal cases instituted against the officers and dealers
but on appeal, the High Court reversed the orders of acquittal and
convicted all the appellants u/s 120B r/ws 420 and 477-A Indian Penal Code
and sentenced them to pay a fine of Rs. 100. The Government oflicials were
further convicted u/s 5(2) r/ws 5(1) (d) of Prevention of Corruption Act.
These appeals had been filed against the judgments of conviction.
The appellants contended that although an appellate court has
jurisdiction to interfere with the finding of fact and reverse such finding
C
on proper appreciation of evidence adduced in the trial, the High Court
had reversed the decisions of the trial court contrary to the well established principles justifying such interference; that the prosecution having
pleaded an excuse for not leading better evidence to establish all the
ingredients of the offence on account of inordinate delay in making proper
D investigation and filing the charge sheet by contending that adverse inference should be drawn against the accused but such contention being
against all cannons of criminal jurisprudence should not have been accepted by the court as it was the obligation of the prosecution to lead
convincing and unimpeachable evidence to prove the charges levelled
E
F
against the accused and failure of the prosecution to establish such charge
for any reason whatsoever could not but enure to the benefit of the accused
particularly when the delay in investigating the case and filing cha.rgesheet
was not attributable to the accused; that the conviction sought to be based
on circumstantial evidence, there was no convincing and unimpeachable
evidence which unerringly pointed out to the guilt of the accused and in
the facts of the case, no conclusion other t

## Text

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A. JA YARAM AND ANR. ETC. ETC.
v.
STATE OF ANDHRA PRADESH BY CBI
JULY 13, 1995
[G.N. RAY AND FAIZAN UDDIN, JJ.]
Indian .Penal Code,
186~Section 420A-Convictions for offences
under-Appeal against-Appreciation of evidence--Fertiliser scandal in
transporting imported fertilisers from ports of arrival to government
godowns--Prosecution case that fertilisers imported not delivered-Circumstantial evidence--Facts established must rnle out any likelihood of innocence of accused-Want of convicing and unimpeachable evidence against
government officials-Govemment officials acquitted on benefit of doubt-Orders of conviction against dealers held legally sustainable.
Evidence Act, 1872-Section :r-circumstantial evidence-conviction
based on-Facts established must mle out any likelihood .of innocence of
accused.
Criminal proceedings instituted against the appellants, being the
officers of the State Government and dealers of fertilizers, related to an
alleged scandal of transporting imported fertilizers from the ports of
arrival to different destinations. Prosecution case that large scale fraud
had been committed by a large number of government officials in conspiracy with the dealers in fertilizers who were entrusted to take the
fertilizers from the port to various government godowns as such fertilizers
had not been transported to the destination but the goods were sold at
some intermediate places and the dealers made a false claim of transportation charges and A3 who was the Agricultural Assistant Officer and
consignee of the goods made a false entry in the stock register to the effect
A
B
c
D
E
F
that the fertilizers were received at the place of destination and on the
basis of certificate used by A3 since endorsed by A.23, the District AgriculG
tural Officer about actual transportation of the fertilizers through shortest
route, the claim of the dealer was allowed by the Government, there being
conspiracy and connivance between A-2, A-3 and A-1 to defraud the
Government. The State police was entrusted with the enquiry. As the
enquiry appearing to be tardy, the CBI made enquiries and charge sheets H
75
76
SUPREME COURT REPORTS [1995] SUPP. 2 S.C.R.
A
were filed. The Special Judge for Fertilizers and charge sheets were filed.
B
The Special Judge for Fertilizers Transport Cases (AP) acquitted all the
accused in the criminal cases instituted against the officers and dealers
but on appeal, the High Court reversed the orders of acquittal and
convicted all the appellants u/s 120B r/ws 420 and 477-A Indian Penal Code
and sentenced them to pay a fine of Rs. 100. The Government oflicials were
further convicted u/s 5(2) r/ws 5(1) (d) of Prevention of Corruption Act.
These appeals had been filed against the judgments of conviction.
The appellants contended that although an appellate court has
jurisdiction to interfere with the finding of fact and reverse such finding
C
on proper appreciation of evidence adduced in the trial, the High Court
had reversed the decisions of the trial court contrary to the well established principles justifying such interference; that the prosecution having
pleaded an excuse for not leading better evidence to establish all the
ingredients of the offence on account of inordinate delay in making proper
D investigation and filing the charge sheet by contending that adverse inference should be drawn against the accused but such contention being
against all cannons of criminal jurisprudence should not have been accepted by the court as it was the obligation of the prosecution to lead
convincing and unimpeachable evidence to prove the charges levelled
E
F
against the accused and failure of the prosecution to establish such charge
for any reason whatsoever could not but enure to the benefit of the accused
particularly when the delay in investigating the case and filing cha.rgesheet
was not attributable to the accused; that the conviction sought to be based
on circumstantial evidence, there was no convincing and unimpeachable
evidence which unerringly pointed out to the guilt of the accused and in
the facts of the case, no conclusion other than complicity of the accused
for the offence charged, was possible and hence conviction of the appellants on probability, surmise or conjecture was not warranted; that the
appellants having no special knowledge as to what route had been actually
followed by the dealer or transporter in bringing the fertilizers to governG ment godown, they had the duty to certify shortest route between the point
of lifting and point of delivery and being governing officers, responsible at
the receiving point were required to ensure that fertilizers had in fact been
delivered at the receiving point; that on receiving the fertilizers, the
appellants had discharged their duties in certifying the receipt for fertilizers; that nobody had verified the stock received at the godown on the
H
date of delivery or even within a reasonable time and if a dealer or
'
A.JAYARAM v. STATE OF A.P.
77
transporter disposes of fertilisers lifted at port en route and brings a new A
consignment of fertiliser by procuring elsewhere, the government otlicers
at the receiving end had nothing to do and if on receipt of the fertilisers
delivered at the destination, such otlicers had issued certificates, no of·
fence charged against them could be held if, have been established.
The appellants who were dealers submitted that the dealers had
obtained certificates about the receipt of the goods transported at the
destination issued by the competent government officials and it had not
. been established that such goods had in fact not been received by leading
B
any convincing positive evidence about the stock position at the relevant
time as no one had verified the stock at the receiving end either on the date C
of delivery or within reasonable time thereafter; that absence of entry in the
checkpost could not be held to be conclusive evidence about non transportation of goods and therefore, the High Court was not justified in allowing
the appeals against the dealers mainly on the ground that there were no
entries at the checkposts and there was evidence of sale of some fertiliser;
that transportation of goods by alternative route was not prohibited and D
the evidence about sale of fertilisers at some places did not establish
conclusively and beyond reasonable doubt as to whether the goods to be
transported had been sold and as such the same had not been delivered at
the destination when no proof had been given by the prosecution to what
quality of fertilisers had been sold; that it was becau:.c uf public uproar, E
CBI was entrusted to cause enquiry at a belated stage and knowing fully
well, that such allegations about the scandal in dealing with fertilizers
could not be established for want of proof, the government in order to pacify
public demand initiated the criminal cases against the appella_nts; that the
trial Court by giving detailed reasons acquitted all the accused but the High
Court by reassessing the findings of the trial court convicted the appellants
F
mainly on the basis of suspicion, surmise and conjectures as the token
punishment given by the High Court amply demonstrated that the Court
also entertained a feeling that the guilt had not been established in fully
convincing manner.
The respondent State submitted that it being a large scale scandal G
in the matter of transportation of imported fertilizers the fraud was
perpetrated with the active conni\'ance of the government officials
entrusted to receive the fertilisers at the destination, such fraud could not
be detected immediately, therefore, the CBI had to be entrusted for causing
enquiry long after the incident, the CBI, handicapped to a large extent, H
Jiii
)
78
SUPREME COURT REPORTS [1995] SUPP. 2 S.C.R.
I
~
A
examined the lorry owners, the persons purchasing the fertilisers stated
to have been transported and the officials in the check post, it ~1ad been
conclusively established that the fertilisers lifted at the port had in fact
not been transported to destination but sold elsewhere and that such
lorries did not pass through the usual route to be followed for such
..,_
B transportation, and therefore, . the certificate which was issued by the
government officials ·about the actual transportation of these fertilisers by
the shortest route was false and fabricated and, such certificate had been
'
issued without actually receiving the goods; that on the basis of such
evidences since accepted by the High Court, the order of conviction by the
High Court by reversing improper judgment of acquittal passed by the
c trial Court was wholly justified and no interference was called for as the
High Court was fully aware of the appeal Court's responsibilities and
duties in dealing with the judgment of acquittal, since the finding of the
trial Court was completely against the weight of the evidence, accordingly
the impugned orders of conviction and sentence had been passed; that the
D
High Court elaborately dealt with several circulars issued prior to March
12, 1968 and subsequent to March 12, 1960, indicating the responsibilities
of the Agricultural Officer and held that despite specific guidelines given,
the accused A-2 and A-3 deliberately failed and neglected to perform their
official duties; that in a case governed by the circumstantial evidence it is
often very difficult to prove when the minds of the facts proved, the
E
reasonable inference can be drawn about the collusion between A-2 and
A-3, namely, the government officials and the dealer in fertilisers A-1; that
it had been established that there was no entry in any of the check posts
and the prosecution had established by examining the purchasers of
fertilisers, the lorry owners, the officials of the check posts that such
F
lorries had not transported the fertiliser at the destination and therefore,
only conclusion could be drawn that a false certificate was procured by the
dealer A-1 and false certificates were given by the local government officials, A-2 and A-3 in perpetrating a deep rooted conspiracy to defraud
;
public exchequer; that a very lenient sentence by the High Court had been
passed considering mitigating circumstances that the case continued for
G long because large number of documents had been exhibited and large
number of witnesses were examined and therefore, the Government officials had to suffer because of the pendency of criminal cases but such by
t
no means, established that the accused are not guilty;
H
Disposing of the matter, this Court
A. JA YA RAM v. STATE OF AP.
79
HELD : 1.1. A large scale fraud had been committed in the mater of A
transportation of fertilisers from the ports of arrival to various destina·
tions in the State of Andhra Pradesh. Such fertilisers had been brought at
a point of time when the State was in dire need of good quality of fertilisers
for cultivation. It was the case of the prosecution that large scale fraud
had been committed by a large number of government officials in conB
spiracy with the dealers in fertilisers who were entrusted to take the
fertilisers from the port to various government godowns. The C.B.I. made
enquiries and charge sheets were filed alleging that the fertilisers lifted
from the port and stated to have been transported at different destinations
had in fact not been transported in the manner alleged but on the basis of C
false entries made by the government officials and also by issuing false
certificate of such transportation payments had been made. No evidence
had been led whether fertilisers in fact had not been delivered on the
relevant date at the destination by proving the stock register at the relevant
time. Senior officials of the concerned department were not examined. No
witness from the locality of the godown was also examined to show on the D
relevant dates no delivery of fertiliser at the destination had taken place.
Unless by unimpeachable and convincing evidence, the factum of non
delivery of such fertilisers with reference to actual stock position on the
relevant date could be clearly established, it was very difficult to proceed
on the footing that the concerned government officials issued false certifiE
cate about receipt of the goods on the dates in question. It was not unlikely
that some fertilisers had in fact been delivered to the government officials
at the destination. On the basis of such delivery, the certificates had been
issued by them. It was not the case of the prosecution that the quality of
the fertilisers was required to be examined by the officers at the receiving
end and they had proper infrastructure to make such exercise. It was not
established that the fertiliser was not available anywhere in the locality so
that it was not possible to replace the quantity of fertiliser after selling the
original consignment. Simply on the basis of evidence given by lorry
owners that their lorries did not carry the fertilisers or such lorries had
F
gone to different places and some fertilisers were sold by the dealers to G
other persons, non delivery of fertilisers at the destination by other means
could not be fully ruled out. The circumstances were undoubtedly very
intriguing and raised considerable doubt but in the absence of unimpeach·
·able direct evidence about the actual stock position at the receiving end,
the indirect circumstantial evidences, did not establish the prosecution H
80
SUPREME COURT REPORTS [1995] SUPP. 2 S.C.R..
A
case beyond all reasonable doubts. There is no absolute standard of proof
in a criminal trial and the court should not nurture fanciful doubts by
exaggerated devotion to the rule of benefit of doubt, but in a case of
circumstantial evidence all the links in the chain of events from which
B
irresistible conclusion ~J>out the guilt of the accused for the offence alleged
can be drawn, must be established beyond the pale of reasonable doubt.
The court has to be watchful and avoid the danger of allowing suspicion
to take the place of legal proof. Conviction can not be based on circumstances indicating that the prosecution case is quite likely to be true. For
basing the conviction in a case governed by circumstantial evidence, the
facts established must rule out any likelihood of innocence of the accused •
. C
The exact stock position on the alleged date of delivery of fertiliser which
would have repelled any other possibility was unfortunately not forthcoming. No attempt to establish the actual stock position of fertiliser in the
godown in question on the relevant date or soon thereafter with reference
to register of stock or any other contemporaneous document had been
D
made. It was only through negative and indirect evidence the prosecution
was attempting to establish that the fertiliser had not been delivered. Such
evidence would have been very convincing to corroborate the direct
evidence about the stock position in the event the correctness of such stock
position was challenged. So long the possibility of some other conclusion
could not be fully ruled out, the prosecution case remained in the realm
E
of probability. [101-H, 102-A-H, 103-A-G]
F
G
· 1.2 The government officials who were appellants could not be held
to be guilty with all certainty and they were entitled to get the benefit of
doubt. Although the High Court reversed the orders of acquittal in convicting the government officials, the High Court perhaps felt that some
convincing evidences were lacking and it was not unlikely that for the said
reasons, although the High Court convicted the government officials for
serious offences charged against them only a token sentence of fine of Rs.
100 and detention till the rising of the Court had been passed which
sentence normally should not have been passed. (103-H, 104-A-B]
1.3. Direct and position evidences had been led by the prosecution
to show that the fertilisers were not. transported by the dealers in the
manner alleged by them. If the dealers had transported the fertilisers by
a different route or by any other transport and if they had sold different
H fertilisers, such facts were within their special knowledge and in the facts
AJAYARAM v. STATE OF AP .
81
. .I'
of the case, the dealers ought to have satisfied the court that the fertilisers A
had in fact been transported by other transports and in a manner different
from what was mentioned in the bills. The evidence adduced by the
prosecution by examining lorry owners, clerks of such owners, officers of
the check posts on the usual routes convincingly pointed out that the
fertiliser was not transported in the way it appeared in the bills since B
certified by the government officials at the destination. If some fertilisers
of equal quantity had been handed over at the destination, it was not
unlikely that the government officials having taken delivery of such fertilisers without appreciating the fraud and with reference to the record of
loading or the fertiliser at port, would be justified in issuing certificate
about transportation at reasonable rate by the shortest route. As the c
possibility or delivering fertilisers of similar quantity which may not be
qualitatively same, by procuring them locally, when non availability f>f
fertiliser in the region had not been established by the prosecution, could
not be fully ruled out, the government officers, were entitled to benefit of
doubt. But in the facts of the case, such benefit will not be available to the D
dealers. (104-C-G]
1.4. It is really unfortunate that in fertiliser scandal of such magr· -
nitude, appropriate steps at the right time has not been taken and for want
of convincing and unimpeachable evidence, the accused who were government otlicials had been acquitted by giving them benefit of doubt. Such E
large scale scandal to transporting imported fertiliser would not have
occurred if larger number of government officials and others than
prosecuted were not involved. It was not unlikely that superior government
officials had also played a vital role in perpetrating the said fraud or
concealing the same. The tardy enquiries made by the State police thereby F
necessitating an enquiry by the C.B.I. at a belated stage was only a sad
commentary on the efficiency on the police administration. This Court only
hopes that in future there will be proper vigilance and scandal of this types
may not take place. (105-B-C]
Janar Lal Das v. State of Orissa, (1991) 3 SCC 27, referred to.
G
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
-,.:
310 of 1989 Etc. Etc.
From the Judgi;nent and Order dated 9.6.87 of the Andhra Pradesh
High Court in Crl. No. 918 of 1982.
H
82
SUPREME COURT REPORTS [1995) SUPP. 2S.C.R.
A
K.T.S. Tulsi, Additional Solicitor General, K. Madhava Reddy, Ms.
Amershwari, K.R. Choudhary, G. Narasimhlu, AS. Nambiar, V.V. Vaze,
D. Satyanarayan, R.P. Srivastava, Hemant Sharma, W.A. Quardi, P. Parmeswaran and C.B. Babu for the appearing parties.
B
The Judgment of the Court was delivered by
G.N. RAY, J. All the aforesaid appeals were heard analogously
because the criminal proceedings instituted against the appellants in these
appeals, being the officers of the State Government of Andhra Pradesh
C
and dealers of fertilizers in the State of Andhra Pradesh related to an
alleged scandal in transporting imported fertilisers from the ports of Tamil
Nadu and Andhra Pradesh to different destinations in the State of Andhra
Pradesh. A tabular statement indicating the numbers of the appeals in this
Court corresponding numbers of the appeals in the Andhra Pradesh High
Court and corresponding number of the criminal cases in the trial Court
D
out of which the appeals in the High Court arose given below :
SL
Supreme Court
High Court
High Court
Trial Court
No.
Appeal No.
Appeal.No.
Appeal No.
Appeal No.
1
Crl. Appeal
A-9 DAO
Crl. Appeal
CC No. 8/73
E
No. 308/89
A-10 DAO
No. 317/82
9n~
I I.,
2
Crl. Appeal
A-14 AAO
Crl. Appeal
CC No. 14/73
No. 309/89
A-15 AAO
No. 66/83
-
A-16 AAO
3
CrL Appeal
A-2 DAO
Crl. Appeal
CC No. 8/73
F
No. 310/89
A-3AAO
No. 918/82
4
Crl. Appeal
A-7 AAO
Crl. Appeal
CC No. 5/74.
No. 31If89
A-8AAO
No. 65/83
5
Crl. Appeal
A-21 AAO
Crl. Appeal
CC No. 10/74
No. 312/89
A-22DAO
No. 164/83
A-23 AAO
A-24AAO
G
6
Crl. Appeal
A-8AAO
Crl. Appeal
CC No. 3/74
No. 313/89
No. 919/82
7
Crl. Appeal
A-10 AAO
Crl. Appeal
CC No. 4/74
H
No. 314/89
A-11 AAO
No. 163/83
,_ ,.
A.JAYARAM v. STATE OF AP. [G.N. RAY,J.]
83
8
Crl. Appeal
A-3 AAO
Crl. Appeal
CC No. 3/78
No. 315/89
No. 540/83
9
Crl. Appeal
A-2 DAO
Crl. Appeal CC No. 7/73
No. 316/89
A-3 AAO
No. 921/82
10
Crl. Appeal
A-15 AAO
Crl. Appeal
CC No. 15/72
No. 317/89
A-16 DAO
No. 185/83
A-17 AAO
11
Crl. Appeal
A-1 Dealer
Crl. Appeal
CC N. 13/72
No. 164/94
A-10 AAO
No. 920/82
A-11 DAO
A-12 AAO
It may be indicated here that the appellants in 11 appeals before this
Court namely Criminal Appeals Nos. 308 to 317 of 1989 are the officers of
the State Government of Andhra Pradesh and all the appellants in
Criminal Appeals Nos. 163, 165, 166, 184 and 185 are dealers in fertilisers
A
B
c
and in Criminal Appeals Nos. 164 of 1994 some of the appellants are D
officers of the State Government and others are dealers.
The Special Judge for Fertilizers Transport Cases (AP.) acquitted
all the accused in the criminal cases instituted against the officers and
dealers. But on appeals by the state of Andhra Pradesh, the High Court E
of Andhra Pradesh by the impugned Judgments reversed the orders of
acquittal and convicted all the appellants. As the Criminal Appeal No. 310
of 1989 was taken up first for hearing and was argued at length as the main
appeal and learned counsel appearing of the appellants in the -other
appeals supplemented the arguments by drawing attention of this Court to
the special facts relating to such appeals, we propose to deal with the F
arguments advanced in Criminal Appeal No. 310 of 1989 at length.
Criminal Appeal No. 310 of 1989 has been preferred by Accused No.
2 District Agricultural Officer Nandiyal (DAO) and Accused No. 3 Assistant Agricultural Officer Nandiyal (AAO) Accused No. 1 who was a dealer
in fertiliser was also convicted by the High Court. Both A-2 and A-3 have G
been convicted by the High Court under Section 120B read with Section
420 1.P.C. and sentenced to pay a fine of Rs. 100 and in default to undergo
rigorous imprisonment for one month. They were further convicted under
Section 5(2) read with Section 5(1) (d) of Prevention of Corruption Act
and sentenced to pay a fine of Rs. 100 and in default to undergo rigorous H
84
SUPREME COURT REPORTS [1995) SUPP. 2 S.C.R.
~
A imprisonment for one month. They were also sentenced to imprisonment
till the rising of the Court. The dealer accused No. 1 was however convicted
under Section 477-/\. l.P.C. and sentenced to pay a fine of Rs. 100 in default
to undergo rigorous imprisonment for one month. He was also sentenced
to detention till the rising of the Court. It may be indicated here that the
B
Government Officers in the other appeals were sentenced similarly on
similar evidence. Accordingly submissions on behalf of such appellants
were also more of less on similar terms.
,,
The impugned judgment of the High Court reversing the orders of
acquittal and convicting the appellants in these appeals have been assailed
c by the learned counsel for the appellants by contending that although an
appellate Court had jurisdiction to interfere with the finding of fact and
reverse such finding on proper appreciation of evidence adduced in the
trial, as a rule of prudence, court of appeal should not interfere with the
order of acquittal if the trial court's reasonings for basing the order of
D acquittal are not perverse or against the weight of the evidence adduced
~
in the case and the basis of judgment is founded on a reasoning which can
not be held to be one the possible views which may be reasonably taken
by the Court. The learned counsel have submitted that the guidelines or
the principles justifying interference by the Court of appeal against an
order. of acquittal have been well settled by a number of decisions of this
E
Court indicating that rules of prudence dictate that unless a very strong
case for interference against a well reasoned order of acquittal is made
out, the court of appeal will refrain from making its own assessment of the
evidence for taking one of the possible views, different from the view taken
by the trial court. It has been submitted that although High Court has
,,
F
rightly pointed out the principles justifying interference against the order
of acquittal it failed to appreciate the facts and circumstances of the cases
and the evidences adduced in the trial and has reversed the decision of the
trial court contrary to the well established principles justifying such interference. The contention of the learned counsel appearing for the appellants
G
in Criminal Appeal No. 310 of 1989 are to the following effect :
(a) The High Court in this case has totally ignored the reasons
~
given by the Trial Court and totally overlooked the several admissions made by t~e prosecution witnesses in their cross-examination
which wholly demolishes the value of their evidence in examinaH
tion-in-chief. Except discussing one aspect, namely that owners of
AJAYARAM v.STATEOFAP.[G.N.RAY,J.]
85
the shops are competent witnesses to identity the handwriting of A
their clerks who made the entries in the account books there is
no discussion regarding several other reasons given by the Trial
Court for not accepting the evidence of the prosecution witnesses.
(b) The High Court has gone by surmises. The High Court has, in
reversing the Trial Courts Judgment of acquittal however found
that on the evidence adduced the view taken by the trial court
could not have been taken. The High Court, sitting in appeals,
ought not to have reversed the acquittal without displacing the
findings of the Trial Court merely because a different view was
also possible. The High Court has nowhere considered how the
officers, A-2 and A-3, could be held guilty of conspiracy without
a categorical finding that no fertilizer was received by the AAO
(A-3). It has not adverted to the admissions made by the prosecution witnesses in their cross examination which were referred to
by the Trial Court for acquitting them.
(c) The High Court has failed to notice that not a single witness
of the prosecution has stated that there was no stock of fertilizers
on the day when it was recorded in the stock register by A-3.
B
c
D
( d) The High Court failed to see that upto the date of issuance of E
the impugned certificates, there was no obligation to verify the
registration number of the trucks in which the fertilizers were
transported.
(e) The High Court failed to consider that the District Agricultural
Officer in Nandiyal which is in Kumool District, has neither F
Jurisdiction nor the staff to monitor each lorry transporting fertilizers lifted from Kakinada port which is five districts away at a
distance of nearly 600 kms. from his place of posting. He (A-2,
DAO) was to take the certificate given by A-3 (AAO) and issue
a certificate verifying the distance and reasonableness of Rate after G
verifying the stock which he did. There is no evidence to the
contrary.
(t) The High Court has erred in noting the DAO's (A-2) contention. It was never argued for A-2 that he had no obligation to verify
the stock.
H
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SUPREME COURT REPORTS (1995) SUPP. 2 S.C.R.
(g) The High Court failed to notice that there is an entry in the
stock register of the respective stock on the particular day and A-3
(AAO) gave the certificate. Prosecution has not examined any
witness even to say that no truck came and no fertilizer was
delivered to A-2 on that day.
(h) No witness was examined to prove that on the day the entry
was made, any inspection was done either on that day or within a
reasonable time thereafter to hold that no stock was received and
certificate given by A-2 and A-3 are false.
(i) No witness was examined to show that attempt was made to
ascertain if any stock was in the godown contemporaneously with
the date of the entry in the stock Register or the issuance of the
certificate; nor was there any specific compalaint to this effect.
No one was examined to prove that there was no stock on the
relevant date.
G) The High Court totally ignored the evidence of PWs. 13. and
15 who categorically stated that fertilizers were freely available in
the market which fact was specifically referred to and relied upon
by the Trial Court to acquit the appellant. With the limited jurisdiction of A-2 and A-3 they could only verify the stock brought to
them and enter in the stock register. They had no machinery to
verify whether it was the self same stock which was lifted by A-1 '
from Kakinada or some other stock. For that purpose A-2 was
required only to verify the part documents showing lifting at this
port. It is the admitted ca5e of prosecution that Dealer A-1 did
lift fertiliser from Kakinada. Hence some fertiliser was delivered
to A-2. Even if it was not the same, A-2 and A-3 were bound to
issue the certificates. Hence they cannot be held guilty. There is
no evidence that fertilizer was not delivered at all. When fertilisers
were freely available the dealers could even after selling away
fertilisers lifted at port could very well have purchased fertilisers
locally and delivered it to A-2. Unless this hypothesis, which is
highly probable is excluded by positive evidence A-2 and A-3
cannot be found guilty.
(k) The trial court further held that the alleged sales by dealer
A.JAYARAM v. STATE OF AP. [G.N.RAY,J.]
87
(A-1) at Bubbili and Sompeta was not established. The trial Court A
also held that the identity of the fertilisers sold is not established.
In the absence of such evidence, the trial court refused to believe
'/,#-.
that the fertilisers were not transported from Kakinada to Alagadda in Kurnool District. Dealing with this aspect, the High Court
has observed that the partner of the shop has been examined and B
in some cases clerk has been examined and accounts in which the
sale transactions are entered are proved and hence sale by A-1 is
proved. In coming to that conclusion, the High Court failed to
notice that :
(i) day books were not filed and only ledgers were filed.
c
(ii) In the ledgers there is no entry of A-1 selling the fertilisers.
(iii) There is also no entry to identify the fertilisers sold, nor
even that it was imported fertiliser taken delivery of at D
Kakinada by A-1. The day book in which such entries are said
to have been made was not produced.
(iv) That the registration number of trucks were not entered
in the ledger and are said to have been entered in the day
book but that day book was not produced. The witnesses E
examined admitted that they . did not travel in the trucks
which transported the fertilizers purchased by them.
)
(v) The drivers were not examined.
(vi) The trip sheets of the trucks were not filed. A few filed F
are loose sheets. Witnesses admitted that they were not maintained for all trips. Referring to the decision in State of Kera/a
v. Thomas Alias Boby, [1986) 2 SCC 411 it was contended
that trip sheets were not worthy of credence because loose
sheets properly maintained and kept not in any book form, G
~
have no evidentiary value. No liability can be imposed on the
...
basis of mere entry in the account books and such trip sheets .
All these facts were taken note of by the trial court in holding
the sales not proved.
(vii) The High Court in reversing the findings has only made H
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SUPREME COURT REPORTS (1995] SOPP. 2 S.C.R.
a general reference to the examination-in-chief of those witnesses and wholly ignored the damaging admissions made by
each one of the witnesses in cross-examination.
(viii) The High Court has only pointed out that partners of
the firm which purchased fertilisers were competent witnesses to identify the signature of the clerks who made these
entries. That by itself does not establish the identity of the
fertilisers lifted from Kakinada port nor does it establish that
A-1 had sold those fertilisers.
(ix) The High Court has placed reliance on entries at the
check posts. Judicial notice of the fact could be taken note
of that for several trucks moving on road there are no entries
in the check posts regions. When these fertilisers iμ-e admittedly not liable for sales tax, if no entries are made, no
inference adverse to the accused could be drawn.
(I) The ingredients of the offence charged against the appellants
have not been established for the following reasons :
(a) A-2 and A-3 are charged with the offence of giving false
certificates. For bringing home the charge of 120-B read with
420 against A-2 and A-3, the prosecution in this case must
establish that they had conspired with A-1 to cheat. There is
no direct evidence on this aspect. Of course, it can be established by circumstantial evidence. The most essential ingredient of the offence of cheating is deceiving any person.
and inducing that person to deliver any property. In this case
there is no proof of non delivery of fertiliser. The certificate
issued by A-2 and A-3, could be said to· be false only if no
fertiliser was·received by A-3 and yet A-3 entered in the stock
register aJid issued the certificate. There is no finding of the
High Court that the stock of fertilisers was not received. It
may be noted that there is no duty cast upon A-3 to certify
that a particular type of fertiliser has been received or imported fertiliser has been received or the very same stock
lifted from Kakinada port was received by him. A-3 was only
to certify the quantity of fertiliser received. It was not within
the power of A-3 to monitor the transport all the way from
. '
...
_...~
AJAYARAM v. STATEOFAP.(G.N.RAY,J.)
89
Kakinada to Allagadda over a distance of 600 Kms. His A
jurisdiction is limited to one of the several talukas of the
district while the fertiliser was to be transported over 5
" .....
districts. When fertiliser was freely available in the market, it
may very well be that A-1 disposed of the fertiliser lifted from
Kakinada at Kakinada or at any other place nearby, purB
chased other fertilisers freely available in the market and
delivered to A-3 and A-3 who having received the same
entered in the stock register and issued the certificate. The
certificate so issued could not be said to be false or given to
deceive anyone unless it is established that no fertiliser at all
was received on the particular day a certificate issued cannot c
be said to be false. There is no such evidence; hence A-3
cannot be held guilty.
(b) A-2, DAO, issued certificate certifying the distance from
Kakinada to Allagadda and the reasonable rate which could D
be paid per ton of fertiliser per km. It is not the case of the
prosecution that the certificate of distance and reasonable
-
price is false or untrue. The case is that the fertilisers were
not transported at all and that no fertiliser was reversed on
the day when it was entered in the stock register. A-3 was to
give the certificate certifying the distance and the rate for E
transport after verifying the stock after obtaining the certificate issued by A-3. If the certificate issued by A-3 is not false,
as submitted above, when there is no evidence that DAO A-2
has not verified the stock, A-2 also cannot be held guilty.
Even assuming that A-1 has disposed of the fertiliser lifted F
from Kakinada at any other place and did not actually
transport it to Allagadda, so long as it is not established that
on the day when the entry is made in the stock register, there
was no stock received by A-3 neither A-2 nor A-3 can be held
guilty. The prosecution has failed to prove positively that
G
there was no fertiliser on the relevant date.
'1
The prosecution however wants the court to draw an inference against the accused on the evidence of sale of certain
fertilisers by A-1 the dealer, at some other place. There is no
basis of or such inference especially when plenty of fertilisers H
90
SUPREME COURT REPORTS (1995] SUPP. 2 S.C.R.
-
A
were freely available in the market and even after disposing
of the fertilisers at a different place, the dealer (A- 1) could
have purchased fertiliser from the nearby market and
delivered the same to A-3. A certificate issued by A-3 on
.- '
receiving such fertilisers cannot be said to be falsely issued
B
with an intent to deceive the government to secure benefit
for A-1. A-2 also could not therefore be found guilty.
The prosecution, however, says that in the circumstances
only negative evidence could be adduced that fertiliser were
disposed of elsewhere and positive evidence of fertiliser not
c
having been delivered on the relevant date to A- 3, coufd
not be adduced. This contention cannot be accepted for
several reasons.
(i) The evidence of anyone who inspected the godowns as
D
they are expected to be inspected periodically could have
been adduced. Not single witness has been examined by the
prosecution to. prove this.
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(ii) Evidence of persons of the locality where the godown was
situated, could have been adduced to show that no trucks
E
came and no fertilisers were received at that godown on that
day or a day or two earlier or later.
(iii) A-3 had certified that A-1 dealer has taken delivery at
Kakinada as per port document and that he has delivered
certain quantity of fertiliser.
F
(iv) The conspiracy is said to be of the DAO (A-2) and AAO,
(A-3) with the dealer (a-1). The conspiracy is not between
any officer above the level of DAO and yet none of those
higher officers have been examined to show that in or about
G
the relevant date, these fertilisers were not available in the
god own.
l(
(v) While the offence is alleged to have taken place in October 1968. FIR was registered on 24.6.1970 and the chargesheet was laid in 1973. The charge sheet does not say that
H
any officer Higher in hierarchy to A-2 was involved. Yet non
AJA YA RAM v. STATE OF AP. [G.N. RAY,J.)
91
of them has been examined to prove that fertilisers were not A
in the godown on the day when they were purportedly
received by A-2.
It has been very strongly contended by the learned counsel for the
appellant that the prosecution pleaded an excuse for not leading better B
evidence to establish all the ingredients of the offence on account of
inordinate delay in making proper investigation and filing the charge sheet
•
and contended that adverse inference should be drawn against the accused.
The learned counsel for the appellants has contended that such contention
being against all cannons of criminal jurisprudence should not have been
accepted by the Court. It was the unfailing obligation of the prosecution c
to lead convincing and unimpeachable evidence to prove the charges
levelled against the accused. Failure of the prosecution to establish such
charge for any reason whatsoever cannot but enure to the benefit of the
accused particularly when the delay· in investigating the case and filing
chargesheet was not attributable to the accused.
D
It has also been contended that the conviction was sought to be based
on circumstantial evidence. The principles underlying circumstantial
evidence are well settled by decisions of this Court in a catena of cases.
Referring to the decision made by this Court in Janar Lal Das v.