# CENTRAL BUREAU OF INVESTIGATION v. V.C. SHUKLA AND ORS

- **Citation:** [1998] 1 S.C.R. 1153
- **Court:** Supreme Court of India
- **Decided:** 1998-03-02
- **Bench:** M.K. Mukherjee, S.P. Kurdukar, K.T. Thomas
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/central-bureau-of-investigation-v-v-c-shukla-and-ors-15969
- **Pages:** 39

## Headnote

B
Evidence Act, I 872 :
Section 34-lngredients of-Two parts of the Section-Explanation
of-"Entries in books of account regularly kept in course of business"- C
Meaning and import of-Held: Ordinary, natural and grammatical meaning
has to be given when neither the context nor any principle of construction
requires their restrictive meaning-Interpretation of Statutes.
Section 34-Jain hawala diaries-Entries in-Held : Admissible under
S. 34-But file containing loose sheets of paper cannot be termed as "book" D
t
and entries therein not admissible under S.34.
Section 34-Books of account "regularly kept"-Meaning of-Held :
Whether a book of accounts regularly kept or not depends on the nature of
occupation-System of accounting and contemporaneity in making entries E
may differ-It is not necessary that an entry must be made at or about the
time of transactions-Further, the system in which the books are regularly
kept affects their probative value and not of their· admissibility as a relevant
fact under S.34.
Section 34-Rationale of-Entries in book of account-Probative value F
of-"Such statements shall not alone be sufficient evidence to charge any
person with liability"-Meaning of-Held: Entries though relevant are only
corroborative evident-Independent evidence regatding the trustworthiness
of those entries necessary to [IX liability-In the circumstance of the case,
entries made in the Jain hawala diaries though admissible under S.34,
truthjitlness thereof not proved by independent evidence.
G
Section 34-"Book "-Meaning of-Held : Spiral notebook/spiral pads
are "books" but not loose sheets.
Section IO-Co-conspirator-Statements, acts or writing of-Against
the other-Admissiblity of-Conditions for-Held : A reasonable ground H
1153
1154
SUPREME COURT REPORTS
[1998] I S.C.R.
A must be there to believe about conspiracy to commit an offence or actionable
wrong-Entries in .Jain notebooks-There is no evidence to show existence
of any conspiracy between the .fains and the persons referred to in the
notebook-Hence, S.10 not applicable-Penal Code, 1860.
Sections 17 to 21-Admission and confession-Distinction betweenB Held: Statement. oral or documentary, made by an accused as admission may
be proved against him but not against others who are being jointly tried with
him unless it amounts to a confession-Assuming that the entries in account
books are admissions made in .Jain. notebooks, such entries may be proved
only against the .fains-Moreover, prosecution case regarding conspiracy
C between .fains and others cannot stand as there is no prima facie case
against the others as being parties to such conspiracy since in a conspiracy
there must be two parties-Therefore, the statements cannot be proved as
admission of the .fains of such conspiracy.
D
Prevention of Corruption Act, 1947 : Section 12.
Abatment by aiding-Held: Act so aided should have been committed-
{
Persons referred to in .Jain diaries did not commit any offence under S. 7Hence, the question of the .fains' committing the offence under S.12 does not
arise-Penal Code, 1860, S.17(iii) Expln. 2.
E
Words and Phrases :
"Account", "books of account" "business" and "regularly kept"-
Meaning of-In the context of S.34 of the Evidence Act. 1872.
"Admission" and "confession"-Meaning of-In the context of Ss. 17
F to 21 of the Evidence Act, 1872.
The appellant-Central Bureau of Investigation (CBI), in 'the course of
the search of the premises of one J.K Jain, recovered, besides other articles
and documents, two diaries, two small notebooks and two files containing
details of receipts of various amounts from different sources recorded in
G abbreviated forms of digits and initials and details of payments of various
persons recorded in similar fashion. Preliminary investigation taken up by
the CBI to decode and comprehend those entries revealed payments amounting
to Rs. 65.47 crores, out of which 53.5 crores had been illegally transferred
from abroad through hawala channels, during the years 1988 to 199

## Text

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l
CENTRAL BUREAU OF INVESTIGATION
A
v.
V.C. SHUKLA AND ORS.
MARCH 2, 1998
[M.K. MUKHERJEE, S.P. KURDUKAR AND K.T. THOMAS, JJ]
B
Evidence Act, I 872 :
Section 34-lngredients of-Two parts of the Section-Explanation
of-"Entries in books of account regularly kept in course of business"- C
Meaning and import of-Held: Ordinary, natural and grammatical meaning
has to be given when neither the context nor any principle of construction
requires their restrictive meaning-Interpretation of Statutes.
Section 34-Jain hawala diaries-Entries in-Held : Admissible under
S. 34-But file containing loose sheets of paper cannot be termed as "book" D
t
and entries therein not admissible under S.34.
Section 34-Books of account "regularly kept"-Meaning of-Held :
Whether a book of accounts regularly kept or not depends on the nature of
occupation-System of accounting and contemporaneity in making entries E
may differ-It is not necessary that an entry must be made at or about the
time of transactions-Further, the system in which the books are regularly
kept affects their probative value and not of their· admissibility as a relevant
fact under S.34.
Section 34-Rationale of-Entries in book of account-Probative value F
of-"Such statements shall not alone be sufficient evidence to charge any
person with liability"-Meaning of-Held: Entries though relevant are only
corroborative evident-Independent evidence regatding the trustworthiness
of those entries necessary to [IX liability-In the circumstance of the case,
entries made in the Jain hawala diaries though admissible under S.34,
truthjitlness thereof not proved by independent evidence.
G
Section 34-"Book "-Meaning of-Held : Spiral notebook/spiral pads
are "books" but not loose sheets.
Section IO-Co-conspirator-Statements, acts or writing of-Against
the other-Admissiblity of-Conditions for-Held : A reasonable ground H
1153
1154
SUPREME COURT REPORTS
[1998] I S.C.R.
A must be there to believe about conspiracy to commit an offence or actionable
wrong-Entries in .Jain notebooks-There is no evidence to show existence
of any conspiracy between the .fains and the persons referred to in the
notebook-Hence, S.10 not applicable-Penal Code, 1860.
Sections 17 to 21-Admission and confession-Distinction betweenB Held: Statement. oral or documentary, made by an accused as admission may
be proved against him but not against others who are being jointly tried with
him unless it amounts to a confession-Assuming that the entries in account
books are admissions made in .Jain. notebooks, such entries may be proved
only against the .fains-Moreover, prosecution case regarding conspiracy
C between .fains and others cannot stand as there is no prima facie case
against the others as being parties to such conspiracy since in a conspiracy
there must be two parties-Therefore, the statements cannot be proved as
admission of the .fains of such conspiracy.
D
Prevention of Corruption Act, 1947 : Section 12.
Abatment by aiding-Held: Act so aided should have been committed-
{
Persons referred to in .Jain diaries did not commit any offence under S. 7Hence, the question of the .fains' committing the offence under S.12 does not
arise-Penal Code, 1860, S.17(iii) Expln. 2.
E
Words and Phrases :
"Account", "books of account" "business" and "regularly kept"-
Meaning of-In the context of S.34 of the Evidence Act. 1872.
"Admission" and "confession"-Meaning of-In the context of Ss. 17
F to 21 of the Evidence Act, 1872.
The appellant-Central Bureau of Investigation (CBI), in 'the course of
the search of the premises of one J.K Jain, recovered, besides other articles
and documents, two diaries, two small notebooks and two files containing
details of receipts of various amounts from different sources recorded in
G abbreviated forms of digits and initials and details of payments of various
persons recorded in similar fashion. Preliminary investigation taken up by
the CBI to decode and comprehend those entries revealed payments amounting
to Rs. 65.47 crores, out of which 53.5 crores had been illegally transferred
from abroad through hawala channels, during the years 1988 to 1991 to its
H persons including politicians, some of whom were members of either House
I l
C.B.I. v. V.C. SHUKLA
ll55
of Parliament during the relevant period, officials of Government and Public A
Sector Undertakings, and friends of S.K Jain, B.R Jain and N.K Jain who
were three brothers carrying on different businesses. H further revealed
that the Jain brothers and J.K. Jain, who was their employee, had acted a
middleman in the award of certain hig projects in the power sector of the
Government of India to different bidders; that they had official dealings with B
politicians and public servants whose names were recorded in the diaries and
the files; and that some of them bad accepted illegal gratification other then
legal remuneration from the Jains as a reward for giving them and the
companies they own, and manage various contracts. On such relcvation the
CBI registered a case on 4-3-1995 under Section 7 and 12 of the Prevention
of Corruption Act, 1947 and Section 56 read with Section 8(1) of the Foreign C
Exchange Regulation Act, 1973 against the Jains, some public servants and
others and on completion of investigation filed charge-sheets against the
Jain brothers and various government servants and politicians including
Shri V.C Shukla and Shri L.K Advani, the then Members of Parliament.
The common allegations made in two of the above charge-sheets (from D
t
which these appeals stem) are that during the years 1988 to 1991 the Jains
entered into a criminal cons11iracy among themselves, the object of which
was to receive unaccounted money and to disburse the same to their companies,
friends, close relatives and other persons including public servants and
political leaders of India. In pursuance of the said, S.K Jain lobbied with E
various public servants and Government organisations in the power and steel
sectors of the Government of India to persuade them to award contracts to
different foreign bidders with the motive of getting illegal kick backs from
them. During the aforesaid period the Jain brothers received Rs. 59,12,685,
major portion of which came from foreign countries, hawa/a channels as
kickbacks from the foreign bidders of certain projects of 11owcr sector F
_,_
undertakings and the balance from within the country. An account of receipts
and disbursements of the monies was maintained by J.K Jain in the diaries
and files recovered from his house and the Jain brothers authenticated the
same. One of two notebooks (MR 71/91) was, according to the prosecution,
the main mother book. Page 1 of the book began with the heading "A!C given
upto 3h1 January on 31-1-1998" and then followed serially numbered entries G
of various figures multiplied by some other figures on the left hand column
and the product thereof on the next column for each month commencing from
January, 1990 to A11ril, 1991. The overleaf (o) of the page contained similar
entries for the period from April, 1988 to December, 1989 and it ended with
the words "2.77 we have to receive". In the subsequent pages, the book H
1156
SUPREME COURT REPORTS
[1998] l S.C.R.
A recorded monthly recei)ltS of monies/funds from inconsJ>icuous Jlerson/
entities during the Jleriod commencing from the months of February 1988
to A)lril 1991 maintained on '2 columns' basis. The left-hand column
re)lresented the recei)lts and the right hand column disbursements. In the
column of recei)lts the source was indicated in abbreviated from on the left
B
of the figure reJ>resenting the sum received. On the right side of the said
figures a number was mentioned which co-related with the serial number of
~
<
the account of receivers recorded on )!ages 1 and l(o) of the diary for the
Jleriod subsequent to 31-1-1988. The names of the Jlayees had also been
recorded in abbreviated form, alJlhabets or words. The entires, however, did
not give any indication of any sale, 1mrchase or trading and showed only
c recei)ltS of money from a set of Jlersons and entities on one side and )layment~
to another set of Jlersons and entities on the other, both reckoned and ke)lt
monthly. As regards the actual amounts received and disbursed it aJ>Jleared
that the figures were in lakhs. The book further indicated that it was from
time of time shown to some persons and they )lUt their signatures in token
D
thereof.
The other book (MR 68/91) contained, inter, alia, entries relating to
'!.
cash and received and disbursed in the months of February, March and A)lril
1991 recorded in similar fashion as in MR 71/91 (some or all of which
corres)lond with the entries in MR 71.91 for those months); exJlenses incurred
E in the month of March 91; and 'Jlolitical ex)lenses on 26-4-1991' with names
of a number of Jlersons mentioned thereunder through their initials or
surnames and various amounts shown against their res)lective names in only
figures running u)lto 2 )Joints after decimal. The other entries in this book
seemed to be wholly unconnected to the entries earlier referred to. The two
small S)liral Jlads(MR 69/71 and MR 70/91) also contained some entries
F relating to similar recei)lt and disbursement on certain days and certain
months during the above )leriod-all written in a similar fashion. In some of
.l
the loose sheets of 1iaJ>ers contained in the files (MR 71/91 and MR 72/91
accounts of money received and disbursed in one )!articular moutn or J>eriod
covering a number of months were written.
G
The S)lecial Judge took cognisance UJlon the above two charge sheets
and issued Jlrocesses against the resJ>ondents. The S)lecial Judge rejected
various contentions of the resJ>ondents and Jlassed se)larate Orders deciding
}-
to frame charges and try the res)londents. Assailing the above order/charges
the resJlondents moved the High Court through )letitions filed under Section
H 482 of the Criminal Procedure Code, 1973, which were allowed by a common
)..
~.
C.B.I. v. V.C. SHUKLA
1157
order and the proceedings of the above two cases were quashed and the A
respondents were discharged. Hence this appeal.
On behalf of the appellant it was contended that the entire edifice of
the prosecution case was built on the diaries and files for that matter the
entires made there-in recovered from J.K. Jain, that the entries in the
documents would be admissible under Section 34, IO and 17 of the Evidence B
Act, 1872; that it being a settled principle of law that statements in account
books of a person are 'admissions' and can be used against him even though
those statements were never communicated to any other person; that the
entries would be admissible as admission. of J.K, Jain, who made them; and
that they would be admissible against the Jain brothers also as they were C
made under their authority as would be evident from their endorsements/
signatures appearing against/below some of those entries.
On behalf of the respondents it was contended that the nature and
character of the documents inhibited their admissibility under all the above
Sections.
Dismissing the appeal, this Court
D
HELD: I. It is manifest from Section 34 of the Evidence Act, 1872 that
while its first part speaks of relevancy of the entry as evidence, the second
part speaks, in negative way, of its evidentiary value for charging a person E
with a liability. To make an entry relevant under Section 34 it must be shown
that it has been make in a book, that book is a book of account and that book
of account has been regularly kept in the course of business. Even if the
above requirements are fulfilled and the entry becomes admissible as relevant
evidence, still, the statement made therein shall not alone be sufficient
evidence to charge any person with liability. It will, therefore, be necessary F
;.
to first ascertain whether the entries in the documents, in the present case,
fulfil the requirements of the above Section so as to be admissible in evidence
and if this question is answered in the affirmative then only its probative
value need be assessed. 11I72-E-FJ
2.1. The words 'account' 'books of account' 'business' and 'regularly G
kept' appearing in Section 34 are of general import. Necessarily, therefore,
such words must receive a general construction unless there is something
in the Act itself, such as the subject matter with which the Act is dealing,
or the context in which the words are used, to show the intention of the
Legislature that they must be given a restrictive meaning.
[1175-H; 1176-AJ H
1158
SUPREME COURT REPORTS
[1998] I S.C.R.
A
2.2. The Act lays down the rules of evidence to be applied and followed
in all judicial proceedings in or before any court including some Courtsmartial. Keeping in view the purpose for which the Act was brought into the
statute book and its sweep, the words appearing in Section 34 have got to
be given their ordinary, natural and grammatical meaning, more so, when
B neither the context nor any principle of construction requires their restrictive
meaning. (1176-B)
2.3. 'Book' ordinarily means a collection of sheet~; of paper or other
materia~ blank, written, printed fastened or bound togei her so as to form a
material whole. Loose sheets or scraps of paper cannot be termed as 'book'
for they can be easily detached and replaced. Therefore, the two spiral
C notebooks (MR 68/91 MR 71/91) and the two spiral pads (MR 69/91 and MR
70/91) are "books" within the meaning of Section 34, but not the loose
sheets of papers contained in the two files (MR 72/91 and MR 73/91).
(1172-G; 1173-D)
D
Mukundram v. Dayaram, AIR (1914) Nag 44, apprnved.
3. It has been rightly observed in Mukundram 's case that "book of
account" involves "either addition or subtraction or both of these operations
of arithmetic. A book which contains successive entires of items may be a
good memorandum book; but until those entries are totalled or balanced, or
both, as the case may be, there is no reckoning and no account. In the
E making of totals and striking of balances from time t,~ time lies the chief
safeguard under which books of account have been distinguished from other
private records as capable of containing substantiv~ evidence on which reliance
may be placed." It must, therefore, be held that MR 71/91 is a "book of
account" as it records monetary transactions duly recorded. [1176-E-G)
F
Mukundram v. Dayaram, AIR (1914) Nag 44, approved.
4. The word "business" is one of wide import and it means an activity
carried on continuously and systematically by a person by the application of
his labour or skill with a view to earning an income. The activities of the
Jain brothers, as sought to be projected by the prosecution now on the basis
G of the 'lllaterials collected during investigation, would, therefore, be
"business" for they were being carried on continuo1asly in an organised
manner, with a set purpose to augment their own resources. MR 71191 is,
therefore, a book of account kept in the course of business. [1177-C)
Narain Swadesh Weaving Mills v. The Commissioner of Excess Profits
H Tax, [1955) l SCR 952, followed.
C.B.I. v. V.C. SHUKLA
1159
Mazagaon Dock ltd. v. The Commissioner of Income Tax and Excess A
,,t
Profits Tax, (1959) SCR 848 and Barendra Prasad Ray v. ITO (1981) 2 Sec
693, relied on.
Black's law Dictionary (Sixth Edition), Words and Phrases, Permanent
Edition, Volume lA and Wigmore: On Evidence, referred to.
5. To ascertain whether ii book of account has been regularly, kept, the
nature of occupation is an eminent factor for wcighment. Thi\, test of regularity
of keeping accounts by a shopkeeper who has daily transactions cannot be
B
the same as that of a broker in real estates. Not only their systems of
maintaining books of account will will differ but also the yardstick of
contemporaneity in making entries therein. It is not possible to accept the C
respondent's contention that an entry mush necessarily be made in the book
of acccount at or about the time the related transaction takes 1J1acc so as to
enable the book to pass the test of 'regularly kept'. The rule fixed no precise
time and each case must depend upon its own circumstances. It must,
therefore, be held that MR.71/91 has been irregularly and systematically D
maintained. Whether the system in which the book has been maintained
guarantees its correctness or trustworthiness is a question of its probative
value and not of its admissibility as a relevant fact under Section 34. The
other three books, namely MR 68/91, MR 69/91 and MR 70/91 would not,
ho"l'l-ever, come within the purview of the above Section, for, even though some
of the monetary transactions entered therein appear to be related to those E
in MR 71/91, they (the three book~) cannot be said to be book of account
regularly kept. (1179-A-D]
Ramchand Pitambhardar v. Emperor 19 Jndian Cases 534. Kesheo Rao
v. Genesh, Am (1926); Nag 407, Kunjamma v. Govinda Kurukka/, (1960)
KLT 184 and Hira/al Mahabir Pershed v. Mutsaddilal Jugal Kishore, (1967) F
.J..
1 ILR P& H 435, approved.
American Jurisprudence, Proof of Facts, (Volume 34, Second Series)
Article 1550, referred to.
6.1. The rationale behind admissibility of parties' books of account as G
evidence is that the 1·egularity of habit, the difficulty of falsification and the
.e.. fair certainty of ultimate detection give them in a sufficient degree a
probability of trustworthiness. Since, however, an element of self interest
and partisanship of the entrant to make a person-behind whose back and
without whose knowledge the entry is made-liable cannot be ruled out, the H
1160
SUPREME COURT REPORTS
(1998] l S.C.R
A additional safeguard of insistence upon other independent evidence to fasten
him with such liability, has been prO\·ided for in Section 34 by incorporating
the words 'such statements shall not alone be sufficient to charge any person
with liability'.11180-E-F]
6.2. It is not, therefore, enough merely to prove that the books hm·e
B been regularly kept in the course of business and the entries therein are
correct. It is further incumbent upon the person rel)ing upon those entries
to prove that they were in accordance with facts. Such entries though relevant
were only corroborative evidence and it is to be shown further by some
independent evidence that the entries represent hone•t and real transactions
C and that monies were paid in accordance with those entries. [1182-E-G]
6.3. Even correct and authentic entries in books of account cannot
without independent evidence of their trustworthiness, fix a liability upon a
person. Keeping in view the above principles, even if it is assumed that the
entries made in MR 71/91 are correct and the entires in the other books
,
D and loose sheets (which have already been found to be not admissible in
evidence under Section 34) are admissible under Section 9 of the Act to
support an inferred about the formers' correctness still those entires lvould
not be sufficient to charge Shri Advani and Sbri Shukla with the accusations
levelled against them for there is not an iota of independent evidence in
support thereof. (1182-0; 1183-A]
E
Hir/iial Mahabir v. Mustaddi/al Jugal Kishore, (1967) 1 ILR P&ll
435, Charz.dradar v. Gauhati Bank, [1967] 1 SCR 898; Yesuvadiyan v. Subbri
Naicker, AIR (1919) Mad 132; Beni v. Bisan Dayal, AIR (1925) and Nag 445
and Hira Lal v. Ram Rakha, AIR (1953) Pepsu 113, approved.
F
Wigmore on Evidence Article 1546, referred to.
7. The statements, acts or writings of one co-conspirator as against
the other are admissible when there is a reasonable ground to believe that
they have conspired together to commit an offence or actionable wrong. The
entries in the Jain notebooks do not show existence of any conspiracy
G between the Jains and the persons referred to in the notebooks. Hence
Section 10 of the Evidence Act is not applicable. (1183-E]
Sardul Singh v. State of Bombay, AIR (1957) SC 747 and Bhagwan
Swarup v. State of Maharashtra, AIR (1965) SC 682, relied on.
4
H
8.1. On a combined reading of Sections 17 to 21 of the Evidence Act
it is manifest that an oral or documentary statement made by a party or bis
l
~
C.B.l. v. V.C .. SHUKLA
1161
authoiised agent, suggesting any inference as to any fact in issue or relevant A
fact may be proved against a JJarty to the Jlroceedings or his authoiised agent
as 'admission' but, aJlati from exceptional cases (as contained in Section 21),
such a statement cannot be proved by or on their behalf. On this point the
distinction between 'admission' and 'confession' needs to be apJlreciated.
[1186-B-CJ B
8.2. Only voluntary and direct acknowledgement of guilt is a confession
but when a confession falls short of actual admission of guilt it may
nevertheless be used as evidence against the person who made it or his
authoiised agent as an 'admission' un!ler Section 21. "A statement made by
an accused person, if it is an admission, is admissible in evidence under
Section 21 of the Evidence Act, unless the statement amounts to a confession C
and was made to a person in authority in consequence of some imJJroper
inducemenf, threat or promise, or was made to Police Officer, or was made
at a time when the accused was in custody of a Police Officer. If a statement
was made by the accused in the circumstances just mentioned its admissibility
would depend upon the determination of the question whether it does not
amount to a confession. If it amount to a confession, it will be inadmissible
under Section 21 of the Act as an admission, provided that it suggest an
inference as to a fact which is in issue in, or relevant to, the case and was
not made to a Police Officer in the course of an investigation under Chapter
XIV of the Criminal Procedure Code, 1973. Secondly , a statement made by
D
an accused person in admissible against others who are being jointly tried E
with him only if the statement amounts to a confession. Where the statement
falls short of a confession, it is admissible only against its maker as an
admission and not against those who are being jointly tried with him.
(1187-B-FJ
Pakala Narayanna v. Emperor, AIR (1939) PC 47, approved.
Palvinder Kaur v. State of Punjab, (1953) SCR 94; Om Prakash v. State
of U.P., AIR (1960) SC 409 and Veera Ibrahim v. State of Maharashtra,
(1976) 3 SCR 692, referred to.
F
9.1. Even if the contentions of the appellant are accepted the entries,
(which are 'statements' as held by this Court in Bhogilal Chunilal and G
hereinafter will be so referred to), being 'admissions'-and not 'confession'-
cannot be used as against Shri Advani or Shri Shukla. However, as against
the Jains the statement may be proved as admissions under Section 18 read
with Section 21 of the Act provided they relate to 'any fact in issue or
relevant fact'. What will be 'facts in issue' or 'relevant facts' in a criminal H
1162
SUPREME COURT REPORTS
(1998) I S.C.R
A trial will depend upon, and will be delineated by, the nature.of accusations
made or charges levelled against the person indicted. [1188-G-H)
9.2. The prosecution sought to prove that there were two separate
conspiracies, in both of \Vhich the .Jains together figured as the common
party and Shri Advani or Shri Shukla, as the other. Since it had already been
B found that the prosecution had not been able to make out aprimafacie case
to prove that Shri Advani and Shri Shukla were parties to such conspiracies,
the charges of conspiracy, as framed/sought to be framed, cannot stljnd also
against the Jains, for the simple reason that in a conspiracy there must be
two parties. Resultantly, the statements cannot be prowd as admissions of -'
C the Jains of such conspiracy. The case the prosecution intended to project
now was not that there was a conspiracy amongst the Jains to offer illegal
gratification to Shri Advani and Shri Shukla and that pursuant thereto the
latter accepted the same. It is not, therefore, necessary to dilate on the
question whether, if such was the case of the prosecution, and the statements
D
could be proved against the .Jains as their admissions. (1189-D-F]
!
Bhogilal Chunilal Panday v. State of Bombay, (1959] "Supp. 1 SCR
J 10, referred to.
10.1. For a person to be guilty under Section 12 of the Prevention of
Corruption Act, 1947 it is not necessary that the offences mentioned therein
E should have been committed pursuant to the abetment Since-'abetment' has
not bee1ulefined under the P.C. Act its exhamtive definition in Section 107
. of Indian Penal Code, 1860 has to be referred to. As per that Section a
person abets the doing of a thing when he does any of the acts mentioned .
in its three clauses. For understanding the scope of the word "aid" in the
F third dause it would be advantageous to sec Explanation 2 in Section 107
IPC. It is thus clear that under the third clause when a person abets by
aiding, the act so aided should have been committed in order to make such
. aiding an offence. In other words, unlike the first two clauses the third
clause applies to a case where the offence if committed. [1190-A-E]
/
G
10.2. Since in the instant case the prosecution intended to prove the
abatment of the Jains by aiding (and not by any act falling under the first
two clauses of Section 107 IPC) and it has earlier been found that no prima
facie case has been made out against Shri Advani and Shri Shukla of their
having committed the offence under Section 7 of the P.C. Act, the question
. of the Jains' committing the offence under Section 12-and for matter, their
H admission in respect thereof-does not arise. [1190-F)
•
I
C.B.I. v. V.C. SHUKLA [M.K. MUKHERJEE, J.]
1163
CRIMINAL APPELLATE rnRISIDCTON : Civil Appeal Nos. 247- A
256 of 1998.
From the Judgment and Order dated 8.4.97 of the Delhi High Court in
Cr!. A. Nos. 124, 166-67, 256-57. 265, 328-31 of 1996.
Altaf Ahmed, Additional Solicitor General, P. Parmeshwaran and A. B
-<
Mariarputham for the Appellants.
Ram Jethmalani, Arnn Jaitley, D.D. Tahkur, Kapil Sibal, R.K. Anand,
Mrs. Rakhi Ray, Ms. Bina Gupta, Harjinder Sing, R.N. Joshi, Navin, Harish
Gulati, H.S. Bhullar, Pawan Narang, S.K. Saxena, Ms. Rashmi Kathpalia, S.P.
Sharma, Arnn Birbal, Vineet Kumar and Jayant Bhushan, for the Respondents. C
The Judgment of the Court was delivered by
M.K. MUKHERJEE, J. Leave granted. On May, 3, 1991 the Central
Bureau of Investigation (CBI), New Delhi, searched the premises of J.K. Jain
at G-36, Saket, New Delhi to work out an information received while D
investigating RC Case No. 5(S)/91 SIU (B)/CBI/New Delhi. In course of the
search they recovered, besides other articles and documents, two diaries, two
small note books and two files containing details of receipts of various
amounts from different sources recorded in abbreviated forms of digits and
initials and details of payments to various persons recorded in similar fashion. E
Preliminary investigation taken up by the CBI to decode and comprehend
those entries revealed payments amounting to Rs. 65.47 crores, out of which
53.5 crores had been illegally transferred from abroad through hawala channels,
during the years 1988 to 1991 to 115 persons including politicians, some of
whom were members of either Houses of parliament during the relevant
period, officials of government and Public Sector Undertakings, and friends F
of S.K. Jain, B. R. Jain, and N.K. Jain, who are three brothers carrying on
different businesses. It further revealed that the Jain brothers and J.K. Jain,
who is their employee, had acted as middlemen in the award of certain big
projects in the power sector of the Government of India to different bidders;
that they had official dealings with politicians and public servants whose
names were recorded in the diaries and the files; and that some of them had G
accepted illegal gratification other than legal remuneration from Jains as a
reward for giving them and tl1e companies they own and manage various
contracts. On such revelation the CBI registered a case on march 4, 1995
under Sections 7 and 12 of the Prevention of Corruption Act, 1988 and
Section 56 read with Section 8(1) of the Foreign Exchange Regulation Act, H
1164
SUPREME COURT REPORTS
[1998) l S.C.R
A 1973 against the Jains, some public servants and others being RC No. l(A)/
95 ACU (VI) and on completion of investigation filed 34 charge-sheets
(challans) in the Court of the Special Judge, New Delhi against various
politicians, Government servants and Jains. In one of the above chargesheets (C.S. No. 4 dated 16.1.1996) Shri Lal Krishna Advani, who at the
B material time was a Member of the Parlian1en~ and the Jains figure as accused
and in another (C. S. No. 8 dated 23.1.1996), Shri V.C. Shukla, also a Member
of Parliament, along with the Jains.
The common allegations made in the above two charge-sheets (from
which these appeals stem) are that during the years 1988 to 1991 Jains entered
C into a criminal conspiracy among themselves, the object of which was to
receive unaccounted money and to disburse the same to their companies,
friends, close relatiyes and other persons including public servants and
political leaders of India. In pursuance of the said conspiracy _S.K. Jain
lobbied with various public servants and Government organisations in the
power and steel sectors of the Government of India to persuade them to
D award contracts to different foreign bidders with the motive of getting illegal
kickbacks from them. During the aforesaid period the Jain brothers received
Rs. 59, 12, II, 685, major portion of which came from foreign countries through
hawala channels as kickbacks from the foreign bidders of certain projects of
power sector undertakings and the balance from within the country. An
E account of receipts and disbursements of the monies was maintained by J.K.
Jain in the diaries and files recovered from his house and Jain brothers
authenticated the same.
As against Shri Advani the specific allegation in the charge-sheet (in
which he arid fains figure as accused) is that he received a sum of Rs. 25 lacs
from fains during his tenure as a Member of the Parliament, (besides a sum
F
of Rs. 35 lacs which was received by him while he was not a Member of the
Parliament). In the other charge-sheet (filed against Shri Shukla and fains) it
is alleged that during the period 1988 to 1991, while Shri Shukla \vas a Member
of the Parliament and for some time a Cabinet Minister of the Central Government
he received Rs. 39 lacs (approximately) from Jains.
G
According to CBI the materials collected during investigation clearly
disclosed that Jains were in the habit of making payments to influential public
servants and political leaders of high status expecting official favours from
thent and the above payments were made to Shri Shukla and Shri Advani with
that oblique motive. Thereby, the CBI averred, the above persons (the
H respondents in these appeals) committed offences under Section 120B I.P.C.
...
..
I i.
C.B.I. v. V.C. SHUKLA [M.K. MUKHERJEE, J.]
1165
and Section 13(2) read with Section 13(1) (d), 7 & 12 of the Prevention of A
Corruption Act, 1988.
The special Judge took cognisance upon the above two charge-sheets
and issued processes against the respondents. After entering appearance
t11ey agitated various grounds (to which we will refer at tl1e appropriate stage)
to contend that there was no material whatsoever to frame charges against B
t11em. The Special Judge, however, the rejected all those contentions and
passed separate orders deciding to frame charges and try the respondents.
Pursuant to tl1e order passed in Case No. 15 of 1996 (arising out of C.S. No.
8 dated 23. LI 996) the following charges were framed against Shri Shukla:-
"Firstly, that you, V.C. Shukla, during the period from Feb. 90 to Jan. c
91 at Delhi agreed with other co-accused S.K. Jain, N.K. Jain, B. R
Jain, and J. K. Jain to do an illegal act, to wit, to obtain pecuniary
advantage from the said Jains by abusing your official position as a
public servant being Member of Parliament during the said period and
also be Minister of External Affairs from 21.11.90 to Jan. 91 and in D
Ii'"
pursuance of the said agreement, you obtained the pecuniary
advantage and accepted Rs. 38, 85,834/- as gratification other than
legal remuneration from the said Jains for a general favour to them
from you and you, thereby, committed an offence punishable U/s 120
-B !PC r/w Sec. 7, 12 and 13(2) r/w 13(l)(d) of the Prevention of
Corruption Act, 1988 and within the cognizance of this Court.
E
Secondly, that you during the aforesaid period at the aforesaid place
in your aforesaid capacity being a public servant,· accepted a sum of
Rs. 38,85,834 from the above said co-accused persons, namely S.K.
Jain, N.K. Jain, B. R. Jain and J.K. Jain as gratification other than legal
F
remuneration for showing general favour to them and you, thereby,
committed an offence punishable U/s 7 of the Prevention of Corruption
Act, 1988 and within the cognizance of tl1is Court.
Thirdly, that you during the aforesaid period and at the aforesaid
place, in your aforesaid capacity being a public servant obtained G
pecuniary advantage amounting to Rs. 38,85,834/- from the co-accused
persons namely, S.K. Jain, B. R. Jain, N.K. Jain and J.K. Jain by
.....
""
abusing ycur position as a public servant and also without any public
interest and you, thereby committed an offence punishable U/s 13(2)
r/w Section 13(l)(d) of the Prevention of Corruption Act, 1988 and
within the cognizance of this Court."
H
1166
SUPREME COURT REPORTS
[1998] 1 S.C.R.
A
The charges framed against S.K. Jain, in that case read as under:"
B
"Firstly, that you, S.K. Jain, during the period from Feb. 90 to Jan. 91
at Delhi, agreed with other co-accused V.C. Shukla, N. K. Jain, B. R.
Jain and J.K. Jain to do an illegal act, to wit, to make payment of Rs.
38,85,834/- to said Sh. V.C. Shukla, as a gratification other than legal
remuneration as a motive or reward for getting general favour from
said V. C. Shukla who was holding the post of a Member of Parlian)ent
during t11e said period and also was Minister for El>temal Affairs
during the period from 21.11.90 to Jan. 91 and in pursuance of the said
agreement, the pecuniary advantage was obtained by said V. C. Shukla
C
by abusing his official position and without any public interest and
the payment was made by you as, aforesaid, gratification and you,
t11ereby, committed an offence punishable U/s 120-b IPC r/w Sec. 7,
12, 13(2) r/w 13(l)(d) of the Prevention of Corruption Act, 1988 and
D
E
F
G
H
within the cognizance of this Court.
Secondly, that you, S.K. Jain during the aforesaid period and at the
aforesaid place abetted the commission of offence punishable U/s 7
of the P. C. Act, 1988 by offering bribe of Rs. 38,85,834 to said V. C.
Shukla, who was a public servant during the relevant period as a
Member of Parliament and also as a minister of External Affairs during
the period from 21.11.90 to Jan. 91 for getting general favour from him
and you, thereby committed an offence punishable U/s 12 of the
Prevention of Corruption Act, 1988 and within the cognizance of this
Court."
Similar charges wen: also framed against the other Jains.
1n the other case (c.c. No. 17 of 1996), in which Shri Advani figure as
an accused with fains no formal charge was franled (as by then the respondents
had moveu the High Court), but the special Judge decided to frame charges
against them in similar lines as would be evident from the order dated September
6, 1996, the relevant portion of which reads as under:
"So, after going through the entire material available on record, i.e.
charge-sheet statements of the witnesses recorded U/s 161 Cr.P.C.,
documents placed on record prima facie, it cannot be said tl1at the
allegations made against all these accused are groundless or tl1at
t11ere is no sufficient ground for proceeding against all the accused.
Prima facie, it is clear that there are sufficient grounds for framing of
(
C.B.I. v. V.C. SHUKLA [M.K. MUKHERJEE, J.]
1167
charges against all these accused. Accordingly, I hereby order that A
the charges against all these accused. Accordingly, I hereby order
that the charges for offences Vis 120B IPC and Sections 7, 12, 13(2)
r/w 13(1) (d) of the P. C. Act, 1988 be framed against all the accused
namely, L.K. Adavani, S.K. Jain, J.K. Jain, B.R . Jain and N.K. Jain.
Further Charges for offence U/s. 7 and 13(2) read with 13(l)(d) of B
P.C. Act, 1988 be framed against accused L.K. Advani.
Further charges for offence U/s 12 of P.C. Act, 1988 be framed
against accused S.K. Jain, J.K. Jain, B.R. Jain and N. K. Jain."
Assailing the above order/charges the respondents moved the High C
court through petitions filed under Section 482 CR. P. C., which were allowed
by a common order and the proceedings of the above two cases were quashed
and the respondents were discharged. The above order of the High Court is
under challenge in these appeals at the instance of the CBI.
From the above resume of facts it is manifest that the entire edifice of D
the prosecution case is built on the diaries and files - and for that matter the
entries made therein - recovered from J. K. Jain. While the appellant claimed
that the entries in the documents would be admissible under Sections 34,10
and 17 of the Evidence Act, ('Act' for short) the respondents contended that
the nature and character of the documents inhibited their admissibility under E
all the above Sections. Needless to say, to delve into and decide this debatable
point it will be necessary at this stage to look into the documents; the two
spiral note books (marked MR 68/91 ·and MR 71/91), two small spiral pads
(MR 69/91 and MR 70/91) and two files, each containing some loose sheets
of papers (MR 72/91 and MR 73/91). Since according to the prosecution MR
71/91 is the main (mother) book we frrst take the same for scrutiny. Page I F
of the book begins with the heading "NC given upto 31st January on
31.1.1998;" and then follows serially numbered entries of various figures
multiplied by 'some other figures on the left hand column and the product
thereof on the next column for each month commencing from January, 1990
to April, 1991. The overleaf ('o' for short) of the page contains similar entries G
for the period from April, 1988 to December, 1989 and it ends with the words
"2. 77" we have to receive. In the subsequent pages the book records monthly
receipts of monies/funds from inconspicuous persons/entities during the
period commencing from the month of February, 1988 to April 1991 maintained
on '2 columns' basis. The left hand column represents the receipts and the
right hand column disbursements. In the column of receipts the source is H
1168
SUPREME COURT REPORTS
[1998] 1 S.C.R.
A indicated in abbreviated form on the left of the figure representing the sum
received. On the right side of the said figures a number is mentioned which
co-relates witl1 the serial number of tl1e account of receivers recorded on
pages 1 and l(o) oftlrn diary for tl1e period subsequent to 31.1.1988. So far
as the names of the payees are concerned the same have also been recorded
in abbreviated fonr., alphabets or words. The entries, however, do not give
B any indication of any sale, purchase or trading and show only receipts of
money from a set of persons and entities on one side and payments to
another set of persons and entities on the other, botll reckoned and kept
montl1ly. As regards the actual amounts received and disbursed we notice
that the figures which have been mentioned briefly against tl1e respective
C names are not suffixed witll any symbol, volume or unit so as to specifically
indicate whetl1er tl1ey are in lakhs, tl1ousands or any otl1er denomination.