Bombay High Court

Suresh Damodar Kagane vs State Of Maharashtra on 19 January, 2021

Bench: S. K. Shinde

Rane                      1/18             APPEAL-649-1996
                                                 19.1.2021

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
     CRIMINAL APPELLATE JURISDICTION

          CRIMINAL APPEAL NO. 649 OF 1996
                        IN
             SPECIAL CASE NO. 2 OF 1988



SHRI. SURESH DAMODAR KAGNE,
Since deceased through his
Legal Heirs :

1. SMT. SUNANDA SURESH KAGNE
   Age: 71 years, Occ : Nil.

2. SHRI. RAVINDRA SURESH KAGNE
   Age : 47 years, Occ : Service
   of Dhule, Indian Inhabitant,
   presently R/at: 18, Wankhedkar
   Nagar, Ambaji Nagar, Deopur,
   Dhule-5.
                                  ....Appellants
                                 (Appellant no.1-
                                 original accused no.1)

       V/s.

The State of Maharashtra,
(Spl. Case No.2/88, A.C.B.
Solapur, decided on 30.9.1996,
Spl. Judge, Solapur)             ....Respondent

                                 ****

Mr. Kartik      Garg,   Advocate     for     the   appellant
(appointed).

Mr. S.R. Agarkar, APP for State.
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                                                       19.1.2021



                  CORAM : SANDEEP K. SHINDE, J.

Tuesday, 19th January, 2021.

ORAL JUDGMENT :

1. Suresh Damodar Kagane, accused no.1 in

Special Case No.2 of 1988 was convicted and sentenced,

by the Learned Special Judge, Solapur, for the

(i) offence punishable under Section 120-B of

the Indian Penal Code ("IPC" for short) and

sentenced to suffer rigorous imprisonment for

the period of one year and to pay fine in sum

of Rs.5,000/- in default to suffer further

rigorous imprisonment for six months.

(ii) convicted for the offence punishable under

Section 409 of Indian Penal Code and

sentenced to suffer rigorous imprisonment for

the period of one and half year and to pay fine

in sum of Rs.7,500/- in default to suffer

further rigorous imprisonment for nine

months.

 Rane                        3/18         APPEAL-649-1996
                                               19.1.2021

(iii) convicted for the offence punishable

under Section 420 of the IPC and sentenced to

suffer rigorous imprisonment for the period of

one and half year and to pay fine of

Rs.7,500/-, in default to suffer further

rigorous imprisonment for nine months.

(iv)convicted for the offences punishable

under Sections 468, 471, 477-A read with

Section 109 of the Indian Penal Code and for

each of the offence, he is sentenced to

rigorous imprisonment for the period of one

year and to pay fine in the sum of Rs.2,000/-, in default, to suffer further rigorous

imprisonment for three months.

(v) convicted for the offence punishable under

Section 5(2) read with section 5(1)(d) of the

Prevention of Corruption Act, 1947 and

sentenced to rigorous imprisonment for the

period of one year and to pay fine in sum of Rane 4/18 APPEAL-649-1996 19.1.2021

Rs.4,000/-, in default, to suffer rigorous

imprisonment for nine months.

(vi) convicted for the offence punishable

under Section 5(2) read with Section 5(1)(c)

but no separate sentence is inflicted and

directed further that, all substantive sentences

shall run concurrently.

2. Suresh Kagane, was a Sales Tax Officer, a

public servant.

3. Pending Appeal, he passed away on 30th

November, 2001. His legal heirs, sought leave to

contest the Appeal filed by Suresh Kagane. As such,

leave was granted by the learned Judge of this Court

vide order dated 10th March, 2015. In para-2 of the

order, the learned Judge has observed thus : "I find the

sentence imposed upon the original appellant was also

of fine. As such, appeal would not abate in view of the Rane 5/18 APPEAL-649-1996 19.1.2021

provisions of Section 394 of the Code of Criminal

Procedure. Appeal would, in any way, would be

required to be decided on merits. As such, application

needs to be allowed".

4. Heard Mr. Garg, learned Counsel

(appointed) for the applicant and Mr. Agarkar,

learned APP for the State.

5. Before adverting to the arguments advanced

by the learned Counsel, it may be stated that, Suresh

Kagane-accused no.1 was tried alongwith accused

nos.2, 3, 4 and 5. Accused no.2 was a Sales Tax Officer;

accused no.3-Sales Tax Inspector, accused no.5 was a

registered 'dealer' within the meaning of the Bombay

Sales Tax Act and accused no.4 is the son of accused

no.5.

 Rane                      6/18          APPEAL-649-1996
                                              19.1.2021

6. Gist of prosecution's case unfolded in

evidence is; that, Suresh Kagane (hereinafter called as

"the deceased") and co-accused in connivance, made a

false claim for set-off (refund of sales tax) admissible to

dealers, engaged in the business of extracting oil from

power oil ghanas, whose sales were exempted under

Entry No.39, Schedule 'A' appended to the Bombay

Sales Tax Act. Accused no.5, Mallikarjun

Chanbasappa, proprietor of M/s. M.C. Dhangapure,

was a registered dealer. Likewise, was Vishwanath

Kalshetti, also registered dealer, was engaged in the

business of extracting oil from oilseeds. It is alleged,

accused no.4, son of accused no.5 forged bills/vouchers

with an intention to claim erroneous-false, a set-off

claim, admissible to dealers, engaged in the business of

extracting oil from oilseeds of tel ghanies. Accordingly,

accused no.4 produced forged sales invoices of M/s.

V.M. Dhangapure (Commission Agent) and on the Rane 7/18 APPEAL-649-1996 19.1.2021

strength of such bills, secured registration under the

Bombay Sales Tax Act, under the trade name "V.S.

Kalshetti", of which Mr. Kalshetti was projected as

proprietor. The registration was allegedly granted by

Trimbakrao Govindrao Bhave, Sales-Tax Officer

(accused no.2). It is unfolded in evidence that, on the

basis of such other bills/forged invocies, accused no.4,

sought set-off (refund of tax), on behalf of and in the

names of accused no.5 (M/s. M.C. Dhangapure) and

M/s. V.S. Kalshetti. Mr. Kangane, Offficer (accused

no.1) without following the due procedure, accepted

claims for set-off made by M/s. V.S. Kalshetti and

M/s. M.C. Dhangapure. In other words, it is

prosecutions's case that deceased Mr. Kangane, in

connivance with the co-accused, knowingly granted set-

off on the basis of forged invoices by passing assessment

orders which resulted wrongful loss to the State and

wrongful gains to conspirators. The high rank officer Rane 8/18 APPEAL-649-1996 19.1.2021

under the Sales Tax Act, when noticed this fact,

initially had decided to revise the assessment orders

passed by Suresh Kagane. However, later department

had directed Kagane to re-open the original assessment

orders and re-assess both the entities i.e. M/s. M.C.

Dhangapure (accused no.5) and M/s. V.S. Kalshetti to

whom the refund orders were issued pursuance to

assessment orders passed by him. It appears, Mr.

Kangane had passed the re-assessment orders for the

period 8th November, 1980 to 27th October, 1981. It is

further unfolded in evidence that, for this period,

Rs.61,000/- were refunded to accused no.5, M/s. M.C.

Dhangapure and Rs.60,000/- to Mr. Kalshetti.

7. Sales Tax Department, held enquiry which

culminated into First Information Report lodged

against the deceased-appellant and the co-accused for

the offences punishable under Sections 120-B, 409, 420, Rane 9/18 APPEAL-649-1996 19.1.2021

468, 471, 477-A read with Section 109 of the Indian

Penal Code and under Sections 5(2) read with Section

5(1)(d) and 5(1)(c)of the Prevention of Corruption

Act, 1947.

8. Prosecution in support of the charge had

examined, as many as, 94 witnesses.

9. Investigation and evidence unfolded the fact

that, accused no.4 (son of accused no.5) was a lead

person in forging the sales invoices; seeking new

registration in the trade name of "M/s. V.S. Kalshetti"

and making claim for set-off in the names of M/s. V.C.

Kalshetti and M/s. M.C. Dhangapure. Investigation

further revealed that, accused no.4 without the

knowledge of Mr. V.S. Kalshetti (P.W.83), not only

secured his registration as a 'dealer' with the Sales Tax, Rane 10/18 APPEAL-649-1996 19.1.2021

but also opened a bank account and deposited the

refund advice and appropriated money to himself.

10. Prosecution, to prove the charge, had

examined, Assistant Commissioner of Sales Tax-

P.W.71. The evidence of this witness, clearly suggests

that the Sales Tax Department held Kagane and other

public servants, guilty of dereliction of duty, for failing

to follow the procedure while passing tax assessment

orders. It is evident from the evidence of Assistant

Commissioner of Sales Tax, that the deceased had

passed the assessment orders without there being tax

returns on the file and without first verifying or cross

checking the vouchers, purchase bills produced by the

dealers for claiming the set-off. The tenor of the

evidence of this witness, therefore suggests that Mr.

Kagane had overlooked the norms while issuing refund

orders. Suffice to say, Sales Tax Department did not Rane 11/18 APPEAL-649-1996 19.1.2021

deliberate on issue whether Mr. Kagane and other

public servants, knowingly overlooked and jumped the

procedure and norms while granting set-off claim.

11. Faced with this kind of evidence, after

examining 92 witnesses, pardon was tendered to the

accused no.4 and he was examined as a 'prosecution

witness'. Though, order granting pardon was

challenged before this Court and the Apex Court, the

challenge was not entertained.

12. Be that as it may, fact remains that, the

learned trial Court relied on the evidence of approver-

P.W.93 and reached the conclusion of guilt,

culminating into conviction of accused nos.1, 2, 3 and

 Rane                       12/18          APPEAL-649-1996
                                                19.1.2021

13. Bhave-accused no.2 was a Sales Tax Officer

and Joshi-accused no.3, a Sales Tax Inspector had

preferred Criminal Appeal No. 634 of 1996 against the

judgment of conviction and sentence. Their Appeal

was heard by the learned Judge (Coram : Hon'ble

Justice M.L. Tahilyani) who by order dated 26th

November, 2013 set aside the judgment of the trial

Court and acquitted them of the offences punishable

under the Indian Penal Code and Prevention of

Corruption Act, 1947. In para-13, the learned Judge

has held thus;

"In the present case, it is possible to say that, the evidence of P.W.93 (approver) has been corroborated to some extent by other witness. However, basic question is whether the approver himself was a reliable witness or not. If the approver's evidence was found to be unreliable evidence, it would not help the prosecution in any manner".

14. This issue has been discussed by the learned

Judge in its judgment and learned trial Judge has Rane 13/18 APPEAL-649-1996 19.1.2021

stated that, basically, the approver has to be a reliable

witness. In the present case, accused no.4 has accepted

tender of pardon, after recording of 80% of the

evidence. In paras-15 and 16, it is observed thus :

"15. In the present case, star prosecution witness (approver) had occasion to hear evidence of 92 witnesses. He had accepted tender of pardon at the fag-end of the trial when the evidence was about to be closed for recording statement of the accused under Section 313 of Cr.P.C.

16. It is possible that P.W.93 might have accepted tender of pardon when he realised that some heat may also turn upon him. In my opinion, it was highly risky to rely upon such a witness. The learned trial Court should not have believed evidence of such a witness particularly when almost all prosecution witness were cross- examined on behalf of him when he was sitting in the dock of the accused. Learned counsel for the appellants have rightly criticised that the pardon should not have been tendered to P.W.93 when the case was about to be closed. The criticism on behalf of the appellants is well founded in as much Rane 14/18 APPEAL-649-1996 19.1.2021

as P.W.93 has filled up the wide gap in the prosecution case. The ultimate aim of the trial is quest for truth and the prosecution has to stand on his own legs. No doubt, the judge is not a silent spectator in the whole trial, however, the Judge has to be very circumspect in the delicate situation like the one which has arisen in the present case after completion of prosecution evidence. Had the Judge used his discretion judiciously, he probably would not have tendered pardon, to a person of highly dubious character. Had the pardon not been granted to accused no.4 who has been examined as P.W.93, the prosecution obviously would have failed miserably."

15. The learned Counsel for the appellant, has

relied on this judgment and observations made therein,

to contend that, since the State has not challenged the

judgment of this Court in Criminal Appeal No.

634/1996 passed in November, 2013, it has attained

finality. Learned Counsel has also relied on the

judgment of the Apex Court in the case of Babuli alias

Narayan Bahera Versus. The State of Maharashtra, Rane 15/18 APPEAL-649-1996 19.1.2021

reported in (1974) 3 Supreme Court Cases page 562 . In

the said case, in para-6, Apex Court has observed

thus :-

"6. The approveer was tendered pardon at a very late stage of the trial, that is, after 31 witnesses were examined. Those witnesses were cross-examined on behalf of the approver and he had the dubious privilege of being able to hear closely almost the entire evidence led by the prosecution. The High Court has observed with plausibility that the prosecution has laid itself open to the criticism that pardon was tendered to one of the accused at the fag end of the trial in an effort to fill up the lacunae in its case."

. In the case in hand, approver tendered

pardon after examining 93 witnesses, i.e. at the fag end

of the trial, obviously to fill up the lacunae in this case.

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                                                19.1.2021

16. Learned Counsel, has taken me through the

impugned judgment to contend that the trial Court to

great extent, relied on the testimony/evidence of the

approver to conclude the guilt of accused, but since

now, approver's evidence has been discarded, being

worthless by this Court in the appeal filed by the co-

accused, approver's evidence is to be kept out of

consideration even while deciding this Appeal.

17. I have no reason to reject this contention of

the learned Counsel for the appellant. Thus, having

accepted this contention, I am left with the evidence of

the other prosecution witnesses to ascertain whether

the order of conviction is sustainable.

18. As stated above, the prosecution had

examined the officers of the Sales Tax Department.

The tenor of the evidence of Assistant Commissioner is Rane 17/18 APPEAL-649-1996 19.1.2021

not suggesting that the assessment orders passed by

Mr. Kagane, which resulted in refund-set-off, were ill-

motivated; but were incorrect and illegal orders due to

procedural irregularity committed by him. Therefore, it

is to be said that the conviction recorded by the learned

trial Court was to a great extent, based on the evidence

of the approver.

19. Thus, taking into consideration the facts of

the case; evidence on record and the order passed by

this Court in Appeals preferred by the co-accused, in

my view, upon excluding approver's evidence, the

remaining evidence was not sufficient to establish

beyond reasonable doubt that the deceased had

committed the offences for which he was charged and

tried.

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                                                                        19.1.2021

20. In the result, the Appeal is allowed and

hence the following order :

ORDER

(i) The judgment of the trial Court dated

30.09.1996 in Special Case No. 2/1988 is set

aside. Appellant (deceased), Suresh Damodar

Kagane is acquitted of the offences punishable

under Sections 120-B, 409, 420, 468, 471, 477-A

read with Section 109 of the Indian Penal Code

and under Sections 5(2) read with Section 5(1)