Kerala High Court
N. Jayamurugan vs The Deputy Superintendent Of ... on 23 February, 2021
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE V.G.ARUN
TUESDAY, THE 23RD DAY OF FEBRUARY 2021 / 4TH PHALGUNA, 1942
Crl.MC.No.5809 OF 2020(E)
AGAINST THE ORDER/JUDGMENT IN CRRP 27/2018 OF VI ADDITIONAL
DISTRICT COURT, ERNAKULAM
PETITIONER/S:
N. JAYAMURUGAN
AGED 51 YEARS
S/O. S. NAGALINGAM, PARTNER OF M J ASSOCIATES,
PALAKKAD, RESIDING AT NO.99, CANAL BANK ROAD, CIT
NAGAR, NANDANAM, CHENNAI, TAMIL NADU - 600 035.
BY ADVS.
SRI.VINUCHAND
SRI.C.R.VINOD KUMAR
SHRI.GEEVARGHESE MATHEW
RESPONDENT/S:
THE DEPUTY SUPERINTENDENT OF POLICE,
CENTRAL BUREAU OF INVESTIGATION, ACB,
KOCHI - 682 017.
OTHER PRESENT:
SC FOR CBI SASTHAMANGALAM S. AJITHKUMAR
THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON
22.12.2020, THE COURT ON 23.02.2021 PASSED THE FOLLOWING:
Crl.MC.5809/2020 2
V.G.ARUN, J.
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CRL.M.C.No. 5809 of 2020
-----------------------------------------------
Dated this the 23rd day of February, 2021
ORDER
Petitioner is the 5th accused in C.C.No.218 of 2015 pending before
the Chief Judicial Magistrate, Ernakulam. The following is a brief
narration of the essential facts;
The Government of Sikkim appointed M/s.Martin Lottery Agencies
Ltd.( 'MLAL' for short ) as its sole distributor for Kerala, to market and
sell lottery tickets organised and conducted by the Government of
Sikkim. For this purpose, agreements were entered into between MLAL
represented by its Director, Santiago Martin and the Government of
Sikkim. The conduct and sale of lotteries ought to have been in
accordance with the Lotteries (Regulation) Act, 1998 ('the Act' for
short), and after its introduction on 1.4.2010, the Lotteries (Regulation)
Rules, 2010 ('the Rules' for short). On 9.11.2010, Crime No.754 of
2010 was registered at the Museum Police Station,
Thiruvananthapuram against Sri.Santiago Martin, Managing Director of
MLAL and Sri.John Kennedy, Proprietor, Megha Distributors, Palakkad
for the offences under Section 420 read with 34 of IPC, Sections 4(d)
and 4(f) read with 7(3) of the Act and Rules 3(5) and 3(17) of the
Rules. The crime was registered based on a written complaint received
from the Head of the Lottery Monitoring Cell, Kerala State, alleging that
the accused, who were the promoters of Sikkim and Bhutan Lotteries,
had violated various provisions of the Act and Rules, such as;
1. Not ensuring the authenticity and credibility of the
tickets.
2. Not remitting the unclaimed prize money to the
Government of Sikkim within the prescribed time.
3. Not printing the lottery tickets in Government Press or
High Security Press.
and
4. Not remitting the money received by the sale of lottery
tickets to the State Public Ledger Account or to the
consolidated fund etc.
2. The complaint resulted in 32 crimes being registered at
different police stations in the State. Later, considering the interstate
ramifications and the amount of money involved, the investigation was
handed over to the Central Bureau of Investigation. Of the 32 cases,
the CBI filed closure reports in 23 cases and filed a consolidated final
report/charge sheet in 7 cases. The allegation regarding non-ensuring
of the authenticity and credibility of the tickets, by printing the seal
and logo of the State on the lottery tickets, was found to be wrong and
the final report was filed with the following allegations;
After being selected as the sole distributor for Sikkim Lotteries, a
criminal conspiracy was hatched among Sri.Santiago Martin (A1), MLAL
and unknown officials of Sikkim Government, for obtaining unlawful
gain to Santiago Martin and MLAL, by cheating the Government of
Sikkim, by violating various provisions of the Act. With this objective,
an agreement was entered into between Santiago Martin, MLAL and
the Government of Sikkim to entrust Sikkim Lottery Tickets to MLAL as
the sole distributor for various states, including Kerala, for a period of
three years from 6.8.1999 to 5.8.2002. Many of the clauses in the
agreement were worded with intent to provide unlawful gain to MLAL
and consequent loss to the Government of Sikkim. A second
agreement, for a period of five years from 9.4.2001 to 8.4.2006, was
entered into on 17.2.2001 and a third agreement for five years, on
6.10.2004, which was extended by another five years. An amendment
agreement was executed on 8.4.2008 incorporating more clauses
favouring the distributor. In the meanwhile, in December, 2007, the
petitioner joined the conspiracy, in furtherance of which Sri.Santiago
Martin constituted a partnership firm named 'M/s.M.J.Associates' with
effect from 31.1.2007, for the sale of Sikkim and Bhutan lottery tickets
in the State of Kerala. Sri.Santiago Martin held 51% shares in the
partnership and the petitioner, 49%. The partnership continued till
13.6.2010. In the meanwhile, MLAL had changed its name to
M/s.Future Gaming Solutions India Private Limited. By yet another
agreement executed on 10.8.2009, the Government of Sikkim
appointed M/s.Future Gaming Solutions India Private Limited as the
sole purchaser and in furtherance of the criminal conspiracy, a clause
providing for fixed payment for the lottery tickets purchased by the
sole purchaser was included in the agreement. As per Rule 3(5) of the
Rules, paper lottery tickets and the stationary on which online lottery
tickets are issued should be printed by the organising State at the
Government Press and/or any other High Security Press included in the
panel of the Reserve Bank of India or the Indian Banks Association.
Contrary to the stipulation, the paper lottery tickets of Sikkim
Government were printed at M/s.Mahalakshmi Offset Printing Press,
Sivakasi, which is not a Government Press or a High Security Press
included in the panel of the Reserve Bank of India or the Indian Banks
Association. Rule 4(5) was alleged to have been violated, by the
distributor failing to return the unsold tickets to the organising State
with full accounts along with challans of the money deposited in the
public ledger account or in the consolidated fund of the organising
State. It was alleged that Section 4(d) stood violated by the
distributor/sole purchaser failing to remit the entire proceeds from the
sale of lottery tickets in Kerala, with the Government of Sikkim.
According to the prosecution, the sales bill raised by the Government
of Sikkim for the period from 1.4.2009 to 31.3.2010 and as per the
MRP of the tickets sold for the period from 1.4.2010 to 31.8.2010 was
Rs.4,970.42 crores against which, M/s.Future Gaming Solutions India
Private Limited remitted only Rs.142.93 crores. Section 4(f) of the Act
was also violated by not remitting the unclaimed prize money with the
organising State. The relevant portion of Charge-1 of the final report
reads as under;
"Thus the accused persons A-1 to A-7 by way of non
remittance of sale proceeds to the Sikkim Government, non
remittance of unclaimed/undisbursed prize money back to the
Sikkim Government, printing of Sikkim Lottery tickets from a
non security press not empanelled by RBI/IBA, not returning the
unsold tickets back to the Sikkim Government, not returning
undisbursed prize amounts to the Sikkim Government and
manipulation of data showing unsold prize winning tickets as
sold and claiming the same from Sikkim Government, and
cheating the Government of Sikkim by entering into an
agreement containing covenants contrary to the LR Act and
Rules and thus deceived the Sikkim Government in not
receiving the full sale proceeds of the lottery tickets and A-1 by
practically conducting the Sikkim Govt. Lotteries in the name of
M/s.FGSIPL, committed the offence punishable U/s.120B, 420
IPC r/w Section 4(d), 4(f), 7(3), 9 of Lotteries (Regulation) Act,
1998 and 3(5), 4(5) of Lotteries (Regulation) Rules, 2010."
3. Charge-8, being the specific charge against the petitioner, is
extracted here under;
"That A-5 Shri N Jayamurugan, Partner of M/s. MJ
Associates, Palakkad during 2007 to 2010 in furtherance of the
Criminal Conspiracy narrated in Charge No.1, sold and
distributed Sikkim Lottery tickets violating Section 4(d) of the
Lotteries (Regulation) Act, 1998; Section 4(f) of the Lotteries
(Regulation) Act, 1998 that the prize money unclaimed within
such time as may be prescribed by the State Government or
not otherwise distributed, shall become the property of that
Government; during 1-4-2010 to 31-8-2010 Rule 3(5) of the
Lotteries (Regulation) Rule, 2010 that the paper lottery tickets
and the stationery on which the online lottery tickets are issued
shall be printed by the organising state at a Government press
or any other high security press included in the panel of
Reserve Bank of India or The Indian Banks' Association,
Mumbai; during 1-4-2010 to 31-8-2010 Section 4(5) of the
Lotteries (Regulation) Rule that the distributors or selling
agents shall return the unsold tickets to the Organising States
with full accounts along with the challans of the money
deposited in the Public Ledger Account or in the Consolidated
Fund of the Organising State through the sale of tickets and
thereby committed offence punishable section 7(3) of Lotteries
(Regulation) Act, 1998."
4. The petitioner entered appearance in the case and thereafter
submitted an application seeking discharge under Section 239 of
Cr.P.C. By Annexure A7 order the jurisdictional Magistrate discharged
the petitioner of the charges under Sections 4(d) and 4(f) of the Act
and Rule 4(5) of the Rules. As regards the offences under Section 9
read with Section 7(3) of the Act, it was held that the question can be
considered only at the time of trial and it would be premature to
conclude that the Sections are not attracted. Likewise, the question as
to whether the offence under Rule 3(5) is attracted or not was also
held to be a matter for evidence, to be decided after full fledged trial.
5. Aggrieved by Annexure A7, the petitioner as well as the
prosecution preferred revision petitions. By Annexure A13, the learned
Sessions Judge partly allowed the revision filed by the prosecution
(Crl.R.P.No.26 of 2016) and dismissed the revision filed by the
petitioner (Crl.R.P.No.27 of 2016). The learned Sessions Judge held
that, in addition to the charges under Section 9 read with Section 7(3)
of the Act, Rule 3(5) of the Rules and Section 120B IPC, charge ought
to be framed for the offence punishable under Section 420 IPC also.
6. Learned Senior Counsel appearing for the petitioner assailed
the finding that charge has to be framed against the petitioner for the
offence under Section 3(5) read with Sections 9 and 7(3) of the Act on
the ground that Section 7 of the Act, which is the penal provision, does
not make contravention of the provisions of the Rules punishable.
Attention was drawn to Section 7(1), which reads as under;
"7. Penalty.- (1) Where a lottery is organised,
conducted or promoted after the date on which this Act
receives the assent of the President, in contravention of the
provisions of this Act, by any Department of the State
Government, the Head of the Department shall be punishable
with rigorous imprisonment for a term which may extend to
two years or with fine or with both;
Provided that nothing contained in this section shall
render such Head of the Department liable to any punishment
if he proves that the contravention was committed without his
knowledge or that he exercised all due diligence to prevent
the commission of such contravention."
7. It is submitted that in view of the settled legal position that
penal provisions are to be interpreted strictly, the petitioner cannot be
charged for alleged contravention of Rule 3(5). A chart containing the
penal provisions in different enactments, wherein violation of the Rules
and Regulations are made punishable, was made available to contend
that the Parliament had consciously omitted to make contravention of
the Rules punishable.
8. With regard to the finding in Annexure A13 that charge should
be framed for the offence under Section 420 read with Section 120B
IPC, it was contended that in so far as the Government of Sikkim has
no complaint of having been cheated of the sale proceeds legitimately
due to it, no charge under Section 420 will lie. Attention was invited to
Annexures A14 and A15 communications, by which the Government of
Sikkim had clarified that the sole distributor (A2) has deposited all the
Government revenues and all the charges due, as per the invoice
raised by the Directorate of Sikkim State Lotteries. It was pointed out
that the Government of Sikkim had even refused to give consent for
conducting CBI investigation against its officials. It was argued that,
going by the prosecution case, the agreements based on which the
sale of Sikkim lotteries commenced in Kerala were executed much
prior to the constitution of M/s.M.J.Associates, wherein the petitioner
figure as a partner with only 49% shares. It is the specific contention of
the learned Senior Counsel that there was no material before the court
to arrive at a finding of the petitioner being a party to the conspiracy
to cheat the Government of Sikkim.
9. Responding to the query of the court as to how the Crl.M.C is
maintainable, the original order having been challenged in revision,
the learned Senior Counsel argued that the bar under Section 397(3)
Cr.P.C against a second revision is not absolute and that under special
circumstances, the High Court can exercise its power under Section
482 Cr.P.C, even when a Crl.M.C is filed against an order dismissing a
revision filed under Section 397. In support of this proposition, the
learned Senior Counsel cited the following authorities; Krishnan and
Another v. Krishnaveni and Another [(1997)4 SCC 241] and
Shakuntala Devi and Others v. Chamru Mahto and Another
[(2009) 3 SCC 310].
10. It was contended that the courts below having committed a
gross illegality in finding the petitioner liable to be charged for the
offences Act, the Rules and the Indian Penal Code, interest of justice
demands that this Court exercise its inherent jurisdiction to prevent
the abuse of process of court.
11. The learned Standing Counsel for the CBI contended that the
scope of interference against an order dismissing an application for
discharge is minimal. According to the learned counsel, all that the trial
court was required to consider was whether the materials submitted
by the prosecution along with the final report were sufficient to create
grave suspicion of the accused having committed the alleged offences.
The trial court having arrived at such finding, which is affirmed by the
revisional court, there is no reason for this Court to entertain the
Crl.M.C, particularly when it amounts to a second revision. It was
contended that this Court cannot be called upon to decide matters
which the trial court should decide on the basis of evidence adduced
before it.
12. Section 397(3) Cr.P.C interdicts the entertainment of further
application by a person who has already filed a revision under Section
397 either to the High Court or the Sessions Court. In Krishnan and
Another (supra), the Apex Court found that, in view of the bar under
Section 397(3), a person cannot ordinarily be allowed to take recourse
to the High Court under Section 397(1) or the inherent power under
Section 482. But, relying on Sections 401 and 483, under which the
High Court has suo motu power of revision and continuous supervisory
jurisdiction, it was held that when the High Court on examination of
the record finds that there is grave miscarriage of justice or abuse of
the process of the courts or that the required statutory procedure has
not been complied with or there is failure of justice or that the order
passed or the sentence imposed by the Magistrate requires correction,
it is the duty of the High Court to have it corrected at the inception,
lest grave miscarriage of justice would ensue. Hence, it was held that,
to meet the ends of justice or to prevent abuse of the process, the
High Court is preserved with inherent power and be justified exercising
the inherent power in appropriate cases. It was made clear that such
power should be exercised sparingly so as to avoid needless
multiplicity of procedure, unnecessary delay in trial and protraction of
proceedings. The same view was taken by the Honourable Supreme
Court in Shakuntala Devi and Others (supra), the relevant portion
of which is extracted hereunder;
"24. It is well settled that the object of the introduction of
sub-section (3) in Section 397 was to prevent a second revision
so as to avoid frivolous litigation, but, at the same time, the
doors to the High Court to a litigant who had lost before the
Sessions Judge were not completely closed and in special cases
the bar under Section 397(3) could be lifted. In other words, the
power of the High Court to entertain a petition under Section
482, was not subject to the prohibition under sub-section (3) of
Section 397 of the Code, and was capable of being invoked in
appropriate cases. Mr Sanyal's contention that there was a
complete bar under Section 397(3) of the Code debarring the
High Court from entertaining an application under Section 482
thereof does not, therefore, commend itself to us."
Therefore, despite the prohibition under Section 397(3), this Court can,
in appropriate cases and for the purpose of preventing abuse of
process of the court, entertain a second revision or exercise the
inherent power under Section 482.
13. The question is whether the instant case can be termed as an
appropriate case and the further proceedings against the petitioner to
be an abuse of process of court, warranting interference under Section
482, despite the bar under Section 397(3). In order to answer the
question, this Court has to consider the contentions put forth by the
learned Senior Counsel. The first contention is that the Act does not
provide for penalising a person for violation of the Rules. Section 7(3),
which is relied on for this purpose, is extracted hereunder;
7.Penalty.-
(1) xx xx
(2) xx xx
(3) If any person acts as an agent or promoter or
trader in any lottery organised conducted or promoted in
contravention of the provisions of this Act or sells,
distributes or purchases the ticket of such lottery, he shall
be punishable with rigorous imprisonment for a term
which may extend to two years or with fine or with both."
Even though at the first brush the argument is impressive, one cannot
view Section 7(3) in isolation. Section 3 of the Act prohibits the State
Governments from organising, conducting or promoting any lottery
except in the manner provided in Section 4, which prescribes the
conditions subject to which lotteries may be organised. As per Section
4(b), the State Government shall print the lottery tickets bearing the
imprint and logo of the State in such manner that the authenticity of
the lottery ticket is ensured. The manner in which the authenticity to
be ensured is prescribed in Rule 3(5) which is extracted hereunder;
"3. Organisation of Lottery.-
(1) xx xx
(5) The paper lottery tickets and the stationery on which
the online lottery tickets are issued shall be printed by the
Organising State at a Government Press or any other high
security press included in the panel of the Reserve Bank of
India or the Indian Banks' Association, Mumbai."
Being so, violation of Rule 3(5) by printing the lottery tickets in a press
other than a Government Press or any other High Security Press would
amount to violation of not only Rule 3(5) but also Section 4(b).
Understood in such manner, the failure of the Legislature to penalise
the violation of the Rules as per Section 7(3) is of no avail, as far as the
instant case is concerned.
14. The learned Sessions Judge rightly found the trial court to
have committed a mistake by holding that the charge does not
mention the offence under Section 420 IPC. The first charge, which is
general to all the accused, include the offence under Section 420. The
contention of the learned Senior Counsel is that the Government of
Sikkim having clarified that the amounts due to it has been paid by the
accused and having issued Annexure A15, stating that there are no
dues from the distributor and having even refused to grant consent to
the CBI to conduct investigation against its officials, the offence under
Section 420 will not be attracted. It is contended that the person
alleged to have been deceived being the Government of Sikkim, the
petitioner cannot be proceeded against for the offence of cheating, in
the absence of a complaint in that regard from the Government of
Sikkim.
15. I find it difficult to accept the contention. Other than the
Government of Sikkim, the Government of Kerala and the accused, the
major stakeholders are the public who have purchased the tickets
under the belief that the lottery was being conducted strictly in
accordance with the provisions of the Act and the Rules. By conducting
the lottery in violation of the provisions, the public, who spent money
for purchasing the lottery tickets, was deceived. Therefore, irrespective
of the fact that the Government of Sikkim has no complaint, the
offence under Section 420 is attracted. Moreover, if during the course
of trial, it is found that the officials with the Government of Sikkim are
also part of the conspiracy, the trial court can exercise its power under
Section 319 to proceed against those persons also.
16. The substantial contentions urged by the learned Senior
Counsel having been answered as above, there is no special
circumstance in this case which compels this Court to entertain a
second revision and grant relief, in exercise of the inherent power
under Section 482 Cr.P.C.
For the aforementioned reasons, the challenge against the
impugned orders fail and consequently, the Crl.M.C is dismissed.
Sd/-
V.G.ARUN, JUDGE
vgs
APPENDIX
PETITIONER'S/S EXHIBITS:
ANNEXURE A1 THE TRUE COPY OF THE CONSOLIDATED FINAL
REPORT SUBMITTED BY THE RESPONDENT IN
R.C.NO.11(S)/2011 CBI/ACB/COCHIN,
R.C.NO.13(S)/2011 CBI/ACB/COCHIN,
R.C.NO.16(S)/2011 CBI/ACB/COCHIN,
R.C.NO.20(S)/2011 CBI/ACB/COCHIN,
R.C.NO.21(S)/2011 CBI/ACB/COCHIN,
R.C.NO.22(S)/2011 CBI/ACB/COCHIN,
R.C.NO.9(S)/2011 CBI/ACB/COCHIN BEFORE THE
HONOUABLE CHIEF JUDICIAL MAGISTRATE COURT,
ERNAKULAM.
ANNEXURE A2 A TRUE COPY OF THE DISCHARGE PETITION FILED
BY THE PETITIONER IN ANNEXURE A1 FINAL
REPORT DATED 8.7.2016, WHICH IS NUMBERED AS
C.M.P.NO.2201/2016 IN C.C.NO.218/2015, ON
THE FILES F CHIEF JUDICIAL MAGISTRATE
COURT, ERNAKULAM.
ANNEXURE A3 A TRUE COPY OF THE COUNTER FILED BY THE
RESPONDENT DATED 20.09.2017 IN ANNEXURE A2
DISCHARGE PETITION.
ANNEXURE A4 A TRUE COPY OF THE REJOINDER DATED
23.09.2017 AGAINST THE ANNEXURE A3 COUNTER
IN ANNEXURE A2 DISCHARGE PETITION.
ANNEXURE A5 TRUE COPY OF THE COUNTER TO THE RE-JOINDER
FILED BY THE RESPONDENT IN
C.M.P.NO.2201/2016 IN C.C.NO.218/15 DATED
4.10.2017.
ANNEXURE A6 TRUE COPY OF THE WRITTEN SUBMISSIONS FILED
BY THE PETITIONER BEFORE THE CHIEF JUDICIAL
MAGISTRATE COURT, ERNAKULAM IN ANNEXURE A2
DISCHARGE PETITION.
ANNEXURE A7 TRUE COPY OF THE ORDER PASSED BY THE CHIEF
JUDICIAL MAGISTRATE COURT, ERNAKULAM IN
C.M.P.NO.2201/2016 IN C.C.NO.218/15 DATED
20.01.2018.
ANNEXURE A8 THE TRUE COPY OF THE CRL. R.P.NO.26/2018
FILED BY THE RESPONDENT BEFORE THE HON'BLE
SESSIONS COURT, ERNAKULAM.
PETITIONER HEREIN IN R.P.NO.26/2018 ON THE
FILE OF ADDITIONAL SESSIONS COURT,
ERNAKULAM.
ANNEXURE A10 THE TRUE COPY OF THE CRL. R.P.NO.27/2018
FILED BY THE PETITIONER BEFORE THE SESSIONS
COURT, ERNAKULAM.
ANNEXURE A11 THE TRUE COPY OF THE OBJECTION FILED BY THE
RESPONDENT HEREIN IN CRL.R.P.NO.27/2018
(ANNEXURE A8), DATED 14.10.2018.
ANNEXURE A12 THE TRUE COPY OF THE CMP NO. 2435/2019 IN
CRL. RP. NO.27/2018 (ANNEXURE A8) ON THE
FILES OF ADDITIONAL SESSIONS COURT,
ERNAKULAM TO RAISE ADDITIONAL GROUNDS.
ANNEXURE A13 THE TRUE COPY OF THE COMMON ORDER PASSED BY
THE VITH ADDITIONAL SESSIONS COURT,
ERNAKULAM IN CRL. R.P.NO.26/2018 AND
CRL.R.P.NO.27/2018 DATED 26.02.2020.
ANNEXURE A14 A TRUE COPY OF THE PUBLIC NOTICE ISSUED BY
JOINT SECRETARY, SIKKIM STATE LOTTERIES,
GOVERNMENT OF SIKKIM DATED 25.09.2020
BEARING NO.FIN/DSSL/III/404/24.
ANNEXURE A15 A TRUE COPY OF THE PUBLIC NOTICE ISSUED BY
JOINT SECRETARY, SIKKIM STATE LOTTERIES,
GOVERNMENT OF SIKKIM DATED 25.09.2020
BEARING NO.FIN/DSSL/III/404/25.
ANNEXURE A16 A TRUE COPY OF THE LOTTERIES (REGULATION)
ACT 1998.
ANNEXURE A17 A TRUE COPY OF THE LOTTERIES (REGULATION)
RULES 2010.
ANNEXURE A18 A TRUE COPY OF THE PROCEEDINGS OF THE
JUDICIAL MAG. COURT, ERNAKULAM DATED
04.12.2020.
