The Supreme Court recently overturned an order discharging the accused under Section 239 of the Code of Criminal Procedure (CrPC). The Court highlighted that the discharge was wrongly based on evidence presented by the defence, instead of considering the materials provided by the prosecution.
A bench comprising Justices Pankaj Mithal and SVN Bhatti made it clear that it is not legally permissible to rely on defence materials when deciding a plea for discharge under Section 239 CrPC. The Supreme Court set aside the Andhra Pradesh High Court’s decision, which had confirmed the Special Court’s order of discharging the accused based on defence documents that contradicted the prosecution's case.
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The case was a criminal appeal filed by the Central Bureau of Investigation (CBI). It involved several accused in a fraud case linked to the procurement of cotton under the Minimum Support Price (MSP) scheme. The accused were alleged to have conspired to buy cotton at low market rates, hoard it, and later sell it to the Cotton Corporation of India (CCI) at higher MSP rates through benami farmers.
The prosecution claimed a wrongful loss to the CCI of ₹21.19 crore and wrongful gain to the accused. The charges included forgery, cheating, and criminal conspiracy under Sections 120-B (criminal conspiracy), 420 (cheating), 468 (forgery), and 471 (using forged documents) of the Indian Penal Code (IPC), along with offences under Sections 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988.
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Both the Special Court and the High Court discharged the accused under Section 239 CrPC. However, they heavily relied on a CCI letter submitted by the defence, which stated that no loss had occurred. This led the CBI to challenge the discharge orders before the Supreme Court.
The Supreme Court, while setting aside the lower courts' orders, observed:
“In clear terms and reasoning, the discharge has been ordered not by referring to any of the situations referred in Section 239 of the CrPC, but by relying on the documents made available by the accused. The procedure followed by the trial court and as confirmed by the High Court is patently illegal, and contrary to the binding precedent.”
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The Court noted that both the Special Court and the High Court effectively conducted a “mini-trial” by evaluating the merits of the CCI’s claims and the defence’s version of events. The discharge was based on the CCI’s letter and other defence materials, which were extraneous to the prosecution’s evidence.
“The passing remark by the High Court in the common order that there is no material for cheating and forgery belies the existence of allegations and documents. The consideration of material, i.e., chargesheet and list of documents, in the background of allegations made against the accused is the available path for discharge by the Special Court and the High Court. But, a path unavailable to the special court and the High Court is the consideration of material invited at the instance of the defence for ordering discharge.”
The Court emphasized that the orders were based on the incorrect assumption that there was no loss to the CCI, citing the letter dated 31.01.2007. However, the prosecution had established that the case involved wrongful gains of ₹21.19 crore through conspiracy and forgery, causing harm to both the CCI and farmers.
Case Title: STATE VERSUS ELURI SRINIVASA CHAKRAVARTHI AND OTHERS
Appearance:
For Petitioner(s) Mr. K M Nataraj, A.S.G. (N.P.) Ms. Rukhmini Bobde, Adv.(argued by) Mr. Mukesh Kumar Maroria, AOR Mr. Anuj Srinivas Udupa, Adv. Ms. Vanshaja Shukla, Adv. Mr. Ashok Panigrahi, Adv. Ms. Seema Patnaha, Adv.
For Respondent(s) Mr. Shoeb Alam, Sr. Adv.(argued by) Ms. Mahima Pandey, Adv. Mr. Mullapudi Rambabu, Adv. M/S. M. Rambabu And Co., AOR Mr. Shoeb Alam, Sr. Adv. Mr. Rajat Singh, AOR Mr. Sarthak Chandra, Adv. Mr. Dev Sareen, Adv. Mr. K V Girish Chowdary, Adv. Mr. D Satya Sumanth, Adv. Ms. Tatini Basu, AOR
