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M.C Gupta v. Central Bureau Of Investigation, Dehradun .
Factual and Procedural Background
M.C. Gupta, an Assistant Divisional Manager of New India Assurance Company Ltd., was authorised to operate the Company’s account with Punjab National Bank, Moradabad. On 9 July 1988 he issued a Company cheque for ₹1,00,200, obtained a bank draft for ₹1,00,000 in favour of M/s. Mohan Dal Mill, and personally collected the draft. The draft was sent to his relative, Mohan Lal Gupta (proprietor of the beneficiary firm), who deposited it in the firm’s State Bank of India account at Orai on 14 July 1988. The prosecution alleged that the two appellants colluded to misappropriate public money belonging to the Company.
An FIR dated 19 February 1990 was registered by the CBI under Section 5(2) read with Section 5(1)(c) of the Prevention of Corruption Act, 1947 (“1947 Act”). After trial, the Special Judge (Anti-Corruption), Dehradun, convicted both appellants under Sections 120-B and 409 of the Indian Penal Code and Section 5(2)/5(1)(c) of the 1947 Act. The Uttarakhand High Court dismissed their appeals on 27 March 2012. The present appeals before the Supreme Court were filed by special leave.
Legal Issues Presented
- Whether criminal proceedings initiated after the repeal of the Prevention of Corruption Act, 1947, but in respect of offences committed while that Act was in force, are vitiated.
- Whether, in the alternative, the sentences imposed on the appellants should be reduced in view of repayment of the misappropriated amount, lapse of time, age and health considerations.
Arguments of the Parties
Appellants’ Arguments
- The 1947 Act stood repealed by the Prevention of Corruption Act, 1988 (“1988 Act”); therefore no FIR could lawfully be lodged under the repealed statute.
- Section 30 of the 1988 Act and Section 6 of the General Clauses Act, 1897 do not save proceedings where no investigative step had been taken prior to the repeal.
- Consequently, the entire prosecution is void and must be quashed.
- Alternatively, since ₹1,00,000 was repaid before registration of the FIR and more than two decades have passed, the sentence should be reduced to the period already undergone, relying on Satpal Kapoor and Shiv Nandan Dixit.
Respondent’s (CBI) Arguments
- The High Court’s judgment is correct; Section 30(2) of the 1988 Act, read with Section 6 of the General Clauses Act, preserves the validity of investigations, trials and convictions for offences committed under the repealed Act.
- No ground is made out for interference with either conviction or sentence.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Bansidhar v. State of Rajasthan (1989) 2 SCC 557 | Effect of repeal; when Section 6, General Clauses Act preserves pending or future proceedings. | Relied on to hold that repeal of the 1947 Act did not bar investigation or prosecution for pre-repeal offences. |
| CIT v. Shah Sadiq & Sons (1987) 3 SCC 516 | Accrued rights survive repeal unless expressly taken away. | Quoted to reaffirm that saving clauses are not exhaustive; accrued rights and liabilities survive. |
| Satpal Kapoor v. State of Punjab (1996) 11 SCC 769 | Basis for reducing sentence due to age and medical condition. | Considered while deciding whether to reduce appellant M.C. Gupta’s sentence. |
| Shiv Nandan Dixit v. State of U.P. (2003) 12 SCC 636 | Sentence reduction in light of long lapse of time and loss of employment. | Used as persuasive precedent on quantum of sentence. |
Court's Reasoning and Analysis
The Court examined Section 30 of the 1988 Act, which repealed the 1947 Act but preserved “anything done or any action taken” under the repealed statute, provided it was not inconsistent with the new Act. Even assuming no action had been taken before 9 September 1988 (the date the 1988 Act came into force), the Court held that Section 6 of the General Clauses Act independently saved the investigation and prosecution because:
- Clause (c) preserves liabilities incurred under the repealed enactment, thereby safeguarding the investigating agency’s right to act on offences already committed.
- Clause (e) expressly allows initiation and continuation of investigations and legal proceedings “as if the repealing Act had not been passed.”
- No “different intention” appears in the 1988 Act to displace these saving provisions.
The Court further invoked Article 20(1) of the Constitution, emphasising that an offender must be tried under the law in force at the time of the offence; applying the more stringent 1988 Act retrospectively would itself be impermissible. Consequently, charging the appellants under the 1947 Act was both valid and necessary.
On sentence, the Court considered the precedents cited, the passage of approximately 24 years, and the fact that appellant M.C. Gupta was about 70 years old and suffering from ailments. Balancing deterrence with humanitarian factors, only his sentence under Section 409 IPC was reduced from two years’ RI to one year; all other sentences and the fines remained intact. No reduction was granted to appellant Mohan Lal Gupta because he was the primary beneficiary of the misappropriation.
Holding and Implications
Holding: Convictions of both appellants under Sections 120-B and 409 IPC and Section 5(2) read with Section 5(1)(c) of the Prevention of Corruption Act, 1947 are AFFIRMED. The sentence of appellant M.C. Gupta under Section 409 IPC is reduced to one year’s rigorous imprisonment; all other sentences and fines are confirmed. Sentence of appellant Mohan Lal Gupta remains unchanged. Appeals are disposed of accordingly.
Implications: The decision reaffirms that repeal of a penal statute does not undermine prosecution for offences committed while the statute was operative, so long as the repealing legislation or Article 20(1) of the Constitution does not indicate otherwise. Although no new legal doctrine is created, the judgment provides authoritative guidance on the interplay between Section 30 of the 1988 Act and Section 6 of the General Clauses Act, and illustrates sentencing discretion in long-pending corruption matters.
Ranjana P. Desai, J.— Leave granted. These appeals, by special leave, are directed against the judgment and order dated 27-3-2012 Criminal Appeal No. 133 of 2006 (Old Criminal Appeal No. 2770 of 1999) delivered by the Uttarakhand High Court confirming the judgment and order of conviction and sentence dated 8-10-1999/25-10-1999 passed by the Special Judge, Anti-Corruption, U.P (East), Dehradun in CBI Case No. 3 of 1990, whereby the Special Judge convicted the appellants, inter alia, under the provisions of the Prevention of Corruption Act, 1947 (for short “the 1947 Act”).
2. It is necessary to narrate the facts of the case. Appellant, M.C Gupta was posted as Assistant Divisional Manager, New India Assurance Company Ltd. (for short “the Company”). He was authorised by the Company to operate its Account No. 314 held with Punjab National Bank, Civil Lines, Moradabad. Appellant, Mohan Lal Gupta was the proprietor of M/s Mohan Dal Mill. Account No. SSI/53 was held in the name of M/s Mohan Dal Mill with State Bank of India, Orai, District Jalaun, Uttar Pradesh.
3. On 9-7-1988, appellant M.C Gupta issued Cheque No. QDE-800186 in the sum of Rs 1,00,200 from the account of the Company and asked the bank to prepare a draft of Rs 1,00,000 in favour of M/s Mohan Dal Mill. Appellant M.C Gupta himself prepared the draft application dated 9-7-1988. The bank, accordingly, prepared a draft of Rs 1,00,000 on the same date and debited the amount of cheque from the account of the Company. Appellant M.C Gupta himself collected the said draft from the bank and sent it to his relative appellant Mohan Lal Gupta at Orai, who deposited the same on 14-7-1988 in the aforementioned account of M/s Mohan Dal Mill vide pay-in-slip dated 14-7-1988. Thus, appellant M.C Gupta, in collusion with appellant Mohan Lal Gupta, dishonestly and fraudulently misappropriated the Company's money, which is public money, for wrongful gain to appellant Mohan Lal Gupta, thereby causing corresponding losses to the Company.
4. When the siphoning off of money came to light, an FIR was lodged on 19-2-1990 under Section 5(2) read with Section 5(1)(c) of the 1947 Act. After investigation, CBI submitted charge-sheet against both the appellants before the Special Judge. After perusing the evidence, the Special Judge convicted and sentenced appellant M.C Gupta to RI for one year and a fine of Rs 1000 for offence under Section 120-B IPC. He was also sentenced to RI for two years and a fine of Rs 2000 for offence under Section 409 IPC. In addition, he was sentenced to RI for one year and a fine of Rs 1000 under Section 5(2) read with Section 5(1)(c) of the 1947 Act. Appellant Mohan Lal Gupta was sentenced to RI for one year and a fine of Rs 1000 for offence under Section 120-B IPC. He was also sentenced to RI for one year and a fine of Rs 1000 for offence under Section 409 IPC. He was also sentenced to RI for one year and a fine of Rs 1000 for offence under Section 5(2) read with Section 5(1)(c) of the 1947 Act read with Section 120-B IPC. All sentences were to run concurrently. In default of payment of fine, the appellants were to undergo imprisonment for six months.
5. Being aggrieved by the order of conviction and sentence, both the appellants filed separate appeals to the High Court. As we have already noted, by the impugned order Criminal Appeal No. 133 of 2006 (Old Criminal Appeal No. 2770 of 1999), the appeals were dismissed by the High Court and, hence, the present appeals.
6. The basic submission of Mr Amarendera Sharan and Mr S.K Dubey, learned Senior Counsel for the appellants is based on the fact that the 1947 Act stood repealed by the Prevention of Corruption Act, 1988 (for short “the new Act”). The alleged crime took place between 9-7-1988 and 14-7-1988 and FIR was lodged in respect of the same on 19-2-1990 alleging offences under the 1947 Act. The counsel submitted that FIR could not have been lodged for the offences punishable under the 1947 Act, which stood repealed by the new Act. It was urged that in fact, by reason of repeal, proceedings under the 1947 Act stand obliterated. In this connection, our attention was drawn to Section 30 of the new Act. Sub-section (1) of Section 30 thereof provides for repeal and saving. It states that the 1947 Act stands repealed. It was pointed out that sub-section (2) of Section 30 of the new Act states that notwithstanding such repeal, but without prejudice to the application of Section 6 of the General Clauses Act, 1897 (for short “the GC Act”), anything done or any action taken or purported to have been done or taken under or in pursuance of the Acts so repealed shall, insofar as it is not inconsistent with the provisions of the new Act be deemed to have been done or taken under or in pursuance of the corresponding provisions of the new Act.
7. The counsel pointed out that nothing was done or no action was taken in pursuance of the 1947 Act and, therefore, there was no question of coming to a conclusion that any action taken could be deemed to have been taken under the provisions of the new Act. Since no action was taken under the 1947 Act, there was no question of saving it. The counsel also drew our attention to Section 6 of the GC Act which speaks about the effect of repeal. The counsel submitted that the instant case is not covered by any of the sub-clauses of Section 6 of the GC Act so as to come to a conclusion that any investigation, legal proceeding or remedy may be instituted, continued or enforced or any penalty or punishment may be imposed as if the repealing Act had not been passed.
8. The counsel submitted that, in the circumstances, the entire prosecution is vitiated and, hence, it is necessary for this Court to quash the proceedings and set the appellants free. Alternatively, the counsel submitted that since the amount of Rs 1,00,000 was repaid by the appellants before 19-2-1990 i.e even before the FIR was lodged, this Court should reduce the sentence of the appellants to the sentence already undergone by them. In support of this submission, the counsel relied on Satpal Kapoor v. State of Punjab (1996) 11 SCC 769 and Shiv Nandan Dixit v. State of U.P (2003) 12 SCC 636 Mr Chandhiok, learned Additional Solicitor General, for CBI supported the impugned judgment Criminal Appeal No. 133 of 2006 (Old Criminal Appeal No. 2770 of 1999).
9. We are unable to accept the submissions of the learned counsel for the appellants. It is true that according to the prosecution, the alleged offence took place between 9-7-1988 and 14-7-1988. The new Act came into force on 9-9-1988. The FIR was registered against the appellants, inter alia, for the offences punishable under the 1947 Act. Charges were framed against the appellants, inter alia, under the provisions of the 1947 Act and the appellants were tried and convicted as aforesaid.
10. Since the repeal of 1947 Act is the major plank of the appellants' submissions, it is necessary to quote Section 30 of the new Act which repealed the 1947 Act. It reads thus:
“30. Repeal and saving.—(1) The Prevention of Corruption Act, 1947 (2 of 1947) and the Criminal Law Amendment Act, 1952 (46 of 1952) are hereby repealed.
(2) Notwithstanding such repeal, but without prejudice to the application of Section 6 of the General Clauses Act, 1897 (10 of 1897), anything done or any action taken or purported to have been done or taken under or in pursuance of the Acts so repealed shall, insofar as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken under or in pursuance of the corresponding provision of this Act.”
Sub-section (1) of Section 30 makes it clear that the 1947 Act has been repealed. Sub-section (2) of Section 30 of the new Act says that anything done or any action taken or purported to have been done or taken under or in pursuance of the repealed Acts insofar as it is not inconsistent with the new Act, shall be deemed to have been done or taken in pursuance of the new Act. Thus, a deeming fiction is introduced so far as action taken under the repealed Act is concerned.
11. Sub-section (2) of Section 30 keeps the application of Section 6 of the GC Act intact and if a situation is not covered by Section 30, resort to Section 6 of the GC Act is open. Section 6 of the GC Act reads thus:
“6. Effect of repeal.—Where this Act, or any Central Act or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not—
(a) revive anything not in force or existing at the time at which the repeal takes effect; or
(b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder; or
(c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or
(d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or
(e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid;
and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the repealing Act or Regulation had not been passed.”
12. In this connection, we may usefully refer to the decision of this Court in Bansidhar v. State of Rajasthan (1989) 2 SCC 557 where this Court was dealing with the question whether the proceedings for fixation of ceiling area with reference to the appointed date i.e 1-4-1966 under Chapter III-B of the Rajasthan Tenancy Act, 1955 could be initiated and continued after the coming into force of the Rajasthan Imposition of Ceiling on Agricultural Holdings Act which with effect from 1-1-1973 repealed Section 5(6-A) and Chapter III-B of the Rajasthan Tenancy Act, 1955. While dealing with this question, this Court observed that:
“21. When there is a repeal of a statute accompanied by re-enactment of a law on the same subject, the provisions of the new enactment would have to be looked into not for the purpose of ascertaining whether the consequences envisaged by Section 6 of the General Clauses Act ensued or not … but only for the purpose of determining whether the provisions in the new statute indicate a different intention.”
This Court further observed that:
“28. A saving provision in a repealing statute is not exhaustive of the rights and obligations so saved or the rights that survive the repeal.”
This Court quoted a paragraph from its judgment in CIT v. Shah Sadiq & Sons (1987) 3 SCC 516. It reads thus: (Bansidhar case (1989) 2 SCC 557)
“28. … ‘15. … In other words, whatever rights are expressly saved by the “savings” provision stand saved. But, that does not mean that rights which are not saved by the “savings” provision are extinguished or stand ipso facto terminated by the mere fact that a new statute repealing the old statute is enacted. Rights which have accrued are saved unless they are taken away expressly. This is the principle behind Section 6(c), General Clauses Act, 1897.’ (Shah Sadiq & Sons case (1987) 3 SCC 516)”
13. Thus assuming that the proceedings under the 1947 Act initiated against the appellants cannot be saved by Section 30(2) of the new Act because no action was taken pursuant to the 1947 Act, prior to coming into force of the new Act, saving clause contained in Section 30 is not exhaustive. Section 6 of the GC Act can still save the proceedings.
14. Viewed from this angle, clauses (c) and (e) of Section 6 of the GC Act become relevant for the present case. Sub-clause (c) says that if any Central Act repeals any enactment, the repeal shall not affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed. In this case, the right which had accrued to the investigating agency to investigate the crime which took place prior to the coming into force of the new Act and which was covered by the 1947 Act remained, unaffected by reason of clause (c) of Section 6. Clause (e) says that the repeal shall not affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment and Section 6 further states that any such investigation, legal proceeding or remedy may be instituted, continued or enforced and such penalty, forfeiture or punishment may be imposed as if the repealing Act had not been passed. Therefore, the right of CBI to investigate the crime, institute proceedings and prosecute the appellants is saved and not affected by the repeal of the 1947 Act. That is to say, the right to investigate and the corresponding liability incurred are saved. Section 6 of the GC Act qualifies the effect of repeal stated in sub-clauses (a) to (e) by the words “unless a different intention appears”. Different intention must appear in the repealing Act (see Bansidhar (1989) 2 SCC 557). If the repealing Act discloses a different intention, the repeal shall not result in situations stated in sub-clauses (a) to (e). No different intention is disclosed in the provisions of the new Act to hold that the repeal of the 1947 Act affects the right of the investigating agency to investigate offences which are covered by the 1947 Act or that it prevents the investigating agency from proceeding with the investigation and prosecuting the accused for offences under the 1947 Act. In our opinion, therefore, the repeal of the 1947 Act does not vitiate or invalidate the criminal case instituted against the appellants and the consequent conviction of the appellants for offences under the provisions of the 1947 Act.
15. There is no substance in the contention that the appellants could not have been charged under the provisions of the 1947 Act after its repeal. As we have already noted, the offence is alleged to have been committed prior to the coming into force of the new Act. When the offence was committed, the 1947 Act was in force. It is elementary that no person shall be convicted of any offence except for violation of a law in force at the time of commission of the act charged as an offence nor can he be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence. Article 20(1) of the Constitution of India is clear on this point. The appellants were, therefore, rightly charged, tried and convicted under the provisions of the 1947 Act. We may also note that the provisions of the new Act are more stringent than the provisions of the 1947 Act. The appellants cannot, therefore, be said to have been prejudiced.
16. So far as the merits of the case are concerned, in our opinion, the guilt of the appellants is clearly established and, hence, no interference is necessary with the impugned judgment Criminal Appeal No. 133 of 2006 (Old Criminal Appeal No. 2770 of 1999) of the High Court which has confirmed the conviction and sentence of the appellants.
17. That takes us to the arguments on quantum of sentence. In Satpal Kapoor (1996) 11 SCC 769, the appellant therein was charged, inter alia, under Section 5(2) of the 1947 Act. He was an angina patient, suffering from coronary diseases requiring medical attention. He was 60 years of age. Considering these facts, his sentence was reduced to four months' simple imprisonment.
18. In Shiv Nandan Dixit (2003) 12 SCC 636, the appellants therein were charged, inter alia, under Section 5(1)(c) read with Section 5(2) of the 1947 Act. While considering the quantum of sentence, this Court took into account the fact that the incident had taken place nearly 23 years ago. Considering the fact that the appellants therein had lost their jobs and retiral benefits; that the prolonged litigation had caused considerable loss to them and that they had crossed 60 years of age, this Court reduced the sentence of one year RI to a period of six months' RI.
19*. In this case, so far as appellant M.C Gupta is concerned, he is about 70 years old and is stated to be suffering from various ailments. The crime in question took place about 24 years ago. In the circumstances, we are of the opinion that his sentence of two years' RI for offence under Section 409 of IPC should be reduced to one year's RI and is accordingly reduced. Rest of the sentences awarded to him shall remain intact. So far as appellant Mohan Lal Gupta is concerned, he has been sentenced to one year's RI for offence under Section 5(2) read with Section 5(1)(c) of the 1947 Act. Considering the fact that he was the beneficiary of the dishonest and fraudulent misappropriation of the Company's money, we are not inclined to reduce his sentence. We clarify that the sentence of fine imposed on both the appellants is confirmed. The appeals are disposed of in the aforestated terms.
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