K.T.M.S. MOHD. AND ANR. versus UNION OF INDIA

Citation: [1992] 2 S.C.R. 879 · Decided: 28-04-1992 · Supreme Court of India · Bench: S. RATNAVEL PANDIAN · Disposal: Appeal(s) allowed
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Judgment (excerpt)

K.T.M.S. MOHD. AND ANR. 
A 
v. 
UNION OF INDIA 
APRIL 28, 19112 
(S. RATNA VEL PANDIAN AND M. FATHIMA BEEVI, JJ.J 
B 
Indian Penal Code, 1860 : 
S.193--Perjury-Prosecution for-lnculpatory statement given to officer 
of Enforcement department under s.39 of FERA subsequently retracted stating 
it as involuntary and obtained by inducement and threat-Allegation of false C 
statement given later to I.T.0.-Prosecuting authority to apply its mind as to 
whether inculpatory statement was voluntary and, not obtained by inducement 
·and threat and whether it was given in a judicial proceeding-Prosecution tC' 
be taken only if expedient in the interest of justice. 
S.120-B--Conspiracy-Can be infe"ed from direct or circumstantial 
evidence-Agreement between conspirators need not be directly proved. 
Foreign Exchange Regulation Act, 1973: 
D 
Ss.39, 40-'Judicial proceeding'-Statement must be recorded by a E 
Gazetted Officer to bring it within the ambit of 'iudicial proceeding'. 
Nature of proceedings-Quasi criminal-Statements falling within the 
ambit of Judicial proceeding' to be examined only quo the provisions of the 
FERA and not with reference to I. T. Act. 
Evidence Act, 1872 
S.24-Statement recorded by Enforcement Officer under FERA in ex-
ercise of power as a Custom Officer--Evidentiary value of-Whether bar to 
admissibility would apply@statement is obtained·by inducement and threat. 
Income Tax Act, 1961 
S.277~alse statement in verijication-Assessee found in posses~ion of 
F 
G 
a large sum of money-lnculpatory statement to officer of Enforcement 
Dire.ctorate subsequently retracte~Statement to LT.O. in assessment 
proceedings deny(i.i~ .connection with money seized-l'rosecution for.giving H 
879 
880 
SUPREME COURT REPORTS 
(1992) 2 S.C.R. 
A false statemen~ecision of Income Tax Appellate Tribunal in assessment 
proceedings exonerating assessee and. holding that money did not belong to 
him and s.69 had no application-Whether can be considered while deciding 
criminal liability. 
B 
Code of Criminal Procedure, 1973 
Ss. 195, 34<>-0iminal proceedings for giving false evidence in assess-
ment proceedings-Courts to take care and caution before taking action 
against deponent-Result of proceedings under I. T. (f.ct to be given due regard. 
C 
S.223-Misjoinder of charges and misjoinder of parties-Accused joint-
ly charged of having conspired to commit offence ·under · I. T. Act.~oint 
Trial-No specific allegations or acceptalJle evidence to connect different 
accused with activities of each other-Whether amounted to a mere ir-
regularity or occasioned f aifure of justice. 
D 
E 
F 
The Enforcement Directorate, Madras, OD receipt or infonnation 
that appellant-I was engaged in illegal disbursement of money, raided his 
premises on 19.10.1966 and recovered a sum of Rs. 4,28,713. On the same 
day appellant-I and his brother-in-law appellant-2 were interrogated by 
Enforcement Officers. Appellant-I in his statement Ext. P. 39 admitted 
that he received a sum of Rs. 6 lakh from a person of Bombay on the 
previous day for being dis.bursed to various parties; that Rs. 48,000 were 
paid to accused No. S and Rs. ·so,ooo to another person; and that the 
amounts were disbursed in compliance of instructions received from · 
abroad. Appellant-2 in his statement Ext. P. 40 admitted the receipt of the 
amount by appellant-I and disbursement of the sum in compliance of bis 
instructi9ns. Accused No. S, when examined, admitted the receipt of Rs. 
49,000 for being disbursed as per the details given in certain sheets of 
paper available with him. 
On 20.10.1966 both the appellants sent their retraction to the deputy 
G Director of Enforcement Direct.orate through their Advocate stating that 
their statements Ext. P. 39 and P. 40 were not voluntary but obtained under 
threat and force and were bereft·oftrutb. 
The Income-Tax · Officer, on coming to know of the raid, issued 
summons to appellant-I who was an assessee and recorded bis statement 
H (Ext. P. 3) on 16.11.1966. Appellant-I denied or having any connection with 
·~· 
K.T.S. MOHD. v. U.0.1. 
881 
the cash of Rs. 4,28,780 recovered from his premises and reiterated that A 
the statement by the Enforcement Officer was taken under force. Appel-
lant-2 also gave a similar statement Ext. P. 73 on 11.1.1974. Accused No. 
5 also denied to have received any money. 
Meanwhile the appellant in Criminal appeal No. 6.12 of 1990 (third 
appellant) who was related to appellants 1 and 2, sent a lette
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