Holding

The Supreme Court held that there was reasonable ground to believe the respondent was a conspirator and set aside the discharge, directing that the trial proceed against her.

Summary

The State of Tamil Nadu alleged that former Chief Minister J. Jayalalitha conspired with ten others to import coal at inflated prices, causing a loss of about Rs 6.5 crore. The Special Judge discharged her, finding the record insufficient to frame a charge, and the Madras High Court affirmed that order. On appeal, the Supreme Court examined whether, at the charge‑framing stage, there was reasonable ground to believe she participated in the conspiracy under Section 10 of the Evidence Act. The Court held that the material, including warnings from senior officials and the Chief Minister’s own letters, showed she was aware of the implications and could not be presumed unaware. Consequently, the discharge was set aside and the trial was ordered to continue, with provisions for her representation in court. The appeal was allowed.

Issues considered

Whether at the charge‑framing stage the court may presume the accused's participation in a criminal conspiracy under Section 10 of the Evidence Act.
Whether the absence of certain pages in the file defeats the presumption of the Chief Minister's knowledge of objections.
Whether the Special Judge erred in discharging the accused on the ground of insufficient material.
Whether the presumption of guilt is rebuttable and the accused must be given an opportunity to defend herself.

Legislation cited

Code of Criminal Procedure, 1973s. 227, s. 239, s. 245
Indian Evidence Act, 1872s. 10
Indian Penal Code, 1860s. 120-B, s. 409
Prevention of Corruption Act, 1988s. 13(2)

Subjects

criminal conspiracycharge framingdischarge of accusedpresumption of guiltSection 10 Evidence Actpolitical corruptioncoal import scandalappeal

Judgment

STATE OF TAMIL NADU A
11.

J. JAY ALALITHA

MAY 9, 2000

B
[K.T. THOMAS AND R.C. LAHOTI, JJ.]

Criminal Procedure Code, 1973-Sections 227,239 and 245-
Discharge-Accused allegedly entered into criminal conspiracy to import
coal causing huge losses to the Stat<r-lmport was made inspite of strong C
objections by fhe bureaucracy, Central Government and other high officials-
Special Judge discharged accused as material on record was found insufficient
to frame a charge-High Court upheld order of discharge-On appeal, Held,
it cannot be decided at this premature stage that accused was unaware of
the serious implications, which were brought to her notice-Exercise at this D
stage should be confined to considering the police report and documents in
order to ascertain whether the allegations are groundless or whether a
rebuttable presumption of guilt can be raised-Order of discharge set aside
and trial to continue-Penal Code, 1860----Section 120-B and section 409-
Prevention of Corruption Act, 1988--Section 13(2).
E
Evidence Act, 1872--Section IO-Relevancy offact-Court should have
material to believe participation of accused in conspiracy and only then
whatever was said, done or written by the accused would be relevant-
Relevant material to be considered to decide whether there is a reasonable
ground to believe participation of accused in the conspiracy even at the
stage offraming charges. F

Respondent, a former Chief Minister, along with 10 others, was accpsed
of entering into a criminal conspiracy to import coal in order to obtain
personal pecuniary advantages, causing huge losses to the State. The
Government Secretary (PWD) had raised strong objections against the G
acceptance of tender regarding the said import but they could not reach the
respondent as the relevant pages were removed from the file. The Union
Minister for Coal and many other high officials also discouraged this import
as it was neither urgent nor qualitative but inspite of all these, the deal was
made.
H
23
24 SUPREME COURT REPORTS [2000] SUPP. I S.C.R.

A Special Judge discharged the respondent, as the materials shown on
record were insufficient to fram4~ a charge. High Court in revision did not
interfere with the order. Hence this appeal.

Appellant contended that the materials and circumstances were _,
sufficient to bring home the guilt of the respondent, that such a conspiracy
B could not have been hatched without the direct, active and positive involvement
of the respondent; that the Government Secretary, Union Coal Minister and
many other high officials had expressed their displeasure inspite of which
the deal was made; and that it was an impossibility that such material could
have escaped Iner attention.
c Respondent contended that there was nothing on record to connect h~r
with the conspiracy; that the sheets containing adverse remarks were absent
from the file and she was herself in dark; and that action was taken on the
proposals and recommendations submitted by departmental heads and high
officials in the bureaucracy.
D
Allowing the appeal, the Court

HELD: I. The question of using anything said, done on written by any
F
one of such conspirators arise only if the facts would help to sustain the first
limb of Section 10 of the Evidence Act, 1872 i.e. there is reasonable ground
E to believe that two or more persons have conspired together to commit an'
offence. Unless the court has some materials to believe that the respondent is,
one of those persons referred to in the first limb of the section, any
consideration for what was said, done or written would not be relevant fact as
against each of the conspirators. It is open to the court, even at this stage, to
consider the materials relating to what was said, done or written with
F reference to the common intention b1!tween the accused for the purpose of
· deciding whether there is reasonable ground to believe that the said accused
would have been one oftbe conspiratoirs. (30-D-E)

State v. Na/ini, (1999) 5 SCC 253, relied on
G 2. It is pertinent to point out that all the materials were included in the
file which was submitted to the respondent. There is no case for the respondent
that they were not in that file when she scrutinised it nor is it anybody's case
..
that those warnings were included only in the missing sheets. If she came to
know of these prompt warnings and despite them accorded her green signal
H to import the coal, then it cannot be concluded at this premature stage that
.--
""
STATE OF TAMIL NADU v. J. JAYALALITHA [THOMAS, J.] 25
=·· she was not aware of the serious implications of the clandestine deal on the A
State exchequer. (34-D)

3. This is not the stage for weighing the pros and cons of all the
implications of the materials nor for sifting the materials presented by the
prosecution. The exercise at this stage should be confined to considering the
police report and the documents to decide whether the allegations against the B
accused are "groundless" or whether "there is ground for presuming that
the accused has committed the offences." Presumption therein is always
rebuttable by the accused for which there must be opportunity of participation
in the trial. [35-H; 36-A-B)

4. The Court should not have discharged the respondent at this C
premature stage. The Special Judge shall proceed against her as one of the
accused in the case, however, she may seek permission to dispense with her
presence in the trial court provided she agrees to abide by the conditions (i)
a counsel shall represent her whenever the case is taken up; (ii) she would
not dispute her identity as the particular accused in the case and (iii) she D
would be present on any day when her presence is required by the court. On
her failure to abide by these conditions it is open to the Special Judge to
revoke the above said benefits. (36-G-H; 37-Al

CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 452
~~- E
From the Judgment and Order dated 13 .1.2000 of the Madras High Court
in Crl. R.C. No. 575 of I 999.

Shanti Bhushan, V.R. Reddy, Anil B. Diwan, R. Mohan, R.
Shunrriughasundaram and V.G. Pragasam for the Appellant. F
Sushi! Kumar, K.V. Viswanathan, N. Jothi, Sanjay Jain, Kunwar Ajit
Mohan Singh, R.P. Wadhwani and K.V. Venkataraman for the Respondent.

The Judgment of the Court was delivered by
G
THOMAS, J. Leave granted.

The former Chief Minister of Tamil Nadu Ms. J. Jayala!itha was arraigned
before the court of a Special Judge, Chennai, along with IO others, depicting
her as the hub of a cabal for knocking off a huge slim of public money to
make vast pecuniary gains at the cost of the State exchequtr. The Special H
26 SUPREME COURT REPORTS [2000] SUPP. I S.C.R.

A Judge at the stage of framing charge felt that the materials shown to him were
insufficient to frame a charge against her and also against one of her fonner
cabinet colleagues (V.R. N~dunchezhian). So they were discharged by the
Special Judge, but a charge 11as been framed against the other nine accused
for criminal conspiracy to misa]ppropriate Government funds and other related
B offences. The State of Tamil Nadu challenged the aforesaid order of discharge
before the High Court of Madras in revision, but a learned Single Judge did
not interfere with the order. In the meanwhile V.R. Nedunchezhian has passed
away. This appeal is by the Sate as against Ms. Jayalalitha (respondent
herein) in challenge of the said order of the High Court.

C The substance of the police case is that during the period between
February 1992 and October 1993, all the above 11 accused and certain foreign
coal suppliers had entered into a criminal conspiracy to import coal for Tamil
Nadu Electricity Board(hereinafter referred to as the 'Electricity Board') for
such price as to obtain huge pecuniary advantage to themselves by causing
heavy and wrongful loss to the State to the tune of about 6. 5 crores of rupees.
D
There are three Thennal Power Stations in Tamil Nadu (at Ennore,
Mettur and Tuticorin) which generate electric power by using coal as fuel.
The annual requirement of coal for those three stations was about 12 million
metric tonnes of coal. As the stock position of coal in March 1992 appeared
E insufficient to meet the requirement a decision was taken to import at least
2 million metric tonnes of coal from foreign countries. The allegatiOII is that
such a decision was taken pursuant to a criminal conspiracy hatched by the
accused persons for obtaining huge pecuniary advantage. Pursuant to the
decision, tenders were invited from foreign suppliers of coal. On 10.3.1993,
tenders were opened, but only 11 of them were found to be in order. H¢wever,
F those bidders were asked to revise the price bid after adding three more
parameters, such as size, ash content and volatile matter. The idea: was to
facilitate import of inferior quality of coal at higher price by showing fav(>uritism
to certain coal suppliers of Indonesia, according to the allegation.

G The Government Secretary (PWD) raised strong objections against the
said tenders being accepted. A company based at Singapore (M/s. Counter
Corporation) made an offer to supply 6 lacs metric tonnes of coal at the rate
of 35.24 US Dollars. But it was rejected without even starting negotiation with
them. But the Electricity Board fixed the price of coal at 40.20 US Dollars per
metric ton and three Indonesian bidders were pennitted to supply coal at that
H price. Subsequently Mis. Counter Co..Poration (Singapore) was also asked to
STATE OF TAMIL NADU v. J. JAYALALITHA [THOMAS, J.) 27
supply coal at the increased price of 40.20 US Dollars per metric ton. A
The offences alleged against all the accused are Section I 20-B read with
Section 409 of IPC as well as Section 13(2) of the Prevention of Corruption
Act, 1988.

What persuaded the Special Judge to adopt the view that materials B
produced before him were insufficient to frame a charge against the respondent,
are briefly the following:

The strong objection raised by Government Secretary (Shri V. Sundaram)
against the proposal to import coal at such a high price would not have C
reached the notice of the respondent because it is an admitted position that
some crucial sheets in the Current File were removed and such sheets were
later added after obtaining approval from the Chief Minister. Special Judge
has made the following observations:

"It is not known as to how and. where and at what point of time the D
pages 223 to 226 and also the pages 21 to 32 were removed from the
Secretariat file (no.55360/U2/93). This part of the file only contains the
objections raised by Sundaram, objections in paras 21 to 32 are based
on the objections already raised in pages 223 to 246. I have carefully
gone through the materials placed before me to find out whether there
is anything to show that the file was intact with the pages containing E
the objections of Sundaram when the file reached the table of A 11 and
Al. The pages containing the objections of Sundaram pages 223 to
246 and pages· 21 to 32 can be called as missing pages for shortness.
The materials on record do not reveal how, when and where the
missing pages were removed and secreted."
F
The Special Judge has further observed thus:

"If the file in the present condition without the missing pages had
been submitted to Al and Al I, they would not have been in a
position to know the removal of pages and suspect foul play. If these G
missing pages have been removed either by 2nd or 3rd accused before
sending the file to I I th accused and I st accused, then there might not
have been any occasion for 11th and I st accused to note the objections
of Sundaram."

Learned Single Judge of the Madras High Court while affirming the said H
28 SUPREME COURT REPORTS [2000] SUPP. I S.C.R.

A order pointed out that the entim case against the respondent is based Qn the """"'"
statement of Shri V. Sundaram and another stateme!lt made by Shri
Venkataraman, the then Chief ~ecretary (who is arrayed as the third accused
in the charge sheet, against wr;om the trial court has framed charge). The
latter statement was recorded under Section 164 of the Code of Criminal
Procedure (for short 'the Code'). Regarding the objections put forward by V.
B Sundaram in the Current File, learned Single Judge noticed that Page Nos. 225
to 245 of that file remained missing at a particular point of time and the
objections made by V. Sundaramwere on those sheets. When there is nothing
to show that those sheets were removed at the behest of respondent Jayalalitha
it must be presumed that she had not come across those objections, according
c to learned Single Judge of the High Court.

While considering the possibility of those pages being surreptitibusly
removed at the behest of respondent Jayalalitha learned Single Judge has
stated thus:

D "A mere imagination cannot be said to be a presumption. There is no
evidence on record to show that the file had gone to the first accused
and she ordered the removal of those pages at the time when she ...
signed the said file. When the file was sent from witness Sundaram
those pages were found in the file and thereafter, it has gone to
E number of officials and the Minister for Public Works, who is the
second accused in this case and from him, the said file has gope to
A· I I and finally to A-1. The fact of the file containing those pages
and thereafter missing of those pages when the file once gain reached
him after the signature of the accused and the fact of inserting those
missing pages together in the file by one Easakki Muthu are also
F spoken to by witness Sundaram. However, .there is absolutely no
evidence as to what had happened in between."

Thereafter learned Single Judge proceeded to consider the statement
attributed to 3rd accused Venkataraman as recorded under Section 164 of the
Code and found that the said material is not capable of being converted into
G
legal evidence later on after framing the charges.

We may, at tlie outset, point out that there is no use with the said
statement attributed to the third accused Venkataraman on account of two
reasons. First is that the said author of the statement has already been ,_
H arraigned in the case and a charge has been framed against him. Second is
STATE OF TAMIL NADU v. J. JAYALALITHA [THOMAS, J.) 29
,_ that on a reading of the statement we have noticed that it is exculpatory in A
nature. Hence the said statement can only lie in store and no court can
possibly treat it as evidence.

Shri Sushi! Kumar, learned senior counsel who argued for respondent
Jayalalitha contended that if the said statement is to be kept at bay there is
nothing else to connect the respondent with the criminal conspiracy alleged. B
He submitted that there is no material to indicate that respondent had ever
come to know of the adverse remarks made by V. Sundaram in the file
concerned as those notes happeped to be on those sheets which were
missing from the Current File. Ir'that be so, according to the learned senior
counsel, respondent could only have acted on the recommendations submitted C
by the departmental heads in the Note, and on the proposals prepared by the
high officials in the bureaucracy. No head of the executive can in such
circumstances be asked to answer any charge of criminal conspiracy, according
to Shri Sushi! Kumar.

On the other hand Shri Shanti Bhushan, learned senior counsel presented D
before us a number of materials and circumstances which, according to him,
are sufficient to bring home the guilt of the respondent. He submitted that
it is for the respondent to controvert those circumstances by participating in
the trial and defend herself and if she fails in that endeavour she would end
in conviction of the offences being the inevitable consequence thereof. Learned E
senior counsel on that premise attacked the order of discharge passed by the
Special Judge and made a forceful onslaught on the order passed by the
learned Single Judge of the High Court for not correcting the mistake committed
by the Special Judge.

At this stage we have to proceed on a premise that a criminal conspiracy F
was hatched in respect of import of2 million metric tonnes.of coal during the
relevant period. Such a premise can be adopted as the Special Judge, after
hearing both sides, has decided to frame charge against the other nine
accused persons presuming that there was such a conspiracy and those nine
accused have involved themselves as the conspirators therein. Hence the G
only question now to be considered is whether at this stage such a presumption
can be stretched towards respondent Jayalalitha as well.

Chapter II of the Evidence Act - deals with "of the Relevancy of Facts."
One particular provision included in that Chapter to deal with evidence
relating to criminal conspiracy is Section IO. It is useful to have a look at that H
30 SUPREME COURT REPORTS [2000) SUPP. I S.C.R.

A Section at this stage. Therefore, we may now refer to Section 10 of the
Evidence Act.

"I 0. Things said or done by conspirator in reference to common
design.- Where there is reasonable ground to believe that two or more
persons have conspired together to commit an offence or an actionable
B wrong, :anything said, done or written by any one of such persons in
reference to their common intention, after the time when such intention
was first entertained by any one of them, is a relevant fact as again$t
each of the persons believe:d to be so conspiring, as well for the
purpose of proving the existence of the conspiracy as for the purpose
c of showing that any such person was a party to it."

The question of using anything said, done or written by any one Of
such conspirators would arise only if the facts would help to sustain the first
limb of the section i.e. there is reasonable ground to believe that two or more
persons have conspired together to 1:ommit an offence. Unless the court has
D some materials to believe that respondent is one of those persons referred to
in the first limb of the section, so far as the conspiracy in this case is
concerned, any consideration for what she had said, done or written would
not be a relevant fact as against each of the conspirators. Nevertheless, it is
open to the court, even at this stage to consider the materials relating to what
E an accused would have said, done or written with reference to the common
intention between the accused for tlhe purpose of deciding whether there is
reasonable ground to believe that the said accused would have been one of
the conspirators. In State v. Na/ini, [1999] 5 SCC 253 a three Judge Bench of
this Court has stated the legal position thus regarding the first limb of Section
'10 of the Evidence Act:
F
"The first condition which is almost the opening lock of that provision
is the existence of 'reasonable ground to believe' that the conspirators
have conspired together. This condition will be satisfied even when
there is some prima facie evidence to show that there was such a
criminal conspiracy. If the aforesaid preliminary condition is fulfilled
G
then anything said by one of the conspirators becomes substantive
evidence against the other, provided that should have been a statement
'in reference to their common intention'. Under the corresponding
provision in the English law the expression used is 'in furtherance of
the common object'. No doubt, the words 'in reference to their common
H intention' are wider than the words used in English law vide Sardar
STATE OF TAMIL NADU v. J. JAYALALITHA [THOMAS, J.] 31
Sardu/ Singh Caveeshar v. State of Maharashtra, AIR (1965) SC A
682)."

So now what we have to consider is whether the materials are sufficient
to show the prospect for holding that "there is reasonable ground to believe"
that respondent Jayalalitha would also have been at least one of the
conspirators, if not the kingpin of it. B

In the above context it is useful to notice the office held by the other
persons against whom the Special Court framed the charge in the same case
for the offence of criminal conspiracy. They can be shown by reference to the
rank allotted to each of them in the challan submitted by the police. A-2 was C
the Minister in the cabinet of respondent Jayalalitha for the portfolio relating
to PWD. A-3 was the Chief Secretary, A-4 was the Chairman of the Electricity
Board, A-5 and A-6 were the Secretaries to Government of Tamil Nadu in the
Finance and Industries departments respectively. A-7, A-8 and A-9 were
members of the Electricity Board and A-10 was the Chief Engineer of the
Electricity Board (Coal Wing). D

Shri Shanti Bhushan submitted that the above officers would not have
even dreamt of committing a criminal conspiracy for knocking off such a
fabulous fund of the Tamil Nadu Government without the direct, active and
positive involvement of the then Chief Minister, particularly due to the peculiar E
set up of the ministerial network arranged by the respondent herself. For that ·
the first circumstance which learned senior counsel highlighted is a
Government Order issued by the State Government on 6.11.1991. This was
issued almost soon after respondent assumed the office of Chief Minister of
the State. The said Government Order pointed out that there was no uniformity
in the procedure followed by the public sector undertakings in the State F
regarding settlement and purchase of contracts and tenders, and hence it was
considered essential that proper scrutiny is exercised before approval of such
tenders and contracts. So the Government ordered that prior approval of the
Government should be obtained in respect of all the tenders and all the
purchases "where the value of the contract exceeds Rs.one crore". It was G
directed that the file shall, therefore, be circulated to the concerned Minister,
Minister of Finance and the Chief Minister for such proper scrutiny and prior
approval.

The next circumstance pointed out is the D.O. letter which respondent
herself addressed to the then Union Minister for Coal (Shri P.A. Sangma). The H
32 SUPREME COURT REPORTS [2000) SUPP. I S.C.R.

A letter was sent on 8.10.1991 seeking permission to import 7 lacs tonnes of coal
from Australia. But the Union Minister discouraged her from buying coal from
outside India, by pointing out the following:

"As reported by Coal India Ltd., these power stations had a coal stock
{
'
of7.95 lakh tonnes at the end of October '91 as compared to 0.44 lakh
B
tonnes at the end of March '91. I have also been told that because
of large stocks, TNEB has not been lifting coal from Paradeep,
Vishakapatnam and Haldia Ports as per programme. As such it would
appear that TNEB prima-facie does not have any justification for
importing any coal for the present. They would be well advised to
c accumulate as much indigenous coal as possible so that they have
comfortable stocks during this busy season."

The respondent did not stop there and she addressed a D.O. letter
dated 30.7.1992 to the Prime Minister requesting him to accord special
D permission to the aforesaid Electricity Board for importing one million tonnes
of coal "as a one time measure, on an emergency basis free of import duty."
Referring to the said letter which respondent has addressed to the Prime
Minister the Central Minister for Coal wrote a reply to her on 29.9.1992,
informing her that the stock position of coal at the three Thermal Power
Stations of TNEB was quite comfortable. A chart was given by him showing
E the stock at the three different power stations. The Central Minister therefore
advised the respondent against import of coal.

It appears that the respondent was insistent on importing coal in spit~
of the strong advice against it. However, even those persons who opposed
F such import had subsequently yielded to her insistence. Nonetheless the
Central Government put a rider that such import shall be routed through
Central Government. It was in the wake of the above materials that the next
circumstance was projected against the respondent as she did not agree to
abide by the said rider as well and it was decided to import coal directly
G through the State and not via the Centre.

Shri Shanti Bhushan invited our attention to the strong language used
by Shri V. Sundaram (PWD Secretary) for castigating the proposal for importing
coal, as per his letter dated 26.5.1993, addressed to the Chairman of the
Electricity Board, with copies to all members of the Board. Some of the
H excerpts of the said letter are the following:
STATE OF TAMIL NADU v. J. JAYALALITHA [THOMAS, J.J 33
"The question how these two Indonesian sources, whose original A
offers stipulated maximum C. V. of 6000 will meet the requirements of
TNEB whose minimum stipulation of C.V. is 6000 baffies me .
........................... In fact the specifications of these 2 Indonesian supply
sources is so divergent from TNEB tender specification in so many
critical elements that they should not merit even a cursory look as can B
be seen from the table below."

After giving the table in his letter Shri V. Sundaram further noted that
"in fact High Moisture and High Volatile matter alone should eliminate these
two Indonesian sources. I have been advised that the combination of High
Total Moisture and High Volatile Matter could prove to be deadly", and he C
concluded thus:

"These are only some of the points that come to my mind immediately.
All in all, I am very uncomfortable about the way this tender has been
issued and processed. I have a feeling of lurking uneasiness that we
will one day discover yet another bloomer which might land us all in D
considerable embarrassment, besides involving TNEB and Government
in protracted legal wrangles and heavy losses, apart from unseemly
public controversy."

On 18.6.1993, the Secretary of the Ministry of Coal, New Delhi, sent an
urgent communication to the Chairman of the Electricity Board as well as to E
Shri V. Sundaram. The relevant portion of the communication reads thus:

"In view of sufficient stock of coal available with the Tamil Nadu
Power Stations there is no justification for import of coal. Moreover
the time limit for import of coal expires in September 1993. One cannot
visualise as to how import will materialise~ithin these few months. F
I request any case be opposed to any extemiion of concessional duty
facility beyond September 1993. I have been informed that tender
specifications have been drawn in such a manner that it will exclude
domestic producers from bidding. If that is true it will be unfortunate.
Kindly appreciate that import of coal on concessional duty has been
allowed to give fair and competitive chance to the domestic producers G
also."

Shri Ramachandran, a Joint Secretary to Government, strongly wrote
against accepting the said tenders in his Note dated 22.6.93. It is not necessary
to extract the whole Note as the same is replete with warnings against the
proposal. Yet we may extract only the barest relevant portion: H
34 SUPREME COURT REPORTS (2000) SUPP. I S.C.R.
1

A "It is apprehended that an excess of Rs. 8,64,93, 100 has to be incurred
by the Tamil Nadu Electricity Board on account of the present
recommendation of the tender proposal by the Tamil Nadu Electricity
Board vide Annexure 6 at page 39 of flag A. Further, the quality of
Indonesian coal is poor and could cause fire explosion in the mill."

B The above note has been fully concurred by Shri Sundaram by further
writing the following in his note dated 23.6.93:

"I have explained the difficulties to Minister (PWD). The tender proposal
may be returned to the Board for various reasons like admitting
certain firms with post - tender clarification and proposing allotment
c of quantities to them besides other infirmities."

It is pertinent to point out that the ab.:ive materials are included in the
Current File which was submitted to the respondent. There is no case for the
respondent that the above were not in that File when she scrutinised it nor
D is it anybody's case that those warnings were included only in the missing
sheets. If respondent came to know of those prompt warnings and despite ·
them she accorded her green signal to import the coal, how could it be
concluded at this premature stage that she was not aware of the serious
implications of the clandestine deal on the State exchequer.

E We again repeat that at this stage we are proceeding on the assumption
that there was a criminal conspiracy to commit the offence under Section 409
of IPC and Section 30(2) of the PC Act, because the trial court has chosen
to frame charge against the co-accused including one Cabinet Minister who
was working under the respondent. Shri Shushil Kumar contended that it is
not necessary that she would have read those portions in the Notes.
F Alternatively he contended that even if she had read those notes she would
have been persuaded to grant permission on the strength of the later note
submitted in same Current File.

Shri Shanti Bhushan, learned senior counsel, on the other hand,
G contended that it is next to impossibility that the Chief Minister would have
missed the above materials, particularly when it was her Government which
wanted through the G.O. dated 6.11.1991 that all the files shall be routed
through the Chief Minister for her "proper scrutiny" regarding any venture
of public sector undertakings involving more than a crore of rupees. The said
G.O. was issued with the idea that without the specific scrutiny and supervision
H of the Chief Minister no approval should be granted.
STATE OF TAMIL NADU v. J. JAYALALITHA [THOMAS, J.] 35
Learned senior counsel further contended that if the Chief Minister had A
read the whole Note of Shri V. Sundaram it is for her to put forth satisfactorily
that she was convinced in spite of such warnings that the deal was genuine
and in the best interest of the State or that she had discussed those points
with the said Secretary and she had good reasons to overrule the objections.
'•
We find force in the said contention that until the respondent affords
satisfactory explanation the court can presume that she was aware of the B
serious consequences of the deal on the State exchequer as pointed out by
the said PWD Secretary. Court can also presume at this stage that there are
reasonable grounds to believe that she was involved in the conspiracy as
envisaged in Section I 0 of the Evidence Act.
c
In the written submission presented by the learned counsel for the
respondent it is contended, inter alia, that when the "Current File" reached
respondent as Chief Minister the relevant sheets were missing therefrom and
hence she acted on the latest Note put up by the officials of the department
which was countersigned by the same V. Sundaram on 7.7.1993. On the said
premise learned counsel argued -why should a conspiring Chief Minister be D
kept in the dark; why should the pages at all be removed and the File
renumbered if respondent was a co-conspirator?

- Sri Shanti Bhushan invited our attention to the statement recorded from
Sri V.Sundaram under Section 161 of the Code on 13.12.1996 in which there
is a narrative of the details of the circumstances in which he had to initial a
E
Note prepared by the other departmental heads including the Chief Secretary
' . (A3). The aggressive and truculent role attributed to a lady by name "Sasikala"
looms large in the said statement of V. Sundaram and that he was veritably
threatened that he would be dismembered if he would persist with his opposition
to the clearance of the proposal to import the coal. Learned counsel submitted F
that prosecution would prove that the said Sasikala was the surrogate of the
respondent and wielded consicierable influence on her during the relevant
time.

We would choose to refrain from dealing with the above contention,
G
lest any comment made by us may tum out to be detrimental to one or the
other side of the case. Nevertheless, it is for the prosecution to explain how
certain relevant sheets were found missing and whether respondent had any
knowledge of and also why the respondent should have caused them to be
removed. This is not the stage for weighing the pros and cons of all the
• implications of the materials nor for sifting the materials presented by the H
36 SUPREME COURT REPORTS (2000] SUPP. 1 S.C.R.

A prosecution. The exercise at this stage should be confined to considering the
police report and. the documents to df:cide whether the allegations against the
accused are "groundless" or whether "there is ground for presuming that the
accused has committed the offences." Presumption therein is always rebuttable
by the accused for which there must be opportunity of participation in the
B trial.

For all the above reasons we have no doubt in our mind that the court
would not, and should not, have discharged the respondent at this premature
stage in respect of the offences charged against the other nine accused
persons.
c Therefore, we set aside the order passed by the Special Court discharging
respondent J. Jayalalitha and that of the High Court which confirmed the said '
order. We direct the Special Judge to proceed against the respondent as one
of the accused in the case. Regarding the witnesses already examined by the
prosecution we permit the prosecution to treat the examination-in-chief already
D done as part of the evidence recorded in this case with all the accused on
the array. Prosecution can elicit from those witnesses any further materials
and they can be recorded as the remaining portion of the examination-in-chief.
Thereafter the respondent shall have filll opportunity to cross-examine such
witnesses as though the entire chief examination was conducted with her on
E the array of the accused. This provision is made by us for avoiding
unnecessary delay and repetition ofre-ri::cording the evidence already recorded.
On completion of examination of such witnesses prosecution can examine any
remaining witnesses. Thereafter, trial <:an proceed in accordance with law.

If respondent Jayalalitha seeks permission to dispense with her presence
F in the trial court it is open to her to file an application for the same before
the Special Judge. The Special Judge shall exempt her from personally
appearing after recording her plea, if she agrees to abide by the following
conditions:

(I) A counsel on her behalf would be present in the court whenever
G the case is taken up.

(2) She would not dispute her identity as the particular accused in
the case.

(3) She would be present on any day. when her presence is required
H by the court. •
STATE OF TAMIL NADU v. J. JAYALALITHA [THOMAS, J.] 37
It is needless to say that if she fails to abide by any of the above A
conditions it is open to the' Special Judge to revoke the aforesaid benefit
granted to her.

The appeal is disposed of accordingly.

A.Q. Appeal allowed. B