Madhu Koda, Delhi HC
Madhu Koda, Delhi HC
Litigation News

Delhi HC refuses to stay conviction of Madhu Koda in coal scam; But read interpretation of S 13(1)(d) of PC Act


The Delhi High Court today refused to stay the conviction of former Jharkhand CM, Madhu Koda in the coal scam case, observing that it would not be apposite to facilitate him to contest elections, till he is acquitted. (Madhu Koda v CBI - 22.05)

The judgement was passed by a Single Judge Bench of Justice Vibhu Bakhru.

Justice Vibhu Bakhru
Justice Vibhu Bakhru

In December 2017, Madhu Koda was sentenced to three years’ rigorous imprisonment under the Indian Penal Code and Prevention of Corruption Act by a Special CBI Court, in relation to one of the coal scam cases.

His conviction pertained to irregularities in the allocation of Rajhara North coal block in Jharkhand to Vini Iron and Steel Udyog Ltd (VISUL) in 2008.

Koda had then moved an appeal against his conviction before the Delhi High Court.

Subsequently, Koda filed applications, inter alia, praying that the operation of the order of convicting him of criminal misconduct under Section 13(1)(d)(ii) and (iii) read with section 13(2) of the Prevention of Corruption Act, 1988, be stayed.

He sought a stay on his conviction in order to contest for election to public offices, including elections for the Legislative Assembly of the State of Jharkhand.

Abhimanyu Bhandari
Abhimanyu Bhandari

Counsel for Koda (Appellant), Abhimanyu Bhandari argued:

  1. In the absence of any allegation or any evidence to establish that Koda had demanded any illegal gratification, his conviction under Section 13(1)(d) of the PC Act was ex facie unsustainable.

  2. Section 13(1)(d) by virtue of the Prevention of Corruption (Amendment) Act, 2018, the allegations no longer constituted an offence and, therefore, Koda was entitled to be acquitted by virtue of the doctrine of beneficial construction.

  3. Third, he submitted that the appellant’s conviction rested on the assumption that he was close to one Vijay Joshi who controlled VISUL.

RS Cheema
RS Cheema

RS Cheema, Senior Advocate appearing for the CBI, on the other hand, argued:

  1. Section 13(1)(d) of the PC did not necessarily require establishing that any illegal gratification had been demanded or paid to the public servant.

  2. The benefit of PC Amendment Act, 2018 could be extended to the appellant. He referred to Section 6(d) of the General Clauses Act, 1897 (hereafter ‘the General Clauses Act’) and contended that since the appellant had been convicted prior to the PC Amendment Act, 2018 coming into force, the benefit of the same could not be extended to the appellant.

  3. This was a case of conspiracy and the facts of the case clearly established that the appellant was complicit in the offence notwithstanding that his connection with Vijay Joshi had not been irrefutably established.

  4. At the interim stage, the sentence awarded to a convict could be suspended on the basis of a prima facie view; a conviction could not be stayed without considering the wider ramifications.

Delhi High Court

The Court held that the plain language of Section 13(1)(d) of the PC Act did not indicate that a demand of illegal gratification by the public servant was an essential ingredient of an offence of misconduct.

The Court said that mere arbitrary or unreasonable exercise of official power to confer any benefit or pecuniary advantage to an unconnected party, might not be sufficient to impute that the exercise of such power is culpable misconduct under Section 13(1)(d)(ii) PC Act.

The Court further observed that in order to fall within the four corners of Section 13(1)(d)(ii) of the PC Act, what had to be proved was that the decision/conduct of the public servant was dishonest amounting to corruption. The Court specifically opined that the contention on behalf of the appellant, that the prosecution had failed to establish any relationship between Vijay Joshi and the Appellant, even though is a matter of evaluating evidence, was prima facie merited.

It, however, said that at this stage, it was not apposite to examine whether the prosecution had established the necessary ingredients of Section 13(1)(d)(ii) of the PC Act.

As far as Koda's acquittal in view of the enactment of the PC (Amendment) Act, 2018 was concerned, the Court said that there was no reason to assume that the legislative intent of repealing Section 13 of the PC Act was to exclude the said offence from the scope of PC Act with retrospective effect.

The Court held that there was no doubt that it had the power to stay the conviction. However, such power ought to be exercised in exceptional circumstances and in cases where the Court is convinced that not staying the conviction would lead to injustice and irreversible consequences, it said.

The Court held that Koda had a prima facie case in his favour; however, it could not be the sole ground to stay his conviction.

Referring to the increasing demand for decriminalization of politics and the Supreme Court's decision in this regard in PUCL vs UOI, the Court remarked,

The applications were dismissed.

With the High Court clarifying that legislative intent was to not punish a public servant for any erroneous decision; but to punish him for corruption,

It has cleared the air that if a public servant is “unconnected” to the third party who has benefited, then it would be difficult to hold the public servant guilty of corruption under section 13(1)(d).

This exposition of law comes as a huge relief to many public servants being prosecuted under section 13(1)(d) of the Act where there is no evidence of quid pro quo and any connection between the beneficiary and the accused public servant.

Advocates Abhimanyu Bhandari, Gauri Rishi, Srishti Juneja, Aashima Singhal, Vinay Prakash appeared for Madhu Koda.

Senior Advocate R S Cheema appeared as Special Public Prosecutor with Advocates Tarannum Cheema, Smrithi Suresh, Hiral Gupta, Akshay Nayarajan.

Read the Order:

Madhu Koda v CBI - 22.05.pdf
Bar and Bench - Indian Legal news