In a sharp rebuke to how discharge pleas are being handled in criminal trials, the Supreme Court has overturned a High Court decision that prematurely cleared several accused in a ₹21 crore fraud case—because the lower courts leaned on evidence offered by the defence, not the prosecution.
The top court was unambiguous: that’s not how Section 239 of the Criminal Procedure Code is supposed to work.
The case revolves around a suspected scam involving the Cotton Corporation of India (CCI) and manipulation of the Minimum Support Price (MSP) scheme. The accused allegedly purchased cotton at low market rates, hoarded it, and later routed it through fake farmers to sell at inflated MSPs to the CCI—causing an alleged ₹21.19 crore loss to the exchequer. Charges ranged from criminal conspiracy and forgery to corruption.
But instead of focusing on the prosecution’s case—as the law demands—the Special Court and the Andhra Pradesh High Court both leaned on a letter from the CCI, furnished by the accused, which claimed there was no loss.
That, according to the Supreme Court, was a fundamental misstep.
A bench comprising Justices Pankaj Mithal and SVN Bhatti called out the lower courts for essentially running a “mini-trial” during the discharge stage—digging into the defence’s narrative, weighing its documents, and deciding the fate of the accused before the trial even began. The problem? Section 239 CrPC is about determining whether prosecution materials suggest a trial is warranted—not evaluating if the accused might later be able to rebut them.
Justice Bhatti, delivering the judgment, didn’t mince words: “The procedure followed by the trial court, and confirmed by the High Court, is patently illegal… The discharge has been ordered not by referring to any of the situations referred to in Section 239, but by relying on the documents made available by the accused.”
The top court also flagged the High Court’s sweeping conclusion that there was no substance to charges of forgery and cheating, noting that such observations overlooked key allegations and materials in the charge sheet.
The ruling reinstates the CBI’s prosecution of the accused and sends the case back to the Special Court—with one critical instruction: this time, stay within the lane laid down by law. Only the prosecution’s materials count at the discharge stage. Defence evidence belongs to the trial, not before it.