Dr. Saraswati Parasad Pathak vs Central Bureau Of Investigation ...
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HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
 
 

Court No. - 28
 

 
Case :- U/S 482/378/407 No. - 15 of 2021
 

 
Applicant :- Dr. Saraswati Parasad Pathak
 
Opposite Party :- Central Bureau Of Investigation Through Director
 
Counsel for Applicant :- Shashank Singh,Ruby Chaudhary
 
Counsel for Opposite Party :- Anurag Kumar Singh
 
Hon'ble Dinesh Kumar Singh,J.

1. A mega scam regarding execution and implementation of National Rural Health Mission (hereinafter referred to as the NRHM) in the State of U.P. took place between 2005-2011. A large sum of money to the tune of Rs.11080.53 crores was allocated by the Government of India for the State of U.P., Ministry of Health and Welfare under the said mission. Out of which a sum of Rs.9,13,377/- crores was released in due course. Large funds were misappropriated by the State Government Officials and other persons including persons holding political positions.

2. A bunch of writ petitions lead petition Being Writ Petition No.3611(PIL) of 2011 and other writ petitions, were filed before before the Lucknow Bench of High Court of Judicature at Allahabad. This High Court vide order dated 15.11.2011 referred the matter to the C.B.I. to enquire into the matter of execution and implementation of NRHM in the State of Uttar Pradesh. The High Court directed the C.B.I. to thorough enquire the misappropriation of the funds allocated by the Government of India to the State of U.P. under the said mission and on finding prima facie commission of the cognizance offence, C.B.I. should register cases in respect of such persons who were involved in commission of the cognizable offences.

3. NRHM is an ambitious project of the Central Government which was launched on 12.04.2015 throughout the country to provide accessible, affordable and quality health care to the rural population, especially vulnerable section of the society. Primary objective was to reduce the maternal mortality rate and infant mortality ratio besides general health care of the rural population. Memorandum of Understandings (MoU) was signed between Ministry of Health and Family Welfare, New Delhi and Government of U.P. on 22.11.2006 and NRHM scheme was launched in State of Uttar Pradesh on 01.04.2007.

4. As per the said scheme, Mission Director, NRHM, State Program Management Unit received grants from Government of India and, the grants so received were directly transferred by the Mission Director in the accounts opened by the Chief Medical Officer (for short ''CMO') of the District in his name. This amount so received was to spend on various schemes as provided in Project Implementation Program. Thus, CMO was key-man in the district who was entrusted with the funds for their proper utilization in implementing nine following schemes as provided under the 'Project Implementation Program':-

01A-RCH Flexi Pool

02B-Mission Flexi Pool

03C-RI (Routine Immunization)

04C1- Pulse Polio Campaign

05D-RNTCP (Revised National Tuberculosis Control Program)

06D-NVBDCP (National Vector Borne Disease Control Program)

07D-NBCP (National Blindness Control Program)

08D-NLEP (National Leprosy Eradication Program)

09D-IDSP (Integrated Disease Surveillance Program)

5. NRHM guidelines also provided instructions to utilize said funds under the aforesaid schemes. C.B.I. found that besides non-adherence to the NRHM guidelines, there had been systematic planning by the accused (public servants and private persons) in criminal conspiracy with each other to loot and misappropriate huge funds, in furtherance of which they dishonestly violated procurement procedure and did not follow any Government Order/Circular and rule set up by the State and Central Governments for the purchase of medicines and medical equipments. The accused/ public servants manipulated/ exceeded their financial powers/limits and violated tender formalities and issued the supply orders in favour of the suppliers who reaped huge profit in turn.

6. The petitioner was posted as CMO of District Gonda at the relevant time. C.B.I. in its investigation found that the petitioner in collusion with private persons/suppliers awarded the work of supply of medicines at exorbitant rates, without following tender formalities and ignoring the rate contract, which prima facie made out commission of criminal case and accordingly Regular Case vide RC/DST/2012/A003 dated 23.02.2012 was registered for specific instances of corruption and taken up for investigation.

7. The CMO was nodal officer of the district concern and all Primary Health Centres/C.H.Cs. and hospitals etc, come under administrative control of the CMO. Funds were allocated to him and were transferred in the Bank account opened by him for his district. The CMO was in-charge officer of the whole district, as per the Family Welfare and other National Programs. He was competent to give directions to District Hospital, Chief and Senior Superintendent and other officers.

8. The State Government had issued various circulars/guidelines regarding financial powers of the CMO of a district. CBI in its investigation found that the petitioner remained CMO Gonda from July, 2007 to January 2009. Dr. M.H. Khan, Dpy. CMO was working as SMO (Stores) between July, 2007 and July 2008 whereas Thakur Prasad Pandey and Ram Naresh Verma were Chief Pharmacist and Accountant respectively in the office of the petitioner during the relevant period between 2007-08.

9. Investigation revealed that the petitioner, the then CMO, Gonda in conspiracy with other accused persons purchased medicines and other equipments under Mission Flexi Pool and RCH Flexi Pool from one M/s Medicine Time, Bahraich without any tender or quotation at exorbitant price. It was also found that some more supply was made by M/s Medicine Time through U.P. Upbhokta Sangh, Lucknow to avoid quotation and tendering process. 

10. As per the Government instructions, all the purchases in NRHM in respect of medicines and equipments should have been at either DGS & D rates or rate contracts or through open tendering process from the manufactures. The petitioner in conspiracy with other co-accused by abusing his official position, dishonestly and fraudulently issued the purchase/indents to the accused firms, M/s Medicine Time at exorbitant rates without inviting tender or quotations and without involving the purchase committee members.

11. M/s Medicine Time was neither the manufacturer nor the rates quoted by the firms were under rate contracts thus, causing wrongful gain to M/s Medicine Time and wrongful loss to the Government Exchequer.

12. The petitioner issued nine indents on 19.12.2007 and nineteen indents on 29.12.2007, under Mission Flexi Pool, for different medicines without any quotation or tender process upon M/s Medicine Time. Against these indents M/s Medicine Time supplied medicines in the office of Chief Medical Officer, Gonda and submitted bills on 31.12.2007. The said M/s Medicine Times was paid Rs.6,77,590/-.

13. Other several indents were issued by the petitioner on M/s Medicine Time. CBI in its charge-sheet filed against the petitioner and other co-accused had calculated loss incurred to the said exchequer in procuring the medicines and equipments from M/s Medicine Time under NRHM Mission Flexi Pool to be Rs.4,07,085/-.

14. Similarly, CBI investigation further revealed that the petitioner dishonestly purchased various medicines and equipments under RCH Flexi Pool at exorbitant rates by purchasing directly through M/s U.P. Upbhokta Sahkari Sangh Limited, Lucknow. It was revealed that the petitioner in criminal conspiracy with the other accused purchased various medicines and equipments amounting to Rs.81,09,573/- under RCH Flexi Pool at exorbitant rates purportedly showing as if purchased was from M/s U.P. Upbhokta Sahkari Sangh Limited, Faizabad whereas in fact these medicines and medical equipments were purchased from M/s Medicine Time on inflated rates causing wrongful loss to the tune of Rs.36,21,689/- to the Government exchequer and corresponding wrongful gain to M/s Medicine Time, Bahraich. Thus, a total loss into two instances had been Rs.40,28,774/- to the Government Exchequer by the petitioner.

15. The CBI after investigating the offence has filed charge-sheet on 30.06.2019 against the petitioner and other accused under Section 120B IPC read with Section 420, 471 IPC read with Section 13(2), 13(1)(d) Prevention of Corruption Act, 1988.

16. Special Judge, C.B.I. (P.C. Act), Ghaziabad after taking cognizance of the offence mentioned in the charge-sheet against the petitioner and other co-accused had issued summons for appearance of the petitioner and co-accused on 10.11.2020.

17. Despite summons having been issued to the petitioner by the trial Court, the petitioner-accused has chosen not to appear before the trial Court and has approached this Court in the present petition.

18. Present petition under Section 482 Cr.P.C. has been filed with a prayer for quashing of the charge-sheet filed by the C.B.I. as well as summoning order dated 06.10.2020 and protect personal liberty of the petitioner in the light of the judgment passed by the Supreme Court on 14.07.2015 in the case of Sanjay Awasthi vs State of U.P.. The petitioner has also prayed for staying the further proceedings before the Special Judge, C.B.I.

19. Heard learned counsel for the petitioner and Mr. Anurag Kumar Singh, learned counsel for the C.B.I.

20. The offence of the magnitude and scale called NRHM scam was committed by the petitioner and other accused in furtherance of the deep rooted criminal conspiracy with each other. They had looted the funds meant for augmenting and providing medical health care to the rural population under the Rural Health Mission. The petitioner was a key person in his district who was in control of the funds.

21. Similarly other CMOs of the other districts were in-charge and control of the funds meant for their respective districts. It was their responsibility as well as duty to make effective use and utilization of the public funds received by them under the mission for the said purpose.

22. The petitioner has not surrendered before the trial Court till date. He has approached this court for quashing of the charge-sheet and other reliefs as mentioned above.

23. Learned counsel for the petitioner has placed reliance on the judgment of the Supreme Court dated 14.07.2015 passed in S.L.P. Criminal No.833 of 2015 and others. The Supreme court in the aforesaid order in para 9 has issued following directions:-

"(i) Such of the petitioners as have not already furnished bail bonds to the satisfaction of the trial courts concerned shall do so within a period of two weeks from today in which event the protection against arrest shall continue but only subject to their furnishing such bonds.

(ii) The trial court(s) shall satisfy themselves about the deposit of the amount directed by us, in terms of our Order(s) passed in each one of the cases. In case deposit is not made as directed, the same shall be made within four weeks from the date the trial Court issues a direction to that effect after verification.

(iii) Liberty is reserved to the CBI to move the trial court concerned in case the amount already deposited by the petitioners does not match the amount on a proportionate basis that should be recovered from them having regard to the amount alleged to have been misappropriated or wrongfully paid/received. Should the petitioner(s) fail to deposit any such further amount directed by the trial court, the bail order granted in his/her favour shall stand cancelled without any further reference to this Court.

(iv) The trial court(s) shall be free to direct deposit of Passports by the accused-persons in such of the cases at it may consider just and proper.

(v) The petitioners shall not tamper with the evidence in any manner whatsoever and if they do so, the Court shall be free to cancel the bail granted to the accused concerned.

(vi) The amount deposited by the petitioners shall be remitted by the trial court(s) to the State Government, Department of Health and Family Welfare, for utilisation in the ongoing NRHM Scheme.

(vii) The trial court(s) shall endeavour to expedite the trial and shall be free to pass appropriate order(s) against the petitioners including an order withdrawing the concession of bail granted to them or any one of them, if the accused do not cooperate or otherwise resort to dilatory tactics."

24. The petitioner has also submitted that this Court in cases of some of the co-accused has directed the trial Court to consider the bail application of the accused as and when it is filed, in the light of the directions containing in the order dated 14.07.2015 passed by the Supreme Court (supra). It is also submitted that the petitioner is ready to deposit proportionate amount inasmuch as there are as many as 7 accused against whom charge-sheet has been filed by the CBI in respect of the NRHM scam in District-Gonda. Total loss to the Government as per the CBI is Rs.40,78,744/- and, therefore, the petitioner is ready to deposit proportionate one seventh amount to the alleged loss as a condition of bail.

25. The economic crime of such scale and magnitude are carefully and meticulously planned and executed. It is well settled that economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. While granting bail, the court has to keep in mind the nature of accusations, magnitude and gravity of offence and nature of evidence in support of the accusations.

26. The Supreme Court in the case of Y.S. Jagan Mohan Reddy vs CBI: (2013) 7 SCC 439 in paras 34 and 35 in respect of granting bail in economic offences having deep rooted conspiracy and large public money involved has held as under:-

"34. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country.

35. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country."

27. In judgment rendered in the case of State of Bihar Vs. Amit Kumar (2017) 13 SCC 751, it has been held that while considering the bail involving socio-economic offences stringent parameters should be applied. Paras 8-9 of the said judgment are extracted hereunder:-

"8. A bare reading of the order impugned discloses that the High Court has not given any reasoning while granting bail. In a mechanical way, the High Court granted bail more on the fact that the accused is already in custody for a long time. When the seriousness of the offence is such the mere fact that he was in jail for however long time should not be the concern of the courts. We are not able to appreciate such a casual approach while granting bail in a case which has the effect of undermining the trust of people in the integrity of the education system in the State of Bihar.

9. We are conscious of the fact that the accused is charged with economic offences of huge magnitude and is alleged to be the kingpin/ringleader. Further, it is alleged that the respondent-accused is involved in tampering with the answer sheets by illegal means and interfering with the examination system of Bihar Intermediate Examination, 2016 and thereby securing top ranks, for his daughter and other students of Vishnu Rai College, in the said examination. During the investigation when a search team raided his place, various documents relating to property and land to the tune of Rs 2.57 crores were recovered besides Rs 20 lakhs in cash. In addition to this, allegedly a large number of written answer sheets of various students, letterheads and rubber stamps of several authorities, admit cards, illegal firearm, etc. were found which establishes a prima facie case against the respondent. The allegations against the respondent are very serious in nature, which are reflected from the excerpts of the case diary. We are also conscious of the fact that the offences alleged, if proved, may jeopardise the credibility of the education system of the State of Bihar."

28. Further, the aforesaid view has been reiterated in the case of Rohit Tandon vs Directorate of enforcement (2018) 11 SSC 46. Paras 21 and 22 of the aforesaid judgement read as under:-

"21. The consistent view taken by this Court is that economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country. Further, when attempt is made to project the proceeds of crime as untainted money and also that the allegations may not ultimately be established, but having been made, the burden of proof that the monies were not the proceeds of crime and were not, therefore, tainted shifts on the accused persons under Section 24 of the 2002 Act.

22. It is not necessary to multiply the authorities on the sweep of Section 45 of the 2002 Act which, as aforementioned, is no more res integra. The decision in Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra [Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra, (2005) 5 SCC 294 : (2005) SCC (Cri) 1057] and State of Maharashtra v. Vishwanath Maranna Shetty [State of Maharashtra v. Vishwanath Maranna Shetty, (2012) 10 SCC 561 : (2013) 1 SCC (Cri) 105] dealt with an analogous provision in the Maharashtra Control of Organised Crime Act, 1999. It has been expounded that the Court at the stage of considering the application for grant of bail, shall consider the question from the angle as to whether the accused was possessed of the requisite mens rea. The Court is not required to record a positive finding that the accused had not committed an offence under the Act. The Court ought to maintain a delicate balance between a judgment of acquittal and conviction and an order granting bail much before commencement of trial. The duty of the Court at this stage is not to weigh the evidence meticulously but to arrive at a finding on the basis of broad probabilities. Further, the Court is required to record a finding as to the possibility of the accused committing a crime which is an offence under the Act after grant of bail.

29. The Supreme Court in its judgement in Serious Fraud Investigation Office Vs. Nitin Johri and another, (2019) 9 SCC 165, while considering the factors to be taken into account while considering the bail involving serious economic offences in para 24-27 has held as under:-

"24. At this juncture, it must be noted that even as per Section 212(7) of the Companies Act, the limitation under Section 212(6) with respect to grant of bail is in addition to those already provided in CrPC. Thus, it is necessary to advert to the principles governing the grant of bail under Section 439 of CrPC. Specifically, heed must be paid to the stringent view taken by this Court towards grant of bail with respect of economic offences. In this regard, it is pertinent to refer to the following observations of this Court in Y.S. Jagan Mohan Reddy [Y.S. Jagan Mohan Reddy v. CBI, (2013) 7 SCC 439 : (2013) 3 SCC (Cri) 552] : (SCC p. 449, paras 34-35)

"34. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country.

35. While granting bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations."

This Court has adopted this position in several decisions, including Gautam Kundu v. Directorate of Enforcement [Gautam Kundu v. Directorate of Enforcement, (2015) 16 SCC 1 : (2016) 3 SCC (Cri) 603] and State of Bihar v. Amit Kumar [State of Bihar v. Amit Kumar, (2017) 13 SCC 751 : (2017) 4 SCC (Cri) 771] . Thus, it is evident that the above factors must be taken into account while determining whether bail should be granted in cases involving grave economic offences.

25. As already discussed supra, it is apparent that the Special Court, while considering the bail applications filed by Respondent 1 both prior and subsequent to the filing of the investigation report and complaint, has attempted to account not only for the conditions laid down in Section 212(6) of the Companies Act, but also of the general principles governing the grant of bail.

26. In our considered opinion, the High Court in the impugned order has failed to apply even these general principles. The High Court, after referring to certain portions of the complaint to ascertain the alleged role of Respondent 1, came to the conclusion that the role attributed to him was merely that of colluding with the co-accused promoters in the commission of the offence in question. The Court referred to the principles governing the grant of bail as laid down by this Court in Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra [Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra, (2005) 5 SCC 294 : 2005 SCC (Cri) 1057] , which discusses the effect of the twin mandatory conditions pertaining to the grant of bail for offences under the Maharashtra Control of Organised Crime Act, 1999 as laid down in Section 21(4) thereof, similar to the conditions embodied in Section 212(6)(ii) of the Companies Act. However, the High Court went on to grant bail to Respondent 1 by observing that bail was justified on the "broad probabilities" of the case.

27. In our considered opinion, this vague observation demonstrates non-application of mind on the part of the Court even under Section 439 CrPC, even if we keep aside the question of satisfaction of the mandatory requirements under Section 212(6)(ii) of the Companies Act."

30. Powers under Section 482 Cr.P.C. are to be exercised sparingly in order to secure ends of justice or to prevent abuse of the process of the Court. The investigation conducted by the CBI has been forensic and based on cogent and credible evidence available with the charge-sheet.

31. Present case involves scam which run to the tune of thousands of crores. The scam has resulted increase in sufferings of the rural population and has dashed the objective of the mission to augment and improve the medical health condition of rural population. The petitioner was the key person being the CMO of District Gonda in implementing the program but instead of performing his duties and function, he in criminal conspiracy with the co-accused had misappropriated huge amount of funds meant for the Mission. Role of the petitioner is not similar to the other accused inasmuch as funds were allocated and transferred to his account directly and he was overall in-charge for its proper and effective utilization.

32. Counsel for the petitioner has not been able to demonstrate that from reading of the charge-sheet no offence against the petitioner and co-accused is made out. Offences for which the cognizance have been taken by the learned trial Court are prima facie made out against the accused-petitioner. I do not see any ground to quash the charge-sheet or on going criminal proceedings against the accused-petitioner.

33. This court while exercising limited power under Section 482 Cr.P.C. should not give directions to the trial Court to consider the bail application in a particular manner. In view thereof, I do not find any ground to interfere either with the charge-sheet or the impugned summoning order passed by the trial Court and, this petition being without merit and substance is hereby dismissed.

Order Date :- 08.1.2021

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