Shakambhari Ispat And Power Ltd vs Central Bureau Of Investigation
2026 Latest Caselaw 110 Chatt

Chattisgarh High Court

Shakambhari Ispat And Power Ltd vs Central Bureau Of Investigation on 26 February, 2026

Author: Ramesh Sinha

Bench: Ramesh Sinha

                                                       1




                                                                      2026:CGHC:9921-DB
                                                                                     NAFR
                             HIGH COURT OF CHHATTISGARH AT BILASPUR
                                             CRMP No. 593 of 2026
                   1-    Shakambhari Ispat and Power Ltd., (Contractor and Purchaser of
                   SMS-1 Scrap, as per charge-sheet) CIN U27109WB2001PLC093869
                   Registered Address Diamond Prestige, 41a, A.J.C. Bose Road, 8th
                   Floor, Room No. 801, Kolkata (W.B.)
                   2 - Vaibhav Khandelwal S/o Shri Ramanand Khandelwal Aged About
                   30 Years R/o 250/a/1 Gt Road, Liluah, Howrah (W.B.)
                                                                              ... Petitioners
                                                    versus
                   1 - Central Bureau of Investigation Anti-Corruption Branch, Raipur
                   (C.G.)
                   2 - Steel Authority of India (SAIL) Through Chief Vigilance Officer Ispat
                   Bhawan, Lodi Road, New Delhi (Complainant)
                   3 - The Director Central Bureau Of Investigation, Plot No. 5-B, CGO
                   Complex, Lodhi Road, New Delhi 110003
                                                                           ... Respondents

For Petitioners : Mr. Kshitij Sharma, Advocate For Respondent - CBI : Mr. Vaibhav A. Goverdhan, Advocate Hon'ble Shri Ramesh Sinha, Chief Justice Hon'ble Shri Ravindra Kumar Agrawal, Judge Order on Board Per Ramesh Sinha, Chief Justice

26.02.2026

1. Heard Mr. Kshitij Sharma, learned counsel for the petitioners as

well as Mr. Vaibhav A. Goverdhan, learned counsel appearing for

ROHIT respondent - CBI.

KUMAR CHANDRA

2. The present petition under Section 528 of Bhartiya Nagarik

Suraksha Sanhita, 2023 (BNSS) has been filed by the petitioners

with following prayers :

"(i) to quash the FIR No. RC1242024A0003 registered with the Respondent No.1 on 28.06.2024 and the consequential Charge-sheet No. 07/2025, dated 27.06.2025 for the alleged offence Under Sections 120-B R/w 420 of IPC and 13 (1) (a) R/w 13 (2) of PC Act.

(ii) to quash the impugned order taking cognizance dated 11.07.2025 (on the basis of impugned charge- sheet), for the allege offence Under Sections 120-B R/W 420 of IPC and 13 (1) (a) R/w 13 (2) of PC Act.

(iii) in consequence to above, be further pleased to quash the consequential pending Special Case (C.B.I) No. 09/2025 pending before the Special Judge of Special Court for Trial of C.B.I Cases, Raipur (C.G.), for the aforesaid offence, as against the Petitioners since the same is nothing but an abuse of the process of law."

3. Brief facts of the case are that Bhilai Steel Plant, a unit of Steel

Authority of India Limited, Bhilai (C.G.), floated a Notice Inviting

Tender (NIT) dated 02.11.2022 bearing Tender No. M&BP/2022-

2023/IA/OpenTender/SMS#1/10160227 for the sale and

dismantling of the surveyed-off scrap of Steel Melting Shop-1

(SMS-1) at Bhilai Steel Plant as a single lot on an "As is where is"

and "No complaint basis." The general scope of work provided

that the bidder would be responsible, on a turnkey basis, for

complete dismantling and disposal of SMS-1 along with all

associated facilities up to the +10.00 meter level, including

stacking, cutting into pieces, loading, and transportation of

dismantled materials such as steel structures, concrete structures,

brick masonry, refractory materials, mechanical and electrical

equipment, pipes, etc., to the bidder's own premises. The ±0.00

level corresponded to the existing ground level at the SMS-1 area.

4. The bid of Petitioner No. 2 was accepted and it was declared the

H-1 bidder. Subsequently, a Sale Offer bearing No. 40074420

dated 16.03.2023 was issued by Bhilai Steel Plant (a unit of

SAIL), Bhilai (C.G.), in favour of Petitioner No. 2. As per the Sale

Offer, the total amount payable was Rs. 3,56,73,86,466/- (Rupees

Three Hundred Fifty-Six Crores Seventy-Three Lakhs Eighty-Six

Thousand Four Hundred Sixty-Six Only), including a Security

Deposit of Rs. 14,35,00,000/- (Rupees Fourteen Crores Thirty-

Five Lakhs Only), to be remitted before 15.04.2023. The Sale

Offer was valid up to 16.03.2025.

5. During dismantling and disposal of the closed Steel Melting

Shop-I (SMS-1) at Bhilai Steel Plant, where M/s Shakambhari

Ispat & Power Ltd. had been awarded the sale order, certain

serious irregularities and instances of theft were detected.

Vigilance inspections conducted by SAIL in August 2023 revealed

unauthorized presence and removal of slabs, blooms, ferro-alloys,

ingots, mould bogies, pipelines, and cables--items not covered

under the contract--indicating possible collusion between the

contractor and concerned plant officials. This allegedly caused an

estimated loss of over Rs. 3.3 crores, with an attempted further

theft of about Rs. 50 lakhs, pointing toward a larger conspiracy. As

the acts involved unaccounted removal of plant assets, breach of

contractual terms, and potential criminal misconduct requiring

examination of officials, contractors, transporters, and relevant

records, the Chairman of SAIL approved referral of the case to

Central Bureau of Investigation (CBI) under Clause 5.3(a) of the

CVC Vigilance Manual, 2021 for comprehensive investigation.

Pursuant thereto, a complaint dated 21.11.2023 was lodged with

the CBI by Shri S. Karuna Raju, IAS, Chief Vigilance Officer, SAIL,

and, on the basis of the said complaint, the impugned FIR bearing

No. RC1242024A0003 was registered on 28.06.2024 at CBI/ACB

Raipur (C.G.).

6. During investigation, it was alleged that the petitioners

misappropriated public assets worth Rs. 21.2 lakhs by violating

contractual provisions, thereby committing criminal misconduct

and causing wrongful loss of Rs. 21.2 lakhs to the exchequer, i.e.,

Bhilai Steel Plant, a unit of SAIL. Consequently, the impugned

charge-sheet bearing No. 07/2025 was filed by CBI/ACB, Raipur

(Chhattisgarh) on 27.06.2025 for offences under Sections 120-B

read with 420 of the IPC and Section 13(1)(a) read with Section

13(2) of the Prevention of Corruption Act.

7. Pursuant to the aforesaid charge-sheet, the learned Trial Court

took cognizance of the matter vide order dated 11.07.2025, and

the case is presently pending before the Special Judge, Special

Court for Trial of CBI Cases, in Special Case (C.B.I.) No. 09/2025.

Hence, the present petition has been filed with the

aforementioned prayers.

8. Learned counsel for the petitioners submits that the impugned FIR

and the consequential charge-sheet, even if taken in their entirety

and accepted at face value, do not disclose the commission of

any offence against the petitioners. It is contended that the entire

genesis of the prosecution arises out of interpretation of the

tender conditions and scope of work under the NIT dated

02.11.2022 issued by Bhilai Steel Plant, a unit of Steel Authority of

India Limited, which is purely civil and contractual in nature and

already subject to arbitration proceedings. The essential

ingredients of offences under Sections 420 and 120-B IPC are

conspicuously absent, as there was no dishonest or fraudulent

intention at the inception of the transaction. The petitioners acted

strictly in terms of written communications, approvals, and

confirmations issued by competent authorities of BSP, including

senior officials of SMS-1 and MRD, and the lifting of materials was

undertaken under official supervision and verification, including by

CISF personnel. Even as per the charge-sheet, the allegation is

limited to an alleged misappropriation of Rs. 21.2 lakhs by

purported violation of contractual provisions, which, at best, gives

rise to a contractual dispute and does not satisfy the statutory

ingredients of cheating or criminal conspiracy

9. It is further submitted that the total contract value was

approximately Rs. 356,73,86,466/-, and the alleged amount of Rs.

21.2 lakhs is minuscule in comparison, rendering the accusation

inherently improbable and trivial. The petitioners have, in fact,

suffered substantial financial loss due to withholding of a part of

the security deposit, the interest component of which exceeds the

alleged misappropriation amount. The dispute stems from internal

miscommunication and interpretational differences within BSP and

has been artificially given a criminal colour to mask what is

essentially an administrative and contractual issue. Notably, BSP

itself, after registration of the FIR, issued an email dated

06.05.2025 invoking arbitration, thereby acknowledging the civil

nature of the dispute. It is also submitted that the initial

proceedings were primarily directed against one accused, who

has since expired and against whom prosecution stands abated,

causing serious prejudice to the present petitioners. The FIR

contains only bald and omnibus allegations without specific

attribution of deceitful conduct, and therefore, the case squarely

falls within the parameters laid down by the Hon'ble Supreme

Court in State of Haryana v. Bhajan Lal for quashing of criminal

proceedings, being an abuse of the process of law.

10. On the other hand, learned counsel, appearing for respondent -

CBI opposed the aforesaid submission and submitted that the

present petition is wholly misconceived and deserves to be

dismissed, as the impugned FIR and the charge-sheet disclose

the commission of cognizable offences based on material

collected during a detailed investigation. It is contended that the

allegations are not confined merely to interpretation of contractual

terms under the NIT issued by Bhilai Steel Plant, a unit of Steel

Authority of India Limited, but pertain to deliberate and

unauthorized removal of valuable plant assets in violation of

contractual provisions, causing wrongful loss to a public sector

undertaking. The investigation has revealed that the petitioners, in

conspiracy with others, misrepresented facts and dishonestly

removed materials not covered under the contract, thereby

attracting the ingredients of offences under Sections 120-B and

420 IPC, as well as relevant provisions of the Prevention of

Corruption Act. The plea that the dispute is civil in nature or that

arbitration proceedings are pending does not bar criminal

prosecution when the allegations disclose elements of deception,

conspiracy, and wrongful gain.

11. It is further submitted that at the stage of consideration of a

petition for quashing, this Hon'ble Court is required only to

examine whether a prima facie case is made out on the basis of

the FIR and charge-sheet, and not to conduct a meticulous

appreciation of evidence or adjudicate disputed questions of fact.

The investigation has been conducted in accordance with law,

statements of witnesses have been recorded, documents have

been seized and analyzed, and upon satisfaction that sufficient

material exists, the charge-sheet has been filed before the

competent Special Court, which has already taken cognizance.

The defence sought to be raised by the petitioners regarding

alleged permissions, quantum of loss, or comparative value of the

contract are matters to be tested during trial. The magnitude of

the contract value is irrelevant when public property is dishonestly

misappropriated, even to a lesser extent. Therefore, as the

allegations and material on record clearly disclose the ingredients

of the offences alleged, the present petition seeking quashing of

FIR and charge-sheet is devoid of merit and liable to be

dismissed.

12. We have heard learned counsel for the petitioners and learned

counsel appearing for the respondent-Central Bureau of

Investigation at length. Perused the impugned FIR, the charge-

sheet, and the material placed on record.

13. The principal contention of the petitioners is that the dispute arises

out of interpretation of contractual terms under the NIT issued by

Bhilai Steel Plant, a unit of Steel Authority of India Limited, and is

therefore civil in nature; that arbitration proceedings have been

invoked; and that the essential ingredients of the offences under

Sections 120-B and 420 IPC and Section 13 of the Prevention of

Corruption Act are not made out. It is further urged that the

alleged loss is minimal in comparison to the total contract value

and that the proceedings are an abuse of process.

14. Upon careful consideration, this Court finds that the allegations in

the FIR and the material collected during investigation, as

reflected in the charge-sheet, prima facie disclose commission of

cognizable offences. The accusation is not confined to a mere

contractual dispute or interpretational variance, but pertains to

alleged unauthorized removal and misappropriation of plant

assets beyond the scope of the contract, causing wrongful loss to

a public sector undertaking. Whether such acts were done with

dishonest intention, pursuant to valid authorization, or in

conspiracy with others are matters requiring evidence and

adjudication at trial. At this stage, this Court cannot undertake a

meticulous examination of the defence put forth by the petitioners

or evaluate the sufficiency of evidence.

15. It is well settled that the inherent jurisdiction to quash criminal

proceedings is to be exercised sparingly and only where the

allegations, even if accepted in their entirety, do not disclose any

offence or where the proceedings are manifestly attended with

mala fides. In the present case, the averments in the FIR and the

supporting material in the charge-sheet clearly spell out the

necessary ingredients of the offences alleged. The pendency of

arbitration or existence of civil remedies does not bar criminal

prosecution when the allegations disclose elements of deception,

conspiracy, and misappropriation of public property.

16. In view of the foregoing analysis, this Court is of the considered

opinion that no case for interference is made out. The petition is

accordingly dismissed. The petitioners are at liberty to raise all

permissible defences before the learned Trial Court at the

appropriate stage, in accordance with law.

                           Sd/-                                       Sd/-
                (Ravindra Kumar Agrawal)                       (Ramesh Sinha)
                         Judge                                   Chief Justice


Chandra