A.K. Jain And Ors. vs State (Cbi)
2005 Latest Caselaw 1404 Del

JUDGMENT

Manju Goel, J.

1. The present revision petition challenges the order on charge dated 26.8.1995 against the petitioners, Mr. A.K. Jain and Ms. Rohini Prakash, as well as against Mr. R.C. Bhargava, for offence under Section 120-B, IPC read with Sections 13 and 13 of Prevention of Corruption Act, 1988 as also for substantive offence under Section 13(2) read with Section 13(1)(d) of Prevention of Corruption Act, 1988.

The story disclosed in the charge-sheet is as under:

(a) On the basis of source information the case was registered on 13.4.1992. The allegations were that during the year 1991, Mr. D.S. Gupta, Divisional Manager (Marketing & Sales), Maruti Udyog Limited (in short 'MUL'), Mr. R. Vasudevan, Regional Manager (North-I), MUL, Mr. A.K. Jain, Department Manager (Sales & dispatch), MUL, Ms. Rohini Prakash, Executive (Sales & dispatch), MUL and others entered into criminal conspiracy and caused pecuniary advantage of Rs. 4 lakh to the allottees of 13 vehicles of different models from the priority quota on the pre-budget price by unauthorisedly withdrawing vehicles, which were meant to be delivered to the general customers on the waiting list in violation of rules and regulations. On investigation by the CBI, the CBI found that the revision petitioners, A.K. Jain & Rohini Parkash, as well as R.C. Bhargava entered into a criminal conspiracy with the object of causing pecuniary advantage to certain customers by providing them vehicles of different models on the pre-budget price after the date of the budget which raised the price of the cars by an amount of Rs. 30,000/- to Rs. 38,000/-. During the period in question, i.e., from 23.7.1991 to 16.8.1991, MUL was a Government undertaking; excise duty was enhanced with effect from 24.7.1991 causing the aforesaid increase in the prices of different models of Maruti cars. Special permissions from the Excise Commissioner was taken for taking out the vehicles from the factory on the budget day and one day before the budget. Vehicles of all categories were dispatched up to 5.00 p.m. on 24.7.1991. At 5.00 p.m., excise gate of the factory was closed. Out of the total vehicles invoiced on 24.7.1991, 17 vehicles of priority category from the manufacturers quota as well as Foreign Exchange Quota could not be taken out of the factory. On 24.7.1991, 19 vehicles were stock transferred for being delivered to the customers who were registered in the general category through Maruti Sales & Service, Delhi [in short 'MSS (D)'].

(b) The Hon'ble Supreme Court vide an order dated 3.9.1987 provided guidelines for allotment of vehicles of different quotas. The customers of the priority category who could not get vehicles dispatched on 24.7.1991 raised objections to the effect that the customers junior to them had received the vehicles whereas they were ignored. To accommodate such customers about 11 vehicles available with MSS (D) out of the stock transferred vehicles dated 24.7.1991 were withdrawn and delivered to them at the pre-budget prices through supplementary invoice dated 31.7.1991 prepared by Ms. Rohini Prakash in connivance with Shri A.K. Jain and Shri R.C. Bhargava. The other 8 vehicles were invoiced by MSS (D) to their customers in general category. On account of such favortism, Maruti AC car was given to Shri Virender Gupta, IFS, by ignoring S/Shri Hans Raj, Charanjeet Singh and Ms. Bala Sharma, who were senior to him. Similarly, M/s. Bagaca A/c. CPS and State Trading Corporation of Sikkim were ignored in allotting cars to Mrs. Fatima Feroza, Mrs. Kavita Sikka, Ms. Bosama Verghese, Mr. N. Shashidharan, Ms. Sheela Bhanwar and Mr. Jagdeep Singh. Similarly, a vehicle was allotted to Shri Pawan Diwan, MP by ignoring the other waiting customers, Lt. General Y.A. Mande, AVSM, Mr. Sanjay Kumar Yagyseni and Mr. Mayank Pareek. Shri. Shibu Soren, M.P. had booked a Gypsy from manufacturers quota vide his application dated 17.7.1991 and he deposited the cost of Gypsy on 22.7.1991. The Gypsy was directly billed on 24.7.1991 but the same could not leave the factory premises because of closure of excise gate. Subsequently on his asking a vehicle was given to him at the pre-budget price out of those which were taken out on 24.7.1991. Thus, it is inferred, that Mr. A.K. Jain, Ms. Rohini Prakash and Mr. R.C. Bhargava entered into a criminal conspiracy for causing pecuniary advantage to certain allottees in preference to others and thereby committed the offences.

The trial Court passed the impugned order on 26.8.1995. At the time of arguments on charge, the CBI placed reliance on the statement of Ms. Renu Sharma, Deputy Manager, MSS (D) (Sales) and argued that it was apparent from her statement that the two accused, A.K. Jain and Rohini Prakash, had actively prevented the general category customers for whom the vehicles were rolled out of the factory from getting those vehicles and got the same allotted to the priority quota customers (also referred to as the 'direct billing customer'). Reliance was also placed on the statement of Mr. Anurag Goel, Joint Secretary, Ministry of Home Affairs, who admitted having been allotted a Maruti AC car out of the manufacturers quota by CMD, Shri R.C. Bhargava on the pre-budget price although his application was received only on 7.8.1991. Similarly reliance was placed on the statement of Shri Shibu Soren, M.P., who said that the Gypsy was delivered to him on 31.7.1991 on the pre-budget price and was thus given a preferential treatment.

2. The learned trial Court opined that the evidence collected, prima facie, showed that certain vehicles which rolled out of the factory at unincreased prices were diverted to M/s. Rohan Motors, Gurgaon though they should have been sent to the MSS (D) and these were meant to be supplied to the general category customers. 12 out of these vehicles were given to direct billing customers and to that extent 12 persons of the general category suffered. The trial Court has also remarked in its order that it also appeared that the seniority in allotment of vehicles to direct billing customers was ignored in certain cases; that certain manipulations were done because the invoices were changed and allotment was withheld as deposed by Ms. Renu Sharma and that those who came in contact with Mr. R.C. Bhargava got the benefit of prices prevailing before 24.7.1991. The defense relied upon the statement of witness, Partha Barooah, who said that there was no irregularity on the part of Shri R.C. Bhargava who was the Chairman-cum-Managing Director of MUL and he had his discretion in giving preference to customers who were entitled to get preference over the general category. The Trial Court found that there was a strong suspicion which was sufficient to frame charges against the accused and, therefore, proceeded to frame charges as mentioned above.

3. It is submitted in the revision petition that the Trial Court did not have any material on the basis of which it could be said that there was any suspicion against the revision petitioners. The trial Court in the impugned order says that during investigation it was found that certain vehicles which rolled out of the factory on unincreased prices were diverted to M/s. Rohan Motors, Gurgaon instead of being delivered to MSS (D). To this extent, there is no dispute inasmuch as the revision petitioners also admit that 19 stock transferred vehicles which rolled out of the factory were sent to M/s. Rohan Motors. But that by itself does not constitute any offence. What the prosecution has to show is that the present petitioners had committed any offence in the matter of actual allotment of these vehicles.

4. It is indeed true that the trial Court has not mentioned the material placed before it by the CBI on the basis of which the trial Court came to the conclusion that there was a strong suspicion against the accused or against the present revision petitioners. The principal points on which the allegations of corruption are made are that some vehicles meant for the general category customers were given to the priority quota customers thereby causing pecuniary advantage to the priority quota customers at the cost of some general category customers and that the present revision petitioners are involved in such diversion of vehicles from the general quota to the priority quota. Yet another allegation which might constitute an offence is that even within the priority quota there was violation of the seniority and so some in the priority quota were favored at the cost of others who were denied the vehicles at the pre-budget price. Although, the charge-sheet says that such things had taken place it did not specify the evidence on the basis of which such prima facie findings could be arrived at. Even the written submission of the CBI before this Court did not categorically bring out the evidence available to support such allegations. Accordingly on 31.3.2005 this Court passed the following order:

"Crl.Rev.P. 217/1995

In the written submission of CBI submitted to this Court on 28th April, 2005 the facts of the case are described in brief. However, this written submission lacks in certain particulars--

(i)    The CBI has not mentioned how it has come to the conclusion that 17 vehicles which were stock transferred or were rolled out of the factory were meant for general category customers on the relevant day and as to whether any of these vehicles had actually been invoiced for a general category customer;
 

(ii)   It is alleged that even amongst the priority customers violation of seniority norm has been done. The CBI has not disclosed if any of those priority customers bypassed had actually paid the price for the vehicle and, therefore, could have a grievance if he was by passed;
 

(iii) The written submission does not disclose how each of the petitioners in this petition is linked to the offence.
 

A statement to this effect be submitted on 8th July, 2005."
 

The CBI filed a written statement in response to the order of this Court. In this written statement, on the first point, reliance is placed on the statements of Shri Partha Barua, Regional Manager (South) MUL, Ms. Renu Sharma, Deputy Manager, MSS (D) (Sales) and Shri S. Raghavan, DPM, MSS (D). The part of the statement of Shri Partha Barua which is relevant for the present issue is as under:

"The Budget for 1991-92 was to be announced on 24th July, 1991. On that date, MUL made efforts to sell as many cars as possible. Cars were either sold to, dealers under 'C' Form or were stock transferred to MSS (D), or were directly billed to customers who were entitled to direct billing e.g. MQ (Management Quota), foreign exchange, Govt. departments, etc. Special permission had been taken from the excise department to make sales on the 24th of July, but the gates of the factory were closed at 5.00 p.m. by the Excise Department. This is the normal practice on the day of the budget. An effort was made to ensure that customers entitled to priority; particularly those with MQ allotments or who had paid in foreign exchange were given vehicles."

"After the factory gates had been closed, it was found that there were some MQ and foreign exchange customers whose vehicles could not be billed and sent out of the factory. In some cases, vehicles were invoiced and loaded for dispatch but could not be sent out of the factory due to closure of gate. Since these customers were priority category customers and in terms of the Company policy were entitled to vehicles before those customers who had paid under the general category, it was decided that the cars available in MSS (D) should be delivered to these customers. Accordingly, 10 of the aforesaid customers who had paid in foreign exchange and one under MQ were given vehicles which were available in MSS (D) under stock transfer. This was done strictly in the order of priority as per the pending list prevailing on 24.7.91."

The part of the statement of S. Raghavan relevant for the issue is as under:

"I am posted as Departmental Manager in MUL. At present I am staying at C-60, NDSE, Part I, New Delhi which is a rented accommodation. I have been working with MUL since 1983. In July 1991 I was posted as Departmental Manager with MSSD (Sales), Malcha Marg. The main function of MSSD (Sales), Malcha Marg was the booking of vehicles (all categories) for sale to customers. At the time of booking the customer used to fill a form prescribed by the Company from time-to-time. We used to maintain a register in which the particulars of bookings were entered on day-to-day basis. An amount prescribed by the Company as booking advance was also to be deposited by the customer. Such advances could be received in the form of B.D. or Cheque, Banker's Cheque or individual Cheques (subject to the realisation) and a receipt was issued to the customer. The information was fed into a computer. The information in P.C. normally used to be date of booking and file No. and customer's name. The information was separate for separate type of vehicles. This was just to maintain a seniority of booking. The vehicles were allotted to the individual customers according to the cut-off date decided by our Regional Office which is at 6th Floor, Ansalya Building, Barakhamba Road, New Delhi. The delivery of vehicles also depended, upon the availability of the colour of the vehicle. The delivery of vehicle was made only after realisation of full cost of the vehicle for which receipt was used to be issued. The vehicles according to our requirements were sent by MUL (Vehicles dispatch Department) to our Narayana Workshop by trailors. The trailor used to unload the vehicles at Narayana at the MSSD Workshop, Narayana and the vehicles were given in the charge of Works Manager. Mr. A. Chaudhary used to be the Works Manager in July 1991 and is still continuing at the same post. Pre delivery inspection was conducted at Narayana and the vehicles were sent by road to Malcha Marg for delivery to the customers. We used to receive the information about the vehicles received for delivery through transfer challans prepared by VDD/MUL factory. The invoices of direct billing vehicles were received along with such transfer challans. All vehicles for which direct billing invoices were not received were meant for general customers. The information of the transfer advices were entered by our officials in stock register and the letters were issued by the concerned Managers and Deputy Managers to the customers according to the seniority. The letters of intimation to the customers were sent as UPC letters. Generally the customers themselves used to make inquiry from time-to-time and they could contact us before the receipt of letters. Therefore, the vehicles were speedily delivered after receipt of the payments from them. Priority was given to the allottees of MQ and foreign exchange quotas. Other vehicles were delivered strictly according to the seniority of full payment and cutoff date."

The portion, of Ms. Renu Sharma's statement relevant for the issue is as under:

"The invoicing and allotment to general customers having booking with us was made by us whereas the foreign exchange customers were issued direct billing invoices by VDD (MUL) according to their own system."

From these statements it appears that there were three ways of allotments; (1) through direct billing, i.e., priority quota; (2) to dealers against 'C' Form; or (3) stock transferred to MSS (D). Those stock transferred were generally speaking allotted by MSS (D) to general category. Till the actual allotment by MSS (D), these stock transferred vehicles remained available with the company for actual allotment. In fact, it is not the case of the prosecution that any vehicle was actually allotted or invoiced to any general category customer which was withdrawn. The case is that some priority customers for whom vehicles had been invoiced but could not be taken out of the factory would have paid a higher price if they had got their vehicles on the day following the budget or thereafter. Instead they were given vehicles out of stock transferred ones which entitled them to purchase vehicles at a lower price. But the question is whether this is sufficient to raise a suspicion of corruption. All the witnesses of the prosecution claim that this was done according to company's policy and strictly according to seniority. It was for the prosecution to show how the distribution of the vehicles was required to be made and how any violation thereof took place. Admittedly, the Supreme Court directive had expired by then. The company's policy continued to have priority quota which included 'foreign exchange quota', 'management quota (MQ)' and Government departments, hospitals, etc. Was any roster drawn up for determining 'seniority' inter se the, general category customers and priority customers? Was there a method to select as to after how many general category allotments one or more allotments of priority category could be made? The CBI could show that one customer was favored over another only if it could show that in giving vehicles to priority quota from the stock transferred vehicles, the norms hitherto followed by the company in respect of seniority or sequence of allotment were violated. The CBI does not claim to have obtained any such seniority list. On the other hand, the statement of witnesses say that they were according to seniority. If the prosecution wants to rely on these statements and yet allege an offence, it has to prove this part of the statements of the witnesses to be false.

The next point to be considered is whether amongst the priority quota customers, there was any violation of seniority while providing them the vehicles in question. Here again the CBI has miserably failed to procure any evidence. A list of priority quota customers has been filed but the CBI has not obtained any evidence to show that the list is drawn according to seniority. On behalf of the defense, it is submitted that delivery depended upon the payments being received and confirmed. It is in evidence that the delivery of cars were not to be made only as per the sequence of booking because the customer's choice of colour of the vehicle was also a factor be considered. It is futile for the CBI to say that any such impropriety had been committed by the MUL in the matter of allotment unless the CBI brings out clearly the entire scenario and point out the deviation, if any. The CBI quotes the statement of one Shri Chander Mohan Kumka who says he is aggrieved on account of the omission of MUL in providing him with a vehicle. The part of his statement relied upon by the CBI is as under:

"I had booked a Maruti Standard Car (any colour) through M/s. Competent Automobiles Co. (P) Ltd. (Dealer Code 03067) at their Connaught Place office on 22.7.91 against foreign exchange. I had deposited a Bank Draft No. C-16613 dated 12.7.91 of SBI, LA (USA) payable at SBI, New Delhi for an amount of Rs. 1,30,713/- vide receipt dated 22.7.91 against foreign exchange quota, which I had received from my brother Mr. Rajesh Kumar Kumra from USA...."

"...But many persons who had paid money after me had been allotted vehicles on old price on 24.7.91 and later on as well. I was allotted a car with chassis No. 452746, engine No. 647894, colour 14G (German Red) vide Direct Billing Invoice No. 121284 dated 12.8.91 on the increased price. I had no other alternative but to take the delivery of the car at the increased price because I could not get my deposit in foreign exchange back. The allotments to foreign exchange customers on 24.7.91 and later on at the old price have not been fairly done by the officials of MUL. The MUL has caused me a wrongful loss of Rs. 31,950/- by intentionally ignoring to allot me the vehicle on old price, whereas some other customers having deposited money after me were given the vehicles at old price. This amount to a malafide and intentional set to cause a wrongful loss for which necessary legal action must be taken against them."

It is clear from a plain reading of this statement that this statement is nothing but a bundle of allegations. This statement could have given cause to the CBI to investigate which the CBI has failed to do. Shri Chander Mohan Kumka says that many persons who paid money after him were allotted vehicles at old prices of 24.7.1991. He, however, has not given the names of those favored customers. He also admits that he could not get his deposit in a foreign exchange bank and yet complains that allotment of foreign exchange customers on 25.7.1991 had not been fairly done by the officials of MUL. This witness proves nothing against the revision petitioners.

6. Shri Partha Barua was interrogated on the question of violation of seniority. He, in his statement, has explained all the allotments of the priority quota customers. The learned Counsel for the prosecution/respondent has not pointed out if despite such explanation, there was any scope to suspect any corruption.

7. Assuming that an offence had been committed by someone in the MUL, it is necessary for the CBI to show how the present revision petitioners, A.K. Jain and Rohini Prakash, are involved in it. In the written submissions filed by the CBI in response to this query, reliance is placed on the statement of Smt. Renu Sharma, Deputy Manager, MSS (D) (Sales) and Shri S. Raghavan, DPM, MSS (D) Sales. The portions of the statement of Smt. Renu Sharma relied upon for A.K. Jain is as under:

"On 26.7.91 Shri A.K. Jain, Department Manager (S&D) visited the showroom at Malcha Marg and informed me and my colleague Mrs. Meena Habibuddin that 17 new cars have been stock transferred to MSSD but instructed not to allot them to any customers till further instructions."

The portion of the statement of Shri S. Raghavan, DPM, MSS (D) Sales relied upon to implicate A.K. Jain is as under:

"Out of the vehicles listed above no vehicle was physically received at MSSD" Sales, Malcha Marg Showroom. Since we had not received transfer challans dated 24.7.91 therefore, we were not aware of the number of vehicles being received by us for allotment to the customers. After 2-3 days of the budget Mr. A.K. Jain, DPM (S&D) had personally visited our showroom in the evening and told Mrs. Renu Sharma/Ms. Meena Habibuddin, that some vehicles have been stock transferred but no action for the allotment of these vehicles should be taken till further orders."

"A few vehicles out of those at stock transferred on 24.7.91 were withdrawn by VDD. Why those vehicles were withdrawn from stock yard and to whom were those allotted is not known to me. Mr. A.K. Jain may be able to tell something about the circumstances of withdrawal of the vehicles from the stock yard. The vehicles reportedly withdrawn were not physically received at MSSD showroom, Malcha Marg, New Delhi."

All that these two statements say is that A.K. Jain asked that these 17 vehicles stock transferred be not allotted to any customer till further instructions. The offence is actually committed, if at all, when the vehicles were actually invoiced and allotted to a specific priority quota customer. Evidence of Smt. Renu Sharma and Shri S. Raghavan quoted above do not in the least say that A.K. Jain was the person who decided that these vehicles be given to the priority quota customers or to any specified priority quota customer. His instruction that these vehicles be not invoiced to anyone till further instructions by itself do not constitute any offence. Nor can any inference be drawn that he was involved in committing any impropriety.

8. So far as Smt. Rohini Prakash is concerned, strong reliance is placed on her notes dated 3.8.1991 & 16.8.1991, which are as under:

"Sales & dispatch Deptt D-60/2P 3/8/91

1.0 The following vehicles originally stock transferred to MSS (D), have been reinvoiced in favor of direct billing customers from other dealership Sl.No. Model Chassis Engine Delivery dlr

1. OS01T 449656 642522 Competent

2. CA01T 449378 641282 Vikas

3. CA01T 449491 641395 Sikand

4. CA01T 449511 641247 Competent

5. GP01T 138876 143583 Competent

6. CS03T 449082 641915 Popular Tractors

7. CS03T 449144 641941 Pasco

8. CS01T 449682 642.504 Popular

9. CA OZM 449545 642342 Kanpur

10. CA OZM 449365 641428 Union Motors

2.0 The Delhi dealers will have their vehicles collected from MSS (D). You are requested to kindly hand these over.

3.0 Vehicles to go to outstation dealies (S.No. 67 to 107) may please be sent back to the factory by the trailer reaching you on Monday, 5th Aug., so that they can be dispatched onward."

"Sales & dispatch Deptt.

          D-60                                                  16/8/91

 

1.0 The following vehicles have been reinvoiced to other dealership, as per our earlier note dated 3/8/91.
      Model          Colour                  Chasis              Engine
     CS             White                   449682              642504
     CS             Cairo Dust              449144              641941

 

2.0 You are requested to kindly send these vehicles back to the factory through the bearer of this note.
 

Sd/- R. Prakash 

(Rohini Prakash) 

Executive (S&D)"
 

These notes mention some decision already having been taken and are written in order to put the decision into effect. It is for the CBI to prove at which level of management such a decision was taken. The management itself has never made any grievance against Smt. Rohini Prakash in respect of these allotments. If the allotment was an offence, the CBI was required to produce evidence before the Court to show who actually made the decision. At least these notes do not show that it was Smt. Rohini Prakash who made the decision.

9. It is further noticed that the prosecution at no place says that either Shri A.K. Jain or Smt. Rohini Prakash had any reason to prefer one customer over another. No link between any alleged favored customer and these two revision petitioners is shown in any way.

10. I find that the evidence with the prosecution is not sufficient to frame charge against the two revision petitioners. There is no quarrel with the proposition that charge can be framed in a case only if a strong suspicion is present in a case. In the present case, however, the crucial evidence of any impropriety of any kind is missing. I am unable to see any strong suspicion against the two revision petitioners which can suffice for framing a charge. One can refer to the oft-quoted classical judgment of Union of India v. Prafulla Kumar, , wherein the principles governing the framing of charge were given. The third principle enunciated in the judgment is:

"10(3). The test to determine a prima facie case would naturally depend upon the facts of each case and it is difficult to lay down a rule of universal application. By and large however if two views are equally possible and the Judge is satisfied that the evidence produced before him while giving rise to some suspicion but not grave suspicion against the accused, he will be fully within his right to discharge the accused."

Since no grave suspicion is evoked by the prosecution, it will not be proper to frame charge against the two revision petitioners. If charge is framed on such vague allegations and without any cogent evidence whatsoever, it will not only amount to miscarriage of justice but will also lead to wastage of judicial time which will be spent in the trial. I, therefore, allow the revision petition and quash the charge framed against the two revision petitioners.