Shri Pratap Narayan vs State Through Cbi
2009 Latest Caselaw 4081 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

+      W.P.(Crl) 631/2008

                                Reserved on: October 5, 2009

                              Pronounced on: October 9, 2009

#      SHRI PRATAP NARAYAN.                  ..... Petitioner

!                           Through: Mr. Arvind K. Nigam, Sr.
                            Advocate with Mr. Sampat Kumar
                            Nigam, Advocate

                     Versus

$      STATE THROUGH CBI                   ..... Respondent

^                           Through: Mr. Vikas Pahwa, Advocate,
                            Standing Counsel for CBI with
                            Advocate BIswajit Kumar Patra.

CORAM:

    HON'BLE MR. JUSTICE V.K. JAIN



       1. Whether Reporters of Local newspapers may be
          allowed to see the Judgment? Yes

       2. To be referred to the Reporter or not? Yes

       3. Whether the Judgment should be reported in the
          Digest? Yes




V.K.Jain, J.

This is a petition under Article 226 of the Constitution,

read with Section 482 of the Code of Criminal Procedure,

seeking quashing qua the petitioner of R.C. No.11/88,

pending in the Court of Special Judge, Delhi.

2. At the relevant time, the petitioner was working as

Executive Director of Fertilizer Coordination Committee

(hereinafter referred to as „FICC‟), which was constituted by

Government of India, Ministry of Chemical & Fertilizers, to

administer and operate the Retention Price Scheme of the

government for fertilizers. The functions to be performed by

F.I.C.C. included fixation of ex-factory price of fertilizers and

payment of subsidy to the manufacturers of fertilizers. One

Shri P.K. Parmar, Managing Director of Punjab Phosphate

Private Limited submitted claims for grant of subsidy for the

fertilizers alleged to have been produced by the Company

during the period from December 1980 to July 1981. The

case of CBI, as disclosed in the charge-sheet and the reply

filed in this court is that the petitioner was party to a

criminal conspiracy, pursuant to which Shri P.K. Parmar,

Managing Director of Punjab Phosphate Private Limited and

others submitted bogus subsidy claims, by falsely showing

production and sale of Single Super Phosphate (hereinafter

referred to as „SSP‟) and fraudulently and dishonestly

cheated Government of India of a sum of Rs. 3,33,45,282/- by

way of bogus / fake subsidy claims. According to the CBI, the

petitioner in criminal conspiracy with Shri P.K. Parmar and

others abused his official position as a public servant and

facilitated Shri P.K. Parmar in obtaining bogus subsidy

claims.

3. The scope of exercise of power under Section 482 Cr.

P.C. and the categories of cases where the High Court may

exercise power under it, relating to cognizable offences, to

prevent abuse of process of any court or otherwise to secure

the ends of justice were set out in State of Haryana v.

Bhajan Lal; AIR 1992 SC 604. The illustrative categories

indicated by the Hon‟ble Supreme Court are as follows:

"(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.

(2) Where the allegations in the First Information Report and other materials, if any accompanying the F.I.R. do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of Magistrate

within the purview of Section 155(2) of the Code.

(3) Where the uncontroverted allegations made in the F.I.R. or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.

(4) Where the allegations in the F.I.R. do not constitute a cognizable offence but constituter only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.

(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.

(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the

concerned Act, providing efficacious redress for the grievance of the aggrieved party.

(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.

4. In R. Kalyani v Janak C. Mehta & Others; (2009) 1

Supreme Court Cases 516, the Hon‟ble Supreme Court

summarized the proposition of law on the subject as under:

"(1) The High Court ordinarily would not exercise its inherent jurisdiction to quash a criminal proceeding and, in particular, a first information report unless the allegations contained therein, even if given face value and taken to be correct in their entirely, disclosed no cognizable offence.

(2) For the said purpose the Court, save and except in very exceptional circumstances, would not look to any document relied upon by the defence.

(3) Such a power should be exercised very sparingly. If the allegations made in the FIR disclose commission of an offence, the Court shall not go beyond the same and pass an

order in favour of the accused to hold absence of any mens rea or actus reus.

(4) If the allegation discloses a civil dispute, the same by itself may not be a ground to hold that the criminal proceedings should not be allowed to continue.

5. While exercising jurisdiction under Section 482 of the

Code, the High Court should not normally embark upon an

enquiry to find out whether the evidence sought to be

produced by the prosecution is reliable or not or whether it

would be possible to sustain the accusation on a reasonable

appreciation of the evidence. Appreciation of evidence is the

function of the Trial Court and not of the High Court

exercising jurisdiction under Section 482 of the Code.

Though the powers of the High Court under Section 482 of

the Code are quite wide, they need to be exercised with due

caution and should not be used to stifle a legitimate

prosecution. It is not appropriate for the High Court to

analyse the case of the prosecution on probabilities and to

come to a particular conclusion, an assessment of the

material produced by the prosecution. The purpose of

empowering the High Court, to quash FIR and/or charge-

sheet/complaint is that the court proceedings should not be

allowed to be used as a tool of harassment or persecution. If

on a consideration of the allegations it appears to the High

Court that ingredients of the offence or offences alleged to

have been committed by the petitioner are made out and

there is no material to show that the prosecution is mala fide,

frivolous or vexatious, there would be no justification for

interference by it. Of course, if the allegations made against

the petitioner even if taken on their face value do not

constitute the offence of which cognizance has been taken or

do not disclose essential ingredients of the offence with

which he is charged or are ex facie absurd or inherently

improbable, it is open to High Court to quash the same in

exercise of inherent powers under Section 482 of the Code.

6. Ordinarily, an accused against whom criminal

proceedings are instituted should be tried in accordance with

the procedure prescribed under the Code of Criminal

Procedure and the High Court should be reluctant to

interfere with such proceedings at an interim stage. It is

only the extreme cases which warrant interference by the

High Court in exercise of the powers u/s 482 of the Code of

Criminal Procedure. The Court would normally interfere only

where it is satisfied that continuance of criminal proceedings

would amount an abuse of the process of the court or that

the quashing of the impugned proceedings are likely to result

in securing the ends of justice. In M/s. Medchl Chemicals &

Pharma Pvt. Ltd. Vs. M/s. Biochemical E. Ltd. 2000 (3) SCC

269, the Hon‟ble Supreme Court held that exercise of

jurisdiction as envisaged in Section 482 of the Code to have

the complaint or the charge-sheet quashed is an exception

rather than a Rule and cases for quashing at the initial stage

must have to be treated as rarest of rare so as not to scuttle

the prosecution. Undue expansion of this jurisdiction is

neither practicable nor warranted. While exercising power

u/s 482 of the Code, the court is required to examine the

allegations in their entirety and has no authority or

jurisdiction to examine their correctness. Whatever appears

on the face of the charge-sheet should be taken into

consideration without any critical examination of the same.

7. The charge attributed to the petitioner is sought to be

proved by the following evidence.

(i) No Single Super Phosphate was actually

produced by Punjab Phosphate Private Limited

during the period in question and this fact was

very much in the knowledge of the petitioner as

Chief Agriculture Officer, Amritsar had been

regularly informing FICC that this company was

not manufacturing and selling any SSP fertilizer

and was in fact submitting Bogus claims for

obtaining subsidy.

(ii) The Chief Agriculture Officer was the Verifying

Authority on behalf of the state government in

respect of subsidy claims and Directorate of

Industries was not competent to verify such

claims. Despite that, the petitioner directed

processing of the very same subsidy bills, which

had earlier been returned by FICC for want of

verification by Chief Agriculture Officer, without

the bills having been verified by the Verifying

Authority.

(iii) Though the letter dated 28.10.82 was not

addressed to the petitioner, it was accepted

directly by him, bypassing the regular office

procedure for receipt of such documents. The

letter dated 28.10.82 was not received through

regular office channel and was brought directly

by Shri P.K. Parmar, Managing Director of

Punjab Phosphate Private Limited to the

petitioner.

(iv) Initially the petitioner wrote "please discuss" on

the letter, but, later on he changed the mind and

directed processing of the claims.

     (v)         The petitioner directed the processing on urgent

                 basis    pursuant        to   which      the   matter    was

processed and the payment was made on the very

same day.

8. According to the petitioner in June, 1982, Joint Director

(F & A) sought his guidance as to whether payment of bills

could be made on the basis of certificate of Industries

Department, as Agriculture Department had reported that

the firm had not manufactured or supplied any SSP and he

advised that considering the view of Agricultural Directorate

the subsidy could not be paid. The bills were therefore

returned to the firm, intimating it about the adverse report of

Agricultural Directorate. Since the representative of the firm

kept pressurizing his claims, a reference was made in July,

1982 by Joint Director (F & A) to Chief Secretary,

Government of Punjab, requesting him to resolve the

contradictory position taken by Industries Department, which

had certified the bills and Agricultural Department which had

taken the stand that the firm has not manufactured or

supplied any SSP. This reference, according to the

petitioner, was made under his advice. In response to the

aforesaid reference, Deputy Secretary (Agriculture),

Government of Punjab, vide his communication dated

28.10.82 advised FICC to release subsidy for the period

December 1980 to July, 1981. The communication dated

28.10.82 was brought to the petitioner, who marked the

same to Joint Director (F&A) (who was officer concerned for

settling the claims), to have it processed urgently. The case

was not put up again to the petitioner and the payment was

finally approved by Joint Director (F&A). His contention is

that he had no reason to go behind the letter dated 28.10.81

from Govt. of Punjab and to withhold the subsidy.

9. This is not the case of the petitioner that he was not

aware of the communications received from the Chief

Agriculture Officer informing FICC to the effect that M/s.

Punjab Phosphate Private Limited had not manufactured any

SSP during the period in question and was claiming bogus

subsidy. The petitioner himself has stated in para 13 of the

petition that he had advised against the payment of subsidy,

as Agricultural Department had reported that this firm had

not manufactured or supplied any SSP. In para 14, he has

stated that the bills were returned to the firm intimating

them about the adverse report of Agriculture Directorate.

Thus, the petitioner was fully aware of the stand taken by the

Chief Agriculture Officer.

Annexure P-8, which is a document filed by the

petitioner himself, records that under letter dated 29.9.81

Shri P.K. Parmar wrote to the Executive Director, FICC

(petitioner herein) enclosing a copy of letter dated 9.3.81

stating that the Chief Agriculture Officer was the authorized

officer for verifying the subsidy bills. If this is true, then the

petitioner cannot dispute that Chief Agriculture Officer was

the authorized officer for verifying the subsidy bills. The

learned counsel for the petitioner has pointed out that vide

OM dated 6th December, 1996 (Annexure P-9), Government of

India, Ministry of Chemicals and Fertilizers has specifically

noted that instructions of the department did not specify the

authority of the state government which had to counter sign

such claims. The contention is that since there was no

instructions from the government as to who was the

Verifying Authority in respect of the subsidy bills, it cannot

be said that Chief Agriculture Officer was the verifying

authority of the State Government for this purpose. At this

stage, it is not permissible for this court, exercising

jurisdiction under Section 482 of Code of criminal Procedure,

to go into this question and take a view as to whether Chief

Agriculture Officer was the Verifying Authority in respect of

subsidy claims as is the case of prosecution or there was no

particular officer nominated by the State Government for this

purpose, as is stated in the OM dated 6th December, 1996. At

this stage, the court has to take the case of the prosecution

on its face value and then see whether any offence is made

out against the petitioner, assuming the allegations to be

correct. CBI has specifically alleged in para 12 of the charge

sheet that the claims submitted by Shri P.K. Parmar had not

been verified by proper and competent authority i.e. Chief

Agriculture Officer, Amritsar, who had been regularly

informing FICC that this firm was not manufacturing and

selling any SSP and was submitting bogus claims for

obtaining subsidy. As per para 17 of the charge sheet, as per

the existing instructions, the claims for subsidy were to be

routed through Chief Agriculture Officer, Amritsar. In para

26 it has been alleged that FICC officials knew fully well that

the subsidy claims were required to be forwarded only by

Chief Agriculture Officer, Amritsar, as per procedure laid

down by the department, but, they sanctioned the subsidy

only on the recommendation of official of DIC Amritsar,

which was against the laid down procedure. As noted

earlier, Annexure P-8 records that the petitioner knew, from

a letter sent to him by Shri P.K. Parmar, that Chief

Agriculture Officer was the Verifying Authority for subsidy

bills. Admittedly, when the letter dated 28.10.1982 was

submitted by Shri P.K. Parmar directly to the petitioner, it

was accompanied by subsidy bills which were not verified by

the Chief Agriculture Officer, Amritsar. Despite that the

petitioner chose to direct the processing of the claims. Prima

facie this would indicate connivance between Shri P.K.

Parmar and the petitioner. it is true that Deputy Secretary

(Agriculture) had advised payment of subsidy bills on the

basis of verification by Directorate of Industries, but, since

the petitioner knew that the competent authority to verify the

subsidy bills was Chief Agriculture Officer and not

Directorate of Industries, had he been acting in a bonafide

manner instead of directing processing of the claim, he

would have advised his officers to request Department of

Agriculture to direct the Chief Agriculture Officer to verify

the subsidy bills instead of asking them to make payment on

the basis of verification by Directorate of industries. FICC

was not subordinate to Government of Punjab and therefore

was not duty bound to act upon the letter written by Deputy

Secretary (Agriculture), Govt. of Punjab, if under the scheme

subsidy bill was required to be verified by Chief Agriculture

Officer. This is, more so, when the Chief Agriculture Officer

had been consistently writing to them that this firm was not

manufacturing or selling SSP during the relevant period and

was claiming bogus subsidy. In the normal course, a senior

officer would not direct processing of the subsidy bills on the

strength of such a letter. The court cannot lose sight of the

fact that this was not a case merely of dispute as to who was

competent to verify the bills. Here, Chief Agriculture Officer,

was regularly writing to FICC, that this firm was not at all

manufacturing or selling any SSP and was claiming bogus

subsidy. In the background of such an official information,

coming from a senior officer, it was not expected of the

petitioner to direct processing of such dubious claims,

particularly when the letter dated 28.10.82 did not say that

in fact this firm was manufacturing or selling SSP during

relevant period or that the information given to FICC by

Chief Agriculture Officer was not correct. Not only that, the

copy of letter dated 28.10.82 was not even endorsed to Chief

Agriculture Officer. It would be noteworthy here, that the

Deputy Secretary, who wrote the letter dated 28.10.82, is

also a co accused with the petitioner.

10. Admittedly, letter dated 3rd July, 1982 was written by

Joint Director (F & A) of FICC to the Chief Secretary,

Government of Punjab and not to the Agricultural

Department. The letter dated 28.10.82 does not contain any

endorsement that it was issued with the approval of the Chief

Secretary. The letter was not issued by the Office of Chief

Secretary, Government of Punjab. If the letter is written to

the Chief Secretary, the response also should come from his

office or with his approval. In a case of this nature, where a

senior officer of the court has been saying that the claims

were bogus, a person acting bona fide would, in such

circumstance, have requested Deputy Secretary (Agriculture)

to place the matter before the Chief Secretary for his

decision and would not have gone by the recommendation

made by the Deputy Secretary. This is, yet, another

circumstance which points out towards complicity of the

petitioner in the matter.

11. The letter dated 28.10.82 is addressed to Deputy

Director (Administration) of FICC. Copy of the letter was not

endorsed to the Chief Secretary, Govt. of Punjab, though the

letter of FICC, referred in this communication, was sent to

the Chief Secretary and not to the Agricultural Department.

The petitioner accepted the letter directly from Shri P.K.

Parmar, though it was not addressed to him. At this stage,

there is no plausible explanation for the petitioner accepting

the letter directly from Shri P.K. Parmar. In the normal

course of office procedure, the letter would have been

delivered either to the Deputy Director (Administration), to

whom it was addressed, or would have been delivered in the

receipt section of the organization. This also is a

circumstance pointing towards the petitioner acting in

connivance with Shri P.K. Parmar. It is true that the

petitioner was senior to Deputy Director (Administration), to

whom the letter was addressed, but, in normal course, such a

senior person would not personally receive a letter addressed

to his subordinate, particularly when it pertains to a case of

this nature, where one department of the Govt. was claiming

that the subsidy claims were bogus.

12. Not only did the petitioner accept the letter addressed

to his subordinate, directly from Shri P.K. Parmar, he also

directed urgent processing of the matter. The direction for

urgent process has to be viewed in the background that

earlier these claims were returned for want of verification by

the Competent Authority. When they were brought to the

petitioner along with letter dated 28.10.82, they were still

not verified by the Chief Agriculture Officer. Copy of the

letter was not endorsed to the Chief Agricultural Officer or to

the Chief Secretary. Therefore, directing immediate urgent

processing of such a matter cannot be appreciated in this

backdrop. The petitioner needs to explain why he directed

urgent processing of such a matter. It is not as if the claim

for subsidy was getting delayed on account of any inaction on

the part of FICC officials. The subsidy claims had been

returned to the claimant as they were not verified by the

competent authority. Therefore, there was hardly any

ground for directing immediate processing of such claims.

13. One more reason why the conduct of the petitioner in

dealing with this matter becomes suspicious is that the letter

addressed by Deputy Secretary, Govt. of Punjab to Deputy

Director (Administration) was brought directly by the

claimant. In normal course, such a letter would have been

sent by Deputy Secretary (Agriculture) to Deputy Director

(Administration) of FICC by post or though a messenger. A

Senior Officer like petitioner should have got suspicious

when such a letter in a tainted case like this one was brought

directly by the beneficiary and if he directs immediate

processing of such a claim, it may be difficult to accept that

he was acting without any ill motive.

14. As is evident from the endorsement made by the

petitioner on the letter dated 28.10.82, he first decided to

discuss the matter but later on changed his mind and

directed its urgent processing. At this stage, there is no

explanation for this change of mind on the part of the

petitioner. The possibility of Shri P.K. Parmar prevailing

upon the petitioner to direct urgent processing instead of

discussion is a distinct possibility in these circumstances.

Presumably, it was felt that if the matter is discussed, there

may be objection to the admissibility of the claim since it was

not verified by the Chief Agriculture Officer.

15. The court cannot lose sight of the fact that there will

hardly be a case in which there would be direct evidence of

criminal conspiracy. It is only by connecting and putting into

place various facts and circumstances that a conspiracy can

normally be unearthed.

16. At this stage, it cannot be said that even if all the

allegations against the petitioner are accepted as correct, no

office of being a party to a criminal conspiracy is made out

against him. As noted earlier, it is not open to the court to

appreciate evidence at this stage and take a view on its

reliability or otherwise. This is a function of the trial court

and has to be left to it. In my view, in the facts and

circumstances of the case, it cannot be said that it would be

manifestly unjust to allow the process initiated against the

petitioner to be continued. This is not a case of no evidence

or no legally admissible evidence in support of the case of the

prosecution. The facts and circumstances of the case do not

warrant interference by this court, in exercise of jurisdiction

under Section 482 of Code of Criminal Procedure. The

petition is hereby dismissed.

The observations made in this order being tentative,

made only for the purpose of deciding this petition, shall not,

in any manner, affect or influence the decision of the trial

court on charge or on merits of the case.

(V.K. JAIN) JUDGE

October 9, 2009/acm