M/S Sri Avatika Contractors (I) ... vs The Inspector Of Police
2021 Latest Caselaw 7087 Kant

                            1


           IN THE HIGH COURT OF KARNATAKA
                  KALABURAGI BENCH

      DATED THIS THE 23 RD DAY OF DECEMBER 2021

                          BEFORE

        THE HON'BLE MR. JUSTICE H.P.SANDESH

        WRIT PETITION No.200441/2021 (GM-RES)
                   CONNECTED WITH
        WRIT PETITION No.200439/2021 (GM-RES)

IN W.P.NO.200441/2021

BETWEEN:

SRI. K ANDREW VINCENT
S/O LATE I. KALANDAIYESU
AGED ABOUT 50 YEARS
PROPRIETOR OF M/S PENTAGON SURVEYS
HAVING OFFICE AT. NO. 1888, 7TH A MAIN ROAD
E-BLOCK, 2ND STAGE, RAJAJINAGAR
BENGALURU-560010.

R/AT NO. 3672, 5TH MAIN
GAYATRINAGAR
BENGALURU-560021.
                                         ... PETITIONER

(BY SRI B.V. ACHARYA, SR. ADVOCATE A/W
 SRI AMRESH S ROJA, SRI MAYUR GADADAM D.S. AND
 SRI K. KUMAR, ADVOCATES)

AND

1. THE INSPECTOR OF POLICE
   CENTRAL BUREAU OF INVESTIGATION
   ANTI-CORRUPTION BRANCH
                          2

  GANGANAGAR
  BENGALURU 560032.

2. NTPC LIMITED
   NTPC BHAVAN, SCOPE COMPLEX
   R/O.NO.7, INSTITUTIONAL AREA
   LODHI ROAD, NEW DELHI-110003
   REP BY ITS: MANAGER DIRECTOR

                                        RESPONDENTS

(BY SRI PRASANNA KUMAR, ADVOCATE R1
 SRI D.P.AMBEKAR, ADVOCATE FOR R2)

      WRIT PETITION UNDER ARTICLE 226 AND 227 OF
CONSTITUTION OF INDIA R/W SECTION 482 OF THE CODE
OF CRIMINAL PROCEDURE, 1973 PRAYING TO ISSUE WRIT
IN THE NATURE OF CERTIORARI OR OF ANY OTHER NATURE
QUASHING THE ORDER DATED 20.01.2021, PASSED BY THE
SR. CIVIL JUDGE AND JMFC, BASAVANA BAGEWADI, TAKING
COGNIZANCE AND ISSUING SUMMONS TO THE PETITIONER
WHO IS ARRAYED AS ACCUSED NO.1, FOR THE OFFENCES
PUNISHABLE UNDER SECTIONS 120-B R/W 420, 468, 472
AND 511 OF IPC PENDING ON THE FILE OF THE SR. CIVIL
JUDGE AND JMFC, BASAVANA BAGEWADI AS AGAINST THIS
PETITIONER WHO IS ACCUSED NO.2, PRODUCED VIDE
ANNEXURE-'A' AND ETC.



IN W.P.NO.200439/2021

BETWEEN:

M/S SRI AVANTIKA CONTRACTORS (I) LTD
REPRESENTED BY ITS MANAGING DIRECTOR
SRI K.NARENDRAREDDY
S/O LATE VENKATARAMANAREDDY
HAVING OFFICE AT NO. 401/A-WING
DO. NO. 6-3-352/2 & 3 HEIGHTS COMPLEX
HYDERABAD-500034.
                          3

PRESENT ADDRESS BEING:
DOOR NO. 8-2-603/23/3 & 15
3RD FLOOR, HSR SUMMIT
BESIDE NO.1, NEWS CHANNEL
ROAD NO. 10, BANJARA HILLS
HYDERABAD-500034.
                                        ... PETITIONER

(BY SRI B.V.ACHARYA SR. ADVOCATE A/W
 SRI AMAR CORREA, SMT. SHRIDEVI BHOSHE AND
 SRI RAMACHANDRA SHENOY, ADVOCATES)

AND

1. THE INSPECTOR OF POLICE
   CENTRAL BUREAU OF INVESTIGATION
   ANTI-CORRUPTION BRANCH
   GANGANAGAR
   BANGALORE-560 032.

2. NTPC LIMITED
   NTPC BHAVAN, SCOPE COMPLEX
   R/O.NO.7, INSTITUTIONAL AREA
   LODHI ROAD, NEW DELHI-110003
   REP BY ITS: MANAGER DIRECTOR
                                      ... RESPONDENTS
(BY SRI PRASANNA KUMAR, ADVOCATE R1
SRI D.P.AMBEKAR, ADVOCATE FOR R2)

      WRIT PETITION UNDER ARTICLE 226 AND 227 OF
CONSTITUTION OF INDIA R/W SECTION 482 OF THE CODE
OF CRIMINAL PROCEDURE, 1973 PRAYING TO ISSUE WRIT
IN THE NATURE OF CERTIORARI OR OF ANY OTHER NATURE
QUASHING THE ORDER DATED 20.01.2021, PASSED BY THE
SR. CIVIL JUDGE AND JMFC, BASAVANA BAGEWADI, TAKING
COGNIZANCE AND ISSUING SUMMONS TO THE PETITIONER
WHO IS ARRAYED AS ACCUSED NO.1, FOR THE OFFENCES
PUNISHABLE UNDER SECTIONS 120-B R/W 420, 468, 472
AND 511 OF IPC PENDING ON THE FILE OF THE SR. CIVIL
JUDGE AND JMFC, BASAVANA BAGEWADI AS AGAINST THIS
                                   4

PETITIONER WHO IS ACCUSED NO.1, PRODUCED VIDE
ANNEXURE-'A' AND ETC.


     THESE PETITIONS HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 15.12.2021, THIS DAY, THE
COURT PRONOUNCED THE FOLLOWING:

                             ORDER

These two petitions are filed under Article 226 of the

Constitution of India read with Section 482 of Cr.P.C.

praying this Court to:

(i) issue a writ in the nature of certiorari to quash the order dated 20.01.2021 passed by the Senior Civil Judge and JMFC, Basavana Bagewadi taking cognizance and issuing summons to the petitioner who is arrayed as accused No.1 for the offences punishable under Sections 120B read with 420, 468, 472 and 511 of IPC as against accused Nos.1 and 2 respectively;

(ii) issue a writ in the nature of certiorari to quash the entire proceedings in C.C.No.12/2021 (arising out of RC.15(A)/2017 CBI ACB BLR) for the offences punishable under Sections 120B read with 420, 468, 472 and 511 of IPC pending on the file of Senior Civil Judge and JMFC, Basavana

respectively;

(iii) issue a writ of certiorari to quash the FIR dated 27.08.2017 in RC.15(A)/2017 registered by the respondent CBI and charge sheet pending in C.C.No.12/2021 for the offences punishable under Sections 120B read with 420, 468, 472 and 511 of IPC pending on the file of Senior Civil Judge and JMFC, Basavana Bagewadi as against accused Nos.1 and 2 respectively.

2. The factual matrix of the case is that the

petitioner/accused No.1 in W.P.No.200439/2021 is the

Company M/s Sri Avantika Contractors (I) Limited (SACIL),

represented by its Managing Director and the

petitioner/accused No.2 in W.P.No.200441/2021 is the

Proprietor of M/s Pentagon Surveys. The case of the

respondent No.1-CBI that the respondent No.2 - National

Thermal Power Project (NTPC) during the year 2012-13

was entrusted the work of site leveling to M/s Sri Avantika

Contractors (I) Limited i.e., accused No.1 and in turn the

accused No.1 entrusted the work of survey the same to

the accused No.2.

3. The respondent No.2-NTPC is the public sector

undertaking engaging the business of generation of

electricity and allied activites, awarded the work of Site

Levelling and Infrastructure Works Package for its Kudgi

Super Thermal Power Project Stage-I (3x800 MW),

Karnataka to the accused No.1 and in terms of the

contract, an agreement was executed on 02.04.2012 for

the value of work an amount of Rs.154,34,54,426/-. The

scheduled period for completion of the work was 30

months started from 27.02.2012 and the completion on

26.08.2014. Subsequently, contract value was increased

to Rs.183.54 crore and again the same was increased to

189.03 crore. Though 30 months time was fixed, there

were various reasons for the delay hence, the said work

could not be completed and the respondent No.2 granted

an extension of six months up to February 2015. Certain

disputes arose between the parties regarding the initial

levels and the quantities in the RA bills, leading to the

termination of the contract by NTPC on 24.03.2014. The

contract (GCC) provided that Dispute Settlement Clause

and several disputes that arose were referred to the

Dispute Resolution Board (DRB). As the decision of the

DRB was not acceptable to both the parties, the parties

resorted to the clause that provided for Dispute Settlement

Mechanism under the Contract and according to which the

dispute has been agreed to be resolved through Arbitration

consisting of a panel of three Member Arbitral Tribunal.

The accused No.1 presented claim for 36 items for the

total amount of Rs.139.14 crore. The accused No.2 made

a counter claim for 16 items. The Arbitration Tribunal by

its arbitral award dated 07.07.2017 accepted five claims of

the petitioner No.1 company and awarded an amount of

Rs.50,21,54,497/- and rest of the claims were rejected

and interest at 14% per annum was awarded. As regards

claims of NTPC, Tribunal accepted four of their counter

claims and rejected the rest of the claims and awarded an

amount of Rs.2,67,23,699/-. Upon setting off the claim

awarded to the petitioner company as against the counter

claim award to NTPC, it was held that an amount of

Rs.47,54,30,798/- was due by NTPC to the petitioner

company. The said award is marked as Annexure-D. The

charge sheet, FIR and the order sheet for having taken the

cognizance are marked as Annexures- A to C. The said

award has been challenged before the Single Judge at

Delhi High Court and Delhi High Court confirmed the award

passed by the Arbitration. In the meanwhile, the

respondent No.1-CBI based on the source information

investigated the matter and filed the charge sheet after

the Arbitral award. The case has been registered against

the accused No.1 and also against the officials of the NTPC

in R.C.15(A)/2017 CBI ACB BLR and issued FIR in terms of

Annexure-B and suspected offences are criminal

conspiracy, cheating, using forged documents as genuine

falsification of accounts, criminal misconduct by the public

servant. Wherein the accused No.1-M.V.Padmakumar,

Senior Manager (Civil), NTPC, S.S.Nathan-accused No.2

AGM (Safety), retired, NTPC and V.K.Pradhan-accused

No.3, General Manager (Project), NTPC and the accused

No.1 arrayed as accused No.4 and also against the non-

officials of NTPC and others. The CBI after the

investigation filed the charge sheet under Section 173(2)

of Cr.P.C., against the accused No.1 and accused No.2 and

another accused No.3 the then Project Managers of the

accused No.1 company and left out the original accused

i.e., accused Nos.1 to 3 in FIR. The charges leveled

against these petitioners that two sets of records are

prepared, one with actual measurements and second one

with inflated quantities/measurements and signed second

set of site level records which facilitated M/s SACIL in

using the said fabricated records to submit highly inflated

false bills to the tune of Rs.45.15 crore and based on the

said fabricated data made subsequent arbitration claim for

Rs.57.06 crore, after NTPC finally terminated the contract

with them.

4. The investigation reveal that two sets of

ground level data submitted by M/s. SACIL i.e., accused

No.1 company is fabricated and brief of the fact that in the

NTPC, original ground levels data bear the signatures of

some of the officials of NTPC but there is no any role of the

said officials of the NTPC and though the signatures are

obtained fraudulently by the accused No.1, it is also an

allegation against the accused No.2 that in collusion with

the accused No.1 got surveyed the land and measured by

the surveyor who is authorised surveyor of M/s SACIL and

hence, invoked the above offences.

5. The counsel appearing for both the petitioners

have vehemently contended that the contract agreement

was entered between the accused No.1 and NTPC on

02.04.2012 and the same was terminated on 24.03.2014

and the matter was referred to three Members panel

Arbitration and both of them have made the claim on

23.01.2016 and after due enquiry, the Tribunal,

unanimous award has been passed on 07.07.2017

considering the claim of both the parties. The very

contention of the counsel for the petitioners that after 100

days of the award and more than 3½ years after the

dispute started, CBI suo motu on the basis of the source

information, registered the FIR against some of the

officials of NTPC and the accused No.1 invoking the offence

under Section 120(b), 420, 468, 471, 477(A) of IPC and

under Section 13(2) read with Section 13(1)(d) of PC Act

but there was no reference to arbitral award whatsoever.

The counsel would submits that NTPC challenged the

award before the Delhi High Court invoking Section 34 of

the Arbitration and Reconciliation Act and the Delhi High

Court after hearing both the parties, dismissed the petition

filed by the respondent No.2 and confirmed the award

passed by the Arbitral Tribunal and uphold the same as

genuine. NTPC has filed the appeal before the Division

Bench which is pending for consideration. The counsel

also would vehemently contend that CBI filed the final

report before the learned Magistrate exonerating the

officials of NTPC for all the offences including Section 13(2)

of the PC Act as it named in the FIR and only against

accused No.1 and accused No.2 filed charge sheet and the

learned Magistrate took the cognizance. The counsel

vehemently contented that the dispute between the parties

before the Arbitral Tribunal is regarding the measurement

recorded in Original Ground Level Data. The petitioner

company has relied on the data sheets signed by the

authorised representatives of NTPC and other engineers as

also by the authorised representatives of the company.

The NTPC relied upon the measurement data sheets signed

by their various representatives and other officials as also

by one Augustin who is admittedly not an authorised

representative of the company who was a only helper to

the survey team. After detailed scrutiny and discussions,

the Arbitral Tribunal accepted the measurement data

sheets relied upon by the company-accused No.1. The

grievance of NTPC was with regard to finding of fact

recorded by the Arbitral Tribunal and the learned Single

Judge of Delhi High Court concurred with the finding

recorded by Arbitral Tribunal. The dispute between the

parties are purely on civil in nature and the matter has

been adjudicated upon by the Arbitral Tribunal with the

consent of both the parties and the same have been

upheld by the learned Single Judge of the Delhi High Court

and invoking of criminal prosecution belatedly that too by

the action of CBI and exonerating the NTPC officials under

Section 13 of the PC Act and filing of the present charge

sheet against the petitioners is nothing but an abuse of

process of law.

6. The counsel vehemently contended that the

FIR registered after the Arbitral award and charge sheet

was filed only after the appeal was filed before the Division

Bench. The counsel would vehemently contend that the

civil dispute between the parties is a contractual dispute

but given the criminal colour that too after passing the

Arbitral award consisting of three Members panel. The

counsel also would vehemently contend that the CBI action

was based on the malafide source information that too

help respondent No.2, CBI took up the investigation. It is

nothing but colourable exercise of powers by CBI. The FIR

is filed with the object of nullifying the Arbitral award and

even Delhi High Court also confirmed the award passed by

the arbitrator. The learned Magistrate has not applied its

mind while taking the cognizance and failed to take note of

the fact that the other officials of NTPC are exonerated.

The offences which have been invoked against the

petitioners does not attracts any of the ingredients of

those offences and investigation conducted by the CBI is

one sided investigation. The counsel also would

vehemently contended that FIR has been registered at the

first instance against the officials of the NTPC as there was

no complaint by NTPC. But only on the basis of source

information, if there is any dispute between the parties,

the same has to be considered only by the Arbitrator in

terms of the contract. Civil disputes already before the

arbitrator and arbitrators also decided the claim of both

the parities and when such being the case, ought not to

have been invoked the criminal prosecution and arbitrators

are also qualified engineers and even second set of

documents filed by the company are also signed by the

officials of NTPC. The counsel also vehemently contend

that when Section 13 of PC Act was not invoked, the CBI

will not get any jurisdiction to investigate the matter and

Section 13 of PC Act invoked only to invoke the jurisdiction

of CBI. The other petitioner i.e., the accused No.2 is only

the surveyor and the said work was entrusted by the

accused No.1 and carried out the survey work and the

same has been accepted by both the company and counter

signed by the NTPC. When such being the case, there

cannot be any criminal prosecution.

7. The counsel appearing for the petitioner also

relied upon the judgment of Sardool Singh and Another

vs Smt. Nasib Kaur reported in 1987 (SUPP) SCC 146

wherein the Apex Court held that when the question

regarding validity of Will is sub judice, criminal prosecution

on the allegation of the Will being a forged one cannot be

instituted. Genuineness or otherwise of the Will in

question as there is no occasion to do so and the question

is wide open before the lower courts and quashed the

criminal proceedings pending in the Court of the

jurisdictional magistrate. The counsel also relied upon the

judgment reported in AIR 1988 SC 709 between

Madhavrao Jiwaji Rao Scindia and Another vs

Sambhajirao Chandrojirao Angre and Others wherein

also the Apex Court held that alleged breach of trust

constituting only civil wrong and quashed the proceedings.

The counsel also relied upon the judgment of Inder

Mohan Goswami and Another vs State of Uttaranchal

and Others reported in (2007) 12 SCC 1 wherein also

the Apex Court held that when the issues involved are of

such magnitude that they cannot be seen in their true

perspective without sufficient material yet no hard and fast

rule can be laid down for exercise of extraordinary

jurisdiction under Section 482 of Cr.P.C. The counsel also

relied upon the paragraph 37 referring the case of Indian

Oil Corpn vs NEPC India Ltd., and again cautioned

about a growing tendency in business circles to convert

purely civil disputes into criminal cases and in paragraph

23 also discussed the scope and ambit of courts' powers

under Section 482 of Cr.P.C. The Apex Court in the

judgment in paragraph 46 also held that the Court must

ensure that criminal prosecution is not used as an

instrument or harassment or for seeking private vendetta

or with an ulterior motive to pressurise the accused. The

counsel also relied upon the judgment reported in (2018)

13 SCC 374 between Medmeme, LLC and Others vs

Ihorse BPO Solutions Private Limited wherein also the

Apex Court with regard to Section 482 of Cr.P.C., held that

filing of a criminal complaint against the appellants alleging

that the appellants had committed the offences of cheating

and misappropriation punishable under Sections 420, 406,

409 read with Section 120-B of IPC and the complaint

gave a clear impression that it was primarily a case where

the respondent had alleged breach of contract on the part

of the appellants in not making the entire payments for the

services rendered, the Court can exercise the powers

under Section 482 of Cr.P.C.

8. The learned counsel also relied upon the

judgment of the Hon'ble Apex Court in the case of Vinod

Natesan vs. State of Kerala and others reported in

(2019)2 SCC 401 wherein the Hon'ble Apex Court

discussed with regard to exercising power under Section

482 of Cr.P.C.,- quashment of complaint when dispute is

essentially civil in nature and did not disclose elements of

crime and brought to the notice of the Court paragraph-10

of the judgment wherein in detail discussion was made

with regard to the dispute.

9. The learned counsel relied upon the judgment

of the Hon'ble Apex Court in the case of Sunil Bharti

Mittal vs. Central Bureau of Investigation reported in

(2015)4 SCC 609 wherein the Hon'ble Apex Court

discussed that when company is the accused, its Directors

can be roped in only if there is sufficient incriminating

evidence against them coupled with criminal intent and

brought to the notice of the Court paragraphs-31 and 54.

10. The learned counsel also relied upon the

judgment of the Hon'ble Apex Court in the case of

Randheer Singh vs. State of U.P. and others reported

in 2021 SCC Online SC 942 and brought to the notice of

this Court paragraph-34 wherein it is held that the given

set of facts may make out a civil wrong as also a criminal

offence. Only because a civil remedy is available may not

be a ground to quash the criminal proceedings. But when

no criminal offence is made out in the FIR read with the

charge sheet, the Court can exercise power for quashing.

11. The learned counsel also relied upon the

judgment of the Hon'ble Apex Court in the case of Mitesh

Kumar J. Sha vs. State of Karnataka and others

reported in 2021 SCC Online SC 976 and brought to the

notice of this Court paragraph-47 wherein the Hon'ble

Apex Court has observed that at innumerable instances

expressed its disapproval for imparting criminal color to a

civil dispute, made merely to take advantage of a

relatively quick relief granted in a criminal case in contrast

to a civil dispute. Such an exercise is nothing but an

abuse of the process of law which must be discouraged in

its entirety.

12. Per contra, learned counsel for respondent

No.1/CBI vehemently contended that attempt was made to

defraud respondent No.2 and two sets of records were

placed, one set of records are admitted and second set of

documents are fabricated by accused Nos.1 and 3 with the

help of accused No.2. The learned counsel brought to the

notice of this Court the charges made in the charge sheet

and when the documents are fabricated, it is a matter of

trial and it is not of contractual breach. No finding was

given by Arbitral Tribunal with regard to fabrication and so

also learned Single Judge. The arbitral award finding is

that it is contractual obligation and not discussed anything

about fabrication. The criminal prosecution initiated for

fabrication of documents and no case is made out to

invoke Section 482 of Cr.P.C. The judgments which have

been relied upon by the learned counsel for the petitioners

are not applicable to the case on hand and the same are in

respect of strained relationship and when the arbitration

was pending. But here is the case of fabrication and hence,

proceedings cannot be quashed.

13. The learned counsel for respondent No.2

vehemently contended that Arbitration Act is not applicable

when the Evidence Act is not applicable to the same. The

learned counsel brought to the notice of this Court Section

3 of the Evidence Act and submits that Arbitrator is

exempted and whether award is admissible or not is

question before the Court and under the Evidence Act,

Arbitrator cannot discharge his duties in consonance with

the Evidence Act. He also brought to the notice of this

Court Sections 40 to 44 of the Evidence Act and submits

that the arbitration award is not judgment in rem and the

same is also not conclusive proof. The Arbitrator is not a

Court. When such being the case, the very contention of

the petitioner that arbitration award is pending before the

Court for consideration and hence, there cannot be any

criminal prosecution cannot be accepted. The arbitration is

only for limited purpose and power under the arbitration

appeal is also very limited. This Court cannot look into the

finding of the arbitration award. Both the actions are

distinct and criminal acts are found only after verification.

NTPC is a Central Government undertaking and there is

loss of Rs.47.00 crores if the criminal prosecution is

quashed and jurisdiction of the trial Court cannot be

scuttled by quashing the proceedings invoking Section 482

of Cr.P.C.

14. In reply to the arguments of the learned

counsel for respondent Nos.1 and 2, the learned counsel

for the petitioners brought to the notice of this Court

clause-7.3 of the agreement between the parties and

submits that dispute is only with regard to the data of the

work done in respect of ground level and actual

measurement has to be tested by the Arbitrator only and

not by criminal Court. The learned counsel also submitted

that authorized signatory Praveen of NTPC has signed the

documents and dispute is also considered by the Arbitrator

and documents are signed by both the parties. He also

submitted that only IPC offences are invoked and not the

PC Act offences. When such being the case, CBI has no

power to investigate the matter and Prevention of

Corruption Act only invoked to book these petitioners and

ultimately exonerated the officials of NTPC. When such

being the case, it amounts to colorable exercise of powers

without reference to the award and the Court has to take

note of the timings of the initiation of the criminal

prosecution i.e., after the award, the case is also

registered after filing the appeal before the High Court and

in order to over-reach the finding, criminal law was set in

motion. When NTPC failed before the Arbitrator filed

criminal case with the aid of CBI and hence, it requires

interference by exercising power under Section 482 of

Cr.P.C., or otherwise it amounts to abuse of process and it

leads to miscarriage of justice.

15. In reply to the arguments, learned counsel for

respondent No.2 submits that decision of arbitration is only

with respect to civil dispute and not with respect to

criminal prosecution.

16. Having heard the learned counsel for the

petitioners and the learned counsel appearing for

respondent Nos.1 and 2 in both the cases and having

considered the material on record, the point that would

arise for consideration of this Court is,

Whether initiation of criminal prosecution against the petitioners is an abuse of process in respect of contractual dispute between the

parties by giving criminal colour to the civil dispute as contended by both the petitioners?

17. Having heard the learned counsel appearing

for the respective petitioners and the learned counsel

appearing for the respondents, there is no dispute between

the parties that there was contract agreement between

M/s. Avantika Contractors and NTPC and estimated cost is

Rs.189 crores. Both the counsels not disputed the contract

agreement dated 02.04.2012. It is also not in dispute that

the contract was terminated by respondent No.2 on

24.03.2014. It is also not in dispute that the matter was

referred to a three Members Panel Arbitration on

23.01.2016. The dispute was also with respect to Original

Ground Level Data, each party relying on conflicting data

sheets. There is no dispute with regard to first set of

documents. The dispute is only with regard to R.A.Bill

No.15 claiming that those documents are fabricated

documents. The said issue of documents are fabricated in

second set of documents is also raised before the

Arbitrators. The Arbitrators taking into note of the material

on record allowed the claim of accused No.1-company

partly as well as respondent No.2/NTPC claim partly. It is

also not in dispute that CBI registered FIR on the basis of

source information arraying first three accused persons as

officials of respondent No.2/company. FIR was registered

on 27.08.2017. It is clear that arbitration award was

passed on 07.07.2017 wherein the NTPC only got claim to

the extent of Rs.2,67,23,699/- and as against accused

No.1/company got Rs.47,54,30,798/-, difference is huge.

Admittedly, FIR is registered after three and half years of

the dispute started i.e., in the year 2014. Immediately

after the dispute is started no criminal compliant is filed by

the NTPC, instead after Arbitral Award, FIR was registered

i.e., after more than three and half years of the dispute

and that too no complaint is given by respondent No.2, but

suo-moto case is registered by respondent No.1 on the

basis of source information. First of all, the claim was

made based on R.A.Bill No.15 relating to second set of

documents, the same is also with regard to measurement

and contract was also terminated on 24.03.2014 by

respondent No.2. It is not in dispute that there was a

contract agreement between M/s Avantika Contractors (I)

Ltd., and NTPC and there is clause in the agreement dated

02.04.2012 that if any dispute arises between the parties,

the same has to be referred to Arbitrators. It is also

important to note that based on the said documents, a

claim was made and for a period of three years no

complaint was given. The complaint was given only after

NTPC has suffered order passed by the three Arbitrators

who have been appointed by both the parties. The said

issue of claim based on the second set of documents and

the said claim made during arbitration and the arbitrators

have given an unanimous finding and considered the claim

of both accused No.1 as well as respondent No.2. It is also

important to note that the said arbitration award was also

challenged before the learned Single Judge i.e., on

13.10.2017 and suo moto case was registered on

27.10.2017 after fourteen days of filing appeal invoking

Section 34 of the Arbitration and Reconciliation Act. The

learned single Judge also confirmed the award passed by

the Arbitrator. First of all, it is clear that there was contract

agreement between the parties and also there is recital in

the agreement that if there is any dispute the same shall

be referred to the Arbitrators and accordingly, the matter

was also referred to the Arbitration in the year 2016 itself

and hence, it is clear that after suffering an award by the

Arbitrators, respondent No.1 set up for criminal

prosecution against the petitioners herein at the instance

of respondent No.2. It is also claim of respondent No.1

that no complaint is given, but they investigated the

matter based on the source of information. It is also

important to note that respondent No.1 registered the case

against the officials of NTPC arraying them as accused

Nos.1 to 3. But only arrayed accused No.4 in the FIR as

accused No.1 in the charge sheet, but exonerated accused

Nos.1 to 3 who have been arrayed as accused Nos.1 to 3

in the FIR. It has to be noted that allegation against the

petitioners herein that they indulged in creation of

documents along with accused Nos.1 to 3 of FIR. But

admitted fact is that authorized representatives of

respondent No.2/company have countersigned those

documents and when those officials who have arrayed as

accused Nos.1 to 3 in the FIR were exonerated, how come

these petitioners become accused and committed offence

of creation of documents and forgery when the counter

signed officials of NTPC officials are exonerated. Hence, it

is clear that these petitioners have been arrayed as

accused only with malafide intention. Though the offences

under the Prevention of Corruption Act are invoked in the

FIR, the same was not pressed into service, but only IPC

offences are invoked against only these petitioners. It is

also not in dispute that the NTPC officials who have signed

those documents have been exonerated and the offences

of creation of documents are invoked only against these

petitioners and officials of NTPC are given clean chit,

hence, the same is nothing but an abuse of process. Apart

from that, when the matter was referred to the Arbitrator,

an arbitration award was suffered by respondent No.2 and

thereafter only after thought through respondent No.1

criminal prosecution is initiated and subsequently suffered

an order from the Delhi High Court confirming the

arbitration award. It is also pertinent to note that the

charge sheet was filed subsequently when the matter is

pending before the Division Bench i.e., on 22.12.2020.

When they failed to succeed before the Arbitration as well

as before the Single Bench at Delhi High Court, the charge

sheet was filed on 22.12.2020 when the appeal filed by

respondent No.2 was pending before the Division Bench.

The issue of second set of documents was also considered

before the Arbitrators. The very contention of learned

counsel for respondent No.2 that the Evidence Act is not

applicable and hence, offences under the Penal provisions

cannot be decided by the Arbitrator cannot be accepted for

the reason that it is nothing but giving criminal color to the

civil dispute between the parties that too dispute is in

respect of only measurement and NTPC officials are also

countersigned those documents and hence, question of

fabrication of documents does not arise. I have already

pointed out, when the officials of the NTPC are also part of

the documents of second set which is claim made in

respect of R.A.Bill No.15, there cannot be two yardsticks

exonerating the officials of respondent No.2 and

registering the case against petitioners herein. Hence,

there is force in the contention of the learned counsel for

the petitioners that it is nothing but colourable exercise of

power by the CBI in respect of the civil dispute and action

of respondent No.1 is nothing but malafide intention and

only to help respondent No.2, the criminal prosecution is

initiated against the petitioners herein, as contended by

the learned counsel for the petitioners. The principles laid

down in the judgments referred to by the learned counsel

for the petitioners are aptly applicable to the case on hand.

The Hon'ble Apex Court in Maksud Saiyed vs. State of

Gujarat and Others reported in 2008(5) SCC 668

held that initiation of criminal prosecution is a serious

matter. The judgment referred by the petitioners counsel

wherein held that it is nothing but giving criminal colour to

the civil dispute between the parties and there was delay

in initiating criminal prosecution and that too the same has

been initiated through CBI only based on some information

and not on any complaint by respondent No.2. It is also

undisputed fact that respondent No.2 is a Central

Government Undertaking and hence, it is clear that with

malafide intention criminal prosecution is initiated through

respondent No.1 and further exonerated the officials of the

respondent No.2 and only initiated criminal prosecution

against the petitioners. The same fortifies the contention of

the petitioners herein. Hence, very initiation of criminal

prosecution requires to be quashed by invoking Section

482 of Cr.P.C., otherwise it amounts to abuse of process

which leads to miscarriage of justice.

18. Apart from that, when the charge sheet was

filed, the learned Magistrate also not applied his mind and

mechanically passed an order saying that perused the

documents and whether the charge sheet material and its

enclosures disclose prima facie case or not, nothing is

discussed and whether material collected by respondent

No.1 disclose prima facie case or not to proceed with the

case, no order has been passed and mechanically took

cognizance. Hence, the order of taking cognizance is also

required to be interfered with by this Court when there is

no judicious application of mind by the learned Magistrate.

Hence, the petitioners are entitled for the relief as sought

in the respective petitions.

19. In view of the discussions made above, I pass

the following:

ORDER

The writ petitions are allowed.

The order of taking cognizance passed by the Senior

Civil Judge and JMFC, Basavana Bagewadi vide order dated

20.01.2021 in C.C.No.12/2021 is hereby quashed in

respect of the petitioners by issuing writ of certiorari and

so also by issuing writ in the nature of certiorari quashed

the entire proceedings in C.C.No.12/2021 (arising out of

RC.15(A)/2017 CBI ACB BLR) pending on the file of Senior

Civil Judge and JMFC, Basavana Bagewadi, in respect of

the petitioners. Consequently, FIR in RC.15(A)/2017

dated 27.08.2017 registered by respondent/CBI and

chargesheet in C.C.No.12/2021 (arising out of

RC.15(A)/2017 CBI ACB BLR) is also quashed in respect of

the petitioners.

Sd/-

JUDGE

SAN/NB*