Delhi District Court
Rs.2.83 Crores On Operation Of Volvo ... vs . on 5 November, 2016
IN THE COURT OF MS. VRINDA KUMARI:ADDL.
SESSIONS JUDGE /SPECIAL JUDGE: CBI03
(PC ACT) SOUTH DISTRICT: SAKET COURTS:
NEW DELHI
CC No. 08/16
CNR NO.: DLST010032452016.
Sh. S.K. Jindal
S/o late Sh. S.P. Jindal,
R/o House No. 1691, HBC Colony,
Gurgaon ..........Complainant
Vs.
1. Sh. B.B. Pattanaik,
ExManaging Director,
Central Warehousing Corporation Ltd.,
R/o Flat no. 302, New Shivalik
Cooperative Group Housing Society,
Plot No. GH4, Sector 51,
Gurgaon - 122 002, Haryana.
2. Sh. Navin Aggarwal,
Director, M/s World's Window,
A unit of Govinddsas Global
Export Pvt. Ltd.,
75, Khirki Village,
Malviya Nagar, New Delhi.
3. Sh. Ajay Khera,
ExExecutive Director (Commercial),
Central Warehousing Corporation,
CC No. 08/16 05.11.2016 Page no. 1/19
Warehousing Bhawan,
4/1, Siri Institutional Area,
August Krant Marg,
Hauz Khas, New Delhi.
4. Sh. N.K. Chaubey,
ExManaging Director,
Central Warehousing Corporation,
Warehousing Bhawan,
4/1, Siri Institutional Area,
August Krant Marg,
Hauz Khas, New Delhi.
5. The SHO,
Delhi Police,
Police Station - Hauz Khas,
New Delhi.
....... Accused/respondents
Date of filing of complaint : 02.08.2016
Date of allocation : 03.08.2016
Arguments concluded on : 24.10.2016
Date of order : 05.11.2016
Complaint U/Sec. 200 Cr.P.C r/w Section 166, 167, 177, 182,
191, 192, 196, 200, 406, 409, 420, 464, 465, 468 r/w section 120B
IPC read with Prevention of Corruption Act.
ORDER
1. The present complaint case U/Sec. 200 Cr.P.C alongwith application U/Sec. 156(3) Cr.P.C involves five broad allegations, which are discussed as follows:
CC No. 08/16 05.11.2016 Page no. 2/19 (1) Allegations in respect of M/s World's Window
2. Respondent no. 2 Sh. Navin Aggarwal is the Director of M/s World's Window. The Central Warehousing Corporation (CWC), a Public Sector Undertaking invited tenders for award of Strategic Alliance Management Contract during the year 2004 for carrying out its operations on its Inland Clearance Depot (ICD). Vide letter dated 15.10.2004 issued by Executive Director, CWC, the Strategic Alliance Management Contract was awarded to M/s World's Window. It has been pointed out that as per tender documents, the fixed and variable fee was subject to yearly escalation of 5% on compoundable basis and was effective from the date of commencement of the operation. The 'Exhibit 10 Format Commercial Bid' mentions that the first escalation of 5% will take place after one year from the date of commencement of operations. In the Letter of Intent (LOI) dated 15.10.2004 issued by Executive Director (Commercial) Sh. Ajay Khera (Respondent no. 3) also, it was added that the first escalation of 5% of compoundable basis will take place after one year from the date of commencement of operations. It has been further pointed out that the agreement signed by both the parties on 16.02.2005 mentions at clause 17(iv) : 'The Fixed fee and the variable fees even for the minimum guranteed throughput, as mentioned above shall be subject to a yearly CC No. 08/16 05.11.2016 Page no. 3/19 escalation of 5% on compoundable basis effective from the date of commencement of the operations except on the containers transported through rail between ICD, Loni and Gateway ports'. It is alleged that the words 'except on the containers transported through rail between ICD, Loni and Gateway Ports' have got their way into the agreement clandestinely and manipulatively to extend undue benefit to M/s World's Window which they did not ask for. It is alleged that it was done for pecuniary gains because of which CWC has suffered massive loss running in crores of rupees. It has been pointed out that in the initial examination, CAG found a loss of more than Rs. 62 crores having been caused to the Corporation on this account. The complainant has relied upon the report of CAG dated 26.03.2012. In respect of the agreement in question dated 16.02.2005, it has also been submitted that open competition was scuttled by not inviting rates from the other prospective bidders.
3. It is also alleged that an illegal waiver of 15% interest roughly amounting to Rs. 8 crores has been allowed in favour of M/s World's Window against settled terms & conditions. It is further stated that preliminary inquiry has already been registered with the CBI and the matter was under investigation.
4. It is also alleged that vide letter dated 26.08.2005 from CC No. 08/16 05.11.2016 Page no. 4/19 General Manager (C) addressed to M/s World's Window, full freedom and authority was given to M/s World's Window to fix, collect and retain charges from users for rendering services or providing facilities. It is submitted that it is nothing but leasing out of the operations which is not permissible under the Warehousing Corporations Act. The letter dated 26.08.2005 is on record. It shows that a copy was also sent to the Regional Manager, CWC, Regional Office, Delhi.
5. I have considered the submissions and have perused the above said documents carefully.
6. CAG Audit Report dated 26.03.2012 is in respect of an agreement in the nature of Strategic Alliance with M/s World's Window Limited for ICD, Loni for the year 2004. The CAG report mentions that no concrete efforts were taken by the management either at RO, Delhi level or CO, New Delhi level to safeguard the interest of the Corporation. The agreement in question, however, is the one dated 16.02.2005.
7. The final agreement dated 16.02.2005 signed by CWC and M/s World's Window shows that it was signed by (i) Sh. S.S. Mahajan, Deputy Manager at Regional Office of CWC, (ii) Sh. Raja Ram, an officer in Regional Office of CWC, and
(iii) Sh. Sushil K. Swami, Regional Manager in the Regional Office of CWC, Delhi on behalf of CWC. None of the CC No. 08/16 05.11.2016 Page no. 5/19 respondentpublic servants has signed this agreement. Further, the agreement dated 16.02.2005 also mentions that CWC had agreed to award the Strategic Alliance Management Contract to the preferred bidder i.e. M/s World's Window in response to their proposal which was opened on 05.07.2004.
8. The roles of the respondents have not been specified either in the allegation qua inclusion of certain words in clause 17(iv) or in awarding of the contract to M/s World's Window or in the alleged leasing out of operations. How issuance of Letter of Intent dated 15.10.2004 puts R3 in the dock has not been explained.
9. From the averments in the complaint, it appears that transactions of CWC with M/s World's Window are already under scanner and CBI is seized of the matter.
10. In respect of the allegations related to M/s World's Window, the complaint does not disclose commission of any offence of criminal misconduct under the Prevention of Corruption Act, 1988 by the respondentpublic servants.
(2) Joint Venture in the name of National Multi Commodity Exchange of India (NMCE) during 2003
11. It is alleged that the respondent no. 4 Sh. N.K. Chaubey who was the Managing Director of CWC from 13.05.1998 to CC No. 08/16 05.11.2016 Page no. 6/19 30.06.2008 entered into a criminal conspiracy with one Sh. Kailash Ram Kishan Gupta of M/s Neptune Overseas Limited in order to create a joint venture in the name of National Multi Commodity Exchange of India (NMCE) during 2003, and swindle away the funds of CWC. It is alleged that R4 contributed an equity of 26% of CWC shares while M/s Neptune Overseas Limited contributed an equity of 25%. It is alleged that this arrangement was made purposely to retain the control of the company by Sh. N.K. Chaubey and Sh. Kailash Ram Kishan Gupta. After his superannuation, Sh. N.K. Chaubey became the Chairman of NMCE. Forward Market Commission (FMC) which is a regulatory body set up by the Government of India conducted detailed of probe of NMCE for the period from 2008 to 2011 and came to the conclusion that Sh. Gupta alongwith Sh. Chaubey and others had criminally defrauded NMCE and siphoned off the huge funds of NMCE to the tune of Rs. 42 crores. FMC also ordered filing of FIR against Sh. Kailash Ram Kishan Gupta of M/s Neptune Overseas Limited.
12. I have considered the submissions and have perused the record carefully.
13. I have perused the final order dated 23.07.2011 of Forward Markets Commission, Government of India in the matter of National Multi Commodity Exchange of India (NMCEI), CC No. 08/16 05.11.2016 Page no. 7/19 Hyderabad in FMC/Comp./VI/2010/12/14. The order reveals that Sh. Kailash Ram Kishan Gupta was the Managing Director and Chief Executive Officer of the Exchange NMCE since the inception of the Exchange in 2003 till May, 2010. Thereafter, he was the Executive Vice Chairman till 26.02.2011. It is further mentioned that as the MD of NMCE, all major financial decisions of the exchange were taken by Sh. Kailash Ram Kishan Gupta himself. The Hon'ble Commission considered all the aspects related to the transactions with M/s Neptune Overseas Ltd and M/s Arrow Total Solution Pvt. Ltd. The order also discloses that audit and inquiry was conducted in these transactions and their reports were considered by the Commission. After considering each and every aspect of the matter, it was observed that Sh. Kailash Ram Kishan Gupta, the then MD and later EVC of the NMCE systematically defrauded the Exchange and misappropriated its property and committed series of crimes under various laws. NMCE was directed to take appropriate legal action against Sh. Kailash Ram Kishan Gupta and M/s Arrow Total Solution Pvt. Ltd, Hyderabad. It was further directed to place before the Board of Directors the evidence regarding irregularities in allotment of shares of NMCE to M/s Neptune Overseas Ltd. This order shows that the matter was examined thoroughly. In the order, CC No. 08/16 05.11.2016 Page no. 8/19 there is not even an iota of reference to the role of respondent no. 4 N.K. Chaubey.
14. During the course of arguments, it was informed by the ld.
Counsel for the complainant as well as the complainant himself that the FIR in this respect was lodged in Gujarat and the chargesheet had already been filed. His grievance is that the officers of CWC including the respondent no. 4 Sh. N.K. Chaubey were not chargesheeted. Since another Court is already seized of the matter, there are no grounds for taking any further action by this Court. Merely because investigation in FIR lodged in Gujarat did not reveal any incriminating role of the respondentpublic servants, it does not constitute any ground for launching a fresh prosecution against them separately in this Court. It is noted that the details of FIR registered and chargesheet filed in the matter have not been provided by the complainant. Bald and vague allegations devoid of material particulars do not disclose any offence under the Prevention of Corruption Act, 1988 against respondent no. 4 or any other respondentpublic servant.
(3) Leasing Out Operations
15. It is alleged that during the tenure of respondent no. 4 Sh.
N.K. Chaubey, Managing Director (1998 to 2002), the entire operations under Container Freight Stations (CFSs) and CC No. 08/16 05.11.2016 Page no. 9/19 Inland Clearance Depots (ICDs) were leased out to the private parties in the name of Strategic Alliance, SPV or in some other names and these private parties were made to run and operate these CFSs and ICDs. It is submitted that such agreements are nothing but leasing out of the operations which is in violation of the provisions of the Warehousing Corporation Act, 1962 under which CWC has been constituted. This Act mandates the CWC to run and operate warehouses/operations on its own. The Customs Act also does not allow such leasing out to other private parties and the services are to be provided by the agency in whose favour license/notification has been issued by the Customs Department. Taking objection to such arrangements by CWC, Customs department issued show cause notices to CWC. Pursuant to such show cause notices, the arrangements/agreements with the private players were modified. It is, however, alleged that these agreements signed earlier before modifications were in violation of the conditions of license/notification issued by the Customs Department. Further, such post contract award modifications also are in violation of the norms laid down by the CWC. Instead of cancelling these contracts which were in violation of the Customs Act, CWC under respondent no. 1 Sh. B.B. Pattanaik allowed such modifications. It is alleged that CC No. 08/16 05.11.2016 Page no. 10/19 examination of the agreements would show how clandestinely these modifications had been done to reap personal benefits. It is alleged that the contract conditions had been drafted to favour the selected few. It has also been pointed out that in case of contract at CFS, the tender was submitted by M/s Shroff while the contract was awarded and agreement was signed with M/s Hind Terminals. It is averred that CAG found serious irregularities in respect of irregular award of handling and transportation contract, tariff, storage charges, operation of tractor trailors and failure to recover warehousing charges in the annual report placed before the parliament. It is alleged that CWC did not take steps to investigate these serious matters.
16. I have considered the submissions and have perused the record carefully.
17. As an instance, the complainant has filed a correspondence dated 29.06.2010 issued by Under Secretary to the Government of India, Ministry of Consumer Affairs to Director (Commercial), Office of CAG. It is related to the CAG report no. 24 of 2009 (Commercial) regarding loss of Rs.2.83 crores on operation of Volvo Truck and Trailors. This correspondence shows that the transaction in question pertains to the period from January to December, 2003. The audit objection was requested to be settled after taking CC No. 08/16 05.11.2016 Page no. 11/19 certain decisions such as not to undertake leasing out operation of the Volvo Truck Trailors.
18. No specific details of irregularities have been provided by the complainant. Bald and sweeping allegations have been made against the respondents no. 1 and 4. The plain reading of the complaint and documents also shows that the decisions taken by CWC are subject to audit by CAG, the office of whom reports the serious irregularities in the annual report placed before the Parliament. Mere averment that respondents no. 1 and 4 were Managing Directors of Central Warehousing Corporation from 1998 to 2008 is not sufficient to bring these respondents within the ambit of the PC Act, 1988.
(4) HRA: House Rent Allowance
19. The grievance of the complainant is that the respondent no. 1 Sh. B.B. Pattanaik, the then Managing Director, CWC in his capacity as disciplinary authority issued a chargesheet for major penalty to one Sh. K. Nageshwar Rao, AGM (G), CWC, RO, Bangalore (now at RO, Chennai). Major charge against Sh. K. Nageshwar Rao was that he had allegedly withdrawn the amount of HRA while staying in the guest house. Under the Central Government Rules, he was not entitled to HRA while staying in the guest house. Upon receipt of the chargesheet, Sh. K. Nageshwar Rao informed CC No. 08/16 05.11.2016 Page no. 12/19 Sh. B.B. Pattanaik that he was not the only person drawing the HRA while staying in the guest house but there were other employees too who drew HRA under similar circumstances. He disclosed the names of one Sh. Pawan Kant, Sh. R.N. Meena, Sh. P.P. Singh, one Sh. Shastri and one Sh. Ravi Prakash JTA posted at different locations in India. Upon this, vide memo dated 20.09.2013, respondent no. 1 passed the following order in his capacity as disciplinary authority:
"Subsequently some of the officers have brought to my notice that these instructions were known to them since 1993, however, they have been paid HRA while staying in the guest house (s) and, hence, violated the instructions. Since a large number of officers have violated these instructions, it would be unfair to prosecute only Shri K.N. Rao on this account. Hence, it is decided to drop the charge no. 1 from the article of charges given to Shri K.N. Rao which relates to drawl of HRA while staying in the guest house."
20. It is alleged that by passing the above order, R1 allowed wilful embezzlement of the Corporation Fund by these officials.
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21. I have considered the submissions and have gone through the record carefully.
22. The act of dropping of the charge of drawing of HRA while staying in the guest house on the ground that a large number of officers have violated these instructions and that it would be unfair to prosecute only Sh. K.N. Rao on this count was subject matter of a departmental enquiry and does not smack of any criminal misconduct as envisaged under the Prevention of Corruption Act, 1988.
(5) Issue of compulsory switch over from CDA (Central Dearness Allowance pay pattern) scales to IDA(Industrial Dearness Allowance pay pattern) scales w.e.f. 01.01.1989 (from 11.01.1990 in this case)
23. Pursuant to the directions of Hon'ble Supreme Court of India in judgment dated 03.05.1990, the department of public enterprises, CWC, issued an Office Memorandum (OM) dated 12.06.1990 directing that all appointments made by the PSEs on or after 01.01.1989 in respect of all the categories of employees would be deemed to have been governed by the IDA pay scales and IDA. Even though this OM was accepted and implemented by the Board of Directors of the CWC, however, pay of some officers was not fixed on IDA pattern pay scales. It was also later clarified that the word 'appointment' would also include promotion. Vide office CC No. 08/16 05.11.2016 Page no. 14/19 order dated 02.12.2011 of CWC, all CDA employees were compulsorily shifted to IDA pay pattern with retrospective effect w.e.f 01.01.1989. It is alleged that even though this office order was still in operation, the pay scales of some officers were not changed to IDA pay pattern during the period from 11.01.1990 to 2004. It is alleged that it has been done to favour them. It is further submitted that the Central Warehousing Corporation Officers' Association of which the complainant is honorary General Secretary made a specific complaint vide letter dated 23.05.2012 in this regard in respect of respondent no. 1 w.e.f. 11.01.1990.
24. I have perused the record carefully including the letter dated 23.05.2012 addressed to the Minister of State for Consumer Affairs.
25. The above said allegation of the complainant is apparently a service matter pertaining to the period from 11.01.1990 to 2004. No case of criminal misconduct under the PC Act is made out in this case.
Issue of delay in filing the complaint
26. The complainant has tried to explain the delay in filing the present complaint case on the basis of the order dated 13.05.2015 of Hon'ble Supreme Court of India in petition for Special Leave to Appeal (C.No. 8979/2015) arising out of CC No. 08/16 05.11.2016 Page no. 15/19 the final judgment dated 12.01.2015 in LPA No. 535/2014 passed by Hon'ble High Court of Delhi.
27. The complainant had filed a writ petition before Hon'ble High Court of Delhi bearing WP(C) No. 4235/2014 and C M Appl. No. 85058506/2014. Vide order dated 14.07.2014, Hon'ble High Court of Delhi dismissed the petition alongwith the pending applications being barred by delay and laches. The perusal of order dated 14.07.2014 shows that the petition was filed by the complainant Sh. S.K. Jindal under the title of Central Warehousing Corporation Officers' Association and had challenged the appointment of two respondents to the post of Managing Director, CWC and General Manager (Finance & Accounts). He also sought directions to CWC and CBI to investigate the complaint of corruption against those respondents. It also appears that the issue of switching over of one of the above mentioned two respondents to IDA pay scale was also taken up by the complainant. It was observed by Hon'ble High Court of Delhi:
"10. Given the above facts, the present petition is found to be stale, particularly, since the respondent No. 9 who was appointed to the post of MD, CWC in the year 2008, and after exhausting the extension granted to him, is going to superannuate two and half months down the line and the promotion of the respondent No. 10 to the post of General Manager CC No. 08/16 05.11.2016 Page no. 16/19 (Finance and Accounts), CWC had taken place five years ago and no steps to challenge the appointments have been taken by the petitioner/Association in all this duration".
28. The complainant, thereafter, preferred an appeal against the above said order in LPA No. 535/2014 dated 12.01.2015. The appeal was dismissed in limine by the Hon'ble Division Bench of the High Court of Delhi noting that the view taken by the learned Single Judge was that delay and laches hits at the very foundation of the writ petition. Aggrieved by the order of Hon'ble Division Bench, the complainant filed petition for Special Leave to Appeal (C) No. 8979/2015 in Hon'ble Supreme Court of India. The Hon'ble Supreme Court of India observed as follows:
"After some arguments, learned senior counsel appearing for the petitioner seeks leave to withdraw this petition reserving their liberty to work out their other remedies in accordance with law.
The petition for special leave is dismissed as withdrawn."
29. Even though Hon'ble Supreme Court of India did not set aside the observations in order dated 14.07.2014 of Hon'ble High Court of Delhi, however, liberty was granted to the CC No. 08/16 05.11.2016 Page no. 17/19 petitioner to work out their other remedies in accordance with law. Even though the order was pronounced by the Hon'ble Supreme Court of India on 13.05.2015, the petitioner has filed the present complaint case only on 30.08.2016. There is no explanation of delay of more than one year in filing the present complaint. In view of the period to which the allegations pertain, observations of Hon'ble High Court of Delhi in WP (C) No. 4235/2014 dated 14.07.2014 and lapse of more than a year since order dated 13.05.2015 of Hon'ble Supreme Court of India, it is apparent that the present complaint suffers from an inordinate delay.
30. It is noted that all the 5 sets of allegations are distinct from each other and are unrelated. As has already been discussed, the issues related to M/s World's Window and NMCE are already either under preliminary inquiry by CBI or a chargesheet has already been filed. The complainant has also failed to reasonably explain the inordinate delay in taking up the issues in question. Even if the allegations in the instant complaint were to be accepted as it is, they do not disclose commission of offence of criminal misconduct as envisaged under the Prevention of Corruption Act, 1988 on part of respondents no. 1,3 and 4 or any other offence under the Prevention of Corruption Act, 1988. Respondent no. 5 SHO is a pro forma party. Respondent no. 2 is not a public servant.
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31. In these circumstances, there are no grounds to either direct registration of FIR U/Sec. 156(3) Cr.P.C or take cognizance U/Sec. 200 Cr.P.C. The cognizance is denied. Complaint U/Sec. 200 Cr.P.C alongwith application U/Sec. 156(3) Cr.P.C is dismissed.
32. File be consigned to record room.
PRONOUNCED IN THE OPEN COURT ON THIS 5 th DAY OF NOVEMBER, 2016.
(Vrinda Kumari)
ASJ/Special Judge (PC Act)
(CBI3), South, Saket Court
New Delhi
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