Allahabad High Court
M/S Sriram Cables Pvt. Ltd Thru. Its ... vs State Of U.P. Thru. Prin. Secy. Home Lko. ... on 28 August, 2025
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
Neutral Citation No. - 2025:AHC-LKO:50822
HIGH COURT OF JUDICATURE AT ALLAHABAD
LUCKNOW
CRIMINAL REVISION No. - 858 of 2025
M/S Sriram Cables Pvt. Ltd Thru. Its Director Anil Garg And 2 Others
.....Revisionist(s)
Versus
State Of U.P. Thru. Prin. Secy. Home Lko. And 2 Others
.....Opposite Party(s)
Counsel for Revisionist(s)
:
Akshay Kumar Singh, Palak Jawa, Zubeida Shahanshah
Counsel for Opposite Party(s)
:
G.A., Anurag Kumar Singh
Court No. - 13
HON'BLE SUBHASH VIDYARTHI, J.
- Heard Sri Jaideep Narayan Mathur, Senior Advocate assisted by Sri Akshay Kumar Singh and Smt. Palak Jawa, the learned counsel for the revisionists and Sri Anurag Kumar Singh, learned counsel for the respondent - Central Bureau of Investigation (C.B.I.).
-
By means of the instant revision filed under Section 397/401 Cr.P.C., the revisionists have assailed the validity of an order dated 31.05.2025 passed by the Learned Addl. District and Session Judge/Special Judge, CBI/PC Act - West, Lucknow in Session Trial No.1770 of 2022 arising out of RC 0062017A0027 registered on 30.11.2017 in Police Station - CBI/ACB, District- Lucknow under Sections 120-B, 420, 467, 468, 471 of I.P.C. and Section 13(2) read with Section 13(1)(d) of Prevention of Corruption Act, 1988 against 13 persons, including the applicant. By means of the impugned order, the revisionists application seeking discharge has been rejected.
-
The aforesaid case was registered on the basis of an F.I.R. lodged in Police Station CBI/ACB, Lucknow on 30.11.2017 in furtherance of a written complaint of the same date sent by a Deputy Superintendent of Police, CBI to the Head of the branch CBI/ACB Lucknow alleging certain irregularities and malpractices committed in the matter of supply of Hard Drawn Grooved Copper (HDGC) contact wire, which is used as overhead power supply wire in railway electrification. A preliminary enquiry held in this regard revealed that HDGC contact wires can be supplied to the railways by RDSO approved firms only. RDSO grants approval after conducting prototype tests. The supplier firms were required to supply HDGC contact wire drawn out of Continuous Cast Copper (CCC) wire rods manufactured through Southwire Technology. Prior to 2012-13 the firms were allowed to supply HDGC contact wires through imported CCC wire rods only, but subsequently the specification was amended on 09.05.2012 and the supply of HDGC contact wire drawn through CCC wire rods manufactured by indigenous firms through Southwire Technology was also permitted.
-
The revisionist No.1 is Sri Ram Cables Pvt. Ltd. and the revisionist Nos.2 and 3 are its Directors. The FIR states that the revisionist No.1 firm and M/s Om Sai Udyog Ltd. and M/s J.K. Cables had submitted invoices to Central Organization for Railway Electrification (CORE), for payment showing procurement of CCC wire rods through indigenous firms namely, HINDALCO and M/s Hindustan Copper Ltd. The invoices for the period 2012-13 to 2015-16 were randomly checked vis-a-vis the data provided by M/s HINDALCO and M/s HCL, which revealed that many forged and manipulated invoices having variation in dates were submitted by the said firms to CORE for payment of bills.
-
The complaint further states that the raw material, i.e., CCC wire Rod is checked by RITES and after drawing of HDGC contact wire i.e. finished product, the same is again checked by RITES and the material is supplied after it is passed by RITES. The supplier is required to submit the documents regarding procurement of raw material at the time of inspection. The documents were to be made a part of the inspection certificate issued by the officials of RITES. The officers of the finance department of CORE were supposed to make payments after checking the inspection certificate and receipted challan of the consignee.
-
The payments are made as per a Price Variation clause formula based on the prevailing price of copper at London Metal Exchange (LME). The price of copper is very volatile and changes on daily basis. Thus, the aforesaid firms by submitting forged and manipulated invoices having different dates knowingly and fraudulently received excess payment from CORE. The excess Payment claimed by M/s Sriram Cables is said to be Rs.2,04,47,322/-.
-
After investigation, a charge-sheet was submitted on 31.12.2021 against 13 persons, including the revisionists. 11 persons, including the officials of CORE and RITES, were not charge sheeted. The charge-sheet states that it is alleged in the FIR that officers of RITES, CORE and RDSO, acting in connivance with four private firms, namely, Chandra Metals, M/s Sairam Cables Pvt. Ltd. (revisionist No.1), M/s J.K. Cables and M/s Om Sai Udyog, committed the offence in approval/allowing and passing of substandard hard drawn grooved copper contact wire (HDGC wire) supplied by these firms during the period 2005-06 to 2015-16.
-
The charge-sheet further states that all the four firms, including the revisionist No.1, had submitted forged invoices to CORE, which were different from the invoices submitted by them to RITES. The firms had made manipulations in dates of invoices in order to claim higher amounts, as price of copper is volatile and changes on a daily basis. Some of the invoices submitted to CORE had actually been issued against supplies made to some other parties.
-
The charge-sheet states that the revisionists No.1- M/S Sriram Cables had supplied HDGC Contact wire drawn through indigenous CCC wire rods only. The firm had submitted to CORE bills of M/s Hindustan Copper Ltd. and M/S HINDALCO regarding procurement of raw material i.e. CCC wire rod. Both the aforesaid firms are South wire licensee firms. The invoices submitted by the firms to RITES during inspection and to CORE alongwith the bill were cross-checked during investigation by CBI which revealed that four invoices of HINDALCO were having manipulated dates and 13 invoices were issued in the names of firms other than M/s Sriram Cables. Thus M/s Sriram Cable has obtained payment from CORE on the basis of forged invoices.
-
Upon submission of the charge-sheet, the trial Court has taken cognizance of the offences.
-
The revisionists filed the application seeking discharge inter alia stating that there was a proper procedure to be followed by the Inspecting Engineers for verification of the bills raised by the revisionists and the Inspecting Engineers were duty bound to check for any deficiencies in the bills. No discrepancy or deficiency was found by the Inspecting Engineers, which clearly indicates that the alleged deficiencies have been created by the officials subsequently in order to over shadow the errors of officials at RITES Ltd. The revisionists contended that the officials did not ever raise any dispute against the quality or quantity of the goods supplied by the revisionists and the payments were made by the authorities of CORE after complete verification of the bills and the other supporting documents.
-
After about an year since CORE had released the payment to the revisionists, it sent a letter dated 14.02.2017 alleging over payment in respect of 17 consignments and threatening to initiate recovery proceedings against the revisionist No.1. CORE invoked 11 warranty bank guarantees and sought encashment of a total amount of Rs.2,05,40,091/-. The revisionist No.1 invoked the arbitration clause contained in Clause 9 of the General Conditions of Contract. A former official of CORE was appointed as the sole arbitrator who gave an arbitration award on 23.08.2024 rejecting the claim of the revisionist No.1.
-
The revisionist No.1 filed an application under Section 34 of Arbitration and Conciliation Act, which has been allowed by means of a judgment and order dated 22.04.2024 passed by the Delhi High Court and the arbitration award had been set-aside.
-
It has further been stated in the discharge application that there is no material for instituting any criminal proceedings against the revisionists as no prima facie case is made out against them.
-
The discharge application has been rejected by means of the impugned order dated 31.05.2025 passed by the trial Court inter alia for the reasons that the charge-sheet alleges that the revisionist No.1 had furnished different invoices to CORE and RITES. There were discrepancies in the dates mentioned in the invoices, as price of the copper varies on day to day basis. Some of the invoices relate to goods supplied to some other entity. This shows that the revisionist No.2 had obtained payments on the basis of forged invoices. Thus, it is clear that the accused persons have caused a wrongful loss to the Railway in connivance with some officials of railways. The trial Court held that whether the accused persons are guilty or not, can only be decided after taking evidence and whether the accused persons had submitted forged invoices or not, cannot be decided at this stage.
-
The respondent CBI has filed a counter affidavit and the revisionists have filed a rejoinder affidavit.
-
Assailing validity of the aforesaid order, the learned counsel for the revisionists has submitted that the trial Court has held in the impugned order that the accused persons had caused a wrongful loss to the Railways in connivance with the officials of the Railways whereas the names of the officials find mention in Entry No.12 of the charge-sheet which contains particulars of the accused persons not charge-sheeted. He has submitted that as it has the investigation could not establish commission of any offence by any official of Railways, the revisionists cannot be tried for having committed offence in connivance with the officials of Railways.
-
The learned counsel for the revisionists has next submitted that the matter of claiming excess payment can at the most make out a civil dispute, regarding which no criminal proceedings could have been instituted against the revisionists. The revisionists had challenged the validity of invocation of bank guarantees and although the sole arbitrator appointed by CORE had upheld the invocation of bank guarantee, that order has been set-aside by Delhi High Court under Section 34 of Arbitration and Conciliation Act. He has submitted that institution of criminal proceedings in respect of a dispute which is essentially of a civil nature, is a gross abuse of the process of law.
-
Shri Mathur, has referred to a letter dated 26.12.2011 issued by G.G.M. (I) RITES which states that after conducting inspection, the Inspecting Engineer (IE) is required to issue I.C. Documents to Purchaser and Consignee, in addition to submitting copy to RITES office of Northern Region. However, it had been noticed that Inspecting Engineers were not dispatching, on their own, these inspection documents to the Purchaser, Consignee and RITES office. This is highly Irregular and a serious lapse on the part of the Inspecting Engineer. The letter reiterated that submission of Inspection documents to Purchaser, Consignee and RITES office is part of Inspecting Engineer's responsibility and he should dispatch these documents on his own. Instances of handing over of such documents to the vendor, for further dispatch, would be treated as misconduct and would be taken up sternly.
-
He has submitted that CORE had issued a notice dated 14.02.2017 to the revisionist No.1 stating that a review of payment of contact wire was done and it had come to light that the revisionist No.1 had claimed payments based on the linked raw material invoices annexed with the bills which were not correct. This conclusion was drawn on the basis of verification of Inspecting Agency RITES, from the original records of inspection. Based on the verified documents as provided by RITES, 17 cases of final I.C. were recalculated and the result of the calculation was annexed to this letter and it was alleged that it showed over payment in many cases. The revisionist No.1 was asked to render an explanation as to why action for recovery of over payment may not be initiated against the revisionist No.1. The list annexed with the aforesaid letter does not contain particulars of any invoice which has allegedly been forged by the revisionist No.1.
-
Shri Mathur has further submitted that no allegation of criminality was leveled before the arbitrator or before the Delhi High Court in proceedings under Section 34 of Arbitration and Conciliation Act. He has submitted that it is only after CORE remained unsuccessful in the arbitration proceedings, that the FIR has been lodged as a counter blast action.
-
The learned Counsel for the revisionists has also submitted that as it is alleged that the offences has been committed in connivance with the officials of Railways and the officials of the Railways have not been charge-sheeted, the revisionists also cannot be prosecuted.
-
The learned counsel for the revisionists has placed reliance on numerous judgments regarding scope of scrutiny while deciding an application seeking discharge of an accused person. Before proceeding any further, it would be appropriate to have a look at the relevant statutory provision and refer to those judgments.
-
Section 227 Cr.P.C. relating to discharge is as under: -
"227. Discharge.?If, upon consideration of the record of the case and the documents submitted therewith, and after hearing the submissions of the accused and the prosecution in this behalf, the Judge considers that there is not sufficient ground for proceeding against the accused, he shall discharge the accused and record his reasons for so doing."
-
In Kanchan Kumar v. State of Bihar: (2022) 9 SCC 577, the Hon'ble Supreme Court held that: -
"13. The threshold of scrutiny required to adjudicate an application under Section 227 CrPC, is to consider the broad probabilities of the case and the total effect of the material on record, including examination of any infirmities appearing in the case. In Prafulla Kumar Samal [Union of India v. Prafulla Kumar Samal, (1979) 3 SCC 4] it was noted that:
"10. Thus, on a consideration of the authorities mentioned above, the following principles emerge:
(1) That the Judge while considering the question of framing the charges under Section 227 of the Code has the undoubted power to sift and weigh the evidence for the limited purpose of finding out whether or not a prima facie case against the accused has been made out.
(2) Where the materials placed before the Court disclose grave suspicion against the accused which has not been properly explained the Court will be fully justified in framing a charge and proceeding with the trial.
(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.
(4) That in exercising his jurisdiction under Section 227 of the Code the Judge which under the present Code is a senior and experienced court cannot act merely as a Post Office or a mouthpiece of the prosecution, but has to consider the broad probabilities of the case, the total effect of the evidence and the documents produced before the Court, any basic infirmities appearing in the case and so on. This however does not mean that the Judge should make a roving enquiry into the pros and cons of the matter and weigh the evidence as if he was conducting a trial."
(emphasis supplied)
14. In Sajjan Kumar v. CBI [(2010) 9 SCC 368], the Court cautioned against accepting every document produced by the prosecution on face value, and noted that it was important to sift the evidence produced before the Court. It observed that:
"21. On consideration of the authorities about the scope of Sections 227 and 228 of the Code, the following principles emerge:
***
(v) At the time of framing of the charges, the probative value of the material on record cannot be gone into but before framing a charge the court must apply its judicial mind on the material placed on record and must be satisfied that the commission of offence by the accused was possible.
(vi) At the stage of Sections 227 and 228, the court is required to evaluate the material and documents on record with a view to find out if the facts emerging therefrom taken at their face value disclose the existence of all the ingredients constituting the alleged offence. For this limited purpose, sift the evidence as it cannot be expected even at that initial stage to accept all that the prosecution states as gospel truth even if it is opposed to common sense or the broad probabilities of the case."
(emphasis supplied)
15. Summarising the principles on discharge under Section 227 CrPC, in Dipakbhai Jagdishchandra Patel v. State of Gujarat [(2019) 16 SCC 547], this Court recapitulated:
"23. At the stage of framing the charge in accordance with the principles which have been laid down by this Court, what the court is expected to do is, it does not act as a mere post office. The court must indeed sift the material before it. The material to be sifted would be the material which is produced and relied upon by the prosecution. The sifting is not to be meticulous in the sense that the court dons the mantle of the trial Judge hearing arguments after the entire evidence has been adduced after a full-fledged trial and the question is not whether the prosecution has made out the case for the conviction of the accused. All that is required is, the court must be satisfied that with the materials available, a case is made out for the accused to stand trial. A strong suspicion suffices. However, a strong suspicion must be founded on some material. The material must be such as can be translated into evidence at the stage of trial. The strong suspicion cannot be the pure subjective satisfaction based on the moral notions of the Judge that here is a case where it is possible that the accused has committed the offence. Strong suspicion must be the suspicion which is premised on some material which commends itself to the court as sufficient to entertain the prima facie view that the accused has committed the offence."
(emphasis added)
-
In State v. Uttamchand Bohra: (2022) 16 SCC 663, it was held that: -
"21. On consideration of the authorities about the scope of Sections 227 and 228 of the Code, the following principles emerge:
(i) The Judge while considering the question of framing the charges under Section 227CrPC has the undoubted power to sift and weigh the evidence for the limited purpose of finding out whether or not a prima facie case against the accused has been made out. The test to determine prima facie case would depend upon the facts of each case.
(ii) Where the materials placed before the court disclose grave suspicion against the accused which has not been properly explained, the court will be fully justified in framing a charge and proceeding with the trial.
(iii) The court cannot act merely as a post office or a mouthpiece of the prosecution but has to consider the broad probabilities of the case, the total effect of the evidence and the documents produced before the court, any basic infirmities, etc. However, at this stage, there cannot be a roving enquiry into the pros and cons of the matter and weigh the evidence as if he was conducting a trial.
(iv) If on the basis of the material on record, the court could form an opinion that the accused might have committed offence, it can frame the charge, though for conviction the conclusion is required to be proved beyond reasonable doubt that the accused has committed the offence.
(v) At the time of framing of the charges, the probative value of the material on record cannot be gone into but before framing a charge the court must apply its judicial mind on the material placed on record and must be satisfied that the commission of offence by the accused was possible.
(vi) At the stage of Sections 227 and 228, the court is required to evaluate the material and documents on record with a view to find out if the facts emerging therefrom taken at their face value disclose the existence of all the ingredients constituting the alleged offence. For this limited purpose, sift the evidence as it cannot be expected even at that initial stage to accept all that the prosecution states as gospel truth even if it is opposed to common sense or the broad probabilities of the case.
(vii) If two views are possible and one of them gives rise to suspicion only, as distinguished from grave suspicion, the trial Judge will be empowered to discharge the accused and at this stage, he is not to see whether the trial will end in conviction or acquittal."
(Emphasis added)
-
In Ram Prakash Chadha v. State of UP: (2024) 10 SCC 651, the Hon'ble Supreme Court referred to some precedents and concluded that:-
"24. In the light of the decisions referred supra, it is thus obvious that it will be within the jurisdiction of the Court concerned to sift and weigh the evidence for the limited purpose of finding out whether or not a prima facie case against the accused concerned has been made out. We are of the considered view that a caution has to be sounded for the reason that the chances of going beyond the permissible jurisdiction under Section 227CrPC, and entering into the scope of power under Section 232CrPC, cannot be ruled out as such instances are aplenty. In this context, it is relevant to refer to a decision of this Court in Om Parkash Sharma v. CBI [(2000) 5 SCC 679]. Taking note of the language of Section 227CrPC, is in negative terminology and that the language in Section 232CrPC, is in the positive terminology and considering this distinction between the two, this Court held that it would not be open to the Court while considering an application under Section 227CrPC, to weigh the pros and cons of the evidence alleged improbability and then proceed to discharge the accused holding that the statements existing in the case therein are unreliable. It is held that doing so would be practically acting under Section 232CrPC, even though the said stage has not reached. In short, though it is permissible to sift and weigh the materials for the limited purpose of finding out whether or not a prima facie case is made out against the accused, on appreciation of the admissibility and the evidentiary value such materials brought on record by the prosecution is impermissible as it would amount to denial of opportunity to the prosecution to prove them appropriately at the appropriate stage besides amounting to exercise of the power coupled with obligation under Section 232 CrPC, available only after taking the evidence for the prosecution and examining the accused.
25. Even after referring to the aforesaid decisions, we think it absolutely appropriate to refer to a decision of the Madhya Pradesh High Court in Kaushalya Devi v. State of M.P. [2003 SCC OnLine MP 672]. It was held in the said case that if there is no legal evidence, then framing of charge would be groundless and compelling the accused to face the trial is contrary to the procedure offending Article 21 of the Constitution of India. While agreeing with the view, we make it clear that the expression "legal evidence" has to be construed only as evidence disclosing prima facie case, "the record of the case and the documents submitted therewith".
(Emphasis added)
-
In Vishnu Kumar Shukla v. State of U.P.: (2023) 15 SCC 502, the Hon'ble Supreme Court quoted the principles laid down in Union of India v. Prafulla Kumar Samal, (1979) 3 SCC 4.
-
Per contra, the learned counsel for the CBI has submitted that the trial Court has rejected the application seeking discharge on cogent reasons as at the stage of discharge, the Court is not required to see whether a case is made out for conviction of the accused persons or not rather the trial Court merely has to see that whether there is sufficient ground for trial of the accused persons or not and the trial court has rightly come to a conclusion that a case for trial of the accused persons is made out.
-
Having gone through the FIR and charge-sheet, it appears that the FIR categorically mentions that the revisionist No.1 had submitted different invoices of raw material to officials of RITES and to Officials of CORE along with the bills. Random checks conducted regarding excess payment of Rs.2,04,47,322/- to the revisionist No.1 due to submission of different invoices during the period 2015-16.
-
The allegations clearly make out commission of cognizable offences by the revisionists. The correctness of the allegations cannot be examined at this stage while examining validity of an order rejecting discharge application of the revisionists. This exercise would be conducted by the trial Court after the parties are given an opportunity to lead evidence in support of their respective cases.
-
So far as the submission of the learned counsel for the revisionists that the charge-sheet alleges that the offences have been committed in connivance with the officials of Railway whereas none of the officials of Railway has been charge-sheeted, suffice it to say that in case the charge-sheet makes out commission of an offence by an accused person, he may be tried for commission of the alleged offence. Merely because the charge-sheet alleges that the offence had been committed in connivance with some person and that other person has not been charge-sheeted, the charge-sheeted accused persons cannot seek their discharge on this ground as it is for the trial Court to examine whether the charge-sheeted accused person is guilty or not. Further, merely because a person named as an accused in the FIR, has not been charge-sheeted, it would not affect the powers of the trial Court to summon that accused person to face trial at the appropriate stage.
-
Therefore, mere non submission of the charge-sheet against certain co-accused person would not make out a ground for discharge of the applicant, when the allegations make out a case of commission of offence by the revisionists.
-
Regarding the submission of the learned counsel for the revisionists that the allegation of criminality was not leveled in the arbitration proceedings, suffice it to say that the scope of civil proceedings is to adjudicate the rights of the parties whereas the scope of criminal proceedings is to decide whether an offence has been committed by any party and whether he is liable to be convicted and sentenced. Civil rights are not to be adjudicated in criminal proceedings and, likewise, criminality is not to be examined in civil proceedings. Therefore, non raising of the allegation of criminality in civil proceedings, would not vitiate the institution of criminal proceedings against the revisionists.
-
This Court does not find force in the submission of the learned counsel for the revisionists that the revisionists are entitled to be discharged as the FIR has been lodged as a counter blast action. The discharge application can only be allowed on the ground that there is no material for trial of the accused persons. In the present case, there is sufficient material warranting trial of the revisionists for the alleged offences and, therefore, the proceedings cannot be quashed on the ground that the FIR is a counter blast action.
-
The trial Court has rightly sifted the material produced and relied upon by the prosecution. While examining the correctness of the sifting done by the trial Court at this stage, this Court in exercise of its revisional power is not required to examine the material so meticulously, and it will be done by the trial Court after hearing the arguments after the entire evidence has been adduced. This Court is satisfied that the prosecution material supporting the allegations make out a strong suspicion against the revisionists and a case is made out for the revisionists to face trial. It is not open at this stage to weigh the pros and cons of the evidence without giving an opportunity to the prosecution to prove the allegations at the appropriate stage by producing the evidence, after which the revisionists will have the opportunity to defend themselves.
-
In view of the foregoing discussion, this Court is of the considered view that the trial Court has not committed any error or illegality in rejecting the discharge application, the impugned order dated 31.05.2025 is based on cogent reasons which warrant no interference by this court in exercise of its revisional jurisdiction.
-
The revision lacks merit and the same is hereby dismissed. It is clarified that any observation made in this order will not affect the trial on its merits.
(Subhash Vidyarthi,J.) August 28, 2025
-Amit K-