Punjab-Haryana High Court
M/S Hemkunt Rice Mills vs Central Bureau Of Investigation on 9 December, 2010
Crl. Misc. No.M-11236 of 2010 1
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH.
Crl. Misc. No.M-11236 of 2010
Date of Decision: 09.12.2010
M/s Hemkunt Rice Mills, Goniana Mandi,
Goniana, District Bathinda through
its proprietor Dalip Singh ....Petitioner
Versus
Central Bureau of Investigation
Anti Corruption Branch,
Sector 30, Chandigarh. ...Respondent
Crl. Misc. No.M-14464 of 2010
M/s Punjab Rice and General Mills ...Petitioner
vs.
Central Bureau of Investigation ...Respondent
Crl. Misc. No.M-20889 of 2010
Pawan Kumar & others ...Petitioners
vs.
Central Bureau of Investigation ...Respondent
CORAM : Hon'ble Ms. Justice Nirmaljit Kaur
Present:- Mr. R.S. Rai, Sr. Advocate
with Mr. Gautam Dutt, Advocate
Mr. C.S. Bakshi, Advocate
for the petitioner.
Mr. S.S. Sandhu, Standing Counsel
for C.B.I.
*****
1. Whether Reporters of Local Newspapers may be
allowed to see the judgment ?
2. To be referred to the Reporters or not ?
3. Whether the judgment should be reported in the
Digest ?
**
Crl. Misc. No.M-11236 of 2010 2
NIRMALJIT KAUR, J.
Vide this common order, Crl. Misc. Nos.M-11236, 14464 of 2010 and Crl. Misc. No.M-20889 of 2009 shall stand disposed of as the FIR and the question involved in all these cases is same. However, the facts are being derived from Crl. Misc. No.M-11236 of 2010.
The facts, in short, are that the petitioner-firms, herein, entered into an agreement with the government agency i.e. The Food Corporation of India (here-in-after referred to as "FCI") for the year 2004-05, whereby, the petitioner agreed to mill paddy as desired by the FCI. The Government of India issued uniform specifications regarding paddy, rice and coarse grains for the procurement for central pool during the Kharif Marketing Season 2004-05 vide letter dated 31.08.2004. The policy, which is popularly known as Custom Milling Policy 2004-05 regulates the terms and conditions. The said policy lays down the procedure of allotment of Rice mills. The scheme under this policy specifically highlights the role of Food Corporation of India in procurement and allotment of paddy to the Rice millers. A rice miller is under obligation to enter into an Agreement with the District Food & Supplies Controller/District Manager, who acts on behalf of the Government. During the year 2004-05, the paddy allotted by FCI was duly milled by the petitioner firm. The paddy duly milled by the petitioner- firm was accepted by the FCI and the FCI issued acceptance note on the receipt of the Rice regarding quality of rice and weight check memo regarding quantity of Rice and the same was stored in the godowns of the Punjab State Warehousing Corporation. Thereafter, the CBI conducted Joint Surprise Checks along with FCI officials at FCI Centres, Jalalabad, Goniana and Mansa in September 2005 and samples were taken randomly in the presence of independent witnesses as per the prescribed FCI procedure. These samples were got examined from the Director, Central Crl. Misc. No.M-11236 of 2010 3 Grain Analysis Laboratory, ICAR, Krishi Bhawan, New Delhi. The analyses report of CGAL in respect of the samples revealed that 9 samples out of 11 samples seized from Guniana centre were below PFA standards and not fit for human consumption. The remaining two samples were also not conforming to specifications and were found BRL. Out of 8 samples seized from Mansa centre, all of them were not conforming to specifications and were found BRL. Out of 26 samples seized from Jalalabad centre, 15 were below PFA standards and not fit for human consumption while the remaining 11 samples were found not conforming to specifications and BRL.
Accordingly, a regular case was registered in CBI ACB Chandigarh on the allegation that during Kharif season of 2004-05 sub- standard consignments have been accepted by FCI officials in Punjab Region (Goniana, Mansa and Jalalabad) from various rice millers and shown as `A' grade rice and payments made for the same. Rice consignments sent to some states had been rejected/accepted as sub- standard causing huge financial loss to FCI. In the FIR, 17 FCI officials and 45 rice mills were named as accused and case was registered under Section 120-B IPC read with Section 420 IPC, Section 13(2) read with Section 13(1)(d) of PC Act and Section 16 of Prevention of Food Adulteration Act, 1954.
Accordingly, the present petitions have been filed by various private millers, against whom, the said FIR was registered by the CBI. Learned counsel for the petitioner, while praying for quashing of the FIR, contended that ;
(a)The Prevention of Food Adulteration Act, 1954 cannot be made applicable as
(i) the entire foundation of the investigation agency is upon the results of the samples analyzed by CGAL, Crl. Misc. No.M-11236 of 2010 4 ICAR Laboratory and New Delhi. It has been specifically mentioned that under Rule 3 of the Prevention of Food Adulteration Rules, 1955, the Laboratory which shall carry out the functions entrusted to it by the Food and Adulteration Act in respect of Punjab is the Central Food Laboratory, Mysore. Since the samples have not been examined from the laboratory as provided by the PFA Act and as prescribed under the PFA Rules, the results of the laboratory on the strength of which the petitioners and others have been booked is totally malafide, wrong and inadvisable. Once the PFA Rules provide for a specific laboratory, the testing had to be got conducted only from that laboratory. Therefore, the proceedings against the petitioner are totally vitiated. The applicability, of Section 16/19 of the PFA Act, 1954, cannot be made applicable since the samples drawn were not tested by the laboratory prescribed under the Act and the Rules.
(ii) as per Section 11 of the Prevention of Food Adulteration Act, 1954, only a Food Inspector is to take sample of food for analysis. Thereafter, it is mandatory for him to firstly give notice in writing of his intention to analyze the food item. The same, too, was not done.
(iii) The Food Inspector is to make 3 samples and take the samples in the presence of the person from whom the samples have been taken. In the present case, this mandatory procedure as laid down in the Prevention of Food Adulteration Rules, 1955 has not been followed.
(iv) as per Section 20 of the PFA Act, 1954, no prosecution for an offence under this Act shall be Crl. Misc. No.M-11236 of 2010 5 instituted except by or with the written consent of the Central Government or the State Government. In the present case, no such authorization has been taken by the CBI. Thus, the Prevention of Food Adulteration Act, 1954 cannot be made applicable on account of total violation of Sections 9, 10, 11, 16 and 20 of the said Act.
(v) Reliance has been placed on the judgment of Hon'ble the Apex Court rendered in the case titled as A.K. Roy & another vs. State of Punjab & others reported as AIR 1986 SC 2160 to contend that where no written consent was sought by the Central or the State Government for prosecuting the accused, the prosecution was illegal and therefore liable to be quashed. In the case of Yamuna Saha & others vs. The State of Bihar reported as 1992 Crl. L.J. 2311, it has been held that Section 20 is mandatory in nature and the prosecution instituted by the police without the requisite authorization as envisaged under Section 20 is sufficient to quash the proceedings in a case. Reliance has further been placed on the judgment in the case titled as Chaturbhuj vs. The State of Madhya Pradesh reported as 1991(0) MPLJ 42 to state that where there is no authority or sanction as required under Section 20 of the Act, the prosecution cannot be sustained. Similarly, reliance has also been placed on the judgment of Hon'ble the Apex Court rendered in the case titled as Municipal Corporation of Delhi vs. Ghisa Ram reported as AIR 1967 SC 970, wherein, it has been held that where a statute enables the accused Crl. Misc. No.M-11236 of 2010 6 to get a sample tested and if he is deprived of that valuable statutory right, the prosecution is bad. A similar view has also been taken in the case titled as State of Haryana vs. Unique Farmaid Pvt. Ltd. reported as 1994(4) RCR (Criminal) 540.
(b) Moreover, the samples of rice were drawn from 29.09.2005 to 01.10.2005. Admittedly, the rice was not in the custody of the petitioner since he had delivered his last consignment as back as on 09.08.2005.
Therefore, for a period of more than 1½ months, the stocks were lying in PSWC Godowns. Moreover, vide letter dated 11.08.2005, the Assistant Manager (Quality Control), Goniana has issued a certificate to the effect that he had inspected the rice in question which had been stored in the PSWC godowns in Goniana and after checking the entire stocks had found the stocks to be in normal position and the moisture was also within the limit. It is noteworthy that document is not disputed since Sh. V.K. Shrivastav, the author of this letter has not been arrayed as an accused by the CBI.
(c) The Food Corporation of India issued acceptance notes and weight check memos against the delivery of all consignments. The Food Corporation of India did not raise at the time of delivery any issue regarding the delivery of sub-standard rice with the petitioner. Facts conclusively establish that the FCI did not complain about the quality of rice of the petitioner either on the date of last consignment in the Kharif Marketing Season 2004-05 or within a reasonable time Crl. Misc. No.M-11236 of 2010 7 thereafter.
(d) no offence under Section 420 IPC can be made out. The stocks of rice which have been allegedly found to be sub-standard have been sold by FCI in public auction at a price much higher to the one which were to be sold earlier in time. No financial loss therefore has occurred to FCI. Therefore, Section 420 IPC is not made out at all. Moreover, there was no deception by the petitioner to FCI since the stocks have been found to be of good quality till its delivery to FCI and even subsequent to its storage. Further, the stocks kept lying in PSWC godowns for more than one and a half month where for the first time, it has been found that there was some anomaly in the quality of rice.
(e) It was further submitted that the CBI has patently discriminated against the petitioner. M/s Bansal Rice Mills, Goniana and M/s Mahashakti Rice Mills, Goniana were similarly placed. However, they were allowed to replace their rice stocks as per the agreement and no charge sheet has been submitted against them. This is totally arbitrary illegal and discriminatory. The CBI and FCI cannot treat the petitioners and others differently. Moreover, in other cases, CBI has taken a strange stand that in cases where the rice millers were accused of supplying of BRL rice, only recommendation of getting them blacklisted were made and they were not tried for offences under Sections 420 and 120-B IPC, Prevention of Corruption Act etc. It was further submitted by learned counsel for Crl. Misc. No.M-11236 of 2010 8 the petitioner-firm M/s Hemkunt Rice Mill that their firm has been discriminated in as much as the other millers who had replaced the rice were conveniently left out and no challan has been filed against them, whereas, the petitioner has been victimized.
(f) Learned senior counsel-Mr. R.S. Rai for the petitioner in Crl. Misc. No.M-14464 of 2010 titled as M/s Punjab Rice and General Mills, however, distinguished his case from others by submitting that as per clause 9 of the agreement with FCI also, if the stock supplied by any firm is found to be not as per specification then the said firm is bound to replace the said rice. The petitioner's firm has replaced the entire rice which was not found to be as per specifications and thereby has committed no offence. It was a civil liability, having violated the contract and even for that, the FCI has been indemnified. The petitioner's firm has fulfilled even contractual liability and thus not liable to be prosecuted.
(g) It was lastly contended that in cases, where the relationship of the parties is governed by the terms and conditions of an agreement, the matter becomes of purely a civil nature and no criminal action can be taken in such a matter and reliance was placed on the judgment of Kailash Verma vs. Punjab State Civil Supplies Corporation reported as 2005(1) RCR (Criminal) SC 727, to substantiate the said argument, as well as, on the judgment of Bal Kishan Das vs. P.C. Nayar reported as 1991 Supp(2) SCC 412, Crl. Misc. No.M-11236 of 2010 9 wherein, it has been held that no criminal offence is made out when the relationship of parties is governed by an agreement.
Reply has been filed by the CBI. Learned counsel for the CBI submitted that it was not only a case under the Prevention of Food Adulteration Act (PFA Act) but also under the other sections of IPC including criminal conspiracy and cheating and relevant sections of Prevention of Corruption Act including abuse of official position. The said sections of PC Act and the IPC form the main body of the offences committed by the accused government officials in connivance with the private rice millers and the CBI being the Central Investigation Agency was fully competent and within its powers to investigate the offence committed by government officials. It was further submitted that the accused petitioner's firm entered into a criminal conspiracy with the accused FCI officials which resulted into the acceptance of poor quality rice during Kharif Marketing Season 2004-05 by FCI and, accordingly, CBI had filed chargesheet in case RC 1(A)/2006/ACBCHG for the offences of criminal conspiracy, cheating, misuse/abuse of official position and adulteration of rice. CBI has collected ample evidence to establish the involvement of petitioner and other accused as detailed in the chargesheet. As the offences committed by the petitioner are grave criminal acts, hence the averments regarding the civil nature of the matter are baseless. Further, the acceptance of the substandard rice from the petitioner's rice mill showing the same to be of uniform specifications was done by the FCI officials in furtherance of the criminal conspiracy with the petitioner. The rice supplied by the petitioner's rice mill was beyond PFA limit and was unfit for human consumption. The job of the rice miller is not complete just by the issuance of acceptance notes. There is procedure for further checking by the senior FCI officials. Even in the agreement between the Crl. Misc. No.M-11236 of 2010 10 Rice Miller and FCI, it is clearly mentioned in clause G(i) that the entire quantity of rice of all varieties delivered by the agent to the FCI shall conform to the uniform specification laid down by the Government of India.
In reply to the fact that Sh. V.K. Srivastva was not charge sheeted, the CBI replied that the certificate issued by Sh. V.K. Srivastva does not speak clearly about the damaged percentage of the rice. The samples, in question, were obtained during a joint surprise check by a team of CBI and FCI Officials in the presence of Independent Witnesses taking all the necessary precautions and following the procedure of sampling as per the prescribed procedure of FCI. The samples of the rice were obtained by the CBI within a short period of two months and no change with regard to the percentage of damaged rice is possible within such a short period. Moreover, in between this period of two months the District Manager, FCI, Bathinda had also conducted checking of the rice and found the same to be beyond acceptable limit. While letting off the PSWC officials, learned counsel for the CBI submitted that as regard the role of PSWC officials, they had only stored the rice in their premises and the responsibility of ensuring the quality of the rice was of the FCI officials.
Learned counsel for the parties have been heard at length. There appears to be some merit in the argument raised by learned counsel for the petitioner that no offence under the Prevention of Food Adulteration Act, 1954 is made out as there is total non-compliance with the provisions of the said Act. There is violation of both Sections 20, as well as, Section 11 of the PFA Act, in as much as, the said sample was not taken as per the mandatory procedure prescribed under the same. As per the Sections 9, 10 and 11 of the PFA Act, the samples of rice were to be drawn by the Food Inspector, the same was, admittedly, not done in the present case. As per Section 11(c) of the Act, one sample was to be sent for analysis to the public analyst, the same was also, admittedly, not done. Crl. Misc. No.M-11236 of 2010 11 Further, as per Section 20 of the PFA Act, 1954, prosecution for such an offence cannot be instituted except by or with the written consent of the State or the Central Government. In the present case, no such authorization was taken by the CBI. It is also not denied that the said samples have not been examined by the Laboratory as provided by the Prevention of Food Adulteration Act, 1954. In accordance with Rule 3 of the Prevention of Food Adulteration Rules, 1955, the competent laboratory to carry out the functions entrusted to it by the Act for the State of Punjab and Chandigarh, is the Central Food Laboratory, Mysore.
However, the charges, in this case, have yet to be framed. Therefore, the petitioner, in any case, would always be at liberty to raise all the pleas before the Court at the time of framing the said charges.
As stated by the CBI, the primary concern, in the present case, is with respect to Section 420 of the IPC, as well as, Section 13(2) read with Section 13(1)(d) of the PC Act.
[The] Delhi Special Police Establishment Act, 1946 makes provision for the constitution of a special police force, which in the present case, is the Central Bureau of Investigation. The amendment made by the Act 26 of 1952 which was enacted is as follows :-
[a] Substituted in long title and preamble for the words "for the State of Delhi for the investigation of certain offences committed in connection with matters concerning Departments of the Central Government" by the Delhi Special Police Establishment (Amendment) Act, 1952 (26 of 1952), S.2 (6-3-1952)."
The objects and reasons behind the said amendment are stated as follows :-
" OBJECTS AND REASONS 1952 - The objects and reasons for the amendments made by Act 26 of 1952 are stated as Crl. Misc. No.M-11236 of 2010 12 follows :-
The Delhi Special Establishment is a Central Police Force constituted under the Delhi Special Police Establishment Act to investigate offences of bribery and corruption committed by officers or others in departments of Central Government. It does not confer any power to deal with cases concerning -
(a) corporation and other bodies set up and financed by the Government of India; and
(b) departments of the administrations in centrally administered States."
It is evident from Annexure D-2 placed on record by the Central Bureau of Investigation that an information was received at the CBI, ACB, Chandigarh that during the Kharif season 2004-2005, sub-
standard rice consignments have been accepted by the FCI officials in Punjab region from various rice millers while releasing payments as prescribed for higher quality rice. The FCI officials from the rank of Technical Assistants to Senior Regional Manager, Punjab Region reportedly connived with various private rice millers and accepted poor quality of rice at the cost of `A' grade rice. In many recipient states these rice consignments were rejected/were accepted as sub-standard rice resulting in huge financial loss to FCI.
In order to ascertain the veracity of information, a joint surprise checking in association with FCI officials was conducted at the godowns of FCI Centre, Guniana on 01.10.2005. FCI Centre Mansa on 30.9.2005 and FCI Centre, Jalalabad on 29.9.2005 in association with Senior FCI officials of Chandigarh. During the course of said joint surprise checking, 18, 8 and 26 rice samples of Raw Rice Grade "A" and Parboiled were taken from FCI Centres Guniana, Mansa and Jalalabad respectively as per the prescribed FCI procedure in the presence of independent witnesses. Samples were taken randomly to be true representatives of rice stock available in the FCI Crl. Misc. No.M-11236 of 2010 13 godowns.
The rice samples taken from the above mentioned FCI godowns along with photocopies of the concerned joint surprise check memos were sent to the Director, Central Grain Analysis Laboratory, ICAR, Krishi Bhawan, New Delhi vide letter No.DPCHG2005/9175/Misc./ACB/CHG dated 04.10.2005 for analysis in order to ascertain whether samples conform to the prescribed specifications as laid down by FCI for rice during the kharif crop season 2004-05 and also requested to report if samples are beyond the specifications as prescribed in Prevention of Food Adulteration Act, 1954.
The analysis report of CGAL in respect of the samples revealed that 9 samples out of 11 samples seized from Guniana centre were below PFA standards and not fit for human consumption. The remaining two samples were also not confirming to specifications and were found BRL. Out of 8 samples seized from Mansa center all of them were not conforming to specifications and were found BRL. Out of 26 samples seized from Jalalabad center, 15 were below PFA standards and not fit for human consumption while the remaining 11 samples were found not confirming to specifications and BRL. The FCI officials in these centers connived with each other and private rice millers and accepted poor quality rice and caused huge loss to public exchequer.
Accordingly, the FIR was registered.
The CBI justified that the said exercise was undertaken by the CBI as per the instructions regarding inspection, sampling and analysis procedure to be followed in acceptance of rice stocks issued by Ministry of Food, Consumer Affairs and Public Distribution and FCI, Headquarters. The relevant instructions dated 28.09.2004 for the Kharif Marketing Season 2004-05 laid down as under :-
1. The rice stocks shall be accepted/purchased as per the Crl. Misc. No.M-11236 of 2010 14 laid down specifications of Government of India for Kharif Marketing Season, 2004-2005 circulated vide this Office letter of even No. dated 02.09.04.
2. The method of sampling is to be followed as per BIS method for sampling of food grains as instructed vide this office letter No.QC/2(1)/2002/Vol.I dated 13.11.2002.
3. The samples will be drawn in triplicate and jointly sealed with the representative of millers or State Government as the case may be. Out of these three samples one sample will be analysed at FCI depot/FCI notified acceptance point for acceptance/rejection and the second sample will be kept under proper custody at the depot for future reference. The third sample will be handed over to the representative of miller or the State Government as the case may be.
4. to 17 xxx xxx xxx
18. The extent of surprise checks at the level of DM (QC), District Manager JM (QC), Manager (QC) of Zone and SRM as prescribed above shall be apart from surprise checks conducted by District/Regional/Zonal/Headquarters squads. Copies of the report of the squads will be submitted to Hqrs invariably."
The instructions prescribed that the rice stock shall be accepted as per specifications laid by Govt. of India for Kharif Marketing Season 2004-05 and BIS method of sampling be followed. The instructions provided hat samples shall be drawn in triplicate (one for analysis at acceptance point, second sample to be kept in under proper custody at the depot for the future reference and third sample to be handed over to the representative of the miller or State Government). The instruction also provided for packaging, marking and storage of rice accepted. The guidelines provided that acceptance of rice stock at Depot level shall be made by TAs and in the absence of TA by AMQC and they shall sign Crl. Misc. No.M-11236 of 2010 15 quality certificate/acceptance note/analysis report. The TA is responsible for 100% checking of the rice accepted by him. The guidelines also provided that to have proper check of rice stock accepted by each TA, 5% and 2% of samples of rice consignment accepted by each TA at each Depot of each FCI district will be got collected by District Manager and SRM, respectively for analysis at District/Regional lab. SRM/DM should also make surprise checks to ensure genuineness of samples. In order to ensure acceptance of rice confirming to specifications the guidelines also provided for super inspection as following :
At the level of % of Test Check
the Officer
Asst. Manager 25% rice consignments accepted by each TA at (QC) each depot on day to day basis.
concerned Deputy 10% rice consignments accepted by each TA Manager (QC) on fortnightly basis at each depot concerned District 2% rice consignment accepted by each TA on Manager fortnightly basis at each depot.
concerned JM (QC) of 10 depots during each month spread over at Region least 3 (three) FCI District by drawing/analyzing samples of rice of at least two different consignments accepted under supervision of different A Ms (QC). Inspection to be carried out in such a way that all the procurements District of the region are covered once in 3 (three) months.
SRM At least 4 (four) depots every month spread
over at least two FCI district by
drawing/analyzing samples from two different consignments at each depot.
Manager (QC)/ A minimum of two depots in different procuring JM (QC), Zonal regions each month by drawing/analyzing Office samples of at least two different consignments of rice already accepted. Next month different Region and different District should be covered. The guidelines also provided for surprise checks to be conducted by special squads. The guidelines stated that the officers found guilty of procuring rice beyond uniform specifications are not to be spared and shall be removed immediately from procurement work besides Crl. Misc. No.M-11236 of 2010 16 disciplinary action. The overall responsibility for procuring rice as per specification rests with District Manager.
Thus, as per the CBI, the said instructions of the Government were fully followed while conducting the said investigation. The investigation became all the more necessary in view of the prevalent situation and circumstances requiring the CBI to step in and take on the said exercise. The said scenario is evident from the letter dated 03.08.2005 addressed by J.P. Sharma, Zonal Manager, which reads as under :-
" A serious note has been taken of the rising trend of quality complaints in procurement of rice in Punjab. In meetings and during discussions at various levels, it has been stressed time and again that only foodgrains conforming to specifications be procured so that no quality complaints are received. It is also a fact that whenever quality complaints are received, action accordingly has been taken against the delinquents. Procurement of bad quality of foodgrains is a criminal offence against the Corporation as well as public for whom the Organisation is supplying foodgrains. During discussions at the Ministry and HQ's level, a suggestion has emanated that why can't FIR be lodged against those employees who indulge in such nefarious and criminal activities, and criminal proceedings initiated. At present, only disciplinary action is taken as per FCI Staff Regulations. It is advised that we may take legal opinion on the issue of lodging FIR also in addition to the action taken under the provisions of Staff Regulations. A model FIR can also be prepared with the help of legal opinion."
Learned counsel for the CBI, accordingly, contended that the FCI officials who conspired and accepted rice beyond PFA standards are only being charge sheeted, whereas, in view of the above facts, a criminal conspiracy was made out. Accordingly, challan has been filed against the FCI officials and private millers for constituting an offence punishable under Sections 120-B IPC read with Section 420 IPC, Section 13(2) read with Crl. Misc. No.M-11236 of 2010 17 Section 13(1)(d) of the PC Act. The same was within the domain of the powers of CBI. Hence, there was no irregularity in registering the FIR and investigating the same.
The said act of the FCI officials in conspiracy with the rice millers has resulted in huge pecuniary advantage to the rice millers causing corresponding loss to the Food Corporation of India. The investigation on the basis of secret information, as discussed above and the Joint Surprise Checks conducted by the CBI along with FCI officials revealed that the rice stock was not accepted as per specifications laid down in the instructions issued by Govt. of India for Kharif Marketing Season 2004-05 causing gain to the millers and loss to the FCI. Thus, attracting other sections of the IPC including criminal conspiracy and cheating and relevant sections of Prevention of Corruption Act including abuse of official position.
Thus, the registration of FIR and investigation of the criminal offence was well within the jurisdiction of CBI.
The argument of learned counsel for the petitioner that Section 420 IPC is not made out as no loss has been suffered by FCI since after four years FCI auctioned the rice in question and has, in fact, got more money than it has previously got or the argument of learned counsel for the petitioner that the entire rice was replaced in accordance with the agreement, has no merit. Admittedly, the said rice was replaced only after the receipt of the notice. Moreover, Hon'ble the Apex Court in the case of Central Bureau of Investigation vs. A. Ravishankar Prasad & others reported as 2009(3) RCR (Criminal) 466, while dealing with Section 420 of the IPC and Sections 13(1)(d) and 13(2) of the Prevention of Corruption Act, 1988, held that mere re-payment of loan under a settlement cannot exempt the accused from the criminal proceedings. In the said case, the accused had defrauded the bank to the tune of crores of rupees in connivance with senior officers and after fabricating documents. Criminal Crl. Misc. No.M-11236 of 2010 18 case under Prevention of Corruption Act and under Section 420, 467 and 471 IPC was registered against the accused. Charge sheet was submitted by the police. A settlement was arrived at between the accused and the Bank. Accused paid all the dues. Proceedings were quashed by the High Court in view of the settlement. However, the order of the High Court was set aside by the Hon'ble Supreme Court by holding as under :-
"43. In our considered view it was extremely unfortunate that the High Court in the impugned judgment has erroneously invoked inherent power of the court under section 482 of the Code of Criminal Procedure. The High Court ought to have considered the entire material available to establish a case against the respondents under section 120-B read with section 420 IPC. It is significant that the respondents and the other bank officials share the charges under section 120-B read with section 420 IPC. Quashing the charges against the respondents would also have very serious repercussions on the pending cases against the other bank officials.
44 & 45. xxx xxx xxx
46. Before parting with the case we would like to observe that mere re-payment of loan under a settlement cannot exempt the accused from the criminal proceeding in the facts of this case."
Hon'ble the Supreme Court, in the case of State of Madhya Pradesh (supra) set aside the order of the High Court, vide which, the FIR was quashed on the ground that the Bank had not suffered any loss as the borrowers had returned the money with interest. Para 38 of the same reads as under :-
"38. Mr. Tankha's submissions, which were echoed by Mr. Jain, that the M.P. Co-operative Societies Act, 1960 was a complete Code in itself and the remedy of the prosecuting agency lay not under the criminal process but within the ambit of Crl. Misc. No.M-11236 of 2010 19 Sections 74 to 76 thereof, cannot also be accepted, in view of the fact that there is no bar under the M.P. Co-operative Societies Act, 1960, to take resort to the provisions of the general criminal law, particularly when charges under the Prevention of Corruption Act, 1988, are involved."
In any case, the argument that no loss had occurred and in fact, rice was sold at a higher price, is an argument in defence. Whether there was any loss or not, is a question of evidence. Even otherwise, the main thrust in the present case is the acceptance of rice by the Government officials, which did not meet the specifications and was not fit for human consumption. In view of the above discussion and the law laid down by Hon'ble the Supreme Court, the subsequently, making good the loss and replacing the stock cannot exempt or absolve the petitioner of criminal liability.
With respect to the argument submitted by learned counsel for the petitioner that non-public servant or a private person cannot be convicted under the Prevention of Corruption Act, has also no merit. The challan presented in the present case is under Sections 120-B IPC read with Section 420 IPC, Section 13(2) read with Section 13(1)(d) of PC Act and Section 16 of Prevention of Food Adulteration Act, 1954. The allegation is that the present petitioners, who are the millers, and the officials of the FCI Department have conspired with each other. The petitioners are challaned with the help of Section 120-B IPC.
In the case titled as P. Nallammal v. State reported as 1999 (3) RCR (Crl.) 676, the Supreme Court rejected the contention made that a non-public or a person who was not a government servant could not be indicted for abetment for commission of an offence under Prevention of Corruption Act. Hon'ble the Supreme Court took into consideration the certain situations to show how relatives, friends and other business Crl. Misc. No.M-11236 of 2010 20 partners can conspire and be an abetters of offence. Paras 21 to 26 of the said judgment are relevant for the purpose and read as under :-
"21. There is no force in the contention that the offences under Section 13(1)(e) cannot be abetted by another person. "Abetment" is defined in Section 107 of the Penal Code as under :-
"107. Abetment of a thing.- A person abets the doing of a thing, who -
First.-Instigates any person to do that thing; or Secondly.- Engages with one or more other person or persons in any conspiracy for the doing of that thing, if an act or illegal omission takes place in pursuance of that conspiracy, and in order to the doing of that thing; or Thirdly.- Intentionally aids, by any act or illegal omission, the doing of that thing."
22. For the "First" clause (i.e. instigation) the following Explanation is added to the section:
"Explanation 1. - A person who, by willful misrepresentation, or by willful concealment of a material fact which he is bound to disclose, voluntarily causes or procures, or attempts to cause or procure, a thing to be done, is said to instigate the doing of that thing."
23. For the "Thirdly" clause (i.e intentionally aids) the following Explanation is added :
"Explanation 2.- Whoever, either prior to or at the time of the commission of an act, does anything in order to facilitate the commission of that act, and thereby facilitates the commission thereof, is said to aid the doing of that act."
24. Shri Shanti Bhushan cited certain illustrations which, according to us, would amplify the cases of abetments fitting with each of the three clauses in Section 107 of the Penal Code vis-a-vis Section 13(1)(e) of the P.C. Act.
The first illustration cited is this :
If A, a close relative of the public servant tells him Crl. Misc. No.M-11236 of 2010 21 of how other public servants have become more wealthy by receiving bribes and A persuades the public servant to do the same is order to become rich and the public servant acts accordingly. If it is a proved position there cannot be any doubt that A has abetted the offence by instigation. Next illustration is this :
Four persons including the public servant decide to raise a bulk amount through bribery and the remaining persons prompt the public servant to keep such money in their names. If this is a proved position then all the said persons are guilty of abetment through conspiracy.
The last illustration is this :
If a public servant tells A, a close friend of him, that he has acquired considerable wealth through bribery but he cannot keep them as he has no known source of income to account, he requests A to keep the said wealth in A's name, and A obliges the public servant in doing so. If it is a proved position A is guilty of abetment falling under the "Thirdly" clause of Section 107 of the Penal Code.
25.Such illustrations are apt examples of how the offence under Section 13(1)(e) of the P.C. Act can be abetted by non-public servants. The only mode of prosecuting such offender is through the trial envisaged in the P.C. Act.
26. For the aforesaid reasons we are unable to appreciate the contentions of the appellants that they are not liable to be proceeded against under the P.C. Act. Accordingly, we dismiss these appeals."
In view of these facts, the judgment cited by learned counsel for the petitioner in the case titled as A. Subair vs. State of Kerala reported as 2009(3) R.C.R. (Criminal) 370 does not help him. In that case, the person was acquitted as the mere recovery of currency note of Rs.20/- Crl. Misc. No.M-11236 of 2010 22 by itself was not held to be proper or sufficient proof of the demand and acceptance of bribe. The judgment cited by learned counsel for the petitioner titled as State of Maharashtra vs. Laljit Rajshi Shah reported as 2000(2) RCR (Crl.) 71 shall also not help the petitioner on account of the amended provisions of Section 2(c) of the Prevention of Corruption Act, 1988. Hon'ble the Supreme Court in the case titled as State of Madhya Pradesh vs. Rameshwar and others reported as 2009(2) RCR(Crl.) 709, in para 37 has distinguished the same, which reads as under:-
"37. The High Court also did not, while considering the definition of the expression "public servant", take into account the fact that the decision in Laljit Rajshi Shah & Ors.'s case (supra) was no longer applicable in view of the amended provisions of Section 2(c) of the Prevention of Corruption Act, 1988, defining the said expression. Prima facie, it appears to us that the Respondent Nos. 1 and 3, in their capacity as the Chairman and Executive Officer of the Bank, come within the definition of "public servant" under Section 2(c)(ix) of the 1988 Act, which reads as follows :-
"public servant" means - any person who is the President, Secretary or other office-bearer of a registered co-operative society engaged in agriculture, industry, trade or banking, receiving or having received any financial aid from the Central Government or a State Government or from any corporation established by or under a Central, Provincial or State Act, or any authority or body owned or controlled or aided by the Government or a Government Company as defined in Section 617 of the Companies Act, 1956 (1 of 1956)."
While meeting the argument of learned counsel for the petitioners that similarly situated persons have not been challaned, Mr. S.S. Sandhu, Advocate for the respondent, while referring to the reply, Crl. Misc. No.M-11236 of 2010 23 submitted that the rice stock supplied by the petitioners-firm was not even fit for human consumption, whereas, the rice supplied by some other parties named by the petitioner was not damaged to the said extent. While meeting comments on the PSWC officials, it was stated that the PSWC officials had only stored the rice in the premises and the responsibility for ensuring the quality of rice is of the FCI officials. The certificate issued by Sh. V.K. Shrivastav was disputed on the ground that the same did not speak about the damaged percentage of rice. The said grounds are subject matter of evidence and a defence by the petitioner. The same cannot be made a ground for quashing of the FIR. The fact that some of them have been let off does not absolve the petitioners of their liability.
While refusing to exercise the jurisdiction under Section 482 Cr.P.C., Hon'ble the Supreme Court, in the case of Central Bureau of Investigation (supra) held in paras 36 and 37 as under :-
" 36. The High Court in the impugned judgment has misunderstood and misapplied the ratio of the three-Judge Bench of this Court in Inder Mohan Goswami & Anr. vs. State of Uttaranchal & Ors., 2007(4) RCR (Criminal) 548 : 2007(5) RAJ 451: 2007(12) SCALE 15 to the facts of this case. One of us (Bhandari, J.) was the author of the said judgment. The ratio of the said judgment is in para 24 at page 25 which reads as under :-
" Inherent powers under section 482 Cr.P.C though wide have to be exercised sparingly, carefully and with great caution and only when such exercise is justified by the tests specifically laid down in this section itself. Authority of the court exists for the advancement of justice. If any abuse of the process leading to injustice is brought to the notice of the court, then the Court would be justified in preventing injustice by invoking inherent powers in absence of specific provisions in the Statute."
37. The court in para 27 also observed that Crl. Misc. No.M-11236 of 2010 24 inherent power should not be exercised to stifle a legitimate prosecution."
In the present case, the concluding part of the FIR reads as under :-
The FCI officials by abusing their official positions caused huge pecuniary advantage to private rice millers causing corresponding loss to the FCI by dishonestly accepting the sub-standard rice consignments while showing these in their record to be as per required specifications and thus cheated the FCI.
The above act of said FCI officials in conspiracy with the rice millers which resulted in huge pecuniary advantage to the rice millers causing corresponding loss to the Food Corporation of India constitutes offences under Section 120-B IPC read with Section 420 IPC, Section 13(2) read with Section 13(1)(d) of Prevention of Corruption Act, 1988 and Section 16 of the Prevention of Food Adulteration Act, 1954."
Therefore, it is not possible to conclude at this stage and in the facts of the case that the allegation in the FIR do not make out any offence under Section 120-B IPC read with Section 420 IPC, Section 13(2) read with Section 13(1)(d) of PC Act.
The petitions are, accordingly, dismissed in view of the discussion as above.
The observations made by this Court are only for the decision of the present case. The observations made, herein, shall have no bearing on the case either at the time of framing of charge or any other subsequent stage or at the final stage of the hearing of the case.
Dismissed.
(NIRMALJIT KAUR) 09.12.2010 JUDGE gurpreet