Delhi District Court
C.B.I. vs . 1. S.S. Khatri on 27 February, 2012
IN THE COURT OF SPECIAL JUDGE (PC ACT), CBI,
SAKET COURTS, NEW DELHI
Presiding Officer : Dinesh Kumar Sharma, Addl. Sessions Judge
CC No.58/11
Unique Case ID No. 02406R0257782002
C.B.I. Vs. 1. S.S. Khatri
S/o Late Sh. Chiranji Lal
R/o H.No. 142, Rajpura, Gud Mandi,
Delhi - 7.
2. Mahender Kumar Oberoi
S/o Late Sh. K.L. Oberoi
R/o 14A/38, WEA, Ground Floor,
Karol Bagh, New Delhi.
RC No. : 63(A)/00
u/Ss : 120B IPC r/w S.420 IPC and u/S 420 IPC
Section 13(2) r/w Section 13(1)(d) of PC Act, 1988
Date of Institution : 21/09/2002
Received by transfer on : 14/11/2011
Arguments Concluded on : 21/02/2012
Date of Decision : 27/02/2012
Appearances:
Sh. DK Singh, Ld. PP for CBI.
Sh. Gurdyal Singh and Sh. KK Patra, Ld. Counsels for A1 SS Khatri.
Sh. RS Jamuar, Ld. Counsel for A2 Mohinder Oberoi.
CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 1 of 28
JUDGMENT
CHARGESHEET 1.0 Upon receipt of an information, CBI registered the First Information Report bearing RCDAI2000A0063 Ex.PW22/A that during the year 1998, M/s Oberoi Medical & General Store, Karol Bagh, New Delhi, a Chemist authorised by CGHS for local purchases, entered into a criminal conspiracy with Sh. Saranjit Deb, Chief Medical Officer, Gol Market CGHS dispensary and Sh. SS Khatri, Pharmacist of CGHS dispensary and some other unknown officials. Pursuant to the criminal conspiracy, M/s Oberoi Medical & General Store, raised inflated bills against the supply of medicines to CGHS, Gol Market Dispensary. The supplier charged higher rates of medicines and excess rates of sale tax / local levies. Sh. Saranjit Deb and other officials knowing fully well that the excess rates are being charged, instead of rejecting the bills, recommended the same for payment. This caused wrongful loss to the CGHS dispensary i.e. Government of India and caused wrongful corresponding gain to M/s Oberoi Medical & General Store. CBI learnt that M/s Oberoi Medical & General Store charged Rs. 3,500/ for the supply of Capsules Cycloserine against the printed rate of Rs. 509/. Similarly, for Shelcal tablet 250 mg and Ticlovas 250mg, M/s Oberoi Medical & General Store charged Rs.66.30 and Rs.131/ against the actual rate of Rs.33.60 and Rs. 115/, respectively. FIR was registered u/Ss 120B r/w Sec. 420 IPC and Sec. 13(2) r/w 13(1)(d) PC Act.
CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 2 of 28
Guidelines for procuring medicines from local chemist by CGHS is contained in circular dated 23/5/96 bearing No. F.No. 85/94 IAU/CGHS, Central Govt. Health Scheme, Internal Audit Unit. In the guidelines for procuring medicines from local chemist at S. No. 10, it has been mentioned that "the local chemist shall indicate MRP against individual item on the voucher before supply of the medicine and at the bottom of the voucher deduct the percentage of discount agreed upon for calculation of the actual claim". The local chemist must write the quantity both in figures and in words, the batch number, name of the company, MRP and the amount while supplying the medicines to the dispensary and no column should be left blank. The Pharmacists accepting the medicines should check the columns mentioned above and verify physically the rates with the medicine supplied, from strip and bottles. The pharmacist and CMO Incharge shall be responsible for the verification. The clause (1) of circular dtd. 21/7/03 (Ex.PW20/D1) issued by Addl. Director, CGHS (HQ) regarding procedure of checking and counter checking of the bills of local chemist for supply of medicines to CGHS dispensaries provides as under:
"the store keeper / pharmacist of the dispensary dealing in the local purchase of medicines will verify the rates claimed by local, chemist by tallying the same with the retail price of the medicines printed on the strips, packs, bottles, vials, ampoules etc at the time of receiving the medicines from local chemist."
The circular also provided that in case of detection of any CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 3 of 28 overcharging of rates, the CMO Incharge and the Pharmacist dealing in local purchase will be held personally liable.
Sh. SS Khatri, was duty bound to ascertain the MRP written on the flaps / bottles of these medicines and sales tax applicable on them being posted at Local Purchase Section. M/s Oberoi Medical & General Store added sales tax in the MRP whereas the chemist was not authorised to charge sales tax. The sales tax of medicines is levelled on the first point i.e., at the factory point. Sh. SS Khatri, also tacitly allowed the addition of sales tax by the Chemist.
After investigation, the chargesheet was filed on 21/9/02 against accused SS Khatri (Pharmacist) and Sh. Mahender Kumar Oberoi (Chemist). Sh. Saranjit Deb, CMO was placed in Column No. 2 on the ground that CMO, Incharge was simply forwarding the indents to MSD Store Depot and no criminal intent could be attributed to him.
1.1 Investigation revealed that during the year 1998 M/s Oberoi Medical & General Store systematically and repeatedly charged excess rates on Capsules Cycloserine, tablet Ticlovas, tablet Cardace of various potencies, tablet shelcal of various potencies and on about 100 occasions, the excess rate were charged by A2 Mahender Kumar Oberoi, chemist and A1 SS Khatri, Pharmacist posted in local purchase section, deliberately did not check the rates of the above said medicines in indents of the above chemist. The above said criminal conspiracy caused the loss of around Rs. 40,000/ to CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 4 of 28 the Government. Sh. AC Hazarika, Addl. Director (CGHS) (HQ) granted sanction for prosecution Ex.PW20/A dtd. 18/9/02 against SS Khatri.
The chargesheet was filed on 21/2/09 and the cognizance was taken on 12/11/09.
CHARGES 2.0 After compliance of Sec. 207 Cr.PC, the charge u/S 420 IPC was framed against A2 Mahender Kumar Oberoi. Separate charge u/S 13(2) r/w 13(1)(d) PC Act, 1988 was framed against A1 SS Khatri. Separate charge u/Ss 120B r/w 420 IPC and u/S 13(2) r/w 13(1)(d) PC Act, 1988 was framed against both the accused persons. Accused persons pleaded not guilty and claimed trial.
EVIDENCE 3.0 Prosecution examined 22 witnesses in support of its case. 3.1 PW1 Sh. Moolchand, Pharmacist, CGHS dispensary, South Avenue, identified the handwriting and signature of A1 SS Khatri on purchase indents Ex.PW1/1 to Ex.PW1/106. Sh. Moolchand also explained the procedure of procuring the medicines through local purchase. PW2 Virender Kumar, Pharmacist, CGHS dispensary, Gol Market proved that accused A1 was working as Pharmacist in Local Purchase in CGHS dispensary in the year 1998. He also identified the handwriting and signature of accused on indent Ex.PW1/1 to PW1/106. PW2 stated that when the CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 5 of 28 medicine is brought by the supplier, the pharmacist is required to check the quantity ordered, name of the manufacturer, name of the medicine, quantity received and rate. The supplier is required to fill up the column of the name of the manufacturer and batch number.
3.2 PW3 Dr. Arun Kumar Bhargav explained the procedure with regard to the local purchase of medicines in CGHS. The indent is prepared by the pharmacist working at the local purchase counter and thereafter, the CMO checks the indent as per prescription before issuing the same to the chemist. The medicines supplied by the Chemist is received in the dispensary by the local purchase pharmacist. The local purchase pharmacist would check the quantity, the company, the price and the date of expiry etc. PW4 Rajesh Kataria is one of the star witness of the prosecution. The witness stated that he saw the indent Ex.PW1/1 to 106 and compared the rates mentioned in the same with the rates of those medicines given by the manufacturer of medicines. These rates were collected by IO during the investigation for comparison. Sh. Rajesh Kataria (PW4) did this exercise alongwith PW Yagdutt (PW7).
3.3 PW5 SK Gupta stated on oath that in the year 1998 medicines for human use were taxable at first point which means that the importer or the manufacturer while selling the medicines first time in Delhi shall charge sales tax and all subsequent sales after charge of sales tax on the first point CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 6 of 28 were exempt from further sales tax. Sh. SK Gupta who was posted in sales tax department at the relevant time stated that if the chemist / retailer has purchased the medicines from local distributor / Delhi distributor, then that chemist / retailer is not entitled to charge sales tax on sale of medicines from any buyer. Thus, if the retailer has declared in his sales tax return that he has not charged any sales tax, it would mean that he is not the first point seller but a subsequent vendor in Delhi and if the retailer has charged sales tax from buyer, he will have to deposit the same (sales tax) with the sales tax authorities.
3.4 PW6 Sh. BM Lal was also posted at Sales Tax office at the relevant time. He placed record pertaining to sales tax relating to M/s Oberoi Medical & General Store of the assessment year 199798, 199899 and 19992000. The attested photocopies of the same were proved as Ex.PW6/A1 to A10. The witness stated that in the year 199798 M/s Oberoi Medical & General Store conducted local sale (tax paid) amounting to Rs. 2,98,48,656.93 and conducted local sale (taxable) @ 5% amounting to Rs. 1,46,323/. The local tax in the sum of Rs.7,316/ was paid to Sales Tax Department. In the assessment year 199899, M/s Oberoi Medical & General Store, the Chemist had a local tax paid sale in the sum of Rs. 3,16,78,104.48 out of the total sale of Rs. 3,17,07,923.40 . M/s Oberoi Medical & General Store did not pay any sales tax to Delhi Government as it was already tax paid at first point and no tax was required to be levied by the dealer on the CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 7 of 28 local sale. In the assessment year 19992000, the firm had a sale of Rs. 3,35,17,710.91 which was all tax paid sale and no sales tax was charged or paid by the dealer to Govt of Delhi as the same was not taxable. 3.5 PW7 Sh. Yugdutt, another star witness of prosecution had also compared the rate shown in the indent Ex.PW1/1 to 106 alongwith PW4 Rajesh Kataria. PW8 Sh. MK Jain, Office Supdt., Vig. Cell, CGHS Head office, New Delhi handed over bills, letter of accounts office pertaining to M/s Oberoi Medical & General Store to CBI, which were seized vide memo Ex.PW8/A. PW9 Sh. Dinesh Rai, an employee of CGHS had handed over documents like bill etc to the IO and the same were seized on 7/8/01 vide seizure memo Ex.PW9/A. 3.6 PW10 Sh. PC Sahni, Sr. Account Officer, in CGHS provided details of the payment of the bills for the year 1998 made to M/s Rishab Enterprises and M/s Oberoi Medical & General Store in respect of Gol Market dispensary vide letter dtd. 13/7/01 Ex.PW10/A. The detail of payment made to M/s Oberoi Medical & General Store was proved as Ex.PW10/B. 3.7 PW11 Sh. Jagmohan Singh stated that he had written a letter dtd. 7/9/01 Ex.PW11/A to the IO of this case on the instruction of his father Late Dr. Tirlok Singh. Sh. Jagmohan Singh stated that his father Sh. Tirlok CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 8 of 28 Singh was the sole proprietor of M/s Karol Bagh Chemist and he used to call him (read Jagmohan Singh) to assist him in the affairs of the shop. Sh. Tirlok Singh expired on 28/8/07. As per letter Ex.PW11/A, M/s Karol Bagh Chemist were importers of Capsule Cycloserine 250mg in 1998 and were selling the same at MRP of Rs.3,000/ per 10 capsules plus a sales tax of 5%. The witness stated that they had three distributors namely M/s Ahuja Medicine Centre, M/s Jawahar Enterprises and M/s Lal Chemists. It is pertinent to mention here that till March 1998, when the consignment of cycloserine arrived, this medicine was not available in India. In the cross examination, the witness stated that he cannot vouch about the correctness of the letter Ex.PW11/A. 3.8 PW12 Sh. Umesh Sawhney, Partner in M/s British Medical Stores proved the letter dtd. 22/8/01 as Ex.PW12/A. In the letter Ex.PW12/A the rate of Evion 200, Evion 400 and Evion 600 have been mentioned for the period during 1998. On being asked this witness also filed the price list of medicine Evion Mark PW12/D1 & PW12/D2 of the year 1998 of the medicine Evion. PW13 Sh. Sanjeev Jain appeared on behalf of M/s RP Associates, Bhagirath Palace, Chandni Chowk and proved the fax dtd. 10/10/01 as Ex.PW13/A. Vide this communication, the information regarding capsule cycloserine 250 mg was furnished. The letter indicated that M/s RP Associates were authorised stockists for M/s Radicura Pharmaceuticals Pvt. Ltd., since 1984 and had purchased cyclokox capsule (cycloserine capsule CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 9 of 28 250mg) from M/s Radicura Pharmaceuticals from April, 1998 to December 1998 and had sold cyclokox capsule (cycloserine capsule 250mg) to M/s Oberoi Medical & General Store. The details of the capsules sold was mentioned in the letter Ex.PW13/A. The witness brought another copy of fax Ex.PW13/A1. He stated that in the year 1989, the MRP of cyclokox capsules was Rs. 485/ per strip of ten capsule and Delhi Sales Tax @ 5%. The witness stated that he had furnished the information on the basis of record. 3.9 PW14 Sh. Rajat Jain an employee of M/s Panacea Biotech proved letter dtd. 8/6/01 bearing his own signature as Ex.PW14/A. As per letter Ex.PW14/A, the price of Myser 250mg was Rs.450/ plus sales tax 5% in the year 1998. As per letter Ex.PW14/A, the PTS (not explained)was Rs. 336.28. He also proved the letter dtd. 2/6/01 Ex.PW7/DA which indicates that the capsule cycloserine BP is sold in the brand name of Myser Capsules. M/s Panacea Biotec informed that they had not manufactured any batch of the aforesaid capsule in the year 1998 and the batch No. 405001 was manufactured in February 1999. In the financial year 199899, the quantity manufactured was 99,960 and the retail price was Rs.450/ Local Tax Extra for 10 capsules.
3.10 PW15 Sh. Gajraj Singh, Branch Manager of M/s Elder Pharmaceuticals Ltd., proved letter dtd. 4/6/01 as Ex.PW7/DC. Vide this letter M/s Elder Pharmaceuticals Ltd., had informed that during the period CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 10 of 28 1/1/98 to 31/12/98, the price of Shelcal 250mg 30's was Rs.32.00 plus 5% sales tax and the price of Shelcal 500mg 15's was Rs.31.50 plus 5% sales tax. PW16 Sh. Ashutosh Sharma, Drug Inspector, Govt. of NCT, Delhi deposed that local tax is the tax which is payable to the Central Government or State Government or to any local authority established under any law and this is payable by manufacturer or its agent or dealer. Retailer / Dealer can recover the Sales Tax which he has paid to the Wholesaler. PW17 Sh. Anoop Lohia, Partner of M/s Tara Lohia Distributors proved the letter dtd 31/8/01 as Ex.PW17/A. Vide this letter, the rate of Cardace tablet 1.25mg, 2.5mg and 5mg was informed as Rs.34.50, Rs.42.50 and Rs.73.50 respectively. It was informed that there was no variation of price of Cardace during the year 1998 and there was first point sales tax on these times @ 5%. 3.11 PW18 Sh. Rakesh, Officer (Corporate Services) USV Pharmaceuticals Ltd., proved the fax copy of the letter dtd. 4/6/01 regarding MRP of Ticlovas 250mg as Ex.PW7/DB. However, he stated that fax copy is not completely legible. Despite opportunities being given, the witness stated that record being old he could not find its original. PW19 Sh. Rajan Jain, proved the letter Ex.PW19/A. Sh. Rajan Jain stated that M/s Radicura Pharmaceuticals Pvt. Ltd., are manufactures of medicine Cyclokox (Cycloserine) since 1998. In the letter Ex.PW19/A, the supplies of Cycloserine made to M/s RP Associates during 1998 were given. CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 11 of 28 3.12 PW20 Dr. AC Hazarika, proved the sanction order Ex.PW20/A vide which he granted sanction for prosecution of A1 SS Khatri. 3.13 PW21 Sh. Lal Babu Prasad employee of M/s Oberoi Medical & General Store stated that M/s Oberoi Medical & General Store used to receive indent from 34 CGHS dispensaries and medicines used to be supplied to such dispensaries on the basis of indents. The local purchase indents Ex.PW1/1 to 106 were identified as to have been received from CGHS dispensary, Gol Market. PW21 stated that A2 Mahender Kumar Oberoi was the proprietor of M/s Oberoi Medical & General Store. He identified the stamp of the medical store on the indents. The witness turned hostile on certain points and was cross examined.
3.14 PW22 IO Inspt. Karan Arya, earlier known as HK Lal deposed regarding the detailed investigation conducted by him. He stated that Sh. Bhagirath Singh, Accounts Officer of CGHS sent photocopies of the letter of Local Purchase Bill pertaining to CGHS dispensary, Gol Market alongwith letter Ex.PW22/B, The detail is Ex.PW22/B1. The photocopy of appointment letter f M/s Oberoi Medical & General Store Ex.PW22/C1 dtd. 21/5/96 was received by the IO alongwith forwarding letter of Sh. AK Bhargav, Addl. Director (MSD) Ex.PW22/C. IO stated that after further investigation, he found that A2 Mahender Kumar Oberoi charged sales tax from CGHS, though he was not entitled to charge it and A1 SS Khatri on CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 12 of 28 about hundred occasions systematically and repeatedly did not check it with dishonest intention and forwarded the bills for payment. STATEMENT OF ACCUSED 4.0 In their statement u/S 313 Cr.PC, accused persons denied all the allegations. A1 SS Khatri stated that though he was posted in the Gol Market dispensary but was not posted on the purchase counter. He stated the the pricing aspect was used to be looked after medical store department and accounts section and his job was not to check the rates of medicines. The accused admitted to have filled up the bills of the local purchase Ex.PW2/1 to 14 as per the dictation of the medical officer. The accused stated that he was not aware about the excessive rates charged by A2 Mahender Kumar Oberoi and he is innocent and has been implicated falsely.
A2 Mahender Kumar Oberoi stated that he used to receive filled in indents in which he himself and staff used to fill in the other required columns of batch no., quantity, price, total amount etc. The accused stated that during the relevant period all the medicines were not carrying MRP rates on the strips and vial and bottles and some medicines used to carry RP+ permissible taxes to be charged. Accused stated that he was charging what was permissible. The accused stated that he has charged only permissible rates and taxes. Regarding the prices of the medicines as mentioned in Ex.PW12/A, the witness stated that he cannot confirm the CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 13 of 28 prices of medicines without the date of manufacturing and batch numbers of the medicines. In respect of Cycloserine capsule, the accused stated that Cycloserine capsule used to be imported till March 1998. In April 1998 one lot of Cycloserine capsule under the brand name Cyclokox was produced in India and he purchased 300 capsules of the same and thereafter, the manufacturer and its sole distributor could not float any such medicine till September 1998 as the next lot came in market in September 1998, as per records produced in this case. Accused stated that his only involved supply is of June 1998 in which he supplied imported medicines and charged for the same. After September 1998 onwards, he supplied the Indian products as the price fixed for the same and hence, he made no false claims. The accused stated that prosecution could not collect any evidence to prove any allegation regarding overcharging of medicines supplied by him.
Accused Mahender Kumar Oberoi initially stated that he wants to lead defence evidence. However, lateron, the accused stated that he does not want to lead any DE and DE may be closed.
ARGUMENTS 5.0 Sh. DK Singh, Ld. PP for CBI advanced oral arguments as well as filed written synopsis. Ld. PP has submitted that prosecution has successfully proved its case against the accused persons beyond reasonable doubt. Ld. PP has submitted that sanction has duly been proved against A1 CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 14 of 28 SS Khatri. Ld. PP submitted that the main allegation is that A2 Mahender Oberoi dishonestly raised bill of medicines on inflated rates and also charged sales tax for which he was not authorised and A1 SS Khatri did not check the inflated rates and the sales tax added on the MRP. Ld. PP submitted that the prosecution has proved on record that the rate of the medicines were shown as inflated and PW4 Rajesh Kataria and PW7 Yugdutt have specifically stated that the rates as shown in the indent were excess as compared to the prevailing rates of the medicines.
5.1 Sh. Gurdyal Singh, Ld. Counsel for A1 SS Khatri has vehemently argued that prosecution has miserably failed to prove its case against the accused persons. The rate of the medicines are determined on the basis of its batch No. and year of production. As per case of the prosecution, Pharmacist A1 SS Khatri was supposed to verify the rates from the rates printed on the strips / vials of the medicines and since no such strips / vials has been produced, the prosecution has miserably failed to prove that the rates shown on the indent by the supplier were excessive. Ld. Counsel has further submitted that prosecution has not placed any cogent or creditworthy evidence on the record to prove that the rates shown in the indent were in excess to the present rate.
5.2 Similarly, Sh. RS Jamuar, Ld. Counsel for A2 Mahender CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 15 of 28 Kumar Oberoi has submitted that prosecution has miserably failed to prove its case against the accused. Investigation officer had conducted the investigation unfairly. There was no material on the record which could attribute any criminality on the part of the accused persons. APPRECIATION OF EVIDENCE 6.0 The accused persons have been charged for the offence that they entered into criminal conspiracy and A2 Mahender Kumar Oberoi dishonestly raised bill of cycloserine, ticlovas tab, shelcal and cardace of various potencies and various other medicines at inflated rates and also charged sales tax on MRP, knowing fully well that he was not authorised to charge sales tax and cheated CGHS dispensary, Gol Market. The graveman of the charge against A1 SS Khatri was that he abused his official position by corrupt or illegal means and did not check inflated rates of bills and sales tax thereon. The accused in conspiracy with each other caused loss of around Rs.40,000/ to the Govt. exchequer. The core point in the present case was that accused A2 Mahender Kumar Oberoi had quoted the price in the indent in excess to the prevailing rate of the particular medicine and A1 SS Khatri in violation of his duty failed to prevent A2 Mahender Kumar Oberoi from charging such excess rate. Thus, the prosecution was primarily required to prove two things - 1) what was the prevailing market rate of the particular medicine at the relevant time, and, 2) the rates charged by A2 Mahender CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 16 of 28 Kumar Oberoi from the CGHS dispensary. It is also pertinent to mention here that the rate of the medicines are determined on the basis of the batch number and the medicines are identifiable on the basis of particular batch No. given to it by the manufacturer. The price of a particular medicine can differ on the basis of its batch. As far as, the rate charged from the government by A2 Mahender Kumar Oberoi is concerned, that is not disputed. A2 Mahender Kumar Oberoi has not disputed about the rate of medicines which has been shown in the indent Ex.PW1/1 to 106. As far as duty of A1 SS Khatri as Pharmacist is concerned, that has also duly been proved by the prosecution on record. A1 SS Khatri being Pharmacist was required to check the rate of medicines as shown in the indent from the rates printed on the strip / vial of the medicines. The issue of sales tax can be considered only after it is brought on the record that what was the rate of a particular medicine at the relevant time. It is an admitted case that the prosecution has not produced on record, the sample drugs or the strip or vials of any particular medicine for which allegedly A2 Mahender Kumar Oberoi had charged inflated rates.
I consider that prosecution has miserably failed to prove its case against the accused. In this regard, cross examination of IO is very interesting. In the cross examination, IO PW22 Inspt. Karan Arya admitted that the testimony of PW4 Rajesh Kataria and PW7 Yugdutt was relied upon in regard to the inflated rates shown by the accused in the indent. IO stated that PW4 Rajesh Kataria and PW7 Yugdutt calculated the overcharges based CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 17 of 28 on the MRP confirmation of medicines received from various dealers / distributors/manufacturers mentioned in the chargesheet with the rates mentioned in the indents. It is interesting to note that the statement u/S 161 Cr.PC of PW4 Rajesh Kataria and PW7 Yugdutt was recorded on 27/7/2001 whereas the letter of M/s British Medical Store giving MRP of the medicines Ex.PW12/A, M/s Tara Lohia Distributors Ex.PW17/A, Jagmohan Singh of Karol Bagh Chemist Ex.PW11/A for various medicines are dtd. 22/8/01, 31/8/01 and 7/9/01. The communication received from M/s RP Associates regarding rate of medicines is also dtd. 10/10/01. Therefore, all the communications indicating the rate of medicines are subsequent to the date of the recording of the statement of witnesses u/S 161 Cr.PC. 6.1 The case of the prosecution is based on the premises i.e., A2 Mahender Kumar Oberoi charged excessive rates and the comparison of the rates is made on the basis of the above said rates given by the distributors. The rate from the distributors were received subsequent to the recording of the statement of witnesses. IO tried to explain this by saying that possibly the date of the statement u/S 161 Cr.PC of PW4 Rajesh Kataria and PW7 Yugdutt is a typographical error. In the cross examination, IO stated that he does not remember whether there is any other material except the statement of PW4 Rajesh Kataria and PW7 Yugdutt in respect of the charge of excess rate taken by A2 Mahender Kumar Oberoi. IO admitted in the cross examination that all the medicines mentioned in the indent through which CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 18 of 28 overcharge prices were claimed had already been distributed amongst the patients and no medicines were available to see the MRP printed on them. The defence has consistently argued that the price of the medicine is based upon the batch No. However, the prosecution has not brought anything on the record to prove the batch No. of the medicines from which the rates have been compared by the prosecution. It is an admitted fact that the batch No. of the medicines supplied by A2 Mahender Kumar Oberoi has been duly mentioned in the indent Ex.PW1/1 to 106. IO had the courage to say in the cross examination that he did not remember whether any search was conducted to collect any residue strips of medicines to know the MRP of particular batch nor did the IO check the stock register of M/s Oberoi Medical & General Store regarding availability of the medicines supplied in June 1998. IO stated that he did not check the stock register as the same was not necessary. IO also did not conduct any investigation to ascertain if the price of cycloserine capsule supplied in June was not as per the price claimed in the indent. In the cross examination on behalf of A1 SS Khatri, IO admitted that he did not collect the sample of the medicines supplied by A2 Mahender Kumar Oberoi to CGHS, Gol Market dispensary. IO also admitted in the cross examination on behalf of A1 that the rates on the basis of which the value was ascertained, pertained to the year 1998. He admitted that the rate of medicines in 1998 can be different from the rate of the medicines of the year 1995, 1996, 1997. Interestingly, IO presumed that all the medicines were of the year 1998. However, he could not deny the CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 19 of 28 possibility of the fact that some of the medicines could be of the year 1996 or 1997. Even at the cost of brevity it may be mentioned that IO admitted in the cross examination on behalf of A1 SS Khatri that he calculated the overpayment amount on the basis of statement of PW7 Yugdutt Sharma. He stated that he verified the calculation arrived by PW7 Yugdutt Sharma from the price list supplied by the supplier of the medicines. IO also admitted that he received the price list of the medicines from the distributor vide letter dtd. 7/9/01 Ex.PW11/A whereas statement of PW7 Yugdutt u/S 161 Cr.PC was recorded on 27/7/01. All this shows on the face of it the quality of investigation conducted by the IO.
The duty of the IO is to conduct the investigation fairly and to place cogent and creditworthy material on th record on the basis of which the Court can reach to the conclusive finding regarding the guilt of the accused. IO had been very casual in the investigation. In the cross examination on behalf of A2 Mahender Kumar Oberoi, IO admitted that indent cum local purchase bills of the period 1/1/98 to 25/3/98 is not on record, but the calculations of overcharging for the period upto 25/3/98 are included in Ex.PW4/A and Ex.PW7/A. PW4 Rajesh Kataria had stated in his cross examination that after the comparison of the prices, he gave in writing to the IO regarding such comparison of rates. However, IO in the cross examination stated that PW4 Rajesh Kataria and PW7 Yugdutt informed him orally about overcharging of the price on account of sales tax and thereafter, he produced such comparison in writing in his statement u/S 161 Cr.PC. During cross CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 20 of 28 examination on behalf of prosecution, PW7 stated that he prepared the list of difference on the plain paper and submitted the same to IO. However, this plain paper has been kept behind the Court. PW7 in the cross examination stated that as a Pharmacist they check the price of the medicines mentioned on the strip. The Pharmacist also checks if the amount mentioned in the bill is as per quantity supplied. He stated that they refer the book "IDR" if the rates seem to be charged on higher side. The witness stated that he was assigned the duty as a Pharmacist in November 1998 and he started checking the price by referring the IDR. It is interesting to note that IDR has not been produced by the prosecution for the reasons best known to them. PW7 had also admitted in the cross examination that in case of doubt the rate of medicines IDR is consulted. PW4 Rajesh Kataria and PW7 Yugdutt have concluded that A2 Mahender Kumar Oberoi had charged inflated rates on the basis of letter Ex.PW11/A dtd 7/9/01, Ex.PW13/A dtd. 10/10/01, Ex.PW17/A dtd. 31/8/01, Ex.PW12/A dtd. 22/8/01, Ex.PW7/DC dtd. 4/6/01, Ex.PW7/DB dtd. 4/6/01, Ex.PW7/DA dtd. 2/6/01 and Ex.PW14/A dtd. 8/6/01. These are letters given by the different distributors / manufacturers / suppliers of the medicine. However, prosecution has not brought any material on the record on the basis of which the rates given in the above said letters have been given. The prosecution in order to prove its case was required to prove the basis on which the different suppliers / manufacturers have given their rates. Without any material to support these documents, it is not safe to place reliance upon them. The court is also required to take into CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 21 of 28 account the fact that there is always a competition amongst the trader and in case the rates have been demanded by the police or the CBI, the trader would try to give the rock bottom price. There is a possibility that if he is asked to supply the medicine on the rate given in the letters, he may not supply the same. It may be reiterated that PW4 Rajesh Kataria admitted in the cross examination on behalf of A1 SS Khatri that pharmacists who used to receive medicines from the supplier used to verify rates printed on medicines and if the prices were to be confirmed subsequently, then it would be compared with the book IDR and he was not shown the strip of medicines and IDR was also not shown to him. IO was not even able to recall the number of indents through which the price were charged. It indicates that IO has been quite vague and unspecific during the investigations.
6.2 The basis of the case of the prosecution is that A2 Mahender Kumar Oberoi charged excessive rates from the CGHS dispensary and A1 SS Khatri who was duty bound to check the rates did not object to it and thus, caused wrongful loss to the public exchequer. The most important evidence in such case was the strip of the medicine or the vial on which the excessive rates were charged. Even PW21 Sh. Lal Babu Prasad employee of A2 Mahender Kumar Oberoi stated in the cross examination that MRP / rate in the indents were used to be mentioned from the strip of the medicine or phial.
CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 22 of 28 6.3 Prosecution examined PW18 Rakesh, from USV Pharmaceuticals Ltd., so as to prove letter Ex.PW7/DB in regard to prove the MRP of Ticlovas 250mg at the relevant time. However, Ex.PW7/DB was the fax copy which was not even legible. The witness failed to produce the original of this letter despite the opportunity given to him. Therefore, this letter has no evidentiary value. Similarly, PW17 Sh. Anoop Lohia from Tara Lohia Distributors was examined to prove the letter dtd 31/8/01 Ex.PW17/A. It is pertinent to mention here that this letter is also a fax copy. The prosecution has not placed on record the original of this document. Indian Evidence Act, requires proof of document by way of primary evidence. Secondary evidence can only be expected in certain circumstances.
Chapter V of Part II of the Indian Evidence Act, 1872, deals with the provisions relating to proof of documentary evidence. Section 61 Indian Evidence Act provides that the contents of documents may be proved by primary or secondary evidence. Sec. 62 Indian Evidence Act provides that primary document means the document itself produced for the inspection of the Court.
6.4 The prosecution has not pleaded to prove the evidence by way of secondary evidence. Thus, on the face of it, the document dtd. 31/8/01 is not proved in accordance with the provisions of Evidence Act. However, still by this letter, the prosecution has tried to prove the rate of tablet Cardace of different potencies. It is interesting to note that witness stated in the cross CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 23 of 28 examination that the rates mentioned in the letter pertains to the year 2001 whereas the case pertains to the year 1998. Therefore, this document itself has no relevance for the prosecution.
6.5 The defence has consistently being saying that the primary evidence in this case were strips of the medicines, the rates of which are under challenge. PW15 Sh. Gajraj Singh proved the document Ex.PW7/DC dtd. 4/6/01. The letter Ex.PW7/DC is regarding the medicine Shelcal. In the cross examination, the witness stated that he supplied the rate on the basis of the rate list as well as rates mentioned in the strip of the medicine lying in the company. If we peruse the cross examination, it seems that in the year 2001 when the letter Ex.PW7/DC was given to the IO, the witness was in the possession of the strips of the medicines. However, these strips were not seized by the IO for the reasons best known to him. The prosecution has not proved on record, the basis on which the rates of tablet shelcal has been given in the communication dtd. 4/6/01. This shows the total irresponsible and careless attitude of the IO. PW14 Sh. Rajat Jain proved the letter Ex.PW14/A and Ex.PW7/DA regarding the rate of Myser 250mg capsule. In the cross examination, the witness stated that MRP plus tax mentioned in Ex.PW14/A must be based on the price list of the firm and were not based on any actual sale / purchase of the medicine. Therefore, it is not certain that whether actually sale of the capsule had also taken place on the rate mentioned in Ex.PW14/A and secondly, even as per the witness, the rates CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 24 of 28 were based on the rate list of the firm. However, such price list has not been placed on the record by the IO. Similarly, in the cross examinationPW13 admitted that M/s RP Associates had sold the medicine to M/s Oberoi Medical & General Store on wholesale price which is lesser than MRP. The witness had not specifically stated that on what rate the medicines were supplied and what was the basis of that rate. Even during cross examination, PW13 Sanjeev Jain stated that in the year 1998, the MRP of cyclokox capsules was Rs. 485/ per strip of ten capsule and Delhi sales tax @5% and he furnished this information on the basis of record available on with him. IO did not seize such record on the basis of which the price was mentioned for the reasons best known to him. This record was a primary evidence and seems to have been conveniently ignored by the IO. It is also interesting to note that PW13 Sanjeev Jain was called to prove the letter dtd. 10/10/01. Again this letter was a fax copy. The witness again produced the legible copy of this document and the original document was withheld by the prosecution for the reasons best known to him. The quality of the investigation can be assessed by the testimony of PW12 Umesh Sawhney. PW12 was examined to prove letter Ex.PW12/A regarding the rate of Evion medicine. The witness stated in the cross examination that he had issued this letter on telephonic information sought by the IO and he never met the IO in his life. Thus, IO has made the investigation merely on telephone and even did not care to meet the witness. In the cross examination on behalf of defence, the witness admitted that price of medicine can marginally change on its batchwise CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 25 of 28 production. He also stated that it is not necessary that medicines produced in new batch would come in the market only on exhaustion of medicines of previous batch. This would mean that at the same time, the price of the same medicine can be different on account of being of different batch. PW11 Jagmohan Singh was examined to prove the letter Ex.PW11/A relating to price of cycloserine capsules 250mg stated in the cross examination that he cannot vouch for the correctness of the contents of Ex.PW11/A. 6.6 It is the golden principle of the criminal jurisprudence that the prosecution is duty bound to prove its case beyond reasonable doubt and if any doubt arises, the benefit of it must be given to the accused. It is also settled proposition that if two view are possible, the view favourable to the accused is to be taken. In the present case, the prosecution has not brought any cogent or creditworthy evidence so as to prove that A2 Mahender Kumar Oberoi had charged inflated rates of the medicines. It is also pertinent to mention here that vide letter dtd. 13/7/01 Ex.PW10/A, it was informed that entire payment for the period 1998 had already been released. The investigation in this case has been conducted in the most casual and careless manner.
6.7 I consider that the prosecution has failed to prove its case beyond reasonable doubt. Hence, in view of the above discussion, A1 SS CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 26 of 28 Khatri and A2 Mahender Kumar Oberoi are acquitted of the charge u/Ss 120B IPC r/w S.420 IPC and u/S 420 IPC and Section 13(2) r/w Section 13(1)(d) of PC Act, 1988, in RC No. 63(A)/00.
Accused persons are on bail. Their surety bonds / bail bonds are canceled. Sureties are discharged. Original documents of the sureties, if any, be released against proper acknowledgment. 7.0 In terms of section 437(A) Cr.P.C., accused persons are directed to furnish bail bond in the sum of Rs.10,000/ each with one surety each in the like amount to appear before the Hon'ble High Court as and when court issues notice in respect of any appeal or petition filed against this judgment. Such bail bonds shall be in force for 6 months.
File be consigned to Record Room.
Announced in the open court (Dinesh Kumar Sharma)
Today on 27.02.2012 Spl. Judge (PC Act) : CBI
Saket Courts : New Delhi
CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 27 of 28
CC No. 58/11
CBI Vs SS Khatri & Anr.
RC No. 63(A)/2000
27/2/2012
Present: Sh. DK Singh, Ld. PP for CBI.
Both accused on bail with Sh. KK Patra, Adv.
Vide separate judgment, A1 SS Khatri and A2 Mahender Kumar Oberoi are acquitted of the charge u/Ss 120B IPC r/w S.420 IPC and u/S 420 IPC and Section 13(2) r/w Section 13(1)(d) of PC Act, 1988, in RC No. 63(A)/00.
Accused persons are on bail. Their surety bonds / bail bonds are canceled. Sureties are discharged. Original documents of the sureties, if any, be released against proper acknowledgment.
In terms of section 437(A) Cr.P.C., accused persons are directed to furnish bail bond in the sum of Rs.10,000/ each with one surety each in the like amount to appear before the Hon'ble High Court as and when court issues notice in respect of any appeal or petition filed against this judgment. Such bail bonds shall be in force for 6 months.
File be consigned to Record Room (Dinesh Kumar Sharma) Spl. Judge (PC Act) : CBI : 27/2/2012 CBI Vs. SS Khatri & Anr. CC No. 58/11 Page 28 of 28