Suresh Kevalram Khemani And Ors. vs Central Bureau Of Investigation Economic Offences Unit-I(Eo-I) And Ors.

2026:BHC-AS:24368
100-REVN-59-2021 (CR).doc
Shubhada S Kadam

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
CRIMINAL REVISION APPLICATION NO. 59 OF 2021
1. Suresh Kevalram Khemani,
Age : 66 years, Occupation : Business,
Residing at Plot No. 6, Devka Beach,
Nani Daman, Daman - 396 210.
2. Ashok Kevalram Khemani,
Age: 68 years, Occupation: Business,
Adult Indian Inhabitant,
Residing at Plot No. 6, Devka Beach,
Nani Daman, Daman - 396 210.
3. Royal Distilleries Pvt. Ltd.
Through its Director, Mr. Ashok Khemani,
Having address at:
Plot No. 207/1, Kachigam,
Daman 396210.
4. Khemani Distilleries Pvt. Ltd.
Through its Director, Mr. Ashok Khemani
Having address at,
Ringanwada, Kachigam,
Daman 396210. ….Applicants
Versus
1. Central Bureau of Investigation,
Economic Offences Unit -I (EO-I),
3rd Floor, CBI Headquarters,
5-B, CGO Complex, Lodhi Road,
New Delhi - 110 003.
2. Union Territory of Daman and Diu
Through the Secretariat, Moti Daman,
Daman – 396 220.
Digitally
signed by
SHUBHADA
SHANKAR
KADAM
Date:
2026.06.17
18:35:07
+0530
SHUBHADA
SHANKAR
KADAM
3. The State of Maharashtra,
(Through the Public Prosecutor) ….Respondents
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_________________________________________________________________
Mr. Aabad Ponda, Senior Counsel along with Mr. Nilesh Tribhuvan, Mr.
Burzin Bharucha, Ms. Jhanavi Shah and Mr. Kaushal Popat i/b. White and
Brief, Advocates for Applicants.
Mr. Kuldeep S. Patil, SPP along with Mr. Digvijay S. Kachare, Ms. Saili
Dhuru, Mr. Anay Joshi, Mr. Sumitkumar Nimbalkar and Ms. Sanika Joshi,
Advocates for the Respodnent-CBI.
Mr. B. B. Kulkarni, APP for Respondent-State.
_________________________________________________________________

CORAM : SHIVKUMAR DIGE, J.
th
DATE OF RESERVING : 29 APRIL, 2026
th
DATE OF PRONOUNCEMENT : 16 JUNE, 2026
Judgment :
1. The challenge in this revision application is order passed by the
learned Special Judge, Daman, below Exhibit-47 in Special Case No.1 of
2015 whereby the discharge application preferred by the applicants came
to be rejected.
2. Two charge-sheets have been filed in the same FIR alleging
illegal gratification and excise/VAT evasion and forgery.
3. Brief facts of the case are, it is alleged that during the period
2005 to 2010, the applicants in conspiracy with officials of the excise
department (Co-accused) evaded excise duty and VAT to the tune of
approximately Rs. 340 crore by creating false records and using bogus
documents. The applicant Nos. 1 and 2 are the promoters and directors of
the applicant Nos. 3 and 4-the companies, registered under the provisions
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of the Companies Act, 1956, and engaged in the business of manufacturing
and sale of alcohol and liquor.
4. It is contention of learned senior counsel for the applicants that
the learned Special Judge has not considered the fact that the allegations
against the applicants are evasion of excise duty and VAT, but these
allegations have been adjudicated by the Excise Commissioner and VAT
authority respectively, and each of these authorities, while adjudicating the
matter, fully exonerated the applicants from these allegations. The order of
Commissioner of Excise has been upheld by the appellate authority i.e. the
learned Administrator, Daman. The order passed by the VAT Department
has not been challenged, and therefore, has attained finality. Learned
senior counsel further submitted that, in view of the above orders,
respondent No.1 has no case to proceed against the applicants. The
allegations in the adjudicating proceeding, and present case are identical.
Exoneration of the applicants in the adjudication proceeding is on merit,
hence, prosecution on same allegations cannot be sustained, and
prosecution under same proceeding cannot be continued as it would be
abuse of process of law. But these facts are not considered by the learned
Special Court, and requested to allow the application. He relied on
1. Radheshyam Kejriwal vs State of West Bengal (2011) 3 SCC 581.
2. Ghulam Hassan Beigh vs. Mohammad Maqbool Magrey & Ors. –
[(2022) SCC OnLine SC 913]
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3. Bhawna Bai vs. Ghanshyam & Ors. – [(2020) 2 SCC 217]
4. Nitya Dharmananda alias K. Lenin & Anr. vs. Gopal Sheelum Reddy &
Anr. – [(2018) 2 SCC 93]
5. State of Orissa vs. Debendra Nath Padhi – [(2005) 1 SCC 568]
6. Radheshyam Kejriwal vs. State of West Bengal & Anr. – [(2011) 3 SCC
581]
7. Karnataka Emta Coal Mines Limited vs. Central Bureau of
Investigation – [2024 SCC OnLine SC 2250]
8. J. Sekar alias Sekar Reddy vs. Directorate of Enforcement – [2022 SCC
OnLine SC 561]
9. Ajit Singh Sodha vs. Union of India – [Special Leave to Appeal (Crl.) No.
6489 of 2021] along with Ajit Singh Sodha vs. Union of India – [2021 SCC
OnLine MP 920]
10. Ashoo Surendranath Tewari vs. Deputy Superintendent of Police, EOW,
CBI & Anr. – [(2020) 9 SCC 636]
11. Air Customs Officer IGI, New Delhi vs. Pramod Kumar Dhamija – [(2016)
4 Supreme Court Cases 153]
12. Videocon Industries Limited & Anr. vs. State of Maharashtra & Ors.–
[(2016) 12 SCC 315]
13. P. S. Rajya vs. State of Bihar – [(1996) 9 SCC 1]
14. Narendra Kumar Santraj Sharma vs. State of Maharashtra & Ors. – [2025
SCC OnLine Bom 99]
15. Siddappa Kashiraya Savli vs. State of Maharashtra – [2024 SCC OnLine
Bom 3658]
16. Sivadasan Kunji Nair vs. Shashikant Laxman Waghmare & Ors. –[2024
SCC OnLine Bom 2585]
17. Dr. Gufran Beig vs. C.B.I., A.C.B., Pune – [2024 SCC OnLine Bom 2917]
18. Vijay Choudhary vs. State of Maharashtra & Anr. – [2023 SCC OnLine Bom
1677]
19. Ramesh Manohar Madawi vs. State of Maharashtra & Anr. – [2022 SCC
OnLine Bom 3125]
20. State vs. Alex Piedade Sales & Ors. – [2021 SCC OnLine Bom 687]
21. Lemuir Express vs. State of Maharashtra & Anr. – [2020 SCC OnLine Bom
5714]
22. Satyendra Singh Gurjar vs. Central Bureau of Investigation, ACB, Mumbai
& Ors. – [2020 SCC OnLine Bom 3223]
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23. Shiv Hari vs. State (NCT of Delhi) – [2023 SCC OnLine Del 362]
24. Ashish Chauhan vs. State (Govt. of NCT of Delhi) Anr. – [2023 SCC
OnLine Del 399]
25. Johnson Jacob vs. State – [2022 SCC OnLine Del 1864]
26. Department of Customs vs. Arvind Kumar – [2017 SCC OnLine Del 6587]
27. Chhatradhri Ram vs. State of Bihar & Anr. – [2025 SCC OnLine Pat 33]
28. Prof. (Dr.) Pusparaj Dash vs. State of Odisha & Anr. – [2023 SCC OnLine
Ori 646]
29. Dr. Minaketan Pani vs. State of Orissa – [2022 SCC OnLine Ori 3304]
30. Mr. A. L. Jayaramu vs. State of Karnataka & Ors. – [Writ Petition No.
19700/2018 (GM – RES)]
31. Vadde Janardhan vs. Vadde Satyanarayana & Anr. – [Criminal Revision
Case No. 2068 of 2015]
32. M/s. Deccan Tobacco Processors Limited & Anr. vs. Union of India & Anr.
[Criminal Petition No. 655 of 2007]
5. It is contention of learned SPP that during period between
2005 to 2010, in pursuance of criminal conspiracy, the applicants and co-
accused, evaded excise duty and VAT and cheated the administration of
Daman and Diu to the tune of Rs 340 crores and thereby caused undue
loss to the government and corresponding gain to themselves. Learned SPP
further submitted that the applicants have prepared bogus bills of
transportation regarding transportation of liquor. They have forged
documents in respect of manufacture and sale of liquor. Learned SPP
further submitted that the material and evidence collected by the
respondent-CBI, against the applicants is different than the material which
was produced before the Excise Commissioner and Deputy Commissioner,
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VAT, while deciding adjudication proceedings and Appeal. There is
sufficient material and evidence available against the applicants on record
to make out prima facie case against them for the alleged offenses. Hence,
requested to reject the application. He relied on following judgments:
1. State of Orissa v/s. Debendra Nath Padhi, (2005) 1 SCC 568
2. M.E. Shivalingamurthy v/s. Central Bureau of Investigation
Bengaluru, (2020) 2 SCC 768
3. State of Tamil Nadu v/s. R. Soundirarasu and Others, (2023) 6 SCC
768
4. Bhawna Bai v/s. Ghanashyam and Others, (2020) 2 SCC 217:
(2020) 1 SCC (Cri) 581
5. Iqbal Singh Marwah and Another v/s. Meenakshi Marwah and
Another, (2005) 4 SCC 370: 2005 SCC (Cri) 1101
6. State of Rajasthan v/s. B.K. Meena and Others, (1996) 6 SCC 417:
1996 SCC (L&S) 1455
7. State (NCT of Delhi) v/s. Ajay Kumar Tyagi, (2012) 9 SCC 685
8. Puneet Sabharwal and Another v/s. Central Bureau of Investigation,
2024 SCC Online SC 324
9. Rajendra Kumar Gautam v/s. State of M.P, (L.L.R. 2022 M.P. 603
(DB))
10. J. Rajesh Kumar v/s. Central Bureau of Investigation, 2021 SCC
Online Ker 3870: (2022) Cri LJ (NOC 144) 48
11. Sarwan Singh v/s. State of Jammu & Kashmir, 2020 SCC Online
J&K 736
12. S. Karunakaran v/s. State of Madras 2018, SCC Online Mad 8051
13. Guru Narayan Mishra v/s. Central Bureau of Investigation and Ors.,
2018 SCC Online Del 10499
14. Chackochan Kunjipailo v/s. Central Bureau of Investigation, 2021
SCC Online Ker 11885
15. Sajan T. Sunny v/s. State of Kerala 2024 SCC Online Ker 4961
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16. Tarkeshwar Prasad Singh v/s. The State of Jharkhand and Others
(2014) SCC Online Jhar 737: (2014) 3 JLJR 127 (HC)
17. Dr. Gufran Beig v/s. C.B.I., A.C.B. Pune 2024 SCC Online Bom
2917.
6. I have heard both learned counsel, perused the impugned order
and documents produced on record. The allegations against the applicants
are that they in conspiracy with excise officers (co-accused) and have
prepared bogus bills in respect of trading of liquor and forged transport
bills in respect of transportation of liquor. They have evaded excise and
VAT duty thereby causing loss to the Government. After conducting a
detailed investigation and after collecting reliable and cogent evidence
against the applicants, charge sheet has been filed against them under
Section 120-B read with Sections 420, 468 and 471 of the Indian Penal
Code (for short "IPC") and under Section 13(2) read with Section 13(1)(d)
of the Prevention of Corruption Act (for short "P.C. Act") against public
servant.
7. It appears that the FIR was lodged against the applicants by
Valsad Police Station under Sections 336, 273, 284, 468, 471, 474,477(A),
120-B and 114 of the Indian Penal Code 1860 and Sections 66(1)(b),
65(b)(c)(e)(f), 81 and 83 of the Bombay Prohibition Act. This FIR is
quashed by the Gujarat High Court on various ground and one of the
grounds was that though offence was of the year 2010, till passing of the
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order in the year 2018, charge-sheet was not filed against the applicants. It
is contention of the applicants that allegations in FIR lodged with Valsad
Police Station and in present FIR are same. In my view, the allegations are
on different footing. Moreover, one of the ground for quashing the said
FIR was chargesheet was not filed. It is contention of learned senior
counsel for the applicants that the applicants have been exonerated from
the allegations of evasion of excise duty by the Commissioner of Excise. It
th nd
appears from record that two notices dated 16 February 2010 and 22
February 2010 were issued to the applicants by Excise Department alleging
evasion of excise duty for the period – Year 2005 to 2010. It appears that
these notices were challenged before this Court and as per order of this
Court, the Commissioner of Excise issued a corrigendum to the show cause
notices with specific information and details regarding allegations made in
the show cause notices. While passing order, the Commissioner of Excise
has observed that no material is produced on record to substantiate the
allegations in notices. The operative order of the Commissioner of Excise
is as under:
O R D E R
For want of any legal, tangible and concrete evidence,
the duty demand of Rs.31,05,17,540/- (Rupees Thirty
One Crores, Five Lakhs, Seventeen Thousand Five
Hundred, Forty Only) and Rs.141,62,98,562/- (Rupees
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One Hundred Forty One Crores, Sixty Two Lakhs, Ninety
Eight Thousand, Five Hundred and Sixty Two only)
raised by the Excise Department, Daman, against the
Noticee is not sustainable and set-aside. Therefore, the
Show Cause Notice dated 16/02/2010 and 22/02/2010
and the subsequent corrigendum dated 07/06/2010 are
dropped.
The said order shows that no evidence was produced before the
Commissioner of Excise to substantiate the allegations made in notices.
The said order was confirmed by the Appellate Authority/Administrator,
Diu and Daman. The Deputy Commissioner of VAT also exonerated the
applicants from the allegations of evasion of VAT.
8. It is contention of learned SPP that the respondent CBI was not
a party before the adjudicating authority or appellate authority. Whereas,
it is contention of learned senior counsel for the applicants that in the
notices, the allegations against the applicants were about evasion of excise
duty and VAT and they have been exonerated from the said allegations.
Hence, the prosecution cannot subject them to trial for the same
allegations.
9. In my view, in the departmental proceedings, the scope of
adjudication was in respect of validity of notices issued to the applicants in
respect of evasion of excise and VAT. However, in the criminal case, the
CBI, after investigation, has collected evidence in respect of conspiracy,
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forgery and cheating. There are allegations that the applicants, in
conspiracy with excise officers not only evaded excise duty, but also
committed fraud and forgery and have committed the alleged offences.
The excise officers are co-accused in present crime. The principles of the
Evidence Act are strictly applied to the prosecution's case, whereas the
same may not be applied strictly in the adjudication proceedings as in
present case, no evidence was produced before the adjudicating authority.
The scope of adjudication in both these proceedings is vastly different. The
authority which conducted the excise evasion proceeding and the authority
conducting the prosecution are completely different. The adjudicating
authority has not held that the allegations against the applicants are
baseless or incorrect. The notices issued against applicants were dropped
for want of cogent evidence. The evidence collected by the CBI during the
investigation and the charge-sheet against the applicants was not placed
before the adjudicating authority, though FIR was registered against the
applicants. The CBI was also not party before the adjudicating authority.
The CBI has collected the bogus bills, forged transport bills and recorded
confessional statements of witnesses to support the charge of forgery of
documents for the purpose of cheating and evasion of excise. There are
serious allegations against the applicants. The CBI has also collected
sufficient evidence against the public servants, who allegedly helped the
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applicants in commission of crime. The learned Special Judge has passed a
well-reasoned order. No interference is required in it. The charge-sheet
produced on record discloses prima facie case against the applicants. At
the threshold, it cannot be said that the charges levelled against the
applicants are groundless. I have gone through the case laws cited by
learned counsel for the applicants. The facts of the cited cases and present
case are different and not applicable to the present case. In view of above,
I pass following order:
O R D E R
(I) The criminal revision application is rejected.
(SHIVKUMAR DIGE, J.)
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