Full Judgment Text
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
th
% Reserved on: 20 April, 2023
th
Pronounced on: 04 July, 2023
+ CRL.M.C. 456/2020, CRL.M.A.1913/2020
+ CRL.M.C. 2083/2021, CRL.M.A.14023/2021
+ CRL.M.C. 2092/2021, CRL.M.A.14067/2021
AMBUJ HOTELS & REAL ESTATE PVT. LTD.
SHARAN BIHARI AGRAWAL
M/S BRANDAVAN FOOD PRODUCTS
..... Petitioners
Through: Mr.Mahesh Jethmalani and
Mr.Vikas Pahwa, Sr Advocates
with Mr.S.S.Sisodia, Mr.Saruva
Kumar, Advocates in Crl.M.C.
No.456/2020.
Mr.Mahesh Jethmalani, Sr
Advocate with Mr.Jasmeet Singh,
Mr.Divjot Singh Bhatia, Mr.Saif
Ali, Mr.Gautam Khazanchi,
Mr.Kumar Vaibhav, Mr.Anurag
Sarda, Ms.Mugdha Pandey,
Mr.Ajay Awasthi, and Mr.Hedo
Khalo, Advocates in Crl.M.C.
No.2083/2021.
Mr.Vikas Pahwa, Sr Advocate
with Mr.Gautam Khazanchi,
Mr.Kumar Vaibhav, Mr.Vaibhav
Dueby, Ms.Sukanya Joshi,
Mr.Anurag Sarda, Ms.Namisha
and Mr.Rohan Wadha, Advocates
with AR in person in Crl.M.C.
No.2092/2021.
versus
CENTRAL BUREAU OF INVESTIGATION ..... Respondent
Through: Mr.Nikhil Goel, SPP and
Mr.Kartik Kaushal, Advocate.
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Signature Not Verified
Digitally Signed
By:PRADEEP SHARMA
Signing Date:06.07.2023 13:57
CORAM:
HON'BLE MR. JUSTICE YOGESH KHANNA
YOGESH KHANNA, J.
1. These petitions are filed seeking quashing of FIR No.RC-DAI-
2015-A-0032 dated 14.10.2015 registered at CBI, New Delhi for offences
under Section(s) 120-B r/w 420 IPC and Sections 13(2) r/w 13(1)(d) of
the Prevention of Corruption Act and setting aside all consequential
orders/ proceedings arising and emanating therefrom.
2. The dispute is if it was mandatory for licensee (Caterers) engaged
in Rajdhani/Shatabdi trains to provide only Rail Neer Packaged Drinking
Water (PDW) , or they could provide PDW of another company. It is
alleged during the period 2013-14 , these licensee (Caterers) deliberately
supplied PDW other than Rail Neer despite huge availability of the same.
It is further alleged by not picking up Rail Neer, the licensees (Caterers)
had caused loss of Rs. 19.55 crores approx to the government exchequer
and corresponding undue pecuniary gain to themselves as they claimed
reimbursement for Rail Neer PDW which they allegedly did not supply
in Rajdhani / Shatabdi trains. Upon conclusion of investigation, CBI filed
chargesheet for offences punishable under Sections 120-B r/w 420 IPC
and Sections 13(2) r/w 13(1)(d) of the PC Act against two public servants
and various licensees (Caterers).
3. While the petitioner was not arraigned as an accused in the
abovementioned FIR, but was arrested on 17.10.2015. Upon completion
of investigation, the respondent filed chargesheet against the petitioner.
The petitioner was in custody for sixty-five days.
4. It is alleged despite a categorical opinion expressed twice by the
CVC and Railway Board advising against grant of sanction for
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Signing Date:06.07.2023 13:57
prosecution under the PC Act and as well as opining the case is not even
fit for regular departmental action, sanction for prosecution was granted
vide sanction order dated 14.03.2017.
5. It is submitted the petitioner is severely prejudiced by the
continuation of the impugned criminal case since:
a) no formal complaint of any loss was lodged by the Ministry of
Railways;
b) the CVC had opined no case for grant of prosecution sanction is
made out and it was in agreement with the Railway Board the case
is not even fit for RDA;
c) the Railway Board categorically stated Indian Railways has not
suffered any loss on account of licensees/ caterers by supplying
PDW brands other than Rail Neer;
d) in fact, the Railway Board said there was no question of
unlawful gain to the licensees who have been suffering losses
irrespective of the brands of PDW they supplied;
e) in any event, IRCTC was able to sell its own brand of PDW i.e.
Rail Neer fully since it was in short supply as the production
capacity of Nangloi plant during the material period was
inadequate to meet the cumulative demands as Rail Neer was to be
supplied not only on Rajdhani/ Shatabdi Train but also to other
mandatory trains and stations;
f) as soon as the supply of Rail Neer was enforced for the premium
trains, the IRCTC expressed its inability to supply the same to
other mandatory trains and stations.
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Signature Not Verified
Digitally Signed
By:PRADEEP SHARMA
Signing Date:06.07.2023 13:57
6. Inspite of the aforementioned findings and rejection of prosecution
sanction, as on date, it has been six years since the sword of prosecution
has been hanging over the petitioners and an amount of Rs. 2,64,00,330/-
belonging to the R.K. Associates & Hoteliers Pvt. Ltd. (arraigned as
Accused No.5) in which the petitioner is a Director stands seized by the
respondent despite there being no basis for the same. The impugned FIR
has caused immense financial and reputational loss to the petitioner. Due
to the pendency of the impugned FIR, proceedings under Prevention of
Money Laundering Act has also been initiated against the petitioner as
well as against M/s.R.K. Associates & Hoteliers Private Limited, hence,
the present petition.
7. The learned senior counsel for the petitioner has referred to the
charge sheet, which notes:-
….xxxxxxx In case of non-availability/ inadequate supply
of Rail Neer by Railway/IRCTC, the Licensee shall be
permitted to sell packaged drinking water of brands
approved by Railway, for which the Licensee is bound to
take prior approval of Railway, in writing. "
xxxxxxx
Investigation has revealed that as per the Agreement
between Railway and Caterers, other branded Packaged
Drinking Water duly approved by Railway could be
supplied to the passengers in the said premium trains only
when Rail Neer Water was not available from IRCTC. In
this regard, caterers were required to take prior
permission from the Railway for supply of such other
branded POW. In the instant case, investigation has
established that licensees had never taken any approval
from Railways/CCM (Catering) for supply of other branded
Packaged Drinking Water.
xxxx
Therefore, total Loss to Railway during 2013-2014 =
Rs.346927117 (total claimed from Railway) -
Rs.151388100 (actual claim for Rail Neer) =
Rs.195539017 (Rs. Ninteen Crore Fifty Five Lacs Thirty
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Digitally Signed
By:PRADEEP SHARMA
Signing Date:06.07.2023 13:57
Nine Thousand Seventeen Only) Investigation has revealed
that during the period from 1.1.2013 to 31.12.2014, the
licensee caterers had claimed a total amount of
Rs.34,69,27,117/- from Northern Railway for supply of
POW/ mineral water to the passengers, in respect of 23
trains controlled by Northern Railway. Train wise details
of the amount claimed by each licensee has been obtained
from the Northern Railway. The loss has been calculated
on the basis of the difference of the price between the
reimbursement claimed by the caterers from Northern
Railway for supply of PDW/ mineral water and the
payment made by them to IRCTC for procurement of Rail
Neer PDW during 2013-14. Except Rail Neer, no other
brand of PDW was approved by the Railway for supply in
Rajdhani and Shatabdi trains originating from Delhi, thus,
the entire amount claimed in excess of Rail Neer PDW has
been taken as undue gain to the contractor/ licensee and
corresponding loss to the government exchequer. The total
loss of approximately Rs.19,55,39,017/- has been caused to
the Govt. Exchequer.
8. Now Annexure P3 viz. Report of Central Vigilance Commission
dated 02.05.2016 inter alia read as under:
1. The Commission has perused the investigation report/comments
of CBI and also the comments of administrative authorities of M/o
Railway and observed that no case is made out to sanction
prosecution of Shri Sandeep Silas, CPM (FOIS)/CRIS and Shri
M.S.Chalia, CCO/NR. Accordingly, Commission would advice
against sanction for prosecution under PC Act, in agreement with
Railway Board. Further in agreement with Railway Board,
Commission also observes that the cases of both Shri M.S.Chalia
and Shri Sandeep Silas are not fit for RDA.
2. Further, Commission would also endorse the recommendation
of Railway Board (Vigilance) indicated in the last para of the note
dated 28.03.2016 of DVT/RB (page 46/n of RB‟s note refers) which
reads as “…however, it is apparent that there were some
irregularities in allowing the supply of PDW other than Rail
Neer and in passing of such bills . Northern Railway Vigilance
may be asked to investigate the case further on these aspects
including the roles and responsibilities of concerned
functionaries……..” and would advice Railway Board (Vigilance)
to submit the investigation report expeditiously.
3. Action taken in pursuance of Commission‟s advise may please
be intimated.
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Signature Not Verified
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By:PRADEEP SHARMA
Signing Date:06.07.2023 13:57
4. The Railway Board ID Note No.2015/V2/NR/Traffic/26/CBI
dated 01.04.20016 refers and its file is sent herewith.
9. However, this decline to accord sanction was never accepted by
the respondent and it wrote a letter dated 16.06.2016 to Railway Board,
New Delhi requiring to convey reasons for coming to conclusion no case
is made out for grant of sanction.
10. Letter dated 18.10.2016 was written by the Ministry of Railways,
Railway Board, New Delhi to the Secretary, Chief Vigilance
Commission, New Delhi to seek reasons so as to take final view in the
matter. The said letter was replied by the CVC vide letter dated
02.11.2016, which inter alia notes:-
“Sub: CBI Case No. RC-DAI-2015-A-0032 registered against
S/Shri M.S. Chalia & Sandeep Silas, both the then CCM/Catering
Northern Railway, Baroda House New Delhi.
Railway Board may please refer to their OM
No.2015/V2/NR/Traffic/26/CBI dated 18.10.2016 on the above
subject.
2. The Commission has already tendered its written advice vide ID
Note dated 02.05.2016, which is self explanatory .”
11. Yet another letter dated 02.12.2016 was then sent by the CBI to the
Director Vigilance, Railway Board asking for the reasons / grounds for
finding of the Railway Board not to grant sanction in the matter.
Thereafter, a letter dated 13.12.2016 was sent by the Ministry of
Railways, Railway Board to Superintendent of Police, CBI stating inter
alia :-
It has to be appreciated that at such a senior level as
CCM/catering, the officers were responsible for overall
supervision of catering provisions at hundreds of trains and
stations in the Zonal railway and in that process assisted
by number of officers and staff. They were no way directly
associated in passing the bills. Bills were passed at lower
levels in Commercial department in association with
officials of Finance department. There has been
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Digitally Signed
By:PRADEEP SHARMA
Signing Date:06.07.2023 13:57
remarkable increase of 57% in off take of Rail Neer by
the 9 licensees in year 2014 compared to 2013 and
penalties have been levied during their tenure on the
erring licensees. At the same time, they have also been
engaged in policy formulation and modification and
conflict resolution with regard to pricing of PDW, which
they were supposed to do.
Policy changes have been made very recently by
Railway Board under which IRCTC will directly supply
Rail Neer to the licensees of premier trains and get
payments from railways directly. This will address the
issue of loss being incurred by the private caterers in
earlier system. Incidentally, Sh. Silas had made this
suggestion while he was CCM/Catering.
Therefore, in the opinion of the Railway Board
Vigilance, as concurred by the CVC, the case does not
qualify for 'Sanction of Prosecution' of Sh. M.S.Chalia &
Sh.Sandeep Silas under section 120 B (Criminal
conspiracy), read with section 420 of Indian Penal Code &
Section 13 (2)R/W 13 (1)(D) of Prevention of Corruption
Act 1988.
12. However, vide letter dated 03.01.2017 the CBI yet again insisted
the Director Vigilance/Traffic, Railway Board, for the sanction to be
granted as it was of the opinion a case is made out against two
government officers and others. Thus, at the instance of the CBI,
sanction was ultimately granted vide sanction order dated 14.03.2017 to
prosecute the Government officers. The said sanction order is annexure
P-10 to this petition (Crl.M.C.No. 2083/2021 ).
13. The grant of such sanction was challenged before the Coordinate
Bench of this Court along with the order taking cognizance by the
learned Trial Court by way of Crl.MC.No. 3137/2017 , 3141/2017,
5094/2017, and 5095/2017. These petitions were allowed vide order
dated 15.03.2019 while noting:-
“42. In the light of my aforesaid conclusion, I may now examine
the impugned sanction order. I find that the said order merely
recites a gist of the allegations against the petitioners and read by
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By:PRADEEP SHARMA
Signing Date:06.07.2023 13:57
itself, it does not disclose whether the Sanctioning Authority had
considered the advice tendered by the CVC on two separate
occasions to not grant sanction for prosecution, which advice was
also concurred by the Railway Board vide its letter dated
13.12.2016. While it is true that a sanction order should not be
read pedantically, it should, so as to inspire confidence, at least
demonstrate that the Sanctioning Authority had applied its mind to
all the relevant material. In the present case, keeping in view the
fact that there is no reference at all to the opinion of the CVC in
the impugned sanction order, the subsequent recommendation of
the Chairman, Railway Board to recall the sanction order,
assumes importance and I deem it appropriate to refer to the same
in in extenso:-
―13. Summing up it may be stated that:-
i. Railway Administration was of the view that there is no
evidence of any criminality and no adequate grounds to
prosecute the officers (S.No.12 – page 33 to 71)
ii. CVC agreed with Railway Administration that no case is
made out to sanction prosecution of the officers and the
cases against the officers is not fit even for regular
departmental action (S No.12 – page 48).
iii. A Committee comprising of Member(Staff), Member
(Traffic) and Member (Mechanical) met on 08.04.16 to
review the suspension of Shri Sandeep Silas. Based on the
findings of Railway Board Vigilance, the Committee
unanimously opined that there is no case for further
extension of suspension beyond 11.04.16 and this was
approved by the then Hon‟ble MR (S.No.15).
iv. After receipt of CVC„s advice that no case is made out to
sanction prosecution, the competent authority sought for
CBI written opinion on the advice tendered by CVC. The
administration did not point out the procedural deviation in
such action of the sanctioning authority. On the other hand
CBI requested for comments of Railway Administration and
thereafter reiterated their findings. The sanctioning
authority took his decision after this procedural deviation
(Page 50 of S.No.12).
v. Sanctioning authority after consideration of the entire
material place before it, entertains any doubt on any point
the competent authority may specify the doubt with sufficient
particulars and may request the authority who h as sought
sanction to clear the doubt. But that would be only to clear
the doubt in order that the authority may apply its mind
proper, and not for the purpose of coming to a conclusion as
to whether such a sanction is to be granted or not. In the
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Signing Date:06.07.2023 13:57
instant case without specifying any particular fact or doubt
for clarification, the opinion of CBI on the advice tendered
by CVC sought and thereafter the competent authority
decided on the issue.
vi. The sanctioning authority was not in the knowledge of
the fact that his disagreement with CVC had to be sent to
DOP&T for resolution and once DOP&T gives its views, the
Disciplinary Authority may have to take a considered final
decision, keeping in view the advice given by DOP&T.
vii. CVC in its annual report has brought out that the
Commission found that these were Acts of omission,
procedural lapses and short-cuts, but the case did not
exhibit any criminality on the part of CCMs and hence it did
not advice sanction for prosecution. The Commission has
observed that the instruction of the DOP&T is that where
there is a disagreement between CVC and the DA, the
matter has to be referred to the DOP&T for a final view.
This is a case of deviation from the Commission„s advice
and of not following the laid down procedure of consultation
with DoP&T (S.No.19).
viii. The matter was not submitted to DOP&T for resolution
after the competent authority disagreed with the advice of
CVC.
ix. As per decision of Hon„ble Supreme Court in the case of
PS Rajya Vs. State of Bihar (1196) 9 SCC 1; the Hon„ble
Apex Court observed that the standard of Proof required to
establish the guilt in a criminal case is far higher than the
standard of proof required in a departmental case. In the
instant case as per the advice of CVC the case of both Shri
MS Chalia and Shri Sandeep Silas are not even fit for
Regular Departmental Action (S.No.12 – page 50).
x. DOP&T vide OM dated 23.10.09 have stated that since
sanction for prosecution by the competent authority is after
satisfying itself regarding the misconduct of a person under
PC Act, the natural conclusion would be that in case any
prosecution is to be withdrawn in respect of such person the
same competent authority may have to satisfy himself
regarding the feasibility for withdrawing the prosecution
against that person. The instructions also state that the
matter was considered in consultation with the Ministry of
Law and Justice, Department of Legal Affairs who have
advised that the withdrawal of prosecution under Section
321 of Cr.P.C. may be approved by such authority which
has accorded the sanction for prosecution in respect of the
person (S.No.17).
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Digitally Signed
By:PRADEEP SHARMA
Signing Date:06.07.2023 13:57
13. Based on facts as brought out in preceding paras,
Ministry of Railways do not have a case to defend in the
matter of sanction for prosecution issued to the petitioners.
Perhaps the same was not adequately considered at the time
of processing the sanction. In this context the best course of
action would be to seek permission of the Hon„ble Court for
withdrawing the sanction.”
49. For the aforementioned reasons, the sanction order dated
14.03.2017 being wholly unsustainable is hereby quashed.
Consequently, the order dated 08.05.2017 rejecting the petitioners‟
application for referring the matter to the DoPT for a final
decision as also the subsequent order dated 01.07.2017 passed by
the learned Trial Court taking cognizance against the petitioners,
are also set aside. The matter is remanded back to the Sanctioning
Authority to reconsider the same after making an appropriate
reference to the DoPT in accordance with the OMs dated
15/17.10.1986, 06.11.2006 and 20.12.2006. It is made clear that
this Court has not expressed any opinion on the merits of the pleas
taken by the petitioners that there is no case warranted for taking
any criminal action against them and it will be open for the
competent authority to take a fresh decision in this regard in
accordance with the observations made hereinabove.”
14. This order was challenged in SLP.(CRL.) 28717/2020 which was
dismissed on account of delay , hence the order of the Co-ordinate Bench
stands till date.
15. After the above decision, yet again sanction was applied, but the
competent authority vide its letter dated 22.09.2020 refused to accord the
sanction and the letter inter alia notes:-
Ref:- CBI‟s letter No. RC-DAI-2015-A-0032/14956 dated
16.12.2015 and number 1861/RC-DAI-2015-A-0032 dated
25.02.2020.
Pursuant to the aforesaid judgment the case was
submitted before the Competent Authority, who after
considering the matter in terms of the observations and
directions of Hon‟ble High Court, Delhi, as contained in
the aforesaid Judgment dated 15.08.2019 and other
relevant material placed before him has accepted the
CVC‟s advice dated 02.05.2016 and 02.11.2016 which
stated that no case is made out to sanction prosecution land
accordingly Commission would advise against sanction for
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Signing Date:06.07.2023 13:57
prosecution under PC Act in agreement with Railway
Board” that cases of both Shri M.S.Chalia and Shri
Sandeep Silas are not fit for RDA (Regular) Department
Action).
Accordingly, the competent Authority has declined
to grant fresh prosecution sanction against both Shri
Sandeep Silas and Shri M.S.Chalia in the subject case, and
has ordered closure of these cases.
16. Thus it is argued despite all the authorities above having declined
to accord sanction/prosecution, yet the CBI is instating to prosecute
private licensees/caterers. It is argued CBI is hanging on to its complaint
filed by one Insp.Raman Kumar of CBI on the basis of a raid conducted
where it was allegedly found instead of using Rail Neer, the Licencees
were using different water bottles, thus causing huge loss to Railways. It
is argued the pleadings are otherwise and rather show no loss was ever
caused to Railways and in fact Rail Neer caters only to the 35% of the
demand of water in rails and also there being a provision in the
agreement with the Licensee to provide packed water bottle from other
sources in the case of non-availability or scarcity, no offence is made
out. It is argued above pleadings do show 100% water produced by
Railways was all consumed.
17. It was argued once sanction qua the Government officials is
declined, the CBI cannot pursue its case against private person since the
case was initially based upon conspiracy of private licencees with the
Government officials and once it is held the Government officials were
not in conspiracy and the fact no loss was ever caused to the Railways,
the CBI cannot espouse cause of complainant, an Inspector and a
Superintendent of CBI, who despite the decline to accord sanction by
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Signing Date:06.07.2023 13:57
various senior authorities of the Government are yet adamant to continue
with prosecution against the petitioners.
18. The learned senior counsel for the petitioner also referred to
Director’s Report for the year 2013-14 viz. the year of alleged offence
which gives the reports of Director along with Statement of Accounts,
Auditors report and review of accounts by the Comptroller and Auditor
General of India for the financial year ended on 31.03.2014 as under:
“Future Potential
As per one study, daily requirement of Packaged Drinking Water
over Indian Railway network is approx 25 lac bottles/day, against
which, at present IRCTC capacity is 4.14 lac bottles/day, which
shall become 6.14 lac bottles/day by the year 2014-15 when plant
at Ambernath (Mumbai) will become operational. This will meet
about 25% of total requirement over Indian Railways.
xxxxxx
Further in an attempt to address unsatisfied demand of drinking
water in Delhi area, another PDW plant is being planned in NCR
region.
xxxxxx
Rail Neer business:
During the year 2013-14, the Rail Neer business registered an
income of Rs.72.11 crores as against Rs.56.33 crores achieved
during year 2012-13. This does not include sale of Rail Neer
through departmental catering, amounting to Rs.16.06 crores as
against t 15.49 crores in the previous year.
The Segment result (profit) during the year was Rs. 5.35 crores as
against profit of Rs.0.46 crore during the previous year. The
increase in revenue is mainly attributed to increase in selling price
of Railneer by Railways and increase in quantity sold from 10.11
crore bottles in 2012-13 to 10.80 crore bottles in 2013-14.”
19. Lastly reference was made to Himachal Pradesh Cricket
Association and Another vs. State of Himachal Pradesh and Others
(2020) 18 SCC 465, it was held:
“50.4 As per the prosecution, there is no criminal act on the part
of the officers and they performed their appropriate
administrative duties due to which sanction stands declined by
the Central Government and the CVC. That itself is sufficient to
absolve others from any criminal prosecution;
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We are conscious of the scope of powers of the High Court under
Section 482 of Cr.P.C. The inherent jurisdiction is to be exercised
carefully and with caution and only when exercise is justified by
the tests specifically laid down in the Section itself. Further,
inherent power under this provision is not the rule but it is an
exception. The exception is applied only when it is brought to the
notice of the Court that grave miscarriage of justice would be
committed if the trial is allowed to proceed where the accused
would be harassed unnecessarily. If the trial is allowed to linger
when prima facie it appears to the Court that the trial could
likely to be ended in acquittal. It is, for this reason, principle
which is laid down by catena of judgments is that the power is to
be exercised by the High Court either to prevent abuse of process
of any court or otherwise to secure the ends of justice. However,
whenever it is found that the case is coming within the four corners
of the aforesaid parameters, the powers possessed by the High
Court under this provision are very wide. It means that the Court
has to undertake the exercise with great caution. However, the
High Court is not to be inhibited when the circumstances warrant
exercise of such a power to do substantial justice to the parties.
This provision has been eloquently discussed in Bhajan Lal's case
which has become locus classicus. Principle Nos. (i) and (ii) of
Indian Oil Corporation are, therefore, become applicable. The
entire subject matter has been revisited in a recent judgment in
Vineet Kumar and some of the discussion therein which takes note
of earlier judgments is reproduced below:
"26. A three-Judge Bench in State of Karnataka v. M.
Devendrappa [State of Karnataka v. M. Devendrappa, (2002) 3
SCC 89 : 2002 SCC (Cri) 539] had the occasion to consider the
ambit of Section 482 CrPC. By analysing the scope of Section 482
CrPC, this Court laid down that authority of the Court exists for
advancement of justice and if any attempt is made to abuse that
authority so as to produce injustice the Court has power to
prevent abuse. It further held that Court would be justified to
quash any proceeding if it finds that initiation/continuance of it
amounts to abuse of the process of court or quashing of these
proceedings would otherwise serve the ends of justice. The
following was laid down in para 6: (SCC p. 94)”
20. Further it was argued it is not a case of dual conspiracy as pointed
out by the learned SPP and in fact in the FIR as also in the chargesheet
the conspiracy was alleged with Government Officials but now since case
against officials had gone, the prosecution against petitioners should also
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be dropped as the CBI cannot argue beyond what is stated in its
chargesheet .
21. The learned counsel for the Department on the other hand argued
the FIR in the present case was registered on 14.10.2015; the chargesheet
was filed in December, 2015; two letters were given by the CVC in May,
2016; the Railway Board gave clean chit in December, 2016, yet the
cognizance was taken in the year 2017. The sanction was also granted on
14.03.2017 though quashed by this Court in the year 2019.
22. The learned counsel for the Department referred to the following
part of the chargesheet, as under:
“(16)2. Result of Investigation & Charges:
xxx xxx xxx
Investigation has revealed that CBI had conducted a surprise
check on 22.08.2014 in the Rajdhani and Sahatabdi trains. During
such checking, the caterers were found not supplying Rail Neer
and rather the other brand Packaged Drinking Water was being
supplied. However, on 22.08.2014, i.e., the date of surprise check,
Rail Neer POW was available in plenty with IRCTC and the
caterers could easily pick/lift the Rail Neer from the respective
railway platforms/ stations but they dishonestly and deliberately
did not pick up/took the desired Rail Neer quota and instead of
Rail Neer other branded cheap PDW like Mount Kailash, Bailley
etc. were being supplied to the passengers .
Investigation has revealed that during the year 2013-14, the
approved price of Mount Kailash and Bailley brand of POW was
varying from Rs.4.66 to Rs.8.16 per bottle and at the said rate the
caterers were purchasing from the manufacturer / distributors. In
this regard, during investigation rates of POW in writing were
obtained for "Mount Kailash" from Sh. Sharad Chand Bhardwaj,
Sales Manager of M/s M.K. Peacock Mineral Waters Pvt. Ltd.,
Faridabad, for "Bailley" from Sh. Sanjeev Kiyawat, Sr. Manager
(Accounts) and Sh. Jaleesh Akmal of M/s Parle Agro Pvt. Ltd.,
Ghaziabad.
Investigation has also revealed that the caterers were supplying
the water bottles other than Rail Neer and for such other branded
POW, they were claiming the reimbursement at the rate of Rs.15/-
per bottle from the Railway and in the process they were earning
huge profit by putting the IRCTC/Railway at great loss.
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Investigation has revealed that the licensees / caterers were not
picking up their required / allotted quota of Rail Neer despite
GGM/Rail Neer had written several letters to CCM, Catering,
Northern Railway whereby GGM, Rail Neer informed that the
licensee caterers are not picking up Rail Neer, POW as per
demand and they are taking limited quantity of Rail Neer . The
licensees have curtailed their demand drastically and using local
brands of PWD. Vide letter dt. 06.03.2003 Sh. A.K. Jain,
GGM/Rail Neer requested the CCM (Catering) that he should
impress upon the licensees to pick up Rail Neer as everyday
approximately 3000 cartons were not being lifted I picked up by
the licensees of Rajdhani and Shatabdi Trains, therefore, more
than one lac cartons of Rail Neer have accumulated in Rail Neer
Plant, Nangloi causing huge inventory lock up and revenue loss.
The perusal of the letter dt. 06.03.2013 reveals that Sh. M.S.
Chalia, the then CCM (Catering) has received the said letter and
made the initials on it. Thus, it is very clear that the issue of not
picking up of Rail Neer by these licensees was well within the
knowledge of Sh. M.S. Chalia.
xxx xxx xxx
Investigation has revealed that during the period 1.1.2013 to
31.12.2014 the licensee caterers has claimed total amount of
Rs.34,69,27,117 from Northern Railway for 23 trains controlled
by the Northern Railway . The details of licensees and trains are
mentioned below in a chart:- xxx xxx xxx
Therefore, total Loss to Railway during 2013-2014 =
Rs.346927117 (total claimed from Railway) - Rs. 151388100
(actual claim for Rail Neer) = Rs. 195539017 (Rs. Ninteen Crore
Fifty Five Lacs Thirty Nine Thousand Seventeen Only).
Investigation has revealed that during the period from 1.1.2013 to
31.12.2014, the licensee caterers had claimed a total amount of Rs.
34,69,27,117/- from Northern Railway for supply of POW/ mineral
water to the passengers, in respect of 23 trains controlled by
Northern Railway.
Train wise details of the amount claimed by each licensee has been
obtained from the Northern Railway. The loss has been calculated
on the basis of the difference of the price between the
reimbursement claimed by the caterers from Northern Railway for
supply of POW/ mineral water and the payment made by them to
IRCTC for procurement of Rail Neer POW during 2013-14. Except
Rail Neer, no other brand of POW was approved by the Railway
for supply in Rajdhani and Shatabdi trains originating from
Delhi, thus, the entire amount claimed in excess of Rail Neer
POW has been taken as undue gain to the contractor/ licensee
and corresponding loss to the government exchequer . The total
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loss of approximately Rs.19,55,39,017/- has been caused to the
Govt. Exchequer.”
23. Further reference was made to a letter dated 02.05.2016 of the
CVC, as under:
“2. xxxxxx“... however it is apparent that there were some
irregularities in allowing the supply of PDW other than Rail
Neer and in passing of such bills. xxxxx.”
24. A letter dated 13.12.2016 of Ministry of Railways, Government of
India, noted:
“Broadly, CBI has alleged that the two officers have not taken
adequate/punitive action against the private caterers who were
supplying other packaged drinking water (PDW) in the premium
trains viz. Rajdhani/Shatabdi in Northern Railway whereas they
should supply Rail Neer produced by IRCTC, a Railway PSU. As
the other PDWs were much cheaper than Rail Neer supplied by
IRCTC, the private caters had pecuniary advantage on account of
deliberate and dishonest inaction on the part of the two officers
which caused a loss of Rs. 19.5 Cr. to Railways .”
25. This letter was replied by the CBI as under:
“2. That IRCTC is able to satisfy only 25-30% of the total demand
of POW in the trains and at the stations and therefore, there is a
provision in the policy guidelines for supplying of POW other than
Rail Neer in case of non supply by IRCTC. Each Railway,
including the Northern Railway, has approved a number of POWs
including the ones mentioned in the CBI chargesheet which can:
be supplied in lieu of Rail Neer.
CBI's view: - While Northern Railway has approved other brands
of PDW to be supplied in other trains, in case there is limited, or
no supply of Rail Neer, no such approval was given in respect of
the premium trains. In this regard, attention is invited to
Commercial Circular No. 15 of 2003 of the Railway Board (0-32),
file no. 2011/TG-111/631/4 (O-19), Letter No.13-AC/SBD-Raj-
STB/15 dated 20.11.2015 (0-25) (which clearly states that no
brand of PDW is approved for supply in premium trains in
Northern Railway) and statements of Sh. Pascal Bilung, ACM,
Catering, Northern Railway (PW-9), Sh. K.P .Yadav, Director,
Railway Board (PW-10), Sh. Manish Haswani (PW-13), Sh. Satya
Prakash, Member, Railway Board (PW-31), Sh. Samir Kumar,
Director (PW-30) and Smt. Mani Anand, ED, Railway Board (PW-
27). Thus, it is clear that no brand of PDW other than Rail Neer
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was approved by the Northern Railways for supply in premium
trains. ”
26. He also referred to order on cognizance of learned Special Judge,
dated 01.07.2017, as under:
“18. Investigation has also revealed that IRCTC, since 19.12.2012
was regularly sending written letters to the CCM/Catering ,
Northern Railway informing about non-picking of Rail Neer by
the Caterers but the CCM/Ctg. Northern Railway has taken no
action against the erring caterers. During 2013, Sh. M.S. Chalia
was CCM (Catering) and he was having the knowledge that the
caterers were not picking up the allotted quota of Rail Neer.
Sh.M.S. Chalia has also attended the Railway Board Meeting dt.
23.10.2013 where the issue of non picking of Rail Neer by the
caterers was deliberated and discussed. He was directed in the
said meeting that he will comply with the Board's guidelines in
the matter and the payment of bill of defaulting caterers should
only be cleared when they restore and supply 100% Rail Neer in
the premium trains. Some important features / decisions taken. in
the Railway Board meeting dated 23.10.2013 and minutes of
meeting which were signed on 25.1-0.2013 stipulates in Para-12
that "An analysis has been done about the inspections conducted
by the Railways and it has been found that in most of the cases
only verbal warning has been given and fines and other punitive·
action taken by the railways is not adequate. xxxxx.”
27. Thus it is argued Railways have been trying to save its own
employees and thus failed to answer if total capacity of water/ neer was
available at stations then why it was not picked up by the contractors.
Thus, the question is not this, the Railways may have supplied such
water/ neer to some other station(s) or trains but the question is if these
caterers/contractors have deliberately failed to lift supply of Railneer
made available to them and why they did not seek prior approval of the
Railways to sell other PDW.
28. No such approval admittedly was ever taken or is available on
record, hence petitioners, cannot seek benefit of non grant of sanction to
public servants. The learned counsel referred to Central Bureau of
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Investigation vs. Arvind Khanna (2019) 10 SCC 686, wherein it was
held:
“17. After perusing the impugned order and on hearing the
submissions made by the learned senior counsels on both sides, we
are of the view that the impugned order passed by the High Court
is not sustainable. In a petition filed under Section 482 Cr.P.C., the
High Court has recorded findings on several disputed facts and
allowed the petition. Defence of the accused is to be tested after
appreciating the evidence during trial . The very fact that the High
Court, in this case , went into the most minute details, on the
allegtions made by the appellant-C.B.I., and the defence put-
forth by the respondent, led us to a conclusion that the High Court
has exceeded its power, while exercising its inherent jurisdiction
under Section 482 Cr.P.C.
18. In our view, the assessment made by the High Court at this
stage, when the matter has been taken cognizance by the
Competent Court, is completely incorrect and uncalled for.”
29. Further in Neeharika Infrastructure Pvt. Ltd. vs. State of
Maharashtra and Others 2021 SCC OnLine SC 315, it was held:
“80. xxxxx
i) to iii) xxxx
iv) The power of quashing should be exercised sparingly with
circumspection, in the ‘rarest of rare cases’ . (The rarest of rare
cases standard in its application for quashing under Section 482
Cr.P.C. is not to be confused with the norm which has been
formulated in the context of the death penalty, as explained
previously by this Court);
xxxxx
x) Save in exceptional cases where non-interference would result
in miscarriage of justice, the Court and the judicial process should
not interfere at the stage of investigation of offences;”
30. The learned SPP for the CBI submits there existed a dual
conspiracy viz , a) amongst private person and b) private persons with the
Government Officials and hence even if the Government Officials could
not be prosecuted for want of sanction, the private contractors cannot
take benefit. It is submitted 120B IPC is a stand-alone offence. In State
vs. Jitender Kumar Singh (2014) 11 SCC 724, the Court held:
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“46. We may now examine Criminal Appeal No. 161 of 2011,
where the FIR was registered on 2.7.1996 and the charge-sheet
was filed before the Special Judge on 14.9.2001 for the offences
under Sections 120B, 420, IPC read with Sections 13(2) and 13(1)
of the PC Act. Accused 9 and 10 died even before the charge-sheet
was sent to the Special Judge. The charge against the sole public
servant under the PC Act could also not be framed since he died
on 18.2.2005. The Special Judge also could not frame any charge
against non-public servants. As already indicated, under sub-
section (3) of Section 4, the special Judge could try non-PC
offences only when “trying any case” relating to PC offences. In
the instant case, no PC offence has been committed by any of the
non-public servants so as to fall under Section 3(1) of the PC Act.
Consequently, there was no occasion for the special Judge to try
any case relating to offences under the PC Act against the
Appellant. The trying of any case under the PC Act against a
public servant or a non-public servant, as already indicated, is a
sine-qua-non for exercising powers under sub-section (3) of
Section 4 of PC Act. In the instant case, since no PC offence has
been committed by any of the non- public servants and no charges
have been framed against the public servant, while he was alive,
the Special Judge had no occasion to try any case against any of
them under the PC Act, since no charge has been framed prior to
the death of the public servant. The jurisdictional fact, as already
discussed above, does not exist so far as this appeal is concerned,
so as to exercise jurisdiction by the Special Judge to deal with non-
PC offences.
47. Consequently, we find no error in the view taken by the Special
Judge, CBI, Greater Mumbai in forwarding the case papers of
Special Case No. 88 of 2001 in the Court of Chief Metropolitan
Magistrate for trying the case in accordance with law.
Consequently, the order passed by the High Court is set aside. The
competent Court to which the Special Case No. 88 of 2001 is
forwarded, is directed to dispose of the same within a period of six
months. Criminal Appeal No. 161 of 2011 is allowed accordingly.”
31. It is submitted the case against the private persons would survive
and hence the learned Special Court has rightly sent the case to learned
CMM to be tried by an ordinary Court and not by a Special Court.
32. Heard.
33. The facts reveal the petitioners were duty bound to supply
packaged drinking water-PDW of IRCTC’s brand called Rail Neer but
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instead have been supplying other PDW, a brand cheaper than Rail Neer,
but simultaneously have been claiming reimbursement at the rate of Rail
Neer though allegedly in conspiracy with public servants viz. Chief
Claims Officer/CCM.
34. The chargesheet reveals per clause 1.3.4 of the agreement, the
petitioners were mandated to supply only Rail Neer in specified Trains
and other PDW could be supplied only when a) Rail Neer was not
available with IRCTC and b) only after taking prior permission from
Railways. Admittedly , no evidence is produced to show Rail Neer was in
less supply for special trains and further no prior permission for supply of
other branded PDW was ever sought. As per agreement the Rail Neer
was to be picked up directly from the platform and was to be supplied in
specified trains. As per surprise check held on 22.08.2014, it was found
petitioners were supplying other branded PDW despite Rail Neer was
available in plenty at the store . Information was given to Railways
Authorities but to no avail. The petitioners were though not supplying
Rail Neer but admittedly were claiming reimbursement at the rate of
Rs. 15 /- per bottle viz. at the price of Rail Neer, from Railways whereas
the PDW supplied in train was of a cheaper brand and thus loss
calculated to the Government Exchequer was about Rs.19,55,39,017/-.
Admittedly, sanction was not given by the Competent Authority for
reasons best suited to them but there is no denial of the fact the loss was
caused to Public Exchequer.
35. Statements of witnesses were recorded under Section 161 Cr.P.C.
viz. PW-1 Senior Executive, Nangloi Plant who stated the licensees failed
to pick up the allotted quota of Rail Neer. PW-3 and PW-4 viz
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Transporters, had stated they picked up PDW from the plant and had
unloaded at railway station but the licensees did not lift PDW as per
quotas allotted to them. Even PW-6 GGM Rail Neer had stated the
petitioners picked up Rail Neer far less than the quota allotted to them
and thereafter the remaining stock was diverted to other stations causing
more expenditure on transportation. PW-7 Chief Plant Manager had also
stated due to non pickup, stocks at plant were piling up causing further
losses to IRCTC. Such bills for reimbursement were cleared without
making any enquiry and admittedly some penalties were imposed upon
the petitioners for non obtaining total quota allotted to them. PW-24 an
employee of the petitioner also stated while working for the petitioners
he never complained to IRCTC about shortage of Rail Neer and instead
of Rail Neer he rather used to procure other branded water from his
office and used to supply it in trains.
36. Thus, the above facts do prima facie show there was never any
complaint by petitioners qua less quantity of Rail Neer being supplied to
them and secondly prior permission as was required to be obtained to use
other PDW was never obtained. As per statement of witnesses Rail Neer
was available in plenty at the railway station itself but deliberately was
not picked up by the petitioners, thus causing monetary loss. In view of
the contradictory stands taken by both sides, it is to be seen if at this stage
this Court can exercise its extraordinary power under Section 482
Cr.P.C.; to conduct a mini trial; determine the evidentiary value of
findings in the chargesheet; directly or indirectly permit the accused to
impress upon his evidence. The answer is no . The petitioners wish this
Court to believe no criminal cause worth going trial is made out despite
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the scope of interference under Section 482 Cr.P.C. is well known viz. the
High Court cannot record findings on disputed facts or consider the
defence of the accused and it cannot embark upon an enquiry whether the
evidence in question is reliable or appreciation of evidence would lead to
accusation being sustained or not. The Court has to only see whether the
allegations made, disclose a cognizable offence or not. The Court cannot
appreciate the evidence at this stage to say the accused is not likely to be
convicted or no useful purpose would be served by prolonging the
proceedings. See CBI vs. Arvind Khanna (2019) 10 SCC 686; State of AP
vs. Gourishetty Mahesh (2010) 11 SCC 226; Saranya vs. Bharathi
(2021) 8 SCC 583 and Satish Kumar Jatav vs. State of Uttar Pradesh in
CRL.A. 770/2020 .
37. The allegations of conspiracy in the chargesheet have two facets
viz. the conspiracy of contractors to dupe/cheat the railway by charging
them for Rail Neer on supplying cheaper PDW. The second facet of
conspiracy involves public servants against whom sanction has not been
received. Now the conspiracy of the petitioners can be proved/disproved
only after a trial. The matter of sanction qua public servant would have
no effect upon allegations of conspiracy and alleged cheating by private
accused and the only effect would be Section 120B IPC would now not
be used to prosecute private individuals for the offences under the
Prevention of Corruption Act. Merely because the sanction is not granted
does not mean the findings qua conspiracy/cheating cannot stand trial.
Rather in State vs. Jitender Kumar Singh (2014) 11 SCC 724, the
Hon’ble Supreme Court held, upon death of the sole public servant
before framing of charge in a PC Act case, the pending trial against the
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private persons under IPC be transferred to the Court of Magistrate. In
the present case the discharge of public servant on account of invalid
sanction will not absolve the petitioners from the offence allegedly
committed under the IPC. Himachal Pradesh Cricket Association (supra),
relied by the petitioners is the decision on facts of that case. The
submission no loss is caused to the Railways as noted down in the letters
of Ministry of Railways saying IRCTC has been able to sell its Rail Neer
fully, if not to the petitioners/licensees but on other mandatory trains and
stations, is of no use at this stage as the case is alleged allotted quota
given to the petitioners was not lifted deliberately and instead the
petitioners used their own bottles, half the price of Rail Neer and claimed
reimbursement at the rate of Rs.15/- per bottle (of Rail Neer), thus
causing loss to the Public Exchequer. The Director’s Report even if it
says no loss was caused to the Railways as the Rail Neer if not picked up
by the petitioners, was anyway sold somewhere else also cannot be
considered at this stage as the question is of loss incurred to the Railways
upon claiming reimbursements of excess amount despite supplying
cheaper bottles. The letter dated 13.12.2016 of the Ministry of Railways
and the balance sheet(s) of the Railways still have to pass the triple test of
admissibility, reliability and relevance and the authors of the documents
have to be cross examined in view of the contrary findings in the
chargesheet. The averments made in chargesheet that they could not
have utilized the PDWs other than the Rail Neer without prior permission
of the Railway authorities; the petitioner company(ies) have been using
bottles priced at Rs.4.66 to Rs.8.16 per bottle and have been claiming
reimbursement at the rate of Rs.15.00 per bottle viz the price of Rail
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Neer; the letter dated 02.05.2016 of Central Vigilance Commission
(CVC) noting there were some irregularities in allowing the supplying of
PDWs other than Rail Neer and in passing of such bills by the officials; a
letter dated 13.12.2016 of Ministry of Railways, Government of India
noting a loss of Rs.19.50 Crores approx has been caused to the Railways;
and no notice was ever given to Railways for short supply of bottles; and
lastly considering the order of cognizance of learned Special Judge dated
01.07.2017 wherein he has noted the punitive action by the Railways was
never taken for reasons best known to them , cannot be ignored at this
stage.
38. In view of overall submissions and case laws stated above, no case
is made out for quashing of FIR at this stage. Accordingly, the petitions
stand dismissed. Pending applications also stand disposed of.
YOGESH KHANNA, J.
JULY 04, 2023
DU
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