STATE REPRESENTED BY CBI/SPE,COCHIN BY INSPECTOR OF POLICE vs JAYARAMAN GOPAL
- Court
- Kerala High Court
CNR : KLHC010256732016
2026:KER:80195
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE A. BADHARUDEEN
TH
FRIDAY, THE 16 DAY OF OCTOBER 2026 / 24TH ASWINA, 1948
CRL.REV.PET NO. 1212 OF 2016
AGAINST THE COMMON ORDERT DATED 05.08.2015 IN CRL.M.P.NOS.1338/2009, 352/2011 AND
499/2014 IN CC NO.10 OF 2006 OF SPECIAL COURT (SPE/CBI)- II, ERNAKULAM
REVISION PETITIONER:
STATE REPRESENTED BY CBI/SPE,COCHIN BY INSPECTOR OF POLICE
BY ADV.SRI.K.M.FIROZ, SPL.PUBLIC PROSECUTOR FOR CBI
RESPONDENTS:
1 JAYARAMAN GOPAL
S/O.JAYARAMAN, "SURAG", HOUSE NO.XVII/246,G.K.PILLAI ROAD,
PERUMBAVOOR, ERNAKULAM,KERALA (A-1). 683 201.
2 S.M.GEORGE
CHIEF MANAGER, (FINANCE - FORMERLY), HOUSE NO.197,POOVAMPUZHA, KSEB
NAGAR, VALLIKEEZHU, NEENDAKARA,KOLLAM, KERALA (A-2) PIN - 675 001.
3 SAJU M.JOSEPH
FORMERLY CHIEF MANAGER (E/M),HINDUSTAN ORGANIC CHEMICALS
LTD.,AMBALAMUGAL, ERNAKULAM (A-3) PIN - 682 027.
4 D.RENJITH
MANAGER (MARKETING), "CHAITHRAM",NO.29/764-A, I.M.PAILY CROSS
ROAD,VYTTILA, ERNAKULAM (A-4) PIN - 682 019.
5 M/S.METEOR PVT.LTD.
72, JOLLY MAKER CHAMBERS NO.2,NARIMAN POINT, MUMBAI - 21 (A-5).
6 TARA JOHN
D/O.P.M.JOHN, MANAGING DIRECTOR,NO.5-A, NEELAMBER, 28 B, SHAKESPEARE
SARANI,KOLKATTA (A-6) - 23.
7 P.M.JOHN
CHAIRMAN, M/S.METEOR PVT.LTD., NO.5-A,NEELAMBER, 28 B SHAKESEAPRE
SARANI,KOLKATTA AND RESIDENT, NO.8/6B, ALIPRE PARK ROAD,KOLKATTA -
23, WEST BENGAL (A-7).
R1 TO R4 BY ADVS.SRI.B.RAMAN PILLAI (SR.)
SRI.R.ANIL
SRI.T.ANIL KUMAR
SRI.A.RAJESH
SHRI.M.SUNILKUMAR
SHRI.SUJESH MENON V.B.
SHRI.THOMAS ABRAHAM (NILACKAPPILLIL)
SRI.M.VIVEK
R5 TO R7 BY ADVS.SRI.P.VIJAYA BHANU (SR.)
SRI.GEO PAUL
SRI.LENIN P. SUKUMARAN
SMT.RADHIKA RAJASEKHARAN P.
SRI.K.S.SREENATH
SRI.JERRY VARGHESE
SRI.C.R.PRAMOD
THIS CRIMINAL REVISION PETITION HAVING BEEN FINALLY HEARD ON 28.09.2026 THE
COURT ON 16.10.2026 PASSED THE FOLLOWING:
CRL.R.P.NO.1212 OF 2016 2 CNR : KLHC010256732016
2026:KER:80195
CR
ORDER
th
Dated this the 16 day of October, 2026
This Crl.R.P. is at the instance of the Central Bureau of
Investigation, Cochin, challenging the common order dated 05.08.2015
in Crl.M.P.Nos.1338/2009, 352/2011 and 499/2014 in C.C.No.10/2006
on the files of the Special Court (CBI)-II, Ernakulam.
2. In this case, accused Nos.1, 2 and 4 did not file discharge
petitions, but others filed discharge petitions. Acting on the submissions
made by all accused persons through their counsel and on evaluation of
materials, the learned Special Judge discharged all the accused persons.
3. Heard Adv.Sri.K.M.Firoz, the learned Special Public Prosecutor
appearing for the CBI as well as Adv.Sri.B.Raman Pillai, the learned Senior
Counsel appearing for respondent Nos.1 to 4 and Adv.Sri.Geo Paul, the
learned counsel appearing for respondent Nos.5 to 7. Perused the
prosecution records and the order impugned.
4. Going through the final report filed by the CBI, running into
CRL.R.P.NO.1212 OF 2016 3 CNR : KLHC010256732016
2026:KER:80195
several pages and containing multiple charges against accused Nos.1 to
7, Charge No. 1 is as follows:
“That, Sri. J.Gopal (A-1), Sri.S.M.George (A-2), Sri.Saju
M.Joseph (A-3), and Sri. D.Rejith(A-4) who were working
as public servants in HOCL, Kochi during the period
December 2002 to March, 2003, entered into a Criminal
Conspiracy between January 2003 to March 2003, with
M/s Meteor Pvt. Ltd. (A-5) represented by Sri.
P.M.John(A-6), Chairman and Mrs. Tara John(A-7),
Managing Director, to obtain pecuniary advantage to
themselves and to cheat Hindustan Organic Chemicals
Ltd., Kochi, and in pursuance of which, they imported
"Cumene" during March, 2003 by flouting the tender
formalities and violating the Purchase Policy of HOCL,
which is based on the Purchase Manual (Purchase Policy
and Procedures) Part-I Order No.11/2001 dt. 13.07.2000
of HOCL, and thereafter imported 2200 Mts of Cumene @
US $ 688/Mt vide P.O. No. MAT 02/659A-10171. dt 18-
02-2003 from M/s Kolmar Petrochemicals AG,
Switzerland through A-5.
That, A-1, A-2, A-3 and A-4 in pursuance of the Criminal
Conspiracy amongst themselves, so as to import Cumene,
did not change the deteriorated Solid Phosphoric Acid
CRL.R.P.NO.1212 OF 2016 4 CNR : KLHC010256732016
2026:KER:80195
Catalyst (SPA Catalyst) of the Cumene Power Plant of
HOCL, Kochi in December 2002, even though the written
request on 20-12-2002 was made by the Deputy General
Manager(Production), for the change of the SPA Catalyst,
to coincide with the shut down of the Kochi Refineries
Ltd., which ultimately resulted in the low production of
Cumene at HOCL.
That, A-1 invited tender for supply of 4000 Mts of
Cumene on 31-01-2003, with the delivery by first week of
April 2003 and sent the Tender notice to 13 parties and
invited their rates for supply of Cumene at Cochin during
the first week of April 2003. Only 3 firms had submitted
their offers by 06-02-2003, which included A-5 which
quoted on 06-02-2003 for the supply of 4000 M.T. +/-
10% in two part, with the validity of their offer upto
07.02.03 viz. 2000 MT at US $ 663/MT CIF New
Mangalore and delivery by March 2003 or USD 690/MT
at CIF Kochi and 2000 MT, and delivery by first week of
April, 2003 at $ 690/MT CIF New Mangalore or $
715/MT CIF Kochi. M/s Inter Trade Exim, Mumbai
quoted for 4000 M.T. at USD 594.50 CIF, Kochi, with
delivery in April, 2003, while the offer from M/s Haresh
Kumar and Company, Mumbai for 4000 M.T. of Cumene
CRL.R.P.NO.1212 OF 2016 5 CNR : KLHC010256732016
2026:KER:80195
was at US $ 675 per M.T. CIF Kochi and arrival during
the first half of April, 2003. The fourth and fifth offers
were rejected due to late receipt and also these parties
had regretted their inability to supply as per the delivery
schedule. The Purchase Committee held its Board Meeting
on 06.02.2003 requesting M/s Intertrade Exim, Mumbai
regarding the confirmation of the nomination of the
vessel by which the Cumene would be shipped and the
details of the manufacturer.
That, a letter was received by A-3 and A-1, both of the
Purchase Committee of HOCL, Kochi, from A-5 on 06-02-
2003 by fax, intimating their protest on behalf of their
Principal M/s Kolmar Petrochemicals Ltd., USA for
accepting the offer of M/s Inter Trade Exim, Mumbai
with the delivery schedule (i.e. anywhere in April, 2003)
which was not as per the Notice Inviting Tender, which
required the delivery of Cumene during first Week of
April, 2003. M/s Intertrade Exim, Mumbai. vide Fax
dt.07-02-2003 intimated HOCL, Kochi, that they were
unable to confirm any vessel for shipment and therefore
requested to extend the validity of the offer up to 11th Feb.
2003. A-3 addressed a letter to A-5 requesting to extend
the validity of their offer till 14.02.2003 and similarly
CRL.R.P.NO.1212 OF 2016 6 CNR : KLHC010256732016
2026:KER:80195
addressed to M/s Haresh Kumar and Company, Mumbai
intimating them that their delivery date is not as per the
Notice Inviting Tender and requested them to confirm
that Cumene will be supplied by 1st Week of April, 2003,
with an extension of the validity till 14.03.2003. M/s Inter
Trade, Exim Mumbai vide their letter 07.02.03 extended
their offer for sale of Cumene to 11.02.2003, while Haresh
Kumar and Company, Mumbai informed that they would
reply before 11-2-2003.
That A-5 vide their letter of 07.02.03 informed that they
are agreeable to extend the validity of offer upto
12.02.2003 for the 1st consignment of 2000 M.T. of
Cumene, but the new rate quoted for the supply of Cumene
was US $ 676.50 per M.T., and thereby the increase in
their offer, and for the second consignment of Cumene, A-5
did not give any commitment. M/s Inter trade Exim,
Mumbai vide their letter of 11.03.03 intimated HOCL their
inability to provide the vessel details as their Principals
(M/s Tricon Energy, USA) could not confirm the delivery
at Kochi by 1st Week of April, 2003, but extended the
validity of offer upto 5.00 Р.М. оn 06.02.2003.
That A-3 then addressed a fax message to M/s Inter Trade
Exim, Mumbai accepting their offer of 4000 M.T.+/- 10% at
CRL.R.P.NO.1212 OF 2016 7 CNR : KLHC010256732016
2026:KER:80195
US $ 594.50 per M.T. with Liquidated Damage Clause and
Delivery Schedule before 30th April, 2003, but M/s Inter
Trade Exim, Mumbai vide his letter dt.12-02-2003
informed HOCL, Kochi regarding inability to accept the
Letter of Indent due to non-availability of the vessels.
That, in pursuance of the Criminal conspiracy between A-1,
A-2, A-3, A-4 and A-5 and in order to exclude M/s Haresh
Kumar and Co., Mumbai, A-3 dishonestly and by abusing
his official position and in order to favour A-5, had
addressed a letter only to A-5, which was ranked as L-3,
asking them to match offer price of M/s Inter Trade Exim,
Mumbai at US 594.50 per M.T. of Cumene for 2000 M.T. of
Cumene and to extend the validity of the offer upto
15.02.2003, while no such letter was originated by A-3 to
M/s Haresh Kumar & Company, Mumbai, the firm which
was ranked as L-2.
That in pursuance of conspiracy A-1 did not consider the
intimation dt. 13.2.2003 of Mr.M.A.Pillai about the worst
condition of the SPA Catalyst and the urgent need to replace
the SPA Catalyst in view of the falling production from 180
tones per day to 120-130 MT.
That on 15.2.2003, in furtherance of the criminal
conspiracy, A-5 falsely intimated through their Regional
CRL.R.P.NO.1212 OF 2016 8 CNR : KLHC010256732016
2026:KER:80195
Manager their inability to match the L-1 price of US $ 594.5
per M.T. CIF, Kochi for the first lot of 2000 M.T. +/- 10%, of
Cumene, by mentioning that there is a steep increase in the
price of Benzene and Propylene for the last two weeks, and
was prepared for "spot sale" on board the vessel M.T. Stolt
Vinland, which had already sailed on 21-01-2003 from
Corpus Christii, USA, and was arriving at New Mangalore
in the first week of March, 2003 at US $ 688 per M.T. and
that in furtherance of criminal conspiracy, A-3 issued the
Letter of Intent on 17-02-2003 and the Purchase Order, so
as to open the Letter of Credit, by the Principals (Kolmar
Petrochemical AG) and thereafter to forward the detailed
contract to HOCL.
That, on 17.02.03 in pursuance of the Criminal Conspiracy
between A-1 to A-4 with A-5 represented by A-6 and A-7, A-
3 dishonestly and fraudulently and in also by violating NIT
and the tender norms floated by HOCL, Kochi accepted the
higher price of US $ 688/MT offered by A-5 as "Spot
Purchase" and in pursuance of that A-3 sent a letter and fax
message to A-5 for the supply of the first lot of 2000 Mts of
Cumene @ US $ 663 per MT, which was arriving at New
Mangalore during March 2003 and another letter dt.
11.02.2003 and the fax message dt.15.02.2003 with regard
CRL.R.P.NO.1212 OF 2016 9 CNR : KLHC010256732016
2026:KER:80195
to the purchase of the "spot parcel" of 2000 M.T +/- 10% on
the Ship Stolt Vinland at the enhanced rate of US $ 688 per
MT.
That, in furtherance of the above said criminal conspiracy
A-1, A-2, A-3, A-4 and A-5 represented A-6 & A-7, and in
order to favour A-5 and to avoid M/s Haresh Kumar &
Company, Mumbai, so as to ensure that the Purchase Order
was given to A-5, A-3 did not send the letter to M/s Haresh
Kumar and Company, Mumbai- the L-2 firm, to match the
price of L-1, but placed the Letter of Indent to A-5 company,
at a higher price and also accepted the "spot parcel" of 2000
M.T +/- 10% on the Ship Stolt Vinland at the enhanced rate
of US $ 688 per MT. The negotiations are permissible as per
the Purchase Policy to bring down the prices, but not for
increasing the price.
That on 17.3.03 in furtherance of the Criminal Conspiracy,
A-1, A-2, A-3 and A-4 convened the Purchase Committe
meeting to place Purchase Order on A-5 at the price of US $
688 per M.T. CIF, New Mangalore for supply of 2000 Μ.Τ.
+/- 10% of Cumene for a total value of Rs.8,31,78,180/-
without intimating the same to Shri M.A. Pillai who was also
one of the member of the Purchase Committee.
That, in furtherance of the Criminal conspiracy the Purchase
CRL.R.P.NO.1212 OF 2016 10 CNR : KLHC010256732016
2026:KER:80195
Committee consisting of A-1, A-2, A-3 and A-4 had shown
reason of threat of war imposed by U.S.A. and the increase in
the prices of crude and derivatives, and hence the increase in
price of Cumene from the date of opening of the tender, being
the reasons for accepting the increased price of A-5 company
from US $ 663 to US $676.50 per MT and then to US $688
per MT, and by relying ICIS-LOR pricing of 07-March-2003
which was irrelevant, as the Purchase Order issued to A-5
was dtd 18-02-2003. The pricing of ICIS-LOR Weekly Price
Report of Cumene during 14-02-2003 to 21-02-2003 was not
considered and the ICIS-LOR Weekly Price Report for the
period 02.01.2003 to 28.03.2003 would reveal that during
the period from 24.01.2003 to 21.02.2003, the price of
Cumene was constant and stood at 578.71 US $ per M.T.
That accused persons in furtherance of the Criminal
conspiracy amongst themselves, though they had the
knowledge of the poor performance of the SPA Catayst of the
Cumene Power plant, which resulted in the poor production
of Cumene, A-1, A-3 and A-4 agreed to replace the SPA
catalyst only on 17-03-2003 by awarding Purchase Order to
A-5 at US $ 688 M.T., as against the initial offer for 2000
M.T. of Cumene for US $ 663 per M.T., which was later
increased to US $ 676.50 per M.T., further finally revising the
CRL.R.P.NO.1212 OF 2016 11 CNR : KLHC010256732016
2026:KER:80195
price to US $ 688 per M.T., which was finally approved by A-
1, as per Part-I order No.3/2000 dt.02.02.2000.
That on 18.2.03 in pursuance of the criminal conspiracy
between A-1, A-2, A-3 and A-4 with A 5, the Purchase Order
No.MAT/02/659A-10171 was signed by A-3 and A-4 for
purchase of 2000 M.T. of Cumene at US $ 688 per M.T.
amounting to US $ 13,76,000 on behalf of Kolmar
Petrochemicals AG, Switzerland, without any proceedings of
the Purchase committee and also without informing Sri.
M.A.Pillai, DGM(Prodn.) and so also the said purchase has
not been reported to the Board of HOCL, which is in violation
of Purchase Policy Item No.5.5 of Purchase Manual and
Clause No.6.2, since the Purchase Committee deliberated the
issuance of the Purchase Order only on 17.03.2003, which is
after the placement of the Purchase Order on Kolmar
Petrochemicals AG, Switzerland through A-5 on 18.02.2003.
That the Cumene purchased from A-5 through Kolmar
Petrochemicals AG, Switzerland, at the enhanced price of US
$ 688 per M.T. for 2200Mts from Kolmar Petrochemicals AG,
Switzerland, through A-5, which was on board the ship “Stolt
Vinland”, that had sailed from Corpus Christii on 21-01-2003
with one consignment of 2500Mts of Cumene already sold to
HOCL through M/s Inter Trade Exim, Mumbai for US $530
CRL.R.P.NO.1212 OF 2016 12 CNR : KLHC010256732016
2026:KER:80195
per Mt, and another consignment of 7503.647 Mts of Cumene
which was sold by Kolmar Petrochemicals AG at an average
price of US $ 593.65 per Mts to Schnectady Herdilla, Mumbai,
as on 12-02-2003,
That, in pursuance of the Criminal conspiracy between A-1, A-
2, A-3 and A-4 with A-5 to give undue favour A-5 and to
facilitate in the purchase of 2200 Mts of Cumene from the lot
of 7000 Mts of Cumene already sold to Schnectady Herdilla,
Mumbai, which was on board the ship “Stolt Vinland", the
date of delivery of Cumene at New Mangalore was altered to
the first week of March 2003, as it was in the knowledge of A-
1, A-2, A-3 and A-4, that the ship "Stolt Vinland" had sailed
from Corpus Christii on 21-01-2003 and would arrive at New
Mangalore, by the first week of March 2003, and thereby one
lot of 2200 M.T. of Cumene was purchased from Kolmar
Petrochemicals AG, Switzerland by HOCL at US $ 688 per
MT, on 17-02-2003 vide P.O. No. MAT 02/659A-10171. dt 18-
02-2003, while the pricing of US $ 571 per MT was charged by
Kolmar Petrochemicals AG, Switzerland for the Cumene sold
to Schnectady Herdilla, Mumbai, and thereby caused a
wrongful loss to the HOCL, Kochi. That the total profit earned
out of the sale of 6364 tones of Acetone and 10133 tones of
Phenol produced during January, 03 to 15 April, 2003, using
CRL.R.P.NO.1212 OF 2016 13 CNR : KLHC010256732016
2026:KER:80195
the imported Cumene (2500 Mts + 2200 Mts) and in-house
produced Cumene was Rs.7561 lakhs, while the cost of
production of Phenol and Acetone at HOCL, Kochi works out
to Rs.6475 lakhs, during the period January, 03 to 15th April,
03, and thereby the profit earned by HOCL, out of the sale of
Phenol and Acetone is Rs.1086 lakhs (7561-6475). That if the
SPA Catalyst was changed as planned in the month of
Jan.2003, and also repeatedly informed and requested by
DGM(Prodn.), then only 1767 Mts of Cumene needed to have
been imported for achieving the output of 6364 M. tones of
Acetone and 10133 M. tones of Phenol, as was produced by
importing the two consignments of Cumene, and thereby the
non-necessity of the import of 2200 Mts of Cumene- 2nd
import from A-5, and thereby the undue favour to A-5.
That, A-1, A-2, A-3, A-4 and A-5 thus caused a wrongful loss to
the tune of Rs.10,15,48,765/- to HOCL and undue pecuniary
gain to A-5 represented by A-7 and A-8 and to themselves and
thereby committed offences punishable u/s 120B IPC r/w 420
IPC and U/s 13(2) r/w 13(1)(d) of Prevention of Corruption
Act, 1988 and U/s 420 IPC and sec.13(2) r/w 13(1)(d) of PC
Act, 1988.”
5. Here, the prosecution alleges commission of offences
CRL.R.P.NO.1212 OF 2016 14 CNR : KLHC010256732016
2026:KER:80195
punishable under Sections 120B and 420 of the Indian Penal Code (for
short, ‘the IPC’ hereinafter) and under Sections 13(1)(d) r/w 13(2) of
the Prevention of Corruption Act, 1988 (for short, ‘the PC Act’
hereinafter), by accused Nos.1 to 7.
6. The learned Special Judge, after analysing the materials,
made his observations while discharging the accused starting from
paragraph Nos.24 to 65 as under:
“24. The basis for finding fault with the accused according
to the prosecution is the statement given by Shri.
M.A.Pillai who has been shown as CW5. He is the
DGM(Production) of HOCL. His statement is that catalyst
performance has started deteriorating from December
2002 beginning itself which was reported by him to A1 as
per letter dated 20.12.2002. He also recommended to
proceed with the unloading of the catalyst since the
catalyst performance had deteriorated very badly, as soon
as the LPG stock got exhausted. He would say that if the
catalyst was changed during January 2003 as proposed
by him the need of importing the second consignment of
2200MT of cumene could have been avoided.
CRL.R.P.NO.1212 OF 2016 15 CNR : KLHC010256732016
2026:KER:80195
25. Thus, CW5 has given statement to the effect that there
was compulsion from his part to change the catalyst, that
it was not acceded to by A1 to A4 which resulted in the
purchase of cumene from A5 at high price. If this version
of CW5 get support from documents, it could have stated
that there is a definite prima facie case to the aforesaid
allegations against the accused. Hence I have to verify
whether there was a purposeful delay committed by A1 to
A4 for replacement of the catalyst as alleged by CW5.
26. For deciding the said aspect I may refer to some
documents produced by the prosecution, Page 22 of the
document described as D1 file forms the fax message sent
by Kochi Refineries Limited to the General Manager,
HOCL Ambalamugal, that is to A1. This message is dated
24.09.2002. In this message it is stated by Kochi Refineries
Ltd. that they have planned to take the annual shut down
of FCCU for a month starting first week of January 2003,
that during the said period they will not be able to supply
LPG to HOCL. In this message there is an endorsement by
A1 dated 25.09.2002 "that HOCL may have to take
decision to import one parcel of cumene (4000MT) to
reach Cochin port atleast by 3rd week of December 2002
and may have to open L/C by end of October 2002 and are
CRL.R.P.NO.1212 OF 2016 16 CNR : KLHC010256732016
2026:KER:80195
initiating necessary action to procure cumene ". This
endorsement is seen marked to the CMD.
27. The above document shows the action taken
immediately by A1 on knowing about the proposal for
shutting down the plant by KRL. If even after knowing
about the shutting down of the KRL A1 had kept silent
without initiating any action one could have attributed
malfides on him. But situation herein is not like that as
already stated by me.
28. Now I may come to some other documents produced
by the prosecution. Document indexed as D6 file contains a
lot of details with respect to the action taken regarding the
replacement of the catalyst. Page 60 of the said file is a
letter by A1 to CW5 dated 20.12.2002 in reply to the letter
by CW5 regarding the replacement of the SPA catalyst. In
this letter A1 had informed CW5 that the subject of
replacing the SPA catalyst was deliberated with the
concerned Head of Departments on 20th December 2002
and the matter was also discussed with the CMD
regarding the scenario of stock out situation for Phenol
and Acetone during the catalyst replacement, that the
CMD informed that due to anti-dumping duty of phenol
hearing, which is in progress and also to protect the
CRL.R.P.NO.1212 OF 2016 17 CNR : KLHC010256732016
2026:KER:80195
market and customers interests, CMD expressed that if the
catalyst replacement can be postponed to a later date by
running the plant with the existing catalyst for another 3
or 4 months thereby continuing the phenol production by
supplementing the cumene required by imported cumene.
As per this letter A1 also informed that necessary action
has been taken to procure one more parcel of imported
cumene.
29. Along with this letter the minutes of tender committee
meeting held on 20.12.2002 regarding the purchase of
imported cumene which finds on page 27 of Exhibit D6 file
also has to be verified. This minutes would show that
whatever is written in the letter contained in page 60 of
D6 file have been approved by the tender committee.
Incidentally CW5 is a member to this committee and
signatory to the minutes referred in page 27 of D6 file.
30. Now I may refer to page 59 of D6 file. This is the
minutes of the meeting held on 27.12.2002 in the GM's
office in connection with the cumene reactor catalyst
changing. Decision (b) in the said meeting reads as
below:-
"(b) Since the market for phenol and acetone is
good and the price continues to be attractive,
CRL.R.P.NO.1212 OF 2016 18 CNR : KLHC010256732016
2026:KER:80195
(Rs.46,000/- and Rs.40,000/- PMT for phenol
and acetone respectively), it is decided to defer
the replacement of SPA CATALYST for the time
being and run the phenol plant with imported
cumene till the LPG supply resumes from Kochi
Refineries Ltd."
31. This minutes would show that Shri.A.A.Piliai, DGM
(Production), that is, CW5 also was present while the said
decision was taken.
32. While giving statement as CW5, this officer in
paragraph 2 has stated that to his letter dated 20.12.2002
Shri.J.Gopal, GM(A1) gave a reply favouring the
postponement of catalyst unloading to a later date, but
the reason thereof for the postponement was not
agreeable to him as the catalyst was deteriorating very
badly and as a result production of phenol and acetone
was also falling from below the rated capacity.
33. I have got considerable difficulties to accept the
statement that CW5 was not agreeable for postponement
of the catalyst unloading. In any of the minutes or letter
referred by me earlier there was any objection raised by
CW5 against the decision to defer the replacement of the
catalyst. The files also do not disclose any letter given by
CRL.R.P.NO.1212 OF 2016 19 CNR : KLHC010256732016
2026:KER:80195
CW5 to any superior officers including A1 and CMD that
the deferring of the replacement of the catalyst would
result in great financial loss to the company. In fact all
the acts of CW5 from the documents already referred by
me very strongly indicate that he was a clear consenting
party to the decision to postponing the replacement of
SPA catalyst and he never had any sort of objection to the
same.
34. In that view of the matter there is some merit in the
contention of the Learned counsel for the accused that if
the charge levelled against the accused is as spoken by
CW5, he also ought have been shown in the very same
position of A1 to A 4 and his idea now is to pretend
ignorance by casting burden or liability on the shoulders
of A1 to A4.
35. Now I may refer to a letter dated 13.01.2003 by A1 to
the CMD which forms page 10 of document indexed as D1
file. Copies of that letter form pages 11 and 12 of D1 file. In
paragraph 2 of this letter it is addressed by A1 to CMD
that since the replacement of SPA catalyst in the cumene
reactor was postponed, there is an anticipation of cumene
production of around 120 to 150 MT per day and when
they restart the cumene plant, against the normal
CRL.R.P.NO.1212 OF 2016 20 CNR : KLHC010256732016
2026:KER:80195
production of 170 to 180 MT per day there is a shortfall of
30 to 40 MT of cumene per day and therefore they are
forced to reduce the phenol plant load from 120 to 100 MT
per day till the imported cumene reaches the site. The
copy of this letter is seen given to CW5 also. CW5 cannot
pretend that he had not received a copy of this letter. This
better would indicate the decision taken for postponing
the replacement of SPA catalyst and the decision to
import cumene.
36. I may now refer to the minutes of tender committee
held on 31.01.2003 regarding the purchase of cumene.
The same forms page 1 of document indexed as D7 file. It
is seen from this that even though an order with M/s.
Tricon Enercy Ltd. for supply of 4000 MT of cumene was
placed they have loaded only 2500 MT which is expected
around 10th March 2003 and that cumene will be used
for phenol production till the 1st week of April 2003. This
meeting also would show that the catalyst change is
planned after the 1st week of April 2003, that the cumene
plant shut down will be a for a period of 30 days and
during the said period the requirement of cumene is
around 5400 MT and one parcel imported cumene of
4000MT + or 10% to enable to continue the phenol
CRL.R.P.NO.1212 OF 2016 21 CNR : KLHC010256732016
2026:KER:80195
production during cumene shut down is required which
should be available latest by 10th April 2003 and the
committee had decided to float enquiry for 4000MT to
meet the shut down requirement.
37. This minutes would show that there was a decision of
replacement of the catalyst change and shutting down of
the cumene plant at that time after 1st week of April
2003. This shows that the decision taken earlier for
deferring the replacement of the SPA catalyst is correct.
CW5 is a signatory to this meeting and approved to the
decisions in this meeting. Hence he cannot now turn
around and say that it was against his wishes that the
decision to replace the catalyst was deferred.
38. This meeting would also show the decision of the
committee which included CW5 to import 4000 MT of
cumene to enable HOCL to continue the phenol
production during the cumene shut down, which cumene
will be made available by 10th April 2003 and decision to
float enquiries for the purchase of the said cumene to
meet the shut down requirement.
39. I may now refer to a letter given by Shri.M.A.Pillai,
CW5 to the GM on 13.02.2003 on the performance of the
cumene catalyst. This is page 76 of the document indexed
CRL.R.P.NO.1212 OF 2016 22 CNR : KLHC010256732016
2026:KER:80195
as D7 file. In this letter CW5 was intimating A1 that “we
were planned to change the catalyst in the month of April
2003 and tried to run the plant with our best ability at a
reduced load to meet market requirement. However, in
the last few days we have observed that the performance
of catalyst is deteriorating and we are facing lot of
problems in cumene section.” He also requested as per
this letter to take appropriate action for change of
catalyst and procurement of sufficient quantity of
imported cumene at the earliest so that the cumene plant
can be stopped for change of catalyst and continue the
phenol production.
40. I may say that this letter speaks volumes. From this it
is clear that CW5 was actually a consenting party to the
decision that the change of catalyst would be had in the
month of April 2003 or to the decision to defer the change
of catalyst on some other day and it need not be in
consonance with shut down of KRL. This letter also would
show that because of the sudden starting of signs of
deteriorating of the performance of the catalyst a stage
had reached that the catalyst required to be changed at
the earliest and it cannot be waited till April 2003. This
letter would further show that CW5 was also actually
CRL.R.P.NO.1212 OF 2016 23 CNR : KLHC010256732016
2026:KER:80195
compelling A1 to take appropriate action to procure
sufficient quantity of imported cumene at the earliest.
41. In view of these situations, it is really idle for CW5
now to contend before the investigating officer that if the
catalyst was changed during January 2003, the need for
importing cumene could have been avoided. This would
then show that the allegations against A1 to A4 that
because of their inaction in getting the change of catalyst
at the appropriate time, there was necessity to import
cumene at an exorbitant rate resulting loss to HOCL are
not at all prima facie well founded. I may also add that
the said allegation appears to be totally groundless.
42. I have already referred about Page 76 of the D7 file. It
is a letter dated 13.02.2003 given by CW5. The same
showed that the necessity of Importing of cumene arose
much before the expected period. Hence it was decided to
import cumene. By this letter CW5 informed A1 to take
appropriate action for change of catalyst and
procurement of sufficient quantity of cumene by import at
the earliest. Page 1 of D7 file is the minutes of the tender
committee meeting held on 31.01.2003 regarding the
purchase of cumene. A1 to A4 and CW5 attended the said
meeting. I have already referred about this minute also.
CRL.R.P.NO.1212 OF 2016 24 CNR : KLHC010256732016
2026:KER:80195
The same would show that the committee had decided to
float enquiries for the purchase of 4000MT +/- 10%
cumene to meet the shut down requirement of HOCL,
when the shutting down would be from the 1st week of
April 2003 for a period of 30 days. The said meeting also
would show that cumene should be available atleast by
10th April 2003. That minutes would show that up to that
date the plant could be operated with the cumene
available by way of the import already made.
43. Subsequent to this meeting on the very same day, that
is on 31.01.2003, A3 invited quotations for the purchase of
4000MT +/- 10% cumene required during 1 week of April
2003 by enclosing detailed terms and conditions with a
request to submit the offer as to reach before 3 p.m on
06.02.2003. Page 6 of D7 file is the office copy of this
letter inviting quotations which show that 13 companies
were asked to submit their quotations. Page 7 to 9 and 13
to 23 in Exhibit D7 file show individual letters to these 13
companies signed by A3.
44. Page 26 of the D7 file is a office note from the Deputy
Manager (P&A) to the Materials Engineer, that is to A3,
dated 06.02.2003 stating that as per the enquiry inviting
quotations, quotations were received from 4 parties
CRL.R.P.NO.1212 OF 2016 25 CNR : KLHC010256732016
2026:KER:80195
namely M/s.Hareshkumar & Company, M/s. Intertrade
Exim, M/s. Meteor Pvt. Ltd., that is A5 herein and M/s.
Heralds Trading Co. Ltd., On perusal of file what I find is
that M/s. Heralds Trading Co. Ltd., had not actually
given a quotation whereas expressing their inability to
supply. So actually there were only 3 quotations, that is
from M/s. Hareshkumar & Company, M/s. Intertrade
Exim, M/s, Meteor Pvt. Ltd..
45. Page 37 of D7 file is the offer given by
M/s.Hareshkumar & Company, quoting the price as USD
675/MT, CIF Cochin and the proposed date of supply is
mentioned as 1st half of April 2003.
46. Page 31 and 30 together of D7 file is the offer given by
M/s. Meteor Pvt. Ltd. that is the 5th accused herein. It is
stated that the required quantity would be supplied in
two lots of 2000 MT each and first lot would be received
in March 2003 and the second lot would be received in the
1st week of April 2003 either at Kochi or New Mangalore
port. It is also stated in this offer that cumene is shipped
in the vessel by name STOLT WINLAND, that the price
for the 1st lot is USD 663/MT CIF New Mangalore or USD
690/MT CIF Cochin and the 2nd lot is priced USD
690/MT at New Mangalore or USD 715/MT CIF at
CRL.R.P.NO.1212 OF 2016 26 CNR : KLHC010256732016
2026:KER:80195
Cochin. It was also requested that if the offer is acceptable
the same may be accepted by 5 p.m on 07.02.2003.
47. Page 33 is the offer given by M/s. Intertrade Exim.
The price quoted in this offer is USD 594.50/MT CIF
Cochin and delivery would be done "Any April 2003".
This offer also was valid till 07.02.2003.
48. Thus, the lowest quotation was by M/s. Intertrade
Exim. The same is described as L1. Page 39 of D7 file is the
minutes of the meeting held on 06.02.2003 in connection
with the import of cumene against the invitation of
tender. A1 to A4 were present in this meeting. This
minutes would show that since the lowest price was
quoted by M/s. Intertrade Exim, it was decided to accept
their offer and requested to confirm the following aspects
before 4 p.m. on 07.02.2003.
(1) Nomination of the vessel - Vessel
particulars should be informed with the
name of the vessel, port of loading, discharge
port and ETA Kochi
(2) The details of the manufacturer /
supplier
(3) M/s. Intertrade informed that they will
th
confirm the above details before 4 p.m. on 7
CRL.R.P.NO.1212 OF 2016 27 CNR : KLHC010256732016
2026:KER:80195
Feb 2003.
49. The above would show that HOCL had decided to
accept the offer of M/s. Intertrade subject to the condition
of nomination of the vessel, the manufacturer of cumene
and date of delivery. The decision of the above meeting was
conveyed to Intertrade Exim. Page 67 is a letter dated
11.02.2003 to A3 from Intertrade Exim. This appears to be
a reply to the request made to M/s. Intertrade Exim on the
points shown above in the meeting held on 06.02.2003. In
this, Intertrade Exim had very categorically stated that
their Principals cannot confirm delivery of the material by
1st week of April 2003, that since the principals have not
fixed the vessel yet, they cannot nominate the vessel and
provide vessel particulars as requested by HOCL and that
they cannot confirm the producers/suppliers of material.
50. To this letter of M/s. Intertrade Exim which was sent
by tax, on 11.02.2003 itself on behalf of HOCL, A3 sent a
reply stating that price of USD 594.5 PMT CIF Cochin will
be accepted subject to delivery of material on or before
30th April 2003, that in case of delay beyond 30th April
2003 liquidated damages have to be paid and also
requested to confirm the vessel particulars and the details
of manufacturers /suppliers as to place the purchase order.
CRL.R.P.NO.1212 OF 2016 28 CNR : KLHC010256732016
2026:KER:80195
This letter forms page 69 of D7 file.
51. To this letter a reply was received by A3 stating that by
the time M/s. Intertrade Exim had sent a letter of indent of
HOCL for supply of cumene to the Principals in US, the
vessel which they were planning to supply the material in
the month of April 2003 was booked by others and the
principals have informed Intertrade Exim that they will
not be able to supply the materials in the month of April
and therefore they expressed their inability to accept the
letter of indent.
52. From the above it is crystal clear that the offer made by
Intertrade Exim was actually withdrawn by them itself.
Moreover, by this letter Intertrade Exim informed HOCL
about their inability to honour the said offer.
53. If so, the option available to HOCL was either to accept
L2 offer by M/s. Hareshkumar & Co. or the L3 offer by A5.
I have already referred about these offers. It is true on
comparison of these two offers, the price quoted by Mis.
Hareshkumar & Co. is a bit less than the price quoted by
A5.
54. I have already said that M/s. Hareshkumar & Co. did
not nominate the vessel particulars, expected loading at
load port, the delivery at the discharge port etc. and in
CRL.R.P.NO.1212 OF 2016 29 CNR : KLHC010256732016
2026:KER:80195
their offer the details of manufacturers / suppliers from
where cumene would be procured also was not shown.
Hence A3 on behalf of HOCL sent a letter to M/s.
Hareshkumar & Co., to confirm the ability to supply the
material by 1st week of April 2003 to confirm the vessel
nomination by supplying the vessel particulars, expected
loading at load port and delivery at discharge port etc. and
confirm the details of manufacturers/suppliers from where
cumene is sourced with a further request to reach the
confirmation before 2 p.m. on 10th February 2003. This
letter forms page 55 of D7 file. M/s. Hareshkumar & Co.
sent a reply to the same to extend the validity of offer till 17
Hrs on 14.03.2003. Page 57 of D7 file forms this letter. On
10.02.2003, A3 on behalf of HOCL sent a letter by fax to
M/s. Hareshkumar & Co., reminding to sent a reply the
reply before 2 p.m. on 11.02.2003 and no more extension of
time will be given. It is further stated that if HOCL did not
receive the reply by the above time, it would be presumed
that M/s. Hareshkumar & Co. is not interested in the above
matter.
55. Page 74 of D7 file is the letter from M/s. Hareshkumar
& Co. to HOCL
stating that the request for nomination of vessel and other
CRL.R.P.NO.1212 OF 2016 30 CNR : KLHC010256732016
2026:KER:80195
particulars shall be forwarded only on acceptance of their
offer. I may say that this kind of offer is not acceptable to
anybody. Unless the vessel by which cumene will be
shipped is informed, it may not be possible to HOCL to
verify the quantity that would be supplied and the possible
time at which time the vessel would reach at the discharge
port and at which time the vessel would be loaded and
from which port etc. Hence this letter itself had made M/s.
Hareshkumar & Co. to a situation that their offer will not
be acceptable by HOCL. If so, I cannot find any fault with
the officers of HOCL in not accepting these sort of offers
which is imperfect, incomplete etc. Supposing this type of
offer is accepted and there was failure on the part of M/s.
Hareshkumar & Co. to deliver the cumene at any
particular port or on any particular date, much loss would
have caused to HOCL and A1 to A4 would have been
fastened with the liability for causing such a loss. If so, the
non-acceptance of this sort of offer by M/s. Hareshkumar
& Co. is a very wise decision taken by the officers of HOCL
including A1 to A4.
56. What was the option then left with A1 to A4 is the next
aspect to be considered. Once the L1 of Intertrade Exim and
L2 of M/s. Hareshkumar & Co. could not be accepted for
CRL.R.P.NO.1212 OF 2016 31 CNR : KLHC010256732016
2026:KER:80195
the reasons already supplied by me earlier, the only option
was to accept L3 offer given by A5. Here I may refer to a
decision of the tender committee dated 17.03.2003. This
forms page 87 and 88 of D7 file. This decision is elaborate
on all aspects of cumene purchase. I have touched on
various aspects covered by this decision on the basis of
documents available in the D7 file. This would show that
since the price offered by M/s. Intertrade Exim was very
competitive when compared with the prices prevailed at
that time, the said offer was accepted on conditions. But
M/s. Intertrade has informed that they could not get a
potential vessel to carry cargo to Cochin for delivery in
April 2003. In this decision it is stated that A5 had
mentioned in their original offer itself about their
commitment to ship cumene in two lots in March 2003 and
in 1st week of April 2003.The spot offer of M/s. Meteor is
the only source of cumene available for an early delivery
and inspite of the increases in price made by them from the
tender price the rates are competitive compared to the
price of phenol and acetone and that there has been
demands for this parcel of A5 from the manufacturers of
Bombay and any delay in taking decision would have
resulted loosing the parcel which would further result in
CRL.R.P.NO.1212 OF 2016 32 CNR : KLHC010256732016
2026:KER:80195
non production of phenol and erosion of the market share
of HOCL. It was by considering all these aspects, decision
for the purchase of cumene from M/s. Kolmar
Petrochemicals, the principal of A5 at USD 688/MT CIF
New Mangalore was taken.
57. Considering the aspects of the case which I have
discussed in the earlier paragraph with reference to the
various documents in D7 file, I repeat that there was
urgent necessity for HOCL to procure cumene by import
which was approved by CW5 also. The possibility of
procuring then was only from A5 through their principal
M/s.Kolmar Petrochemicals even though the price offered
by them was high as compared to the prices offered by
other two companies. Since the other two companies have
either withdrawn their offers or not responding properly
as already stated by me the only option available for HOCL
was to place order with A5 for procuring cumene. Hence I
repeat that I cannot attach any sort of illegality in the
decision dated 17.03.2003 which I have referred earlier.
58. The comparative statement for import of cumene with
respect to the three offers also find place in pages 85 and
86 of D7 file. This statement definitely would show the offer
by A5 was on a higher rate but they were definite about the
CRL.R.P.NO.1212 OF 2016 33 CNR : KLHC010256732016
2026:KER:80195
date of delivery as compared to the indefinite dates
supplied by M/s. Hareshkumar & co and Intertrade Exim
59. In this context what has to be verified is was there any
actual loss resulted to HOCL by purchase of cumene at the
above rate from A5. Supposing heavy loss was resulted to
HOCL and huge profit was obtained by A5 from this
purchase the prosecution could have argued that there was
some sort of illegal agreement amongst A1 to A7 for
procuring profit to A5 to A7. Here I may refer to the
statements of CW6. He is the Manager (Finance), HOCL.
He stated that Import shall be made on the basis of realistic
consumption levels and the available stocks. The letters by
A1 to CMD, CW5 to A1 and the decisions would show that
realistic consumption level was noticed by all and
available stock also was taken into consideration and
when a compulsory situation arose that import alone was
the only source of obtaining cumene it was decided to
brought cumene by import. CW6 also referred about the
meeting of the tender committee dated 27.12.2002 deciding
to postpone the change of catalyst and the decision to float
enquiries for import of cumene as to reach by 10th April
2003. In his further statement he would say with reference
to the daily production for the period from January 2003
CRL.R.P.NO.1212 OF 2016 34 CNR : KLHC010256732016
2026:KER:80195
to March 2003 the imported cumene was utilized for the
production of phenol and acetone, that the cost of
production of phenol and acetone using the imported
cumene was Rs.2365.5 lakhs and the total realisation of the
sale value of this phenol and acetone was Rs.2610.05 lakhs
resulting in a profit of Rs.245 lakhs for the company. If this
is the version of CW6, the charge that in view of the
purchase of cumene from A5, HOCL has sustained a loss of
crores of rupees cannot be accepted. Thus, from the version
of CW6 there is a prima facie evidence available in this
case to show that due to the action of A1 to A4 much loss
was not at all resulted to HOCL. If loss was not resulted to
HOCL, it is not possible to draw a conclusion that there
was any sort of illegal agreement between A1 to A7 to
result any profit to A5 to A7 and loss to HOCL. If so, the
plea of conspiracy levelled against the accused has to be
stated as without any proper grounds.
60. One allegation against A1 to A4 is that the contract was
given to A5 to A7 without observing the guidelines given in
Purchase Manual. It is contended that as per the guidelines
in the Purchase Manual which is document No. 33, the
concurrence of the Board was required. It is true a perusal
of document No. 33 would show that previously the
CRL.R.P.NO.1212 OF 2016 35 CNR : KLHC010256732016
2026:KER:80195
committee for import has to function under the control of
Director (Marketing). However, that position was changed
and as per order No. 3/2000 which is document No. 34, the
Board was reconstituted consisting of Factory Manager,
Production Manager, Head of Materials and Head of Unit
Finance which will work under the chairmanship of
General Manager. The General Manager, no doubt was A1
and production manager was CW5. The Factory Manager
was A2, the Head of material was A3 and Head of unit
finance was A4. In the decision dated 17.03.2003, which I
have already referred, except the Production Manager all
the other persons have subscribed signature. Even though
the name of Production Manager is written therein, the
signature of CW5 does not find a place therein. However,
since the committee has worked under the chairmanship of
Chairman and A1 is a signatory to this meeting, it cannot
be contended that the decision in this meeting was not a
collective discussion. In any view of the matter, in the light
of document No.34 which I have referred, there is no
necessity to obtain the sanction of the Board of HOCL for
import of cumene which is a subject matter in this case.
Thus, this allegation raised against A1 to A4 therefore has
no legs to stand.
CRL.R.P.NO.1212 OF 2016 36 CNR : KLHC010256732016
2026:KER:80195
61. It is contended that there was inducement by A5 to A7
on A1 to A4 with respect to obtaining of order for import.
In this context I may refer to page 43 of document indexed
as D14 file. This is the commercial invoice given by
M/s.Kolmar Petrochemicals dated 21.02.2003 with respect
to 2200MT of cumene which is shipped in the vessel by
name STOLT WINLAND. On receipt of the same the
purchase order dated 18.02.2003 was given to Kolmar
Petrochemicals by HOCL. This purchase order forms page
94 of D7 file. This will show that the contract by HOCL was
directly with Kolmar Petrochemicals only and A5 was only
an agent in between them.
62. Document No.15 is the agency agreement pursuant to
which M/s. Kolmar Petrochemicals has appointed A5 as its
agent. There is a specific clause in Document No. 15 that
agent shall not without the written consent of Kolmar
Petrochemicals offer for sale products in India for a third
party and the agent was to provide information on
companies in India as customers of Kolmar
Petrochemicals. This agency agreement along with the
invoice and the purchase order would show that what A5
was doing was only offering service to M/s. Kolmar
Petrochemicals with respect to the customer, namely
CRL.R.P.NO.1212 OF 2016 37 CNR : KLHC010256732016
2026:KER:80195
HOCL, what A5 was quoting was only the price of Kolmar
Petrochemicals and not any independent price of them.
Hence it is not at all possible to tell that A5 to A7 had in any
way acted in a manner to induce A1 to A4 to import
products for the higher price in order to obtain undue
advantage for them and to cause loss to HOCL.
63. There is a definite evidence to show the price of cumene
was not at all constant or consistent rather the same was
varying frequently. As already stated, in the opening part
of this order, HOCL was relying on ICIS-LOR report with
respect to the price of cumene. Document indexed as D19
file shows the ICIS-LOR report regarding the price of
cumene at USD during various periods. Page 25 of this file
is the summary of the price. This will show that from
24.01.2003 to 21.02.2003 the price of cumene was 578.71
USD, the price before that was 529.11 USD and the price
thereafter upto 21.03.2003 was 688.94 MT and from
28.03.2003 the price was 716.50 USD. From this it is
evident that as on the date of import of cumene as per the
purchase order the price was 688.94 USD. From this also it
is not possible to conclude that the purchase of cumene or
the import of cumene as per the purchase order to M/s.
Kolmar Petrochemicals was at an exorbitant price as
CRL.R.P.NO.1212 OF 2016 38 CNR : KLHC010256732016
2026:KER:80195
wanted to be canvassed by the prosecution. From this also
what could be gathered is that there is no resulting of any
loss to HOCL by the act of A1 to A4 was wanted to be
highlighted. At best it could have been stated that had there
been a purchase of cumene somewhere during January or
in the early weeks of February, price would have been lass
and more profit could have been earned by the company.
As already stated, the necessity for import arose only after
escalation of price of cumene and by the time actual import
took place there was further escalation of price. The
escalation of price was beyond the control of A1 to A4 and
therefore they cannot be faulted for parting with more
money of HOCL for the imported articles. Moreover, in the
FIR which is produced as document No. 38, there is an
averment that customs did not accept the invoice value of
A6 stating that the same was under invoiced and therefore
HOCL had to pay customs duly at the rate of USD 688 per
MT for the consignments. This averment is an indication to
show that the price at USD 688 per MT was the real price
at the time of delivery of the cumene at the New Mangalore
Port.
64. I may also add something about the sanction. The
CMD is the sanctioning authority. It was he who directed
CRL.R.P.NO.1212 OF 2016 39 CNR : KLHC010256732016
2026:KER:80195
the deferring of the change of catalyst to the month of April
2003. He was properly informed by A1 about all the acts
done for procuring cumene at the appropriate time. He
also had verified all the records in this case and about the
necessity arose for the Importing of cumene. He also had
noticed the versions of CW6 that no loss was actually
resulted to the HOCL. Still I fail to understand as to how he
happened to give sanction for prosecuting A1 to A4 for the
offences under the Prevention of Corruption Act.
65. In view of the above discussion, I have to say that what
the prosecution could bring out from the records available
in this case is only a suspicion against A1 to A4 that there
was conspiracy by them with A5 to A7 and by their acts
there was resulting of loss to HOCL. No grave suspicion
about any conspiracy or about any criminal misconduct
could be brought in by the prosecution. No grave suspicion
about the indulging of any sort of inducement by A5 to A7
on A1 to A4 or any act of deception committed by any of the
accused could be brought out.”
CRL.R.P.NO.1212 OF 2016 40 CNR : KLHC010256732016
2026:KER:80195
7. While challenging the order impugned, the learned
Special Public Prosecutor for the CBI has placed hearing note and
the same would show the status of respondent Nos.1 to 7 as under:
Accused
A-1 J. Gopal General Manager; Head of
Purchase Committee; alleged final
approval; ignored catalyst warnings;
part of postfacto committee process.
(final approving authority)
A-2 S.M. George Chief Manager (Finance);
finance/Purchase Committee member;
alleged participation in procurement
and approval.
A-3 Saju M. Joseph Chief Manager (E/M)/Head of
Materials; key tender
communications; allegedly approached
A-5 but not L-2; issued LOI;
signed/processed purchase.
A-4 D. Rejith Manager (Materials); assisted A-3;
signed Purchase Order with A-3.
A-5 Meteor Pvt. Ltd. Indian agent of Kolmar;
bidder/supplier -side entity; protested
L1; revised price upward; made US$688
spot offer.
A-6 Tara John Managing Director of A-5; private
accused represented/participated in A-
5’s acts.
A-7 P.M. John Chairman of A-5; private accused
represented/participated in A-5’s acts.
CRL.R.P.NO.1212 OF 2016 41 CNR : KLHC010256732016
2026:KER:80195
8. The chronology of events is stated as under:
Chronology — Relevant dates
Date Event / prosecution significance
15.12.2002–Jan. 2003 Kochi Refineries shutdown period. Final
report says this was the ideal period to
replace the deteriorated SPA catalyst.
20.12.2002 DGM (Production) makes written request to
replace SPA catalyst. Replacement is not
carried out.
31.01.2003 Tender enquiry for 4000 MT cumene sent to
13 parties.
06.02.2003 L-1 Inter Trade: US$594.50 CIF Kochi; L-
2 Haresh Kumar: US$675 CIF Kochi; A5/L-3
quotes US$663 CIF New Mangalore / US$690
CIF Kochi for first lot.
06–07.02.2003 A-5 protests L-1 and thereafter raises first-lot
price to US$676.50.
12.02.2003 L-1 backs out for non-availability of vessel.
13.02.2003 CW5 M.A. Pillai again warns that catalyst
condition is worst and production has fallen
to about 120–130 MT/day.
15.02.2003 A-5 says it cannot match L-1 due to steep price
increase and offers spot parcel at
US$688/MT from Stolt Vinland.
17.02.2003 A-3 issues Letter of Intent accepting the
higher-priced spot purchase.
18.02.2003 A-3/A-4 sign Purchase Order No. MAT
02/659A-10171 at US$688/MT.
24.01.2003–21.02.2003 ICIS-LOR price of US$578.71/MT as constant
during this period.
17.03.2003 Purchase Committee meeting records reasons
for US$688 purchase; catalyst replacement
also agreed. Prosecution case: this is after the
purchase commitment.
CRL.R.P.NO.1212 OF 2016 42 CNR : KLHC010256732016
2026:KER:80195
9. According to the learned Special Public Prosecutor for the
CBI, in the instant case, prima facie, the offences are made out, and he
has pointed out the following reasons as to why the order is found to be
unsustainable:
Why the impugned discharge order is perverse and
unsustainable
1) Wrong legal test applied by the trial court. Under Sections
239–240 Cr.P.C., discharge is permissible only when the charge
is groundless. The Court may sift the material, but cannot
decide credibility, choose the defence version, or ask whether
conviction is certain. Grave suspicion is sufficient.
2) The impugned order conducts a mini-trial. It rejects CW-
5’s version by assessing his conduct and credibility. It accepts
explanations concerning spot sale, high-seas sale, commercial
practice, price fluctuation and agency. These are matters for
evidence and cross-examination.
3)
The order does not deal with the strongest price/cargo
material in the final report. The charge-sheet states that Stolt
Vinland was already carrying cumene sold at much lower
rates; it specifically alleges that the 2200 MT sold to HOCL at
US$688 came from a lot sold by Kolmar to Schenectady
Herdilla at about US$571/MT. This is not merely an abstract
market-index comparison.
4)
The false representation is specific. A-5 stated on
CRL.R.P.NO.1212 OF 2016 43 CNR : KLHC010256732016
2026:KER:80195
15.02.2003 that prices of benzene/propylene had steeply
increased and offered US$688. The prosecution relies on
contemporaneous ICIS-LOR material to say cumene remained
at US$578.71 from 24.01.2003 to 21.02.2003. The truth of the
representation cannot be finally decided at discharge.
5) The timing itself requires trial. Letter of Intent is dated
17.02.2003. Purchase Order is dated 18.02.2003. Detailed
Purchase Committee meeting/reasons was much thereafter on
17.03.2003. The prosecution sttes that the order was placed
without prior Purchase Committee proceedings, without CW5
(M.A. Pillai), and without the required Board reporting. A post-
facto explanation cannot be accepted as conclusive at
discharge.
6) L-2 was not out of the field. The final report alleges that A-
3 approached only A5/L-3 to match L-1 and did not give the
same opportunity to Haresh Kumar & Co./L-2. Whether this
was bona fide procurement or deliberate exclusion is a trial
issue.
7)
Overall profit does not erase the alleged offence. Profit on
phenol/acetone is not the same question as whether an
unnecessary import was engineered or a pecuniary advantage
was obtained by abuse of official position. Under old Section
13(1)(d), obtaining pecuniary advantage for another by abusing
official position is itself material.
8) Conspiracy must be viewed cumulatively. The court
cannot separately explain away each circumstance and then
say there is no direct proof of agreement. Conspiracy is
ordinarily inferred from coordinated acts and surrounding
circumstances.
CRL.R.P.NO.1212 OF 2016 44 CNR : KLHC010256732016
2026:KER:80195
9)
Non-prosecution of another person is not exoneration of
the accused before court. If evidence later implicates another
person, Section 319 Cr.P.C. supplies the remedy. The omission
cannot convert otherwise incriminating material against the
existing accused into a groundless charge.
10) A-1, A-2 and A-4 had filed no discharge applications. Their
counsel adopted the arguments of others. Yet they were
discharged without an accused-specific analysis and without the
prosecution having notice of a separate discharge case on their
individual roles.
10. In addition to that, the learned Special Public Prosecutor for
the CBI submitted that in this case, letter of intent was issued only on
17.02.2003 and purchase was made on 18.02.2003 even though the
decision to make the purchase was taken only on 17.03.2003. This fact
itself would show the prosecution allegation which resulted in a total
loss of Rs.10.15 Crores to HOCL. It is pointed out that the learned
Special Judge, instead of assessing the materials to find whether prima
facie the offences are committed or whether a strong suspicion is made
out from the materials, stepped into the stage of trial by evaluating the
materials in excess of the power within the ambit of Section 239 of the
Code of Criminal Procedure (for short, ‘the Cr.P.C.’ hereinafter) and
CRL.R.P.NO.1212 OF 2016 45 CNR : KLHC010256732016
2026:KER:80195
recording the evidence. It is also submitted that accused Nos.1, 2 and 4
were discharged without giving the prosecution an opportunity to
submit on their involvement, since they did not file any discharge
petition. Therefore, the impugned order will not sustain in the eye of
law and is liable to be set aside.
11. The learned counsel appearing for respondent Nos.5 to 7
submitted that, as far as respondent Nos.5 to 7 are concerned, they are
absolutely innocent of the allegations. According to him, when the
tender was called for, L1, L2 and L3 submitted their tenders, and L1’s
proposal was initially accepted, being the lowest. However, the supply
as offered by L1 did not materialise. It was thereafter accused Nos.1 to
4 attempted to proceed with the next lot of the proposal offered by L2,
but the same also failed to be implemented. Accordingly, as requested
by the officials of the HOCL, respondent No.5 quoted the rate for
supply of Cumene at 688 US Dollars per metric tonne, even though
they had earlier agreed to supply Cumene at the rate of 663 US Dollars
CRL.R.P.NO.1212 OF 2016 46 CNR : KLHC010256732016
2026:KER:80195
per metric tonne, since, by the time the rate was quoted, it was an
export product coming from the USA. Thus, criminal culpability of the
accused could not be found as such.
12. In reply to this argument, it is submitted by the learned
Special Public Prosecutor for the CBI that, in fact, Cumene is the
product manufactured by HOCL and that the prosecution has made a
specific allegation that the manufacture of Cumene was delayed by the
officials with a view to have the same imported from the USA and
thereby grabbing money.
13. The learned Senior Counsel appearing for respondent Nos.1
to 4 also supported the findings of the learned Special Judge.
According to him, only three quotations were received when quotations
were invited for the urgent requirement of the company. Out of the
three quotations, L1 and L3 had quoted lesser amounts than L2. L1 and
L2 attempted to get their quotations accepted, but the same failed, as
they could not fulfill the requirement of supplying the same. It is at this
CRL.R.P.NO.1212 OF 2016 47 CNR : KLHC010256732016
2026:KER:80195
juncture that, in order to ensure the supply of Cumene for the smooth
functioning of HOCL, Cumene was purchased by accused Nos.1 to 4 at
the rate of 688 US Dollars per metric tonne, even though the initial
quotation for the same was 663 US Dollars. Therefore, the offences
alleged to have been committed by them could not be found prima
facie and, thus, the learned Special Judge rightly discharged them, and
the said order of discharge does not require any interference.
14. In the instant case, the prosecution case is that, even though
L1 had written a letter stating that L1 could not supply Cumene at the
quoted rate of 594.50, instead of attempting to finalise the quotation of
L2 at the rate of 675, accused Nos.1 to 4 placed an order with L3 for the
supply of Cumene at the rate of 688 US Dollars per metric tonne, even
though L3 had initially quoted to supply the same at the rate of 663 and
subsequently enhanced the same to 688. Accordingly, on the purchase
from L3 at the behest of accused Nos. 5 to 7, a total loss of ₹10.15 crores
was sustained by the company.
CRL.R.P.NO.1212 OF 2016 48 CNR : KLHC010256732016
2026:KER:80195
15. It is relevant to note that the learned Special Judge found
that no loss was caused, since accused Nos.1 to 4 accepted the offer of
L3 in the given circumstances to ensure the availability of Cumene for
running the company.
16. In this connection, it is relevant to note that when public
limited undertakings want to purchase materials of any nature, the
usual procedure is to invite competitive tenders and award the contract
to the person who quotes the lowest rate. When nobody who put up
quotation was ready to provide the product for the rate quoted, the
procedure to be adopted is to call for fresh quotations and not to fix a
higher rate for one who put up a quotation and was not ready to supply
the product for the rate quoted. Thus, the course of action when
nobody who were not ready to supply the goods, is to go for fresh
quotations in the form of competitive tenders to get the lowest rate.
17. Here, as per the prosecution records, L3 initially quoted 663
US Dollars per metric tonne and, subsequently, increased the rate to
CRL.R.P.NO.1212 OF 2016 49 CNR : KLHC010256732016
2026:KER:80195
688 US Dollars per metric tonne. Therefore, at least, the contract with
L3 ought to have resulted in the purchase of Cumene at the rate of 663
US Dollars per metric tonne and not beyond that. However, the
prosecution records would reveal that, instead of purchasing Cumene
at the quoted rate of 663 US Dollars per metric tonne from L3, accused
Nos.1 to 4 purchased the same at 688 US Dollars per metric tonne. The
price difference, which would come to Rs.10,15,48,765/-, (Rupees Ten
Crore Fifteen Lakh Forty-Eight Thousand Seven Hundred and Sixty-
Five only) is alleged to be the loss caused to the undertaking and the
th
corresponding pecuniary gain obtained by the 5 respondent by the
acts of respondent Nos.1 to 4. It is on this premise, the prosecution
alleges commission of offences punishable under Sections 120B and
420 of the IPC as well as under Sections 13(1)(d) r/w 13(2) of the PC
Act, by the accused persons.
18. It is true that the learned Special Judge found that the
crucial witness, CW5, also ought to have been arrayed as an accused, in
CRL.R.P.NO.1212 OF 2016 50 CNR : KLHC010256732016
2026:KER:80195
the facts of the case. Accordingly, the learned Special Judge found fault
with the prosecution and considered the same also as a reason to
discharge the accused persons, even though the records would show
that the crucial witness, CW5, whose name was shown in the minutes,
had not signed the same.
19. In this connection, on perusal of the prosecution records,
this Court is of the view that one or more persons, who have not been
arrayed as accused, are also involved in the commission of the offence,
the same is not a reason to discharge the other accused persons whose
role could be found from the prosecution records. In fact, the mere fact
that such persons have not been arrayed as accused cannot, by itself, be
a reason to discharge the accused, who have already been arrayed, once
offences alleged against them to be seen from the prosecution records,
prima facie . In such circumstances, the Court has the power to
implead such persons as accused by exercising the power under Section
CRL.R.P.NO.1212 OF 2016 51 CNR : KLHC010256732016
2026:KER:80195
319 of the Cr.P.C., as rightly pointed out by the learned Special Public
Prosecutor for the CBI.
20. Similarly, it is well-settled law that, while considering a plea
of discharge, the Court is expected to scrutinize the materials on record
only to ascertain in as much as the alleged offence/s is/are made out
prima facie or at least, whether there is a strong suspicion regarding
the involvement of the accused to be discernible from the prosecution
records. However, the said power is not wide enough to go for a
meticulous evaluation or appreciation of the statements and other
materials on record. Thus, a Court while considering discharge need
not do the evaluation of evidence in minute niceties as permissible
after trial. Such an exercise is not permissible at the stage of
considering an application for discharge under Section 239 of the
Cr.P.C.
21. Here, the observations of the learned Special Judge,
extracted hereinabove, would show that the learned Special Judge had
CRL.R.P.NO.1212 OF 2016 52 CNR : KLHC010256732016
2026:KER:80195
proceeded to evaluate the materials and statements in considerable
detail and had entered into the merits of the prosecution case, rather
than confining the consideration to the limited question as to whether
the materials on record disclose a prima facie case or raise a strong
suspicion against the accused persons.
22. Here, on perusal of the records, as already discussed, prima
facie , the allegations against the accused persons to be found,
otherwise, a very strong suspicion regarding involvement of the
respondents herein/the accused persons in the commission of offences
alleged against them could be found, warranting trial. In such a case,
discharge of the respondents herein/the accused persons by the
learned Special Judge by exceeding its jurisdiction beyond the scope of
Section 239 of the Cr.P.C. is liable to fail.
23. In the result, this Crl.R.P. is allowed. The order impugned is
set aside with direction to the respondents herein/the accused persons
CRL.R.P.NO.1212 OF 2016 53 CNR : KLHC010256732016
2026:KER:80195
to appear before the Special Court (CBI)-II, Ernakulam, at 11.00 a.m.
on 24.10.2026 to proceed with the trial after framing charge.
Registry is directed to forward a copy of this order to the Special
Court (CBI)-II, Ernakulam, for information and compliance.
Sd/-
A. BADHARUDEEN
JUDGE
Bb
CRL.R.P.NO.1212 OF 2016 54 CNR : KLHC010256732016
2026:KER:80195
APPENDIX OF CRL.R.P.NO.1212 OF 2016
PETITIONER’S ANNEXURES
ANNEXURE A1 CERTIFIED COPY OF COMMON ORDER PASSED IN
CRL.M.P.NO.1338/2009, CRL.M.P.NO.352/2011 AND
CRL.MP.NO.499/2014 IN CC NO.10/2006 OF THE
SPECIAL JUDGE FOR CBI CASES, COURT-II,
ERNAKULAM.
RESPONDENTS’ ANNEXURES : NIL