CBI case over alleged ₹10.15-crore loss in HOCL purchase revived; Kerala High Court orders trial of seven accused

The CBI alleged that HOCL officials (A-1 to A-4) conspired with Meteor Pvt. Ltd. and its officers (A-5 to A-7) to procure cumene at an inflated price, causing a loss to HOCL and obtaining pecuniary advantage, through acts including non-replacement of a deteriorated catalyst, exclusion of a lower-ranked bidder, and acceptance of a higher-priced spot offer

The Special Court discharged all accused after detailed consideration of witness statements and documentary material, finding no sufficient basis for the allegations.

The CBI challenged that common discharge order in revision.

1. Whether the Special Court applied the proper standard under Section 239 Cr.P.C. when considering discharge, or impermissibly conducted a detailed evaluation of the prosecution evidence.

2. Whether the prosecution material disclosed a prima facie case or raised strong suspicion against the accused sufficient to require trial.

3. Whether the discharge of A-1, A-2 and A-4, who had not filed discharge petitions, could stand.

Under Section 239 Cr.P.C., the court may discharge an accused where the charge is groundless, but at that stage it must determine whether the prosecution material discloses a prima facie case or raises strong suspicion; it must not conduct a meticulous evaluation of evidence or resolve disputed matters as at trial.

The prosecution alleged offences under Sections 120B and 420 IPC and Sections 13(1)(d) read with 13(2) of the Prevention of Corruption Act, 1988.

The Court also observed that the omission to array another potentially involved person as an accused does not, by itself, justify discharging the accused already before the court; Section 319 Cr.P.C. may be used to proceed against additional persons if warranted by evidence.

The High Court found that the Special Judge had assessed the credibility of CW5, weighed explanations concerning the procurement and pricing, and evaluated the alleged loss in detail—matters that exceeded the limited inquiry permissible at discharge.

The allegations concerning the price increase, the treatment of the bidders, the timing of the purchase order and subsequent committee decision, and the alleged pecuniary advantage, considered with the prosecution records, were sufficient at this stage to disclose a prima facie case or raise strong suspicion requiring trial.

The Court therefore held that the discharge order could not stand; the potential involvement of an uncharged person did not negate the case against the respondents.

It directed all respondents/accused to appear before the Special Court (CBI)-II, Ernakulam, at 11:00 a.m. on 24 October 2026, for the trial to proceed after framing of charge.