IN THE HIGH COURT OF GUJARAT AT AHMEDABAD (1) CRIMINAL MISC.APPLICATION No 1038 of 2001 (2) CRIMINAL MISC.APPLICATION No 1278 of 2001 (3) CRIMINAL MISC.APPLICATION No 3760 of 2001 (4) CRIMINAL MISC.APPLICATION No 4865 of 2001 and (5) CRIMINAL MISC.APPLICATION No 5285 of 2001 For Approval and Signature: Hon'ble MR.JUSTICE M.H.KADRI ============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements? 2. To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the Civil Judge? : NO -------------------------------------------------------------- JASABHAI BARAD Versus STATE OF GUJARAT -------------------------------------------------------------- Appearance: 1. Criminal Misc.Application No. 1038 of 2001 MR AD SHAH for Petitioners 2. Criminal Misc. Application No.1278 of 2001 Mr. P.M. Thakker, Senior Advocate, with Mr. N.M. Amin for the petitioner. 3. Criminal Misc. Application No.3760 of 2001 Mr. Yatin N. Oza, Senior Advocate, with Mr. R.s. Sanjanwala, for the petitioner 4. Criminal Misc. Application No.4865 of2001 Mr. K.S. Nanavati, Senior Advocate, with Mr. Nandish Chudgar, for M/s. Nanavati Associates, for the petitioner 5. Criminal Misc. Application No.5285 of 2001 Mr. N.D. Nanavati, Senior Advocate for M/s. Nanavati Advocates for the petitioners In all the matters: Advocate General, Mr. S.N. Shelat, with Additional Public Prosecutor, Mr. Samir Dave for the respondent No.1-State Government Mr. M.R.Shah, Additional Standing Counsel, for the respondent No.2-Central Bureau of Investigation -------------------------------------------------------------- CORAM : MR.JUSTICE M.H.KADRI Date of decision: 11/12/2001 COMMON C.A.V. JUDGMENT 1. The abovenumbered Criminal Misc. Applications are filed under the provision of Section 482 of the Code of Criminal Procedure, 1973 ('Code' for short) by the petitioners, who are public servants and private transport contractors, to quash the complaint being Regular Case No.31()/2000-GNR registered at the Central Bureau of Investigation, Gandhinagar Branch, on November 15, 2000, against the petitioners public servants and transport contractors for commission of offences punishable under Sections 120B, 420 of the Indian Penal Code and Sections 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988 ('Act' for short). 2. The background of the case is as under: The Government of Gujarat had carried out an internal enquiry into the allegations that during the year 1997-98 huge monetary loss was caused to the Government of Gujarat and Gujarat State Civil Supplies Corporation (GSCSC) by the accused public servants by awarding a disproportionate hike in the contractual rates of transportation of levy sugar and food grains to support the Public Distribution System (PDS) causing corresponding ineligible gains to transporters. Shri Arvind Agarwal, IAS, Director ( Civil Supplies ) & Jt. Secretary to the government conducted the fact finding enquiry and submitted his report on 12-5-1998 to the Government of Gujarat confirming the above allegation. He further concluded that the extension of the period of contract was granted permitting the transporters to continue transportation at the increased rates for another year was unjustifiable and unwarranted and was also not in the public interest. The enquiry report brought out a prima facie case of criminal misconduct on the part of public servants and hence the government decided to carry out a criminal investigation into the matter. Apparently, for seeking a fare and impartial investigation, the Government of Gujarat vide letter No.LRV-1198-OD-33-H, dated December 2, 1998, requested the Government of India to order an investigation by the Central Bureau of Investigation (CBI). The Government of India, Department of Personnel & Training vide ID NMo.228/24/00-ADV.II dated April 16, 1999 requested the CBI to carry out an investigation into the allegations. Looking to various issues like the possible political overtones, identity of the public servants involved, CBI as a matter of abundant precaution decided to look into the matter afresh before taking cognizance of the complaint. Accordingly, PE No.10(A)/99/GNR was registered in CBI, Gandhinagar Branch, on May 31, 1999 and the allegations were enquired into. The preliminary enquiry, prima facie, revealed the commission of offences of criminal conspiracy, cheating and criminal misconduct and hence Regular Case No.31(A)/2000-GNR was registered on November 15, 2000 against the accused public servants and transport contractors for commission of offences punishable under Sections 120B, 420 Indian Penal Code and Sections 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988. 3. The Government of Gujarat and the Gujarat State Civil Supplies Corporation after following the prescribed procedure awarded transport contracts to the private transport contractors in 1997-98 for transportation of levy sugar and food grains to support the public distribution system. It is alleged in the First Information Report that during the year 1997-98, subsequent to the award of contract, the petitioners Ministers and other public servants, while working in respective capacities, entered into criminal conspiracy with the private transport contractors and in furtherance thereof abusing their official position allowed unjustifiable and arbitrary increase in the existing contractual rates of transportation in violation of the terms and conditions of the agreement and also unjustifiably and arbitrarily extended the period of contract by one year upto March 31, 1999 and thereby caused wrongful pecuniary loss to the Government and corresponding wrongful gain to private transport contractors to the tune of Rs.6.40 crores. 4. While the investigation was in progress, Shri Jasabhai Barad, the then Minister, Food, Civil Supplies & Consumer Affairs, and Shri Vithalbhai Shah, the then Minister of State, Food, Civil Supplies & Consumer Affairs, have filed Criminal Misc. Application No.1038 of 2001 in this High Court to quash the First Information Report being Crime No. RC 31(A)2000-GNR registered on November 15, 2000, and to restrain the Central Bureau of Investigation ('CBI' for short) from conducting further investigation. Subsequently, Shri A.M. Bhardwaj, IAS, the then Additional Chief secretary, Food, Civil Supplies & Consumer Affairs Department, has filed Criminal Misc. Application No.1278 of 2001 praying for the similar reliefs. In both the above Criminal Misc. Applications, the Court had granted ad-interim relief in favour of the petitioners restraining the CBI from proceeding further with the investigation of the case. Thereafter, Shri D. Kishore Rao, IAS, the then Director (Food), and Shri Vijaysinh Parmar, IAS (Retd.), the then Managing Director, Gujarat State Civil Supplies Corporation ('GSCSC' for short), have filed Criminal Misc. Application No.3760 of 2001 and Criminal Misc. Application No.4865 of 2001 respectively praying for the similar reliefs. Similarly, the private transport contractors have filed Criminal Misc. Application No.5285 of 2001 in this Court for quashing the First Information Report and restraining the CBI from carrying out further investigation. All the abovenumbered Criminal Misc. Applications came to be consolidated and were heard together at length on June 19, 2001 by the Court (Coram: B.J. Shethna, J.). During the hearing, the learned Additional Standing Counsel, Mr. M.R. Shah, representing the CBI, submitted that, before registration of the First Information Report, the CBI had taken necessary precaution looking to the possible political overtones, etc by carrying out a preliminary enquiry into the allegations and in that process had examined relevant witnesses and collected the material documents. On the basis of the preliminary enquiry conducted by the CBI, the Court, by its order dated June 19, 2001, directed the CBI to produce the records of the preliminary enquiry and to file an affidavit by June 28, 2001 highlighting the role played by each of the petitioners in the commission of the alleged offences. Accordingly, on June 27, 2001, a detailed affidavit in reply was filed by Mr. Jagroop Meena, Deputy Superintendent of Police, CBI. The preliminary enquiry prima facie disclosed that the acts and omissions on the part of the suspect public servants (including the Ministers) and the private transport contractors constitute criminal offence warranting an open investigation and registration of the case and its investigation was a logical and legal follow up. The record of the present case further indicates that all the Criminal Misc. Applications were heard at length on different dates and, after the hearing and perusal of the documents and the statements recorded during the Preliminary Enquiry, the Court (Coram: B.J. Shethna, J.) in its order dated July 10, 2001, in paragraphs 11 and 12, has observed as under: "11. Before proceeding further with the hearing of the matter consensus was arrived at between learned counsel for the parties that the investigation which has been stayed earlier by this court in some of the matters be permitted to be carried out so as to be over latest by 8.8.2001 and before submitting the report to the higher authority the relevant material be placed before this court and only after obtaining the permission from this court they may proceed further in the case otherwise not with the condition that all the present petitioners-accused shall fully cooperate during the investigation. 12. Accordingly, interim relief granted in some of the petitions restraining respondent CBI from carrying out the investigation in pursuance of the impugned FIR is modified to the extent that the CBI is permitted to proceed with the investigation and conclude it latest by 8.8.2001 and place the entire material with relevant papers before this Court on 9.8.2001 before submitting the same to the higher authority for obtaining sanction to prosecute the present petitioners. All the petitioners accused are accordingly directed to fully cooperate with the investigation and they shall not be arrested without the prior permission of the court." 5. Accordingly, after the ad-interim relief was modified by the Court, the investigation had resumed. As the time granted by the Court to conclude the investigation was inadequate, the Investigating Officer had moved the High Court to seek extension of time while submitting the status report of the case on August 9, 2001. The Court, vide its order dated August 9, 2001, had expressed its satisfaction with the progress of the investigation and had granted extension of time for two months to complete the investigation. Accordingly, the CBI has completed the investigation and has submitted a detailed investigation report along with the statements and the evidence collected during the investigation, to this Court on October 12, 2001. 6. Criminal Misc. Application No.8380 of 2001 was filed in Criminal Misc. Application No.3760 of 2001 by the applicant, D. Kishore Rao, inter alia, praying that the investigation report and the material supplied by the CBI to this Court be supplied to the applicant and other petitioners so that they can represent their case for quashing the First Information Report and the investigation properly. This Court, by its order dated October 23, 2001, rejected the Criminal Misc. Application No.8380 of 2001 to supply copies of the investigation report and other materials collected by the CBI during the investigation and it was ordered that all the abovenumbered Criminal Misc. Applications be heard together on November 2, 2001. Accordingly, all the abovenumbered Criminal Misc. Applications were heard thereafter and the hearing was concluded on November 9, 2001. As the Court was to close for Diwali vacation from November 10, 2001, the Court reserved the order for pronouncement. 7. Learned counsel, Mr A.D. Shah, representing petitioners, Shri Jasabhai Barad and Shri Vithalbhai Shah (Ex-Ministers), in Criminal Misc. Application No.1038 of 2001, has submitted that in the First Information report, except the averments of conspiracy, cheating and abuse of official position, there are no factual data disclosed for commission of the offences. It is submitted by the learned counsel Mr. A.D. Shah that the First Information Report does not disclose the ingredients of the offence under Section 420 of the Indian Penal Code. It is submitted by the learned counsel Mr. A.D. Shah that no allegations of misrepresentation, inducement or dishonest intention have been made in the First Information Report and, therefore, the First Information Report registered with the CBI deserves to be quashed. The learned counsel Mr. A.D. Shah in support of his submission has placed reliance on the decision of the Supreme Court in the case of (i) Alpic Finance Limited vs. P. Sadasivan and another, reported in JT 2001 (2) SC 588, wherein the Apex Court has ruled that, "to bring home the offence of cheating it must be shown that there existed a fraudulent and dishonest intention at the time of commission of the offence. There being no allegation of any wilful misrepresentation or fraudulent inducement nor any element of deception in the whole transaction, the High Court was justified in quashing the criminal proceedings." The learned counsel Mr. A.D. Shah has placed reliance on the decision of the Supreme Court in the case of (ii) State of West Bengal and others vs. Swapan Kumar Guha and others, reported in AIR 1982 Supreme court 949, in support of the submission that, if the First Information Report does not disclose commission of cognizable offence, the High Court was justified in quashing the investigation. It is further ruled that whether an offence has been disclosed or not must necessarily depend on the facts and circumstances of each particular case. That, if on a consideration of relevant materials the Court is satisfied that no offence is disclosed, it will be the duty of the Court to interfere with any investigation and to stop the same to prevent any kind of uncalled for and unnecessary harassment to an individual. Learned counsel Mr. A.D. Shah has also placed reliance on the decision of the Supreme Court in the case of (iii) State of U.P. vs. R.K. Srivastava and others, reported in AIR 1989 Supreme Court 2222, in support of the submission that if no allegations are made in the First Information Report, disclosing that the accused bank employees had no intention whatsoever to make any wrongful gain or to make any wrongful loss to the Bank in accepting certain cheques and that neither the First Information Report nor the chargesheet showed that the bank employees or the client had acted dishonestly, that is to say, acted with a deliberate intention to cause wrongful gain or wrongful loss, nor did the allegations constitute any offence of cheating or forgery, it amounted to an abuse of the process of the Court and the criminal proceedings were therefore liable to be quashed in exercise of powers under Section 482 of the Code of Criminal Procedure. The learned counsel, Mr. A.D. Shah, has also placed reliance on the decision of the Supreme Court in the case of (iv) Hridaya Ranjan Pd. Verma and others vs. State of Bihar and another, reported in 2000 Criminal Law Journal 2983, in support of the submission that, to hold a person guilty of cheating it is necessary to show that he had fraudulent or dishonest intention at the time of making the promise. From his mere failure to keep up promise subsequently such a culpable intention right at the beginning that is when he made the promise cannot be presumed. The reliance is also placed on the decision of the Supreme Court in the case of (v) State of Karnataka vs. Arunkumar Agarwal and others, reported in AIR 2000 Supreme Court 411, in support of the submission that the acts of the person will not be subject of criminal investigation unless a crime is reported to have been committed or reasonable suspicion thereto arise. On a mere conjecture or surmise as a flight of fancy that some crime might have been committed, somewhere, by somebody but the crime is not known, the persons involved in it or the place of crime unknown, cannot be termed to be reasonable basis at all for starting a criminal investigation. In the above case, the Supreme Court had quashed order passed by High Court which ordered C.B.I. probe into alleged kickbacks paid for alleged favours shown to M/s. Cognetrix Inc. established in U.S.A. in connection with the setting up of thermal power plant of 1000 MW capacity at Mangalore mainly on the grounds that none of the thirteen circumstances noticed by High Court can give rise to any suspicion. Muchless a basis for investigation by a criminal investigating agency. 8. After the arguments were heard by this Court, the learned advocate, Mr. N.M. Amin, who has appeared for the petitioner, Mr. A.M.Bhardwaj, has filed a note requesting this Court that the petitioner, Mr. A.M. Bhardwaj, does not want to press Misc. Criminal Application No.1278 of 2001 and he may be permitted to withdraw the application at this stage without prejudice to his rights and contentions and reserving the liberty to raise the same as and when necessary. In view of the request made by the learned advocate for the petitioner, Mr. A.M. Bhardwaj, the submissions made by the learned Senior Advocate, Mr. P.M. Thakkar, in the Misc. Criminal Application No.1278 of 2001 filed by the petitioner, Mr. A.M. Bhardwaj, are not dealt with and discussed. The permission is granted to the learned advocate Mr. N.M. Amin to withdraw Misc. Criminal Application No.1278 of 2001 at this stage without prejudice to his rights and contentions and reserving the liberty to the petitioner to raise such contentions as and when necessary. Misc. Criminal Applicatin No.1278 of 2001 stands dismissed as withdrawn. Rule is discharged. The interim relief stands vacated. 9. Learned Senior Advocate, Mr. K.S. Nanavati, who appears for the petitioner, Shri Vijaysinh Parmar, IAS (Retd), of Criminal Misc. Application No.4865 of 2001, who was at the relevant time discharging his duties as Managing Director, GSCSC, has submitted that the petitioner, Mr. Parmar, was serving as Managing Director of GSCSC from May 18, 1997 to April 16, 1998 and had retired from service with effect from December 31, 2000. It is submitted by learned Senior Advocate, Mr. K.S. Nanavati, that the petitioner, Mr. Parmar, had suggested 15% hike in price of transportation charges. It is submitted that, even in the affidavit in reply, the Investigating Officer had stated that rise of 11% should have been justified because of sudden rise in price of diesel. Learned Senior Advocate, Mr. K.S. Nanavati, relying on the averments made in the affidavit in reply, has submitted that there was no dishonest intention or any intention to cause monetary loss to the State Government. The petitioner had only recommended 15% hike in price of transportation charges. It is submitted by the learned Senior Advocate Mr. K.S. Nanavati that there is no material or evidence against the petitioner to proceed further against the petitioner in the present case. Learned Senior Advocate, Mr. K.S. Nanavati, has also submitted that the petitioner, Mr. Parmar, has not suggested extension of contract period from April 19, 1998 to March 1999 and, therefore, he cannot be held responsible for causing any monetary loss or acting dishonestly so as to cause monetary loss to the State Government. It is further submitted by the learned Senior Advocate, Mr. K.S. Nanavati, that, in the representation made by the private transport contractors, they had given a threat to proceed on strike and if the transporters had proceeded on strike, there would have been total collapse in the supply of food-grains and levy sugar and it would have invited great criticism on the administration as the Diwali festival was fast approaching. It is submitted that even the Minister in-charge of Civil Supplies Department had given direction to complete the formalities within five days and, therefore, a decision was taken in a great haste due to pressure of the higher-ups and, therefore, there was no dishonest intention on the part of the petitioner, Mr. Parmar. Learned Senior Advocate, Mr. K.S. Nanavati, in the alternative, submitted that, even if the petitioner, Mr. Parmar, has suggested 15% hike in transportation charges, it can be at best said to be an error of judgment which will not attract provision of Section 13 of the Act nor Section 420 of the Indian Penal Code. It is submitted by the learned Senior Advocate that the First Information Report does not disclose prima facie ingredients of offences for which it was filed against the petitioner, Mr. Parmar, and, therefore, the First Information Report and the whole proceedings may be quashed. Learned Senior Advocate, Mr. K.S. Nanavati, has placed reliance on the decision of the Supreme Court in the case of Anil Kumar Bose vs. State of Bihar, reported in AIR 1974 Supreme Court 1560, wherein, it is held that, for the purpose of holding the accused guilty under Section 420 of the Indian Penal Code, the evidence adduced must establish beyond reasonable doubt mens-rea on the part of the accused. It is further ruled that, if there was an error of judgment or breach of performance of duty on the part of the accused, it could not per se be equated with dishonest intention which was one of the essential ingredients of offence of cheating under Section 420 of the Indian Penal Code. 10. Learned Senior Advocate, Mr. Yatin Oza, instructed by learned advocate, Mr. R.S. Sanjanwala, for the petitioner, Mr. D. Kishore Rao, the then Director, Department of Food & Civil Supplies, of Misc. Criminal Application No.3760 of 2001, has submitted that, no specific role has been attributed to the petitioner, Mr. D.Kishore Rao, in the First Information report or in the affidavit in reply filed by the Investigating Officer that the petitioner had dishonest intention to cause monetary loss to the Government and monetary gain to himself or to the private transport contractors in giving hike in price of transportation charges of levy sugar and food-grains. It is submitted by the learned Senior Advocate, Mr. Yatin Oza, that the First Information Report leads nowhere as no allegations have been levelled against the petitioner, Mr. D.Kishore Rao, of committing offence of cheating and criminal conspiracy and abusing position as public servant. Learned Senior Advocate, Mr. Yatin Oza, has vehemently submitted that the impugned First Information Report is a gross case of abuse of process of law and is filed as a result of political ill-will and malice. It is submitted that the petitioners, Mr.Jasabhai Barad and Shri Vithalbhai Shah, of Misc. Criminal Application No.1038 of 2001, originally belonged to Bhartiya Janata Party but later on joined Rashtriya Janata Party headed by Mr. Shankersinh Waghela who had at the relevant time formed a Government in the State of Gujarat. It is submitted that the petitioners, Mr.Jasabhai Barad and Shri Vithalbhai Shah, of Misc. Criminal Application No.1038 of 2001, were appointed as Ministers and it was during the course of discharge of such duties, the decision granting hike in transportation charge, which is subject matter of the impugned First Information Report, was taken. It is further submitted that, in the general election held in 1998, the Bhartiya Janata Party had secured majority and had formed Government and to wreck vengeance on the party which was earlier in power, the present First Information report was filed alleging corrupt practice against the Officers and the Ministers. It is submitted that the petitioner, Mr. D. Kishore Rao, has become the victim of the political rivalry between the BJP and the RJP. The learned Senior Advocate, Mr. Yatin Oza, has further submitted that the petitioner,Mr. D. Kishore Rao, had not taken any decision giving rise in transportation charges nor was he involved in decision making process and, therefore, the First Information Report deserves to be quashed against the petitioner. It is also submitted by the learned Senior Advocate, Mr. Yatin Oza, that, in the past, there was practice to consider increase in transportation charges and, in fact, in 1984, 1989 and 1991, such request for increase had been considered by the Government. It is further submitted that, due to sudden rise in the price of diesel, and due to the representation made by the private transport contractors, the decision to increase the rates in transport charges was taken by the Officers of the Department which was duly approved by the Ministers and there was no dishonest intention on the part of any of the Officers or the Ministers or to cause wrongful loss to the Government or wrongful gain to the transporters. It is further submitted by the