CRIMINAL MISCELLANEOUS NO.14332 OF 2009 ---------- 1. Binay Kumar Singh, son of Late Ram Kripal Singh, resident of Sabalpur, Police Station- Deedarganj, Patna City, presently residing at Panchwati, Nepali Kothi, Boring Road, Police Station-S. K. Puri, Town and District-Patna. 2. Ramesh Chandra Gupta, Son of Late Shri Ram Gupta, resident of 502, Santosha Complex, Bandar Bagicha, Police Station-Kotwali, Town & District- Patna. 3. Vijay Kumar Gupta, son of Late Shri Ram Gupta, resident of Durga Vihar Chowk, Police Station- Chowk, Town Patna City, District- Patna..............................................................Petitioners. -Versus- 1. The State of Bihar. 2. Bhupendra Narayan Sinha, Son of Late Narenda Sinha, Deputy Superintendent of Police, Vigilance Department, Electricity Board Cell, Vidhyut Bhawan, Bailey Road, Patna...................................................Opposite Parties. -With- CRIMINAL MISCELLANEOUS NO. 13248 OF 2009. ---------- 1. Swapan Mukherjee, Son of Late Mohan Lal Mukherjee, at present Chairman, Bihar State Electricity Board, Patna. 2. M.I. Ansari, Son of Md. Shakhawat Hussain, retired Chief Engineer (Commercial),Bihar State Electricity Board, Patna, at present residing at 2 Village- Chalna, Post Office- Chalna, Police Station- Dhuraiya, District- Banka. 3. C.L. Prakash, Son of Late Upasu Manjhi, General Manager-cum- Chief Engineer, Patna Electric Supply Area (Pesu), Patna, Bihar State Electricity Board, Patna. 4. R. N. Singh, Son of Late Sheo Lal Singh, Electrical Superintending Engineer, Electrical Supply Circle, Patna, Bihar State Electricity Board, Patna. 5. P.K. Singh, Son of Late Punkal Singh, Director Metering, Metering Cell Commercial, Vidhyut Bhawan, Bihar State Electricity Board, Patna. 6. Ratneshwar Jha, Son of Late S. N. Jha, Ex- Superintending Engineer, Rural Electrification, Bihar State Electricity Board, Patna...........................................................Petitioners. -Versus- 1. Cabinet (Vigilance) Department, Electricity Board Cell, Patna Through- Director General. 2. Bhupendra Narayan Sinha, Deputy Superintendent of Police (Vigilance) Electricity Board Cell, Patna.............................Opposite parties. -With- CRIMINAL WRIT JURISDICTION CASE NO. 921 OF 2008 ---------- 3 1. M/S. Dadiji Steels Ltd., a company incorporated under the provisions of the Companies Act, 1956 having its registered office situated at 308, Narayan Plaza, Exhibition Road, Police Station- Gandhi Maidan, Town & District- Patna, through one of its Directors, Binay Kumar Singh, Son of Late Ram Kripal Singh, resident of Panchwati, Nepali Kothi, Boring Road, Police Station-S.K. Puri, Town & District-Patna. 2. Binay Kumar Singh, Son of Late Ram Kripal Singh, resident of Panchwati, Nepali Kothi, Boring Road, Police Station-S. K. Puri, Town and District- Patna. 3. Ramesh Chandra Gupta, Son of Late Shri Ram Gupta, resident of 502, Santosha Complex, Bandar Bagicha, Police Station-Kotwali, Town and District- Patna. 4. Vijay Kumar Gupta, Son of Late Shri Ram Gupta, resident of Durga Vihar Chowk, Police Station-Chowk, Town Patna City, District- Patna..........................................................Petitioners. -Versus- 1. The State of Bihar. 2. Yogendra Prasad Singh, Son of Late Deo Prasad Singh, Deputy Superintendent of Police, Vigilance Department, Electricity Board Cell, Vidhyut Bhawan, Bailey Road, Patna. 3. Manju Jha, Superintendent of Police-cum- Officer-in-charge, Vigilance Police Station, 6, Circular Road, Town and District-Patna. 4 4. The Bihar State Electricity Board, Vidhyut Bhawan, Bailey Road, Patna through its Chairman. 5. The Chairman, Bihar State Electricity Board, Vidhyut Bhawan, Bailey Road, Patna................................................Opposite parties. -------- For the petitioners: Mr. Rana Pratap Singh, Senior Advocate (In Cr. Misc. No. & M/S. S.D. Sanjay and Gautam 14332 of 2009) Kejriwal, Advocates. For the Petitioners: Mr. Y.V.Giri, Senior Advocate & M/S. (In Cr. Misc. No. Raju Giri & Ashish Giri, Advocates. 13248 of 2009). For the Petitioners: Mr. Chitranjan Sinha, Senior Advocate (In Cr. W.J.C. No. 921 & Mr. S. D. Sanjay, Advocate. Of 2008). For the Vigilance: Mr. Prasun Sinha, counsel for (In all cases) Electricity Vigilance. ----------- P R E S E N T THE HON'BLE MR. JUSTICE SHYAM KISHORE SHARMA THE HON'BLE MR. JUSTICE DINESH KUMAR SINGH 5 S.K.Sharma & D.K.Singh,J.J. Petitioners of the aforementioned two Criminal Miscellaneous Applications and Criminal Writ application have prayed for quashing of the entire criminal proceeding including the First Information Report of Vigilance Police Station Case No. 67 of 2008 (Spl. Case No. 43 of 2008) registered on 16.9.2008 under Sections 166, 109, 119, 406, 420, 465, 467, 468, 120(B) of the Indian Penal Code, under Sections 135 & 138 of the Electricity Act, 2003 and under Section 13 (1) (d) of the Prevention of Corruption Act, 1988 and also for quashing of the entire criminal prosecution of Vigilance Police Station Case No. 34 of 2009 dated 3.4.2009 (Spl. Case No. 26 6 of 2009) registered under Sections 13(1) (d) of Prevention of Corruption Act,1988 and Section 120(B) of the Indian Penal Code. In Vigilance Police Station Case No. 67 of 2008 M/s. Dadiji Steels Ltd., and its members of the Board of Directors, namely, Binay Kumar Singh, Ramesh Chandra Gupta, Vijay Kumar Gupta, Shri Sachint Agrawal, all partners of M/s. Dadiji Steels Ltd., and all persons connected with the management of the company were made accused without specifically naming them. In Vigilance Police Station Case No. 34 of 2009 Shri Swapan Mukherjee, Chairman, Bihar State Electricity Board, (retired); Shri 7 M.I. Ansari, Chief Engineer (Commercial), Bihar State Electricity Board (retired); Ratneshwar Jha, Retired Electricity Engineer (Commercial), Bihar State Electricity Board; Shri C.N. Prakash, General Manager-cum-Chief Engineer, Central Supply Region, Patna; Shri R.N. Singh, Superintendent Electrical Engineer, Central Supply Circle, Patna; Shri P.K. Singh, Executive Engineer Electricity (Commercial), Bihar State Electricity Board and 4 members of the Board of Directors of M/S. Dadiji Steels Ltd., namely, Vinay Kumar Singh, Ramesh Chandra Gupta, Shri Sachint Agrawal and Shri Vijay Kumar Gupta were also made accused. M/s. Dadiji Steels Ltd., Vinay Kumar 8 Singh, Ramesh Chandra Gupta and Vijay Kumar Gupta have prayed for quashing of Vigilance P. S. Case No. 67 of 2008 (Spl. Case No. 43 of 2008) through Cr.W.J.C. No. 921 of 2008 whereas Vinay Kumar Singh, Ramesh Chandra Gupta, Vijay Kumar Gupta being the Directors of M/s. Dadiji Steels Ltd., have filed Cr. Misc. No. 14332 of 2009 under Section 482 of the Cr. P. C. for quashing of Vigilance P.S. Case No. 34 of 2009 (Special Case No. 26 of 2009). Swapan Mukherjee, M.I. Ansari, C.L. Prakash, R.N. Singh, P.K. Singh and Ratneshwar Jha have filed Cr. Misc. No. 13248 of 2009 under Section 482 of the Cr. P. C. for quashing of the entire prosecution of Vigilance P.S. 9 Case No. 34 of 2009 (Special Case No. 26 of 2009). At the admission stage, the interim orders for not taking any coercive steps were passed on 6.4.2009, 15.4.2009 and on 24.11.2009. Subsequently, while considering the contentions of the parties, the learned Single Judge on 24.11.2009 referred the matter to Division Bench broadly on three points which is as follows:- “This court finds that these aspects of the matter have to be decided and controversy settled once and for all and therefore, I 10 find that this being an important question and as there is no decision on this issue, should be decided by a Division Bench. I, accordingly, refer this matter to the Division Bench. I (i) The Issue is whether the Vigilance Department can institute a case of theft of Electricity in view of the provision of Sections 135, 151 and (151(A) of the Electricity Act. (ii) It would be of vital importance to consider whether in a case where the petitioners have been 11 able to establish a semblance of a right specially by way of the provisions of a statute, whether those acts can amount to a theft? (iii) Another issue, which is of equal importance, is whether the officers of the Vigilance Cell are competent to decide technical question as to how and what should be rate of Tariffs to be charged from the licensee as also whether grant of remission as per statute would amount to an offence in the facts stated in this case.” Since all the three applications 12 basically raise the same questions and were clubbed at the initial stage of admission, hence, all the three applications are being considered together. To consider the points of reference, it is desirable to have a look on the basic accusation of both the First Information Reports. Though the factual matrix of both the First Information Reports are almost the same but for the proper appreciation, separate accusations of both the First Information Reports are mentioned hereunder: VIGILANCE P.S. CASE NO. 67 OF 2008 (SPECIAL CASE No. 43 of 2008): 13 The First Information Report was lodged on 16.09.2008 on the basis of the written report submitted by Yogendra Prasad Singh, Deputy Superintendent of Police (Vigilance Department), Electricity Cell, Vidhyut Bhawan, Patna, against M/s. Dadiji Steels Ltd., and its Directors under various provisions of the Indian Penal Code, Electricity Act, 2003 and Prevention of Corruption Act, 1988, as mentioned above, alleging interalia: (i) An Inspection team was constituted for making inspection of M/S. Dadiji Steels Ltd., Sabalpur, Patna, in view of the confidential report of 14 electricity theft by conspiracy; (ii) Consequently on 6.5.2008 at 19.14 hrs. the constituted team made a surprise inspection of meter bearing no. BEB 08091 and other appliances relating to supply of electricity in the premises of M/s. Dadiji Steels Ltd., in presence of Electrical Executive Engineer (Supply), Fatuha; Assistant Electrical Engineer, Deedarganj, Patna, representative of M/s. Secure Meter Ltd., and representatives of petitioner No. 1. (iii) During the course of inspection, Data of the meter was downloaded by common meter reading instrument(hereinafter referred 15 to as CMRI), and thereafter the Meter Reading Instrument(hereinafter referred to as MRI) was sealed in presence of inspection team, officials of the Electricity Board and representative of the Company. (iv) On 07.05.2008 the seal of CMRI made on 06.05.2008 was removed and the MRI was downloaded in presence of Executive Engineer, representative of M/S. Secure Meter Ltd., and representative of the Company. (v) The downloaded data reflected 13 instances of C. T. Short between 2.3.2008 and 13.3.2008. 16 (vi) Downloaded data from MRI necessitated expert investigation and suggestion. Accordingly, FAX messages were sent to M/s. National Physical Laboratory, Delhi, but no response was received. Thereafter, reminder was also sent to the said laboratory. (vii) On 9.7.2008, Electrical Executive Engineer and R.D., Electricity Board, Patna, were directed to seize the meter and produce it to Electricity Vigilance, Patna. (viii) The Electrical Executive Engineer, on the basis of being the member of Inspection team on 6.5.2008 and on the 17 basis of reproduced data of MRI, submitted a note to DG, Vigilance, suspecting some interference with the meter for committing theft of electricity. In such circumstances, it was decided to get the meter tested by an independent expert. Hence, the meter was sent to Central Power Research Institute (hereinafter referred to as CPRI), Bhopal. On 17.7.2008 CPRI, Bhopal, transmitted its report reflecting tampering of C.T. Shorting in March 2008. It is relevant to state here that the meter records the tampering if the meter has been by-passed from 18 outside or inside. In view of the report of CPRI, Bhopal, it was suspected that the Electricity theft was committed by C.T. Shorting due to which the Electricity Board had suffered loss and the consumer got illegal gains. The MRI downloaded report dated 7.5.2008, which reflects theft of electricity, was handed over to the representative of M/S. Dadiji Steels Ltd., Thereafter, on 27.6.2008, the consumer made voluntary disclosure under clause 11.4 of Bihar State Electricity Supply Code, 2007. (ix) It is further alleged that in the agreement between M/s. Dadiji Steels 19 Ltd., and the Electricity Board, the category of the Tariff is mentioned as HTSS-I, whereas in the Tariff notification of the Board issued between 1.11.2006 to 31.8.2008 there is no reference of HTSS-I Tariff. It is not clear as to from where HTSS-I Tariff figured in the agreement and whether such an error was under ignorance or deliberately. It is also alleged that in the bill raised to the consumer, the category is mentioned as HTSS, which is valid for Induction Furnace, whereas in the premises of the consumer, apart from 20 Induction Furnace, Rolling Mill is also situated and the readings of the consumption of electricity is jointly recorded by a single meter. Hence, the Electricity Board has been raising the bill on the basis of common consumption on a fixed rate applicable for Induction Furnace only. Thus, the consumer has been using energy at a lower rate by which huge economic loss has been suffered by Electricity Board and it is not clear as to why separate meter has not been installed by Electricity Board for Induction Furnace and for Rolling Mills separately. 21 (xi) By allowing the consumer for availing common consumption on a fixed rate, it is not clear from the agreement that how much load is sanctioned separately for each Rolling Mill and Induction Furnace, out of total sanctioned load of 120.51 kVA. Further the sanctioned load of 120.51 kVA to the consumer, HTSS-I is not under any Tariff and yet how the load was sanctioned and how the bill is being raised is not clear, as even the HTSS category is only applicable for Induction Furnace whereas in agreement the object of supply is for production of MS Ingots and MS Rods. Thus, the 22 authorities of the Electricity Board in an arbitrary manner, prima-facie, put the consumer in a wrong category of Tariff and sanctioned the load of 120.51 kVA, which does not fall under any Tariff category for the purpose of causing economic loss to the Electricity Board and gain to the consumer. (xii) It is also alleged that the Board ought to have raised the bill as stipulated in Annexure-7(B)(i) of Bihar State Supply Code 2007, which prescribes charging of double amount of consumption of the last 12 months, if it is found that the electrical energy supplied is used for 23 such purpose for which higher Tariff is applicable. Hence, from April 2008, the bill ought to have been prepared @ Rs.4.20 per unit as against Rs.1.35 per unit because the consumer was running Rolling Mill along with Induction Furnace. Thus, it appears that for the purpose of providing illegal gain to the consumer such billing has been made. (xiii) It is also alleged that even when the consumer made a voluntary declaration under Clause 11.4 of Bihar State Electricity Supply Code, 2007 the bill was raised @ 1.35 per unit instead of Rs.4.20 per unit as a result of which 24 the Board suffered a huge loss of Rs.3.41 crores. (xiv) It is further alleged that after the Vigilance inspected the premises of M/S. Dadiji Steels Ltd., several old matters of electricity theft were raked up and hurriedly five F. I. Rs., were lodged, which reflects the connivance of employees of Electricity Board. Hence, it was recommended for lodging of the case against the employees of the Board also, but the formal part of the F.I.R reflects that the F.I.R was lodged only against M/S. Dadiji Steels Ltd., its members of Board of Directors, partners 25 and the managing employees and not against any officers of the Electricity Board but the F.I.R was registered under Sections 166, 109, 119, 406, 420, 465, 467, 468, 120(B) of the I.P.C and under Sections 135, 138 of the Electricity Act, 2003 and under Section 13(1)(d) of the Prevention of Corruption Act, 1988. VIGILANCE P.S. CASE NO. 34 OF 2009 (Special Case No. 26 of 2009) The First Information Report was lodged on 2.4.2009 alleging therein interalia: (i) A confidential information was received by Vigilance Cell of Electricity Board in March–April, 26 2008 regarding various consumers having HT and HTSS connections, having indulged in large scale electricity theft in conspiracy with higher officials of Electricity Board, resulting in large scale wrongful loss to the Electricity Board and wrongful gain to the consumers. (ii) It is also alleged that when the Vigilance accelerated its activities then the Electricity Board hurriedly lodged several cases of Electricity theft. (iii) On 6.5.2008 surprise inspection 27 was conducted in the premises of M/S. Dadiji Steels Ltd., by Ratan Kumar, Electrical Executive Engineer, deputed in Vigilance Cell along with Yogendra Prasad Singh, Dy. S.P., Sh. N.L. Ram, Electrical Executive Engineer (Supply) and consequently Vigilance P.S. Case No. 67 of 2008 was registered on 16.9.2008 against M/S. Dadiji Steels Ltd., and its employees. (iv) Finding the Vigilance Cell active, the Electricity Board started investigating some old tampered 28 meters and obtained specialist reports and also got F.I.R registered. Though these meters were earlier removed only by saying that they were defective meters and new meters were installed but the whole thing was done within the knowledge of the top officials of Electricity Board, which further gets proved by the decision of the Board to send these defective meters to the laboratory of M/s. Secure Meters Ltd. (v) It is further alleged that advertisement for voluntary 29 disclosure under Clause 11.4 of Bihar State Electricity Supply Code was hurriedly made to save the consumers indulging in meter tampering and thereby gain of Rs.19 crores has been made by the consumers as the Chairman of the Board allowed the voluntary disclosure under clause 11.4 in spite of protest by the Vigilance Department. (vi) It is also alleged that in the public advertisement there was allurement as well as threat of coercive action and as such any thing done in view of the advertisement 30 cannot be said to be a voluntary act and the said advertisement could be seen as an evidence of conspiracy. The voluntary disclosure made by the M/s. Dadiji Steels Ltd., on 27.6.2008 under clause 11.4 of the Bihar Electricity Supply Code, 2007 appears to have been accepted in utter haste on 9.7.2008 and a bill of Rs.1.19 crores was issued, which was immediately deposited by the consumer though the authorities of the Board had the knowledge of meter tampering case giving rise to Vigilance P.S. Case No. 67 of 2008. 31 (vii) It is also alleged that in accordance with Annexure-7 of the Bihar State Electricity Supply Code 2007, the Electrical Executive Engineer, Ratan Kumar calculated the penal bill to the tune of Rs.20.98 crores. However, calculations were nullified by the benefit extended to the company resulting in wrongful loss of Rs.19 crores to the Electricity Board and such benefit was extended to the consumer in connivance with the top officials of the Electricity Board. (viii) It is also alleged that Electrical 32 Superintending Engineer, Electric Supply Division, Patna, vide letter dated 14.5.2008 was informed about inspection of the meter made by the Vigilance in the premises of M/s. Dadiji Steels Ltd., and vide letter no. 1084 dated 9.7.2008, the removal of the meter was also informed. It is further alleged that the Chairman of the Electricity Board, in his letter dated 9.3.2008 addressed to the Deputy Secretary, Department of Energy, stated that he has no information regarding the action being taken by the Vigilance Department. However, it 33 was also said that if any action was taken by Investigating Agency from before and any case under Section 135 of Electricity Act is made out then Voluntary disclosure will be not in operation. Accordingly, the Chairman had the knowledge of action taken by the Vigilance against the consumer. (ix) It has further been alleged that in spite of F.I.R being lodged against the consumer, no penal bill has been raised by the Board, which shows their intention. (x) It is also alleged that Sh. Ratneshwar Jha, in course of his 34 statement, has stated that the entries of the application of the consumer, making declaration under clause 11.4 of the Bihar State Electricity Supply Code 2007, was not done serially and date wise, hence, the procedure adopted appears to be hasty one. (xi) It is also alleged that the extra generosity was shown by the Chairman to M/S. Dadiji Steels Ltd., as payment of security amount were allowed to be made in instalments and other generosity was shown with regard to fuel surcharge. 35 Consequently, Vigilance P.S. Case No. 34 of 2009 (Spl. Case No. 26 of 2009) was registered on 2.4.2009 under Section 120(B) of the I.P.C and 13(1)(d) of the Prevention of Corruption Act,1988 against the Chairman of Electricity Board, its officials and 4 members of the Board of Directors of M/s. Dadiji Steels Ltd. The fulcrum of the accusation in both the F.I.Rs. is the suspected theft committed by M/s. Dadiji Steels Ltd., and the voluntary declaration accepted by the Electricity Board under Clause 11.4 of the 36 Supply Code 2007 after the inspection of the Vigilance and allowing the consumer to consume the electricity on the same connection for Induction Furnace as well as for Rolling Mill under HTSS-1 Tariff, which is nowhere mentioned in the 2006 Tariff Notification. The contention of the vigilance is that quashing of F.I.R. is not maintainable under Section 482 Cr. P.C. and Article 226 of the Constitution of India, moreover, loss was being caused to the Electricity Board by corrupt means, hence with regard to theft of Electricity, the Vigilance is empowered to register the case under memo No. 4119 dated 25 April 1991, whereby the Governor of Bihar 37 authorised Electricity Vigilance Cell to register the case under Electricity Act 1910 in Vigilance Police Station. The remission under Clause 11.4 under Bihar Electricity Supply Code was not permissible. Moreover, consumer could not have run the Rolling Mill and Induction Furnace under one connection. The main contention of the petitioners is that the Vigilance Cell of the Electricity Board is not empowered to institute the case for theft of electricity, make assessment or fix the Tariff in view of the specific provisions in the Electricity Act, 2003 and the Bihar Electricity Supply Code, 2007 but the malicious prosecution has 38 been launched only to harass the innocent petitioners. Moreover, the prosecution is barred under sub Clause „C‟ of Clause 11.4 of the Supply Code and above all the question of theft and the fixation of Tariff and assessment is specifically authorised, under the Act and the Supply Code, to the officers of Electricity Board. The quashing of F.I.R. is maintainable both under Section 482 Cr. P.C. as well as Article 226 of the Constitution of India. The contention of the Electricity Board is that the prosecution has maliciously been launched, as the Vigilance has no power to institute a case for electricity theft, fix 39 the Tariff or raise question with regard to the remission granted by the Board under the provisions of the Act and the Supply Code. The brief contention on behalf of the consumer/petitioners is that M/s. Dadiji Steels Ltd., is a company incorporated under the provisions of the Companies Act 1956, which established the Rolling Mill in the year 1997 and applied for H.T. Industrial connection, which was granted on 15.9.1997 for a contract demand of 835 kVA at 11 kVA. Subsequently, the consumer company got the connection converted into 33 kVA line at contract demand of 1000 kVA exclusively for the Rolling Mill as till then the consumer 40 company had not installed the Induction Furnace. The consumer, in the year 2005 installed an Induction Furnace and for the said purpose HTSS-I (Induction Furnace Tariff) issued vide Notification no. 166 dated 28.5.2001 was applicable and according to this notification the consumer company was liable to pay fixed charges @ 600 kVA per M.T. capacity of each Induction Furnace in terms of Clause 2 of the Tariff schedule and since the firm had installed the Induction Furnace with capacity of 8 M.T. therefore, it applied for additional contract demand for 4800 kVA. However, on measurement of 41 Induction Furnace, it was found to be having capacity of 8.42 M.T., therefore, the consumer company was granted the contract demand of 5051 kVA for Induction Furnace. Therefore, the total contract demand of Rolling Mill of 1000 kVA and for the Induction Furnace of 5051 kVA comes to 6051 kVA, for which the consumer company became liable to make payment. Subsequently the consumer company again installed 2 more Induction Furnace of 5 tonnes capacity each and accordingly it raised this contract demand of 6000 kVA and accordingly the contract demand for Induction Furnace came to be 11051 kVA