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Judgment
Gurvinder Singh Gill, J
This order shall dispose off the above mentioned six petitions seeking quashing of FIR No.115 dated 21.3.2014 registered at Police Station Ambala
City, District Ambala, Haryana under Sections 406, 420 and 120-B of Indian Penal Code, 1860 and all subsequent proceedings emanating therefrom.
The FIR was registered at the instance of District Manager, HAFED, Ambala City, the gist of which is to the effect that ‘M/s J.K. Jute
Mills’ had supplied 1300 gunny bales(each bale containing 500 bags), which did not even bear the marking of brand ‘J.K. Jute Mills’ and
were either bearing marking of some other brand or were not bearing any marking at all. HAFED informed about the matter to Director General,
Food and Supplies, Haryana (DGFS), who constituted a committee. The said committee visited Rail Head, Ambala and inspected the condition of
bales and it was found that the bales do not contain markings of the agency. It is alleged that the mill had cheated HAFED and caused wrongful loss
to HAFED while causing wrongful gain to itself by supplying old, mutilated, torn and unbranded gunny bales.
The learned senior counsl representing the petitioners has submitted that since the petitioners namely Govind Kumar Sarda, Damodar Parshad
Bhattar, Shashi Kant Jha, Shobhanand Jha @ Ravishankar Prabhakar and Aditya Sarda are neither named in the FIR and nor can be said to be
related to the firm ‘M/s J.K. Jute Mills Company Limited’, in any manner, therefore, they cannot be held liable for loss allegedly caused to
HAFED, much less be liable for having committed any offence. It has further been submitted that, in any case, the contract pertaining to supply of
2600 bales (each bale containing 500 jute bags) was between DGS&D and M/s Jugilal Kamalapat Jute Mills Co. Ltd. as would be evident from
Annexure P-3 (in CRM-M-24861-2015) and that HAFED had no privity of contract with M/s J.K. Jute Mills and since HAFED had made payment to
DGS&D, which was to procure the jute bags, therefore, in these circumstance it cannot be said that M/s J.K. Jute Mills had cheated the complainant
HAFED, in any manner.
The learned counsel has pointed out that infact out of the total 13 lacs bags, as many as 10,73,060 bags were found to be usable as per joint
inspection carried out under the directions of Hon’ble High Court of Calcutta and only 2,23,440 bags were found to be unusable. It has further
been submitted that the value of the said unusable 2,23,440 bags worked out to Rs.92,73,824/-and since an amount of Rs.1,14,40,505/- had already
been withheld by the Controller of Accounts, Directorate of Supplies and Disposal, Calcutta, the aforesaid amount of Rs.92,73,824/- out of the
withheld amount was refunded to the Assistant Controller, Food Accounts for Director Food and Supplies, Haryana vide demand draft sent vide letter
dated 26.2.2016 (Annexure P-5 in CRM-M-13643-2014) being the recovery amount on account of value of sub-standard jute bags including shortage
of jute bags. It has thus been submitted that since the amount in respect of the alleged torn, mutilated, defective and unbranded bags had already been
paid back to the quarter concerned, therefore, it cannot be said that any loss had been caused to the complainant by the petitioners.
It has further been submitted that although it was in the year 2016 i.e. much after lodging of the FIR, that the remaining jute bags numbering
10,73,060 had been declared to be defective, but it is now in the year 2018 that a civil suit has been filed i.e. after more than four years of the lodging
of the FIR, claiming recovery of an amount of Rs.6.99 crores against M/s J.K.Mills, which would neccessarily indicate that infact, at best it is a case
of civil liability only.
The aforesaid contentions have been vehemently opposed by respondent/State. Some relevant facts, as extracted from written submissions, are
being stated below chronologically:
27.08.2013HAFED sent its requirement for 75,000 jute gunny bales for Rabi 2014-15 marketing season to the Director General, Food and Supplies,
Haryana (DGF&S) vide letter dated 27.08.2013 and as per the norms/guidelines applicable, an advance payment of Rs.159.29 crores was also sent to
the DGF&S in the shape of demand drafts in favour of the Director General Supplies and Disposals (DGS&D), Government of India, Kolkata in the
year September, 2013, and December, 2013.
04.09.2013The Food and Supplies Department, Haryana placed an indent for the supplies of gunny bales with the DGS&D vide letter dated
04.09.2013.
09.01.2014The DGS&D, Government of India, placed an order for supply of 2600 gunny bales to HAFED with M/s Juggilal Kamlapat Jute Mills
Company Limited @ JK Jute Mills Company Limited, Kanpur vide supply order No.C-3/3266/JK/2014/0088 dated 09.01.2014. In accordance with the
said order, the said JK Jute Mills Company Limited dispatched gunny bales to Rail Head, Ambala in two lots of 1300 gunny bales each in January
2014 and March 2014.
26.01.2014 First lot of 1300 bales was supplied by JK Jute Mills Co. Ltd. against the Supply Order dated 09.01.2014, which was transferred by
HAFED, Amabala to HAFED, Kurukshetra directly from the Rail Head.
15.03.2014 A complaint was received by HAFED from the Secretary, JK Jute Mills Mazdoor Ekta Union, Kanpur, vide a letter dated 15.03.2014
regarding dispatch of old mutilated, torn and unbranded jute bales to HAFED.
18.03.2014 Committee constituted by DGF&S, Haryana inspected the gunny bales on receipt of the same at Ambala on 18.03.2014, under complete
videography.
In the said inspection, it was noticed that the second lot which was received on 18.03.2014, which should have contained 1300 bales, was in fact
having only 1293 bales.
19.03.2014 It was noticed that the bales which were inspected did not have the required lead seal and markings as were required under the
instructions and guidelines of the competent authority i.e. DGS&D. Therefore all the 1293 gunny bales were rejected vide letter dated 19.03.2014
(Annexure P-5 in CRM-M-13643-2014).
21.03.2014 HAFED got registered FIR bearing No.115/2014 (Annexure P-1) against the said JK Jute Mills Co. Ltd. on 21.03.2014 under sections
406/420 of the IPC at P.S. Ambala City for committing cheating and having caused wrongful loss intentionally to HAFED by supplying old, mutilated,
torn and unbranded gunny bales.
22.03.2014 HAFED also inspected the first lot which was supplied by JK Jute Mills Company Limited and it was also found that the same was not
meeting the standards and the specifications as laid down by DGS&D. Accordingly these 1300 gunny bales of first lot were also rejected and JK Jute
Mills Company Limited as well as DGS&D, Government of India were informed vide letter dated 22.03.2014 by
HAFED.
07.04.2014 As a counter blast to the said rejection of bales, the said JK Jute Mills Company Limited filed a recovery suit bearing No.137/2014
(Annexure P-6) on 07.04.2014 before the Hon’ble High Court at Calcutta challenging the said rejection of the jute bales and prayed for joint
inspection of the gunny bales in the presence of the said JK Jute Mills Company Limited.
07.05.2014 The Hon’ble High Court at Calcutta, on an application bearing GA No.1166/2014, passed an order dated 07.05.2014 directing the
HAFED to conduct the inspection in accordance with the contract.
Further, the Hon’ble High Court at Calcutta, on applications filed by the JK Jute Mills Company Limited and by JK Jute Mill Mazdoor Ekta Union
directed to complete full inspection in accordance with the contract by 10.06.2014. It was directed that the inspection shall be jointly made by the
parties according to the contract. Further, it was directed that till the time the final decision is not taken and communicated with regard to rejection or
partial rejection of the goods, HAFED will not take any step against the plaintiffs. An interim order passed earlier on 09.04.2014 was accordingly
modified to said extent.
16.05.2014 The Hon’ble High Court at Calcutta in the civil suit bearing CS No.137/2014 directed that the following line be added in the order
dated 07.05.2014.
“The inspection of bags and segregation report should be filed in Court by 20th June, 2014.â€
09.06.2014 to 13.06.2014 In compliance of the order of Hon’ble High Court at Calcutta, a joint inspection team again carried out inspection at
Ambala, Pehowa and Sahabad. As per the inspection report of DGS&D, all 2593 gunny bales as supplied by the JK Jute Mills Company Limited were
found to be not in conformity with the description as mentioned in the quality assurance certificate, as issued by the office of Director, Quality
Assurance, DGS&D, Kanpur and the bales bore markings of different jute mills and of previous crop years i.e. 2012-13 and 2013-14. Hence the same
were rejected.
27.06.2014 The JK Jute Mills Company Limited filed a contempt application with case title Nandlal Giya and Anr. Vs. P.K. Kanchan and Ors.,
bearing CC No.66/2014 on 27.06.2014 before Hon’ble High Court at Calcutta alleging defiance of the order dated 07.05.2014 and 16.05.2014 of
the Hon’ble Court by not having held a full ‘joint’ inspection and segregation of the jute bags.
04.07.2014 The Hon’ble High Court at Calcutta in the aforesaid contempt petition bearing No.66/2014 vide order dated 04.07.2014 clarified that
inspection has to be made of bales as well as of bags.
Sept., 201 to Nov., 2014 A fresh joint inspection was therefore carried out between the said period in accordance with the directions of the
Hon’ble High Court at Calcutta and the inspection reports were submitted to the Hon’ble High Court on 28.11.2014. The contempt petition
bearing No.66/2014 was disposed off vide order dated 28.11.2014.
In accordance with the directions in the said fresh joint inspection, 2,23,440 bags were declared ‘unusable’, and the remaining 10,73,060 bags
were declared ‘usable’ by the committee subject to certain conditions.
30.03.2015 Applications filed by accused seeking Anticipatory Bail were rejected by the Ld. Sessions Court. Accused had thereafter approached this
Court but even this Court dismissed their applications vide order dated 30.03.2015 (Annexure P-14).
02.4.2015 Govind Sarda (petitioner) & Aditya Sarda obtained Transit Bail from Kolkata.
06.04.2015 The Jute Commissioner addressed a letter to DM, HAFED advising that the entire lot received by HAFED was unacceptable and
therefore should not be used by consignee/HAFED as not only the bags were not manufactured by JKJMCL but also bore markings of different jute
mills pertaining to different crop years.
09.04.2015 The Hon'ble High Court at Calcutta directed on 09.04.2015 that the orders passed in the Civil Suit will not fetter the hands of any Criminal
Court to make any order in accordance with law.
05.05.2015 The matter was placed before the Board of directors of HAFED in its meeting held on 05.05.2015 and the DGS&D, Government of India
was informed regarding the decision taken by the HAFED vide letter dated 22.06.2015 and was further requested to issue instructions to JK Jute Mills
Company Limited to the following effect:-
“i. For immediate replacement of the 2,23,440 bags found unusable / rejected during joint inspection at its own cost specifying time limit of such
replacement. M/s J.K. Jute Mills Co. Ltd. will first supply the requisite quantity of new bales / bags F.O.R. Ambala / Kurukshetra to HAFED and
only thereafter will lift back the un-usable / rejected 2,23,440 bags at their cost.
ii. To submit an undertaking to replace, more bags amongst 10,73,060 usable / acceptable bags, found defective / un-usable or not conforming to BIS
specifications, if any, during its use by HAFED, as mentioned in the re-joint inspection reports; and
iii. To recover from M/s JK Jute Mills Company Limited and remit to HAFED, the expenditure incurred by HAFED on inspection and interest on the
entire cost of gunny bags from the date of its receipt i.e. 26.01.2014/8.03.2014 to 31.03.2015.â€
08.05.2015 There was a submission from the side of counsel for HAFED before the Hon’ble High Court at Calcutta as recorded vide order dated
08.05.2015 (Annexure P-8) in which the counsel for HAFED submitted that HAFED will accept the goods according to the inspection report.
22.06.2015 In terms of the statement given before the Hon’ble High Court at Calcutta, vide letter dated 22.06.2015 as addressed to the DGS&D,
HAFED requested to recover the actual cost of 2,23,440 rejected bags from JK Jute Mills Company Limited and to remit the amount to HAFED
along with expenditure incurred by HAFED and interest on the entire cost of gunny bales from the date of its receipt calculated upto 31.03.2015.
17.09.2015 A contempt petition being CC No.209/2015 filed by the JK Jute Mills Company Limited before the Calcutta High Court for violation of its
order dated 08.05.2015.
08.10.2015 In pursuance to the aforesaid letters dated 22.06.2015 and 03.10.2015 as issued by the HAFED herein a joint meeting was convened by
the DGS&D at Kolkata wherein the representative of JK Jute Mills Company Limited contended for the first time they are not in position to replace
the said goods since the Mill / factory is lying closed and it was conveyed by DGS&D that the cost of rejected bags along with cost of seven bales
found short would be refunded to the HAFED and the DGS&D would issue necessary directions to allow JK Jute Mills Company Limited to lift the
rejected goods.
27.11.2015 DGS&D at Kolkata conveyed its decision vide letter dated 27.11.2015 (Annexure P-12) to pay the cost of sub standard 446 bales plus 440
bags along with the cost of seven bales received short from the side of JK Jute Mills Company Limited, through a demand draft to HAFED.
08.03.2016 An amount of Rs.92,73,824/- was received on 08.03.2016 through a DD dated 24.02.2016 by HAFED.
In compliance of the order dated 08.05.2015 passed by the Hon’ble High Court at Calcutta, HAFED intended to use 10,73,060 bags in the RMS
(Rabi Marketing Season) 2016- 17 only after inspecting the same to categorically identify as to whether the bags meet out the specification as laid
down by the BIS (Bureau of Indian Standard) for packaging of wheat during RMS 2016-17.
16.03.2016 The DGS&D at Kolkata was therefore requested vide letter dated 16.03.2016 to depute an officer to associate with the officers of the
Jute Commissioner of India (JCI), Food Corporation of India (FCI), DGF&S-Haryana and HAFED for inspection of these gunny bags. Besides it, the
Director General, BIS was also requested to depute an officer for the said inspection.
21.03.2016 to 28.03.2016 The aforesaid inter agency inspection was carried out from 21.03.2016 to 28.03.2016 at Ambala, Shahabad and Pehowa
(Kurukshetra) by a committee of offices of FCI, F&S Department, Haryana and HAFED as per the terms and conditions mentioned in the supply
order dated 09.01.2014 and the specifications laid down by the BIS for jute gunny bags meant for packaging of wheat / rice or similar food grains.
08.04.2016 The Hon’ble High Court at Calcutta in the aforesaid contempt petition bearing No. CC 209/2015 vide order dated 08.04.2016 inter alia
directed that “the alleged contemnor will not act beyond the inspection report and will only act in terms thereof. If money has been properly
refunded in relation to the rejected bags, the bags may be made over to the petitioners as expeditiously as possible.â€
20.04.2016 In view of the findings of the inter agency inspection report, a rejection memo in respect of remaining 10,73,060 bags was issued on
20.04.2016 to the DGS&D at Kolkata, Government of India with a copy to JK Jute Mills Company Limited, Kanpur along with the claim of storage
costs, other expenses and penal interest @ 18% upto 31.03.2016 amounting to Rs.6.99 crores.
The DGS&D vide letter dated 06.05.2016 forwarded the said letter dated 20.04.2016 of HAFED to JK Jute Mills Company Limited for information
and necessary action with a copy to HAFED.
27.04.2016 A letter dated 27.04.2016 was received from the Inspector/IO of Ambala City Police Station asking the District Manager, HAFED,
Ambala to keep 1293 bales supplied by the JK Jute Mills Company Limited safe in HAFED godowns being the case property in FIR/Case
No.115/2014, till the final decision of the case.
22.06.2016 Another contempt petition bearing CC 70/2016 was filed by JK Jute Mills Company Limited alleging that order dated 08.04.2016 of the
Hon’ble High Court at Calcutta had not been complied with.
17.08.2016 The accused challenged dismissal of their petitions for anticipatory bail by the Hon’ble Punjab & Haryana High Court by filing Special
Leave Petition (Crl) No.3269/2015 in the Hon’ble Supreme Court of India against the said order dated 30.03.2015. Hon’ble Supreme Court
granted anticipatory bail to co-accused Damodar Parshad Bhattar vide order dated 17.8.2016 (Annexure P-16) passed in Special Leave Petition (Crl.)
No.3269 of 2015 while dismissing the Special Leave Petition (Crl.) No.4009 of 2015 filed by Govind Sarda as he preferred to withdraw the petition.
The learned State counsel has submitted that 2600 bales of jute bags were supplied by way of two consignments of 1300 bales each. It has been
pointed out that after the first consignment had been received on 26.1.2014, it was noticed that the jute bags supplied were mutilated, torn and
unbranded and consequently a committee was constituted by Director General, Food and Supplies, Haryana, which inspected the bags. The second
consignment of 1300 bales was received on 18.3.2014 and upon inspection it was found that there was shortage of 7 bales and only 1293 bales had
been received. It has further been submitted that pursuant to directions of Hon’ble High Court of Calcutta, a joint inspection of bags was
conducted and 2,23,440 bags were found to be unusable while the remaining 10,73,060 bags were found to be usable subject to certain conditions.
However, subsquently even the remaining bags were also found unacceptable and the Jute Commissioner vide his letter dated 6.4.2015 had conveyed
the same to HAFED directing that the said bags be not used as the bags in question were not only found to be not manufactured by M/s J.K. Jute
Mills and Company Limited but were also of different mills pertaining to different crop years. Subsequently, another inspection was jointly conducted
wherein all the agents concerned were associated i.e. DGS&D, Jute Commissioner, FCI, DGF&S-Haryana and HAFED and pursuant to said inter-
agency inspection, a rejection memo in respect of remaining 10,73,060 bags was issued on 20.4.2016.
As regards involvement of petitioner Govind Sarda, it has further been submitted that infact M/s Rainey Park Suppliers, of which Govind Sarda is
Director, had acquired majority stake in J.K. Jute Mills and signed agreement with workers union. And that even in judgment of Delhi High Court
dated 8.3.2011 in Writ Petition (c) 2839/2010, it had been observed that Govind Sarda controls the management of the accused-company. It has been
submitted that from investigation it is borne out that Govind Sarda and his son Aditya Sarda are the real owners of the accused company and that
Aditya Sarda has represented the company before various authorities as its official representative.
As regards role and involvement of Damodar Prashad Bhattar, it has been submitted that although he claims to have resigned as a Director of the
company w.e.f. 8.12.2008, i.e. much before the order for supply of jute bags in question, but during police investigation it has been found that the bank
account opened in the name of the company with UCO Bank, Lower Circular Road, Kolkata wherein cash transactions of this case were made,
carries the name of the Damodar Prashad Bhattar, Shashi Kant Jha and Shobha Nand Jha and the transactions had been made from the said account.
He is also found to be a director in two companies i.e. M/s Silvertone Construction Pvt. Ltd. and M/s. Bengal Transport City alongwith co-accused
Govind Sarda, proving his deep conspiracy in the present scam. Accused Shashi Kant Jha and Shobha Nand Jha are also stated to be Directors of the
accused company which had supplied defective bags intentionally to cause loss to HAFED.
Upon considering rival submissions, it is noticed that HAFED has received back only a part of the payment in respect of the defective jute bags
i.e. Rs.92,73,824/- in respect of 2,23,440 bags only whereas it had incurred loss in respect of all the bags. The amount qua remaining 10,73,060
defective bags has been witheld by the accused illegally, and the said loss had occurred on account of the defective bags having intentionally been
supplied by the company with which the petitioners are closely associated.
Hon'ble the Supreme Court in State of Haryana Vs. Bhajan Lal, 1992 Supp (1) SCC 33 5enumerated the categories of cases where inherent
powers under Section 482 Cr.P.C. could be exercised for quashing FIR as follows:
“(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their
entirety do not prima facie constitute any offence or make out a case against the accused.
(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence,
justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section
155(2) of the Code.
(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the
commission of any offence and make out a case against the accused.
(4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted
by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.
(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever
reach a just conclusion that there is sufficient ground for proceeding against the accused.
(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is
instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing
efficacious redress for the grievance of the aggrieved party.
(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for
wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.â€
It was further held therein as follows:
“103. We also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with
circumspection and that too in the rarest of rare cases; that the court will not be justified in embarking upon an enquiry as to the reliability or
genuineness or otherwise of the allegations made in the FIR or the complaint and that the extraordinary or inherent powers do not confer an arbitrary
jurisdiction on the court to act according to its whim or caprice.â€
In another recent case Dineshbhai Chandubhai Patel Vs. State of Gujarat, (2018) 3 SCC 104 the Hon'ble Supreme Court held as follows:
“29. …………….. In order to examine as to whether the factual contents of the FIR disclose any prima facie cognizable offences or not, the
High Court cannot act like an investigating agency and nor can exercise the powers like an appellate court. The question, in our opinion, was required
to be examined keeping in view the contents of the FIR and prima facie material, if any, requiring no proof.
………………….
In our considered opinion, once the court finds that the FIR does disclose prima facie commission of any cognizable offence, it should stay its hand
and allow the investigating machinery to step in to initiate the probe to unearth the crime in accordance with the procedure prescribed in the Code.â€
From the above refered judgements, it can be discerned that an FIR and the consequent investigation cannot be quashed unless no offence is spelt
out from the same. It also follows that FIR has to be taken on its face value and then it is to be examined as to whether it spells out the offences
alleged to have been committed. There is no question of considering the merits of the allegations contained in the FIR at initial stage or testing the
veracity of allegations. In this case, the FIR and investigation suggest that are serious allegations against the accused inasmuch the complainant
HAFED has been cheated of colossal amount running into crores. Not only the bags supplied were found to be mutilated and defective but some of
them bore marking of some other firm and of a different year. Still further, there was even shortfall of the bags and all this was done apparently with
an intention to cheat the complainant.
Although some amount in respect of the shortfall was subsequently paid to the complainant pursuant to several inspections and directions issued by
High Court at Calcutta but such subsequent making good a part of the loss would not absolve the accused of their liability for having nursed an
intention to cheat the complainant and having actually cheated the complainant of huge amount. The complicity of the petitioners is evident as they are
prima-facie shown to be actively associated with M/s JK Jute Mills. In any case at this stage meticulous examination is not required to be conducted
and if the facts broadly and prima-facie do suggest the involvement of accused, then it is during trial that the accused may lead evidence to demolish
the case of prosecution. The present case is certainly not a case where the investigation should be scuttled short at this stage. It is not for this Court,
in exercise of powers u/s 482 Cr.PC to examine as to whether any offence was actually committed by the accused persons or not. At this stage the
only question to be examined is as to whether the FIR does contain allegations of any offence.
The contention of the petitoners that it is merely a case of civil liability cannot be accepted in view of the factual position stated above which
necessarily indicates that loss has been caused intentionally to HAFED by the accused in an attempt to cause unlawful gain to themselves. The facts
prima-facie satisfy the ingredients of offences complained of and thus no case for quashing of FIR is made out.
The petitions are sans any merit and the same are hereby dismissed.