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2002 DIGILAW 382 (ORI)

SAROJ KUMAR SAHOO v. STATE OF ORISSA

2002-07-01

L.MOHAPATRA

body2002
L. MOHAPATRA, J. ( 1 ) PETITIONER in this application under S. 402, Cr. P. C. has prayed for quashing the FIR No. 61 of 2000 corresponding to Bhubaneswar Vigilance P. S. Case No. 61 of 2000 registered against him and some others for commission of the offences under Sections 120-B/420/468/471, IPC read with Sections 13 (2) and 13 (1) (d) of the Prevention of Corruption Act (hereinafter referred to as 'the Act' ). ( 2 ) THE facts giving rise to the present case are that the petitioner is the Secretary-cum-Managing Trustee of Nabapravat Trust which is a Charitable Trust created under the Indian Trust Act having its registered office at Bhubaneswar. The trust in order to achieve its objectives established a Technical Educational Institution in the year 1997 in the name and style of C. V. Raman School of Engineering which was subsequently renamed as Nilachal Polytechnic at Mancheswar Industrial Estate, Bhubaneswar with due permission from the appropriate authorities. This institution imparts technical education in various branches of Engineering. The Trust subsequently established another technical institution in the year 1999 in the name and style of Nilachal Institute of Computer Science (for short, 'nics') for imparting education in Computer Science. This institution also runs in the same premises at Mancheswar Industrial Estate, Bhubaneswar. From the date of establishment of both the institutions, the students were admitted as per guidelines of the State Government and All India Council for Technical Education (for short, 'aicte) and necessary education and training were imparted. The petitioner who is a qualified Civil Engineer was serving as the Principal of Nilachal Polytechnic and was also looking after the affairs of the other institution viz. NICS. In April, 2000, Vigilance P. S. Case No. 25 of 2000 was registered for the offence alleged to have been committed under the Act against one Bichitrananda Muduli who was working as the Chief Engineer, Rural Works at the relevant time. The said case was also registered against the son of the aforesaid public servant viz. Nalinikant Muduli who was the Managing Trustee of Nabapravat Trust. Another Vigilance case vide Bhubaneswar P. S. Case No. 43 of 2000 was also registered against the aforesaid two persons for offences alleged to have been committed under certain provisions of the Penal Code as well as the P. C. Act. Nalinikant Muduli who was the Managing Trustee of Nabapravat Trust. Another Vigilance case vide Bhubaneswar P. S. Case No. 43 of 2000 was also registered against the aforesaid two persons for offences alleged to have been committed under certain provisions of the Penal Code as well as the P. C. Act. In connection with the aforesaid two cases a raid was conducted in the premises of the Trust as well as the institutions running under the said Trust. The premises where two technical institutions are functioning had been taken on hire by the Trust from M/s. Zerina Marine (P) Ltd. which is a Private Limited Company belonging to the aforesaid Nalinikant Muduli, who is the son of the public servant against whom two Vigilance Cases have been registered. The premises previously belonged to one M/s. Utkal Ceramics. The said unit had been financed by the Orissa State Financial Corporation (for short, 'osfc') and as it could not pay the loan dues to the CSFC, it was taken over in exercise of power under Section 29 of the State Financial Corporation Act and pursuant to a sale notice the same was purchased by M/s. Zerina Marine (P) Ltd. who in turn allowed the Trust to use the premises for running two institutions on hire. However, after conducting raid in the premises, the Vigilance Department instituted the present case. In this case, prosecution allegations are that a conspiracy was hatched between the Branch Manager of CSFC, Branch-I, Bhubaneswar and other accused persons and pursuant to such conspiracy, industrial assets consisting of land more than 1/2 acre , two IDCO sheds earlier belonging to M/s. Utkal Ceramics had been handed over to accused Nalinikant Muduli in undue haste on 7-7-1997 for sale price of Rs. 20,00,000. 00 which is considered to be lower than the market rate and that too with down payment of only Rs. 5,00,000. 00. As per prosecution allegation one of the essential conditions of sale was that in case of diversification of products buyer has to take written approval from the lending institution failing which it has to continue with the same product as earlier occupant was producing. 5,00,000. 00. As per prosecution allegation one of the essential conditions of sale was that in case of diversification of products buyer has to take written approval from the lending institution failing which it has to continue with the same product as earlier occupant was producing. It is further alleged by the prosecution that the said Nalinikant Muduli declared himself to be a Civil Engineer and prepared a project report for setting up a fabrication unit at Bhubaneswar on behalf of M/s. Zerina Marine (P) Ltd. and impersonating himself as an Engineer could obtain transfer of title of lands and sheds from IDCO. It is also alleged that the said Nalinikant Muduli along with the present petitioner under the name of Nabapravat Trust established both the institutions where the present petitioner continued as Principal. ( 3 ) SRI H. S. Misra, learned counsel appearing for petitioner challenged the initiation of the proceeding on the ground that the petitioner was only working as Principal of both the technical institutions and had nothing to do with transfer of assets from the OSFC to M/s Zerina Marina (P) Ltd. and even if the entire prosecution case is accepted, no offence is made out so far as the present petitioner is concerned, Sri D. K. Mohapatra, learned counsel for Vigilance Department on the other hand, submitted that there was a conspiracy between accused Nalinikant Muduli, present petitioner and officials of the OSPC resulting in transfer of assets which had been taken ever by the OSFC in exercise of power under Section 29 of the State Financial Corporation Act and pursuant to such conspiracy, transfer of assets having been made the petitioner is liable for the alleged offences. ( 4 ) IN the light of the argument advanced by the learned counsel for both the parties, I proceed to examine the case of the prosecution. The FIR in the present case, in essence alleges the following acts of Nalinikant Muduli as well as the present petitioner. (I) Nalinikant Muduli who is the Managing Director of M/s. Zerina Marine (P) Ltd. obtained a special class and super class contractors licence in fraudulent manner which is the subject matter of Bhubaneswar Vigilance P. S. Case No. 43 of 2000. (I) Nalinikant Muduli who is the Managing Director of M/s. Zerina Marine (P) Ltd. obtained a special class and super class contractors licence in fraudulent manner which is the subject matter of Bhubaneswar Vigilance P. S. Case No. 43 of 2000. (II) Nalinikant Muduli along with one Susant Kumar Kar, the Branch Manager of OSFC, Branch-I, Bhubaneswar hatched a conspiracy and got the assets of M/s. Utkal Ceramic transferred in the name of M/s. Zerina Marine (P) Ltd. in a haste for sale price of Rs. 20,00,000. 00 which is considered lower than the market rate. (III) Without approval of the competent authority M/s. Zerina Marine (P) Ltd. could not have changed the product produced by the earlier occupant and could not have used the premises for any purpose other than producing what M/s. Utkal Ceramic was producing. (IV) The petitioner was also a part of conspiracy as the Principal of both the institutions. (V) Accused Nalinikant Muduli and the present petitioner by heavily bribing the officials managed to get affiliation for the Engineering College from the Director of Technical Education, Orissa, AICTE and other authorities and put the career of hundreds of students at a stake. From the case diary, it appears that statement of one Bhuban Mohan Maharana, Branch Manager, OSFC, Branch No. 1, Bhubaneswar had been recorded by the I. O. The said witness in his statement has stated that as per record industrial assets of M/s. Utkal Ceramic had been seized under Section 29 of the State Financial Corporation Act by Susant Kumar Kar, the then Branch Manager of the said Branch on 22-2-1997. The industrial assets of M/s. Utkal Ceramics consisted of the number of sheds on plot Nos. B/3 and B/8 in Mancheswar Industrial Estate along with plant, machinery and other equipments, liability of M/s. Utkal Ceramics as on 30-6-1996 was Rs. 27,83,416. 08. The industrial unit and its assets were physically handed over to Nalinikant Muduli, Managing Director of M/s. Zerina Marine (P) Ltd. pursuant to sale letter No. 442 dated 27-6-1997 issued by Recovery Department on 7-7-1997 for a consideration of Rs. 20,00,000. 00 out of which down payment of Rs. 5,00,000. 00 had been received. This witness does not speak of any conspiracy whatsoever alleged to be made between Susant Kumar Kar and Nalinikant Muduli. 20,00,000. 00 out of which down payment of Rs. 5,00,000. 00 had been received. This witness does not speak of any conspiracy whatsoever alleged to be made between Susant Kumar Kar and Nalinikant Muduli. On the other hand, the statement of the witness clearly shows that through official process sale had been made in favour of M/s. Zerina Marine (P) Ltd. for a consideration of Rs. 20,00,000. 00 as against an outstanding due of M/s. Utkal Ceramics standing at about Rs. 20,00,000. 00. Another witness viz. , Pravat Ranjan Mohapatra working as Joint General Manager, Recovery in CSFC in his statement has clearly stated that the seized industrial assets of M/s. Utkal Ceramics had been put to sale by way of advertisement in the daily Prajatantra dated 16-3-1997 and the Samaj dated 17-3-1997. The seized industrial assets were valued on 26-3-1997 by the Deputy Manager, Technical at 20. 16 lakhs. As per the above advertisements, the proposal for disposal of industrial assets was placed on 27-3-1997 in 198th D. A. C. (Disposal-cum-default Advisory Committee) consisting of four members viz, Sri I. Srinivasan, I. A. S, Chairman, Sri G. C. Das, E. D. , Sri N. K. Pasayat and Sri P. K. Swain, Directors, only one party viz. A. K. Giridhar on behalf of one Budhiraj gave an offer of Rs. 14. 40 lakhs as a result of which the sale was deferred. Again sale was advertised on 6-6-1997 and pursuant to such advertisement Nalinikant Muduli expressed his willingness to purchase the industrial assets which was placed before the aforesaid Committee in its 199th meeting held on 18-6-1997. Nalinikant Muduli was the only person who had offered to purchase the assets of the said industrial unit and had offered Rs. 17,00,000. 00. After negotiation, price was settled at Rs. 20,00,000. 00 with down payment of Rs. 5,00,000. 00. The Committee being satisfied with the offer decided to finalise the same for a price of Rs. 20,00,000. 00 in favour of Nalinikant Muduli. Down payment of Rs. 5,00,000. 00 was received and the rest Rs. 15,00,000. 00 were taken as loan component on deferred payment basis by the D. A. C. After the receipt of payment of Rs. 5,00,000. 00, the unit was handed over. 20,00,000. 00 in favour of Nalinikant Muduli. Down payment of Rs. 5,00,000. 00 was received and the rest Rs. 15,00,000. 00 were taken as loan component on deferred payment basis by the D. A. C. After the receipt of payment of Rs. 5,00,000. 00, the unit was handed over. This witness has further stated that accused Nalinikant Muduli has never applied to the OSFC seeking permission for diversification of the products of the original loanee M/s. Utkal Ceramics. ( 5 ) I have carefully perused the statements of other witnesses when have been examined during investigation. From the statements of the aforesaid witnesses, the following facts are clearly established. (I) The industrial assets originally belonged to M/s. Utkal Ceramics which had been financed by the O. S. F. C. As the said company had defaulted in payment of dues of the OSFC, the unit was taken over by OSFC in exercise of power under Section 29 of the State Financial Corporation Act. (II) The first advertisement was issued in March, 1997 and OSFC received only one offer for Rs. 14. 40 lakhs. The negotiation, the price was settled at Rs. 20. 00 lakhs. Out of the said consideration, Rs. 5. 00 lakhs had been deposited as down payment and the rest Rs. 15. 00 lakhs were to be paid within 51/2 years. In view of such facts established by way of oral and documentary evidence, it can never be said that there was any conspiracy whatsoever, between the officials of the OSFC and other accused persons for purchasing the unit at a price lower than the market value. The records and statements of the witnesses clearly indicate that the OSFC had not got an offer at first instance to its satisfaction for which second advertisement was issued and pursuant to the said advertisement, accused Nalinikant Muduli had offered Rs. 17. 00 lakhs which was ultimately settled at Rs. 20,00 lakhs after negotiation. The Committee also accepted the sale consideration and sale letter was issued. In view of such evidence available on record, I have no hesitation to hold that the prosecution has not been prima facie able to prove that there was any conspiracy as alleged. 17. 00 lakhs which was ultimately settled at Rs. 20,00 lakhs after negotiation. The Committee also accepted the sale consideration and sale letter was issued. In view of such evidence available on record, I have no hesitation to hold that the prosecution has not been prima facie able to prove that there was any conspiracy as alleged. So far as sale of the unit in favour of M/s Zaire Marine (P) Ltd. is concerned, there is no whisper about any role played by the present petitioner in such transaction and accordingly, I also do not find any prima facie case so far as the present petitioner is concerned, There is some material to show that accused Nalinikant Muduli without permission of the competent authority has gone in for diversification of products. There also the present petitioner had no role to play. Even if such evidence is accepted, no offence under the penal Code is established. Violation of any terms of contract is a civil dispute and no criminal liability can be attributed. ( 6 ) IN this connection, reference may be made to a decision, of this Court in the case of Ramesh Chandra Das v. Smt. Premalata Patra, reported in (1988) 2 OLR 254. In the said decision, this Court while dealing with offence under Section 420, IPC clearly held that in order to bring a case within the ambit of Section 420, IPC, it is necessary that there should be a direct connection between the false representation and the delivery of the property of the doing of something by the person deceived. It is further necessary that the act or the omission complained of should cause or is likely to cause damage or harm to the person or property. In order that a person can be convicted under Section 420, it has to be established that not only he has cheated someone but also that by doing so he has dishonestly induced the person who was cheated to deliver the said property etc. There must be a deception which must precede the fraudulent or dishonest inducement. In order that a person can be convicted under Section 420, it has to be established that not only he has cheated someone but also that by doing so he has dishonestly induced the person who was cheated to deliver the said property etc. There must be a deception which must precede the fraudulent or dishonest inducement. Further this Court also while dealing with Section 468, IPC held that the essential ingredients constituting the offence under Section 468, IPC are that the document in question is a forged document, that the accused forged the same and in forging he intended that it shall be used for the purpose of cheating. There is absolutely no material on record to establish either office under Section 420 or 468, IPC and therefore, I find that no prima facie case has been made out for the aforesaid two offences against the petitioner. ( 7 ) SO far as Section 120-B, IPC is concerned, reference may be made to a decision of the Apex Court in the case of B. H. Narasimha Rao v. Government of Andhra Pradesh, represented by C. B. I. reported in AIR 1996 SC 64 . In the said decision the Apex Court held that before a person can be convicted constructively with the aid of Section 120-B, IPC, the requirement of Section 120-A, IPC defining 'criminal conspiracy' would have to be met. Section 120-A, IPC reads as follows :"120-A. Definition of criminal conspiracy- when two or more persons agree to do, or cause to be done.- (1) an illegal act, or (2) an act which is not illegal by illegal means, such an agreement is designated a criminal conspiracy; provided that no agreement except an agreement to commit an offence shall amount to a criminal conspiracy unless some act besides the agreement is done by one or more parties to such agreement is pursuance thereof. "even accepting the prosecution case in entirety so far as transfer of industrial assets are concerned, in my view, no prima facie case of criminal conspiracy has been made out and therefore, offence under Section 120-B, IPC is also not made out. ( 8 ) SO far as offence under Section 471, IPC is concerned, I also do not find any material in support of the same so far as the present petitioner is concerned. ( 8 ) SO far as offence under Section 471, IPC is concerned, I also do not find any material in support of the same so far as the present petitioner is concerned. In view of the aforesaid discussions, I do not find that the prosecution has been able even to make out a prima facie case for the alleged offences committed under Sections 120-B, 420, 468 and 471, IPC so far as the present petitioner is concerned. ( 9 ) SRI Mohapatra, learned counsel appearing for the Vigilance Department also submitted in course of argument that this Court in exercise of jurisdiction under Section 482, Cr. P. C. should not interfere at the preliminary stage. In this connection, reference may be made to the case of Ramesh Chandra Das (supra ). This Court in the aforesaid decision has laid down the guidelines where the Court should exercise jurisdiction under Section 482, Cr. P. C. "5. Section 482 of the Code of Criminal Procedure is a verbatim reproduction of the corresponding provision in S. 561-A of the Code of Criminal Procedure, 1898. Since the High Court has jurisdiction over all criminal Courts subordinate to it, in course of administration of justice, the Court comes across cases and circumstances which are not covered by the express provisions of the Code of Criminal Procedure and yet it feels that justice has to be done, No Legislature can foresee all events and circumstances and no rule can regulate for all times to come. Every Court in the absence of express provision in the Code is deemed to possess powers necessary to do the right and undo a wrong in course of administration of justice. The High Court in addition to the same, because of its overall jurisdiction over all Criminal Courts should not abuse the process of Court and should act in a manner so as to secure the ends of justice. The inherent power of the High Court is exercised for the aforementioned purposes. It is not in every case of an error committed by a lower Criminal Court that the High Court would interfere in exercise of its inherent jurisdiction, it is only when the High Court comes to the conclusion that there has been an abuse of the process of Court or there has been gross miscarriage of justice, the High Court would be justified in exercising its inherent jurisdiction. That is why, the Supreme Court has said in several cases that the inherent jurisdiction of the High Court should be very cautiously and sparingly used. The circumstances in which and the parameters within which such power is exercised vis-a-vis an order of cognizance by a Criminal Court of framing of charge by the Criminal Court at the initial stage has been considered by Supreme Court and this Court in large number of cases. In a recent decision of the Supreme Court in the case of Madhavrao Jiwaji Rao Scindia v. Sambhajirao Chandrajirao Angre, 1988 Cri App R 121 (SC) it was observed by the Supreme Court :"the legal position is well-settled that when a prosecution at the initial stage is asked to be quashed, the test to be applied by the Court is as to whether the uncontroverted allegations as made prima facie establish the offence. It is also for the Court to take into consideration any special features which appear in a particular case to consider whether it is expedient and in the interest of justice to permit a prosecution to continue. This is so on the basis that the Court cannot be utilised for any oblique purpose and where in the opinion of the Court chances of an ultimate conviction is likely to be served by allowing a criminal prosecution to continue, the Court may while taking into consideration the special facts of case also quash the proceeding even though it may be at a preliminary stage. "the Apex Court in the case of State of Haryana Ch. Bhajan Lal, reported in AIR 1992 SC 604 also laid down the principles and guidelines with regard to exercise of jurisdiction under Section 482, Cr. P. C. The Apex Court in the said case held as follows :-"in the following categories of cases, the High Court may in exercise of powers under Art. 226 or under S. 482, Cr. P. C. may interfere in proceedings relating to cognizable offences to prevent abuse of the process of any Court or otherwise to secure the ends of justice. However, power should be exercised sparingly and that too in the rarest of rare cases. P. C. may interfere in proceedings relating to cognizable offences to prevent abuse of the process of any Court or otherwise to secure the ends of justice. However, power should be exercised sparingly and that too in the rarest of rare cases. (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 S. 156 (1) of the Code except under an order of a Magistrate within the purview of S. 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 S. 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 of 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. (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. Where allegations in the complaint did constitute a cognizable offence justifying registration of a case and investigation thereon and did not fall in any of the categories of cases enumerated above, calling for exercise of extraordinary powers or inherent powers, quashing of FIR was not justified. " ( 10 ) SINCE I find that no prima facie case is made out so far as the present petitioner is concerned, even accepting the entire prosecution case to be correct, I am of the view that continuance of the proceeding will be an abuse of process of Court and may lead to gross miscarriage of justice so far as the present petitioner is concerned. ( 11 ) ACCORDINGLY, the application is allowed and the proceeding in Bhubaneswar Vigilance P. S. Case No. 61 of 2000 stands quashed so far as the present petitioner is concerned. Application allowed.