Judgment
1/25 WP-1730-2024 (J).odt IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION WRIT PETITION NO. 1730 OF 2024 1.
Mylan Laboratories Limited a company incorporated under the Companies Act, 1956 having its registered office at:- Plot No. 564/A/22, Road No. 92 Jubilee Hills, Hyderabad – 500 094 Telangana, India, through its CEO and Managing Director Mr. Rakesh Bamzai …Petitioner Versus 1.
The State of Maharashtra Through Economic Offences Wing Mumbai.
2.
The Senior Police Inspector Mr. Nitin Unhavane Economic Offences Wing Sales Tax Unit – XII GST Bhawan, H Wing Ground Floor, Nesbit Road Mazgaon, Mumbai, 400010.
Respondents Senior Advocate Mr. Amit Desai, a/w Advocate Parag Kabra, Vikrant Singh Negi, Ekta Tyagi, Pratik Thakkar, Sneha Barange i/b Dsk Legal, Advocates for the Petitioner.
Mr. Tanveer Khan, learned APP for Respondents.
------- CORAM : ASHWIN D. BHOBE, J.
Arjun
2/25 WP-1730-2024 (J).odt Reserved On : 08th May, 2026 Pronounced On : 07th August, 2026 JUDGMENT :
1.
Heard Mr. Amit Desai, learned Senior Advocate for the Petitioner and Mr. Tanveer Khan, learned APP for the Respondents.
2.
Rule. Rule made returnable forthwith and with the consent of the parties, heard finally.
3.
This petition, filed under Article 226 of the Constitution of India read with Section 482 of the Cr.P.C., is preferred by the Petitioner to quash the FIR bearing No. 550 of 2023, dated 20.10.2023, registered by the Agripada Police Station, Mumbai, subsequently transferred to the Economic Offences Wing, Mumbai (“EOW”) and renumbered as C.R. No. 59 of 2023 (“impugned FIR”), for offences punishable under Sections 406, 409, 420, 120B and 34 of the Indian Penal Code, 1860 (“IPC, 1860”).
4.
In brief, the prosecution case is that the EOW, Mumbai, received a complaint alleging corruption and cheating by officials of the Municipal Corporation of Greater Mumbai (“MCGM”), the Petitioner and others in relation to the purchase of vials of Remdesivir injections under a Tender floated for the purchase of Arjun
3/25 WP-1730-2024 (J).odt Remdesivir injections (used for the treatment of COVID-19) during the COVID-19 pandemic at escalated rates. The allegation was that the vials of Remdesivir injections purchased by MCGM at different rates raised suspicions of fraud against the Government exchequer.
5.
On 06.05.2024, the Division Bench of this Court passed the following order in this petition:
“1.
Report of Lokayukta, State of Maharashtra dated 3 January, 2023 is annexed to the Petition (page 198-215). Upon a query put to the Investigating Officer, he feigned ignorance about such report being in existence. It clearly appears to us that, the Investigating Officer is oblivious of the fact that certain Affidavits of Government Officers were filed in the inquiry conducted by the Lokayukta in Complaint No.LA/COM/1486/2021 (T-1).
2.
We therefore called upon the Investigating Agency to show the statement of Deputy Dean, Dr.
Vandana Tandel who had filed an Affidavit in the said inquiry before the Lokayukta and whose name also reflects in last paragraph of page No.1 of the statement of Senior Police Inspector Mr. Nitin Unhvane.
2.1) It was informed us that, the Investigating Officer is attending this Court today without record of investigation and therefore we are precluded for having an opportunity to peruse the statement of Deputy Dean, Dr.
Vandana Tandel.
3) In view thereof we direct the Investigating Officer to file a detailed reply to the Petition.This be done within a period of five weeks from today.
4) Stand over to 18th June, 2024.
5) Till the returnable date, though investigation of the crime may continue, the Investigating Agency shall not file charge-sheet without prior leave of this Court.” Arjun
4/25 WP-1730-2024 (J).odt 6.
The direction contained in paragraph No. 5 of the interim order dated 06.05.2024 continues to operate as on date.
7.
Mr. Amit Desai, learned Senior Advocate for the Petitioner, canvassed oral arguments and in addition, placed the written submissions on record. The list of dates referred to in the chart of the written submission is not disputed by Mr. Tanveer Khan, learned APP.
Accordingly, by consent of the parties, the said list of dates, relevant for the purpose of this petition, is reproduced herein below verbatim:
- Sr. No.
Date Particulars 1.
July, 2020 Petitioner launched Remdesivir in India under the brand name DESREMTM at a price of Rs. 4,800 per vial.
2.
July, 15, 2020 Municipal Corporation of Greater Mumbai (“MCGM”) issued E-Tender No.
7100179253 for 11,000/- vials. The Petitioner supplied 7,500 vials of which 5500 vials were supplied at Rs. 2,626 and 2000 were supplied at Rs. 2,237 3.
September,
11, 2020 MCGM issued E-Tender No. 7100180976 for 66,740 vials. The Petitioner supplied 65,770 vials at Rs. 2,183.
4.
March 15, 2021 April 1, 2021 MCGM
issued
E-Tender
No.
71001206945 for 40,000 vials. The Petitioner was allotted 70% of the tender (28,000 vials), being the L1 Arjun
5/25 WP-1730-2024 (J).odt bidder and supplied 19,000 at Rs. 650.
Revised PO for 18,000 vials (13 hospitals). 19,000 supplied to MCGM and MCGM dedicated hospital (Seven Hills Hospitals).
5.
April 1, 2021 Owing to a sudden surge in COVID -19 cases, and the fact that supply wasn’t forthcoming, MCGM issued another tender for 200000 vials. Petitioner was the sole and successful bidder and supplied 64942 vials at Rs. 1,598.
6.
April 7, 2021 The Petitioner participated in three other public institution tenders apart from MCGM and was awarded multiple tenders around the same period at the same price.
7.
April 10, 2021 to May 23, 2021 The Petitioner supplied 64492 vials under the April 2021 Tender.
8.
May 26, 2021 The April 2021 Tender was cancelled by the MCGM.
9.
Total amount of Rs. 10,95,59,742/- (without interest) due from MCGM to Petitioner under all 4 tenders, i.e., July 2020 – April, 2021, including the March, 2021 tender.
10.
January 3, 2023 A complaint was filed before the Lokayukta against MCGM and other institutes alleging corrupt malpractices Arjun
6/25 WP-1730-2024 (J).odt in purchase of Remdesivir. Lokayukta rejected all the allegations made in the complaint by order dated January 3, 2023.
11.
October 20, 2023 Impugned FIR registered for the offences u/s. 406, 409, 420, 120B, and 34 of the IPC against officials of MCGM and directors of the Petitioner. Hence, the present petition is filed seeking to quash the impugned FIR.
8.
Mr Amit Desai, learned Senior Advocate for the Petitioner, submits that the tenders forming the subject matter of the impugned FIR were earlier the subject of a detailed investigation by the Maharashtra Lokayukta on a complaint alleging that the MCGM did not follow proper procedures, engaged in corruption and charged higher prices. By referring to Exhibit-N (pages 198 to 215 of the petition paper book), he submits that the Maharashtra Lokayukta concluded that no corruption was involved in the procurement of Remdesivir vials by MCGM, that the tender process was transparent and that the escalation in prices of the vials was attributable solely to increased market demand, thereby exonerating the public servants.
9.
Mr Amit Desai, learned Senior Advocate by referring to the decision of the Hon’ble Supreme Court in Delhi Race Club (1940) Ltd Arjun
7/25 WP-1730-2024 (J).odt v. State of U.P.1, submits that offences under Sections 409 and 420 of the IPC, 1860 cannot be invoked simultaneously in respect of the same transactions, as the offences are mutually destructive and cannot co-exist on the same factual foundation. He submits that, even otherwise, the ingredients of offences under Sections 406, 409 or 420 of the IPC, 1860 are not made out against the Petitioner. He further submits that none of the ingredients required for an offence of cheating punishable under Section 420 of the IPC, 1860 are made out in the impugned FIR.
10.
Mr. Amit Desai, learned Senior Advocate, submits that Respondent No. 2, in its Affidavit in reply dated 19.07.2024, has specifically stated that although the investigation indicated certain procedural irregularities, the allegations forming the basis of the impugned FIR remain unsubstantiated. By referring to the Additional Affidavit dated 06.02.2025 of Respondent No. 2, he submits that Respondent No. 2 has restricted its allegation to the alleged non- supply of 9000 vials of Remdesivir to the MCGM under Tender No.
7100206945 and further alleges that this non-supply constitutes a wrongful loss to the Government and hence an offence is committed. He submits that the quantity alleged not to have been supplied was in fact supplied to Seven Hills Hospital, an MCGM- dedicated Covid Hospital. He submits that even MCGM, in its letter 1 (2024) 10 SCC 690 Arjun
8/25 WP-1730-2024 (J).odt dated 22.04.2021 addressed to CPWD, has admitted that the complete quantity under Tender No. 7100206945 was received. He submits that MCGM has failed to pay the Petitioner for supplies made by the Petitioner under the four (4) tenders, including payment for 19,000 vials pertaining to the March, 2021 Tender and that an aggregate sum of Rs. 10,95,59,742/- remains outstanding from the MCGM. He submits that the allegations made against the public servants, i.e. MCGM officials, pertaining to the tender forming the subject matter of the impugned FIR were found, on merits, not sustainable by the Maharashtra Lokayukta, resulting in the exoneration of the said public servants and that this would accrue to the benefit of the Petitioner, consequently, the criminal prosecution on the same set of facts ought not to be permitted. He submits that no case for registration of the impugned FIR is made out.
11.
Mr. Tanveer Khan, learned APP for the State, submits that the contents of the impugned FIR indicate that the Petitioner committed the offence. He further submits that wrongful loss has been caused to the Government for the reasons stated in the impugned FIR.
12.
Mr. Tanveer Khan learned APP does not contest the submission of Mr. Amit Desai, learned Senior Advocate for the Petitioner, in relation to the Order dated 03.01.2023 passed by the Maharashtra Lokayukta in Complaint No. LA/Com/1486/2021 (T-1) and the Arjun
9/25 WP-1730-2024 (J).odt findings/observations made by the Maharashtra Lokayukta in the said order.
13.
Mr. Tanveer Khan, learned APP, on instructions from the Respondents, does not dispute the statement made by Mr. Amit Desai, learned Senior Advocate for the Petitioner, that MCGM is due to pay the Petitioner for the vials supplied by the Petitioner to MCGM under the four (4) tenders. However, Mr. Tanveer Khan does not agree with the quantum of the amount due as submitted by Mr. Amit Desai, learned Senior Advocate.
14.
Perused records with the assistance of the learned Advocates for the parties.
15.
The gist of the allegations in the impugned FIR is that, instead of purchasing Remdesivir vials at Rs. 650/- per vial under Tender No.
7100206945 dated 30.03.2021, MCGM purchased vials at Rs. 1568/- per vial under a new Tender No. 7100207702 dated 07.04.21, thereby causing loss to the Government to the tune of Rs.5,96,70,000/-. The FIR alleges that the Central Purchase Department of MCGM conspired with the Petitioner and by issuing a new Tender, purchased additional vials at a higher price, thereby causing wrongful loss to the Government and consequential wrongful gain to the Petitioner. The impugned FIR alleges offences under Arjun
10/25 WP-1730-2024 (J).odt Sections 406, 409, 420 and 120B read with Section 34.
16.
To constitute an offence of criminal breach of trust, punishable under Sections 406 or 409 of the IPC, 1860, the essential ingredients are: (i) entrustment of property or dominion over property; and (ii) dishonest misappropriation, conversion, use, or disposal of such property in violation of any legal direction or contract.
17.
The offence of cheating punishable under Section 420 of IPC postulates dishonest or fraudulent inducement at the inception resulting in delivery of property and consequent wrongful gain to the accused and / or wrongful loss to the person so deceived.
18.
In Delhi Race Club (supra), the Hon’ble Supreme Court, in para 55, has observed as follows:
“55.
It is high time that the police officers across the country are imparted proper training in law so as to understand the fine distinction between the offence of cheating vis-à-vis criminal breach of trust. Both offences are independent and distinct. The two offences cannot coexist simultaneously in the same set of facts. They are antithetical to each other. The two provisions of IPC (now BNS, 2023) are not twins that they cannot survive without each other.” 19.
In Arshad Neyaz Khan v. State of Jharkhand2, the Hon’ble Supreme Court, in para 21, observed as follows:
“21.
Furthermore, it is pertinent to mention that if it is 2 2025 SCC OnLine 2058 Arjun
11/25 WP-1730-2024 (J).odt the case of the complainant/respondent No. 2 that the offence of criminal breach of trust as defined under Section 405 IPC, punishable under Section 406 IPC, is committed by the accused, then in the same breath it cannot be said that the accused has also committed the offence of cheating as defined in Section 415, punishable under Section 420 IPC.
This Court in Delhi Race Club (1940) Limited v. State of Uttar Pradesh, (2024) 10 SCC 690 observed that there is a distinction between criminal breach of trust and cheating. For cheating, criminal intention is necessary at the time of making false or misleading representation i.e. since inception.
In criminal breach of trust, mere proof of entrustment is sufficient. Thus, in case of criminal breach of trust, the offender is lawfully entrusted with the property, and he dishonestly misappropriates the same. Whereas, in case of cheating, the offender fraudulently or dishonestly induces a person by deceiving him to deliver a property. In such a situation, both offences cannot co-exist simultaneously.
Consequently, the complaint cannot contain both the offences that are independent and distinct. The said offences cannot co-exist simultaneously in the same set of facts as they are antithetical to each other.” 20.
In State of Gujarat v. Jaswantlal Nathalal,3 the Hon’ble Supreme Court in paragraph no. 8 has observed as follows:
“8.
The term “entrusted” found in Section 405 IPC governs not only the words “with the property” immediately following it but also the words “or with any dominion over the property” occurring thereafter —see Velji Raghvaji Patel v.
State of Maharashtra. Before there can be any entrustment there must be a trust meaning thereby an obligation annexed to the ownership of property and a confidence reposed in and accepted by the owner or declared and accepted by him for the benefit of another or of another and the owner. But that does not mean that such an entrustment need conform to all the technicalities of the law of trust — see Jaswantrai Manilal Akhaney v. State of Bombay . The expression “entrustment” carries with it the implication that the person handing over any property or on whose behalf that property is handed over to another, continues to be its owner. Further the person handing over the property must have confidence in the person taking the property so as to create a fiduciary relationship between them. A mere transaction of sale cannot amount to an entrustment. It is true that the Government had sold the cement in question to BSS solely for the purpose of 3 (1967) SCC OnLine SC 58 Arjun
12/25 WP-1730-2024 (J).odt being used in connection with the construction work referred to earlier. But that circumstance does not make the transaction in question anything other than a sale. After delivery of the cement, the Government had neither any right nor dominion over it. If the purchaser or his representative had failed to comply with the requirements of any law relating to cement control, he should have been prosecuted for the same. But we are unable to hold that there was any breach of trust.” 21.
In Central Bureau of Investigation New Delhi V. Duncans Agro Industries Ltd.4, the Hon’ble Supreme Court in paragraph 21 has observed as follows:
“21.
Mr Shanti Bhushan has also referred to a decision of this Court in State of Gujarat v. Jaswantlal Nathalal [(1968) 2 SCR 408 : AIR 1968 SC 700] . In the said decision it has been indicated that the term ‘entrusted’ found in Section 405 IPC governs not only the words “with the property” immediately following it but also the words “or with any dominion over the property” occurring thereafter. Before there can be any entrustment, the entrustment carries with it the implication that the person handing over any property or on whose behalf that property is handed over to another, continues to be its owner. A mere transaction of sale cannot amount to an entrustment. It has been observed in the said decision that although the Government had sold the cement in question to BSS solely for the purpose of being used in connection with the construction work referred to earlier, that circumstance does not make the transaction in question anything other than a sale. After delivery of the cement, the Government had neither any right nor dominion over it. If the purchaser had failed to comply with the requirements of any law relating to cement control, he should have been prosecuted for the same. But the Court was unable to hold that there was any breach of trust.” 22.
In the present case, as noted above, the allegations relate to the procurement of Remdesivir through a Tender process. It is alleged 4 (1996) 5 SCC 591 Arjun
13/25 WP-1730-2024 (J).odt that instead of purchasing Remdesivir at Rs. 650 per vial, MCGM subsequently issued a new Tender and purchased additional vials at a higher price, i.e. Rs. 1568 per vial. A mere sale transaction would not constitute an entrustment. In the present case, as submitted by Mr.
Amit Desai, learned Senior Advocate, the Respondents do not dispute that MCGM owes an amount to the Petitioner for the supply of Remdesivir under the tenders.
23.
In V. Y. Jose and Anr. v. State of Gujarat and Anr5, the Hon’ble Supreme Court in paragraph 13 and 14 has observed as under:
“13.
Section 415 of the Penal Code defines cheating as under:
“415. Cheating.—Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to ‘cheat’.” 14.
An offence of cheating cannot be said to have been made out unless the following ingredients are satisfied:
(i) deception of a person either by making a false or misleading representation or by other action or omission;
(ii) fraudulently or dishonestly inducing any person to deliver any property; or to consent that any person shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do or omit.
5 2009 (3) SCC 78 Arjun
14/25 WP-1730-2024 (J).odt For the purpose of constituting an offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation. Even in a case where allegations are made in regard to failure on the part of the accused to keep his promise, in the absence of a culpable intention at the time of making initial promise being absent, no offence under Section 420 of the Penal Code can be said to have been made out.” 24.
Mr. Amit Desai, learned Senior Advocate, referring to the entire impugned FIR, submits that the impugned FIR does not disclose the ingredients of the offence under Section 420 of the IPC, 25.
In the Order dated 03.01.2023 in Complaint No.
LA/Com/1486/2021 (T-1), the Maharashtra Lokayukta has recorded the following in paragraphs 21 to 25:- “21 From the affidavit in reply and documents produced by the Respondents, I am of the view that it has not been established and proved by the complainant that there was any
corruption in the purchase of injection Remdesivir by the
respondents. It is also not proved that there was irregularity and non-transparency in the purchase of this injection by them.
It is
abundantly clear from the documents produced by the respondents including the letter issued by the Central Government that there was a sharp variance in the purchase price of injection Remdesivir in couple of weeks after March, 2021 and that was on account of the increased demand for the said injection and reduced supply by the manufacturers and dealers of the Remdesivir injection.
22.
Apart from relying on the purchase orders issued by the respondents, the complainant also has relied on newspaper reports. It is a well settled principle of law that news reports appearing in newspaper cannot be accepted as an evidence and on that basis, no finding can be given about existence of any fact.
Arjun
15/25 WP-1730-2024 (J).odt 23.
The issues, therefore, are accordingly answered -
(i) Whether it is proved that the method and manner of procurement of Remdesivir injection by the respondents was not transparent?
Answer - In the negative.
(ii) Whether it was true that there was corruption in procurement of Remdesivir Injection by MCGM and other authorities?
Answer - Not proved.
(iii) Whether the justification given by the MCGM and other respondents for procurement of Remdesivir injection was plausible and acceptable ?
Answer - Explanation given by MCGM, is plausible and is accepted.
(iv) Whether any recommendation should be made to the Government, MCGM to regulate the sale and purchase of life saving drug in case of any future pandemic?
Answer - The following recommendation will have to be made in respect of issue No. (iv).
Corona pandemic was an event, which had happened almost after 100 years and the Government and its instrumentality such as Corporation etc. was taken by surprise. Though the said outbreak of Covid-19 was declared as a -Pandemic under the provisions of the Disaster Management Act, 2005 and The Epidemic Diseases Act, 1897 was made applicable by the Government of Maharashtra and other States, there was no effective machinery for directing private manufacturers to sell the lifesaving drugs at the particular fixed price. The State of Maharashtra ought to have brought a legislation or ordinance directing the manufacturers to make the supply of lifesaving drugs available at the reasonable rate. If in any case the provisions of the Disaster Management Act, 2005, they do not give powers to the Government, then a suitable amendment has to be made in the Epidemic Diseases Act, 1897. It is a matter of common knowledge that whenever the demand goes up and it cannot be matched with the supply of these lifesaving drugs, the medicines are sold in black market by anti- social elements. The Government of Maharashtra, therefore, shall devise proper action plan by issuing necessary notification, regulation and pass appropriate Act to curtail this menace so that if such a situation arises in future, the Government will be equipped with adequate powers to ensure the proper supply of these lifesaving drugs.
During this period, rumours were afloat that the lifesaving drugs were sold in black market. Effective machinery should have been Arjun
16/25 WP-1730-2024 (J).odt prepared to tackle this problem of black-marketing through the Police and through the Corporation officials.” (emphasis supplied) 26.
Mr. Amit Desai, learned Senior Advocate for the Petitioner, by referring to the Order dated 03.03.2025 passed by the Maharashtra Lokayukta, submits that exoneration of the public servants in Complaint No. LA/Com/1486/2021 (T-1) on merits would benefit the Petitioner. He therefore submits that, on the same set of facts, the impugned FIR should not be continued, as it would be an abuse of the process of law. Reliance is placed on the decisions in the case(s) of Radheshyam Kejriwal v. State of West Bengal6, P.S. Rajya vs. State of Bihar7, Ashoo Surendranath Tewari vs. Deputy Superintendent of Police EOW, CBI and Anr.8, Keshav v. State of Maharashtra9 and Gufran Beig v. CBI10 27.
In Radheshyam Kejriwal (supra), the Hon’ble Supreme Court, in paragraph No. 38(vii), has held as follows:
(vii) In case of exoneration, however, on merits where the allegation is found to be not sustainable at all and the person held innocent, criminal prosecution on the same set of facts and circumstances cannot be allowed to continue, the underlying principle being the higher standard of proof in criminal cases.
6 (2011) 3 SCC 581 7 1996 (9) SCC 1 8 (2020) 9 SCC 636, 9 2022 SCC OnLine Bom 1314 10 2024 SCC OnLine Bom 2917 Arjun
17/25 WP-1730-2024 (J).odt 28.
In P.S. Rajya (supra), the Hon’ble Supreme Court, in paragraphs 17 and 23, has observed as under:
“17.
At the outset we may point out that the learned counsel for the respondent could not but accept the position that the standard of proof required to establish the guilt in a criminal case is far higher than the standard of proof required to establish the guilt in the departmental proceedings. He also accepted that in the present case, the charge in the departmental proceedings and in the criminal proceedings is one and the same. He did not dispute the findings rendered in the departmental proceedings and the ultimate result of it. On these premises, if we proceed further then there is no difficulty in accepting the case of the appellant. For if the charge which is identical could not be established in a departmental proceedings and in view of the admitted discrepancies in the reports submitted by the valuers one wonders what is there further to proceed against the appellant in criminal proceedings. In this context, we can usefully extract certain relevant portions from the report of the Central Vigilance Commission on this aspect.
“Neither the prosecution nor the defence has produced the author of various reports to confirm the valuation. The documents cited in the list of documents is a report signed by two engineers namely S/Shri S.N. Jha and D.N. Mukherjee whereas the document brought on record (Ex. S-20) has been signed by three engineers. There is also difference in the estimated value of the property in the statement of imputation and the report. The document at Ex. S-20 has been signed by three engineers and the property has been valued at Rs 4,85,000 for the ground floor and Rs 2,55,600 for the second floor. A total of this comes to Rs 7,40,900 which is totally different from the figure of Rs 7,69,800 indicated in the statement of imputation.
None of the engineers who prepared the valuation report though cited as prosecution witnesses appeared during the course of enquiry. This supports the defence argument that the authenticity of this document is in serious doubts. It is a fact that the income tax authorities got this property evaluated by S/Shri S.N. Jha and Vasudev and as per this report at pp. 50 to 63 they estimated the property at Rs 4,57,600 including the cost of land Rs 1,82,000 for ground and mezzanine floor plus Rs 2,55,600 for first floor and Rs 20,000 for cost of land. Thus both the engineers who prepared the valuation report for income tax purposes also prepared the report for the CBI and there is no indication in the subsequent report as to why there is a difference in the value of the property. A perusal of these two reports reveals that there is difference in the specification of the work. The valuation report prepared by Shri S.N. Jha for ground floor for income tax purposes clearly states that the structure was having “RCC pillars at places, brickwork in cement mortar, RCC lintel, 60 cm walls, 9 inch floor height, 17.6, 8.00, 8.00 Arjun
18/25 WP-1730-2024 (J).odt inch” but in the report for CBI which was also prepared by him the description is “RCC framed structure open verandah on three sides in the ground floor”. Similarly, for the first floor it is written in the report as “partly framed structure and partly load being walls, floor heights 3.20 mm. Further Shri S.N. Jha on p.
54 of Ex. D-1 had adopted a rate of Rs 290 per sq. mtr. for ground floor and adding for extra height he had estimated ground floor including mezzanine floor at Rs 2,02,600. But for the report at Ex. S-20 the rate has been raised to 365 per sq. mtr.
There is no explanation for this increase of rate by Rs 75 per mtr. It is also observed that for the updating of the cost of index 5% was added to the rate of Rs 290 as per p. 55 of Ex. D-1 by Shri S.N. Jha but this has been raised to 97% as an escalation to the cost of index in Ex. S-20 without explaining or giving the reasons therefor. It is surprising that same set of engineers have adopted different standard for evaluating the same property at different occasions. Obviously, either of the report is false and it was for the prosecution to suitably explain it. In the absence of it the only inference to be drawn is that report at Ex. S-20 is not authentic. Since the same set of engineers have done the evaluation earlier and if subsequently they felt that there was some error in the earlier report, they should have explained detailed reasons either in the report itself or during the course of enquiry. Therefore, Ex. S-20 is not reliable.
20.
Moreover a perusal of Ex. S-20 reveals that Shri Vasudev, Executive Engineer has recorded a note as follows:
‘Hence the valuation of Shri S.N. Jha was never superseded by any other estimates. As is confirmed from the records, his estimated figures were only accounted for by the ITO Bokaro.’ Thus according to Shri Vasudev, who was the seniormost among the three CPWD engineers who prepared Ex. S-20, the valuation of ground floor remains at Rs 1,82,600 plus Rs 20,000 for the cost of land. The first floor as per Ex. S-20 was estimated at Rs 2,55,600 and a total of all this comes to Rs 4,57,600 which is very near to the declaration of actuals to the income tax authority and also the estimated cost by the Bokaro Steel Township Engineer and the government approved valuer.
21.
It is clear from the above discussions that though the document cited in Annexure III is a joint report of two engineers what has been brought on record is a document signed by three engineers, the same set of engineers who evaluated the property for income tax purposes, and there is a vast difference in the specifications and the rates adopted for calculating the cost in Ex. S-20 have been increased without any explanation and none of these engineers were produced during the course of enquiry to clarify the position. Hence the authenticity of Ex. S-20 is doubtful as claimed by the defence.
22.
It needs to be mentioned that the report at Ex. S-20 has evaluated the ground floor at Rs 4,85,300 and a note to the Arjun
19/25 WP-1730-2024 (J).odt effect that 10% should be allowed for self-supervision and procurement of material has also been recorded at the end. On this basis the net value of ground floor comes to Rs 4,36,810 (Rs 4,85,344-Rs 48,534). The first floor has been evaluated at Rs 2,55,600 after allowing the allowance for self-supervision and a total of both items would come to Rs 6,62,410. Thus, even the report at Ex. S-20 does not support the prosecution case that as per the report of CPWD Engineers the property is valued at Rs 7,69,800. As the property assessed by the income tax authority for Rs 4.67 lakhs and even the valuation given by the Bokaro Steel Township Engineer and the government-approved valuer are very near to this figure, the reasonable value of this property could only be taken as 4.75 lakhs assessed by the Bokaro Township Engineer on detailed estimate basis.” 23.
Even though all these facts including the Report of the Central Vigilance Commission were brought to the notice of the High Court, unfortunately, the High Court took a view that the issues raised had to be gone into in the final proceedings and the Report of the Central Vigilance Commission, exonerating the appellant of the same charge in departmental proceedings would not conclude the criminal case against the appellant. We have already held that for the reasons given, on the peculiar facts of this case, the criminal proceedings initiated against the appellant cannot be pursued. Therefore, we do not agree with the view taken by the High Court as stated above. These are the reasons for our order dated 27-3-1996 for allowing the appeal and quashing the impugned criminal proceedings and giving consequential reliefs.” 29.
In Ashoo Surendranath Tewari (supra), the Hon’ble Supreme Court, in paragraphs 8 to 14, has observed as under:
8.
A number of judgments have held that the standard of proof in a departmental proceeding, being based on preponderance of probability is somewhat lower than the standard of proof in a criminal proceeding where the case has to be proved beyond reasonable doubt. In P.S. Rajya v. State of Bihar [P.S. Rajya v. State of Bihar, (1996) 9 SCC 1 : 1996 SCC (Cri) 897] , the question before the Court was posed as follows:
(SCC pp. 2-3, para 3) “3. The short question that arises for our consideration in this appeal is whether the respondent is justified in pursuing the prosecution against the appellant under Section 5(2) read with Section 5(1)(e) of the Prevention of Corruption Act, 1947 notwithstanding the fact that on an identical charge the appellant was exonerated in the departmental proceedings in the light of a report submitted by the Central Vigilance Commission and concurred by the Union Public Service Commission.” Arjun
20/25 WP-1730-2024 (J).odt 9.
This Court then went on to state: (P.S. Rajya case [P.S.
Rajya v. State of Bihar, (1996) 9 SCC 1 : 1996 SCC (Cri) 897] , SCC p. 5, para 17) “17. At the outset we may point out that the learned counsel for the respondent could not but accept the position that the standard of proof required to establish the guilt in a criminal case is far higher than the standard of proof required to establish the guilt in the departmental proceedings. He also accepted that in the present case, the charge in the departmental proceedings and in the criminal proceedings is one and the same. He did not dispute the findings rendered in the departmental proceedings and the ultimate result of it.” 10.
This being the case, the Court then held: (P.S. Rajya case [P.S. Rajya v. State of Bihar, (1996) 9 SCC 1 : 1996 SCC (Cri) 897] , SCC p. 9, para 23) “23. Even though all these facts including the report of the Central Vigilance Commission were brought to the notice of the High Court, unfortunately, the High Court took a view [Prabhu Saran Rajya v. State of Bihar, Criminal Miscellaneous No. 5212 of 1992, order dated 3-8-1993 (Pat)] that the issues raised had to be gone into in the final proceedings and the report of the Central Vigilance Commission, exonerating the appellant of the same charge in departmental proceedings would not conclude the criminal case against the appellant. We have already held that for the reasons given, on the peculiar facts of this case, the criminal proceedings initiated against the appellant cannot be pursued. Therefore, we do not agree with the view taken by the High Court as stated above. These are the reasons for our order dated 27-3-1996 for allowing the appeal and quashing the impugned criminal proceedings and giving consequential reliefs.” 11.
In Radheshyam Kejriwal v. State of W.B. [Radheshyam Kejriwal v. State of W.B., (2011) 3 SCC 581 : (2011) 2 SCC (Cri) 721] , this Court held as follows: (SCC pp. 594-96, paras 26, 29 & 31) “26. We may observe that the standard of proof in a criminal case is much higher than that of the adjudication proceedings. The Enforcement Directorate has not been able to prove its case in the adjudication proceedings and the appellant has been exonerated on the same allegation. The appellant is facing trial in the criminal case. Therefore, in our opinion, the determination of facts in the adjudication proceedings cannot be said to be irrelevant in the criminal case. In B.N. Kashyap [B.N. Kashyap v. Crown, 1944 SCC OnLine Lah 46 : AIR 1945 Lah 23] the Full Bench had not considered the effect of a finding of fact in a civil case over the criminal cases and that will be evident from the following passage of the said judgment: (SCC OnLine Lah: AIR p. 27) Arjun
21/25 WP-1730-2024 (J).odt ‘… I must, however, say that in answering the question, I have only referred to civil cases where the actions are in personam and not those where the proceedings or actions are in rem. Whether a finding of fact arrived at in such proceedings or actions would be relevant in criminal cases, it is unnecessary for me to decide in this case. When that question arises for determination, the provisions of Section 41 of the Evidence Act, will have to be carefully examined.’ *** 29. We do not have the slightest hesitation in accepting the broad submission of Mr Malhotra that the finding in an adjudication proceeding is not binding in the proceeding for criminal prosecution. A person held liable to pay penalty in adjudication proceedings cannot necessarily be held guilty in a criminal trial. Adjudication proceedings are decided on the basis of preponderance of evidence of a little higher degree whereas in a criminal case the entire burden to prove beyond all reasonable doubt lies on the prosecution.
*** 31. It is trite that the standard of proof required in criminal proceedings is higher than that required before the adjudicating authority and in case the accused is exonerated before the adjudicating authority whether his prosecution on the same set of facts can be allowed or not is the precise question which falls for determination in this case.” 12.
After referring to various judgments, this Court then culled out the ratio of those decisions in para 38 as follows:
(Radheshyam Kejriwal case [Radheshyam Kejriwal v. State of W.B., (2011) 3 SCC 581 : (2011) 2 SCC (Cri) 721] , SCC p. 598) “38. The ratio which can be culled out from these decisions can broadly be stated as follows:
(i) Adjudication proceedings and criminal prosecution can be launched simultaneously;
(ii) Decision in adjudication proceedings is not necessary be- fore initiating criminal prosecution;
(iii) Adjudication proceedings and criminal proceedings are independent in nature to each other;
(iv) The finding against the person facing prosecution in the adjudication proceedings is not binding on the proceeding for criminal prosecution;
(v) Adjudication proceedings by the Enforcement Directorate is not prosecution by a competent court of law to attract the provisions of Article 20(2) of the Constitution or Section 300 of the Code of Criminal Procedure;
(vi) The finding in the adjudication proceedings in favour of the person facing trial for identical violation will depend upon the nature of finding. If the exoneration in adjudication Arjun
22/25 WP-1730-2024 (J).odt proceedings is on technical ground and not on merit, prose- cution may continue; and (vii) In case of exoneration, however, on merits where the al- legation is found to be not sustainable at all and the person held innocent, criminal prosecution on the same set of facts and circumstances cannot be allowed to continue, the under- lying principle being the higher standard of proof in criminal cases.” 13.
It finally concluded: (Radheshyam Kejriwal case [Radheshyam Kejriwal v. State of W.B., (2011) 3 SCC 581 :
(2011) 2 SCC (Cri) 721] , SCC p. 598, para 39) “39. In our opinion, therefore, the yardstick would be to judge as to whether the allegation in the adjudication proceedings as well as the proceeding for prosecution is identical and the exoneration of the person concerned in the adjudication proceedings is on merits. In case it is found on merit that there is no contravention of the provisions of the Act in the adjudication proceedings, the trial of the person concerned shall be an abuse of the process of the court.” 14.
From our point of view, para 38(vii) is important and if the High Court had bothered to apply this parameter, then on a reading of the CVC report on the same facts, the appellant should have been exonerated.
30.
In Keshav (supra), the Division Bench of this Court, in paragraph No. 8, observed as follows:
8.
In the present case, we find that allegations made in the criminal complaint are similar and identical to the allegations made against this applicant in the departmental enquiry proceedings. In other words, the foundation of the criminal complaint made against the present applicant is a same set of allegations which constituted charge no. 1 levelled against the applicant in the departmental enquiry proceedings. The departmental enquiry proceedings insofar as charge no. 1 is concerned has gone in favour of the applicant and it has, in our view, wiped out the very basis of the criminal complaint filed against this applicant. It then does not appeal to reason to say that while the officer has committed no misconduct on the basis of one set of allegations, the officer has prima-facie committed criminal offence on the basis of the same set of allegations. It is pertinent to mention here that the criminal complaint filed against the applicant by informant-Shri Milind Totare does not contain any more allegations than what formed the basis of charge no. 1 levelled against the applicant in the department enquiry proceedings held against him in which the applicant has been exonerated of charge no.
1. It then follows that the criminal investigation being carried out Arjun
23/25 WP-1730-2024 (J).odt against the applicant in its present form cannot continue. But, at the same time, if any other enquiry is made by the Investigating Officer and some new material constituting new offence is discovered, the Enquiry Officer would always be at liberty to book the applicant for the new offence prima-facie found against him. But till that time, the complaint in the present form and the investigation based on it cannot be allowed to continue or otherwise it would be nothing but abuse of process of law.
31.
In Gufran Beig (supra)this Court, in paragraphs 28 and 36, has observed as follows :- “28.
It is well settled law that the test of proving charges in disciplinary enquiry is preponderance of probabilities as against the test of proof beyond reasonable doubt in criminal prosecution. The question therefore is, if the charges could not be proved on the test of preponderance of probability in the departmental enquiry, will the CBI be in a position to secure conviction of Applicants by applying stricter test of proof beyond reasonable doubt in criminal prosecution? The answer to the question appears to be in the negative. Though, Mr. Munde has sought to contend that the purpose of conduct of two proceedings is different and that therefore the findings recorded in one proceeding cannot affect the other, this submission would be more apposite in a reverse situation if Applicants were to be acquitted in criminal prosecution and they were to seek dropping of disciplinary proceedings. In a converse situation, the submissions sought to be canvassed by Mr. Munde would have no application. Therefore, his reliance on judgments in B.K. Meena (supra), Sardar Bahadur (supra) and Bhagwan Singh (supra) would be irrelevant for determining the issue at hand.
36.
Therefore, I am of the view that the prosecution against the Applicants cannot be permitted to be continued. I am unable to hold that CBI has any chance of securing conviction of the Applicants based on the material collected by it. In fact, continuation of proseuction of the Applicants would not only be an empty formality but an abuse of process of law.
32.
Apparently, the tenders forming the subject matter of the impugned FIR were investigated by the Maharashtra Lokayukta in Complaint No. LA/Com/1486/2021 (T-1) under the provisions of the Maharashtra Lokayukta Act, 2020. The allegations in Complaint No.
LA/Com/1486/2021 (T-1) and the foundation of the impugned FIR Arjun
24/25 WP-1730-2024 (J).odt against the Petitioner are identical, relating to the purchase of the Remdesivir injection by the MCGM from the Petitioner.
33.
A perusal of the Order dated 03.01.2023 in Complaint No.
LA/Com/1486/2021 (T-1) reveals that the Maharashtra Lokayukta, an independent authority under the Maharashtra Lokayukta Act, 2020, after a detailed examination of the merits and evidence in Complaint No. LA/Com/1486/2021 (T-1) has exonerated the public servants from all allegations that also form the basis of the impugned FIR.
34.
Exoneration in Complaint No. LA/Com/1486/2021 (T-1) being on merits is not disputed by the Respondents.
35.
Taking the allegations in the impugned FIR, as made, they do not disclose the commission of a cognizable offence against the Petitioner. The ingredients of the offences charged in the impugned FIR are not made out as against the Petitioner.
36.
In light of the above, the peculiar facts and circumstances of this case, namely the conclusions of the Maharashtra Lokayukta in para No. 23 of the Order dated 03.01.2023 in Complaint No.
LA/Com/1486/2021 (T-1) and the statements made by Mr. Amit Desai, learned Senior Advocate for the Petitioner, that the Petitioner has supplied the Remdesivir injection to MCGM in terms of the four Arjun
25/25 WP-1730-2024 (J).odt (4) Tenders and that the aggregate sum of Rs. 10,95,59,742/- remains outstanding from MCGM, are such that the Petitioner is justified in contending that continuation of the criminal proceedings against the Petitioner would amount to an abuse of the process of law.
37.
The powers under Section 482 of the Cr.P.C. serve two purposes: first, to prevent abuse of process of any Court; and second, to secure the ends of justice. Guided by the principles laid down in State of Haryana v Bhajanlal 11, this is a fit case for the exercise of powers under Section 482 of the Cr.PC to quash the impugned FIR.
38.
This Petition is allowed in terms of prayer clause 20(i).
Consequently, the impugned FIR is quashed qua the Petitioner.
39.
It is clarified that the observations made herein are restricted to the impugned FIR.
40.
Rule made absolute in the above terms. No orders as to costs.
[ASHWIN D. BHOBE, J.]
11 (1992) Supp (1) SCC 335 Arjun ARJUN KRISHNA RODGE Digitally signed by ARJUN KRISHNA RODGE Date:
2026.08.09 17:11:30 +0530