Baljit Singh And Another @APPELLANT@Hash Central Bureau Of Investigation And Another

In this petition, filed under Section 561_A Cr. PC, the petitioners crave the indulgence of this Court in quashing the FIR bearing No. 123/2017

A003 dated 26.09.2017, registered against them at Police Station CBI, ACB, Srinagar, on a written complaint dated 19.09.2017 of Shri Sundeep Singh,

Chief General Manager (Vigilance), Food Corporation of India-FCI, Zonal Office (North), Noida,-U.P, addressed to the Head of Branch CBI ACB-

Srinagar, which was received by him on 25.09.2015. The complaint pertains to the misappropriation of rice & wheat stocks at PEG (Private

Entrepreneur Guarantee) Store, Baramulla, valued at over 14 Crores. It is stated in the complaint that 130 No. of Trucks were missing during the

reconciliation from the records at the Lower Munda (Qazigund) which have been shown to have been acknowledged and also in the reconciliation

statements. The genuineness of the stamp affixed on the challans of these 130 Trucks was cross checked with the specimen copy of stamps obtained

from Lower Munda (Qazigund). It was found that fake stamps have been affixed on these challans and it appears that stocks have been

misappropriated by the transport contractor i.e. M/s Gagan Traders and M/s Walia Goods & Transport, both from Punjab in connivance and collusion

with the Food Corporation India Staff, the State Government officials and the owner of PEG Baramulla, between the dispatching depot of Bhogpur

and Kartarpur, under FCI District Office Jalandhar and Lower Munda Check Post. The complaint further reads that since various parties, FCI

Employees as well as State Machinery appear to be involved in this Criminal Misappropriation of FCI Stocks and forgery of documents, therefore, it is

requested to take up the investigation of the matter and to proceed against the culprits under the appropriate provisions of criminal law. On the receipt

of this complaint, a regular case was registered under Section 120 B, 420, 467, 468, 471 RPC and 5 (1) (C) r/w 5 (2) of J&K PC Act against the

above mentioned suspect persons and the investigation of the case was entrusted to Mr. Sheikh Firdous, Inspector of Police.

The petitioners have challenged the FIR, inter alia, on the grounds that the petitioners are proprietors of the sole proprietorship concern against

whom the impugned FIR has been registered by the CBI. The proprietorships concerns are not legal entities or juridical persons against whom

prosecution can be launched. The proprietorship is doli incapax and thus can neither be prosecuted nor punished under any statute. The inference that

can be drawn from the allegations contained in the FIR is that the alleged commission of the breach of trust and misappropriation has taken place

beyond the territorial jurisdiction of State of Jammu and Kashmir, that is, in the State of Punjab. Such offences have no territorial nexus vis-Ã -vis the

penal offences provided under Ranbir Penal Code and their prosecution cannot be countenanced within the State of J&K. Therefore, neither the

Central Bureau of Investigation has the jurisdiction to investigate the offences nor can these offences be tried within the territorial jurisdiction of the

State of J&K. The Central Bureau of Investigation (CBI) has no jurisdiction to investigate the case in the territory of J&K State without the sanction

of the State Government as required under Section 6 of Delhi Special Police Establishment Act. The FIR has been registered on the basis of a

complaint directly transmitted by the Zonal Office Food Corporation of India, Noida, UP, in the absence of a valid sanction.Â

It is further submitted that the matter pertains to the entrustment of property with the transport agency at the dispatching centre within Punjab

region regulated by a contract. Since the affairs pertain to the territory of Punjab as also elicited by the show cause notices appended herewith as

Annexures “H & Iâ€, involving alleged civil wrong the criminal liability, cannot be investigated beyond the territorial limits of State of Punjab.

Therefore, the investigation for the Criminal Breach of Trust and Misappropriation under the impugned FIR is without jurisdiction. The allegations in

the FIR tend to implicate M/s Gagan Traders and Walia Goods Carrier without showing the individual participation of its proprietors. Therefore, the

petitioners cannot be made vicariously liable for any of the acts or omissions of the proprietorship concern, moreover without imbibing the status of

person as defined under RPC. It is further submitted that the offences stated in the FIR relate to RPC together with the provisions of the Jammu and

Kashmir Prevention of Corruption Act 1947, which do not admit of any vicarious liability. Therefore, the functionaries or management of an artificial

or juridical person cannot be fastened with such nature of criminal liability and the registration of the FIR against the proprietorship concern, which is

not a legal person, is illusory and unfounded. It is further submitted that the gravamen of charge in the FIR carries mandatory punishment of

imprisonment, as such, on this count also the legal person like a Company or an incorporated body cannot be prosecuted under law. The investigating

agency has contemplated to proceed against the petitioners in their personal capacity without commenting on their participation in the commission of

any offence.Â

It is also submitted that M/s Gagan Traders and Walia Goods Carriers conduct a large scale transport service with a fleet of trucks, and lend

extensive manpower involved in the performance of contract with FCI Regional Office, Punjab. Any deficiency in transportation as a result of

forgery, fabrication or fraud on account of shipment of isolated truck loads cannot be vicariously attributed to the proprietorship concern or vice versa

unless the proprietor or the person managing the affairs of the concern is shown to have committed the offence. In the FIR there is no allegation that

the petitioners personally indulged in the commission of cheating, misappropriation or fabrication of documents or in any manner entered into

conspiracy or abetted the commission of offences by aid, instigation. The allegations not traceable to the petitioner, cannot be proceeded with as it, is

illegal and unconstitutional. Therefore, the entire prosecution being void ab initio, is liable to be quashed.

It is also submitted that the food grains to be transported/allotted under a contract have been delivered at the destination within the valley. The

reconciliation report prepared by FCI illustrates the same. Therefore, the allegation of misappropriation of entrusted property does not arise. Moreover

since the transaction is contractual and emanates from a contractual duly entered with FCI, as such, allegation of inducement by dishonest intention or

deception cannot sustain. The allegations in the FIR thus lack basic ingredients to constitute any offence of cheating and the allied offences in which

the contracting party is implicated. These cannot be made out from the contents of complaint and the FIR. It becomes manifest from the contents of

the notice that the deficiencies noticed therein constitute a civil liability arising out of a breach of contract for which the remedy lies under the civil law

and the mode stipulated and provided under the terms of the contract. Therefore, no criminal liability can be fastened for the alleged deficiencies in the

transportation of stocks. The principle of the contract cannot convert civil liability into criminal when the breach is enforceable under a contract. The

involvement of trading proprietorship establishment regarding forgery of records and the conspiracy or abetment of offence under the Prevention of

Corruption Act in the Districts of J&K State is unfounded. The allegations relating to misuse of official position attributed to the officials of the Food

Corporation of India constitute a distinct offence and cannot be tried with the offence of Breach of Trust which with all its ingredients is asserted to

be complete beyond the territory of J&K State. A severe prejudice is likely to be caused to the petitioner in case the prosecution is allowed to sustain

because of the deprivation of effective defence at this distant place. There is no sanction in the present case to investigate the offences under Section

120-B RPC, as provided under Section 155 Cr. PC. The respondents have no authority to investigate the offences under RPC without the prior

permission of a Magistrate. No provision in the Preventions of Corruption Act, Svt. 2006, confers the power of investigation beyond the ambit of the

Act of Svt. 2006. In absence of the permission to investigate a distinct non cognizable offence falling under Section 120-B RPC, the entire prosecution

is liable to be set aside. The FIR alleges criminal conspiracy along with offences under the Prevention of Corruption Act. The offence of criminal

conspiracy emanates from vicarious liability. On the other hand the Prevention of Corruption Act, incorporates offences which create a strict liability.

The impugned FIR intends to co-prosecute criminal conspiracy and the strict liability offences, which goes repugnant to the basic tenets of criminal

jurisprudence that there can be no vicarious liability unless specified in the criminal statute. In the end, it has been stated that the impugned FIR

bearing NO. RC 123/2017 A003 dated 26.09.2017, registered at Police Station, CBI ACB, Srinagar for the commission of offences punishable under

Sections 120-B RPC, read with Section 420, 409, 467, 468 and 471 of RPC, 4-H, 5 (2), read with 5 (1) (d) J&K Prevention of Corruption Act, Samvat

2006 and the investigation carried thereunder may be quashed in order to secure the ends of justice.

The respondent CBI has resisted and controverted the petition of the petitioners, inter alia, on the grounds that the case has been registered by the

CBI based on the complaint received from Food Corporation of India, alleging therein that the investigation of the matter by a committee of FCI’s

Officers and the investigation report submitted indicates the misappropriation of 130 trucks of rice and wheat stocks weighing at-least 26,047.00

quintals valued at over Rs. 14 Crores. As per the compliant the stocks of rice and wheat have been misappropriated by the transport contractors

namely M/s Gagan Traders and M/s Walia Goods, in connivance and collusion with the FCI Staff, the State Government Officials and PEG

Baramulla, between the dispatching depot of Bhogpur and Kartarpur, under FCI District Office Jalandhar and Lower Munda Check Post. The

accused petitioners are running their business under the name and style of M/s Gagan Traders and M/s Walia Goods Carriers respectively, whose sole

proprietors are prima facie involved in this huge misappropriation of rice and wheat by obtaining fake stamps on the challans at Lower Munda Check

Post in respect of 130 trucks. Hence, the subject matter of the complaint needs to be thoroughly investigated, in order to unearth the larger conspiracy

amongst the accused petitioner, FCI officials and others as referred to herein before. It is further submitted that the petition is not maintainable in law

and that too in a matter where investigation of public funds and public stores is involved. It is also pleaded that the investigation is at an initial stage and

the involvement of accused petitioners will be unearthed by way of thorough probe undertaken in the matter. The investigation has not reached at the

end and the petitioners cannot be permitted to scuttle the investigation at this stage. The FIR has been registered on the written complaint of FCI,

which itself is based on the facts investigated by the FCI. It is also pleaded that the petitioner companies are named in the FIR for criminal conspiracy

along with the other accused persons including the public servants of FCI Baramulla. As per the complaint and as per prima facie proof, the petitioner

as well as FCI employees of Baramulla are found involved in the criminal misappropriation of FCI stocks of rice and wheat dispatched for FCI

Baramulla, from FCI Punjab. The place of occurrence is Baramulla, situated within the State of J&K. The role of the accused played by them

beyond the territorial jurisdiction of State of Jammu and Kashmir can be investigated in the involvement of criminal conspiracy or other offences.

Therefore, the CBI has jurisdiction to investigate the offences against the accused petitioners as per the mandate of law. It is also pleaded that the

facts which are subject matter of investigation cannot be decided in a petition under Section 561_A of Cr. PC, moreso, when the investigation in the

matter is still pending. It is also pleaded that after receiving a complaint, the contents of the complaint have to be thoroughly investigated by the CBI as

per the mandate of law and the investigation of a complaint cannot be scuttled at its threshold, in keeping with the fact that the complaint is based on

the fact finding report of FCI, which adds to the credibility of the complaint and thus making it imperative for the CBI to investigate the complaint in

hand.

It is already submitted in the preceding paragraphs that the petitioners are accused in the present FIR registered by the CBI for Criminal

Conspiracy viz commission of offences under Sections 420, 467, 468, 471 RPC and 5 (1) (c) read with 5 (2) of J&K PC Act, which are specified

offences and for which the State Government of J&K, has already granted consent vide Notification No. S253/57-PD dated 7th May 1958. The

allegations levelled against the petitioners in the complaint filed by the CBI are of very serious nature and hence the mandate of law justifies that the

complaint should be investigated thoroughly by the CBI and in case the petitioners are not guilty they should cooperate with the CBI. It is also pleaded

that Section 120-.B of RPC is not an offence in itself but pertains to conspiracy in the commission of a particular offence. The investigating agency is

within its right to investigate the matter as per the mandate of law, which is being duly complied by the CBI. The petition, as such, is devoid of the

facts and the law is liable to be dismissed in limine so as to enable the CBI, to conclude the investigation as per law. In the end, it has been prayed that

in view of the present response filed by the CBI to oppose the petition filed by the petitioners in terms of Section 561-A Cr. PC, it is clear that there is

no ground or contingency or a circumstance which would mandate the quashment of an investigation undertaken by CBI on the basis of a complaint

received from FCI, with respect to a scandal involving embezzlement of public stores meant for public distribution worth R 14 Crores and in the

interests of justice, equity, fair play and for the benefit of the public at large deserves to be dismissed so that the investigation in the matter can be

concluded and the guilty can be punished as per the mandate of law.Â

The respondent No. 2, i.e., Food Corporation of India has also filed its objections in which it is stated that the crime has been committed well within

the jurisdiction of the State of J&K. The FCI audit committee while perusing the relevant records found that there were many discrepancies that

came to their notice. The FCI committee in its final report found that the stocks to the tune of Rs. 14.74 Crores have been misappropriated. It is

settled that the companies, corporations and firms do not enjoy the blanket immunity from prosecution for serious offences merely because the

prosecution would ultimately entail a sentence of mandatory imprisonment. It is submitted that the corporate bodies, such as firms and companies

undertakes series of activities that affect the life, liberty and property of the individuals. The corporate bodies now occupy such a large portion in

industrial, commercial and sociological sectors that its amenability to criminal law is essential for a Welfare State. The petitioners are involved in a

huge embezzlement and had misappropriated 130 truckloads of stock of the corporation to the tune of Rs. 14.74 Crores in league with some other

persons which were meant for public at large by forging the signatures of the officials as well as the stamps that were affixed on the challan copies of

130 trucks in connivance with the staff of PEG Baramulla and State authority..

Heard and considered.

What comes to the fore from the perusal of the material on record is that a huge amount of money spreading over 14. 74 Crores has been

misappropriated as a corollary to which the Food Corporation of India is said to have suffered loss in an equivalent amount of money. The petitioners

have challenged the vires of the FIR registered against them on various counts which can be decided and determined on the culmination of the

investigation of the case also for who knows what will be the fate of the investigation of the case and in which direction it will land. The allegations

levelled against the petitioners and others including the officers/officials of the FCI as is palpable from the FIR appear to be serious in nature and the

mandate of law justifies that the matter should be investigated into its entirety without aborting it midway. It is only after the conclusion of the

investigation of the case that a definite opinion can be framed in light of the grounds agitated and urged by the petitioners in this petition. It will be too

early in the day to comment as to which offence is and which is not made out in the case. Any comment on that count is not warranted to be made at

this stage. It can be seen only after a full dressed investigation of the case.Â

The food grains are alleged to have been loaded in Scooters, Tractors, HGV and Motor Cycles, as can be seen from the report laid in the matter

by the authorities of the FCI, which is attached to the petition as Annexure “R1â€. It provides the mode and manner in which the documents have

been allegedly fudged and forged to obtain undue pecuniary gains. The investigation of the case cannot be scuttled, stalled and thwarted at this stage

of the initial probe in the matter of the embezzlement of a huge amount of money. The FIR in a case like the present one cannot be quashed promptly

without allowing the CBI to make an appropriate investigation of the case. The Supreme Court has in a catena of judicial pronouncements held that

the FIR cannot be quashed at the threshold itself without allowing the investigation to proceed. The investigation will reveal as to who is/are the

person/persons, who have embezzled such a huge amount of money thereby causing a huge loss to the national exchequer. Therefore, taking into

consideration the above, the petition of the petitioners’ entails dismissal, as a sequel to which, the same is dismissed and interim directions passed

in the case shall stand vacated.Â

It needs must be said that any observation made in this order shall not be taken as observations on merits and the investigating authority shall

consider the matter on its own merits. Â