Punjab State Cooperative Supply and Marketing Federation Ltd. vs State of Punjab

M.L. Singhal, J.

This is Crl. Misc. No. 20481M of 1998 whereby the Punjab State Cooperative Supply and Marketing Federation Limited (Markfed) through its Chief Manager (Law) has prayed for the cancellation of anticipatory bail allowed to Ashok Kumar etc. respondents No. 2 to 7 in case FIR No. 30 dated 25.2.1998 under Section 406/420 IPC of PS City Ferozepur vide order Annexure P5 by Additional Sessions Judge, Ferozepur.

The prosecution case in brief is that in the paddy procurement season of the year 199495, an agreement was concluded between Markfed and several rice millers of Ferozepur district. According to that agreement, paddy was to be purchased in the account of the applicant Markfed to be stored and stocked by the rice millers. Paddy was to be taken out of the godowns for custom milling on the release orders issued by the concerned District Manager of the Markfed and after milling rice was to be supplied to the Food Corporation of India in the account of the Markfed. Millers were not at liberty to take out paddy of their own volition. On 23.7.1996, physical verification was conducted by a team comprising the District Managers of Markfed, Punsup, Warehousing Corporation and the representative of the accused when it was found that there was no paddy in the stock and there was shortage of 17,998 bags IR8 and 6304 bags of PR106. The checking committee prepared statement Annexure P1 at the spot which was signed by all concerned including the representative of the millers. According to the prosecution, the millers committed an offence punishable under Section 406/420 IPC read with Sections 3 and 7 of the Essential Commodities Act since the millers failed to supply rice to the Food Corporation of India. Rather millers removed the paddy unauthorisedly and converted the same into rice for their own use. On District Manager, Ferozepur writing letter Annexure P2 to SSP, Ferozepur, case was registered. It is alleged that Additional Sessions Judge, Ferozepur granted anticipatory bail to Ashok Kumar etc. accusedrespondents on wrong premises. Additional Sessions Judge, Ferozepur recorded statement Annexure P3 of Shri L.S. Sekhon, the District Manager, Markfed, Ferozepur to the effect that the accused might deposit the amount in accordance with the physical verification conducted on 23.7.1996. It is alleged that while stating so, the District Manager did not mean or suggest that the accused could deposit price of the misappropriated paddy at any particular rate. District Manager had pointed out that Markfed would not accept from the accused anything short of the economic cost if the accused were to be allowed anticipatory bail. They could be allowed anticipatory bail only on paying for the misappropriated paddy. As per the written agreement between the parties, in the event of any shortage or damage, the millers were supposed to make payment to the Markfed at one and a half times of the economic cost. The Markfed office computes the economic cost of paddy every year and for the year 199495, the economic cost of IR8 variety of paddy was Rs. 439.56 per quintal whereas that of fine and superfine variety of PR106 paddy was Rs. 464.89 and Rs. 489.07 per quintal vide Annexure P3/A. Adding 50% thereto, the liability of the miller was in the measure of Rs. 659.34, Rs. 697.30 and Rs. 733.60 respectively. It is alleged that the Additional Sessions Judge, Ferozepur passed an order Annexure P4 directing the accused to deposit the amount at Rs. 240/ per quintal of PR106 and Rs. 220/ per quintal of IR8 and pay the amount of deficient paddy to the Markfed. It is alleged that the Additional Sessions Judge wrongly stated in the order that the District Manager, Markfed had no objection to the assessment of price of deficient paddy at the said rate and the District Manager, Markfed was put to a considerable financial loss by the accused respondents by misappropriating the paddy entrusted to them for custom milling and, therefore, anticipatory bail could not be granted to them. It is alleged that the accused and the Additional Sessions Judge, Ferozepur found the District Manager handy in a certain measure with a view to facilitate the grant of bail to the accused which on merits could not be granted in view of the huge misappropriation of paddy committed by them. Accused could not have been allowed anticipatory bail in view of the gravity of the offence said to have been committed by them. If at all bail was to be allowed to the accused, at least they should have been called upon to pay what was due to the Markfed from them. Markfed is one of the government agencies meant to procure foodgrains. Court should have protected its rightful claims against the acts of fraud and misappropriation. It is further alleged that the custodial interrogation of the accused was necessary as the police had to recover the misappropriated paddy of the value of crores of rupees. Learned Additional Sessions Judge relied on the false representation of the accused that physical verification of their stocks was conducted on 17.1.1997 and paddy was found lying in the stock. Accused and other rice millers of Ferozepur district filed CWP No. 6706 of 1997 against Markfed for a direction that it shall issue release order for the disposal of the paddy in stock held by them. There an argument was advance regarding physical verification on 17.1.1997 and the court observed in its order dated 21.8.1997 (Annexure P6) that the submission was false. It was held that the recourse to the writ petition had been taken in a bid to avoid the consequences of shortage and misappropriation. It is alleged that accused concealed the filing of the writ petition and its dismissal from the Additional Sessions Judge. Additional Sessions Judge admitted the accused to bail unjustifiably in disregard of the patent facts by devising a curious mode of payment at a grossly low rate than even the economic cost of the paddy misappropriate by the accused.

Learned counsel for the petitioner submitted that the learned Additional Sessions Judge should not have allowed anticipatory bail to Ashok Kumar etc. when the allegation against them was that they had misappropriated paddy belonging to Markfed and had failed to deliver the rice after custom milling to the FCI in the Markfed account. This caused loss of Rs. 84,20,597/ to the Markfed. He submitted that Additional Sessions Judge allowed anticipatory bail on the statement of the District Manager, Markfed, Ferozepur that the accused might deposit the amount in accordance with the physical verification conducted on 23.7.1996. He submitted that when the District Manager, Markfed, Ferozepur made that statement, he did not mean that the price of the misappropriated paddy could be deposited at any rate by the miller. He never meant that they could deposit the amount @ Rs. 240/ per quintal of paddy PR 106 and Rs. 220/ per quintal of paddy IR8 in accordance with the alleged physical verification dated 23.7.1996 against actual weighment. They were required to deposit the economic cost of the paddy which had been misappropriated by them and which was not found in stock with them. Learned counsel for the respondentaccused on the other hand submitted that from the perusal of the FIR, no case of criminal misappropriation is made out. Only case of civil nature is made out. It was submitted that none of the respondents accused has committed any offence. Written agreement was executed between the Markfed and the accused and as per clause 18 of the written agreement, all disputes and differences arising out (or in any manner touching or concerning the agreement whatsoever except as to any matter the decision of which is expressly provided for in the contract) shall be referred to the sole arbitrator and in pursuance of this clause, the Managing Director of the Markfed appointed Shri J.B. Chandan as arbitrator. Arbitration proceedings commenced in the month of May 1997 i.e. prior to the registration of this case. It was further submitted that when arbitration proceedings had been resorted to, registration of the case is abuse of the process of the court. It was further submitted that case hinges on documentary evidence and the custody of the accused was not at all required. It was further submitted that the accused were allowed anticipatory bail by the learned Additional Sessions Judge justifiably and there is no reason for its cancellation. It was further submitted that the challan has been put in court. Only Parkash Chand accused has been challaned. All other accused were found innocent and shown in column No. 2 of the challan. It was further submitted that the accused have joined investigation. It was further submitted that the grant of bail is one thing; and cancellation of bail already allowed stands on an altogether different footing. Very cogent and overwhelming circumstances are necessary for an order seeking cancellation of bail. It was further submitted that the accused are readily available for their trial and they are not likely to tamper with the evidence. Paddy was supplied to the accused for shelling. Paddy was to remain in joint custody of the procuring agency and the miller till milling was done. It was submitted that if that was so, how could there be any misappropriation. Physical verification was done at the back of the accused. Major portion of the paddy allotted to them was milled in accordance with the terms and conditions agreed upon and against the advance supply of rice to the FCI. Only a minor portion of the said paddy could not be milled. It was further submitted that department issued policy matter permitting sale of paddy at different rates. Subsequently the rate of paddy was reduced to Rs. 240/ per quintal vide letter dated 14.1.1997. The price for common paddy variety was fixed at Rs. 220/ per quintal whereas the price of fine variety was fixed at Rs. 230/ per quintal and price of super fine was kept at Rs. 240/ per quintal. Policy of sale was framed by the Markfed in view of the fact that the paddy for the year 199495 was damaged due to heavy rains and paddy was not yielding rice within the limits of its specifications prescribed by the corporation. It was submitted that the accused presented the bank draft for the remaining paddy but the Markfed refused to accept the said money and the Markfed demanded the economic cost of the paddy which under the agreement Markfed is not entitled to. Accused deposited the entire amount by way of bank draft as per the physical verification conducted on 23.7.1996 and the amount deposited conduced to the statement of the District Manager made by him before the Additional Sessions Judge. Amount was not received by the Markfed saying that the matter is pending before the arbitrator.

Learned for the accusedrespondents submitted that the High Court may cancel bail if it has been granted by the trial court by taking into account totally irrelevant considerations and by ignoring even the basic principles of law by giving a gobye to the allegations themselves. In support of this submission, he drew my attention to Court on its Motion v. Kulbir Singh, 1998(1) RCR 186 . Learned counsel for the respondents submitted that where case is based on purely documentary evidence and the anticipatory bail was granted to the accused, anticipatory bail granted to the accused should not be cancelled. In support of this submission, he drew my attention to Inder Singh Guram v. U.T. Chandigarh, 1998(1) RCR(Crl.) 456. It was submitted that this court has power to cancel an order of bail which is considered to be unjust, illegal or amounts to gross miscarriage of justice. It was submitted that very cogent and overwhelming circumstances are necessary for an order seeking cancellation of bail. Power to grant bail is not to be exercised as if punishment before trial is being imposed. The only considerations in such a situation are whether the accused would be readily available for trial and whether he is likely to abuse the discretion granted in his favour by tampering with evidence. In support of this submission, he drew my attention to Bhagirath Sinh Judeja v. State of Gujarat, AIR 1994 SC 372. It was submitted that it is easier to reject a bail application in a nonbailable case than to cancel a bail granted in such a case. Cancellation of bail necessarily involves the review of an order already made and can by and large be permitted only if on account of supervening circumstances it would be no longer conducive to a fair trial to allow the accused to retain his freedom during the trial. In support of this submission, he drew my attention to State through Delhi Administration v. Sanjay Gandhi, AIR 1978 SC 961.

In this case the matter is lying referred to the arbitrator. Challan has been put in. That means, the investigation is over. If the anticipatory bail allowed to the accused is cancelled, that will not serve any purpose when the investigation is over. Case hinges on documentary evidence. Miller offered to pay to the tune of Rs. 7,75,000/ to the Markfed. Markfed refused to accept it saying that vide order dated 18.5.1998 the head office had directed him to receive the economic cost of paddy along with interest and not @ Rs. 200/ per quintal and Rs. 240/ per quintal.

There as a dispute between the Markfed and the miller as to the rate at which the miller was required to deposit the amount. I think the miller should be called upon to deposit some more amount in the account of the Markfed. As sum of Rs. 10 lacs will be deposited in the account of the Markfed by the accused respondents 2 to 7. This amount shall be over and above what they have been required to deposit in pursuance of the orders of Additional Sessions Judge, Ferozepur and further the amount of Rs. 7,75,000/ which they had offered to the Markfed through pay order dated 19.5.1998. They shall deposit this amount in the account of the Markfed on or before 31.8.1999. It is on the deposit of this amount in the account of the Markfed that the anticipatory bail allowed to the accused shall become indefeasible. If accusedrespondents fail to deposit this amount till the stipulated date, anticipatory bail allowed to them by Additional Sessions Judge shall stand cancelled.

Disposed of accordingly.