Sunil Chauhan vs C.B.I. SC-II

Amreshwar Pratap Sahi, J—The applicant is the then Chief Marketing Manager of U.P. Small Industries Corporation, Kanpur. The said Corporation, which is a Government Undertaking, was authorized to execute a work order for supply of Intra Uterine Device and FRU Kits through a tender process. This was a work order placed by the State Health Mission authorised through the Medical and Family Health department that was proceeding to implement the National Rural Health Mission Scheme.

For the supply of the said material, the Managing Director of the U.P.S.I.D.C. Mr. Abhai Kumar Bajpai constituted an inspection Committee with the Director General, Family Welfare, having it''s nominee on the said Committee. The then Director General, Family Welfare, was Dr. Raja Ram Bharti.

At the very out set it may be placed on record that both these persons namely Abhai Kumar Bajpai, the then Managing Director, UPSIDC and Dr. Raja Ram Bharti are co-accused in the same case but they have already been bailed out by the High Court. The bail order in the case of Abhai Kumar Bajpai was passed on Bail Application No. 17220 of 2013 dated 25.10.2013 and the bail order in the case of Dr. Raja Ram Bharti was passed on bail application No. 17028 of 2013 dated 29.10.2013.

This bail application on behalf of the applicant has been filed in January, 2015.

There is yet another fact which deserves to be noticed namely that the Apex Court vide order dated 14.7.2015 in Sanjay Kumar Awasthi v. C.B.I. and others, has issued directions granting bail to many co-accused of the NRHM Scam on certain conditions and the order is extracted here under:--

"ITEM NO. 14 COURT NO. 2 SECTION II

SUPREME COURT OF INDIA

RECORD OF PROCEEDINGS

Petition(s) for Special Leave to Appeal (Crl.) No(s). 833/2015

(Arising out of impugned final judgment and order dated 16/01/2015 in AN No. 152/2015 passed by the High Court of Judicature at Allahabad, Lucknow Bench)

SANJAY AWASTHI

Petitioner(s)

VERSUS

STATE OF UTTAR PRADESH AND ANR.

Respondent(s)

CORAM: HON''BLE MR. JUSTICE T.S. THAKUR

HON''BLE MR. JUSTICE V. GOPALA GOWDA

HON''BLE MRS. JUSTICE R. BANUMATHI

UPON hearing the counsel the Court made the following

ORDER

S.L.P. (Crl.) Nos. 4664/2015, 4654/2015, 4839/2015, 4892-4894/2015, 4832/2015, 5107/2015, 5274/2015, 3603/2015, 5029/2015, 5031/2015, 5116/2015 and CRLMP No. 10918/2015 in S.L.P.(Crl.) No. 3725/2015:

These matters are de-tagged.

List these matters on 21.07.2015.

IN REST OF THE MATTERS:

As many as 74 different cases have been registered by the Central Bureau of Investigation ("CBI") established under the Delhi Special Police Establishment Act for offences punishable under Sections 13(1)(d) and 13(2) of the Prevention of Corruption Act and Sections 420, 120-B, 467, 468, 471 and other provisions of the Indian Penal Code ("IPC") against a very large number of Officials working in the U.P. State Health and Family Welfare Departments and against suppliers of drugs and medicines. The cases, it appears, came to be registered pursuant to a direction issued by the High Court of Allahabad in a Public Interest Litigation ("PIL") which brought to fore what is now known as National Rural Health Mission ("NRHM"). It is common ground that NRHM was launched on 12.04.2005 throughout the country to provide accessible, affordable and quality health care to the rural population, specially the vulnerable sections of society and to reduce the infant mortality ratio. The Scheme/Mission was to be implemented by the State Governments.

The prosecution case appears to be that between 2005 and 2011 a large sum of money said to be to the tune of Rs. 11,080.53 crores was allocated by the Government of India for the State of Uttar Pradesh, Ministry of Health and Family Welfare, out of which, a sum of Rs. 9,133.77 crores was in due course released. It is also the case of the prosecution that out of the amount so released a sum of Rs. 8,658.03 crores is said to have been spent on the Mission by the State Government.

Allegations among others of large scale irregularities, misappropriation of funds, fake billing and purchases at exorbitant rates led the High Court of Allahabad to direct an inquiry into the scam by the CBI, which in turn led to the registration of 74 Regular cases and 28 Preliminary inquiries by the CBI branches at SC-II, STF, Delhi, EOU.IV, SCB, Lucknow and Dehradun. Mr. Maninder Singh, learned Additional Solicitor General, appearing for the CBI submitted that investigation in as many as 56 cases, out of the above, has already been completed and charge sheets filed in as many as 46 cases. In 5 other cases, the CBI appears to have submitted closure reports, while sanction for prosecution is awaited in 5 other cases. All the preliminary inquiries are said to have been disposed of leaving just about 18 cases only in which investigation is currently in progress.

With the filing of the charge sheets before the Special Courts concerned, warrants appear to have been issued to the accused named therein for their appearance before the Courts concerned. Apprehending their arrest in connection with the said cases some of the petitioners appear to have approached the High Court of Allahabad in petitions filed under Section 482 of the Code of Criminal Procedure for quashing the charge sheets and the warrants issued for their arrest/production. These petitions were dismissed by the High Court with the direction that the petitioners ought to approach the trial court for redress. Petitioners in Special Leave Petitions Nos. 4229/2015, 4237/2015 and 4239/2015 however appear to have filed regular bail application before the trial court, which were rejected, whereupon the petitioners appear to have approached the High Court, who too concurred with the view taken by the trial court. Aggrieved by the orders passed by the High Court, the petitioners have filed the present special leave petitions for grant of protection against arrest/bail in the cases pending before the Trial Courts concerned.

When these petitions came up before us for preliminary hearing, notices were issued to the respondents and interim protection granted to the petitioners against arrest on the condition that they deposit with the trial court the amount stipulated in the orders passed by this Court. In some of these cases, we directed petitioners to furnish bail bonds to the satisfaction of the trial court besides deposit of the amount mentioned in the orders.

It is not in dispute that the petitioners have deposited the amount directed to be deposited. It is also not in dispute that wherever a direction was issued for the petitioners to furnish bail bonds, the requisite bail bonds have also been furnished by them to the Courts concerned.

Having heard learned counsel for the petitioners and Mr. Maninder Singh, learned Additional Solicitor General appearing for the CBI, we are of the view that these petitions can be disposed of with appropriate directions. It is noteworthy that the CBI had not chosen to arrest any one of the petitioners during the investigation. Investigation into the cases was completed and charge sheets filed without the agency facing any impediment whatsoever. There is in that view no compelling reason for the petitioners to be committed to custody at this stage. That apart the prosecution has cited a large number of witnesses in each charge sheet, which would imply that conclusion of the trial is likely to take time. There is no possibility of the petitioners jumping bail, as most if not all of them are serving doctors in the U.P. State Health and Family Welfare Department. In the circumstances even when the petitioners could have approached the trial court we see no reason to relegate them to that process at this stage which may only prolong their agony and lead to multiplicity of proceedings. In the result, we issue the following directions:

"(I) Such of the petitioners as have not already furnished bail bonds to the satisfaction of the trial courts concerned shall do so within a period of two weeks from today in which event the protection against arrest shall continue but only subject to their furnishing such bonds.

(ii) The trial court(s) shall satisfy themselves about the deposit of the amount directed by us, in terms of our Order(s) passed in each one of the cases. In case deposit is not made as directed, the same shall be made within four weeks from the date the trial Court issues a direction to that effect after verification.

(iii) Liberty is reserved to the CBI to move the trial court concerned in case the amount already deposited by the petitioners does not match the amount on a proportionate basis that should be recovered from them having regard to the amount alleged to have been misappropriated or wrongfully paid/received. Should the petitioner(s) fail to deposit any such further amount directed by the trial court, the bail order granted in his/her favour shall stand cancelled without any further reference to this Court.

(iv) The trial court(s) shall be free to direct deposit of Passports by the accused-persons in such of the cases at it may consider just and proper.

(v) The petitioners shall not tamper with the evidence in any manner whatsoever and if they do so, the Court shall be free to cancel the bail granted to the accused concerned.

(vi) The amount deposited by the petitioners shall be remitted by the trial court(s) to the State Government, Department of Health and Family Welfare, for utilisation in the ongoing NRHM Scheme.

(vii) The trial court(s) shall endeavour to expedite the trial and shall be free to pass appropriate order(s) against the petitioners including an order withdrawing the concession of bail granted to them or any one of them, if the accused do not cooperate or otherwise resort to dilatory tactics."

The special leave petitions are disposed of with the above directions. We make it clear that the amount of deposit made by the petitioners in terms of the court''s order shall have no bearing on the legitimacy and/or legality of the prosecution launched by the CBI.

(S.K. RAKHEJA) COURT MASTER

(VEENA KHERA) COURT MASTER"

The Court had clearly put this to the learned Counsel for the applicant about the terms and conditions in relation to the deposit as directed therein upon which learned Counsel Sri V.P. Srivastava, learned Senior Counsel assisted by Umesh Vats, has urged that applicant does not have any evidence against him and even otherwise there are no instructions to make any offer for any proportionate deposit of the alleged misappropriated amount on behalf of the applicant.

Consequently, this Court is proceeding to deal with the merits of the bail as urged on behalf of the applicant.

The principal allegations against the applicant are that while acting as a Member of the tender Committee, the applicant was also responsible for issuance of tender documents and the bids were opened by the said tender Committee of which the applicant was also one of the members. The tender of other firms was rejected but that of M/s. Surgicoin Mediquip, Ghaziabad, being the lowest one, was recorded. Sri Naresh Grover is the Director of that company. It may be also put on record that the bail application of Naresh Grover was rejected by this Court on previous occasions where after he filed second bail applications that have also been rejected on 14.8.2015.

The aforesaid recording of the bid of the aforesaid firms being the lowest is on an evaluation that was made by the Committee. The allegation against the applicant and other co-accused is that the supply and work order was issued at exorbitant rates and thereafter substandard material after purchasing it from the local market was supplied. Thus, both on the issue of rates, the method of opening tender documents and accepting goods supplied have all caused loss to the State Exchequer for which the applicant was also responsible.

Sri V.P. Srivastava, learned Counsel for the applicant, contends that the entire F.I.R. is based on mere suspicion without there being any material to substantiate the allegation nor is there any cogent reason available so as to prosecute the applicant. He further submits that the rates are all verified and at par and had been approved in the agenda of a high power Committee under the Chairmanship of the Principal Secretary, Medical Health, dated 19.8.2009. The bid was approved by the Managing Director Mr. Abhai Kumar Bajpai, who has already been bailed out. In such circumstances, the applicant only having issued the work order, he cannot be held to be responsible for any alleged discrepancy. Sri Srivastava submits that any difference in rates and allegations about the same of any manipulation are the imagination of the Investigating Agency inasmuch as the goods have been supplied and also inspected and verified of having possessed the certified standard marks of I.S.I. and C.E. For this, he has invited the attention of the Court to the agreement and also to the actual indications on document about the approval of the quality of supply of the goods.

He has then invited the attention of the Court to the statement of the approvers Manvendra Chaddha and Girish Malik to contend that it is they, who informed the alleged manipulation in the supply mode but there is no indication of the involvement of the applicant nor his name is mentioned in the statement of the aforesaid two persons under Section 164 Cr.P.C. He, therefore, submits that on an over all consideration of these facts there is no material so as to detain the applicant behind bars and even level allegations against him for having caused a loss of Rs. 21,20,87,617/-. It may be put on record that this figure of loss is contained in the charge-sheet and has also been mentioned in the bail rejection order of the court below dated 8.9.2014.

Replying to the said submissions, Sri N.I. Jafri contends that neither any market survey was conducted and absolutely local material was supplied without following any elementary rules of procedure of award of government contract. The rate tender form was not filled up and the same was accepted by the tender Committee against all norms without verifying the market rates and in contravention of the Circular dated 13.5.2009.

It is also urged that the charge-sheet indicates that even before the acceptance of the tender an advance of Rs. 3 Crores has been made to the superior which was totally contrary to norms.

Having considered all the submissions raised and also the facts that have been stated again in the rejoinder-affidavit filed by the applicant, the allegations are of a serious nature indicating the involvement of the applicant. It is correct that two of the co-accused, as noted above, have been bailed out by the High Court earlier but in view of the later order passed by the Apex Court on 14.7.2015, and in the absence of any offer of deposit by the applicant, this Court does not find any reason to extend the benefit of bail to the applicant at this stage. The involvement of the applicant is evident from perusal of the F.I.R. and the Charge-sheet as having actively participated in the tender process and issuance of work order and receiving of supply at an alleged exorbitant rate and not being qualitatively up to the mark. The huge loss of exchequer, therefore, appears to have been caused to the State Government. Consequently, no case for bail is made out.

The bail application is rejected.