Back
Andhra Pradesh High Court Quashes FIR Over Substandard Oxygen Plant Citing
In a significant ruling that draws a clear line between and , the has quashed a criminal case against the CEO of a Bengaluru-based company who was accused of a Vijayawada hospital by installing a substandard oxygen plant during the COVID-19 pandemic. Justice K. Sreenivasa Reddy, sitting in single bench, held that the dispute was essentially civil in nature and that, even if the allegations were taken at their highest, they pointed only to a “” and not to the offences of under Section 420 or under .
Oxygen Plant Deal Goes Wrong Amid Pandemic
At the height of the second COVID-19 wave, the Andhra Pradesh government directed hospitals to set up their own oxygen plants. Dr. R. Suresh Kumar, who runs Dr. Suresh Super Specialty & Critical Care Centre in Vijayawada, decided to procure a ZHONGRUI brand oxygen plant. He availed a loan of ₹1.96 crore under the “Star Sanjeevani COVID Scheme” from Bank of India and, with his own contribution, transferred a total of ₹2.10 crore to Roy Opportune Pvt. Ltd., whose Chief Executive Officer, Kum. C. Rohini Roy, had assured him of a top-quality, fully equipped plant within 40 days.
The supplier erected a shed and installed a plant, but Dr. Suresh Kumar alleged that the equipment was of substandard quality and did not match the agreed specifications. Claiming that he had been induced to part with his money under false pretences, he filed a police complaint, leading to the registration of Crime No. 390 of 2021 at for offences under Sections 406 and 420 IPC. A charge sheet was subsequently filed and the case numbered C.C. No. 508 of 2023 before the .
Petitioner’s Stand: A Civil Wrinkle, Not a Criminal Wound
Appearing for the accused CEO, counsel argued that the entire transaction was a commercial contract. The plant was erected and installed, albeit with some delay, and invoices were raised for the full consideration. He contended that, to make out a case of under , the prosecution must show that the accused harboured a right from the inception of the deal, not one that developed later. Here, the petitioner had actually supplied and installed the equipment, meaning no fraudulent misrepresentation could be inferred at the time the contract was formed. Further, he submitted that the offences of and could not ordinarily coexist because their ingredients were fundamentally different. At worst, the allegations amounted to a , which should be agitated before a civil court – and, in fact, Dr. Suresh Kumar had already filed O.S. No. 50 of 2023 before the .
State Opposes , Claims Dishonesty From the Outset
The Assistant Public Prosecutor, representing the State, argued that the petitioner was fully aware that the oxygen plant she installed was of substandard quality, yet she proceeded with its installation. This, according to the State, demonstrated a right from the inception. She maintained that the truthfulness of the allegations was a matter for trial and could not be tested in a petition under .
The Court’s Analysis: Drawing the Line Between Crime and Contract
Justice K. Sreenivasa Reddy meticulously examined the required for the offences. He underlined that defines as deception that a person to deliver property; Section 420 punishes such when property is involved. For under , there must be and its subsequent or use in violation of a legal direction or contract.
Crucially, the Court observed that in the present case, the petitioner had indeed set up the shed and installed the oxygen plant in response to an order placed by the complainant. The mere fact that the equipment was allegedly of inferior quality would, at best, point to a . There was no material to indicate that the petitioner had a at the very beginning of the transaction. The Court quoted from the landmark decision in State of Haryana v. Ch. Bhajan Lal (AIR 1992 SC 604) and invoked the third category of illustrations laid down therein: where the and the evidence collected do not disclose the commission of any offence and make out no case against the accused, the High Court is justified in the proceedings.
Key Observations
“ If the plant installed is allegedly of inferior or substandard quality, the same would, at best, amount to on the part of the Petitioner. ”
“ Merely because there is an alleged in supplying or installing the Oxygen plant as per the requirements of Respondent No. 2, the ingredients constituting the offences punishable under Sections 406 and 420 of the IPC would not attract as against the Petitioner. ”
“ This Court is of the considered opinion that it cannot be inferred that the Petitioner possessed any from the very inception of the transaction. ”
“ Even if the made in the charge sheet and the material collected in support of the same are accepted as true and correct, no case for the offences alleged, is made out as against the petitioner. ”
Decision and Implications
The High Court allowed the Criminal Petition and quashed the entire proceedings in C.C. No. 508 of 2023 pending before the . All pending miscellaneous applications were closed. The Court explicitly stated that continuing the criminal trial would be nothing but an .
The judgment reinforces the principle that every contractual breach or supply of defective goods does not automatically translate into a criminal offence. It underscores that the existence of a , when the parties had an admittedly subsisting commercial arrangement, militates against prosecuting the supplier for or breach of trust. For businesses engaged in supply contracts, the ruling offers a robust shield against the into what is essentially a . The High Court’s approach echoes the growing judicial sentiment that the drastic power of must be exercised to prevent the machinery of criminal justice from being misused to settle commercial scores.
