The court can exercise inherent powers to prevent abuse of the judicial process and quash proceedings when the allegations lack the ingredients of criminal offenses and are civil in nature.

1. The first petitioner is the Chairman of the second petitioner Firm and they are taken as accused Nos.2 and 3 in RC No.47A of 2008 pending investigation on the file of the respondent/CBI for offences punishable under Section 420 read with Sec.120B IPC. The respondent registered the case on the basis of Source Information Report as against the petitioners and A-1, who was functioning during the relevant period as Director, BCG Vaccine Laboratory, Chennai, and Pasteur Institute of India, Chennai. The allegation is that, during 2006-2007, the first accused, pursuant to criminal conspiracy with the petitioners/A-2 and A-3 to cheat Government of India, without valid authorisation, entered into an agreement with the second accused for supply of Measles Seed (Edmonstons), Rubella Virus Seed (RA-27-WISTAR) and Human Diploid Cell Line and for manufacture of Measles and Rubella Vaccine; thereby, caused wrongful loss to the Government of India to the tune of Rs.3.25 crores and corresponding wrongful gain to themselves. By setting in motion the task of investigation, the respondent/CBI collected materials in the form of documents and communications between the parties and the Government and, while the investigation is at progress, the present petition has been preferred before this Court to quash the proceedings of the respondent/CBI.

2. Mr. B. Sriramulu, learned Senior Counsel elaborately argued the matter by referring to various transactions between the parties and background thereof from the inception till the culmination of the proceedings at the hands of the CBI, in his endeavour to demonstrate that it is a deserving case to grant the prayer sought for.

At the outset, learned Senior Counsel submitted that even if the allegations as put forth in the First Information Report are presumed to be true, on the basis of the materials collected during the course of investigation, a prima facie case is not made out and it is an exceptional case warranting exercise of the inherent powers of this Court under Section 482 of the Code to quash the investigation at the threshold as otherwise, the petitioners, who all along acted in good faith and with bona fide intention and whose transparent transactions are borne out by records, would suffer great prejudice and damage.

To substantiate such contention, it is submitted that the petitioners are engaged in pharmaceutical business and importing pharmaceutical raw materials with technical know-how for manufacture of vaccines. After acquiring technological expertise in the field, the petitioner firm entered into agreement with foreign companies for importing Measles and Rubella Vaccine Seeds. Substantive materials in this regard were produced by the petitioners during the course of investigation. For decades together, the Government purchased Measles Vaccine by spending approximately Rs.300 crore per annum from a private company viz., M/s. Serum Institute of India, Pune, (hereinafter referred to as Private Unit) for the purpose of Expanded Programme on Immunisation (EPI) of the Government of India. Even though Pasteur Institute of India (in short Institute) possesses requisite equipment, manpower and resources for manufacture of the vaccine, it does not have raw-materials and technical know-how to commence production. Since facilities and infrastructure are available with the Institute, the Government and the first accused negotiated with the Private Unit for supply of raw-materials and sharing technical expertise, but, such endeavour did not materialise; with the result, the first accused was frequently asked by the Government to explore other possibilities to secure the raw materials and expertise from other sources, and particulars are available to substantiate the same. The first accused, only after obtaining due approval, placed orders with the petitioners, who, in order to comply with the request made, took immediate initiatives to import raw materials and technology from foreign countri