2010 Supreme(P&H) 3298
2011(1) Law Herald (P&H) 216
IN THE HIGH COURT OF PUNJAB AND HARYANA
Before
The Hon’ble Mrs. Justice Nirmaljit Kaur
Crl. Misc. No.M-11236 of 2010
M/s Hemkunt Rice Mills & Ors.
v.
Central Bureau of Investigation Anti Corruption Branch
{Decided on 09/12/2010}
Present:Mr. R.S. Rai, Sr. Advocate with Mr. Gautam Dutt, Advocate.
Mr. C.S. Bakshi, Advocate for the Petitioner.
Mr. S.S. Sandhu, Standing Counsel for C.B.I.
Headnote:(A) Prevention of Corruption Act, 1988, Ss.13(1)(d) and 13(2)--Indian Penal Code, 1860, Ss.420 & 120-B--Prevention of Food Adulteration Act, 1954, S.16--Corruption--Investigation on the basis of secret information, and the Joint surprise checks conducted by the CBI along with FCI officials revealed that the rice stock was not accepted as per specifications laid down in the instructions issued by Govt. of India--Registration of FIR and investigation of the criminal offence was well within the jurisdiction of CBI--Cannot be said that allegation in the FIR do not make out any offence under Section 120-B IPC read with Section 420 IPC, Section 13(2) read with Section 13(1)(d) of PC Act--Petition dismissed. (Paras 18, 19 & 23)
(B) Prevention of Corruption Act, 1988, Ss.13(1)(d) and 13(2)--Indian Penal Code, 1860, Ss.420 & 120-B--Prevention of Food Adulteration Act, 1954, S.16--Corruption--Cheating--FCI officials in conspiracy with the rice millers has resulted in huge pecuniary advantage to the rice millers causing corresponding loss to the Food Corporation of India--Argument that Section 420 IPC is not made out as no loss has been suffered by FCI since after four years FCI auctioned the rice and got more money than it has previously got or that the entire rice was replaced in accordance with the agreement, has no merit--Argument that no loss had occurred and in fact, rice was sold at a higher price, is an argument in defence--Whether there was any loss or not, is a question of evidence--Subsequently, making good the loss and replacing the stock cannot exempt or absolve the petitioner of criminal liability. (Paras 18 & 20)
Mrs. Nirmaljit Kaur, J.:- Vide this common order, Crl. Misc. Nos.M-11236, 14464 of 2010 and Crl. Misc. No.M-20889 of 2009 shall stand disposed of as the FIR and the question involved in all these cases is same. However, the facts are being derived from Crl. Misc. No.M-11236 of 2010.
2. The facts, in short, are that the petitioner-firms, herein, entered into an agreement with the government agency i.e. The Food Corporation of India (here-in-after referred to as “FCI”) for the year 2004-05, whereby, the petitioner agreed to mill paddy as desired by the FCI. The Government of India issued uniform specifications regarding paddy, rice and coarse grains for the procurement for central pool during the Kharif Marketing Season 2004-05 vide letter dated 31.08.2004. The policy, which is popularly known as Custom Milling Policy 2004-05 regulates the terms and conditions. The said policy lays down the procedure of allotment of Rice mills. The scheme under this policy specifically highlights the role of Food Corporation of India in procurement and allotment of paddy to the Rice millers. A rice miller is under obligation to enter into an Agreement with the District Food & Supplies Controller/District Manager, who acts on behalf of the Government. During the year 2004-05, the paddy allotted by FCI was duly milled by the petitioner firm. The paddy duly milled by the petitioner firm was accepted by the FCI and the FCI issued acceptance note on the receipt of the Rice regarding quality of rice and weight check memo regarding quantity of Rice and the same was stored in the godowns of the Punjab State Warehousing Corporation. Thereafter, the CBI conducted Joint Surprise Checks along with FCI officials at FCI Centres, Jalalabad, Goniana and Mansa in September 2005 and samples were taken randomly in the presence of independent witnesses as per the prescribed FCI procedure. These samples were got examined from the Director, Central Grain Analysis Laboratory, ICAR, Krishi Bhawan, New Delhi. The analyses report of CGAL in respect of the samples revealed that 9 samples out of 11 samples seized from Guniana centre were below PFA standards and not fit for human consumption. The remaining two samples were also not conforming to specifications and were found BRL. Out of 8 samples seized from Mansa centre, all of them were not conforming to specifications and were found BRL. Out of 26 samples seized from Jalalabad centre, 15 were below PFA standards and not fit for human consumption while the remaining 11 samples were found not conforming to specifications and BRL.
3. Accordingly, a regular case was registered in CBI ACB Chandigarh on the allegation that during Kharif season of 2004-05 substandard consignments have been accepted by FCI officials in Punjab Region (Goniana, Mansa and Jalalabad) from various rice millers and shown as ‘A’ grade rice and payments made for the same. Rice consignments sent to some states had been rejected/accepted as substandard causing huge financial loss to FCI. In the FIR, 17 FCI officials and 45 rice mills were named as accused and case was registered under Section 120-B IPC read with Section 420 IPC, Section 13(2) read with Section 13(1)(d) of PC Act and Section 16 of Prevention of Food Adulteration Act, 1954.
4. Accordingly, the present petitions have been filed by various private millers, against whom, the said FIR was registered by the CBI. Learned counsel for the petitioner, while praying for quashing of the FIR, contended that;
(a)The Prevention of Food Adulteration Act, 1954 cannot be made applicable as
(i) the entire foundation of the investigation agency is upon the results of the samples analyzed by CGAL, ICAR Laboratory and New Delhi. It has been specifically mentioned that under Rule 3 of the Prevention of Food Adulteration Rules, 1955, the Laboratory which shall carry out the functions entrusted to it by the Food and Adulteration Act in respect of Punjab is the Central Food Laboratory, Mysore. Since the sam