Dismissed

Nand Kishore Fogla v. State Of Jharkhand Through Cbi

Jharkhand HC11 Apr 2014Cr.M.P./1491/2013

Case brief

AI extract

What is this about?

The High Court of Jharkhand dismissed the petition for quashing criminal proceedings against the petitioner under the IPC and Prevention of Corruption Act. The court held that the petitioner, being the proprietor and signatory of cheques in a case involving alleged corrupt procurement and exorbitant pricing, could not claim immunity merely by delegating business to his son; points regarding knowle

What did the court decide?

Application for quashing of criminal proceedings dismissed; petitioner at liberty to raise points during trial.

Nand Kishore Fogla Vs State Of Jharkhand Through Cbi — Corruption | Jharkhand HC (2014)

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IN THE HIGH COURT OF JHARKHAND AT RANCHI

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Cr. M.P. No. 1491 of 2013

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Nand Kishore Fogla........... Petitioner Versus State of Jharkhand through CBI …….... Opp. Party …… Coram: Hon’ble Mr. Justice R.R.Prasad …… For the Petitioner : Mr. A.K.Kashyap, Sr. Advocate M/s Lina Shakti, Anurag Kashyap For the CBI : Md. Mokhtar Khan, ASGI .......

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3./11.04.2014 Heard the parties.

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2 . This application has been filed for quashing of the entire criminal proceedings of R.C. Case No. 11(A)/2009-AHD-R, including the order dated 10/08/2011, passed by the Special Judge, (CBI-ACB), Ranchi, whereby and whereunder cognizance of the offence punishable under Sections 120B, 420, 467, 468, 471 of the Indian Penal Code and also under Section 13(2) read with Sections 13(1)(c), 13(1)(d) of the Prevention of Corruption Act, has been taken against the petitioner.

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3 . The case of the prosecution is that during financial year 2007-08, the Health Department, Government of Jharkhand having invited tenders purchased medicines on fixed prices under the scheme known as NRHM . For the financial year 2008-09 also medicines were purchased after inviting tenders on the rate approved for the financial year 2007-08 but by that time 'Purchase Preference Policy' had come into force whereby certain medicines were to be purchased compulsorily from the Government manufacturing companies and if the medicines would have been purchased, fixed percentage of discount was admissible but medicines were purchased ignoring the said policy completely, as a result of which, enormous pecuniary loss was caused to the State of Jharkhand whereas public servants as well as private suppliers received wrongful pecuniary gain.

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It has been further alleged that medicines/equipments/ appliances/sundry items to be used in hospital were purchased worth crores of rupees from M/s. Satya Sai Agencies, M/s. J.R.Pharma, M/s. Kalyan Enterprises, M/s. Medhavi Associates, M/s. P.D.P.L, M/s. Annu Enterprises, M/s. Endo Lab, M/s. Hindustan Antibiotics, M/s. U.P.D.P.L, M/s. Savitri Sales, M/s. Hindustan Latex, M/s. Unique Pharma, M/s. Laxmi Medial Agencies, M/s.G.R.Associates, M/s. Prabhat Drug House,

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M/s.Gaurav Enterprises, M/s. Plasti Surge India Pvt.Ltd, M/s. Nicholas Piramal India Limited and also from M/s. Nand Kishore Fogla, but these purchasers were not at all need based, as quantity of medicines and medical equipments/instruments which were purchased were far more than the actual requirement.

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4 . In this regard it has been alleged that Nitrozen Oxide Cylinders of 510 liters capacity were purchased in huge quantity which were to be supplied to the PHC/CHC where Anesthetists are posted but in the State of Jharkhand hardly there is any PHC/CHC where Anesthetist is posted and as such, it remained lying unused. Similarly, some of the medicines were purchased which were being rarely prescribed by the Doctors. Likewise, some instruments including Fogger Mechine (which is subject matter in this case) were purchased many times more than the actual requirement.

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5 . Further it has been alleged that budget allocation for purchase of Sahiyya Kit, medicines and equipments were far less than the amount invested in purchasing those items. Out of the budget allocation made by the State government, 50,000 units of Disinfectant Microgen-D 125, 300 units of Fogger Machine and dispenser have been purchased for Rs.14.74 crores, Rs.5.15 crores and Rs.19,57,000/- respectively and that medicines and medical equipments worth Rs.48.58 crores have been purchased from M/s. Nand Kihsore Fogla which firm was not authorized dealer/supplier of medicines and medical equipments. Those medicines and equipments have been purchased at an exorbitant rate and in excess without ascertaining the requirement and that too by procuring false documents to show excess consumption of requirement of medicines and equipments.

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6 . Thus, it has been alleged that the then Secretary, Health Department, Government of Jharkhand, State RCH Officer, Namkum, Ranchi and other officials of the Health Department in connivance with suppliers by abusing their official positions as public servants, fraudulently and dishonestly purchased medicines/medical equipments/ appliances/sundry items worth Rs. 1,30,50,79,951.74 from 19 suppliers without having such requirement and beyond the fund allocation allotted to 'National Rural Health Mission (NRHM)”.

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7 . On such allegation, a case was registered as R.C. Case No. 11(A) of 2009-AHD-R, under Sections 120B, 420, 467 468, 471 of the Indian Penal Code and also under Sections 13 (2) read with Section 13(1)(c), 13(1)(d) of the Prevention of Corruption Act. The matter was taken up for investigation. On completion of investigation, charge sheet was submitted,

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upon which cognizance of the offences punishable under Sections 120B, 420, 467 468, 471 of the Indian Penal Code and also under Sections 13(2) read with Section 13(1)(c), 13(1)(d) of the Prevention of Corruption Act, was taken against the petitioner vide order dated 10.8.2011, which is under challenge.

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8 . Mr. Kashyap, learned senior counsel appearing for the petitioner submits that M/s. Microgen Hygiene Pvt. Ltd. (M/s. Microgen India), use to have license to import drugs manufactured by M/s. Microgen Incorporation, New Jersy, USA, a world wide known manufacturer of medicines/equipments, of which M/s. Microgen India is the exclusive agent. Various products of M/s. Microgen Incorporation are being supplied to various State Governments in India as well as to the Institutes and Corporal Hospitals through various consignee agent including M/s. Sonanchal Enterprises, Ranchi, who is concerned with the supply of the products in the State of Jharkhand.

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It was further submitted that in the month of July, 2008, a tender was issued by the Department of Health and Family Welfare, Government of Jharkhand, inviting tenders from the Government as well as private manufacturers for the purpose of supplying Disinfectant, Fogger Machines and Dispenser and also other materials and medicines. That tender was cancelled. Subsequently, another NIT was issued putting a clause that the manufacturer would be eligible to participate in the tender having turn over in current financial year of Rs. 12 crores. On issuance of NIT, M/s. Microgen India approached M/s. Nand Kishore Fogla to supply its products Disinfectant D-125 and Fogger Machines, on a condition that products should be supplied against the supply order through consignee agent M/s. Sonanchal Enterprises, on advance payment. On submission of the tender, M/s. Nand Kishore Fogla, was awarded with the work order for supply of 50,000 liters of Disinfectant, 300 pieces of Fogger Machines as well as disposable syringes etc. When supply order was issued to M/s Microgen Hygiene Pvt. Ltd., it supplied the aforesaid products through M/s. Sonanchal Enterprises, who received the payment from M/s. Nand Kishore Fogla. On supply of the aforesaid materials and other medicines and equipments, when information was received by the C.B.I that the purchases have been made clandestinely by the officials of the Government in league with the suppliers whereby the State Government has been put to loss to a great extent, a case was registered against certain persons, Government officials as well as suppliers. In course of investigation, It got transpired that this petitioner is the De-jure proprietor of M/s Nand

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Kishore Fogla, who is completely a blind person and entirely dependent upon his son Rajesh Kumar Fogla for all the business activities of the Firm. In spite of that, charge sheet was submitted against the petitioner alongwith Rajesh Kumar Fogla and other accused persons including Riyaz Khan Faridi as it was found that M/s Nand Kishore Fogla had participated in the tender and quoted exorbitant rate of Disinfectants, fogger machines and Dispenser and that the officials favoured M/s Microgen through M/s Nand Kishore Fogla and that the market/purchase rate of Disinfectant was Rs. 1200/- per liter, whereas the rate was quoted at Rs.2948/- per liter by M/s. Nand Kishore Fogla and market/purchase rate of Fogger Machine was Rs. 15000/- per piece whereas rate quoted by M/s. Nand Kishore Fogla was Rs.1,71,722/- per piece, which was much much more higher than the market rate and still supply order was given to M/s. Nand Kishore Fogla and, thereby, it is said that all the accused persons, in conspiracy with each other put the State exchequer to a great loss but the CBI has found that this petitioner being a blind peprson was a De-jure proprietor of a Company namely M/s Nand Kishore Fogla and that the CBI also made out a case that it was Rajesh Kumar Fogla, the son of the petitioner, who did everything that is to say submitting of quotation, quoting price, receiving money and then making payment of the bribe to the Ministers and other officials, still the petitioner has been made accused on the premise that this petitioner used to have knowledge of the shady transaction, but one cannot be put to trial for an offence under Section 120B IPC simply for the reason that he was having knowledge without actually participating in the crime conspired to be committed.

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In this regard, learned senior counsel has referred to a decision rendered in a case of “ Gulam Sarbar- versus- State of Bihar (now Jharkhand) [2014 (1) East Cr.Cases 72 (SC)] ”. By referring to that decision, learned counsel again put emphasis that as per the case of the CBI, this petitioner had knowledge of the shady transaction and that the petitioner was the signatory of the cheques through which payments were made to the supplier, but even if the payments were made, no culpability is there as when the supplier had supplied the materials, the petitioner was obliged to make payments to him and in that event, there is absolutely nothing against the petitioner showing his hand in the commission of the offence as alleged.

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Learned counsel further submits that it is said that this petitioner had gone in conspiracy with one Riyaz Khan Faridi, partner of the Firm Microgen India Limited, who had supplied the fogger machines,

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Disinfectants to the RCH through Sonanchal Enterprises, but his case has been quashed by this Court and, therefore, order taking cognizance against the petitioner also warrants to be quashed.

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9. As against this, Mr.Khan, learned counsel appearing for the C.B.I submits that the CBI, in course of investigation, though did find that everything has been done by Rajesh Kumar Fogla in the matter of supply of the medicines, equipments to the RCH and receiving payments and giving bribe to the Ministers and the Officials, but the CBI has reached to the definite conclusion that this petitioner had knowledge of the shady transaction and that it was the petitioner, who was the signatory of the cheques through which payments were made to M/s Microgen India Limited. That apart, the CBI has also collected materials to the effect that this petitioner had come to the contact of Dr. Vijay Shankar Narayan Singh and on the advise of Dr. Vijay Shankar Narayan Singh, this petitioner had managed to get a Drug License issued in the name of M/s Nand Kishore Fogla and it was Dr. Vijay Shankar Narayan Singh, who was introduced Nand Kishore Fogla to the concerned person associated with the RCH and it is only at the behest of Dr. Vijay Shankar Narayan Singh, the petitoiner succeeded in getting the supply order worth Rs.48,58,63068/- and that on account of that the petitioner succeeded in getting the supply order of disposable syringe irrespective of the fact that he was L2 and on account of supply of the disposable syringe by M/s Nand Kishore Fogla, the department has suffered a loss of Rs. 6,38,97,158/-. Further it has been found that the petitioner did supply surgicot spirit in lieu of surgical spirit and hymatic sprayer in lieu of dispenser and even these two were accepted and the payments were made against the sale proceeds of surgical spirit and dispenser. It has also been found that M/s Nand Kishore Fogla, had charged exorbitant price for each of the items he supplied though he had purchased it for far less than he charged from the RCH. The difference from the purchase p;rice and billed price has gone to Rs. 31,68,50,746/and, therefore, the Court has rightly took cognizance of the offence, as aforesaid, against the petitioner. it is the petitioner at whose instance first tender was cancelled and re-tender was issued and that the petitioner having entered into conspiracy with other accused public servants and M/s. Nand Kishore Fogla had participated in the tender and quoted exorbitant rate of Disinfectents, Fogger Machines and Dispenser and that the officials favoured his company through M/s. Nand Kishore Fogla and that market/purchase rate of Disinfestent was Rs.1200/- per liter whereas rate quoted was Rs.2948/- per liter by M/s. Nand Kishore Fogla and

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market/purchase rate of Fogger Machine was Rs.15000/- per piece whereas rate quoted by M/s. Nand Kishore Fogla was Rs.1,71,722/- per piece which was much much higher than the market rate and still supply order was given to M/s. Nand Kishore Fogla and thereby all the accused persons in conspiracy with each other put the State exchequer to a great loss and under the circumstances, order taking cognizance never warrants to be quashed.

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10. At this stage, learned senior counsel appearing for the petitioner submits that though it was placed before this Court that it was the petitioner, who, when had come into contact with Dr. Vijay Shankar Narayan Singh, he induced him to be a supplier and then at his instance a Drug License was obtained in the name of M/s Nand Kishore Fogla, but from the charge sheet, which has been submitted by the CBI, it would appear that it was Rajesh Kumar Fogla, son of the petitioner, who had come to contact with Dr. Vijay Shankar Narayan Singh and, thereby, whatever case has been placed on behalf of the CBI that is contrary to the case made out in the charge sheet.

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11. Be that as it may, it is admitted case of the parties that this petitioner being the proprietor of M/s Nand Kishore Fogla had signed the cheques, through which payments were made to M/s Microgen India Limited. At the same time, it is also the case of the CBI that this petitioner had knowledge about the shady transaction, wherein when M/s Nand Kishore Fogla was awarded with the order of supply of 50,000 liters of Disinfectants 300 pieces of fogger machines, it were supplied by the petitioner through M/s Sonanchal Enterprises by purchasing it from M/s Microgen at the rate of Rs. 2948/- per liter. It has also come that the petitoiner's consignee agent M/s Sonanchal Enterprises had supplied Disinfectants (D-125) at the rate of Rs. 1300/- per liter but M/s Nand Kishore Fogla had quoted price at the rate of Rs. 2948/- per liter and similarly, fogger machines were supplied at the rate of Rs. 15000/- per piece, whereas fogger machines was quoted at the rate of Rs. 171722/- per piece.

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12. In that view of the matter, the CBI came to the finding that this petitioner was having knowledge of all the shady transaction. However, it was submitted on behalf of the petitioner that the CBI has simply said that this petitioner was having knowledge of shady deals, but nothing has been placed on record to show as to how the petitioner, who is a complete blind person, came to know about the shady deals and, therefore, in absence of any such material, case of the CBI cannot be accepted that this

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petitioner was having knowledge of the shady deals.

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13. In that event, learned counsel submits that the case of the petitioner falls under third category laid has referred to a decision rendered in a case of “ R.P. Kapur-versus- State of Punjab [AIR 1960 SC 866] ”, where Their Lordships have laid down following categories where as per Their Lordships, inherent jurisdiction can and should be exercised for quashing of the proceeding.

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Where it manifestly appears that there is legal bar against the institution or continuance of the said proceeding.

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Where the allegations in the FIR or the complaint even if they are taken at their face value and accepted in their entirety, do not constitute offence alleged.

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In cases where the allegations made against the accused persons do constitute offence alleged but there is neither legal evidence adduced in support of the case or evidence adduced clearly or manifestly fails to prove the charge.

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14. However, it be stated that there has been no denying of the fact that the petitioner was the Director/Proprietor of the Firm known as M/s Nand Kishore Fogla and the manner in which the State was put to loss has already been indicated. The petitioner intends to come out of the ring of the prosecution on the ground that whatever misdeeds was done, it was done by his son Rajesh Kumar Fogla. But, at the same time, it is the case of the CBI that this petitioner was having knowledge of all the misdeeds committed by Rajesh Kumar Fogla. That apart, the petitioner seems to be the signatory of the cheques, through which payments were made to M/s Microgen India Limited.

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15. In such situation, it would not be proper and appropriate to quash the proceeding at this stage, rather the points, which have been raised by the petitioner, need to be raised during trial and at the same time the prosecution would be placing his case before the trial Court to establish that this petitioner was having knowledge of the shady deals.

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16. Accordingly, I am not inclined to interfere with the order taking cognizance against the petitioner and, hence, it needs no interference. Consequently, this application stands dismissed.

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17. Notwithstanding the fact that this application got dismissed, the petitioner would be at liberty to raise all the points, which have been raised in this application, at an appropriate stage.

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(R.R.Prasad, J)

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Mukund/-cp. 3

Nand Kishore Fogla v. State Of Jharkhand Through Cbi

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Nand Kishore Fogla v. State Of Jharkhand Through Cbi

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