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Punjab-Haryana High Court
Jimmy Subawalla And Ors vs Cbi on 15 March, 2021 In virtual Court
CRM-M-40489-2016 -1-
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
CRM-M-40489-2016 (O&M)
Date of decision: 15.03.2021
Jimmy Subawalla and others
… Petitioners
Vs.
Central Bureau of Investigation and another
… Respondents
CORAM: HON’BLE MR. JUSTICE ARVIND SINGH SANGWAN
Present: Mr. J.S. Bedi, Sr. Advocate with
Mr. Karan Pathak, Advocate
for the petitioners.
Mr. Sumeet Goel, Advocate
for the respondent-CBI.
*******
ARVIND SINGH SANGWAN, J.
Prayer in this petition is for quashing of FIR
No.RCCHG2014A0021 dated 09.12.2014 under Section 120-B of the Indian
Penal Code (for short ‘IPC’) read with Section 420 IPC and Section 13 (2) read
with Section 13(1)(d) of the Prevention of Corruption Act, 1988 (for short ‘PC
Act’), registered at ACB, CBI, Chandigarh as well as report under Section 173
Cr.P.C. dated 10.10.2016 and further proceedings pending before Special
Judge, CBI, Chandigarh, being misuse of process of law.
It is worth noticing that at the stage, when the case before the trial
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Court/Special Judge, CBI was fixed for framing of charge, this petition was
filed in the year 2016 and on 06.12.2016, it was directed that charge be not
framed. Interim order is continuing, as the arguments are not advanced on
behalf of the petitioners.
The Special Judge, CBI, Chandigarh, vide request letter dated
16.02.2021, has sought permission for resuming the trial process in view of
judgment of the Hon’ble Supreme Court in Asian Resurfacing of Road
Agency Pvt. Ltd. and anr. Vs. CBI, 2018 (2) RCR (Crl.) 415, wherein it is
held that the cases, which are at trial stage and proceedings are stayed by the
higher Court, after a lapse of six months, said order will automatically be
lapsed, unless it is extended by a speaking order and the trial Court may, on
expiry of aforesaid period, resumed the proceedings.
Learned senior counsel for the petitioners has submitted that the
FIR was registered after conducting a preliminary inquiry against S.K. Bansal,
the then Chief Engineer, Municipal Corporation, Chandigarh (for short ‘MCC’),
S.R. Aggarwal, the then Superintending Engineer, MCC, Public Health, R.C.
Diwan, then Executive Engineer, MCC, Public Health and M/s Selvel Media
Services Pvt. Ltd. and its partners i.e. petitioners. It is further submitted that on
completing of the inquiry, a report under Section 173 Cr.P.C. was submitted
against six persons i.e. R.C. Diwan, Bishwadeep Dutta, G.M., M/s Selvel Media
Services Pvt. Ltd., Jimmy Subawalla, Director, M/s Selvel Media Services Pvt.
Ltd., Mysa Ganesh, Director, M/s Outdoor Communication Pvt. Ltd. and two
firms i.e. M/s Selvel Media Services Pvt. Ltd. and M/s Outdoor Communication
Pvt. Ltd. through its directors, whereas S.R. Aggarwal and S.K. Bansal were
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kept in column No.2, as no chargesheet was presented against them. It is further
submitted that the allegations against the petitioners are that in the year 2007,
two tenders for operation and maintenance of 40 toilet blocks in various
complexes of Chandigarh were floated by MCC and these 40 number of toilet
blocks were in two parts. Part A of the work consisted of display of
advertisement on the wall of the toilet blocks and Part B was of displaying the
advertisement on the connecting passage. Similarly, for 46 number of toilet
blocks, tenders were floated by MCC for earning the revenue with a stipulation
that the agency will quote licence fee per toilet and minimum proposed licence
fee per toilet per month was Rs.500/- for each toilet in each group of toilet
blocks per month for a period of five years. It was also submitted that the
contractor will pay the advertisement tax in respect of the advertisement
displayed on the wall of the toilet along with licence fee and other taxes
leviable from time to time. Petitioners Jimmy Subawalla and Bishwadeep Dutta
being the authorized representatives of M/s Selvel Media Services Pvt. Ltd.
submitted their tender with MCC and demanded an amount of Rs.9800 per
month per toilet. Later on, there were some negotiation between the petitioners
and MCC regarding waiving off advertisement fee and the tax, however, it was
specified by MCC that no remission for licence fee will be allowed, in case any
advertisement space remains un-utilized. It was also provided that the
contractor will comply with the byelaws and legal orders of the local body or
any public authority. As per Clause 7 of the tender, the contractor was required
to pay the advertisement fee to MCC along with licence fee, if offered by the
agency and all incidental service charges levied from time to time. As per terms
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and conditions of Part 2 of the tender, MCC shall not be responsible in case
advertisements are not displayed on the board and no waiver shall be given in
the licence fee, as per Chandigarh Advertisement Order, 1954. It was also
provided that some other stringent provisions like Clauses 17 & 19 will be
adhered to by the contractor.
Learned senior counsel has next submitted that two companies M/s
Selvel Media Services Pvt. Ltd. and M/s Outdoor Communication Pvt. Ltd.
submitted their conditional bids and MCC was demanded payment of operation
and maintenance of toilet blocks, therefore, they did not submit bid for the
licence fee with reference to the connecting passage and in the bid, against this
column, it was stated as Nil and even no technical bids were submitted by both
the companies. Though it was specific condition of the MCC that no conditional
tender will be accepted, however, both the companies submitted their
conditional bids. M/s Selvel Media Services Pvt. Ltd. demanded a sum of
Rs.9800 for operation and maintenance of toilet blocks and M/s Outdoor
Communication Pvt. Ltd. demanded an amount of Rs.1198 for operation and
maintenance of toilet blocks, but did not submit any bid regards licence fee for
display of advertisement on connecting passage by quoting the licence fee as
Nil, despite the fact that the contractor was expected to earn huge revenue from
the display boards.
During the inquiry, it was found that R.C. Diwan, being the
Executive Engineer of MCC negotiated with M/s Selvel Media Services Pvt.
Ltd. and reduced the amount from Rs.9800/- to Rs.8800/- with an annual
increase of 10% instead of 15%, as quoted in the original bid, which shows that
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both of them connived and conspired with each other, as an undue favour was
shown to M/s Selvel Media Services Pvt. Ltd. and no licence fee payable for the
connecting passage was offered by this company. It was also found that R.C.
Diwan in order to give undue favour to M/s Selvel Media Services Pvt. Ltd.
placed a supplementary agenda in a meeting of F&CC without disclosing the
change in the nature of original tender floated by MCC for operation and
maintenance of toilet blocks and the connivance and conspiracy was to bar
MCC from recovering the revenue generated by the advertisement on the
connecting passage, as in the supplementary agenda, it was offered to provide
connecting passage free of costs to M/s Selvel Media Services Pvt. Ltd. Since
F&CC had upper power of finance limit upto Rs.35.00 lacs but in the tender,
the value more than Rs.5.00 crores was involved, therefore, F&CC did not
approve the tender as per the policy decision. It was further found that while
preparing the comparative statements of bids submitted by two companies, R.C.
Diwan, in order to give undue benefit to M/s Selvel Media Services Pvt. Ltd.,
mentioned at his own that apart from licence fee and advertisement tax, M/s
Selvel Media Services Pvt. Ltd. is not willing to pay any other levy to MCC. At
the time of allotment of tender to M/s Selvel Media Services Pvt. Ltd., R.C.
Diwan, S.R. Aggarwal and S.K. Bansal, the officials of MCC, gave undue
benefit to M/s Selvel Media Services Pvt. Ltd. while allotting work for
operation and maintenance of toilet blocks for a period of five years on
10.09.2007. Thereafter, within a period of three months, R.C. Diwan sent a
communication to M/s Selvel Media Services Pvt. Ltd. that as per advice of
Chief Auditor, MCC, advertisement tax as per Punjab Municipal Corporation
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Act, shall be payable on the allotted work. Upon this, M/s Selvel Media
Services Pvt. Ltd. through its officials i.e. petitioners No.1 & 2, undertook to
pay the advertisement tax, however, later on, all the accused, in conspiracy with
each other, did not recover/collect the advertisement fee/tax from M/s Selvel
Media Services Pvt. Ltd., which resulted into loss of crores of rupees.
Learned senior counsel for the petitioners has relied upon certain
communications between M/s Selvel Media Services Pvt. Ltd. and R.C. Diwan,
the then Executive Engineer, MCC, to submit that as per communication, no
offence under Section 120-B IPC is made out. It is argued that an offence under
Section 120-B IPC can be attracted when ingredients of Section 120-A IPC are
attracted, an ‘Illegal Act’, as defined in Section 43 IPC, says, when it appears
that two or more persons, in criminal conspiracy, agree to do or caused to be
done an act, same will be punishable under IPC. It is submitted that act of the
petitioners, in submitting the bid, showing the inability to pay the licence fee, is
neither illegal nor prohibited.
It is next argued that no offence under Section 420 IPC is made
out, as there was no dishonest intention of the petitioners from the beginning,
when initial bid was submitted. Even on subsequent occasions, when similar
bids were allotted regarding other toilets in the markets, no licence fee was
demanded by MCC. It is further submitted that no offence under Section 13(2)
read with Section 13(1)(D) of PC Act is made out. There is no evidence to show
that any valuable things or pecuniary advantage was given by the petitioners to
co-accused, who were officers of MCC and since the petitioners are not public
servants, provisions of PC Act cannot be invoked against them.
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In reply, learned counsel for respondent-CBI has opposed the
prayer on the ground that all the accused, in conspiracy with each other, have
caused huge loss to the public exchequer. It is submitted that this petition was
filed at the stage, when the charges were to be framed and for the purpose of
framing of charge, the Court is required to satisfy, if a prima facie case exists
for proceeding against the accused and for that limited purpose, the Court can
evaluate the material or documents on record and cannot appreciate the
evidence. Learned counsel has relied upon State of Orrisa and another Vs.
Saroj Kumar Sahoo, 2006 (1) RCR (Crl.) 324 to support his arguments.
Learned counsel has further submitted that present petition filed
under Section 482 Cr.P.C. praying for quashing of criminal proceedings at the
stage when the investigation was pending or before the charges were framed, is
not maintainable, as the High Court cannot evaluate the material or documents.
In this regard, reliance is placed upon State of Madhya Pradesh Vs. Awadh
Kishore Gupta and others, 2004 (1) RCR (Crl.) 233.
It is further argued that it has been held by the Hon’ble Supreme
Court in State of Andhra Pradesh Vs. Goloconda Linga Swamy and
another, 2004 (3) RCR (Crl.) 831 that while framing the charge, the material,
which is in existence, collected during the investigation, if sufficient for holding
the accused guilty, should be considered at the time of trial, whereas while
framing the charge, the Court is to see if prima facie case is made out, showing
the commission of an offence and involvement of the person charge-sheeted. It
is also held that while exercising powers under Section 482 Cr.P.C., the High
Court does not function as a Court of appeal or revision and the inherent
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jurisdiction, though wide, has to be exercised sparingly and with caution and
ordinarily, the High Court should not embark upon an inquiry whether the
evidence in question is reliable or not.
Learned counsel for respondent-CBI has lastly relied upon State of
Haryana and others Vs. Ch. Bhajan Lal and ors., 1991 (1) RCR (Crl.) 383
to submit that the present case do not fall within the parameters laid down by
the Hon’ble Supreme Court, for exercising the jurisdiction under Section 482
Cr.P.C. for quashing of an FIR.
On merits, learned counsel for CBI has argued that the conspiracy
between R.C. Diwan, the then Executive Engineer, MCC and M/s Selvel Media
Services Pvt. Ltd. is apparent on record, as in order to give undue benefit, firstly
he, by way of negotiation, reduced the bid from Rs.9800/- to Rs.8800/- with
annual increase of 10% instead of 15%, as quoted in the original bid and then
kept silent regarding licence fee payable for connecting passage, as the
petitioners deliberately quoted the price as Nil in the tender. It is further
submitted that the conspiracy between MCC officials and the petitioner is also
apparent, as the petitioners gave a conditional bid despite the fact that it was
specifically provided that no conditional bid will be accepted and thereafter, a
proposal was made by R.C. Diwan for providing free of costs passage to M/s
Selvel Media Services Pvt. Ltd., which was later on declined by F&CC. Even
while preparing the comparative statement of two bids, in order to give undue
benefit to M/s Selvel Media Services Pvt. Ltd., R.C. Diwan, in conspiracy with
the petitioners, mentioned that apart from licence fee and advertisement tax, the
petitioners are not willing to pay any other levy to MCC, therefore, prima facie
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evidence of conspiracy between all the accused, based on documentary
evidence, was sufficient to submit the report under Section 173 Cr.P.C.
Learned counsel for respondent-CBI has also submitted that it is
well settled principle of law that where a public servant is being tried for an
offence under the provisions of PC Act, a private person, against whom, charge
is under Section 120-B IPC, can also be tried together with the same.
It is further argued that M/s Selvel Media Services Pvt. Ltd. had
filed CWP-4163-2014 against MCC regarding charging of advertisement
fee/tax, on basis of the letters, which were written by the co-accused/officers of
MCC and the same demonstrates the conspiracy between them. It is also
submitted that vide order dated 18.05.2017, aforesaid writ petition filed by the
petitioner(s) was disposed of, by appointing an independent Arbitrator for
adjudication of the dispute.
Learned counsel further submits that CBI was not a party before
the writ Court and therefore, the MCC officials connived with M/s Selvel
Media Services Pvt. Ltd. for giving consent for appointment of an Arbitrator, on
the basis of the communications, which is the evidence in this case to prove
conspiracy. It is also submitted that in fact, the whole action of MCC officials
and M/s Selvel Media Services Pvt. Ltd. and other accused in the negotiation
bid and then in allotting the tender, is illegal and therefore, the MCC officials,
who are accused in this case, did not brought this fact to notice of writ Court
that present FIR is pending against them. Learned counsel thus submitted that it
was beyond scope of the sole Arbitrator to look into the commission of offence
by the accused persons and therefore, the proceedings before writ Court and
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Arbitrator, if any, at back of CBI cannot be considered as a defence in these
proceedings.
Learned counsel further submitted that later on, Review
Application No.241 of 2019 was filed in CWP No.13565 of 2015 by a third
party, which had filed an application under Order 1 Rule 10 CPC during
pendency of writ petition and this application was rendered as infructuous while
deciding main petition. It is further also submitted that one of the ground of
review the appointment of Arbitrator was that present FIR
No.RCCHG2014A0021 dated 09.12.2014 against officials of MCC and writ
petition is pending and in this petition itself, stay order against framing of
charge is passed on 06.12.2016. However, despite noticing this fact, the review
application was dismissed with Rs.2.00 lacs as costs vide order dated
24.09.2019.
Learned counsel has referred to Priti Saraf and another vs State
of NCT of Delhi and another, passed in Criminal Appeal No.296 of 2021
decided on 10.03.2021, wherein the Hon’ble Supreme Court has held that
initiation of arbitral proceedings has no co-relation with the criminal
proceedings and there is no reason for holding that the offence of cheating
would elude from a commercial transaction as in many cases, offence of
cheating is committed in course of a commercial transaction invoke Sections
415, 418 and 420 IPC.
Learned counsel has further referred to the case of Trisuns
Chemical Industry vs Rajesh Aggarwal, 1999(4) RCR (Criminal) 223,
wherein a similar view has been taken by the Hon’ble Supreme Court as noticed
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in Priti Saraf’s case (supra).
Learned counsel thus concluded that any award if passed by Sole
Arbitrator will have no bearing on the commission of offences and the same
should be decided independently by the Special Judge, CBI, Chandigarh.
After hearing learned counsel for the parties and going through the
record, I find that no case for quashing of the proceedings is made out within
the parameters of State of Haryana vs Bhajan Lal, 1992 Suppl (1) SCC 335,
accordingly, finding no merit, the present petition is dismissed.
Considering the fact that proceedings before the trial Court were
stayed in the year 2016, the trial Court/Special Judge, CBI, Chandigarh is
directed to expeditiously conclude the trial preferably within a period of two
years.
The order dated 18.05.2017 and 24.09.2019 in CWP No.13565 of
2015 and Review Application No.241 of 2019 titled as M/s Selvel Media
Services Pvt. Ltd. Vs. The Municipal Corporation, Chandigarh and others or
any award of Sole Arbitrator, if passed, will not be looked into evidence by the
trial Court.
[ ARVIND SINGH SANGWAN ]
15.03.2021 JUDGE
vishnu
Whether speaking/reasoned : Yes/No
Whether Reportable : Yes/No
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