P SUNDARAPARIPOORANAN Vs. UNION OF INDIA

JUDGEMENT

(1.) PETITION under Section 482 of the Code of Criminal Procedure to call for the records pertaining to R.C. No,47A of 2008 pending investigation on the file of the respondent police and quash the same.)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 (Edmonston's), 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 countries. The petitioners were informed by the first accused that the Institute is an autonomous body and competent to enter into agreements with the petitioners. Consequently, an agreement dated 27.11.2006 was entered into between the petitioners and the Institute at Coonoor and immediately thereafter, supply of raw materials and technical expertise was effected. It was agreed that the Institute would pay a sum of Rs.3.25 crores and, after the commencement of commercial manufacturing, the profit would be divided between the petitioners and the Institute in the ratio of 70:30. The petitioners imported raw materials to the value of US $ 5,00,000 equivalent to Rs.2.50 cores. Raw materials along with necessary documents relevant for production of vaccines were supplied. Following such transaction, several letters, dated 28.11.2006, 29.11.2006, 14.12.2006, 15.12.2006 and 25.06.2007, were addressed to the first accused to apprise that the petitioners performed their part of the contract in accordance with the terms and conditions. Since the Institute had only paid Rs.2.05 crores as against Rs.3.25 cores, for recovery of the balance, the petitioner firm filed a money suit in C.S. No,43 of 2009 before the High Court and since the Institute threatened to annul the agreement, the same was challenged by filing a Suit in O.S. No.117 of 2008 on the file of Sub Court, Nilgiris at Coonoor and the proceedings are pending. A Notice was also addressed to the first accused and, in reply thereto, it was stated that the first accused did not obtain approval from the Finance Committee and the Governing council and further, a request was made to the petitioners to annul the agreement. It was represented by the petitioners that the Institute is an autonomous body and the contract was entered into between them in accordance with law and further, the document has been duly signed by the Director of the Institute.Thus, on the basis of the materials collected during investigation, there is nothing to suggest or substantiate any violation of terms by the petitioners, but, diametrically, the documentary materials, on the fact of it, give a strong suggestion that the complaint has been filed with mala fide intention to fasten criminal liability on the petitioners. Further, even if there is any violation, in view of the nature of agreement, it is abundantly clear that the dispute involved is purely of civil in nature particularly when there is not even an allegation of dishonest intention made against the petitioners. By virtue of Article-11(c) of the agreement, the first accused has got every power and authority to execute, deliver, perform the agreement and carry out the obligations on behalf of the Institute. It is the object of the Government to commence manufacturing of vaccine by the Institute which possesses enough man power and infrastructure so as to break the monopoly of the Private Unit, to reduce the cost and to ensure safety. Since the Institute only required raw materials and technology, the continuous efforts taken by the Government culminated in the agreement between the first accused and the petitioners. The object of commencement of production by a Public Sector Undertaking is laudable and it is not known as to why, on flimsy reasons, a request for annulment did emerge from the first accused pursuant to the communications received by him from the authorities of the Government. A careful examination of the circumstances behind registration of the FIR having regard to the various aspects adverted to above would go to show that the FIR was registered at the instigation of the Private Unit since the said Unit lost the deal of Rs.300 crores as a consequence of the agreement arrived at between the first accused and the petitioners and thereby, the monopoly hitherto enjoyed by it was put to an end.Learned Senior Counsel, by pointing out that a sum of Rupees One Crore was deposited subsequent to the order passed in Crl.O.P. No,25762 of 2008 granting anticipatory bail to the first petitioner, on instructions, submits that the petitioners are willing to deposit the balance money with the Institute in the event of return of raw materials and the technology supplied to it and also to withdraw the civil litigation pending so that a quietus can be given to the whole dispute therefore, in a case of this nature where every aspect is borne out by records, it is absolutely necessary that the FIR as well as the criminal proceedings are quashed.

(3.) IT is of much relevance to refer to the documents in order to better understand the actual state of affairs.a) With reference to transfer of technology pertaining to Measles Vaccine from the Private Unit to the Institute at Coonoor, by letter/representation dated, 02.06.2005, the first accused conveyed the following to the Chairman, Vaccine Production Board, Directorate General of Health Services, Nirmal Bhavan, New Delhi-11,