ROOP KISHORE DARGAR Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) This Writ Petition takes exception to the order passed by the Special Judge for C. B. I. , Greater Mumbai, dated November 21, 2003 in Miscellaneous Application No. 267 of 2000 in Special Case No. 56 of 1998 (R. C. No. 24/a/94) , thereby rejecting the discharge application preferred by the petitioner, who has been named as Accused No. 1 in the abovenumbered case.

(2.) The petitioner, along with seven others, has been named as accused in the criminal case registered as Charge-Sheet R. C. No. 24/a/acb/mumbai for offence punishable under sections 120-B, 420 of the Indian Penal Code and section 13 (2) read with section 13 (l) (d) of the Prevention of Corruption Act, 1988. The petitioner at the relevant time was working as the Chief Marketing manager of Rashtriya Chemicals and Fertilizers Limited at Mumbai. The prosecution case as spelt out from the charge-sheet filed by the investigating agency is as follows. "that Shri R. Venkatesan the then Chairman and Managing Director, Rashtriya chemical Fertilizers Ltd. , Chembur, Mumbai, while functioning as such during 1987-1991 abused his official position in as much as he is in conspiracy with S/shri Surendra Mohan Dingra, Dy. General Manager, rcf, Chembur, Mumbai, Roop Kishore Dargar, Chief Marketing manager, RCF, Chembur, Mumbai, Kuldip Narayan, the then General manager, RCF, Chembur, Mumbai and Shri Pradip Ramrakhiani, Partner of M/s. Pradip and Co. , Mumbai and Prop, of M/s. Raja Chemical corporation, Mumbai cheated the Rashtriya Chemical and Fertilizers Ltd. , chembur, Mumbai, by providing unauthorized supply of Sodium Nitrate and Sodium Nitrite to the said Shri Pradip Ramrakhiani on clean credit basis contrary to the policy of the RCF of "pay Cash - Carry basis". Thus, causing wrongful loss to the R. C. F. Ltd. , Chembur, mumbai, and corresponding gain to the said Shri Pradip Ramrakhiani. That Sodium Nitrate (Nanos) and Sodium Nitrite (Nano2) are the by products of R. C. F. Ltd. , and these by products are sold by the RCF Ltd. , mumbai to various firms/companies on cash or Bank/collateral basis. These by-products are used by g\\ass industries, five-work manufacturers, in explosives, fertilizers and in pharmaceutical items. That the said Shri Pradip Ramrakhiani, Partner of M/s. Raja Chemical Corpn. and Prop, of M/s. Pradip and Co. , Mumbai is dealing in the aforesaid chemicals items since 1985 and initially he was purchasing the aforesaid chemical material from the R. C. F. Ltd. , Chembur, Mumbai on cash payment and from 1986 he was purchasing the said material from the rcf Ltd. Mumbai on the credit basis against the bank guarantee. That in pursuance of the letter dated 7.11.1998 of the RCF Ltd. , Chembur, mumbai, addressed to M/s. Raja Chemical Corporation asking them to enter into a long term agreement for sale of Sodium Nitrate the said shri Pradip Ramrakhiani on 26.11.1985 asked the RCF Ltd. , Chembur, mumbai to give him clean credit facility to the tune of Rs. 20 lakhs approximately and promised the RCF Ltd. , Mumbai to lift 100 MTs of the Sodium Nitrate every month and that the said Shri Pradip ramrakhiani further expressed that it was not possible to take the aforesaid chemical material on cash and carry basis and he desired to lift the said chemical material on credit of 60 days by furnishing bank guarantee of Rs. 5 lakhs. That in pursuance of the note dated 5.12.1989 put up by Shri Sudhakar ghildyal, Dy. Marketing Manager, RCF Ltd. , Chembur, Mumbai the said Shri S. M. Dhingra approved and recommended the aforesaid facility as requested by the said Shri Pradip Ramrakhiani mentioning that there will be a change from the company's conventional policy as such approval of the Board was required after the trial period given to the party was successful and satisfactory. That the said Shri Kuldip Narayan recommended and approved the aforesaid facility to the said Shri Pradip Ramrakhiani on trial basis till 31.3.1989. That the said Shri R. Venkatesan approved the aforesaid recommendations of the said Shri Kuldip Narayan saying, "ok let us see as a trial to increase the sale and then decide on permanent basis" that in pursuance of the note put up by Shri R. Sen, Dy. Marketing Manager. RCF Ltd. Chembur. Mumbai on 31.3.1989, the said Shri R. K. Dargar approved and recommended to continue the aforesaid facility to the said Shri Pradip Ramrakhiani for a further period of three months knowinr fully well that there were outstanding dues of Rs. 17.70 lakhs against the said Shri Pradip Ramrakhiani. That the said Shri Kuldip Narayan approved and recommended the aforesaid facility to the said Shri Pradip Ramrakhiani for a further period of three months with effect from 1.4.1989. That the said Shri R. Venkatesan approved the aforesaid recommendations of the said S/shri R. K. Dargar and Kuldip Narayan for extending the aforesaid facility to the said Shri Pradip Ramrakhiani for a further period of 3 months till July, 1989, without obtaining the approval of the Board. That in pursuance of the note put up by Shri A. T. Mulev. Dy. Marketing manager. RCF Ltd. Chembur. Mumbai. the said Shri R. K. Dargar approved and recommended further credit facility to the said Shri pradip Ramrakhiani falsely mentioning that the party's performance had improved and that the stock of the aforesaid chemical material was at zero level. That the said S/shri Kuldip Narayan and R. Venkatesan, approved the recommendations of the said Shri R. K. Dargar as aforesaid and okayed the said proposal enhancing the credit facility to the said shri Pradip Ramrakhiani till 31.3.1990 inspite of the fact that there were outstanding dues to the tune of Rs. 22 lakhs against the said shri Pradip Ramrakhiani. That the said Shri L. S. Bapna on 30. 12.1987, put up a note saying the ex-factory price of the Sodium Nitrate was Rs. 6,050/- and the competitors, m/s. Deepak Nitrite were selling the said product at the rate of Rs. 5600 per ton and offering discount of 2.5% and that in order to compete with M/s, Deepak Nitrite it was essential to give 60 days interest free credit for Sodium Nitrate sold. It is further alleged that the said shri L. S. Bapna recommended discount of Rs. 176/- per ton and that the said Shri R. Venkatesan gave his approval in this regard on 31.12.1987 and a circular dated 1.1. 1988 was issued to the effect that the material Nano3 can be sold on 60 days credit basis against collaterals or a cash discount of Rs. 160/- per ton. That the rates of M/ s. Deepak Nitrite during the said period did not fluctuate. It is alleged that the aforesaid note of the said Shri L. S. Bapna recommending reduction of price of Sodium Nitrate by RCF Ltd. , Chembur was false and as a result of this price reduction, the R. C. F. Ltd. , Chembur, Mumbai, suffered a loss of Rs. 1,12,200/ -. That in pursuance of the said aforesaid criminal conspiracy a wrongful loss of Rs. 50,37,503.15 was caused to the RCF Ltd. , Chembur, Mumbai and corresponding gain to the said Shri Pradip Ramrakhiani, in the aforesaid manner. That the aforesaid acts on the part of S/shri R. Venkatesan, Roop Kishore dargar, L. S. Bapna, Kuldip Narayan, Pradip Ramrakhiani, Partner of m/s. Pradip and Company and Proprietor of M/s. Raja Chemicals Corporation, mumbai constitute offences punishable under sections 120-B and 420 IPC and section 13 (2) r/w 13 (l) (d) of P. C. Act, 1988. That the aforesaid acts on the part of Shri Surendra Mohan Dhingra constitute offences punishable under section 120-B and 420 IPC. It is prayed that aforesaid accused persons may kindly be tried according to law for the aforesaid offences. " (emphasis supplied) insofar as the involvement of the petitioner in the alleged crime is conncerned, it is alleged that he recorded his approval on the Note prepared by shri R. Sen, the Deputy Marketing Manager and recommended to continue the facility to private party Shri Pradip Ramrakhiani for further period of three months, though there were outstanding dues of Rs. 17.70 lakhs against that party. It is also alleged that the petitioner approved the Note prepared by shri A. T. Muley, Deputy Marketing Manager and recommended further credit facility to the same private party Shri Pradip Ramrakhiani falsely mentioning that the party's performance had improved and that the stock of the chemical material was at zero level. In support of this allegation, the prosecution is relying on several documents, including Circular issued by the General Manager (I) dated 25th October, 1988 calling upon the concerned officials to ensure that the outstanding amounts with the parties are recovered/adjusted before delivering any more supplies to such parties. Reliance is also placed on letter of Shri S. M. Dhingra, Finance Manager (I) , addressed to the petitioner dated 28th February, 1989, asking the petitioner to refer the matter to the private party (M/s. Raja Chemical Corporation) for immediate recovery of the amount over and above the Bank guarantee and clean credit, as the outstanding amount of the said party as on 31st December, 1988 was Rs. 20. 51 lakhs in respect of supplies of Sodium Nitrate and Sodium Nitrite. Reliance is also placed on letter sent by the private party to the petitioner dated 16th march, 1989 requesting to reserve for them 35 tons of Sodium Nitrite (Nano2) and 20 tons of Sodium Nitrate (Nano3) , on which letter an endorsement is made by the petitioner to accede to that request. Reliance is also placed on the Note which has been initialled by the petitioner on 12th October, 1989 submitted by Shri A. T Muley dated 11th October, 1989 on the subject of sodium Nitrite. According to the prosecution, the remark regarding surplus fund available with RCF as noted by the petitioner on this Note was misleading. Besides several documentary evidence, which have been made part of the charge-sheet, the prosecution is also relying on the statement of Mr. K. S. Gopal Krishnan, Senior General Manager, as well as statement of Sudhakar jagannath Kunjarkar, Deputy Marketing Manager, to indicate complicity of the petitioner in the alleged offence. It is not necessary to multiply the other materials, which have been placed on record along with the charge sheet.

(3.) The petitioner, however, filed application before the Special Judge for c. B. I. , Greater Mumbai, where the criminal case is pending for trial, for discharge. The first contention raised on behalf of the petitioner is that the Court cannot take cognisance as against the petitioner for want of sanction, much less valid sanction. It was stated that Charge sheet was filed against the petitioner on 30th September, 1998, on which date, however, the petitioner continued to be in the employment of RCF, for which reason the Sanction to prosecute the petitioner was pre-requisite to take cognisance of the alleged offence against the petitioner. According to the petitioner, the material produced by the prosecution in support of the allegation, even if accepted as it is, will not indicate the complicity of the petitioner in the commission of the crime. Besides, no offence is made out as against the petitioner, for which the petitioner needs to be tried. The petitioner also relied on documents to support his claim that the petitioner has been falsely implicated inasmuch A the petitioner had merely given effect to the prevailing policy/scheme of the RCF and had not deviated in any manner. It is his case that, in fact, the Board of Directors had occasion to consider the entire matter and at least on three occasions, they declined to grant sanction to prosecute the petitioner, on the finding that it was the practice to offer credit to the parties, which was in vogue. The Board of RCF was of the opinion that the petitioner had facilitated recovery of outstanding amount substantially. Moreover, the Note of the Chairman-cum-Managing Director, a well as the opinion of the Board, would clearly indicate that the decisions taken by the petitioner were in the realm of commercial decisions in the best interest of the Company at the relevant time. Relying on the said opinion, it is the case of the petitioner that the prosecution has not made out even a case of suspicion, much less grave suspicion against the petitioner, so as to warrant framing of charge and to try the petitioner for the alleged offence. It was also argued that although other officers were also involved along with the petitioner in the decision making process and offering facility to the private party, however the petitioner was singled out and being persecuted. It is the case of the petitioner that as officials superior to the petitioner and the members of the board of directors, who were supporting the claim of the petitioner, were not arraigned as accused, the prosecution theory of conspiracy ought to fail. It is the case of the petitioner that if the act of the petitioner was one which was a commercial decision taken at the relevant time in the best interest of the company and which decision has been accepted even by the board of directors of RCF, there can be no question of the petitioner being party to criminal conspiracy. It is the case of the petitioner that the petitioner has not concealed any relevant fact while approving the proposal to offer facility to the private party and the decision to do so was a conscious one with knowledge about the outstanding amounts in respect of the supplies already made at the instance of that party. According to the petitioner, therefore, there was no tangible material to proceed against the petitioner in respect of the alleged offence.