Vishnu Chandra Gupta, J.:— In these cases, the CBI register five first information reports (herein after referred to as ‘FIR’) having RC Case Nos. 0062011A0004 of 2011, 0062011A0005 of 2011, 0062011A0006 of 2011, 0062011A0007 of 2011 and 0062011A0008 of 2011. After investigation charge sheets were filed in all the five cases before the Special Judge Anti Corruption, CBI, Lucknow The Special Judge Anti Corruption, CBI, Lucknow after taking cognizance registered criminal case No. 30 of 2012, 31 of 2012, 32 of 2012, 33 of 2012 and 34 of 2012 respectively, which are pending before learned Special Judge, Anti Corruption, CBI, Lucknow.

2. In all the petitions under section 482 Cr.P.C the accused persons arrayed in charge sheets sought relief of quashing the Charge sheet/summoning order and consequential proceeding pending before Special Judge Anti Corruption, CBI, Lucknow.

3. For deciding all the cases relating to the aforesaid five FIRs, as per consent of Counsel for petitioners and CBI the Cr.M.C(U/S, 482 Cr.P.C) No. 4253 of 2012, Fertico Marketing & Investment Pvt. Ltd. v. CBI relating to RC Case No. 0062011A0005 of 2011 has been taken as leading case, where in the parties exchanged their pleadings. The Counsel for the parties agreed that on the basis of pleadings in this case all other cases may be disposed of as the facts and the law point raised in all the above mentioned cases are almost similar. Hence all these petitions are being decided by this common judgement.

4. As all these petitions are being disposed of by common judgement so, it would be appropriate to give short details of all the cases arising out of different FIRs.

(RC Case No. 0062011A0005 of 2011 and Cr. Case No. 32 of 2012.)

(Leading Case)

5. Criminal Misc. Cases (under Section 482, Cr.P.C) No. 4683 of 2012, 4773 of 2012, 4905 of 2012, 616 of 2013 and 4253 of 2012 are relating to the criminal case No. 32 of 2012 arising out of RC Case No. 0062011A0005 of 2011.

6. A FIR has been registered in CBI, ACB, Lucknow on 13.04.2011, under Section 120-B, 420 of IPC and Section 13(2) read with Section 13(1)(d) of Prevention of Corruption Act, 1988 (hereinafter referred to as ‘PC ACT’) against Shri. Anil Kumar Agrawal, Director of M/s. Fertico Marketing & Investment Pvt. Ltd., B-20, Industrial Area, Ram Nagar, Chandauli, unknown officers/officials of DIC, Chandauli, unknown officers/officials of Northern Coal Fields Limited, Singrauli (NCL) and others, on the basis of a joint surprise check conducted on 25.03.2011 in the factory premises of M/s Fertico Marketing & Investment Pvt. Ltd., B-20, Industrial Area, Ram Nagar, District Chandauli with allegations that M/s. Fertico Marketing & Pvt. Ltd. situated at B-20, Industrial Area, Ram Nagar, District Chandauli, registered with U.P State Industries Department as Small Scale Industry (SSI) for manufacturing Special Smokeless Fuel (SSF), which receives raw material i.e coal, from the coal mine projects of Northern Coal Fields Ltd. (NCL), under the New Coal Distribution Policy (for short ‘NCDP’) of Govt. of India on notified/subsidized rates, in active connivance of unknown officers/officials of District Industries Centre (for short ‘DIC’), Chandauli; unknown officers/officials of Northern Coal Fields Ltd. (NCL), Singrauli and others, does not actually process the coal; instead the coal so received is sold in the black market at a high premium, causing huge wrongful loss to the Govt. and corresponding wrongful gain to the accused. It is further alleged that during 2010-11, M/s. Fertico Marketing & Investment Pvt. Ltd. Lifted 30569.86 M.T coal from NCL at an average price of Rs. 1700/- per MT (notified/subsidized rate) and sold the same at the rate of Rs. 4200/- per MT and thereby caused wrongful gain to the tune of Rs. 7.46 crores (30569.86 × Rs. 2500/-) to themselves.

7. After investigation by CBI charge sheet has been filed with following conclusions against the petitioners in para 16, which are quoted herein below:-

“16(ii) 25 The investigation further disclosed that during 2010-11, the sale of at least 12148 MT undersized coal, made to M/s. Baba Enterprises (owned by Shri. Anil Kumar Agrawal, A-1 by M/s. Fertico Marketing & Investment Pvt. Ltd. Made through 10 truckloads, has been proved false on the basis of the vehicles determined as other than trucks (i.e Motor Cycle, Scooter, Bus etc.) and denial of the owners/drivers of trucks for transportation of SSF to M/s. Baba Enterprises from the premises of M/s. Fertico Marketing & Investment Pvt. Ltd., B-20, Industrial Area, Ram Nagar, Chandauli. Further, the investigation has proved the non-functional status of the factory of M/s. Fertico Marketing & Investment Pvt. Ltd. Thus, the involvement of Shri. Anil Kumar Agrawal (A-1) in the criminal conspiracy of illegal diversion of coal by showing fake purchases of undersized coal, is established. (Annexure-E).

16.(ii).30- The investigation further disclosed that during 2010-11, the sale of at least 213.09 MT Undersized coal, made to M/s. Yadav Traders (owned by Anil Kumar Agrawal (A-1) by M/s. Fertico Marketing & investment Pvt. Ltd. Made through 18 truckloads, has been proved false on the basis of the vehicles determined as other than trucks (i.e Motor Cycle, Scooter, Bus etc.) and denial of the owners/drivers of trucks for transportation of SSF to M/s. Yadav Traders from the premises of M/s. Fertico Marketing & investment Pvt. Ltd., B-20, Industrial Area, Ram Nagar, Chandauli. Further, the investigation has proved the non-functional status of the factory of M/s. Fertico Marketing & investment Pvt. Ltd. Thus, the involvement of Shri. Anil Kumar Agrawal (A-1) in the criminal conspiracy of illegal diversion of coal by showing fake purchases of Undersized coal, is established.

16(ii) 38 During the investigation, the role of the officers/officials of NCL and Coal India Ltd. has been looked into. As per the provisions of NCDP, CIL was to undertake verification of such consumers of erstwhile non-core sector in a time bound manner either directly or through an agency, so as to check the veracity of their claim of being bonafide consumers of coal, and thereafter, act accordingly. However, it is revealed that no clear cut guidelines/methods regarding the verification of non-core sector SSI units could be evolved, although, as per the provisions of FSA, the NCL was bound to supply the coal of M/s. Fertico Marketing & Investment Pvt. Ltd. on the notified price. In the absence of any clear cut guidelines, no physical verification of the factory of M/s. Fertico Marketing & Investment Pvt. Ltd. Could take place, while on the basis of the bogus/false verification certificates issued by DIC, NCL kept on supplying coal to M/s. Fertico Marketing & Investment Pvt. Ltd.

16 (ii) 39 The investigation disclosed that the accused Shri. Anil Kumar Agrawal (A-1), Shri. Arun Kumar Agarwal (A-2), Shri. Jay Narayan Agarwal (A-3), Shri. Subhash Chand Tulsyan (A-4), Shri. Mukesh Kumar Tulsyan (A-5), Shri. Anand Shukla (A-6), Shri. Ramji Singh (A-7) and Shri. Yogendra Nath Pandey (A-8) conspired together and in furtherance of said criminal conspiracy Shri. Anil Kumar Agrawal (A-1) and Shri. Arun Kumar Agarwal (A-2), fraudulently and dishonestly prepared false documents with the intention to cheat NCL and used the same as genuine and Shri. Ramji Singh (A-7) and Shri. Yogendra Nath Pandey (A-8) being public servants, by corrupt or illegal means dishonestly and fraudulently, issued bogus/forged certificates regarding the existence of unit, its operational status and end use of the coal and in furtherance of said conspiracy they concealed material fact and on the basis of false/fake reports in cheating to NCL. In furtherance of the above criminal conspiracy, accused Shri. Jay Narayan Agarwal (A-3), Shri. Subhash Chand Tulsyan (A-4), Shri. Mukesh Kumar Tulsyan (A-5) and Shri. Anand Shukla (A-6) deliberately made false entries in their records regarding purchase of SSF/Undersized coal.

16.(ii).40- No incriminating evidence has found during the investigation against officers/officials of NCL/CIL.

16.(ii).41- Thus, the aforesaid acts of Shri. Anil Kumar Agrawal (A-1), Director of M/s. Fertico Marketing & investment Private Ltd., Prop. of Anil Traders and owner of three firms i.e M/s. Baba Enterprises, Om Enterprises and Yadav Traders (Private person); Shri. Arun Kumar Agarwal (A-2), Director, M/s. Fertico Marketing & investment Pvt. Ltd. and Proprietor of M/s. Surya Industries (private person); Shri. Jay Narayan Agarwal (A-3), Director Ananda Coal Movers Pvt. Ltd. and Prop., Shivam Coal Movers and Trishul Industries (private person); Shri. Subhash Chand Tulsyan (A-4), Director, Purnagiri Holding Pvt. Ltd., and Prop. Tulsyan Coke Syndicate (Private person); Shri Mukesh Kumar Tulsyan (A-5), Director, Purnagiri Holding Pvt. Ltd. (private person); Shri. Anand Shukla (A-6), Prop., Shubhangi Traders (private person); Shri. Ramji Singh (A-7), the then GM, DIC, Chandauli and Shri. Yogendra Nath Pandey (A-8). Asstt. Manager, DIC, Chandauli; constitute the offences punishable U/s 120-B, 420, 467, 468, 471 IPC and U/s 13(2) r/w 13(1)(d) of Prevention of Corruption Act, 1988.

16.(ii).42- The sanction for prosecution in respect of accused public servant namely Shri. Yogendra Nath Pandey, Asstt. Manager, DIC, Chandauli obtained from the competent authority is hereby enclosed in original. Since Shri. Ramji Singh, the then GM, DIC, Chandauli is retired from service now, no sanction for prosecution is required against him.

16.(ii).43- Therefore, it is humbly prayed that the Hon'ble Court may be pleased to take cognizance of aforesaid offences against Shri. Anil Kumar Agrawal (A-1), Director of M/s. Fertico Marketing & Investment Private Ltd., Prop. of Anil Traders and owner of three firms i.e M/s. Baba Enterprises, Om Enterprises and Yadav Traders (private person); Shri. Arun Kumar Agarwal (A-2), Director, M/s. Fertico Marketing & Investment Pvt. Ltd. and Proprietor of M/s. Surya Industries (private person); Shri. Jay Narayan Agarwal (A-3), Director Ananda Coal Movers Pvt. Ltd. and prop., Shivam Coal Movers and Trishul Industries (private person); Shri. Subhash Chand Tulsyan (A-4), Director, Purnagiri Holding Pvt. Ltd., and Prop., Tulsyan Coke Syndicate (private person); Shri. Mukesh Kumar Tulsyan (A-5), Director, Purnagiri Holding Pvt. Ltd. (private person); Shri. Anand Shukla (A-6), Prop., Shubhangi Traders (private person); Shri. Ramji Singh (A-7), the then GM, DIC, Chandauli and Shri. Yogendra Nath Pandey (A-8), Asstt. Manager, DIC, Chandauli and trial process may be initiated in accordance with law for the offences mentioned above or for any other offences which the Hon'ble Court deems fit.”

Facts of RC Case No. 0062011A0004 of 2011

8. Criminal Misc. Applications (under Section 482, Cr.P.C) No. 4251 of 2012, 4904 of 2012 and 617 of 2013 are relating to the criminal Case No. 34 of 2012 arising out of the RC Case No. 0062011A0004 of 2011. The same is pending before learned Special Judge, Anti Corruption, CBI, Lucknow.

9. A FIR was registered in CBI, ACB, Lucknow on the basis of source information on 13.04.2011, under Sections 120-B, 420 IPC and Section 13(2) read with Section 13(1)(d) of PC Act, 1988 against Sri. Pawan Kumar Tulsian, Director of M/s. Swastik Cement Products Pvt. Ltd., Industrial Area, Ram Nagar, District Chandauli; unkown officers/officials of DIC, Chandauli; unknown officers/officials of NCL, Singrauli and others on the basis of a joint surprise check conducted on 25.03.2011 in the factory premises of M/s Swastik Cement Products Pvt. Ltd. Situated at A-5, Industrial Area, Ran Nagar, district Chandauli with the allegations that M/s. Swastik Cement Products Pvt. Ltd. Situated at A-5, Industrial area, Ram Nagar, District Chandauli, U.P registered with U.P State Industries Department as Small Scale Industry for the for the manufacture of Special Smokeless Fuel, which receives raw material i.e coal, from the coal mine projects of Northern Coal fields Ltd., under the New Coal Distribution Policy of Government of India on notified/subsidized rates, in active connivance of unknown officers/officials of District Industries Centre, Chandauli; unknown officers/officials of Northern Coal fields Ltd., Singrauli and others, does not actually process the coal; instead the coal so received is sold in the black market at a high premium, causing huge wrongful loss to the Government and corresponding wrongful gain to the accused. It is further alleged that during 2010-11, M/s. Swastik Cement Products situated at A-5, Industrial Area, Ramnagar, Chandauli lifted 13777.14 M.T Coal from NCL at an average price of Rs. 1700/- per MT (notified/subsidized rate) and sold the same at the rate of Rs. 4200/- per MT and thereby caused wrongful gain to the tune of Rs. 3.44 crores (13777.14 × Rs. 2500/-) to themselves.

10. After investigation by CBI charge sheet has been filed with following conclusions against the petitioners in para 16, which are quoted herein below:-

“16 (ii) 25. Thus, the investigation has established that the private firm i.e M/s. Swastik Cement Products Pvt. Ltd. owned by accused Shri. Pawan Kumar Tulsian and registered with U.P State Industries Department as Small Scale Industries for the manufacturing of Special Smokeless Fuel (SSF) has received coal as raw material from the Coal Mine Projects of Northern Coal Fields Ltd. (NCL), under the New Coal Distribution Policy (NCDP) of Govt. of India, on the notified/subsidized rates, but actually did not function at all; the coal received by it, was illegally sold in the open market at high premium, thereby, causing wrongful gain to the tune of Rs. 2,30,78,609.28 (approx.) to the accused persons and corresponding wrongful loss to NCL. The preparation of false and forged documents to show bogus production and sale of SSF, by accused Shri. Pawan Kumar Tulsian in connivance with his brother (accused Shri. Subhash Chandra Tulsian) is also established. The involvement of the officials of DIC i.e Shri. Ramji Singh and Shri. Yogendra Nath Pandey, in facilitating diversion of coal, by way of issuing false/forged certificates regarding the end use of coal, is also proved. However, criminal involvement of officers/officials of NCL/CIL, is not proved.”

Facts for RC Case No. 0062011A0006 of 2011

11. Criminal Misc. Cases (under Section 482, Cr.P.C) No. 4250 of 2012, 4684 of 2012, 4850 of 2012 and 4907 of 2012 are relating to the criminal Case No. 31 of 2012 arising out of RC Case No. 0062011A0006 of 2011.

12. A FIR was registered in CBI, ACB, Lucknow on the basis of source information on 13.04.2011, under Sections 120-B, 420 IPC and Section 13(2) read with Section 13(1)(d) of PC Act, 1988, against Shri. Ratan Singh, Director of M/s. Jai Durga Industries, B-12 Industrial Area, Ram Nagar, District Chandauli; unknown officers/officials of DIC, Chandauli; unknown officers/officials of NCL, Singrauli and others on the basis of a Joint Surprise Check conducted on 25.03.2011 in the factory premises of M/s. Jai Durga Industries situated at B-12, Industrial Area, Ram Nagar, District Chandauli. The FIR was lodged with the allegations that M/s. Jai Durga Industries situated at B-12, Industrial Area, Ram Nagar, District Chandauli, registered with U.P State industries Department as Small Scale Industry for manufacturing Special Smokeless Fuel, which receives raw material i.e coal, from the coal mine projects of Northern Coal fields Ltd., under the New Coal Distribution Policy of Government of India on notified/subsidized rates, in active connivance with unknown officers/officials of District Industries Centre, Chandauli; unknown officers/officials of Northern Coal fields Ltd., Singrauli and others, does not actually process the coal; instead the coal so received is sold in the black market at a high premium, causing huge wrongful loss to the Government and corresponding wrongful gain to the said accused. It is further alleged that during 2010-11, M/s. Jai Durga Industries, situated at B-12, Industrial Area, Ram Nagar, District Chandauli; lifted 32619.54 MT coal from NCL at an average price Rs. 1700/- per MT (notified/subsidized rate) and sold the same at the rate of Rs. 4200/- per MT and thereby caused wrongful gain to the tune of Rs. 8.15 corers (32619.54 × Rs. 2500/-) to themselves.

13. After investigation by CBI charge sheet has been filed with following conclusions against the petitioners in para 16, which are quoted herein below:-

“16 (ii) 24 Thus, the investigation has established that the private firm i.e M/s. Jai Durga Industries owned by accused Shri. Ratan Singh and registered with U.P State Industries Department as Small Scale Industries for the manufacturing of Special Smokeless Fuel (SSF) has received coal as raw material from the Coal Mine Projects of Northern Coal Fields Ltd. (NCL), under the New Coal Distribution Policy (NCDP) of Govt. of India, on the notified/subsidized rates, but actually did not function at all; the coal received by it, was illegally sold in the open market at high premimum and thereby, caused wrongful gain to the tune of Rs. 70,25,720.30 (Approx.) to the accused persons and corresponding wrongful loss to NCL. The preparation of false and forged documents to show fake production and sale of SSF, by accused Shri. Ratan Singh in connivance with his Shri. Mohan Kumar, Shri. Vinay Kumar Agrawal, Shri. Ravindra Agrawal is also established. The involvement of the officials of DIC i.e Shri. Ramji Singh and Yogendra Nath Pandy, in facilitating diversion of coal, by way of issuing false/forged certificates regarding the end use of coal, is also proved.”

Facts for RC Case No. 0062011A0007 of 2011

14. Criminal Misc. Cases (under Section 482, Cr.P.C) No. 4446 of 2012, 4553 of 2012, 4554 of 2012, 4555 of 2012, 4556 of 2012, 4774 of 2012, 4852 of 2012, 5013 of 2012, 5014 of 2012, 5015 of 2012, 5016 of 2012, 618 of 2013 are relating to criminal Case No. 33 of 2012 arising out of RC Case No. 0062011A0007 of 2011. A FIR was registered in CBI, ACB, Lucknow on the basis of source information on 13.04.2011, under Sections 120-B, 420 IPC and Section 13(2) read with Section 13(1)(d) of PC Act, 1988, against Shri. Sunil Kumar Singh, Director of M/s. Shree Ram Fuel Pvt. Ltd., H-4, Industrial Area, Ram Nagar, Chandauli; unknown officers/officials of DIC, Chandauli; unknown officers/officials of NCL, Singrauli and others, on the basis of a Joint Surprise Check conducted on 25.03.2011, in the factory premises of M/s Shree Ram Fuels Pvt. Ltd. situated at H-4, Industrial Area, Ram Nagar, District Chandauli. The allegations in the FIR are that M/s. Shree Ram Fuels Pvt. Ltd. situated at H-4, Industrial Area, Ram Nagar, District Chandauli registered with U.P State Industries Department as Small Scale Industry for manufacturing Special Smokeless Fuel, which receives raw material i.e coal, from the coal mine projects of Northern Coal fields Ltd. (NCL), under the New Coal Distribution Policy of Government of India on notified/subsidized rates, in active connivance of unknown officers/officials of District Industries Centre, Chandauli; unknown officers/officials of Northern Coal fields Ltd., Singrauli and others, does not actually process the coal; instead the coal so received is sold in the black market at a high premium, causing huge wrongful loss to the Government and corresponding wrongful gain to the said accused. It is further alleged that during 2010-11, M/s. Shre Ram Fuel Pvt. Ltd. lifted 35511.54 MT coal from NCL at an average price of Rs. 1700/- per MT (notified/subsidized rate) and sold the same at the rate of Rs. 42,00/- per MT and thereby caused wrongful gain to the tune of Rs. 8.87 crores (35511.54 × Rs. 2500/-) to themselves.

15. After investigation by CBI charge sheet has been filed with following conclusions against the petitioners in para 16, which are quoted herein below:-

“16 (ii) 34 Thus, the investigation has established that the private firm i.e M/s. Shree Ram Fuels Pvt. Ltd. owned by accused Sunil Kumar Singh and registered with U.P State Industries Department as Small Scale Industries for the manufacturing of Special Smokeless Fuel (SSF) has received coal as raw material from the Coal Mine Projects of Northern Coal fields Ltd. (NCL), under the New Coal Distribution Policy (NCDP) of Govt. of India, on the notified/subsidized rates, but actually did not function at all; the coal received by it, was illegally sold in the open market at high premium and thereby, caused wrongful gain to the tune of Rs. 1,05,25,486.90 (approx.) to the accused persons and corresponding wrongful loss to NCL. The preparation of false and forged documents to show fake production and sale of SSF, by accused Shri. Sunil Kumar Singh is also established. The involvement of the officials of DIC i.e Shri. Ramji Singh and Shri. Yogendra Nath Pandey, in facilitating diversion of coal, by way of issuing false/forged certificates regarding the end use of coal, is also proved.”

Facts for RC Case No. 0062011A0008 of 2011

16. Criminal Misc. Cases (under Section 482, Cr.P.C) No. 4252 of 2012, 4682 of 2012, 4853 of 2012, 4906 of 2012, 614 of 2013, 615 of 2013 are relating criminal case No. 30 of 2012 arising out of RC Case No. 0062011A0008 of 2011.

17. The FIR was registered in CBI, ACB, Lucknow on the basis of source information on 13.04.2011, under Sections 120-B, 420 of IPC and Section 13(2) read with Section 13(1)(d) of PC Act, 1988 against Shri. Ratan Singh, Director of M/s. Drolia Coke Industries Pvt. Ltd., B-8, Industrial Area, Ram Nagar, District Chandauli. Unknown officers/officials of NCL, Singrauli and others on the basis of a Joint Surprise Check conducted on 25.03.2011 in the factory premises of M/s. Drolia Coke Industries Pvt. Ltd. situated at B-8, Industrial Area, Ram Nagar, District Chandauli. The allegations in the FIR are that M/s. Drolia Coke Industries Pvt. Ltd. situated at B-8, Industrial Area, Ram Nagar, Chandauli registered with U.P State Industries Department as Small Scale Industry for manufacturing Special Smokeless Fuel, which receives raw material i.e coal, from the coal mine projects of Northern Coal field Ltd., under the New Coal Distribution Policy of Government of India notified/subsidized rates, in active connivance with unknown officers/officials of District Industries Centre, Chandauli; unknown officers/officials of Northern Coal field Ltd., Singrauli and others, does not actually process the coal; instead the coal so received is sold in the black market at a high premium, causing huge wrongful loss to the Government and corresponding wrongful gain to the said accused. It is further alleged that during 2010-11, M/s. Drolia Coke Industries Pvt. Ltd. situated at B-8, Industrial Area, Ram Nagar, District Chandauli lifted 33542.76 MT coal from NCL at an average price of Rs. 1700/- per MT (notified/subsidized rate) and sold the same at the rate of Rs. 4200/- per MT and thereby caused wrongful gain to the tune of Rs. 8.36 corers (33452.76 × Rs. 2500/-) to themselves.

18. After investigation by CBI charge sheet has been filed with following conclusions against the petitioners in para 16, which are quoted herein below:-

“16 (ii) 25 Thus, the investigation has established that the private firm i.e M/s. Drolia Coke Industries Pvt. Ltd. owned by accused Shri. Ratan Singh and registered with U.P State Industries Department as Small Scale Industries for the manufacturing of Special Smokeless Fuel (SSF) has received coal as raw material from the Coal Mine Projects of Northern Coal fields Ltd. (NCL), under the New Coal Distribution Policy (NCDP) of Govt. of India, on the notified/subsidized rates, but actually did not function at all; the coal received by it, was illegally sold in the open market at high premium and thereby, caused wrongful gain to the tune of Rs. 77,17,664/- (approx.) to the accused persons and corresponding wrongful loss to NCL. The preparation of false and forged documents to show fake production and sale of SSF, by accused Shri. Ratan Singh in connivance with his Shri. Mohan Kumar, Shri. Vinay Kumar Agrawal, Shri. Ravindra Agrawal is also established. The involvement of the officials of DIC i.e Shri. Ramji Singh and Shri. Yogendra Nath Pandey, in facilitating diversion of coal, by way of issuing false/forged certificates regarding the end use of coal, is also proved.”

19. The perusal of the aforesaid FIRs and the charge-sheets it is revealed that the common allegations against the petitioners are that they in active connivance of officers/officials of DIC, Chandauli and officers/officials of NCL., Singrauli and others diverted the supplied coal by the Coal Companies under Fuel Supply Agreement (for Short ‘FSA’) sold in open market and gained substantial amount by causing substantial loss to the Coal Companies and Central Government. During this process, they have fabricated the documents to establish the consumption at the end of end user.

Leading Case

20. Now I will take up the leading case having Criminal Misc. Case (under Section 482, Cr.P.C) No. 4253 of 2012.

21. The undisputed facts of this case are that petitioner (M/S Fertico Marketing & Investment Pvt. Ltd.) used to lift the coal with the Coal Companies as per the terms of the earlier policy. After de-control of coal the Coal India Limited, a Central Government owned corporation, was authorized to formulate policy and guidelines with regard to pricing of coal.

22. A policy of e-auction of coal was introduced in 2004-05 and Coal Companies after acceptance of bid through e-auction under the contract used to supply coal to the industrial unites. This policy was challenge in different High Courts. The Apex Court after getting transferred all petitions pending in different High Courts challenging the policy of e-auction to Supreme Court, heard and decided the matter in Ashoka Smokeless Coal India Pvt. Ltd. v. Union of India; (2007) 2 SCC 640. While deciding the said case, the Apex Court set aside the policy of e-auction of coal and gave necessary directions to frame a New Coal Distribution Policy (NCDP). The Coal India Limited (in short CIL) framed a new coal distribution policy in compliance of the directions of Hon'ble Supreme Court which was approved by Central Government. According to the aforesaid policy, a Fuel Supply Agreement (FSA) has to be entered into in between the Coal Companies and the purchasers of the coal. This FSA is a bilateral commercial and enforceable contract in terms of the NCDP. The price of coal was to be fixed and notified by the CIL.

23. All the erstwhile SSF small scale industries (SSI) and new applicants were required to enter into FSA within a period of six months on prescribed formate. It was made obligatory on the part of the Coal Companies that before entering into FSA with buyer, first to verify whether unit is in operation or not or in working condition and what would be the requirement of raw coal? In NCDP the recommendations of DIC were not at all needed for allotment of coal to SSI.

24. After coming into operation of NCDP, the Subsidiary Company of CIL, namely, Northern Coal Fields Limited (NCL) wrote letter to the petitioners to enter into FSA in order to supply the coal in terms of NCDP. It was mentioned in this letter that the FSA will be purely bilateral contract and coal will be supplied on notified price which has been fixed by CIL. In pursuance thereof, FSA was entered into in between the petitioner and the Coal Company on 30.04.2008 In this agreement, the Coal Companies were given liberty to forfeit the Security Deposit and to terminate the FSA in case of breach of agreement i.e diversion of supplied coal for any other use for which it was supplied. In terms of FSA, the Coal Companies were given authority to verify the units before entering into the FSA and also to verify the units by periodically inspecting and for the same call for any document with regard to end use of supplied coal.

25. The notified price is the price which has been fixed by CIL without taking any subsidy from the Central or State Government or any short of financial assistance from any one. Thus, the notified price of coal could not be termed as subsidised price of the coal.

26. The supply of coal under NCDP on the notified price was meant for SSF production units and not for other big Industrial Units. The issue regarding supply of coal for other big units is not before this Court. It would be suffice to mention here that the fixation of price for other big units (not applicable for Small Scale Units dealing with SSF) is based on e-auction, which may be higher then the notified price.

27. During the continuance of FSA, the CBI registered a case on the basis of a joint surprise check conducted on 25.03.2011 in the factory premises of petitioners having RC Case No. 0062011A0005 of 2011 with allegations that officers/officials of Coal Companies in active connivance with the officers/officials of DIC, the petitioners were permitted to divert the use of supply of coal and gained a substantial amount causing substantial loss to the Central Government to the tune of Rs. 36.28 crores. After investigation, the CBI found that the officers of the Coal Companies have no role and the petitioners and the authorities of DIC were involved in the conspiracy and thereby filed the charge-sheet in the case with the allegations as stated above. Thereafter, the court took cognizance on the basis of the charge-sheet. Aggrieved by the submission of charge-sheets and orders of taking cognizance, this petitions have been filed to quash the proceedings as well as the impugned order of taking cognizance.

28. Heard Sri. Ajit Kumar Sinha, learned Senior Counsel for the petitioner assisted by Sri. Yashovardhan Swaroop, Advocate and Sri. Bireshwar Nath, learned counsel for the CBI and perused the record.

29. Submissions of Petitioners' Counsel.

30. Learned counsel for the petitioners has submitted that it is purely a case of breach of contract giving rise to the civil liabilities in terms of FSA which is evident from Clause 4.4 of the FSA. No criminal offence is made out, specially when the CBI is of the view that no incriminating evidence has been found during investigation against the officers/officials of NCL/CIL. Clause 4.4 of the FSA is quoted below:

“4.4- The total quantity of Coal supplied pursuant to this Agreement is meant fro use at the M/s Fertico Marketing & Investment Pvt. Ltd., B-20 Industrial Area, Ramnagar, Chandauli (UP) as listed in Schedule-I the Purchaser shall not sell/divert and/or transfer the Coal for any purpose whatsoever and the same shall be treated as material breach of Agreement. In the event that the Purchaser engages or plans to engage into any such resale or trade, the Seller shall terminate this Agreement forthwith without any liabilities or damages, whatsoever, payable to the Purchaser. It is expressly clarified that the Seller shall reserve the right to verify including the right to inspect/call for any document from the Purchaser and physically verify the end-use of Coal and satisfy itself of its authenticity. The Purchaser shall have the obligation to comply with the Seller's directions/extend full cooperation in carrying out such verification/inspection.”

31. In this case, the entire liability before supply of coal to the petitioner was of the officers/officials of NCL, who were entered into FSA with the petitioners. The Coal Companies were given an authority to terminate the contract or may stop the supply of coal and also given authority to forfeit the security deposits in case of diversion or supplied coal for any purpose other than that for which coal has been supplied to the petitioners.

32. Learned counsel has further submitted that in this case, neither the NCL/CIL nor the Central Government/State Government or any other person made any complaint whereas the first information reports have been lodged by the CBI on its own accord almost after three years of entering into FSA by the petitioners. After conclusion of the investigation, the CBI given clean chit to the officials/officers of NCL and wrongly shifted the burden on the officers/officials of DIC who were not suppose to verify or monitor the supply of coal or for its use after de-control of coal. A new NCDP has been formulated in terms of the orders passed by the Apex court in Ashoka's Smokeless case (supra) creating purely civil liability in case of breach of contract by buyer in view of clause 4.4 of FSA. The charge-sheet filed by the CBI is only to give colour of criminal case to pure civil wrong, which is liable to be quashed. In support of his contention, learned counsel for the petitioners relied upon the judgement of the Apex Court in the case of Anil Mahajan v. Bhore Industries Limited; (2005) 10 SCC 228, Gorige Pentaiah v. State of Andhra Pradesh; (2008) 12 SCC 531; V.Y Jose v. State of Gujarat; (2009) 3 SCC 78 and V.P Srivastava v. Indian Exclusive Limited; (2010) 10 SCC 361.

33. Learned counsel has further submitted that the sole basis for filing the charge-sheet against the petitioners is that the petitioners by diverting the use of coal gained a substantial amount causing substantial loss to coal companies. To substantiate its claim of gain and loss, the CBI adopted the method of calculating the difference of price in between notified price and price meant for other industries decided on e-auction basis. Learned Counsel has further submitted that notified price is meant for Small Scale Units. If all the allegations made against the petitioners regarding diversion of use of coal are on its face value accepted to be correct the officers/officials of NCL were not found involved in causing alleged loss to NCL or the Central Government or State Government. Therefore, the question of loss to the Central Government or to the State Government or to any coal company does not arise.

34. It has been further urged that none of the person or Government or coal company, who alleged to have sustained loss, come forward to make a claim of causing loss to them. The supplies to petitioners were interrupted after lodging the first information reports for which a separate writ petition having Writ Petition No. 23321 of 2013 was filed before this Court at Allahabad and the matter was posted for final hearing. Hence, in view of above, no offence under Section 120-B, 420, 468, 471 IPC is made out as the officers/officials of NCL/CIL were exonerated during investigation. The officers of DIC are not supposed to monitor or verify the supply of coal or its use by petitioner, therefore, the offence of Section 13(2) read with Section 13(1)(d) of PC Act is also not made out. In support of his contention, learned counsel relied upon the cases of Yogesh Alias Sachin Jagdish Joshi v. State Of Maharashtra; (2008) 10 SCC 394, State of M.P v. Shitla Sahai; (2009) 8 SCC 617, Hridya Ranjan Prashad Verma v. State of Bihar; (2000) 4 SCC 168, Hira Lal Hari Lal Bhagwati v. Cbi, New Delhi.; (2003) 5 SCC 257.

35. Learned counsel has further contended that in this case, the CBI has not taken consent/permission from the State Government for investigating the case especially when public servant of Government of Utter Pradesh alleged to have been involved. The non observance of mandatory statutory provision of Section 6 of Delhi Special Police Establishment Act (herein referred to ‘DSPE Act’) by the CBI caused serious prejudice to the petitioners, as the fundamental rights enshrined in Articles 20 and 21 of Constitution of India has been violated. Thus, the investigation conducted by the CBI is without jurisdiction. Therefore, the prosecution launched on the basis of such illegal investigation suffering from jurisdictional error and is liable to be quashed. In support of his contention learned counsel for the petitioner relied upon the judgement of Dharmendra Deo Mishra v. CBI new Delhi; 2005 CriLJ 180 (Allahabad High Court), M. Bala Krishna Reddy v. Director, CBI; (2008) 4 SCC 409, State of West Bengal v. CPDR; (2010) 3 SCC 571 and Mayawati v. Union of India; (2012) 8 SCC 106.

36. Learned counsel has further submitted that in identical facts and circumstances, the CBI filed closure report in four cases out of which two cases have been closed after passing the orders by the court for accepting the closure reports. The reference of these cases have been given in the supplementary affidavit filed by the petitioner. The closure reports submitted by CBI and the orders of the court of Special Judge, CBI Rachi and Dhanbad were annexed as Annexure-SA-2 to the supplementary affidavit filed by the petitioners. On this score, it has been stated that CBI, which is the highest investigating agency of the country, acted in a malafide manner by not following the doctrine of parity. In support of it, learned counsel for the petitioners relied upon the judgement of the Apex Court in Ajmer Singh v. State Of Haryana.: (2010) 3 SCC 746.

37. On the aforesaid grounds, learned counsel for the petitioners has submitted that it is a fit case for exercising extra ordinary jurisdiction under Section 482, Cr.P.C by this Court to prevent the abuse of process of court.

Submissions of Counsel for CBI

38. It has been contended by Sri. Bireshwar Nath, learned counsel for the CBI that so far as the consent of Section 6 of DSPE Act is concerned, the State of Uttar Pradesh has already issued notification on 15.06.1989 authorizing the CBI to investigate the cases for whole of State of Uttar Pradesh. The notification dated 15.06.1989 is quoted herein below:

“Government of Uttar Pradesh

Home (Police) Section-1

No. 3442.VIII-1-84/88

Lucknow, Dated: June 15, 1989

Notification

In pursuance of the Provisions of Section 6 of the Delhi Special Police Establishment Act, 1946 (25 of 1946) the Governor of the State of Uttar Pradesh is pleased to accord consent to the extention of powers and jurisdiction of the members of the Delhi Special Police Establishment in whole of the State of Uttar Pradesh, for investigation of offences punishable under the Prevention of Corruption Act, 1988 (49 of 1988), and attempts, abetments and conspiracies in relation to all or any of the offence or offences mentioned above and any other offence or offences committed in the course of the transaction and arising out of the same facts, subject however to the condition that no such investigation shall be taken up in cases relating to the public servants, under the control of the State Government except with the prior permission of the State Government.

BY ORDER IN THE NAME of THE GOVERNOR.

(S.K TRIPATHI)

HOME SECRETARY TO THE GOVT

OF UTTAR PRADESH”

39. It has further been contended that no formate of consent has been prescribed under DSPE Act. In this regard, he relied upon the judgement of M. Balakrishna Reddy v. Director Central Bureau of Investigation, New Delhi; (2008) 2 SCC (Cri) 391. Para 71 of the said judgement is extracted below:

“71. A closer scrutiny of the relevant provisions of the Delhi Act also add credence to the view which we are inclined to take. Section 3 refers to ‘notification’ and requires the Central Government to issue notification specifying offences or class to be investigated by Special Police Establishment. Section 5 uses the term ‘order’ and enables the Central Government to extend powers and jurisdiction of Special Police Establishment to other areas not covered by the Act. Section 6 which speaks of consent of the State Government for the exercise of powers and jurisdiction of the Special Establishment neither refers to ‘notification’ nor ‘order’. It merely requires consent of the State Government for the application of the Delhi Act. Parliament, in our considered opinion, advisedly and deliberately did not specify the mode, method or manner for granting consent though in two preceding sections such mode was provided. If it intended that such consent should be in a particular form, it would certainly have provided the form as it was aware of different forms of exercise of power. It, therefore, depends on the facts of each case whether the consent required by Section 6 of the Delhi Act has or has not been given by the State Government and no rule of universal application can be laid down.”

40. On the strength of judgement of M. Balakrishna Reddy's (Supra), it has been submitted by learned counsel that in this case, the prosecution sanction has been accorded under Section 19 of Prevention of Corruption Act against the petitioner Yogendra Nath Pandey, Assistant Manager of DIC. So it shall be deemed to be implied consent for investigation. In support of his contention, learned counsel relied upon the judgement of this Court in Sriniwas Dwivedi v. The State of U.P through S.P CBI decided on 09.09.2013 in Criminal Misc. Case (under Section 482, Cr.P.C) No. 3830 of 2013. The relevant paragraph of the said judgement is extracted below:

“Admittedly, in this case, the State Government has granted sanction to prosecute the applicant. This Court also concur with the view of the trial court that grant of sanction implies that the investigation, in this case, was done with the implied permission of the State. Hon'ble Apex Court in the aforesaid case of Balkrishna Reddy (Supra) has clearly held that there is no specific proforma provided for the permission of the State to investigate the case to CBI. Therefore, such permission may be in any form. If the intention of the State had not been to grant permission to investigate then there was no question to grant sanction to prosecute the applicant.”

41. It has been further submitted that even if Section 6 is not compiled with but investigation is concluded and cognizance has been taken after submission of report under section 173 Cr.P.C by the court, the proceedings shall not be vitiated unless it is shown that some serious prejudice has been caused to the accused. In support of his contention, learned counsel relied upon the judgement of the Apex Court in the case of Major E.G Barsay v. State Of Bombay .; AIR 1961 SC 1762. The paragraph 28 of the said judgement is quoted herein-below:

“28. This Court in H.N Rishbud and Inder Singh v. The State of Delhi, 1955-1 SCR 1150: [(S) AIR 1955 SC 196] held that s. 5(4) and proviso to s. 3 of the Prevention of Corruption Act, 1947, and the corresponding s. 5A of the Prevention of Corruption (Second Amendment) Act, 1952 (LIX of 1952) are mandatory and not directory and that an investigation conducted in violation thereof is illegal. In the same decision this Court also pointed out that the illegality committed in the course of investigation did not affect the competence and jurisdiction of the court for trial and where cognizance of the case had in fact been taken and the case had proceeded to termination the validity of the preceding investigation did not vitiate the result unless miscarriage of justice of been caused thereby. The question is whether in the present case the investigation made by the Inspector duly authorized by the Inspector-General of Police to investigate under s. 5A of the Prevention of Corruption Act, without complying with the two conditions laid down in the proviso to that section, had caused any prejudice to the accused. The High Court, after considering the entire evidence, found that the alleged irregularity would not justify the conclusion that the non-observance of the conditions prescribed in the proviso to s. 5A of the Prevention of Corruption Act had occasioned any failure of justice. Learned counsel has taken us through different steps in the investigation made by the said officer, and we have no reason to differ from the conclusion arrived at by the High Court.”

42. It has further been submitted that so far as, the private dealers and Persons are concerned, the notification dated 15.06.1989 clearly speaks about the authorization of CBI to investigate the matter. It has further been contended that when the employees of the Central Government are involved and if any other person is also found to be accused then in that event, no consent under Section 6 of the State Government would be required. Therefore, on this score, the proceedings initiated against the petitioners cannot be set aside.

43. It has further been submitted that so far as the case of alleged breach of contract is concerned, it is well established that if any act or omission results into a civil wrong and its remedy is available in civil law but at the same time the similar act or omission have the necessary elements of an offence, the criminal prosecution may be instituted. Such validly instituted criminal prosecution could not be quashed merely for this simple reason that the case is based on breach of contract. In support of his contention, he relied upon the judgement of the Apex Court delivered on 19th September, 2014 in Criminal Appeal No. 2048 of 2014 arising out of SLP (Criminal) No. 6461 of 2011 (State of Maharashtra through CBI v. Vikram Anantrai Doshi). On the strength of this authority, learned counsel for CBI has submitted that the present cases are not overwhelmingly and predominantingly civil cases but have an element of fraud in showing the use of the supplied coal. It has further been submitted that Officers of DIC were supposed to verify and monitoring all small scale industries in the State even after the de-control of coal. If a small scale industry is dealing in SSF, continued to be a small scale industries and is fully governed by the regulations of Industries Department of the State and the officers of industries department under obligation to verify and monitor the industries whether they are working in proper manner or not. Therefore, even in absence of any liability upon the officers of DIC under the FSA the officers of DIC cannot be exonerated from its liability.

44. It has been further urged that the officers of NCL have not been found involved in the alleged conspiracy but it cannot be said that if NCL officers/officials were exonerated, the other accused would be entitled for its benefit or the alleged conspiracy could not be proved.

45. It has been further contended that question of filing of closure reports by CBI in other similar cases is concerned, the facts of those cases are entirely different as evident from the documents filed by the petitioners. Thus, benefit of it cannot be extended to the petitioners.

Questions for determination

46. On the basis of submissions of the Counsels for the parties following question arise for determination;

Q. No. 1:- Whether the investigation conducted by the CBI in these bunch of cases are illegal and without jurisdiction for non-compliance of section 6 of DSPE Act? If so, its effect?

Q. No. 2-Whether the cases are overwhelmingly and predominantingly of civil nature as purely bases on breach of contract (FSA) and the criminal prosecutions are liable to be quashed?

Q. No. 3-Whether CBI did not follow doctrine of parity in filing the criminal prosecutions against the petitioners? If so, its effect?

Q. No. 4-Whether in absence of Officers/official of NCL, charge of Criminal conspiracy under section 120-B IPC could be made out?

Question No. 1

47. The Hon'ble Supreme Court in M. Balakrishna Reddy v. CBI, (2008) 4 SCC 409, have consider the necessity of consent of section 6 of DSPE Act and decided the matter in the light of letter written by State Government to Central Government as contained in para 22 :

“22. A copy of the letter addressed by the Deputy Secretary to the Government of Madhya Pradesh to the Secretary, Ministry of Home Affairs, Government of India, New Delhi has been placed on record by the appellant, which reads thus:

The Secretary,

Ministry of Home Affairs,

Govt. of India,

New Delhi

Bhopal, dated 5 February, 1957

Sub.: Consent of the State Government to the functioning of the Special Police Establishment in the State.

In continuation of this Department Letter No. 20/12(II)/Home Police dated 29 December, 1956 on the above subject, I am directed to state that this State Government have no objection to the members of the Delhi State Police Establishment exercising powers and jurisdiction within this State.

Yours faithfully,

P.N Mishra,

Deputy Secretary to the Govt.”

48. Keeping in view of the above mentioned letter there Lordships of Hob'ble Apex Court in para 15, 16, 17, 18 and 19 has observed, which reads as under:-

“15. At the outset, we must frankly admit that the two factors weighed with the High Court, namely, (i) the head office of UPSC is located at New Delhi; and (ii) the appellant is an employee of the Central Government and on those grounds, the Delhi Act would be applicable have not impressed us. The said grounds, in our opinion, do not confer jurisdiction on CBI to invoke the Delhi Act. The main ground, therefore, which remains to be considered is whether “consent” as envisaged by Section 6 of the Delhi Act has been given by the State Government of Madhya Pradesh to the Central Government so as to enable the latter to invoke the provisions of the Delhi Act. For the said purpose, it is necessary to bear in mind the relevant provisions of the Delhi Act.

16. As the Preamble of the Act states, it is an Act to make provision for the constitution of a Special Police Force in Delhi for the investigation of certain offences in the Union Territories and for the extension to other areas of the powers and jurisdiction of the members of the said force in regard to the investigation of the said offences. Section 1 declares that the Act extends to the whole of India. Section 2 provides for constitution and powers of Special Police Establishment. Section 3 enables the Central Government to investigate offences by Special Police Establishment. It reads thus:

“3. Offences to be investigated by Special Police Establishment.—The Central Government may, by notification in the Official Gazette, specify the offences or classes of offences which are to be investigated by the Delhi Special Police Establishment.”

17. Section 4 covers superintendence and administration of Special Police Establishment. Section 5 empowers the Central Government to extend the powers and jurisdiction of Special Police Establishment to States. The said section is also relevant and may be reproduced:

“5. Extension of powers and jurisdiction of Special Police Establishment to other areas.—(1) The Central Government may by order extend to any area (including railway areas), in a State, not being a Union Territory the powers and jurisdiction of members of the Delhi Special Police Establishment for the investigation of any offences or classes of offences specified in a notification under Section 3.

(2) When by an order under sub-section (1) the powers and jurisdiction of members of the said police establishment are extended to any such area, a member thereof may, subject to any orders which the Central Government may make in this behalf, discharge the functions of a police officer in that area and shall, while so discharging such functions, be deemed to be a member of a police force of that area and be vested with the powers, functions and privileges and be subject to the liabilities of a police officer belonging to that police force.

(3) Where any such order under sub-section (1) is made in relation to any area, then, without prejudice to the provisions of sub-section (2) any member of the Delhi Special Police Establishment of or above the rank of Sub-Inspector may subject to any orders which the Central Government may make in this behalf, exercise the powers of the officer in charge of a police station in that area and when so exercising such powers, shall be deemed to be an officer in charge of a police station discharging the functions of such an officer within the limits of his station.”

18. Section 6 is very important which requires consent of the State Government for exercising powers and jurisdiction under the Act by Special Police Establishment to any area in a State not being Union Territory or Railways. The said section, therefore, may be quoted in extenso:

“6. Consent of State Government to exercise of powers and jurisdiction.—Nothing contained in Section 5 shall be deemed to enable any member of the Delhi Special Police Establishment to exercise powers and jurisdiction in any area in a State, not being a Union Territory or railway area, without the consent of the Government of that State.”

19. Plain reading of the above provisions goes to show that for exercise of jurisdiction by CBI in a State (other than Union Territory or Railway area), consent of the State Government is necessary. In other words, before the provisions of the Delhi Act are invoked to exercise power and jurisdiction by Special Police Establishment in any State, the following conditions must be fulfilled:

(i) A notification must be issued by the Central Government specifying the offences to be investigated by Delhi Special Police Establishment (Section 3);

(ii) An order must be passed by the Central Government extending the powers and jurisdiction of Delhi Special Police Establishment to any State in respect of the offences specified under Section 3 (Section 5); and

(iii) Consent of the State Government must be obtained for the exercise of powers by Delhi Special Police Establishment in the State (Section 6).”

49. After considering the facts of the aforesaid case their Lordship of Hon'ble Supreme Court in M. Balakrishna Reddy v. CBI, (2008) 4 SCC 409, in para 71 at page 433 held as follows:

“71. A closer scrutiny of the relevant provisions of the Delhi Act also add credence to the view which we are inclined to take. Section 3 refers to “notification” and requires the Central Government to issue notification specifying offences or class of offences to be investigated by Special Police Establishment. Section 5 uses the term “order” and enables the Central Government to extend powers and jurisdiction of Special Police Establishment to other areas not covered by the Act. Section 6 which speaks of consent of the State Government for the exercise of powers and jurisdiction of the Special Establishment neither refers to “notification” nor “order”. It merely requires consent of the State Government for the application of the Delhi Act. Parliament, in our considered opinion, advisedly and deliberately did not specify the mode, method or manner for granting consent though in two preceding sections such mode was provided. If it intended that such consent should be in a particular form, it would certainly have provided the form as it was aware of different forms of exercise of power. It, therefore, depends on the facts of each case whether the consent required by Section 6 of the Delhi Act has or has not been given by the State Government and no rule of universal application can be laid down.”

50. The Hon'ble Supreme Court in State of W.B v. Committee for Protection of Democratic Rights, (2010) 3 SCC 571, had an occasion to consider the rider imposed under section 5 and 6 of DSPE Act while exercising powers by the Constitutional Court under article 32 and 226 of Constitution of India at page 588:

“36. Having noticed the scope and amplitude of Sections 5 and 6 of the Special Police Act, the question for consideration is whether the restriction imposed on the powers of the Central Government would apply mutatis mutandis to the constitutional courts as well. As stated above, the main thrust of the argument of Shri. K.K Venugopal, learned Senior Counsel, is that the course adopted by the High Court in directing CBI to undertake investigation in the State of West Bengal without the consent of the State is incompatible with the federal structure as also the doctrine of separation of powers between the three organs of the State, embodied in the Constitution even when the High Court, on the material before it, was convinced that the State police was dragging its feet insofar as investigation into the 4-1-2001 carnage was concerned.”

51. The conclusion arrived at on the point in issue Hon'ble Apex Court in State of W.B v. Committee for Protection of Democratic Rights, (2010) 3 SCC 571, at page 602 in para 68 and 69 held as under:

“68. Thus, having examined the rival contentions in the context of the constitutional scheme, we conclude as follows:

(I)--------

(vi) If in terms of Entry 2 of List II of the Seventh Schedule on the one hand and Entry 2-A and Entry 80 of List I on the other, an investigation by another agency is permissible subject to grant of consent by the State concerned, there is no reason as to why, in an exceptional situation, the Court would be precluded from exercising the same power which the Union could exercise in terms of the provisions of the statute. In our opinion, exercise of such power by the constitutional courts would not violate the doctrine of separation of powers. In fact, if in such a situation the Court fails to grant relief, it would be failing in its constitutional duty.

(vii) When the Special Police Act itself provides that subject to the consent by the State, CBI can take up investigation in relation to the crime which was otherwise within the jurisdiction of the State police, the Court can also exercise its constitutional power of judicial review and direct CBI to take up the investigation within the jurisdiction of the State. The power of the High Court under Article 226 of the Constitution cannot be taken away, curtailed or diluted by Section 6 of the Special Police Act. Irrespective of there being any statutory provision acting as a restriction on the powers of the Courts, the restriction imposed by Section 6 of the Special Police Act on the powers of the Union, cannot be read as restriction on the powers of the constitutional courts. Therefore, exercise of power of judicial review by the High Court, in our opinion, would not amount to infringement of either the doctrine of separation of power or the federal structure.

69. In the final analysis, our answer to the question referred is that a direction by the High Court, in exercise of its jurisdiction under Article 226 of the Constitution, to CBI to investigate a cognizable offence alleged to have been committed within the territory of a State without the consent of that State will neither impinge upon the federal structure of the Constitution nor violate the doctrine of separation of power and shall be valid in law. Being the protectors of civil liberties of the citizens, this Court and the High Courts have not only the power and jurisdiction but also an obligation to protect the fundamental rights, guaranteed by Part III in general and under Article 21 of the Constitution in particular, zealously and vigilantly.”

52. Their Lordship of Hon'ble Supreme Court after considering the law laid down by the Constitution Bench of Hon'ble Supreme Court in State of W.B v. Committee for Protection of Democratic Rights, (2010) 3 SCC 571, again considered the necessity of consent of section 6 of DSPE Act in Mayawati v. Union of India, (2012) 8 SCC 106, held in para 30 as under;

“30. As rightly pointed out that in the absence of any direction by this Court to lodge an FIR into the matter of alleged disproportionate assets against the petitioner, the investigating officer could not take resort to Section 157 of the Code of Criminal Procedure, 1973 (in short “the Code”) wherein the officer in charge of a police station is empowered under Section 156 of the Code to investigate on information received or otherwise. Section 6 of the DSPE Act prohibits CBI from exercising its powers and jurisdiction without the consent of the Government of the State. It is pointed out on the side of the petitioner that, in the present case, no such consent was obtained by CBI and submitted that the second FIR against the petitioner is contrary to Section 157 of the Code and Section 6 of the DSPE Act. It is not in dispute that the consent was declined by the Governor of the State and in such circumstance also the second FIR No. RC 0062003A0019 dated 5-10-2003 is not sustainable.”

53. For arriving at the aforesaid conclusion, the Hon'ble Supreme Court recorded the reasons in its judgement in Mayawati v. Union of India, (2012) 8 SCC 106 in para 39, 40 and 41, which are being reproduced herein below:

“39. As discussed above and after reading all the orders of this Court which are available in the “compilation”, we are satisfied that this Court being the ultimate custodian of the fundamental rights did not issue any direction to CBI to conduct a roving inquiry against the assets of the petitioner commencing from 1995 to 2003 even though the Taj Heritage Corridor Project was conceived only in July 2002 and an amount of Rs. 17 crores was released in August/September 2002. The method adopted by CBI is unwarranted and without jurisdiction. We are also satisfied that CBI has proceeded without proper understanding of various orders dated 16-7-2003, 21-8-2003, 18-9-2003, 25-10-2004 and 7-8-2006 passed by this Court. We are also satisfied that there was no such direction relating to second FIR, namely, FIR No. RC 0062003A0019 dated 5-10-2003.

40. We have already referred to the Constitution Bench decision of this Court in Committee for Protection of Democratic Rights (2010) 3 SCC 571 wherein this Court observed that only when this Court after considering the material on record comes to a conclusion that such material does disclose a prima facie case calling for investigation by CBI for the alleged offence, an order directing inquiry by CBI could be passed and that too after giving opportunity of hearing to the affected person. We are satisfied that there was no such finding or satisfaction recorded by this Court in the matter of disproportionate assets of the petitioner on the basis of the status report dated 11-9-2003 and, in fact, the petitioner was not a party before this Court in the case in question. From the perusal of those orders, we are also satisfied that there could not have been any material before this Court about the disproportionate assets case of the petitioner beyond the Taj Corridor Project case and there was no such question or issue about disproportionate assets of the petitioner. In view of the same, giving any direction to lodge FIR relating to disproportionate assets case did not arise.

41. We finally conclude that anything beyond the Taj Corridor matter was not the subject-matter of reference before the Taj Corridor Bench. Since the order dated 18-9-2003 does not contain any specific direction regarding lodging of FIR in the matter of disproportionate assets case against the petitioner, CBI is not justified in proceeding with FIR No. RC 0062003A0019 dated 5-10-2003. In view of the above discussion, we are satisfied that CBI exceeded its jurisdiction in lodging FIR No. RC 0062003A0019 dated 5-10-2003 in the absence of any direction from this Court in the order dated 18-9-2003 or in any subsequent orders.”

54. Admittedly no Constitutional Court either under article 32 or 226 of Constitution of India had granted any permission to CBI to investigate the FIRs lodged on his own accord, having RC Case Nos. 0062011A0004 of 2011, 0062011A0005 of 2011, 0062011A0006 of 2011, 0062011A0007 of 2011 and 0062011A0008 of 2011, relating to cases in hand.

55. The consent order of State Government of U.P Dated 15.6.1989 relied upon by the CBI has a clause which completely debars the CBI to investigate the cases relating to the public servants, under the control of the State Government except with the prior permission of the State Government. The public servants, under the control of the State Government namely and Shri. Ramji Singh, the then GM, DIC, Chandauli and Shri. Yogendra Nath Pandey, Asstt. Manager, DIC, Chandauli were named in all the above mentioned FIRs. Despite of this, the CBI did not take prior permission of the State Government of U.P to investigate their ‘case’.

56. The discussion made herein above leave no room to doubt and made it is crystal clear that in absence of any order permitting the CBI to investigate the FIRs concern to these cases the CBI without the prior permission/consent of Sate Government of U.P under section 6 of DSPE Act cannot proceed with the investigation in State of U.P in respect of the FIRs relating to aforesaid cases.

57. As such the prior permission/consent of State Government under section 6 of DSPE Act to conducted investigation was a mandatory requirement in these cases and thus, the investigation conducted by CBI in these cases is per see illegal and without jurisdiction.

58. Now the question arises what would be its effect?

59. The CBI taken three ground to meet it. These 3 grounds are as under:-

1. The prosecution sanction has been accorded to prosecute Sri. Yogendra Nath Pandey, Asst. Manager, DIC Chanduli, under section 19 of P.C Act, so the defect of prior permission in the light of G.O Dated 15.6.1989 had been rectified by the State Government.

2. That special Judge has taken cognizance on the police report submitted by CBI in these cases, hence the the illegality if any stand cured. Now the burden lies on the petitioners to show what prejudice has been caused to them and the same could be looked into by the trial court and not by this Court.

3. That no consent of State Government is required to investigate in respect of those who are not public servant under the control of State Government, so the whole investigation cannot set a side.

Ground No. 1

60. The learned Counsel for CBI after taking help of judgement in M. Balakrishna Reddy v. CBI, (supra), and judgement of this Court in Sriniwas Dwivedi v. The State of U.P through S.P CBI (Supra) relied upon the sanction order passed by Sri. M.K Kadam, Addl. Director of Industries, under section 19 of PC Act against Yogendra Nath Pandey Asst. Manager DIC.

61. Section 6 of DSPE Act require consent of State Government. However in section 19(1) of P.C Act prior sanction for prosecution would be required;

(a) in the case of a person who is employed in connection with the affairs of the Union and is not removable from his office save by or with the sanction of the Central Government, of that Government;

(b) in the case of a person who is employed in connection with the affairs of a State and is not removable from his office save by or with the sanction of the State Government, of that Government;

(c) in the case of any other person, of the authority competent to remove him from his office.

(Specially in State of U.P)

(d) the State Government may be exercised the power to grant the previous sanction also in a case where the authority referred to in clause (c) has earlier refused to give the previous sanction. (Vide U.P Act No. 4 of 1991, Section 2 (w.e.f 1-9-1990).

62. It shows that the authority granting prosecution sanction may or may not be State Government. When the power under section 19 is exercised by State Government, than in that case at the most, it may be presumed that there was an implied consent for investigation against public servant. But where the Authority is other than State Government, as in clause (a) or (c) mentioned above the aforesaid presumption cannot be drawn at all.

63. The scope of both the section, i.e, Section 6 of DSPE Act and of Section 19 of PC Act are entirely different. Not only this, the field in which both the aforesaid section operate are also quite different. Compliance of Section 6 of DSPE Act is mandatory. I am of the view that total non compliance of section 6 would fall within the category of ‘inherent lack of jurisdiction’ as held in Mayavati's case supra.

64. Here in the cases in hand the sanction has not been accorded by the State Government but by Addl. Director of Industries, so I am of the view that in these cases, the presumption of implied consent of State Government as alleged by the CBI cannot be drawn. It also necessary to mention here that no sanction has been taken to prosecute Shri. Ramji Singh, the then GM, DIC, Chandauli.

65. In Sriniwas Dwivedi's case (Supra) the sanction to prosecute has been accorded by the State Government so the aforesaid judgement in my opinion is not extending any help to CBI.

66. I am also of the view that non compliance of section 6 is not curable after taking help of section 19 of P.C Act. in the way as stated by CBI because the provision of section 6 of DSPE Act are not directory in nature but are mandatory.

Ground No. 2

67. It is no doubt true that court has taken cognizance in these cases and summoned the accused persons for trial. The order of taking cognizance has been taken behind the back of the petitioners and as such is an ex party order. The Charge sheet submitted by the CBI in these cases do not disclose that prior permission/consent under Section 6 of DSPE Act of State Government was not required in view of prosecution sanction granted under section 19. The CBI also failed to demonstrate that at the time of passing order of taking cognizance the trial Court was informed about it and while taking cognizance the Special Judge noticed it and than taken cognizance.

68. In absence thereof it has to be considered whether such cognizance would cure the defect of mandatory nature and accused may be debarred to take this plea of legal bar?

69. Article 21 of Constitution of India protect the personal liberty of person and guaranteed that the same would not be deprived except in accordance with procedure established by law.

70. In AIR 1967 SC 295 Barium Chemicals v. Company Law Board and (1999) 3 SCC 422 Babu Verghese v. Bar council of Kerala it has been observed by the Apex Court that;

“things should be done in the manner provided in the statute or not at all”.

71. When and where any mandatory statutory provision is violated the prejudice shall be presumed to have been occurred to the person effected thereby.

72. In R.S Singh v. Uttar Pradesh Malaria Nirikshak Sangh, (2011) 4 SCC 281, the Hon'ble Supreme Court at page 285 cautioned the Courts:

“15. This Court has repeatedly noticed that the real power of courts is not in passing decrees and orders, nor in punishing offenders and contemnors, nor in summoning the presence of senior officers, but in the trust, faith and confidence of the common man in the judiciary. Such trust and confidence should not be frittered away by unnecessary and unwarranted show or exercise of power. Greater the power, greater should be the responsibility in exercising such power.

73. The Apex Court in State of Haryana v. Bhajan Lal (1992 Supp (1) 335). The illustrative categories indicated that.

“Where there is an express legal bar en grafted in any of the provisions of the Code or the Act concerned (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or Act concerned, providing efficacious redress for the grievance of the aggrieved party.”

74. In Anil Kumar v. M.K Aiyappa, (2013) 10 SCC 705, the Supreme Court affirmed the order of High Court wherein the High court after setting a side the order of taking cognizance on a private complaint against the public servant held that the Special Judge could not have taken notice of the private complaint unless the same was accompanied by a sanction order, irrespective of whether the court was acting at a pre-cognizance stage or the post-cognizance stage, if the complaint pertains to a public servant who is alleged to have committed offences in discharge of his official duties.

75. In view of the aforesaid discussion it cannot be said that by taking cognizance by Special Court the defect of violation of mandatory statutory provision stand cured or in such a situation the accused cannot take the plea of legal bar in prosecution.

76. The law down by the Apex Court in Major E.G Barsay's case would not of any help as in that case the provisions of Section 5-A of DSPE Act was dealt with and compliance of which was found directory and not mandatory.

77. The non compliance of mandatory requirement of previous permission/consent under section 6 of DSPE Act goes to the root of the case and cannot be ignored in such a way by this Court.

Ground No. 3

78. The perusal of G.O of State Government dated 15.6.1989 reveals that jurisdiction of CBI was extended to the State of U.P in regard to investigation in respect of offences specified therein but with rider in regard to cases in which public servant under control of State Government are involved. The word “cases” is of significant importance so for as ‘offences punishable under the Prevention of Corruption Act, 1988 (49 of 1988), and attempts, abetments and conspiracies in relation to all or any of the offence or offences mentioned above and any other offence or offences committed in the course of the transaction and arising out of the same facts’.

79. Therefore, if a case having involvement of Public servant under control of State Government of U.P as well as private individuals, such cases by virtue of G.O Dated 15.6.1989 cannot be investigated by CBI assuming suo moto jurisdiction without the previous permission or consent of State Government.

80. of course, when public servant of Central Government or any other State Government having involved along with private individuals residing in or working for gain within the territory of State of U.P, no previous sanction or consent of State Government of U.P would be required to CBI for investigation in view of G.O Dated 15.6.1989

81. After considering the matter from different angles, I am of the view that in these cases the investigation conducted by the CBI without the previous permission/consent of Government of U.P were in violation of the mandatory provisions of section 6 of DSPE Act and as such the investigation suffered with incurable defect of lacks inherent jurisdiction.

Question No. 2, 3 and 4

82. So far as these questions are concern, I am of the view that these questions need not be gone into at this stage because in view of difference of opinion on question No. 1 with the law propounded in Sriniwas Dwivedi's case I am inclined to refer the questions with regard to question No. 1 for decision by a larger bench. Only after that Question No. 2, 3 and 4 would be decided, if required.

83. While deciding the question No. 1, I have expressed a contrary view with the law propounded in Sriniwas Dwivedi v. The State of U.P through S.P CBI decided on 09.09.2013 in Criminal Misc. Case (under Section 482, Cr.P.C) No. 3830 of 2013 (deliver by Hon'ble Single Judge of this Court), I am under legal obligation to refer this matter for decision by a larger bench, as no binding law or precedent, either of this Court or of Hon'ble Supreme Court, has been brought to the knowledge of this Court on the following points:-

1. Whether investigation of such cases having involvement of Public servant under control of State Government of U.P as well as private individuals for offences punishable under the Prevention of Corruption Act, 1988 (49 of 1988), and attempts, abetments and conspiracies in relation to all or any of the offence or offences mentioned above and any other offence or offences committed in the course of the transaction and arising out of the same facts under the G.O of State Government Dated 15.6.1989 can be investigated by CBI assuming suo moto jurisdiction under section 6 of DSPE Act without the previous permission or consent of State Government?

2. Whether total non compliance/absence of previous consent of State Government under section 6 of DSPE Act could be cured by grant of prosecution sanction under section 197 Cr.P.C of under section 19 of P.C Act by State Government or competent authority?

84. Let the record of these cases along with record of leading case be placed before Hon'ble the Chief Justice for appropriate orders.

85. Interim order to continue till further orders of this Court.