JUDGMENT
S.K. Mahajan, J.
(1) This order will dispose of the revision petition filed by the petitioner for quashing of the order dated 16th September, 1995 whereby the Special Judge, Delhi had framed charges against the petitioner under Sections 120-B Indian Penal Code read with Sections 5(2) & 5(1)(d) of the Prevention of Corruption Act and under Sections 5(2) read with Section 5(1)(d) of the Prevention of Corruption Act, 1947. The case of the prosecution in short is :-
(2) That while functioning as the Chief Marketing Manager, Agriculture Commodity Division, State Trading Corporation of India, New Delhi during the year 1978-81, the petitioner allegedly entered into a criminal conspiracy with Sh.K.S.Kohli, Manager (Procurement), Food Corporation of India, New Delhi, Sh.George R.Lobo and M/s.Action S.A.Paris to cause wrongful loss to the Food Corporation of India, Government of India, in the matter of sale of 45,000 MTs of IR-8 variety rice to M/s.Action S.A.Paris at uneconomical rates. By letter dated 23rd August, 1980, Sh.B.S.Raghvan, the then Additional Secretary, Department of Food, Ministry of Agriculture wrote to Sh.K.V.Seshadri, the then Managing Director, Food Corporation of India, New Delhi authorising Food Corporation of India to sell/export 50,000 MTs of rice in their best commercial judgment. It was stipulated in the letter that the sale proceeds as a result of the sale/export would cover at least the full economic cost of the rice and that no loss or subsidy whatsoever would be involved on that account. This letter is stated to have been examined in the Food Corporation of India by various officers including Sh.R.L.Bhatia, Manager (Cost), who was of the opinion that a request be made to the Government of India to nominate an officer to participate in the decision making or the matter should be left to the best commercial judgment of the Corporation. Sh.K.S.Kohli, Manager (Procurement) vide his note dated 8th October, 1980 opined that this suggestion of Manager (Cost) would delay the guidelines given by the Department of Food and in case of any difficulty to fulfilll the laid down conditions, the matter could be informally discussed at the higher level.
(3) The petitioner is allegedly had a meeting with Sh.George R.Lobo, representative of M/s.Action S.A.Paris on 6th November, 1980 who made an offer for purchase of 45,000 MTs of IR-8 variety of rice with 25% broken packed in 50 Kgs. single gunny bags at the rate of Us $ 310 Pmt Fob Ex.Kandla/Bombay with shipment period upto March, 1981. This offer was conveyed to Sh.K.S.Kohli, Manager (Procurement), Food Corporation of India, on telephone. The matter was discussed by the petitioner along with Sh.George R.Lobo in the office of Sh.Kohli on 10th November, 1980 and Sh.Kohli was handed over a D.O. letter by the petitioner asking him to process the offer of M/s.Action S.A.Paris for sale of 45,000 MTs of IR-8 variety of rice with 25% broken in 50 Kgs. single gunny bags at the rate of Us $ 310 Pmt Fob Ex.Kandla/Bombay including 1% commission to State Trading Corporation. Allegations against the petitioner are that he in his aforesaid letter of 10th November, 1980 had falsely indicated that the rate quoted by the foreign buyer was reasonable since some Government Agencies had sold the said variety of rice at Us $ 305 PMT. It is alleged that though the National Agriculture Co-operative Marketing Federation of India Limited did sell IR-8 variety of rice to M/s.Action S.A.Paris at the rate of Us $ 305 Pmt during the said period but the said variety of rice was of inferior quality as the percentage of broken rice was stated to be 30 per cent.
(4) It has been further alleged that Sh.K.S. Kohli asked Sh.Narinder Singh, Deputy Manager (Procurement) on 10th November, 1980 itself to process the offer of M/s.Action S.A.Paris. Sh.Narinder Singh is alleged to have declined to do so on the plea that the rate quoted by M/s.Action S.A.Paris was below the economic cost and Sh.Kohli thereafter himself processed the said offer and allegedly worked out the economic cost of the said variety of rice at Us $ 322.08 PMT. Sh.Kohli is alleged to have deliberately recommended acceptance of the said offer on the ground that firstly the international market of rice was going to fall in future and secondly the Food Corporation of India had enough stock of IR-8 variety of rice which was allegedly not correct at all. The recommendations of Sh.Kohli were put to Sh.R.L.Bhatia, Manager (Cost) who in turn opined that the price offered by M/s.Action S.A.Paris was below the economic cost and the sale of rice at the said price would, therefore, be against the directions of the Government of India to sell rice not below the economic cost. However, the matter was left to the discretion of Sh.K.V.Seshadri, the then Managing Director. Sh.Seshadri gave administrative approval to the proposal on 10th November, 1980 and added that the rice being sold should be preferably from 1978-79 crop or else 1979-80, if the broken limit went with the letter. The file was marked to Sh.Kohli and the Financial Adviser. It is alleged that Sh.Kohli did not discuss the matter with Financial Adviser, as desired by Sh.Seshadri and falsely recorded a note on 11th November, 1980 that the matter had been discussed with the Financial Adviser who had concurred with the proposal. Sh.Kohli in turn informed the petitioner about the acceptance of the offer on telephone and also wrote a D.O. letter to the petitioner to that effect. The acceptance, it appears, was for 35,000 MTs of rice. The petitioner, therefore, wrote a letter of 11th November, 1980 to Sh.Kohli to the effect that the buyer wanted 45,000 MTs and requested him to examine the matter and Food Corporation of India’s consent be communicated for sale of 45,000 MTs. He also indicated in his letter that the price of Us $ 310 was quite reasonable and the price of Thai rice was likely to go down in the international market. Matter was re-examined by Sh.Kohli vide his note dated 13th November, 1980 and informed the petitioner permitting sale of 45,000 MTs of IR-8 variety of rice at the rate of Us $ 310 Pmt in single gunny bags.
(5) It is alleged that when the matter to sell rice to M/s.Action S.A.Paris at Us $ 310 Pmt in single gunny bags was being processed in the State Trading Corporation, M/s.Riz E.T.Denres Paris allegedly submitted their offer to the State Trading Corporation for the purchase of IR-8 variety of rice with 25% broken Fob Stowed Kandla/Bombay at the rate of Us $ 310 Pmt vide letter dated 15th November, 1980. The matter was examined in the State Trading Corporation and the price quoted was not found reasonable. Thereafter M/s.Riz E.T.Denres Paris revised their price to Us $ 321 Pmt in single gunny bags. Simultaneously, it is alleged that M/s.Action S.A.Paris also submitted another offer to purchase IR-8 rice with 25% broken Fob Kandla/Bombay at 322.50 Pmt in double gunny bags. The offer of M/s.Action S.A.Paris at 322.50 Pmt in double gunny bags allegedly came to nearly Us $ 307 Pmt in single gunny bags. Both the offers of M/s.Action S.A.Paris and M/s.Riz E.T.Denres Paris were forwarded by the petitioner to Sh.Kohli. It is alleged that the petitioner while forwarding the details of the offer of M/s.Riz E.T.Denres Paris suppressed the information relating to the package requirements in gunny bags. Sh.Kohli is alleged to have talked to the petitioner over the telephone and informed about the package requirements of gunny bags. It is alleged that the petitioner knowing fully well that the offer of M/s.Riz E.T.Denres, Paris for 50,000 Mt of IR-8 rice at the rate of Us $ 321 Pmt was in single gunny bags while the subsequent offer of M/s.Action S.A.Paris was in double gunny bags allegedly falsely informed Sh.Kohli over the telephone that both the offers were in double gunny bags. This is alleged to have been done so that the offer of M/s.Action S.A.Paris at Us $ 322.50 Pmt could be accepted. This offer of M/s.Action S.A.Paris is alleged to have been recommended for acceptance by Sh.Kohli with the minor increase of price to Us $ 325/326 PMT. When the matter was examined by Sh.R.Srinivasan, Financial Adviser, Food Corporation of India at the instance of Sh.Raghavan who had then taken over as the Managing Director, Food Corporation of India during the leave period of Sh.Seshadri, it was pointed out by the Financial Adviser that the delivery of the rice would not take place in December, 1980 and the economic cost had, therefore, to be revised to cover the delivery period upto March, 1981. After discussing the matter with the Manager (Cost), he worked out the economic cost of the rice with 25% broken at Us $ 352 Pmt for the period ending March, 1981 in double gunny bags including State Trading Corporation’s commission. The said matter was further alleged to have been examined by Sh.Raghavan and he decided to offer the rice at Us $ 340 Pmt on “leave it or take it” basis. M/s.Action S.A.Paris had allegedly accepted the above rates on 16th December, 1990 but later on the subsequent deal at Us $ 340 did not materialise. Till this time, the contract for the sale of 45,000 MTs of IR-8 rice with 25% broken had not been signed. It is alleged that the petitioner failed to ascertain the bank reference to M/s.Action S.A.Paris while in the case of M/s.Riz E.T.Denres Paris he referred the matter to their Paris office for ascertaining the bank reference. It is also alleged that the petitioner in order to show favour to M/s.Action S.A.Paris falsely recorded a note and misrepresented the facts that M/s.Action S.A.Paris and Ipi Trade Paris are one and the same party to whom the State Trading Corporation had earlier sold rice and hence bank references were not necessary. This is alleged to have been done to facilitate the execution of the agreement orally. It is alleged that both the parties were separate entities. The contract was executed between M/s.Action S.A.Paris and State Trading Corporation of India on 17th December, 1980 for the sale of 45,000 MTs of IR-8 variety of rice with 25% broken in single gunny bags at Us $ 310 Pmt while the economic cost of the said variety of rice was alleged to be Us $ 327 Pmt for delivery at Vizag port. It is alleged that Sh.Kohli misrepresented the facts to Sh.Seshadri to approve the said proposal for sale at Us $ 310 Pmt against the economic cost of Us $ 327 Pmt in single gunny bags and thereby allegedly caused a loss to the tune of Rs.8,54,000.00 to the Food Corporation of India/Government of India.
(6) It was on these allegations that the learned Special Judge framed charges against the petitioner under Sections 120-B Indian Penal Code read with Sections 5(2) & 5(1)(d) of the Prevention of Corruption Act and under Sections 5(2) read with Section 5(1)(d) of the Prevention of Corruption Act, 1947. It was held by the Special Judge that the petitioner had acted in connivance with co- accused Sh.K.S.Kohli to get the lower rates approved and further he had concealed the material information regarding gunny bags and in order to show favour to M/s.Action S.A.Paris, he had falsely recorded the notes and had misrepresented the facts. It was, therefore, held that there were sufficient ground for framing charges against the petitioner for his allegedly having shown favour to M/s.Action S.A.Paris and falsely recording notes and misrepresenting facts in getting the proposal approved from Sh.Seshadri at Us $ 310 Pmt against the economic cost of Us $ 327 Pmt in single gunny bags.
(7) After the charge sheet is filed in Court, the prosecutor has to inform the Court as to what is the charge against the accused and state by what evidence he proposes to prove the guilt of the accused. It is at that stage that the Court is to consider the record of the case and the documents submitted therewith and to hear the submissions of the accused and the prosecution in that behalf. The Judge has thereafter to pass an order either under Section 227 or 228 of the Code of Criminal Procedure (in short referred to as “the Code”). If the Judge considers that there is no sufficient ground for proceeding against the accused, he shall discharge the accused and record his reasons for doing so as enjoined by Section 227 of the Code. If on the other hand, the Judge is of the opinion that there is ground for presuming that the accused has committed an offence, he shall frame in writing the charge against the accused as provided in Section 228 of the Code. Therefore, at the time of framing of charge, the Court is not required to meticulously judge the truth, veracity and effect of the evidence which the prosecutor proposes to adduce at the trial. It is not obligatory for the Judge at that stage to consider in any detail and weigh in a sensitive balance whether the facts, if proved, would be incompatible with the innocence of the accused or not. The standard of test and judgment which is to be finally applied before recording a finding regarding the guilt or otherwise of the accused is not exactly to be applied at the stage of deciding the matter under Section 227 or Section 228 of the Code. At that stage, the Court is not to see whether there is sufficient ground for conviction of the accused or whether the trial is sure to end in his conviction. If there is a strong suspicion which leads the Court to think that there is a ground for presuming that the accused has committed an offence, then it will not be open for the Court to say that there were no sufficient grounds for proceeding against the accused. It was, therefore, held by the Supreme Court in State of Bihar Vs.Ramesh Singh, , that if the scales as to the guilt or innocence of the accused are even at the conclusion of the trial, then on the theory of benefit of doubt the case must end in the acquittal of the accused; but if on the other hand, the scales are even at the initial stage of making an order under Section 227 or Section 228 of the Code, then in such a situation, ordinarily and generally, the order will have to be made under Section 228 and not under Section 227 of the Code. The test is whether there is sufficient ground for proceeding and not whether there are sufficient grounds for conviction.
(8) But then is it in every case that the Court must frame charges on the basis of the material which has been placed on record by the prosecution before the Court? The Supreme Court in State of Bihar Vs.Ramesh Singh (Supra), has added a word of caution that if the evidence which the prosecutor proposes to adduce to prove the guilt of the accused, even if fully accepted before it is challenged in cross-examine or rebutted by the defense evidence, if any, cannot show that the accused committed the offence, then there will be no sufficient ground for proceeding with the trial.
(9) In Union of India Vs.Prafulla Kumar Samal and Another, , it was held that in exercising the jurisdiction under Section 227 of the Code, the Special Judge, which under the present Code is a senior and experienced Court, cannot act merely as a post-office or mouth-piece of the prosecution, but has to consider the broad probabilities of the case, the total effect of the evidence and the documents produced before the Court, any basic infirmities appearing in the case and so on. This, however, does not mean that the Judge should make a roving enquiry into the pros and cons of the matter and weigh the evidence as if he was conducting a trial. While considering the question of framing charges under this Section, he has the undoubted power to sift and weigh the evidence for the limited purpose of finding out whether or not a prima facie case against the accused had been made out. It was also held that by and large if two views are equally possible and the Judge is justified that the evidence produced before him while giving rise to some suspicion but not grave suspicion against the accused, he will be fully within his rights to discharge the accused.
(10) It is in this background that this Court has to look into the facts of the present case to find out whether charges could framed against the petitioner. Let me now look into the evidence against the petitioner which had weighed with the learned Special Judge to frame charges against him. The evidence against the petitioner, as emphasised by Sh.Lal, learned prosecutor for the Central Bureau of Investigation, is that the petitioner had forwarded the offer of M/s.Action S.A.Paris for purchase of IR-8 variety of rice with 25% broken booked in 50 Kgs. single gunny bags at Us $ 310 Pmt to Sh.K.S.Kohli, Manager (Procurement), Food Corporation of India on telephone and had recommended that the offer was reasonable. This representation of the petitioner to Sh.Kohli that the offer was reasonable is alleged to be false. The other allegation against the petitioner is that after deliberations when the deal was finalised at the level of Food Corporation of India for the sale of 35,000 MTs of IR-8 variety of rice to M/s.Action S.A.Paris, the petitioner wrote to Sh.Kohli that the buyer wanted 45,000 MTs and requested him to examine the matter and it was at the request of the petitioner that the Food Corporation of India gave consent for sale of 45,000 MTs rice to M/s.Action S.A.Paris. The other allegation against the petitioner is that in a subsequent offer the said M/s.Action S.A.Paris had offered to purchase IR-8 variety of rice with 25% broken at Us $ 322.50 Pmt in double gunny bags whereas another firm M/s.Riz E.T. Denres Paris had made an offer of Us $ 321 Pmt in single gunny bags. The offer of M/s.Action S.A.Paris if converted into single gunny bags would have allegedly come to Us $ 307 Pmt, however, it is alleged that the petitioner deliberately did not mention the packaging conditions of M/s.Riz E.T. Denres Paris and thereby made the officers of Food Corporation of India to believe that the offer of both M/s.Riz E.T. Denres Paris and M/s.Action S.A.Paris was for single gunny bags. It will not be out of place to mention here that this offer did not materialise at any stage and the rice was not sold either to M/s.Riz E.T. Denres Paris or to M/s.Action S.A.Paris pursuant to the said offer. Therefore, the allegations that by his actions and alleged conspiracy with Sh.K.S.Kohli, Sh.George R.Lobo and M/s.Action S.A.Paris, the petitioner had conspired to cause wrongful loss to the Food Corporation of India is only in the matter of sale of 45,000 MTs of IR-8 variety of rice which was offered to be sold by Food Corporation of India by letter dated 11th November, 1980.
(11) From the record, I find that the only role played by the petitioner in the transaction was that he had forwarded the offer of M/s.Action S.A.Paris to Sh.K.S.Kohli and it was in the office of the Food Corporation of India that officers had deliberated on this offer and gave their final approval for sale of the said variety of rice. Even the Managing Director of the Food Corporation of India, Sh.Seshadri in his note gave administrative approval to the proposal and added that the rice being sold should be preferably from 1978-79 crop or else 1979-80 crop. Though, it is alleged by the prosecution that after this file has been marked by Sh.Seshadri to Sh.Kohli, Sh.Kohli without discussing the matter with the Financial Adviser, as desired by Sh.Seshadri, falsely recorded a note on 11th November, 1980 that the matter had been discussed with the Financial Adviser who had concurred with the proposal, informed the petitioner about the acceptance of the offer on telephone and also wrote a D.O. letter to the petitioner to that effect, however, any action of Sh.Kohli in writing this letter to the petitioner, in my view, will not amount to any conspiracy in so far as the petitioner was concerned. No role has been alleged to the petitioner as to in what manner he was instrumental in having the said letter written by Sh.Kohli. Though, it is alleged that the petitioner had in his letter written that the offer of M/s.Action S.A.Paris was reasonable, however, that in itself, in my view, will not amount to any conspiracy. The final decision about the rate has been taken by the Food Corporation of India at its own level and even if the petitioner had recommended that the offer of M/s.Action S.A.Paris was reasonable, there was nothing to prevent the Food Corporation of India from disagreeing with that proposal and not to sell rice to the said party at the rates offered by it. The officers of the Food Corporation of India including the Managing Director appear to have found the offer reasonable and it was only thereafter that they agreed to sell the rice to M/s.Action S.A.Paris. Moreover, there is nothing on record to show that at the relevant time this variety of rice could be sold at a higher price which might lead the Court to conclude that the price offered by M/s.Action S.A.Paris was not reasonable. In my view, therefore, no conspiracy can be attributed to the petitioner only because of his having forwarded the offer of M/s.Action S.A.Paris to Food Corporation of India with his recommendation that the offer was reasonable.
(12) Now coming to the second allegation that the petitioner had recommended the acceptance of 45,000 MTs of rice to M/s.Action S.A.Paris whereas the Food Corporation of India had agreed to sell 35,000 MTs of rice, in my view, the allegations of any conspiracy even in increasing the quantity of rice are also without any basis. The only thing which had been done by the petitioner was that he had written a letter on 11th November, 1980 to Sh.Kohli of the Food Corporation of India informing him that the buyer wanted 45,000 MTs of rice and also requested him to examine the matter. This request was considered by the Food Corporation of India and they agreed to sell 45,000 MTs of rice to M/s.Action S.A.Paris. It is not understood as to how and in what manner any conspiracy can be alleged between the petitioner and Sh.Kohli in the sale of the said variety of rice.
(13) Though, it is also alleged that the petitioner did not verify the bank references of M/s.Action S.A.Paris and had written that M/s.Action S.A.Paris and Ipi Trade Paris were one and the same parties whereas this was only done to facilitate the execution of the agreement as according to the prosecution both the parties were separate entities. Even assuming this allegation to be true, I find that it is not the case of the prosecution that because of the petitioner not verifying the references, any loss has been caused to the Food Corporation of India and it is in evidence that the Food Corporation of India has made profits in this deal. This clearly shows that not only that the price was reasonable but it also met the Ministry’s criteria that the sale should cover at least the full economic cost and no loss or subsidy should be involved on that account.
(14) In view of the foregoing, I am of the opinion that the evidence which the prosecution is seeking to place on record against the petitioner is not such which could result in framing of charges against him. In my view, the material before the Court is not such which would give rise to a grave suspicion against him and in my view, learned Special Judge was not justified in framing charges against the petitioner.
(15) I, therefore, allow this petition and while setting aside the impugned order, I discharge the petitioner.