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2023 (11) TMI 878 - HC - Indian LawsAllegation against the officials of four public sector oil companies viz. IOCL, HPCL, BPCL and IBP - Respondent Accused were discharged by the CBI Court - Sale of High Speed Diesel (HSD) to various private industries of three States viz. Gujarat, Maharastra and Madhya Pradesh at concessional rates of sales tax - non-compliance with the mandatory requisite permission from the Ministry of Petroleum Natural Gas - Revenue loss to Government - HELD THAT - In the case of MOHD. HADI RAJA VERSUS STATE OF BIHAR AND ORS. 1998 (4) TMI 576 - SUPREME COURT , the Apex Court observed that the importance of the public undertaking should not be minimised. It is observed that the government's concern for the smooth functioning of such instrumentality or agency can be well appreciated but on the plain language of Section 197 of the Code of Criminal Procedure, the protection by way of sanction is not available to the officers of the public undertaking because being a juridical person and distinct legal entity such instrumentality stands on a different footing than the government departments. Here, in the case on hand, the aspect of sanction by the authority concerned would bear not of much importance. The issue is whether C.B.I. had any case to even lodge a prosecution. Admittedly CVC too had not found any case against the accused to grant sanction. The compilation and circulation by OCC on 08.07.1991, of the Guidelines for Release of Petroleum Products and Lubricants to Direct Consumers have not been denied, which suggests that the same was in force and all oil companies were following the guidelines since 1991. The chargesheet has been filed for period between 1997-2000. The guidelines of OCC dated 08.07.1991 had not found any change. The letter of the OCC dated 04.12.1996 to the under Secretary MoP NG, New Delhi, for the requirement of HSD/ HF HSD/LSHF and NGL/Naphtha for M/s. Shaynoa Petrochem Ltd. for manufacture of speciality solvent and lubricants, reflects that the TEC was required to evaluate the requirement, and submit the recommendation to MoP NG and based on the recommendation of the TEC, it was noted that, MoP NG, may consider to release of HSD/HF-HSD/LSHF for processing use ex-Koyali refinery, while the supply of NGL ex-Hazira was ruled out, as the only possibility was of supplying Naphtha ex-Koyali refinery of IOC - While observing the TEC by the Circular dated 27.03.2002, it was specifically noted by the under Secretary, Government of India that the matter was reviewed by the Ministry and on dismantling of the APM from 01.04.2002, in the circular, it was noted that the price of diesel would be also decontrolled, and under such circumstances, the specific objective and role of the TEC had lost its purpose and relevance, and were informed that the TEC stood dissolved with effect from 01.04.2002. This Court finds that the Special Judge, CBI Court No. 2 Ahmedabad has not committed any error in discharging the accused by allowing their Criminal Revision Applications preferred against the orders of rejection of their discharge applications by orders dated 27.05.2019 below different Exhibits in 36 applications and by the orders dated 13.03.2018 below different Exhibits in 3 applications by the Learned Additional Chief Judicial Magistrate, Special CBI Court No. 1, Ahmedabad in Special Case arising out of FIR RC No. 12(A)-2000-GNR. No sanction has been granted for prosecuting the officers of the oil companies. The assessment made by the Special Judge discharging the accused is consistent with the record. The orders passed by the learned Special Judge, CBI Court No. 2, Ahmedabad allowing the Revision Applications and discharging the accused respondents herein are just and correct, the findings are in accordance to the documents on record, the accused are rightly discharged, as there are no sufficient grounds for proceedings against them - Application dismissed.
Issues Involved:
1. Legality of the impugned orders passed by the Special CBI Court. 2. Allegations of conspiracy, cheating, and abuse of official position by officials of public sector oil companies. 3. Requirement of technical evaluation and necessary permissions for the sale of High Speed Diesel (HSD). 4. Validity of sales tax concessions and alleged misuse of C-Forms. 5. Requirement of sanction for prosecution under Section 197 Cr.P.C. and Section 19 of the Prevention of Corruption Act. Summary: 1. Legality of the Impugned Orders: The Central Bureau of Investigation (CBI) challenged the orders dated 06.10.2020 and 29.03.2019 passed by the Special CBI Court No. 2, Ahmedabad, which discharged the accused officials of public sector oil companies under Sections 420, 467, 468, 471, and 120B of the Indian Penal Code, and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988. The High Court upheld the Special Judge's decision, finding no sufficient grounds for proceeding against the accused. 2. Allegations of Conspiracy, Cheating, and Abuse of Official Position: The allegations were that officials of IOCL, HPCL, BPCL, and IBP sold HSD to private industries at concessional rates without mandatory permission from the Ministry of Petroleum & Natural Gas (MoP&NG), leading to revenue loss and wrongful gain. The CBI argued that the trial court wrongly appreciated the evidence and made a roving inquiry at the stage of framing charges. The High Court found no prima facie evidence of conspiracy or cheating, noting that the accused acted as per government circulars and guidelines. 3. Requirement of Technical Evaluation and Necessary Permissions: The CBI contended that the sale of HSD required technical evaluation and permission from the MoP&NG. However, the High Court observed that the circulars and guidelines did not mandate technical evaluation for regular HSD, except for specific cases like the Koyali Refinery. The court noted that the oil companies followed the existing guidelines, and the TEC's role was limited to specific products like LSHF-HSD, LDO, and crude sludge. 4. Validity of Sales Tax Concessions and Alleged Misuse of C-Forms: The CBI alleged that private firms misused sales tax concessions and submitted fake C-Forms. The High Court found no evidence of forged documents or that the accused were aware of any such misuse. The court noted that the sales tax authorities were responsible for verifying the genuineness of C-Forms and that there was no evidence of financial loss to the oil companies due to the transactions. 5. Requirement of Sanction for Prosecution: The CBI argued that no protection under Section 197 Cr.P.C. was available to public sector employees. The High Court, referring to precedents, held that sanction for prosecution was not required for officers of government companies or public sector undertakings. The court noted that no sanction was obtained, and the Central Vigilance Commission confirmed the non-issuance of sanction against the officers. Conclusion: The High Court dismissed the CBI's Special Criminal Applications, upholding the discharge of the accused by the Special CBI Court. The court found that the accused acted in accordance with government guidelines and there was no prima facie evidence of conspiracy, cheating, or abuse of official position. The findings of the Special Judge were consistent with the record, and there were no sufficient grounds for proceeding against the accused.
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