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TMI Blog2023 (6) TMI 1235X X X X Extracts X X X X X X X X Extracts X X X X ..... cessors. According to him, HSD allocation to the processors is approved by the MoP NG based on the certification and recommendation of the TEC of the Oil Companies. The guidelines referred and relied upon does not reflect any certification and recommendation of the TEC to the oil companies, and, when a clarification was sought by P. Sudarsnam by a letter dated 23.08.1999, Mr. Shastri states before the C.B.I. that there was no change in the allocation policy and requested P.Sudarsnam of IOC not to make HSD supplies to the processors without the Ministry s allocation / Linkage, and, since clarification was sought by the E.D., IOC from OCC, reply was sent by OCC, which stated by Mr. Shastri, according to the existing guidelines available, the directions were to be followed by the oil companies necessarily, and according to him the clarification was in accordance with the existing guidelines of the Ministry, and, in the present case, to his clarification on behalf of OCC, Ministry did not issue any such amendment, which implies, concurrence of the MoP NG on the particular issue, upon which the Oil Companies were required to act accordingly. It is required to be noted that TEC was di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed offence - For the offence under the P.C. Act, the learned Special Judge found that there is no prima facie evidence to show that the applicants had accepted any gratification from any person as a motive or reward, and the applicants accused had followed all the instructions issued by the MoP NG and acted in discharge of the duties; no sanction has been brought on record by the C.B.I., while sanction has been refused against the officers of the oil companies and against refusal C.B.I. had written to Central Vigilance Committee, but the said committee to confirm the order of non-issuance of sanction against the officers of the oil companies and therefore, no summons were issued against those accused persons. The Petroleum Rules, 2002 came into force on 13.03.2002. A technical body being Oil Industry Safety Directorates Standards (OISD) had been formed for assisting the safety council constituted under the MoP NG. The rules deals with restrictions of delivery and dispatch of petroleum in all classes A, B and C, the requirement of the licence for the import of petroleum, and the dispute with regard to the HSD would have to be resolved by the Board, which is governed by the Petr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ICATION NO. 1185 of 2018 R/CRIMINAL REVISION APPLICATION NO. 1219 of 2018 R/CRIMINAL REVISION APPLICATION NO. 1216 of 2018 R/CRIMINAL REVISION APPLICATION NO. 1189 of 2018 R/CRIMINAL REVISION APPLICATION NO. 1217 of 2018 R/CRIMINAL REVISION APPLICATION NO. 1340 of 2018 R/CRIMINAL REVISION APPLICATION NO. 1346 of 2018 R/CRIMINAL REVISION APPLICATION NO. 1339 of 2018 R/CRIMINAL REVISION APPLICATION NO. 803 of 2021 R/CRIMINAL REVISION APPLICATION NO. 898 of 2021 R/CRIMINAL REVISION APPLICATION NO. 807 of 2021 R/CRIMINAL REVISION APPLICATION NO. 802 of 2021 R/CRIMINAL REVISION APPLICATION NO. 796 of 2021 Appearance In Cr.R.A. No.1175 Of 2018: Mr RC Kodekar(1395) For The Applicant(S) No. 1 Ms, Maithili Mehta App For The Respondent(S) No. 1 Mr Yogesh S. Lakhani Senior Advocate With Advocate Mr Nandish Y Chudgar Assisted By Advocate Ms. Nidhi Prajapati For The Respondent(S) No. 3,4,5 Mr Yogesh S. Lakhani Senior Advocate With Mr. Bhadrish S Raju For The Respondent(S) No. 2 Sairica S Raju(8761) For The Respondent(S) No. 2 Appearance In Cr.R.A. No.1187 Of 2018: Mr RC Kodekar(1395) For The Applicant(S) No. 1 Ms, Maithili Mehta App For The Respondent(S) No. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hadrish S Raju For The Respondent(S) No. 13-16 Sairica S Raju(8761) For The Respondent(S) No. 13-16 Appearance In Cr.R.A. No.1182 Of 2018: Mr RC Kodekar(1395) For The Applicant(S) No. 1 Ms, Maithili Mehta App For The Respondent(S) No. 1 Mr Yogesh S. Lakhani Senior Advocate With Advocate Mr Nandish Y Chudgar Assisted By Advocate Ms. Nidhi Prajapati For The Respondent(S) No. 10-11, 6-9 Mr Rajesh K Kanani For The Respondent(S) No. 12 Mr Yogesh S. Lakhani Senior Advocate With Mr. Bhadrish S Raju For The Respondent(S) No. 2-5 Sairica S Raju(8761) For The Respondent(S) No. 2-5 Appearance In Cr.R.A. No. 1218 Of 2018: Mr RC Kodekar(1395) For The Applicant(S) No. 1 Ms, Maithili Mehta App For The Respondent(S) No. 1 Mr Nanavati Associates For The Respondent(S) No. 4 Mr Yogesh S. Lakhani Senior Advocate With Advocate Mr Nandish Y Chudgar Assisted By Advocate Ms. Nidhi Prajapati For The Respondent(S) No. 2-3, 5-6 Mr Rajesh K Kanani For The Respondent(S) No. 7 Appearance In Cr.R.A. No.1186 Of 2018: Mr Yogesh S. Lakhani Senior Advocate With Advocate Mr Nandish Y Chudgar Assisted By Advocate Ms. Nidhi Prajapati For The Respondent(S) No. 3 4 Mr Yogesh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) No. 2 Appearance In Cr.R.A. No.1190 Of 2018: Mr RC Kodekar(1395) For The Applicant(S) No. 1 Ms, Maithili Mehta App For The Respondent(S) No. 1 Mr Yogesh S. Lakhani Senior Advocate With Advocate Mr Nandish Y Chudgar Assisted By Advocate Ms. Nidhi Prajapati For The Respondent(S) No. 3-7 Mr Yogesh S. Lakhani Senior Advocate With Mr. Bhadrish S Raju For The Respondent(S) No. 2 Sairica S Raju(8761) For The Respondent(S) No. 2 Appearance In Cr.R.A. No. 1211 Of 2018: Mr RC Kodekar(1395) For The Applicant(S) No. 1 Ms, Maithili Mehta App For The Respondent(S) No. 1 Mr Yogesh S. Lakhani Senior Advocate With Advocate Mr Nandish Y Chudgar Assisted By Advocate Ms. Nidhi Prajapati For The Respondent(S) No. 10-12, 7-9 Mr Rajesh K Kanani For The Respondent(S) No.13 Mr Yogesh S. Lakhani Senior Advocate With Mr. Bhadrish S Raju For The Respondent(S) No. 2-6 Sairica S Raju(8761) For The Respondent(S) No. 2-6 Appearance In Cr.R.A. No. 1214 Of 2018: Mr RC Kodekar(1395) For The Applicant(S) No. 1 Ms, Maithili Mehta App For The Respondent(S) No. 1 Mr Yogesh S. Lakhani Senior Advocate With Advocate Mr Nandish Y Chudgar Assisted By Advocate Ms. Nidhi Pra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a App For The Respondent(S) No. 1 Mr Yogesh S. Lakhani Senior Advocate With Advocate Mr Nandish Y Chudgar Assisted By Advocate Ms. Nidhi Prajapati For The Respondent(S) No. 10, 2-9 Appearance In Cr.R.A. No. 1209 Of 2018: Mr RC Kodekar(1395) For The Applicant(S) No. 1 Ms, Maithili Mehta App For The Respondent(S) No. 1 Mr Yogesh S. Lakhani Senior Advocate With Advocate Mr Nandish Y Chudgar Assisted By Advocate Ms. Nidhi Prajapati For The Respondent(S) No. 10-11, 7-9 Mr Rajesh K Kanani For The Respondent(S) No. 12 Mr Yogesh S. Lakhani Senior Advocate With Mr. Bhadrish S Raju For The Respondent(S) No. 2-6 Sairica S Raju(8761) For The Respondent(S) No. 2-6 Appearance In Cr.R.A. No. 1185 Of 2018: Mr RC Kodekar(1395) For The Applicant(S) No. 1 Ms, Maithili Mehta App For The Respondent(S) No. 1 Mr Yogesh S. Lakhani Senior Advocate With Advocate Mr Nandish Y Chudgar Assisted By Advocate Ms. Nidhi Prajapati For The Respondent(S) No. 10-15, 3-5 Mr Yogesh S. Lakhani Senior Advocate With Mr. Bhadrish S Raju For The Respondent(S) No. 2, 6-9 Sairica S Raju(8761) For The Respondent(S) No. 2, 6-9 Appearance In Cr.R.A. No. 1219 Of 2018: Mr RC Kodeka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .A. No.803 Of 2021: Mr RC Kodekar(1395) For The Applicant(S) No. 1 Ms, Maithili Mehta App For The Respondent(S) No. 2 Mr Yogesh S. Lakhani Senior Advocate With Mr. Bhadrish S Raju With Mr Shaishav S.Pandit For The Respondent(S) No. 1 Mr Dhanesh R.Patel For The Respondent(S) No.1 Appearance In Cr.R.A. No.898 Of 2021: Mr RC Kodekar(1395) For The Applicant(S) No. 1 Ms, Maithili Mehta App For The Respondent(S) No. 2 Mr Yogesh S. Lakhani Senior Advocate With Advocate Mr Nandish Y Chudgar Assisted By Advocate Ms. Nidhi Prajapati For The Respondent(S) No. 1 Appearance In Cr.R.A. No.807 Of 2021: Mr RC Kodekar(1395) For The Applicant(S) No. 1 Ms, Maithili Mehta App For The Respondent(S) No. 2 Mr Yogesh S. Lakhani Senior Advocate With Mr. Bhadrish S Raju With Mr Shaishav S.Pandit For The Respondent(S) No.1 Mr Dhanesh R.Patel For The Respondent(S) No.1 Appearance In Cr.R.A. No.802 Of 2021: Mr RC Kodekar(1395) For The Applicant(S) No. 1 Ms, Maithili Mehta App For The Respondent(S) No. 2 Mr Darshan M.Varandani For The Respondent(S) No. 1 Appearance In Cr.R.A. No.796 Of 2021: Mr RC Kodekar(1395) For The Applicant(S) No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly appreciated the statement of P.W. - R. Ramakrishnan, while he has clearly stated in his statement given before C.B.I. that HSD was sold by oil companies without physical inspection or technical inspection, the statement reveals that, the HSD was diverted by the private companies for their own wrongful gain. Mr. Kodekar stated that the statement of prosecution witnesses, Shri K.L.N. Shastri, ED, IOC, Shri P.Sudarshnam, ED, IOC, Shri A.K. Dubey, (IAS) of MoP NG, clarify the guidelines of the Ministry, which stipulates the requirement of Technical Evaluation Committee for sale of HSD, to such private firms for its use as raw materials. 3.2 Standing counsel Mr. Kodekar submitted that the Court committed error while noting about the issue of sanction for prosecution under section 197 Cr.P.C., submitting that no protection to the employees of public sector undertaking is provided under the said provisions. Mr. Kodekar, states that inference of commission of offence under section 13(1)(d) of the P.C. Act, can be drawn with prima facie material to show recklessness or misconduct in discharge of duty, who have acted in the manner, unbecoming of a government servant, and has acted ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a preliminary and mandatory duty of the officials before supply of the HSD to the processing units to check the order for allotment of HSD quota by the Ministry; hence, Mr. Kodekar submitted that no supply of HSD could be made to the processing units, without the order of the Ministry. 3.6 Mr. Kodekar stated that Shri A.K. Dubey, IAS Director (Supplies), MoP NG, was examined by the CBI to prove the policy of the government for supply of HSD to the processing units, and Mr. Sharad Gupta, Mr. H.C. Khurana, Mr. Kuldip Singh, Mr. C.S. Mishra and Mr. K.L.N. Shastri, and other officials of MoP NG, have also reiterated and reaffirmed the statement of Mr. A.K. Dubey regarding the established procedures and policy prescribed by the MoP NG, and requirement of TEC for supply of HSD to processing units. 3.7 Mr. Kodekar, thus, stated that as per established procedure, a Field Officer of the concerned oil company is required to visit the factory of the processing unit for conducting physical inspection and also to verify the quota allotted by the government, and after inspecting the processing unit and checking the mandatory approval of quota, the Field Officer is required to subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n sales tax. 3.9 Mr. Kodekar, thus, further contended that the evidence with regard to the policy of MoP NG, requirement of technical evaluation by the TEC etc., was evaluated, and there was unanimous opinion in respect of the criminal involvement of the officials of the oil companies of marketing division, private firm owners and those mediators who had purchased the Dos/allocation letters of HSD from the firm owners and further lifting HSD and diverted the same in the market; and thus, concluded that the essence of the offence is the supply of HSD to private parties without the mandatory permission of the MoP NG, and the officers, at different levels, have failed to ensure the compliance of the policy, and have even failed to ensure the bonafide end-use of the HSD; and the responsibility of the oil company can be viewed only through the acts of its officials in making supplies of HSD to the accused firms without observing the compliance of the policy. Mr. Kodekar stated that the irregularities in issuance of HSD has spread over several years, and the Oil Coordination Committee (OCC) has expressed the concern over the possibility of product being uplifted on inter-state bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that, law does not prohibit launching prosecution against the officials under IPC offences, where sanction has been denied and even against the retired officials under P.C. Act; while no protection can be granted to the officials of government companies or public sector undertakings. 3.13 Learned standing counsel Mr. Kodekar relied on the judgments of (i) Punjab State Warehousing Corporation Vs. Bhushan Chander And Anr., reported in (2016) 13 SCC 44 (ii) Mohd. Hadi Raja Vs. State of Bihar And Anr., reported in (1998) 5 SCC 91. 4. Senior Advocate Mr. Y.S. Lakhani for the respondents stated that OCC was connected with the MoP NG, in need of implementation of the guidelines, and submitted, that the Circular dated 02.01.1981 by the MoP NG was addressed only to IOCL for utilization of HSD by Koyali Refinery for production of high value specialization items. Mr. Lakhani submitted that after about 7 years by a Circular dated 17.03.1988 of MoP NG, in context with the Circular dated 02.01.1981 to IOCL, it was informed to all the companies regarding reconstitution of TEC on supply of feed-stock for the production of petroleum specialties. According to the said Circular, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or Advocate Mr. Lakhani further submitted that by letter dated 27.03.2002 by the Government of India, MoP NG, the TEC, which was constituted under the Circular dated 23.05.1995 and 18.09.1996, came to be dissolved with effect from 01.04.2002, and on dissolution of TEC by the said letter, Mr. Lakhani submitted that, all the companies were given liberty to make their own judgments about allocation of crude sludge, high Flash-HSD and LDO from the said date to put conditions to the best of their commercial prudence and business requirements. 4.3 Mr. Lakhani, senior advocate, thus, stated that the very case against all the accused are baseless since there was no reference to the requirement of TEC for the supply of HSD to processing units, nor there was any necessity of any recommendation of TEC for supply of HSD to the processing units. 4.4 Mr. Lakhani referring to the guidelines for release of petroleum products and lubricants to direct consumers submitted that, OCC on July, 1991, had prepared a Manual complied by the member of oil industries as an aid to the field staff, in advising new as well as existing customers about the modalities for obtaining supplies of Petroleum Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e; and, thus submitted that this very circular, which reads all the earlier circulars has concluded that the procedure to be adopted for an approval from TEC was not in connection with HSD, and the letter of A.K. Dubey, Director, Government of India, clearly proves that C.B.I. has filed the case against all the accused on a wrong assumption, which does not have its base on the circulars issued by the MoP NG. 4.6 Senior Advocate Mr. Lakhani submitted that after the year 1996, there has been no other guidelines by the Government of India, and the allegations are pertaining to the year 1997-2000; the TEC stood dissolved vide effect from 01.04.2002, vide letter dated 27.03.2002, of the Ministry. Mr. Lakhani submitted that HSD was never a part of the guidelines and the government guidelines changed time to time, but there was no change in the Manual of the OCC. 4.7 Mr. Lakhani refers to the statement dated 31.10.2000 of Sales Tax Officer, Dilip Dixit and the questionnaires put to Mr. A.K. Dubey to state that no case has been made out against any of the accused, and submitted that statement recorded by the C.B.I. of A.K. Dubey is in contrast to the questionnaires. Mr. Lakhani ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany, who suffered social stigma and arrest, and few of them were suspended and some are still under suspension; nothing prima facie is remotely suggested, the only circular in connection with HSD is with Koyali Refinery. Senior Advocate Mr. Panchal submitted that C.B.I. Officers have failed to even understand that HSD is separate and different product, which could be easily understood by simple reading of the circulars. 5.1 Making reference to the definition under the Petroleum Act, 1934, Mr. Panchal, senior advocate stated that, there is a classification of the petroleum, and, the flash-point denigrates the class, HSD falls under section 2(bb) of the Petroleum Act for petroleum Class B , which means petroleum having a flash-point of twenty-three degrees centigrade and above but below sixty-five degrees centigrade, and, thus stated that under the Act itself different flash-points classify the product. Mr. Panchal stated that sections 7 of the Petroleum Act clarifies that no license is needed for transport and storage for limited quantity of petroleum class B or petroleum Class C, and no license is needed for import, transport or storage of small quantities of petroleum Class A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ineer, reported in (AIR 1962 Bom. 198; (iv) Sheila Sebestian Vs. R.Jawaharaj And Anr., reported in (2018) 7 SCC 581; (v) Mohammed Ibrahim And Others Vs. State of Bihar And Anr., reported in (2009) 8 SCC 751; (vi) Maksud Saiyed Vs. State of Gujarat And ors., reported in (2008) 5 SCC 668; (vii) Suryalakshmi Cotton Mills Ltd. Vs. Rajvir Industries Ltd. And Ors., reported in (2008) 13 SCC 678; (viii) Chittaranjan Das Vs. State of Orissa, reported in (2011) 7 SCC 167; (ix) Aneeta Hada Vs. Godfather Travels And Tours Pvt. Ltd., reported in (2012) 5 SCC 661; (x) Sushil Sethi And Another Vs. State of Arunachal Pradesh And Others, reported in (2020) 3 SCC 240; (xi) D.L. Rangotha Vs. State of Madhya Pradesh, reported in (2015) 12 SCC 733; (xii) Judgment of Lucknow Bench of Allahabad High Court in case of S.M. Dutta And Ors. Vs. State of Uttar Pradesh And Anr., reported in 2012 SCC Online All 838; (xiii) S.M. Dutta And Ors. Vs. State of Uttar Pradesh And Anr., rendered in Special Leave to Appeal (Crl.) No.7085/2012; (xiv) Vakil Prasad Singh Vs. State of Bihar, reported in (2009) 3 SCC 355; (xv) Union of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of C.B.I., the HSD so sold could only be used as raw material in the manufacture of taxable goods under the Gujarat Sales Tax Act and could not be used for any other purpose like processing material, consumable stores etc. While it was alleged that the HSD sold in the name of private companies were diverted in open market instead of using it for their declared use. It was alleged that HSD was sold in the market above the higher rate and because of the diversion, there has been huge revenue loss in the form of evasion of sale tax. 9.2 The C.B.I. has placed the case stating that, during the course of investigation commission of similar offences by 11 more units of Gujarat, 23 units of Madhya Pradesh and 12 units of Maharashtra came to light and searches were conducted at the office of four oil companies, sales tax offices and premises of the private industrial units. It has been contended by the C.B.I. that investigation revealed that HSD is an essential commodity under the Essential Commodity Act; its supply and distribution is controlled by the orders issued by MoP NG under section 3 of the Essential Commodity Act. 9.3 The case of the C.B.I. is that, there was a laid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some unknown officers of the oil companies, sales tax department and owners of private units, alleged to have hatched conspiracy, abusing official positions and having caused wrongful loss to the government exchequer by selling HSD to various private industries of various states, which were either non-existent or non-functional. The learned Judge referring to the charge-sheet has noted that TEC had issued various circulars for supply of HSD and the circular dated 2/6-11981 applies only to Koyali Refinery, Vadodara, and at that time, this refinery was manufacturing LSHF-HSD (Low Sulphur High Flash Diesel), which was meant for Navy. The learned Judge observed that the statement given to C.B.I. by R. Ramakrishnan, who is convener of TEC, on 09.06.2000, notes that the evaluation by TEC was only for LSHF-HSD; Mr. Ramakrishnan had also stated that the specification of both items LSHF-HSD and HSD are different and this circular does not refer to any other State or refinery other than Koyali. The learned Judge referring to the statement of the convener of TEC found that the circular of 1981 will not apply to HSD. All the Circulars thereafter were applicable only for the sale of LSHF-HSD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgued by Senior Advocate Mr. Lakhani that TEC was entrusted with the task of reviewing the supply of feed-stock to the existing and new manufacturers of petroleum speciality and the committee was required to draw method and procedure with the assistance of oil companies and other agencies to ensure that the petroleum specialities are used in bonafide manner and the TEC was required to look into the supply of LSHF-HSD, LDO and crude sludge for the manufacture of petroleum specialties. Mr. Lakhani submitted that vide Circular dated 17.03.1988, which has a reference of the letter dated 02.01.1981, which was in context of Koyali Refinery, the circular very clearly noted that additional items would be assigned to the TEC as necessary from time to time, thus, Mr. Lakhani stated that notification under the Circular dated 17.03.1988 was addressed to all the oil companies, while circular dated 02.01.1981 was only in respect to M/s. Indian Oil Corporation Ltd., when at that time the refinery was manufacturing Low Sulphur High Flash-Diesel (LSHF-HSD). 12.1 The Circular dated 17.03.1988 was addressed to all the companies with subject of constitution of Technical Evaluation Committee on supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduction of petroleum specialities . Sir, In supersession of this Ministry s letter of even number dated 9.2.94 on the subject noted above, I am directed to convey the approval of the Government to the re-constitution of the said Committee till further orders, comprising of the following:- i) A representative from Indian Oil Corporation Convenor. ii) A representative from CHT, New Delhi. iii) A representative from Bureau of Indian Standards (BIS), New Delhi. iv) A representative from OCC, New Delhi. 2. The scope of Technical Evaluation Committee would be: (a) To examine the technological capability of the undertaking to process the allocated feedstock. (b) To inspect the testing laboratory capabilities to evaluate the products quality. (c) Products quality assurance system. (d) Adequacy of safety pollution control measures available in the factory and (e) To evaluate the suitability of the products intended for end use industries/consumers. The technical committee would look into all the industries processing High flash HSD, LDO, Crude Sludge and feedstocks to produce solvents in small medium scale industries an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rivate industries would lift HSD from oil companies for the industrial use as raw material and for captive power generation, and no necessary permission of the MoP NG was obtained nor any recommendation of TEC, oil companies and State Electricity Board was taken 14. The guidelines for release of petroleum product and lubricants to direct customers was issued on 08.07.1991 by Oil Coordination Committee. The Manual was complied by the members of the oil industries as an aid to the field staff in advising new as well as existing customers about the modalities for obtaining supplies to petroleum products and lubricants directly from the oil companies. The guidelines stated in the Manual pertained to the situation prior to the introduction of Demand Management dated 21.06.1990; with further clarification that the Demand Management Guidelines had not been incorporated as they would change from time to time depending upon product availability, and therefore it was clarified that users of the said Manual would therefore ensure that these guidelines were read in conjunction with the then applicable Demand Management Guidelines, as advised by the Deptt. of P NG from time to time; and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such as spray oil, white oil, industrial solvents, etc. The customer approaches the Oil Industry for release by placing an indent for supplies. The Oil Industry verifies the approval of Explosive Deptt. for storage of product. Also if the supplies are required on Inter State basis, the Oil Industry checks the Central Sales Tax Registration Certificate for assessing the customers eligibility to receive supplies on Concessional Sales Tax. 14.4 In regard to the delivery of the product, the said letter contained as under: Subject to satisfying the above needs and based on Commercial understanding, a customer code number is allotted in respect of the customer. Thereafter, the Supply Point is authorized to release the product. The authorization is issued through a letter of a delivery order which indicates the details of customer code, indentor / consignee, period of supply, price of the product, validity of the delivery instructions, commercial terms, etc. Oil Industry in certain cases is providing storage and dispensing facilities based on the laid down norms to the customers. These facilities are constructed by the Oil Industry to meet the requirement of criteri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received the quantity indicated in the Delivery Challan. This whole process, as noted in the Manual does not insist for any report of the TEC. The Manual itself clarifies the process of self supply in bulk and in small percentage. In case of inter state supplies, the process of concessional sales tax form is to be followed and, the oil companies checks the central sales tax certificate for assessing the customer s eligibility to receive supplies on concessional sales tax. 15. Here, the F.I.R. was registered on 23.05.2000, thereafter the letter dated 06.11.2000, signed by directors of four oil companies viz. IOC, BPC, HPC and IBP addressed to Additional Secretary, MoP NG, Government of India, New Delhi, referred to all the earlier circulars dated 17.03.1988, 09.02.1994, 23.05.1995 and 18.09.1996, with regard to the constitution of TEC on supply of feed-stock specialities. It was clarified by the companies that in all the referred communications, the TEC was to look into the supply of LSHF-HSD/High Flash-HSD, LDO and Crude Sludge for the manufacture of petroleum specialities, and further noted as being conveyed that additional items would be assigned to the TEC as necessary from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nery of Vadodara. At that time, this refinery was manufacturing LSHF-HSD (Low Sulphur High Flash Diesel), which was meant for Navy. The statement given to CBI by R. Ramakrishnan, who is convener of TEC, on 9/6/2000, clearly stated that as per the policy circular, evaluation by TEC was only for LSHF-HSD. He also stated that the specification of both items does not refer to any other State or any other refinery, other than Koyali. So, looking to the statement given by the convener of TEC, prima facie appears that the circular of 1981 will not to apply to HSD. After 1981, TEC had also issued circulars on 17/3/1988 and then after in 1994, 1995 and 1996. All the circulars state that the TEC would look into supply of LSHF-HSD, LDO Slug etc. and HSD was not within the purview of TEC as per the circulars. The MOP NG s circular dated 2nd January, 1981 regarding scope of TEC was issued for release of diesel from Koyali Refinery, Vadodara to Indian Oil Corporation only and not other oil companies. The scope of circular is limited and not applicable to other oil companies as BPCL, HPCL AND IBP. Looking to all the circulars, the prosecution has not established that the circulars were issued f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no evidence regarding forged document. It is true that blank C forms were submitted. But there is no allegations that the said C forms were bogus. Supposed that C forms were bogus, but then it is not the case of the prosecution that those C forms were forged and produced by the applicants accused. Generally the C form were produced by the purchaser. There is no evidence that the applicants were aware that the C forms were bogus. There is no allegation that the accused committed forgery or produced forged documents. The applicants accused have not used any C form but the private party has produced it at the time of delivery. Looking to the C form, no officer of oil companies can say that C forms were bogus. There is no allegation against the accused that HSD was sold at lower price. There is no evidence to show that oil company has suffered any financial loss because of such transaction. There is also no prima facie evidence to prove that the delivery of HSD was wrongly given. It appears that the applicants accused have sold HSD as per the price fixed by the Govt. It has also not come on record that if the purchasers had obtain any benefit, that was not due to mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otection by way of sanction under Section 197 Cr. P.C. 25. It will be appropriate to notice that whenever there was felt need to include other functionaries within the definition of 'public servant', they have been declared to be 'public servants' under several special and local acts. If the legislature had intended to include officers of instrumentality or agency for bringing such officers under the protective umbrella of Section 197 Cr. P. C. It would have done so expressly. 26. Therefore, it will not be just and proper to bring such persons within the ambit of Section 197 liberally construing the provisions of Section 197. Such exercise of liberal construction will not be confined to the permissible limit of interpretation of a statute by a court of law but will amount to legislation by Court. 27. Therefore, in our considered opinion, the protection by way of sanction Section 197 of the Code of Criminal procedure is not applicable to the officers of Government Companies or the public undertakings even when such public undertakings are 'State ' within the meaning of Article 12 of the Constitution on account of deep and pervasive control of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 409 is a condition precedent. The approach and the analysis are absolutely fallacious. We are afraid, though the High Court has referred to all the relevant decisions in the field, yet, it has erroneously applied the principle in an absolute fallacious manner. No official can put forth a claim that breach of trust is connected with his official duty. Be it noted the three-Judge Bench in B. Saha (supra) has distinguished in Shreekantiah Ramayya Munipalli (supra) keeping in view the facts of the case. It had also treated the ratio in Amrik Singh (supra) to be confined to its own peculiar facts. The test to be applied, as has been stated by Chandrasekhara Aiyar, J. in the Constitution Bench in Matajog Dube (supra) which we have reproduced hereinbefore. The three-Judge Bench in B. Saha (supra) applied the test laid down in Gill s case wherein Lord Simonds has reiterated that the test may well be whether the public servant, if challenged, can reasonably claim, that what he does, he does in virtue of his office. 17.3 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 lod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the utilization of HSD from Koyali Refinery for the production of High Value Specialities items and the guidelines dated 08.07.1991 of OCC. He had also been asked regarding his clarification dated 23.08.1999 in respect to release of HSD to processors, and he had referred to a letter No.TEC/Circ. dated 04.08.1999 of Shri P.Sudarsnam, ED (Plng., P S and BD), IOC, Ho. Mumbai to the Executive Director, OCC, regarding the release of HSD to processors. The said letter reads as under: Executive Director, Oil Co-ordination Committee, Scope Complex, 2nd floor, Core-8, Lodhi Road, NEW DELHI 110 003. Dear Sir, SUB: RELEASE OF HSD TO PROCESSORS This has reference to MOP NG s letter no.P-21017/14/93-Dist dated 11.05.94, P17011/16/93-Sup dated 23.5.95 and P17011/15/93-Sup dated 18.9.96 on the above subject. So far IOC has been releasing the supplies of HSD to the processing units as feed stock for the production of various speciality oils like Spray oil, White oil, Agarbathi oil, Textile oil, Honing oil, Antistatic oil etc. based on MOP NG s approval after the assessment by the Technical Evaluation Committee (TEC). Since effective 1.4.1998, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heet has been filed for period between 1997-2000. The guidelines of OCC dated 08.07.1991 had not found any change. Mr. Shastri had referred in his Fax message of no change in the guidelines for allocation of HSD to processors. According to him, HSD allocation to the processors is approved by the MoP NG based on the certification and recommendation of the TEC of the Oil Companies. The guidelines referred and relied upon does not reflect any certification and recommendation of the TEC to the oil companies, and, when a clarification was sought by P. Sudarsnam by a letter dated 23.08.1999, Mr. Shastri states before the C.B.I. that there was no change in the allocation policy and requested P.Sudarsnam of IOC not to make HSD supplies to the processors without the Ministry s allocation / Linkage, and, since clarification was sought by the E.D., IOC from OCC, reply was sent by OCC, which stated by Mr. Shastri, according to the existing guidelines available, the directions were to be followed by the oil companies necessarily, and according to him the clarification was in accordance with the existing guidelines of the Ministry, and, in the present case, to his clarification on behalf of OCC, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. It was further noted that since December, 1992, Naphtha import had been deccanalised and the same could be imported after obtaining special licence/approval from DGFT. The communication, on record, by the Ministry of MoP NG shows of private companies lifting of HSD from M/s. Indian Oil Corporation Ltd. only. 18.11 The C.B.I. while filing the F.I.R. has failed to take a clarification from the authorized person of the Ministry as to why the Circular dated 02.01.1981 was only addressed to IOCL for the utilization of HSD from Koyali Refinery and not for any other oil companies. While the guidelines of the OCC does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss requirements. 18.13 In view of this circular itself, there was no reason for the C.B.I. to file charge-sheet against any of the accused. None of the communications of the Ministry, except of 02.01.1981, for the utilization of HSD from Koyali Refinery, required any TEC recommendation for lifting of HSD from any other companies. The C.B.I. failed to take into account that the Ministry had never called for any clarification from any other company during the period between 1997 2000 in connection with the alleged facts noted in the F.I.R., the officers, who were working in the company, would go by the understanding of the Circulars. It would have been the functioning of the Ministry to specify the requirement of TEC recommendation for supply of HSD from other oil companies to the processors. The oil companies all throughout had been following the directions contained in the MoP NG circulars issued between the year 1988 to 1996, with clear understanding that TEC evaluation was not required to be carried out for supply of HSD as feedstock to processors for the manufacture of petroleum specialities. 19. The statement of Shri Dilip Dixit Dy. Commissioner, Sales Tax (Enforcement) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the firm exist at the place shown in the application, and, the aspect of manufacturing of goods and engagement in business activities etc. were verified later on, but initially the firm can get registered and start its business, and the firms on their request for the declared purpose were issued blank C-forms by the Sales Tax Officer of their jurisdiction. Mr. Dixit stated that the competent authority for registration certificate is the Sales Tax Officer of the registered branch, and the issuance of C forms is by the assessing officer of their jurisdiction, and the officer in-charge of assessment of that particular case; the procedure for issuance of C form would be that a new registered purchaser is issued 5 C-forms at the initial application subject to a bank guarantee for 37 months, and at the time of issuance of C-forms every next time, utilisation reports of the C-forms issued earlier is compulsorily obtained by the issuing authority, and the utilisation of C-forms is ensured in that form only and for the issuance of C-forms, basic formalities are to be observed and it is issued only to the registered purchasers under the CST Act. 19.3 Mr. Dilip Dixit in regard to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iracy. The learned Special Judge observed that as per the record, four oil companies are of Gujarat, Maharashtra and Madhya Pradesh and there is no evidence to show that the officers of the oil companies had gathered, or met sales tax officers or staff or purchasers with an intention to commit the alleged offence. 20.2 For the offence under the P.C. Act, the learned Special Judge found that there is no prima facie evidence to show that the applicants had accepted any gratification from any person as a motive or reward, and the applicants accused had followed all the instructions issued by the MoP NG and acted in discharge of the duties; no sanction has been brought on record by the C.B.I., while sanction has been refused against the officers of the oil companies and against refusal C.B.I. had written to Central Vigilance Committee, but the said committee to confirm the order of non-issuance of sanction against the officers of the oil companies and therefore, no summons were issued against those accused persons. 20.3 The learned Special Judge while discharging the accused had observed that the offence alleged to have been committed for the year 1997 to 2000, and F.I.R. was f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21.2 The communication by the oil companies dated 06.11.2000 regarding the circulars of the MoP NG reflects their understanding about those circulars of the Ministry. The officers of the Oil Companies were required to follow the circulars and as has been noted by the learned Special Judge, they have been consistently followed by all the oil companies and the circulars do not refer to, regular HSD. 21.3 The Petroleum and Natural Gas Regulatory Board Act, 2006 defines HSD under section 2(r) and section 2(zd) defines oil company, which read as under: 2(r):- high speed diesel means any hydrocarbon oil (excluding mineral colza oil and turpentine substitute), which conforms to such specifications for use as fuel in compression ignition engines, as the Central Government may, in consultation with the Bureau of Indian Standards, notify from time to time. 2(zd):- oil company means a company registered under the Companies Act, 1956 (1 of 1956) and includes an association of persons, society or firm, by whatsoever name called or referred to, for carrying out an activity relating to petroleum, petroleum products and natural gas. 21.4 By the Circular, the Ministry had in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the test to determine a prima facie case would naturally depend upon the facts of each case and it is difficult to lay down a rule of universal application, and, where the materials placed before the Court disclose grave suspicion against the accused which has not been properly explained, the Court will be fully justified in framing a charge and proceeding with the trial. Further observed that, by and large however, if two views are equally possible and the judge is satisfied 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 right to discharge the accused. 22. This Court finds that the Special Judge has not committed any error in discharging the accused. 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. 23. In view of the reasons given herein above, the orders passed by the learned Special Judge discharging the accused respondents herein are just and correct, the findings are in accordance to the documents on record, the accused are rightly discharge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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