P.Sundaraparipooranan v. Union of India

2006-2007, the first accused, pursuant to criminal conspiracy withthe petitioners/A-2 and A-3 to cheat Government of India, withoutvalid authorisation, entered into an agreement with the secondaccused for supply of Measles Seed (Edmonston's), Rubella Virus Seed(RA-27-WISTAR) and Human Diploid Cell Line and for manufacture ofMeasles and Rubella Vaccine; thereby, caused wrongful loss to theGovernment of India to the tune of Rs.3.25 crores and correspondingwrongful gain to themselves. By setting in motion the task ofinvestigation, the respondent/CBI collected materials in the form ofdocuments and communications between the parties and the Governmentand, while the investigation is at progress, the present petition hasbeen preferred before this Court to quash the proceedings of therespondent/CBI. 2. Mr.B.Sriramulu, learned Senior Counsel elaborately argued thematter by referring to various transactions between the parties andbackground thereof from the inception till the culmination of theproceedings at the hands of the CBI, in his endeavour to demonstratethat it is a deserving case to grant the prayer sought for.At the outset, learned Senior Counsel submitted that even if theallegations as put forth in the First Information Report are presumedto be true, on the basis of the materials collected during the courseof investigation, a prima facie case is not made out and it is anexceptional case warranting exercise of the inherent powers of thisCourt under Section 482 of the Code to quash the investigation at thethreshold as otherwise, the petitioners, who all along acted in goodfaith and with bona fide intention and whose transparent transactionsare borne out by records, would suffer great prejudice and damage.To substantiate such contention, it is submitted that thepetitioners are engaged in pharmaceutical business and importingpharmaceutical raw materials with technical know-how for manufactureof vaccines. After acquiring technological expertise in the field,the petitioner firm entered into agreement with foreign companies forimporting Measles and Rubella Vaccine Seeds. Substantive materialsin this regard were produced by the petitioners during the course ofinvestigation. For decades together, the Government purchased MeaslesVaccine by spending approximately Rs.300 crore per annum from aprivate company viz., M/s.Serum Institute of India, Pune,(hereinafter referred to as 'Private Unit') for the purpose ofExpanded Programme on Immunisation (EPI) of the Government of India.Even though Pasteur Institute of India (in short 'Institute')possesses requisite equipment, manpower and resources for manufactureof the vaccine, it does not have raw-materials and technical know-howto commence production. Since facilities and infrastructure areavailable with the Institute, the Government and the first accusednegotiated with the Private Unit for supply of raw-materials andsharing technical expertise, but, such endeavour did not materialise; https://hcservices.ecourts.gov.in/hcservices/ with the result, the first accused was frequently asked by theGovernment to explore other possibilities to secure the raw materialsand expertise from other sources, and particulars are available tosubstantiate the same. The first accused, only after obtaining dueapproval, placed orders with the petitioners, who, in order to complywith the request made, took immediate initiatives to import rawmaterials and technology from foreign countries. The petitioners wereinformed by the first accused that the Institute is an autonomousbody and competent to enter into agreements with the petitioners.Consequently, an agreement dated 27.11.2006 was entered into betweenthe petitioners and the Institute at Coonoor and immediatelythereafter, supply of raw materials and technical expertise waseffected. It was agreed that the Institute would pay a sum ofRs.3.25 crores and, after the commencement of commercialmanufacturing, the profit would be divided between the petitionersand the Institute in the ratio of 70:30. The petitioners imported rawmaterials to the value of US $ 5,00,000 equivalent to Rs.2.50 cores.Raw materials along with necessary documents relevant for productionof vaccines were supplied. Following such transaction, severalletters, dated 28.11.2006, 29.11.2006, 14.12.2006, 15.12.2006 and25.06.2007, were addressed to the first accused to apprise that thepetitioners performed their part of the contract in accordance withthe terms and conditions. Since the Institute had only paid Rs.2.05crores as against Rs.3.25 cores, for recovery of the balance, thepetitioner firm filed a money suit in C.S. No.43 of 2009 before theHigh Court and since the Institute threatened to annul the agreement,the same was challenged by filing a Suit in O.S. No.117 of 2008 onthe file of Sub Court, Nilgiris at Coonoor and the proceedings arepending. A Notice was also addressed to the first accused and, inreply thereto, it was stated that the first accused did not obtainapproval from the Finance Committee and the Governing council andfurther, a request was made to the petitioners to annul theagreement. It was represented by the petitioners that the Instituteis an autonomous body and the contract was entered into between themin accordance with law and further, the document has been duly signedby the Director of the Institute. Thus, on the basis of the materials collected duringinvestigation, there is nothing to suggest or substantiate anyviolation of terms by the petitioners, but, diametrically, thedocumentary materials, on the fact of it, give a strong suggestionthat the complaint has been filed with mala fide intention to fastencriminal liability on the petitioners. Further, even if there is anyviolation, in view of the nature of agreement, it is abundantly clearthat the dispute involved is purely of civil in nature particularlywhen there is not even an allegation of dishonest intention madeagainst the petitioners. By virtue of Article-11(c) of theagreement, the first accused has got every power and authority toexecute, deliver, perform the agreement and carry out the obligations https://hcservices.ecourts.gov.in/hcservices/ on behalf of the Institute. It is the object of the Government tocommence manufacturing of vaccine by the Institute which possessesenough man power and infrastructure so as to break the monopoly ofthe Private Unit, to reduce the cost and to ensure safety. Since theInstitute only required raw materials and technology, the continuousefforts taken by the Government culminated in the agreement betweenthe first accused and the petitioners. The object of commencement ofproduction by a Public Sector Undertaking is laudable and it is notknown as to why, on flimsy reasons, a request for annulment didemerge from the first accused pursuant to the communications receivedby him from the authorities of the Government. A careful examinationof the circumstances behind registration of the FIR having regard tothe various aspects adverted to above would go to show that the FIRwas registered at the instigation of the Private Unit since the saidUnit lost the deal of Rs.300 crores as a consequence of the agreementarrived at between the first accused and the petitioners and thereby,the monopoly hitherto enjoyed by it was put to an end.Learned Senior Counsel, by pointing out that a sum of Rupees OneCrore was deposited subsequent to the order passed in Crl.O.P.No.25762 of 2008 granting anticipatory bail to the first petitioner,on instructions, submits that the petitioners are willing to depositthe balance money with the Institute in the event of return of rawmaterials and the technology supplied to it and also to withdraw thecivil litigation pending so that a quietus can be given to the wholedispute; therefore, in a case of this nature where every aspect isborne out by records, it is absolutely necessary that the FIR as wellas the criminal proceedings are quashed. 3. Per contra, Mr.N.Chandrasekaran, learned Special PublicProsecutor for CBI Cases, submits that the case has been registeredagainst the petitioners and the first accused viz., Director of theInstitute at Coonoor, for offences punishable under Sections 120-Bread with 420 IPC. and Section 13 (2) read with 13(1)(3) of thePrevention of Corruption Act and FIR of the case is pending beforethe Special Court for CBI Cases, Chennai.The total amount involved in the transaction is Rs.3.25 croresand it is provided in the agreement that profit would be shared atthe ratio of 70:30 between the petitioners and the Instituterespectively. Pursuant to the agreement, the Institute unauthorisedlypaid Rs.2.05 crores to the petitioners, thereby, the petitioners wereunduly favoured resulting in wrongful loss to the Government. A1extended undue favour to A2 since the wife of A1 and that of A2 areDirectors of the sister concern of the petitioner firm by nameM/s.Vatsan Bio Pharma Pvt. Limited, Chennai. Also, one of theDirectors of the petitioner-firm is closely associated with the wifeof A1 and further, the petitioner firm has tie up with the sisterconcern and the contract was given because of the close association https://hcservices.ecourts.gov.in/hcservices/ and acquaintance between the aforesaid persons. The first accused,being a public servant, abused his official position and committedcriminal misconduct and due to his act, the Institute suffered hugeloss to the tune of Rs.3.25 crores. Since the source informationdisclosed that, prima facie, the offences aforementioned have beencommitted by the petitioners in collusion and conspiracy with A1, thecase came to be registered and investigation is being pursued.Subsequent to registration of the case on 27.09.2008, the CBIconducted search at the residential and office premises of the firstaccused and the petitioners. Ultimately, about 30 documents came tobe recovered from,(i) Pasteur India Limited, Coonoor;(ii) Ministry of Health the and Family Welfare,Government of India;(iii) NCG Vaccine Laboratory, Chennai;(iv) Drugs Controller of India, Delhi and Chennai;(v) Serum Institute of India, Pune; (vi) Registrar of Companies, Chennai, etc.,and those documents are under scrutiny. Any commission or omission onthe part of A-1 and the petitioners will not amount to civil disputeand the enquiry revealed commission of cognizable offences,justifying the investigation and there are sufficient grounds toproceed against the petitioners and A-1. To the above effect, adetailed counter affidavit has also been filed. According to thelearned Special Public Prosecutor for CBI Cases, this is not a fitcase to quash the proceedings. 4. I have meticulously examined the materials available onrecord in the light of the rival submissions made on either side todecide the question involved viz., as to whether, in the given casewhere the entire transaction is borne out by records, it is necessaryto quash the proceedings pending before the respondent/CBI byinvoking the inherent powers of this Court available under Section482 of the Code of Criminal Procedure.Before proceeding further, it is pertinent to point out thatthis Court need not traverse into the allegation pertaining to thealleged offences committed under the provisions of Prevention ofCorruption Act insofar as the petitioners herein are concerned, for,probably, it might be with reference to the first accused since heacted in his official capacity as Director of the Institute/PublicSector Undertaking. The Private Unit was supplying Measles Vaccine for decades and,in order to procure the vaccines from the said Unit, the Governmentof India was spending approximately Rs.300 crores per year. TheInstitute is a Government of India Undertaking in which the firstaccused was the Director. Since huge money was spent towardspurchase of vaccines under the Expanded Programme on Immunization(EPI), Government of India addressed the first accused to explore the https://hcservices.ecourts.gov.in/hcservices/ possibilities for production of the vaccine with the facilitiesavailable at the Institute. Admittedly, only under suchcircumstances, steps were taken by the first accused to procure rawmaterials and technical expertise for production of Measles Vaccineat a lower cost. The transactions between the petitioners and thefirst accused and the communications between the first accused andthe Government of India have been enclosed in the typed set of papersfiled before this Court by the petitioners. Those documents are notcontroverted by the respondent and in fact, the same were collectedfrom the accused during the course of investigation. 5. It is of much relevance to refer to the documents in order tobetter understand the actual state of affairs.a) With reference to transfer of technology pertaining toMeasles Vaccine from the Private Unit to the Institute at Coonoor, byletter/representation dated, 02.06.2005, the first accused conveyedthe following to the Chairman, Vaccine Production Board, DirectorateGeneral of Health Services, Nirmal Bhavan, New Delhi-11," It would not be out of place to mention here thatthe production of Anti Rabies Vaccine (sheep brain) hasbeen stopped at PII, Coonoor and the facilities set-upfor the said purpose are at present lying idle and hence,the same can be used for production of Measles vaccine inthe event of transfer of technology and seed strain fromSerum Institute of India, Pune. Moreover, the scientificpersonnel at PII who were involved in the production ofARV (sheep brain) can be engaged in the production ofMeasles Vaccine. Hence, the transfer of Measles Vaccine seed strainalong with the technology from SII to PII would ensurethat the entire country demand for Measles Vaccine can bemet. I, therefore, request that the possibility oftransfer of Measles Vaccine seed strain and technologyfrom SII to PII may kindly be examined at the earliest".b) A copy of the aforesaid letter was marked to the ManagingDirector of the Private Unit who, by reply dated 08.06.2005,addressed to the Chairman, Vaccine Production Board, New Delhi,expressed his views as follows:-" I was most surprised and annoyed to receive a copyof letter dated 2nd June addressed to your goodself byDr.N.Elangeswaran, Director on "Addl. Charge", PasteurInstitute of India, Coonoor. In this connection, I wouldlike to draw your attention to the following points:-First of all the letter is misleading for reasonsbest known to Dr.Elangeswaran. For example, he statesthat the entire country's need for Measles Vaccine can bemet if he/Pasteur Institute is given the opportunity to https://hcservices.ecourts.gov.in/hcservices/ manufacture Measles Vaccine, whereas the factual positionis that not only is India self-sufficient, but, becauseof the untiring efforts and pioneering work done by ourCompany, the world's demand for Measles Vaccine has beencompletely met with following accolades which have beenrecognized internationally:. . . . . " From the above, it is clear that the first accused, in his capacityas Director, suggested a via-media to slash the expenditure beingincurred due to the monopolised business in the field by the PrivateUnit and when such suggestion fell to the adverse interest of thePrivate Unit, they raspingly reacted by posing numerous questionsabout the viability of the scheme suggested. c) By letter dated 30th January, 2006,the Government of Indiainformed A-1 as follows:- " I am directed to refer to your letter No.A-50011/21/2005-ADMN dated 5th September, 2005 on the abovesubject and to say that the possibility of getting thestrain from other sources may be found out. It has beendecided that the matter may be discussed on 6th February,2006 in the chamber of Joint Secretary (KR)."d) The Government, in its efforts and endeavour to haveproduction by the Institute at Coonoor, also addressed therepresentative to India, WHO (World Health Organisation), throughletter dated 22nd February, 2006, by marking a copy to the firstaccused and the contents thereof are extracted below:-" In order to be self-sufficient in the field ofvaccines required for Routine Immunization Programme,Government of India proposes to create facilities forproduction of Measles Vaccine at Pasteur Institute ofIndia, Coonoor. Presently, Measles Vaccine is producedin India solely by the Serum Institute of India, Pune,which is in the private sector. However, the SerumInstitute of India, Pune has declined to transfer thetechnology and seed strain to the Pasteur Institute ofIndia, Coonoor.In view of the above, you are requested to kindlyexplore the possibility of arranging for transfer oftechnology for the production of Measles Vaccine and seedstrains from other countries to the Pasteur Institute ofIndia, Coonoor. " https://hcservices.ecourts.gov.in/hcservices/ e) Not able to get any positive outcome, again, the Government,through its letter dated 05.04.2006, addressed the first accused forsubmitting an alternate proposal and the body of the letter isextracted below:-"Measles Vaccine is included in the NationalImmunization Programme and availability of safe,effective and affordable measles vaccine is essential.At present this vaccine is being produced only in oneinstitution in the private sector. You are requested tokindly explore the feasibility of production of measlesvaccine in your Institution. A project proposalindicating timeliness and estimated budget requirementsmay please be submitted."On the basis of the above materials, it could be discerned that, asprojected by the petitioners, the Government was communicating withthe first accused to explore the possibilities which in a wayalleviate the burden of its dependency on the Private Unit andsimultaneously for production of vaccines by its own Unit viz., theInstitute at Coonoor. 6. Ultimately, the first accused, in his official capacity,transacted with the petitioners, who, in order to fulfil theobligations on their part, contracted with WISTAR Institute ofAnatomy and Biology based at United States for import of raw-materials and technology relating to manufacture of measles vaccines.Subsequently, both the petitioners and the Institute represented byits Director, the first accused, entered into the agreement on27.11.2006 and the following clauses relating to 'financial details'and 'representations and warranties' are relevant to be mentioned, " 6.1.(a) Transfer Fee (Seeds, Cell Line andTechnology):-The total costs for the Seed and Cell Line to betransferred to the Institute under this agreement isRs.3.25 Crores (Rupees Three Crores and twenty five lakhsonly). The Institute shall pay the above cost to theSponsor in Eight Instalments within a period of 4 monthsas mentioned below:. . . . .The Institute has all necessary power and authorityto execute, deliver, and perform this Agreement and tocarry out its obligations under this Agreement, and theexecution, delivery and the performance of this Agreementand the consummation of the transactions contemplated bythis Agreement have been duly authorized by all necessaryaction on the part of the Institute. " https://hcservices.ecourts.gov.in/hcservices/ While so, the petitioners received a letter dated 24.06.2008 fromthe first accused, to the following effect:-"This is to inform you that the Ministry of Healthand Family Welfare vide its letter No.V.11012/7/2005-CC&V(pt) dated 5.6.2008 has requested the undersigned toinitiate action to annul the agreement entered into bythis Institute with your company for the purchase ofseeds of Measles and Rubella Vaccines on the grounds thatthe said agreement has not been approved by the Ministry.The Ministry has further requested the undersigned toinitiate action for recovery of Rs.1.2 Crores withinterest from your company on the grounds that thepayment was not authorized by the Ministry." Probably, the first accused forwarded the letter dated 24.06.2008since he received the following communication, dated 05.06.2008, fromthe Government," It is seen from the Statement of Expenditure,submitted by you for the financial year 2007-08 for PII,Connoor that you have incurred an expenditure of Rs.1.2crores for the purchase of seeds of Measles and RubellaVaccines.It is also seen that you have entered into anagreement with M/s.Green Signal Biopharma Ltd., forpurchase of seeds of Measles and Rubella Vaccines andsharing of profit with the said Company as a result ofproduction of these Vaccines in PIIC.Neither the agreement was approved by the Ministryof Health & Family Welfare nor the payment of Rs.1.2crores was authorised by the Ministry. In view of thesefacts, you are requested to initiate necessaryproceedings for annulling this agreement and recovery ofRs.1.2 crores with interest from M/s.Green SignalBiopharma Ltd."No reason has been assigned in the letter dated 24.06.2009 exceptstating that the agreement has not been approved by the HealthMinistry. It is curious to note that an agreement that has beenentered into by the Institute with the petitioners in the year 2006was sought to be annulled in the middle of 2008. The alacrity andseriousness usually expected from the Governmental Authorities aretotally absent in this case, suggesting something different about theevents that had taken place. 7. Thus, assessing the issue involved with the materialsavailable, it appears that the first accused, who was often addressedby the Government to identify an alternate mode for production of https://hcservices.ecourts.gov.in/hcservices/ measles vaccine by their own unit, ventured to procure materials andsupply of technology only on the approval of the Government of India,for, even the communication addressed to the first accused on05.06.2008 does not find fault with his action in entering into theagreement with the petitioners nor it states that the agreement wasnever placed before the competent authority but the only observationis that the agreement was not approved by the Ministry and paymentmade was not sanctioned.As regards the allegation that there is close nexus betweenthe firm of the petitioners and the wife of the first accused, novalid materials have been collected to substantiate undue gain to thepetitioner and wrongful loss to the Government. It must also be taken note of that the only Private Unit havingmonopoly in the field declined to supply the raw materials and theirreply to the suggestion of the first accused must be viewed with allseriousness having regard to the sequence of events. Even the firstline of the reply letter, dated 8th June, 2005, reflects the surpriseand 'annoyance' expressed by the Private Unit for the alternate modeto commence production in the public sector.8. Added to this, this court could fathom rather a strangeattitude on the part of the Investigating Agency in dealing thecase. It appears that, based on source information, preliminaryinvestigation was conducted by the Investigating Officer without evenapproval by the competent authority. When approval was sought for,for registration of case, the Joint Director, CBI, SZ, Chennai,expressed his displeasure for submitting the verified sourceinformation report straightaway without obtaining approval of thecompetent authority for registration and verification of the SourceInformation Report. The Investigating Officer concerned was cautionedand the superior officer was instructed to ensure that theInvestigating Officers do not resort to such practice in future. The conduct of the Investigating Officer in suo motu taking uppreliminary enquiry without even approval from the authorityconcerned and proceeding further on his self-initiative and finallysubmitting a report for approval suggests that all was not well evenfrom the inception. Contemporaneous materials gathered would go toshow that the only party whose interests were put at stake by theagreement was the Private Unit, who, even for the suggestion offeredby the first accused, responded immediately through letter dated08.06.2005 expressing their displeasure and annoyance against thefirst accused for his initiative to commence production at thepremises of the Institute at Coonoor. Admittedly, a sum of Rs.300crores was being spent every year by the Government towards the https://hcservices.ecourts.gov.in/hcservices/ scheme. Instead of spending Rs.300 crores every year by sparing thesaid amount with the Private Unit, if production is commenced by theInstitute in collaboration with the firm of the petitioner,definitely, there would be huge loss to the monopolised business ofthe Private Unit. Again, it must be pointed out that the replyletter sent immediately by the Private Unit in a way objecting to theproposal submitted by the first accused spells out deep meaning andcoupled with that, the rigour and vigour with which the Investigatingofficer attached to CBI acted without even getting approval from thehigher authority, would lead to a strong presumption that the actualsource might have emerged from the person whose interests were put atperil and that the investigating officer, with extraordinary zeal andenthusiasm, took up the investigation with mala fide intention. It is pertinent to point out that court, when it feels justand necessary, can always call for the case diary maintained by theInvestigating Officer and that an accused person is not entitled tolook through the information contained therein. On a perusal of the'Source Information File', I find that though it is submitted to theJoint Director (S), Chennai, that an 'information' has been received,the 'source' is not even disclosed. As to who passed on theinformation and whether the source is 'oral' or 'written' stillremains to be a mystery. The D.S.P. concerned proceeded with thepreliminary enquiry conveniently ignoring the mandatory requirementof obtaining permission from the competent authority. Normally, evenbefore proceeding against an accused person, by conducting apreliminary enquiry, the Investigating Officer would verify andrecord the credibility of the information and the person from whomthe information emerged and the reason behind the same. It seems, inorder to save someone or to avoid adverse comments, vital particularshave been suppressed. When everyone hails and glorifies the benefitsof the Right to Information Act, the court, which is vested with theright to examine the entire case diary/CD File, is denied such vestedright in a smart manner ie., by furnishing the File without theinformation/details as pointed out above. An Investigating Officer,who is expected to act with a sense of responsibility, should not bepermitted to answer in an evasive manner that investigation of a casewas taken up on source information and such source cannot bedisclosed. The Joint Director (S), CBI SZ, Chennai, while expressingdispleasure about the way in which the initial investigation was doneby the Investigating Officer concerned without authority, in allprobability, should have directed the investigation to be donehenceforth by some other officer but, for the reasons best known tothe said official, he restricted himself with a routine instructionto the S.P.I. to ensure that the I.Os. do not resort to such practicein future. The other aspect is, when several communications emergedfrom the Government, in particular the letter dated 05.06.2008 https://hcservices.ecourts.gov.in/hcservices/ addressed to the first accused by the Government for annulment of theagreement, in all probability, being fully ware of the transactionsbetween the petitioners and the first accused, the officers concernedof the Government of India should have initiated criminal proceedingsagainst the first accused and the petitioners, if the Government wasin fact aggrieved by the acts of the accused. I am at a loss tounderstand as to why the enquiry was taken up suo motu when theauthorities of the Government themselves did not consider theagreement as an outcome of criminal conspiracy between the firstaccused and the petitioners. They have kept quiet with an insensateapproach towards the events in spite of knowing well about theagreement executed between the accused much earlier. Curiously, thecommunication requesting the first accused to annul the agreementdoes not accuse A-1 for executing the agreement with the petitionersrather advises him to take steps to recover the amount available withthe petitioners with interest. When there was not even a whisper bythe Government of India or its officers finding fault with the firstaccused or his acts, the wayward approach of the InvestigatingOfficer attached to CBI in conducting a suo motu enquiry in a casewhere one of the parties lost a contract worth Rs.300 crores andthereby aggrieved to a great extent, assumes great significancesuggesting that the investigation itself has been taken up with malafide intention and ulterior motive particularly when there is nosubstantive material to suggest wrongful loss to the Government andcorresponding gain to the accused. In such circumstances, the onlyconclusion that could be reached is even if the allegations aresubstantiated, the facts may constitute a civil wrong and theingredients of the criminal offences are wanting insofar as thepetitioners herein are concerned. 9-(i). In a case law reported in (2002) 1 SCC 241 (S.W.Palanitkar v. State of Bihar), with reference to the inherent powersof the High Court available under Section 482 Cr.P.C., the SupremeCourt observed thus:-"27. ..... Exercise of inherent power is availableto the High Court to give effect to any order under CrPC,or to prevent abuse of the process of any court orotherwise to secure the ends of justice. This being theposition, exercise of power under Section 482 CrPC shouldbe consistent with the scope and ambit of the same in thelight of the decisions aforementioned. In appropriatecases, to prevent judicial process from being aninstrument of oppression or harassment in the hands offrustrated or vindictive litigants, exercise of inherentpower is not only desirable but necessary also, so thatthe judicial forum of court may not be allowed to beutilized for any oblique motive. When a person approachesthe High Court under Section 482 CrPC to quash the very https://hcservices.ecourts.gov.in/hcservices/ issue of process, the High Court on the facts andcircumstances of a case has to exercise the powers withcircumspection as stated above to really serve thepurpose and object for which they are conferred."(ii) The said aspect was elaborately considered in a subsequentdecision reported in 2007 (12) SCC 1 (Inder Mohan Goswami v. State ofUttaranchal), where the Supreme Court referred to its earlierdecisions and the principles evolved therein, and the relevantportions are extracted below:-" 31. This Court in Madhavrao Jiwajirao Scindia v.Sambhajirao Chandrojirao Angre & Others, 1988 (1) SCC692, observed in para 7 as under: “7. The legal position is well settled that when aprosecution at the initial stage is asked to be quashed,the test to be applied by the court is as to whether theuncontroverted allegations as made prima facie establishthe offence. It is also for the court to take intoconsideration any special features which appear in aparticular case to consider whether it is expedient and inthe interest of justice to permit a prosecution tocontinue. This is so on the basis that the court cannot beutilised for any oblique purpose and where in the opinionof the court chances of an ultimate conviction are bleakand, therefore, no useful purpose is likely to be servedby allowing a criminal prosecution to continue, the courtmay while taking into consideration the special facts of acase also quash the proceeding even though it may be at apreliminary stage.”32. In State of Haryana v. Bhajan Lal & Others, 1992Supp. (1) SCC 335, this Court in the backdrop ofinterpretation of various relevant provisions of CrPCunder Chapter XIV and of the principles of law enunciatedby this Court in a series of decisions relating to theexercise of the extraordinary power under Article 226 ofthe Constitution of India or the inherent powers underSection 482 CrPC gave the following categories of casesby way of illustration wherein such power could beexercised either to prevent abuse of the process of thecourt or otherwise to secure the ends of justice. Thus,this Court made it clear that it may not be possible tolay down any precise, clearly defined and sufficientlychannelised and inflexible guidelines or rigid formulaeand to give an exhaustive list to myriad kinds of caseswherein such power should be exercised: “(1) Where the allegations made in the firstinformation report or the complaint, even if they are https://hcservices.ecourts.gov.in/hcservices/ taken at their face value and accepted in their entiretydo not prima facie constitute any offence or make out acase against the accused.(2) Where the allegations in the first informationreport and other materials, if any, accompanying the FIRdo not disclose a cognizable offence, justifying aninvestigation by police officers under Section 156(1) ofthe Code except under an order of a Magistrate within thepurview of Section 155(2) of the Code.(3) Where the uncontroverted allegations made in theFIR or complaint and the evidence collected in support ofthe same do not disclose the commission of any offenceand make out a case against the accused.(4) Where the allegations in the FIR do notconstitute a cognizable offence but constitute only anon-cognizable offence, no investigation is permitted bya police officer without an order of a Magistrate ascontemplated under Section 155(2) of the Code.(5) Where the allegations made in the FIR orcomplaint are so absurd and inherently improbable on thebasis of which no prudent person can ever reach a justconclusion that there is sufficient ground for proceedingagainst the accused.(6) Where there is an express legal bar engrafted inany of the provisions of the Code or the Act concerned(under which a criminal proceeding is instituted) to theinstitution and continuance of the proceedings and/orwhere there is a specific provision in the Code or theAct concerned, providing efficacious redress for thegrievance of the aggrieved party.(7) Where a criminal proceeding is manifestlyattended with mala fide and/or where the proceeding ismaliciously instituted with an ulterior motive forwreaking vengeance on the accused and with a view tospite him due to private and personal grudge.”In the very same Judgment, the supreme Court, while explaining theconcept of dishonest and fraudulent intention, observed as follows:-"42. On a reading of the aforesaid section, it ismanifest that in the definition there are two separateclasses of acts which the person deceived may be inducedto do. In the first class of acts he may be inducedfraudulently or dishonestly to deliver property to anyperson. The second class of acts is the doing or omittingto do anything which the person deceived would not do oromit to do if he were not so deceived. In the first class https://hcservices.ecourts.gov.in/hcservices/ of cases, the inducing must be fraudulent or dishonest.In the second class of acts, the inducing must beintentional but need not be fraudulent or dishonest.Therefore, it is the intention which is the gist of theoffence. To hold a person guilty of cheating it isnecessary to show that he had a fraudulent or dishonestintention at the time of making the promise. From hismere failure to subsequently keep a promise, one cannotpresume that he all along had a culpable intention tobreak the promise from the beginning."In the light of the principles propounded by the Hon'ble Apex Courtand the facts and circumstances involved, this Court is of theconsidered view that this a fit case where the proceedings pendingagainst the petitioner must be quashed.10. By pointing out the fact that though the agreement wasentered into for Rs.3.25 crore, the petitioners received only Rs.2.05crores and further, pursuant to the orders passed in Crl.O.P.No.25762 of 2008 (dt.30.10.2008) granting interim bail, a sum of Rs.1crore was deposited; learned Senior Counsel, on instructions, submitsthat the petitioners are willing to deposit the balance amount viz.,Rs.1.05 crore received from the Institute in spite of the fact thatcivil litigation is pending. In view of such submission and takingnote of the fact that the petitioners deposited Rupees One Crore,favouring the Institute, in Fixed Deposit, the Institute is atliberty to withdraw the same after collecting the F.D. Receipt lyingwith the Special Judge for CBI Cases, Chennai, who shall passappropriate orders in this regard by releasing the F.D. Receipt infavour of the Institute. Further, as per the undertaking given beforethis Court, the petitioners shall deposit the balance ie., Rs.1.05crore, with the Institute within three weeks from to-day. On suchdeposit being made, the Institute shall forthwith return back to thepetitioners the raw materials and the documents, if any, pertainingto the technical know-how supplied to them pursuant to the contract.11. Criminal Original Petition is ordered accordingly, and theproceedings in RC. No.47A of 2008 pending against the petitioners onthe file of the respondent/CBI are quashed. Connected MiscellaneousPetition is closed.JI.Sd/Asst.Registrar/true copy/Sub Asst.Registrar https://hcservices.ecourts.gov.in/hcservices/ To1. The Additional Superintendent of Police, CBI / ACB / Chennai.2. The Special Judge for CBI Cases, Chennai3. The Director, Pasteur Institute of India, Coonoor.4. Mr. N. Chandrasekaran, Spl Public Prosecutor for CBI Cases, High Court, Madras.+ 1 cc to Mr. B. Ravi, Advocate SR No.19770BK(CO)SR/4.5.2009ORDER in Crl.OP.No.4389 of 2009