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Coal India Limited

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When the FIR can be quashed ? =1. Where the allegations made in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima-facie constitute any offence or make out a case against the accused. 2. Where the allegations in the First Information Report and other materials, if any, accompanying the F.I.R. do not disclose a cognizable offence, justifying an investigation by police officers Under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code. 3. Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused. 4. Where, the allegations in the F.I.R. do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated Under Section 155(2) of the Code. 5. Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused. 6. Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party. 7. Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge. 109. We also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the Court will not be justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the F.I.R. or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the Court to act according to its whim or caprice.”

1 Reportable IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO. 1356 OF 2004 Union of India & Ors. …….. Appellants Versus Ramesh Gandhi ……… Respondent J U D G E M E N T Chelameswar, J. 1. This appeal arises out of a judgment of the High Court of Calcutta dated … Continue reading

Dismissing the appeals, the Court HELD: 1. The FIR lodged by the CBI contained allegations of mis-utilization of and sale of the allotted coal by the appellants in the open market. As a matter of fact, in the charge sheet which was filed after investigation in the Court of Special Judge, CBI Cases, it was stated that a search was conducted at the plant premises of the appellants in June 2009 by the CBI officials in the presence of independent witnesses during which the plants of the appellants were found to be non-functional and the names of employees/workers as per the Attendance Register as well as other documents relating to sale of finished goods as produced by the appellants were found to be fake and fabricated as full particulars, addresses etc. were not provided in the records in respect of such employees/workers engaged and the purchasers of finished goods and thus the quantity of coal issued to the appellants-companies was not utilized in their plants but sold in the black-market. It was thus clear that there were materials with the CBI in support of the allegations made in the FIR against the appellants that they were not utilizing the allotted coal in their plants but were selling the same in black-market, but these materials could not be placed before the Court because the CBI was not impleaded as a respondent in the writ petitions filed by the appellants. The Coal India Ltd. and respondent no.1 are Government Companies and are bound by the policy decisions of the Government of India, Ministry of Coal, and since under the new Coal Distribution Policy formulated pursuant to the observations of the Supreme Court in *Ashoka Smokeless Coal India (P) Ltd., mis-utilization of allotted coal and black-marketing of such coal by the appellants was to be checked, the Coal India Limited and respondent no.1 did not act arbitrarily or unreasonably to suspend the supplies of coal under FSA to the appellants, if they entertained a serious doubt on the basis of the FIR lodged by the CBI that the supplies of coal, if made, to the appellants may be mis- utilized by the appellants and may be sold in the open market. [Paras 11-12] [529-B-F; 530-B-D] *Ashoka Smokeless Coal India (P) Ltd. & Ors. v. Union of India & Ors. (2007) 2 SCC 640, relied on. 2. It is settled law that even in the domain of contractual matters, the High Court can entertain a writ petition on the ground of violation of Article 14 of the Constitution when the impugned act of the State or its instrumentality is arbitrary, unfair or unreasonable or in breach of obligations under public law. However, the public authorities are essentially different from private persons. Even while taking decision in respect of commercial transactions, a public authority must be guided by relevant considerations and not by irrelevant ones. [Para 13] [530-E-G] Sterling Computers Ltd. v. M/s M & N Publications Limited and Others (1993) 1 SCC 445, relied on. Kumari Shrilekha Vidyarthi v. State of U.P. (1991) 1 SCC 537; ABL International Ltd. & Anr. v. Export Credit Guarantee Corporation of India Ltd. & Ors. (2004) 3 SCC 553; Noble Resources Ltd. v. State of Orissa & Anr. (2006) 10 SCC 236, referred to. 3. It is true, as was held by the single judge of the High Court, that Clause 13(1) of FSA provides that in the event the appellants fail to pay any amount including any interest due to respondent no.1 under FSA within a period of 30 days of the same falling due, respondent no.1 shall have the right to suspend supplies of coal to the appellants, but Clause 13(1) does not stipulate that in no other contingency the respondent no.1 can suspend supplies of coal under FSA to the appellants. Moreover, Clause 13(1) of FSA enumerates the three options available to respondent no.1 in case the dues towards the price of coal and interest is not paid by the appellants and it does not provide for the different contingencies in which respondent no.1 can suspend the supplies of coal to the appellants. Respondent no.1 will also have the right to suspend supplies of coal to the appellants where it has doubts that the appellants may mis-utilize the allotted coal and divert or sell the same in open market because, as would be clear from Clause 4.4 of the FSA and the new Coal Distribution Policy decision dated 18.10.2007, the very object of FSA as well as policy decision of the Government is to allot coal to the appellants for utilization in their plants and not for any other purpose. Therefore, if the FIR lodged by the CBI, which is a premier investigation agency of the Central Government, created serious doubts that the allotted coal may be diverted or sold in the open market instead of being utilized in the plants of the appellants, respondent no.1 would be within its rights to suspend the supplies of coal to the appellants till the doubts are cleared in appropriate proceedings. The Division Bench of the High Court was, therefore, right in setting aside the judgment and order of the single judge quashing the order of respondent no.1 suspending supplies of coal to the appellants. [Paras 14, 15] [531-B- H; 532-A] Case Law Reference: (2004) 3 SCC 553 referred to Para 6 (2006) 10 SCC 236 referred to Para 6 (2007) 2 SCC 640 referred to Para 10 (1991) 1 SCC 537 relied on Para 13 (1993) 1 SCC 445 relied on Para 13 CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 8037-38 of 2010. From the Judgment & Order dated 27.10.2009 of the High Court of Judicature at Patna in LPA Nos. 1265 & 1266 of 2009. Jaideep Gupta, M.L. Varma, S.B. Upadhyay, Anupam Lal Das, Abhishek Kumar, Gaurav Agrawal, Manish Kumar Saran, Rajendra Krishna, Ratan Kumar Chaudhary, Santosh Mishra, Dharmendra Kumar Sinha for the appearing parties.

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOs._8037-38_ of 2010 (Arising out of S.L.P. (C) Nos. 30344-30345 of 2009) M/s Sushila Chemicals Pvt. Ltd. & Anr. …… Appellants Versus Bharat Coking Coal Ltd. & Ors. …… Respondents J U D G M E N T A. K. PATNAIK, J. Leave granted. … Continue reading

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