Jammu & Kashmir High Court Refuses To Quash FIR In Asha Kit Scam, Says Can't Stifle Genuine Prosecution

The Jammu & Kashmir and Ladakh High Court has refused to quash the FIR registered by Vigilance Organization (Now ACB) in Asha Kit Scam, observing that the allegations in the FIR clearly disclose commission of cognizable offence and therefore, it would not be open to the Court to stifle a genuine prosecution.

The case relates to purchase of medicines at exorbitant rates by the Director Health Services, Jammu from companies that had been permanently de-registered or blacklisted.

Justice Sanjay Dhar was hearing the plea moved by- verification board member Deepak Kapoor, the then managing director (MD) of Bengal Chemicals and Pharmaceuticals Limited Suprakash Kundu, the then MD of Karnataka Antibiotics and Pharmaceuticals Limited Suhas Laxman Phadke and the then director (finance) of Hindustan Antibiotics and Pharmaceuticals limited Sitaram Vaidya- challenging the FIR registered for offences under Section 5(1)(d) read with Section 5(2) of J&K Prevention of Corruption Act, 2006 and Section 120-B RPC. 

Drugs kits were allegedly purchased from Central Public Sector Enterprises (CPSEs) in deviation from the guidelines, without considering the approved medicines list. Many medicines in the kits did not fall within the approved list, even the tender opening committee approved high rates quoted by all bidders, without conducting market surveys or negotiations in utter disregard of the discounts provided by the National Pharmaceutical Pricing Authority, the bench recorded.

Addressing the contention raised by the Managing Directors of the CPSEs regarding vicarious liability in criminal law, the court observed that even if the CPSEs are implicated in the alleged crime, the petitioners in their capacity as Managing Directors cannot escape investigation and prosecution. The petitioners, as Managing Directors, were involved in a criminal conspiracy where they appointed representatives to negotiate with the Director Health Services for the supply of drug kits and as a result of this conspiracy, certain unqualified private companies supplied the drugs and gained undue benefits from the Directorate of Health Services, causing a loss to the State exchequer, the bench said. 

"These allegations against the petitioners/Managing Directors are in their personal capacity, so it is not a case where they are being prosecuted in respect of the acts committed by the Companies of which they happen to be the Managing Directors. The question, whether these allegations relating to conspiracy leveled against the petitioners/ Managing Directors are established after investigation of the case, is a matter which can be decided only after the investigation is completed and the case is considered by the Special Judge for framing of charges", the bench observed.

Court was of the view that when considering a petition to quash an FIR, its role is limited to determining whether the allegations in the FIR indicate the commission of a cognizable offence and it is not obligated to analyze the merits of the allegations.

The power of quashing criminal proceedings has to be exercised very sparingly and with circumspection and that too in the rarest of rare cases and the Court should not embark upon an enquiry as to the reliability or genuineness or otherwise of the allegations, the bench underscored.

Based on these considerations the bench found the petition devoid of any merit and dismissed the same.

Case Title: Suhas Laxman Phadke & anr Suprakash Kundu Deepak Kapoor Vs State of J&K

Citation: 2023 LiveLaw (JKL) 134

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