Delhi High Court Refuses To Quash FIR Against Matrix Cellular, Others Accused Of Selling Substandard Oxygen Concentrators During COVID-19

The Delhi High Court has refused to quash an FIR registered against Matrix Cellular, its CEO and others accused of selling defective and substandard oxygen concentrators at inflated prices during the COVID-19 pandemic.

Justice Dinesh Kumar Sharma said that it is not appropriate to quash the proceedings at the stage while investigation is still pending.

“The factum of oxygen concentrators not meeting the parameters as set by the WHO and Government and whether the petitioner had the knowledge that the oxygen concentrators are sub-standard ones and did not meet the requirements is still under investigation. The investigation is still pending, and therefore, it would not be apposite to quash the proceedings at this stage,” the Court said.

The plea was moved by Matrix Cellular and other accused persons which include its CEO Gaurav Khanna and others namely Gaurav Suri, Satish Sethi, Hitesh and Vikrant. 

It was the prosecution's case that in 2020, the company shifted to dealing in COVID-19-related items and imported and sold products like oximeters, oxygen concentrators, and KN-95 masks, making a profit of Rs. 40,000–Rs. 42,000 per oxygen concentrator. It was alleged the oxygen concentrators did not meet WHO guidelines, which require oxygen purity levels of 82%-96%.

The quashing was sought arguing that the concentrators were legally purchased and sold through Matrix's 'X Factor' online platform and distributors using legitimate banking channels, ensuring transparency and compliance with tax obligations.

It was submitted that the FIR lacked evidence to substantiate cheating charges and that Matrix operated within the law, paying taxes and utilising legitimate channels.

It was also contended that while granting bail to accused in 2021, the trial court had observed that no prima facie case of cheating was evident and that the charge was added to justify the arrests.

Furthermore, it was submitted that the FIR made no mention of sub-standard product quality and the said claim was raised only later.

Rejecting the plea, the Court said though the investigation was still pending, however the charges under the Essential Commodities Act had admittedly been dropped by the Delhi Police.

However, it said, that the allegations of selling the un-tested oxygen concentrators to get wrongful gains, taking undue advantage of the crisis and acute shortage of oxygen supply caused due to the pandemic, and compelling needy persons to part with their hard-earned money cannot be ignored.

“The margin of profit was very high, especially in view of the ongoing pandemic. Further, the fact that the oxygen concentrators sold by the petitioners were not in compliance with the required parameters recommended by the WHO to help patients suffering from COVID-19 is still to be investigated,” the Court said.

Observing that during the COVID-19 pandemic, access to reliable and effective oxygen concentrators was critical, the Court said it would not be apposite to quash the proceedings at this stage.

“However, it is made clear the petitioner is at liberty to approach the appropriate forum after the completion of the investigation. The contentions raised by the petitioner are kept open for consideration at a later stage. No expression made herein shall tantamount to be expression on the merits of the case,” the Court said.

Title: MATRIX CELLULAR INTERNATIONAL SERVICES LIMITED AND ORS v. STATE NCT OF DELHI

Citation: 2024 LiveLaw (Del) 1268

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