J&K Prevention Of Corruption Act | Mere Misuse Of Position By Public Servant Without Dishonest Intent Not 'Abuse' U/S 5(1)(d): High Court

“.. The use of words by "corrupt or illegal means" or by "otherwise abusing his position as public servant appearing in the Section (Supra) suggests dishonest element on the part of the public servant himself or while obtaining a valuable thing or pecuniary advantage for a third person… the court explained while adding,

“.. words “otherwise abusing his position as public servant also suggests that it does not confine merely to misuse of his position as a public servant, but such misuse has to be with a dishonest mind. The abuse of position by a public servant, thus, in order to come within the mischief of Section 5(1) (d) must necessarily be dishonest for obtaining a valuable thing or pecuniary advantage for himself or for any other person”

Justice Javed Iqbal Wani made these observation as the court quashed an FIR filed by the Anti-Corruption Bureau (ACB) against one Raj Singh Gehlot, a chartered accountant and promoter of Ambience Towers Private Limited (ATPL), over allegations of corruption in securing a ₹300 crore loan for his company.

The controversy arose from a term loan of ₹258 crore sanctioned to ATPL by J&K Bank in 2015, later increased to ₹300 crore. The ACB alleged that the loan was sanctioned based on unregistered lease deeds, violating bank norms, and causing undue pecuniary benefit to ATPL. It further claimed that the bank's failure to obtain registered lease agreements before disbursal of the loan, coupled with discrepancies in lease terms, reduced the loan's eligibility to ₹195.89 crore.

The petitioner argued that the loan, sanctioned for a shopping-cum-office complex in Rohini, Delhi, followed all regulatory norms and that no financial loss was caused to J&K Bank. He further argued that the forensic audit commissioned by the bank supported this claim, finding no evidence of fund diversion or fraudulent practices. Despite this, the ACB registered an FIR alleging criminal conspiracy and abuse of power which was being assailed by the petitioner through the instant petition.

Court's Observations:

In order to address the critical question of whether the allegations in the FIR disclosed any offense under the relevant provisions of law the court made extensive observations on the scope of abuse under Section 5(1)(d) and the ingredients required to establish criminal conspiracy under Section 120-B of the RPC.

The court emphasized that for a public servant's actions to fall under the mischief of Section 5(1)(d), there must be a dishonest element aimed at securing a valuable thing or pecuniary advantage and reasoned that dishonest intention can be inferred from the facts and circumstances of each case, but mere procedural lapses or deviations, absent evidence of dishonesty, cannot attract criminal liability.

“.. perusal of the impugned FIR inasmuch as the incriminating material collected by the investigating agency during the course of investigation so far manifestly tend to show that the offences alleged to have been committed by the petitioner herein are not made out on a plain reading, in that, it is evident that the allegations levelled in the complaint instead seemingly are constituting at the most a procedural lapse committed by the bank officers/officials in discharge of their duties”, the court said.

Justice Wani clarified that actions reflecting business judgment or administrative decisions, even if flawed, could not be equated with abuse unless accompanied by a dishonest motive.

Addressing the allegations of conspiracy under Section 120-B RPC, the court reiterated that an agreement to commit an illegal act or to achieve a lawful object through illegal means is essential. Merely leveling allegations without specifics regarding the who, what, and how of the conspiracy is insufficient, the court said and added that conspiracy must be supported by tangible evidence, not assumptions or conjectures.

Referring to the principles laid down in State of Haryana v. Bhajan Lal and subsequent judgments to highlight the limited scope for interference in criminal proceedings the court emphasized that courts must carefully examine whether the allegations disclose a cognizable offense and whether the proceedings are justified or malicious.

Based on these consideration the court deemed it proper to exercise its inherent power and hence quashed the FIR in so far as the petitioner was concerned.

Case Title: Raj Singh Gehlot Vs The Anti-Corruption Bureau

Citation: 2024 LiveLaw (JKL) 352

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