1. The 2nd accused in C.C.No. 162/2016 on the files of the Enquiry Commissioner and Special Judge, Thalassery, arising out of Crime No. 3/2012 of VACB, Wayanad, has filed this Criminal Miscellaneous Case under Section 528 of the the Bharatiya Nagarik Suraksha Sanhita, 2023, seeking to quash the proceedings against him in the above case.

2. Heard the learned counsel for the petitioner and the learned Special Public Prosecutor in detail. Perused the relevant documents.

3. The allegation in the final report is that the 3rd accused, who was the Managing Director of the Mananthavady Tribal Plantation Co-operative Society Limited, popularly know as Priyadarsini Estate and also the RDO of Mananthavady, abused his official position and executed an agreement with the 2nd accused, with the assistance of the 1st accused, to purchase green tea leaves at a higher rate with extra cost for transportation, without obtaining Administrative Sanction and thus caused unlawful loss to Mananthavady Tribal Plantation Co-operative Society and thereby the 2nd accused obtained an unlawful gain to the tune of ₹22,63,324/- (Rupees twenty two lakh sixty three thousand three hundred and twenty four only) during the period from 2002 - 2003 to 2004 - 2005. On this premise, the prosecution alleges commission of offences punishable under Section 13(1)(d)(ii) r/w. 13(2) of the Prevention of Corruption Act, 1988 (hereinafter referred to as ‘PC Act, 1988’ for short) and under Sections 409 and 420 r/w. 34 of the Indian Penal Code (hereinafter referred to as ‘IPC’ for short) by the accused persons.

4. In this matter, the learned counsel for the petitioner canvassed quashment of the proceedings mainly relying on Annexure A2 order dated 01.04.2025 in Crl.R.P.No.753/2020, arising out of the same crime, whereby this Court discharged the 2nd accused – Sri.P.A. Deepthesh by allowing the revision petition. The learned counsel for the petitioner pointed out the findings of this Court in Annexure A2, particularly in paragraph Nos.9 to 13 of the order, and contended that the allegations against the petitioner herein are similar and in view of the findings in Annexure A2 order, none of the offences would prima facie lie against the petitioner, who is a contractor. Paragraph Nos.9 to 13 of Annexure A2 order are extracted as under:

                  “9. The materials produced by the prosecution would show that the agreement for the supply of green tea leaves between the petitioner and the 3rd accused was entered into without obtaining sanction from the Administrative Committee of the Society. To that extent there occurred a lapse on the part of not only the 3rd accused but also the 1st accused, who was the Secretary of the Society. That by itself may not amount to an offence under Section 13(1)(c) of the PC Act. If that to be an offence, public servant should have acted dishonestly or fraudulently and as a consequence of the act, there occurred misappropriation or obtaining of pecuniary advantage by himself or any other person. If accused Nos.1 and 3 entered into the agreement with the petitioner without ensuring purchase at the lowest price and that act was tainted with dishonest or fraudulent intention, it might amount to an offence inasmuch as the materials produced by the prosecution prima facie would show that the Society sustained a loss. Of course, the loss has been calculated based on the fluctuations in the market price of green tea leaves. But, dishonest intention could be attributed on the part of the petitioner, who was said to be the beneficiary, only if the society could purchase green tea leaves from other sources at a lower price.

                  10. Witness No.17 was the Divisional Manager in charge of the KFDC during the period 07.05.2013. He gave a statement to the investigating officer based on the records available in his offence. Going by his statement, green tea leaves were supplied by KFDC to the Society till 2001 and as an amount of Rs.6,39,603/- fell overdue, supply was stopped. It is seen that the KFDC could obtain that amount at the intervention of the District Collector only and KFDC did not supply green tea leaves after 2001. When the allegations in the final report is to the effect that green tea leaves could be purchased from the KFDC for a lesser amount than the cost agreed as per the agreement in question which was the price being notified by INDCOSERVE from time to time, the statement of witness No.17 goes against the case of the prosecution. In the light of the said statement, it cannot be said that the Society was in a position to purchase green tea leaves from the KFDC.

                  11. Of course, there are references to the effect that the market value of green tea leaves was less during the period. However, that cannot be a reason for a criminal prosecution when terms of agreement have already been put in writing, and subsequently only there occurred a fall in price. No criminal intention at the time of execution of the agreement can therefore be attributed. Be noticed that the INDCOSERVE is a co-operative federation under which so many co-operative societies in South India have functioned. When such an authoritative body fixes the price of green tea leaves, it cannot be said that agreeing to purchase green tea leaves at the price fixed by INDCOSERVE is a decision taken by the authorities in a mischievous manner.

                  12. In regard to the transportation charges, the stipulation in the agreement entered into with Sri.T.C.Varghese was carried in the agreement with the petitioner as well. It is pertinent to note that the Managing Director at the time of executing the agreement with Sri.T.C.Varghese was not accused No.3 here. When accused No.3 only followed the terms of the earlier agreement which was executed by his predecessor in office, attributing dishonest intention only on the basis of accepting such a term is without any basis. At any rate, the allegation that there occurred dishonest or fraudulent misappropriation of the fund of the Society on account of agreeing to the terms in the agreement dated 21.04.2004 is beyond reason. Prosecution of the petitioner on the basis of the aforementioned materials would not be a successful one.

                  13. The contention that the transportation charge ten years before was Rs.1.25/- per Kilogram cannot be countenanced since that plea is based on Annexure 3 which does not form part of the prosecution records. Therefore, that contention cannot be considered. Dehors that, the materials produced by the prosecution are insufficient to have a presumption that the petitioner had committed the alleged offences. Framing of charge against the petitioner and asking him to stand trial will only be an abuse of the process of law. Therefore, the impugned order in relation to the petitioner is liable to be set aside.”

5. Apart from that, it has been pointed out the fact that mere failure to get Administrative Sanction, by itself, is insufficient to find commission of offences under Sections 13(1)(d)(ii) r/w. 13(2) of the PC Act, 1988 and under Sections 409 and 420 r/w. 34 of IPC as found in Annexure A2. According to the learned counsel, the charges payable for green tea leaves is fixed by Tamilnadu Small Tea Growers' Industrial Cooperative Tea Factories' Federation Limited (INDCOSERVE). It is also pointed out that as per Annexure A3, payment for transportation charges was at the rate of Rs.1.25/- per Kilogram during 1993 and in the year 2004 also, the same rate was obtained irrespective of the hike in the fuel price. Therefore, according to the learned counsel for the petitioner, none of the offences would be attracted.

6. Whereas, it is submitted by the learned Special Public Prosecutor that, as per the audit report, the price for which purchase was made, including the transportation charges, was excessive and thereby a loss to the tune of Rs.22,63,324 was caused and in such a case, offences under Section 13(1)(d)(ii) r/w.13(2) of the PC Act, 1988 and as under Sections 409 and 420 r/w. 34 of IPC would attract prima facie. Therefore, quashment is liable to fail. The relevant contentions are stated in paragraph Nos.4, 5 and 6 which read as under:

                  “4. It is most respectfully submitted that subsequently Sri.T.C.Varghese ( The petitioner herein) Sri.P.V.Balan and Sri.K.Rohildas were arrayed as accused 3, 4 and 5 respectively in this case. After completion of the investigation two separate charge sheets were submitted as A-Charge and B-Charge before the Honourable Court of Enquiry Commissioner and Special Judge, Thalassery on 20-08-2015.

                  5. It is most respectfully submitted that in charge B of the above case, the charge against the accused is that on 01.11.2002 A3 Sri. P. V Balan (former Revenue Divisional Officer Mananthavady) by abusing his official position as a public servant, signed an agreement with A2 Sri. T. C Varghese with the aid and assistance of A1 Sri. M. K. Sreedharan (former Secretary Mananthavady Tribal Plantation Co-Operative Society Ltd. No. W 26) to purchase green tea leaves at higher rate and by paying extra cost for transportation without obtaining administrative sanction and thus caused unlawful loss to Mananthavady Tribal Plantation Co-Operative Society and allowed A2 to obtain unlawful gain of Rs. 22,63,324/- thus A1, A2 and A3 colluded and committed criminal misconduct by abusing their official position and caused unlawful loss to the society and unlawful gain to A2 during the period from 2002-03 to 2004-05 amounts to offences punishable U/s 13 (1) (d) (ii) R/w 13 (2) of PC Act 1988 and Section 409, 420 R/w 34 of IPC.

                  The Honorouble Court of Enquiry Commissioner and Special Judge, Thalassery accepted the charge sheet and assigned number as CC 162/2016.

                  6. It is most respectfully submitted that it is admitted that, it was not the duty of A2 (the petitioner herein) to obtain administrative sanction from the authority to purchase green tea leaves. It was the duty of A1 and A3. In this case A1 and A3 purposefully avoided sanction of the Administrative Committee as a result of the conspiracy between A1, A2 and A3. Their common intention was that purchase green tea leaves from A2 at an exorbitant rate and to cause undue pecuniary advantage to A2 Sri. T. C Varghese. It cannot say that A1 and A3 was ignorant about the procedure to be followed because Al was the then RDO Mananthavady and A3 was the Secretary of the Society, both of them had enough experience in their official capacity. The act of Sri. T. C Varghese (the petitioner herein) amounts cheating the society with common intention.

7. Coming to the crux of the matter, Annexure A2 order or the finding therein, arose out of the same crime, have not been challenged by the prosecution. On reading paragraph Nos.9 to 13 of Annexure A2, the allegations against the petitioner are similar. Be it so, there is no reason to take a contra view in the case of the petitioner. Therefore, for the reasons found in Annexure A2, the petitioner also is entitled to get the relief of quashment sought for.

In the result, this petition is allowed and all further proceedings in C.C.No.162/2016, pending before the Enquiry Commissioner and Special Judge, Thalassery, as against the petitioner, stand quashed.