The Allahabad High Court has handed over to the Central Bureau of Investigation (CBI), the probe regarding subsidy scam of more than Rs 48.18 lakh on purchase of fertilizers worth Rs 1200 crore in Fatehgarh (Farrukhabad).
A Single-Judge Bench of Justice Gautam Chowdhary passed this order on Thursday, while hearing an application under Section 482 CrPC, filed by Avinash Kumar Modi.
The application sought quashing of proceedings pending before the Chief Judicial Magistrate, Farrukhabad, charge sheet filed on November 15, 2019 and also the summoning order of September 10, 2021, passed in the case under Section 482 CrPC in case registered under Sections 409, 420, 467, 468, 471, 120-IPC at Police Station Kotwali Fatehgarh, District Farrukhabad.
As per the case, pursuant to the letters of Government of U.P. dated August 23, 2000 and August 14, 2000, with regard to scam of Rs 1200 crore in subsidy to the manufacturers of fertilizers, without supply of fertilizers by the manufacturers to the distributors, had been obtained from the Government thus wrongful loss had been caused to the State Exchequer and in compliance orders passed by Additional Chief Secretary, Agricultural Commissioner, the investigation was carried on by the then S.I. Kalyan Singh of Special Investigation Branch (Agriculture), Lucknow, in which it was revealed that during the financial years 1998-99 and 1999-2000, the sale and purchase of 3,396.025 mt. tonnes of rock phosphate and 6080.329 mt. tonnes of single super phosphate claimed by M/s Madan Madhav Fertilizers and Chemicals Pvt. Limited, Fatehgarh, was found false and thus embezzlement of Rs 48,18,243.04 had been calculated and the subsidy claimed from the Government on false and frivolous transactions.
As per the case, pursuant to the letters of Government of U.P. dated August 23, 2000 and August 14, 2000, with regard to scam of Rs 1200 crore in subsidy to the manufacturers of fertilizers, without supply of fertilizers by the manufacturers to the distributors, had been obtained from the Government thus wrongful loss had been caused to the State Exchequer and in compliance orders passed by Additional Chief Secretary, Agricultural Commissioner, the investigation was carried on by the then S.I. Kalyan Singh of Special Investigation Branch (Agriculture), Lucknow, in which it was revealed that during the financial years 1998-99 and 1999-2000, the sale and purchase of 3,396.025 mt. tonnes of rock phosphate and 6080.329 mt. tonnes of single super phosphate claimed by M/s Madan Madhav Fertilizers and Chemicals Pvt. Limited, Fatehgarh, was found false and thus embezzlement of Rs 48,18,243.04 had been calculated and the subsidy claimed from the Government on false and frivolous transactions.
In the scam, M/s Ujjwal Trading Company, was also found to be involved, of which the applicant is stated to be proprietor.
Counsel for the applicant submitted that the applicant is alleged to be the proprietor of M/s Ujjwal Trading Company, Jhansi which company is alleged to have supplied the rock phosphate and single super phosphate to M/s Madan Madhav Fertilizers and Chemical Ltd Fatehgarh and thereafter subsidy has been claimed from the Government.
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He further submitted that in fact, the proprietor of M/s Ujjwal Trading Company is Ashutosh Kumar Modi, who is the brother of the applicant but the said company was closed in the year 1994-95 due to non supply of rock phosphate and in this regard, the brother of the applicant has given a letter to the Investigating Officer, as is evident from the extract of parcha dated March 10, 2010.
He also submitted that U.N Modi, the uncle of the applicant was the Chartered Accountant of M/s Ujjwal Trading Company and it
appears that after shutting down of the said company, U.N Modi kept the firm alive on papers and transactions were done by him on behalf of M/s Ujjwal Trading Company without the knowledge of applicant and the proprietor, which resulted into prosecution of the company in the case.
The counsel for the applicant has next argued that by the stretch of no imagination, the applicant could be prosecuted since he has no concern with the said company and was not involved in any of the business transactions performed by the said company.
The counsel has also argued that M/s Madan Madhav Fertilizers and Chemical Ltd, which claimed subsidy has already been exonerated in the year 2012 in view of the fact that the subsidy has been granted in accordance with rules.
It is lastly argued that M/s Madan Madhav Fertilizers and Chemical Ltd has been exonerated and that the applicant, who is neither proprietor nor had any participation in the company can be prosecuted under the charged Sections and the applicant has been made scapegoat, therefore the entire prosecution against the applicant being malicious is liable to be quashed by the Court.
Per contra, Additional Government Advocate has opposed the application and argued that allegations made in the FIR makes out a prima facie case against the applicant and that the applicant was involved in alleged act of causing huge loss to the State Exchequer, hence the impugned proceedings are not liable to be interfered with by the Court.
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The Court observed that the matter pertains to the scam of Rs 1200 crores, committed in the year 1998-99, 1999-2000, with regard to the same, the FIR was lodged on September 10, 2004 against 20 accused persons. First charge sheet was submitted after a lapse of more than 13 years on November 15, 2019 against the applicant and one Chandra Bhan Verma, wherein it has been stated that investigation against one Mritunjay Kumar is going on.
As has been orally stated by AGA, that another charge sheet dated April 12, 2021 has been filed against three accused persons, Suresh Kumar Jain, Bhupendra Kumar Jain and Sharad Khera and in the said charge sheet too, the investigation against Mritunjay Kumar is stated to be pending consideration.
On October 6, 2004, which demonstrates the statement of Satendra Kumar Mishra, SubInspector-Economic-Wing, who had conducted the investigation reveals that G.C Katiyar, the then District Agriculture Officer, Farrukhabad, Ratan Kumar Singh Chauhan, the then Agriculture Director, Government of U.P, Ishwaku Singh Agriculture Director, Government of U.P Veerpal Singh the then Joint Agriculture Director (Supply) Rang Bahadur Singh, the then Junior Agriculture Director (General), Ganga Ram Additional Agriculture Director (General) Aditya Narayan Sinha, the then Joint Agriculture Director (Supply) Rang Bahadur Singh, the then Junior Agriculture Director (General), Ganga Ram Additional Agriculture Director (General) Aditya Narayan Sinha, the then Joint Agriculture Director (Supply) and Abhar Kumar Singh, Treasury Officer (Supply), Agriculture Directorate, Lucknow are responsible in providing wrong benefits to the said companies thus their act comes within the purview of Sections 467, 468, 471, 120-B IPC and Section 13 (2) of Prevention of Corruption Act but there is not even a whisper against them and they were neither interested nor any charge sheet has been filed against them, the Court noted.
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The Court also takes a serious note that FIR was lodged against as many as 20 accused persons but charge sheet dated November 15, 2019 (under challenge) has been filed against two accused persons and another charge sheet dated April 12, 2021 has been filed against three accused persons and the remaining 15 Dolphins accused persons have been exonerated by the Investigating Agency.
The Court said since the scam is of Rs 1200 crore, whereas the allegation of mis-appropriation of Rs 48,18,234.04/- has been levelled against the applicant but there is nothing on record to show, as to how and under what circumstances, M/s Madan Madhav Fertilizers and Chemical Ltd has been given clean chit and what has happened with regard to remaining Rs 1152 crores and thus it appears that the same has been misappropriated. The investigation appears to be defective and to unveil the Dolphins accused, who are untrapped and keeping in mind the mis-appropriation of huge amounts of public money, the Court is of the opinion that the matter requires comprehensive further investigation.
Accordingly, the Court directed that matter be further investigated by Central Bureau of Investigation (CBI) against the named accused persons in the FIR, as well as charge sheeted under scrutiny of the Court and a progress report with regard to the same shall be placed before the Court on the next date of listing.
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Manish Tiwary, Senior Counsel has stated that the interim order granted earlier may be extended. He further undertakes that the applicant will cooperate in the further investigation and shall not leave the country without prior permission of the Court.
“In view of statement of Manish Tiwary, Senior Counsel, the interim order dated February 11, 2022 shall continue to operate, till the next date of listing subject to condition that the applicant shall cooperate and participate in the investigation and shall not leave the country without prior permission of the Court,” the order read.
Case name: State vs Avinash Kumar Modi