Bombay High Court
TAPAS BASU AND ORSversusTHE INSPECTOR OF POLICE
- Decided
- Disposal
- Disposed Off
- Bench
- ABHAY MANTRI
Holding
Exoneration in departmental adjudication does not bar criminal prosecution where prima facie evidence of conspiracy and fraud exists, so the discharge application is rejected.
Summary
The applicants, senior officials of MSTC Ltd., filed a revision seeking discharge from a criminal case alleging a Rs 500‑crore fraud, contending that the FIR did not name them and that they had been exonerated in a departmental enquiry. The Special Judge had rejected their discharge application after considering witness statements and prima facie evidence of a conspiracy. The respondents argued that the adjudication findings are independent of criminal proceedings and that the applicants had materially participated in the fraud. The Court examined the precedent of Ashoo Surendranath Tewawri and the principles laid down in Radheshyam Kejriwal, concluding that exoneration in an administrative enquiry does not preclude criminal prosecution where sufficient evidence exists. Consequently, the revision application was dismissed, and the discharge order upheld.
Issues considered
- Whether an applicant can be discharged from criminal proceedings on the ground that the FIR does not disclose their name and they were exonerated in a departmental enquiry.
- Whether findings in adjudication or departmental proceedings are binding on a criminal trial.
- Whether the failure to annex the charge‑sheet to the revision application defeats the application.
- Whether the material on record prima facie establishes participation in a conspiracy warranting trial.
Legislation cited
Subjects
- criminal revision
- discharge application
- departmental enquiry
- exoneration
- prima facie evidence
- conspiracy
- fraud
- MSTC
- Prevention of Corruption Act
- adjudication proceedings
- criminal prosecution
- independence of proceedings
Judgment
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Digitally
signed by
VINA
VINA
ARVIND
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ARVIND KHADPE
KHADPE Date:
2026.01.27
CRIMINAL APPELLATE JURISDICTION
17:37:54
+0530
CRIMINAL REVISION APPLICATION NO. 158 OF 2017
1 Tapas Basu
Indian resident
Age 59. R/o 13/1, Sarkhel Para
Lane, Bally, Howrah, 711201
2 Malay Sengupta
Indian resident
Aged 68 yrs, Indian Inhabitant,
residing At ‘Tapovan’,Block H,
Baishnavghata Patuli Township
Kolkata.
3 Utpal Sarkar
Age 59, r/o Indian resident
88, P.K. Dutta Sarani
-Bhadrakali, Hooghly 712232 … Applicants
Versus
1 Inspector of Police
Anti Corruption Bureau, CBI,
Mumbai
2 The State of Maharashtra … Respondents
----
Mr. Siddhant Choudhari i/b. Mr. Mandar M. Goswami for the
Applicants.
Mr. Amit Munde, Special Public Prosecutor with Ms. Jai Vohra for
CBI, ACB, Mumbai.
Ms. Shilpa G. Talhar, APP for Respondent – State.
----
CORAM : ABHAY J. MANTRI, J.
DATE : 17th JANUARY, 2026
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ORAL JUDGMENT :-
1. The learned Advocate Mr. Siddhant Choudhari h/f Mr.
Mandar M. Goswami submitted that Mr. Goswami is not available.
Therefore, sought time to argue the matter. However, on perusal of
the record, it appears that the impugned order was passed on 14 th
December, 2016, and the Application was filed on 7th March, 2017;
since then, the same is pending. No stay order has been granted in
favour of the Applicants. But the record indicates that the matter has
been kept pending and adjourned on one or the other grounds.
Therefore, I am not inclined to adjourn the old matter.
2. On the other hand, the learned Special Prosecutor for the
CBI strongly opposes granting an adjournment as the matter is an
old one and he has instructions to work out the old matters on a
priority basis. He also submitted that the Applicants have not
annexed the entire copy of the chargesheet/statement of witnesses
along with the Application. It is to be noted that since 7 th March,
2017, the matter has been pending, which itself indicates that the
Applicants are not interested in prosecuting it on that ground alone;
the Application has to be dismissed. Having considered the above
facts, the request to adjourn the matter is refused.
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3. Heard. Rule. Rule made returnable forthwith and heard
finally by consent of the learned counsel for the respective parties.
4. The original Accused Nos. 8, 9, 10 are challenging the
order dated 14th December, 2016, passed by the learned Special
Judge, CBI, Mumbai (for short, ‘the learned judge’), in Special Case
No.22 of 2013, whereby rejecting the Application filed by them for
discharging them from the Special Case.
5. The learned Advocate for the Applicant vehemently
contended that FIR does not disclose the names of the Applicants,
nor is any iota of evidence found against them in the charge sheet to
frame the charge against them. Hence, he urged that, on the said
ground alone, the applicants are entitled to discharge themselves
from the case. He further argued that Applicant No.1 Tapas Basu,
who is Accused No.10, was exonerated from the departmental
enquiry initiated by the concerned office. Therefore, the Applicant
No.1 is entitled to discharge from the present case. During the
argument, he has drawn my attention to the order dated 30 th May,
2016, passed in enquiry No. Ref. No. P&T:07:030:14:186 conducted
by the enquiry officer, i.e. the Chairman cum Managing Director &
Disciplinary Authority. (Which is at page No. 145 of the Petition.)
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6. To buttress his case, he relied upon the Judgment in
Ashoo Surendranath Tewawri Vs. Deputy Superintendent of Police, EOW,
CBI, (2020) 9 SCC 636, and points out Paragraph 13 of the said
Judgment, and submitted that in view of the law laid down in the
said Judgment, the Applicant No.1 is entitled to discharge, as the
allegations made in the departmental enquiry and in the Criminal
proceedings are the same. As such, he urged that the Application be
allowed.
7. On the contrary, the learned Special Public Prosecutor
strongly opposed the Application and contended that the order
passed by the learned Special Judge is just and proper and no
interference is required in it. He has drawn my attention to
paragraphs 12 and 13 of the impugned Judgment, and submitted that
the learned Judge has considered the statement of witnesses
Mahendra Kumar Joshi and Jayesh Desai, and after considering the
same, observed that prima facie material appears against the
Applicants in the present case and therefore rejected the
Application. He further canvassed that on the relevant time all
Applicants were holding key posts, i.e. Applicant No.1 was General
Manager, Applicant No. 2 was the Chairman and Managing
Director, Applicant No.3 was the Deputy General Manager, Finance
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and Audit along with other accused persons had made a conspiracy
and caused loss to MSTC to the tune of Rs. 500 crore and thereby
cheated the MSTC. The material collected on record prima facie
indicates that they entered into a criminal conspiracy with other
accused persons and committed fraud amounting to more than Rs.
500/- Crores. Therefore, he urged that no interference is required in
the impugned order.
8. He further pointed out paragraph no.12 of the Judgment in
Ashoo Surendranath Tewawri (supra) and submitted that ‘the findings
against the person facing prosecution in the adjudication
proceedings is not binding on the proceeding for criminal
prosecution, and therefore even though assuming that Applicant
No.1 was exonerated from the departmental enquiry, he is not
entitled to seek discharge from the present proceedings, hence, he
submitted that Application be rejected.
9. Having heard the learned Advocate for both the parties and
having gone through the impugned order, and record it appears that
the learned Special Judge dealt with the statements recorded by the
witnesses, and after considering the material on record, has passed
the detailed order. I would like to reproduce relevant paragraphs 12
and 13 of the said order :-
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“12. It is worth noting that the accused are allegedly involved in a
conspiracy to dupe the MSTC. The secrecy is the hallmark of
a conspiracy, & there can be hardly any direct evidence of
conspiracy. Mainly, there is circumstantial evidence to
prove the conspiracy. The circumstances against the present
accused are that the fraud was indeed committed in a
transaction in which the accused played an important role.
The circumstance is that a person who was not registered with
IRDA was appointed as an insurance consultant/broker . The
accused persons are justifying that act by saying that he
was already working as an insurance consultant of STC.
However, if anything wrong is done by any person, it does
not mean that the same wrong done by others is
justifiable. Another circumstance is that one of the
accused, namely Jayesh Desai, is the director of the
exporter company, i.e. Joshi Bulions, and he also had
connections with the buyer companies. PW-15, Mahendra
Kumar Joshi, has stated that he was the owner of Joshi
Bulions & has sold the goodwill to the accused, Jayesh
Desai. PW-19 Rohit Pandya has stated that the accused
Jayesh Desai is 100% shareholder of M/s. Superior
General Trading FZE. This firm is shown as a buyer firm
in the charge sheet. So also, the charge sheet reveals that
the accused Jayesh Desai was also the owner of firms
M/s. Leo Diamond, M/s. Himalaya Diamond, M/s. Golden
Stock Electronics, which was the identified buyer. The
question arises how the same person can be an exporter
as well as an importer. If there was a business deal wherein
the exporter himself acted as the importer, then the inference
is that the MSTC only acted as a financier under the disguise
of exporting the goods itself. It is further to be noted that, as
per clause 11(d) of the MOU, it was the responsibility of
the associate companies to ensure that the buyers pay the
price & they were responsible for the loss, if any. This
again shows whether the MSTC acted as a financier or
exported the goods itself. It is further to be noted that
witness Dayal Munda, who was DGM (Administration),
MSTC, has stated that the business of jewellery export was
new and he was reluctant to accept the proposal, but there
was pressure from CMD and GM (F&A), and hence the
action was started.
13. This is not the stage of evaluating the circumstances in detail.
In my opinion, the prosecution should be given an
opportunity to adduce the evidence & then only any decision
as to the culpability of the accused is required to be made.
Thus, considering the gravity of the offence, the aforesaid
circumstances & the fact that the accused were an important
chain in the transaction wherein the fraud of about Rs. 500
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crores was committed, in my opinion, the accused should be
put to trial. Hence order.
ORDER
1. The discharge application Exh.54 is rejected.”
10. A bare perusal of the said order, it appears that the learned
Judge has categorically held that the material on record prima facie
indicates that the Applicants, along with other Accused persons,
were involved in the present crime. Also, a chain of transactions
wherein the fraud of about Rs. 500 Crores was committed, and
therefore rejected the Application.
11. The learned APP during the course of argument also
pointed out that the draft charge submitted by the investigating
officer and pointed out paragraph/clause 12 of the said charge,
which reads thus:-
“12 That investigation reveals that the accused directors of the
aforesaid six associate firms entered into a criminal conspiracy
with the accused public servant, namely Shri Malay Sengupta,
the then Chairman and Managing Director of M/s. MSTC Ltd.,
Shri Tapas Basu, General Manager (F & A). M/s MSTC Ltd. and
Shri Utpal Sarkar, Dy. General Manager (F&A) Operation of M/s
MSTC Ltd. and other accused persons and in pursuance of the
said criminal conspiracy purchased the jewelleries from various
local sellers and made the export to the buyers at UAE identified
and arranged by Shri Jayesh Desai and Mrs. Gul Raihna Omer
on the understanding that they would accept the documents on
2% commission of the invoice value without having any genuine
business. It is also revealed that the consignments of gold
jewellery were received by the two consignees, namely M/S
RKM General Trading of Jayesh Desai and M/S. Bin Karam
of Dubai, who cleared the consignments from the UAE
customs. In pursuance of the criminal conspiracy Shri Jayesh
Desai and M/s Bin Karam disposed of the gold Jewellery in
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the open market at UAE without supplying it to the buyers
who accepted the documents and diverted the sale proceeds
of the said consignments as per the directions of Shri Prem
Kumar Sharma, Shri Shishir Dharkar and Mrs. Gul Raihana
Omer and paid them 2% commission for abetting them in
their endeavour to commit crime. The documents accepted by
the approved buyers on the commission of 2% of the invoice
value, and their signature, were identified by their bankers in
the UAE, and were sent back through the buyers' bankers to
the bankers of MSTC. After the receipt of the bill of
acceptance, MSTC released 80% of the total export value to
the above-said six associates. The total payments made to the
six accused associates during the year 2008-09 are as under:
12. Perused the Judgment in Ashoo Surendranath Tewawri
(supra) wherein facts were that “the trial Court found that since no
sanction was taken under the Prevention of Corruption Act, the
offences under that Act cannot, therefore, be proceeded with and
against the appellant therein, and therefore the Appellant therein
was discharged.” Similarly, in paragraph 13, it is observed that the
allegations in the adjudication proceedings as well as the
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proceedings for prosecution were identical, and the exoneration of
the person concerned in the adjudication proceedings is on merits. It
was also found on merit that “there was no contravention of the
provisions of the Act in the adjudication proceedings; therefore, it
was observed that the trial of the person concerned would be an
abuse of the process of the Court”.
13. Similarly, in the said Judgment, the Hon’ble Apex Court,
after referring to the various Judgments, in paragraph 12, has culled
out the ratio of those decisions which were referred to in paragraph
38 of the Judgment in Radheshyam Kejriwal Vs. State of W.B. (2011) 3
SCC 581, which reads thus:-
12. After referring to various judgments, this Court then culled out
the ratio of those decisions in para 38 as follows:
(Radheshyam Kejriwal case, SCC p. 598)
"38. The ratio that can be culled out from these decisions
can broadly be stated as follows:
(i) Adjudication proceedings and criminal
prosecution can be launched simultaneously;
(ii) Decision in adjudication proceedings is not
necessary before initiating criminal prosecution:
(iii) Adjudication proceedings and criminal
proceedings are independent in nature to each other:
(iv) The finding against the person facing
prosecution in the adjudication proceedings is not
binding on the proceeding for criminal prosecution:
(v) Adjudication proceedings by the Enforcement
Directorate is not prosecution by a competent court of
law to attract the provisions of Article 20(2) of the
Constitution or Section 300 of the Code of Criminal
Procedure;
(vi) The finding in the adjudication proceedings in
favour of the person facing trial for an identical violation
will depend upon the nature of the finding. If the
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exoneration in adjudication proceedings is on a technical
ground and not on merit, prosecution may continue; and
(vii) In case of exoneration, however, on merits
where the allegation is found to be not sustainable at
all, and the person held innocent, criminal prosecution
on the same set of facts and circumstances cannot be
allowed to continue, the underlying principle being the
higher standard of proof in criminal cases."
14. In Clauses (iii) and (iv), it is categorically observed that
adjudication proceedings and criminal proceedings are independent
in nature to each other, and the finding against the person facing
prosecution in the adjudication proceedings is not binding on the
proceeding for criminal prosecutions. Based on the said
observations themselves, the Applicants are not entitled to claim
discharge in the present proceedings.
15. It is pertinent to note that the learned Advocate for the
Applicants, prima facie, failed to point out from the record how the
allegations in the adjudication proceedings and criminal prosecution
are identical.
16. He has also failed to produce a copy of the chargesheet
along with the Application. Apart from that, the charge sheet in the
criminal prosecution case was not available before the enquiry
officer in the departmental enquiry; therefore, I do not find any
substance in the contention of the learned Advocate for the
Applicants that Applicant No.1 is exonerated in the departmental
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enquiry. So, Applicants are entitled to discharge from the present
Criminal proceedings.
17. Thus, having considered the facts in the present case
and material on record as well as in view of the dictum laid down in
paragraph 12 of the Judgment, I am not inclined to the submissions
made by the learned Advocate for the Applicants that the Applicants
be discharged from the criminal proceedings. Therefore, in my view,
the law laid down in Ashoo Surendranath Tewawri (supra) is hardly of
any assistance to the Applicants in support of their contention to
seek discharge from the criminal trial.
18. On the contrary, it appears that from the record that the
learned Judge, after considering the material on record, has rightly
held that the material on record prima facie indicates that the
Applicants, along with other Accused persons, were involved in the
present crime and also a chain of transactions wherein the fraud of
about Rs. 500 Crores was committed.
19. It also reveals from the findings of the Trial Court that
allegations in the case in hand are grave and serious, wherein fraud
of about Rs. 500 Crores has been committed, and material on record
prima facie indicates the complicity of the Applicants along with
other accused persons in the present crime. Therefore, non-
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disclosure of the names of the Applicants in the FIR would not
entitle them to claim discharge in the proceedings.
20. To sum up the above discussion, it emerges that the
Applicants failed to point out that no material was collected against
them by the prosecution to implicate them in the present crime. On
the contrary, material on record prima facie denotes the complicity
of the Applicants, along with other accused persons, in the present
crime.
21. As a result, the Revision Application, being bereft of
merits, stands dismissed. No order as to costs. Rule stands
discharged. Inform the order to the learned Trial Court accordingly.
(ABHAY J. MANTRI, J.)
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