Loss Of ₹19.50 Crores Caused To Railways: Delhi HC Refuses To Quash FIR Against Caterers In Rail Neer Scam Case

The Delhi High Court has refused to quash the FIR against two catering companies in a case relating to the Rail Neer Scam saying that a loss of around Rs. 19.50 crores was caused to the Railways.

A Single Bench of Justice Yogesh Khanna held, “The averments made in chargesheet that they could not have utilized the PDWs other than the Rail Neer without prior permission of the Railway authorities; the petitioner company(ies) have been using bottles priced at Rs.4.66 to Rs.8.16 per bottle and have been claiming reimbursement at the rate of Rs.15.00 per bottle viz the price of Rail Neer; the letter dated 02.05.2016 of Central Vigilance Commission (CVC) noting there were some irregularities in allowing the supplying of PDWs other than Rail Neer and in passing of such bills by the officials; a letter dated 13.12.2016 of Ministry of Railways, Government of India noting a loss of Rs.19.50 Crores approx has been caused to the Railways”

The Bench noted that no notice was ever given to the Railways for the short supply of bottles and that the punitive action by the Railways was never taken for reasons best known to them which cannot be ignored at such a stage.

Senior Advocates Mahesh Jethmalani and Vikas Pahwa appeared on behalf of the petitioners while SPP Nikhil Goel and Advocate Kartik Kaushal appeared on behalf of the CBI (Central Bureau of Investigation).

Brief Facts -

A batch of petitions was filed seeking quashing of the FIR registered in the year 2015 for the offences under the provisions of the Prevention of Corruption Act (PCA) and setting aside all consequential orders/proceedings arising and emanating therefrom. The dispute was if it was mandatory for the licensee (Caterers) engaged in Rajdhani/Shatabdi trains to provide only Rail Neer Packaged Drinking Water (PDW) or if they could provide PDW of another company.

It was alleged that during the period 2013-14, the said caterers deliberately supplied PDW other than Rail Neer despite huge availability of the same and that they caused a loss of Rs. 19.55 crores approx. to the government exchequer. This led to undue pecuniary gain to the caterers as they claimed reimbursement for Rail Neer PDW which they allegedly did not supply in the trains.

The High Court in view of the above facts of the case observed, “… there was never any complaint by petitioners qua less quantity of Rail Neer being supplied to them and secondly prior permission as was required to be obtained to use other PDW was never obtained. As per statement of witnesses Rail Neer was available in plenty at the railway station itself but deliberately was not picked up by the petitioners, thus causing monetary loss.”

The Court said that it cannot exercise its extraordinary power under Section 482 of the Cr.PC. to conduct a mini-trial and determine the evidentiary value of the findings in the chargesheet.

“The Court cannot appreciate the evidence at this stage to say the accused is not likely to be convicted or no useful purpose would be served by prolonging the proceedings. … . In the present case the discharge of public servant on account of invalid sanction will not absolve the petitioners from the offence allegedly committed under the IPC”, also said the Court.

The Court further noted that the case alleged allotted quota given to the petitioners was not lifted deliberately and instead the petitioners used their own bottles, half the price of Rail Neer, and claimed reimbursement at the rate of Rs.15/- per bottle (of Rail Neer), thus causing loss to the Public Exchequer.

Accordingly, the Court dismissed the pleas and refused to quash the FIR against the petitioners.

Cause Title- Ambuj Hotels & Real Estate Pvt. Ltd. & Ors. v. Central Bureau of Investigation (Neutral Citation: 2023:DHC:4284)

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