No Mens Rea or Loss to State Exchequer: Punjab & Haryana High Court Quashes FIR in Cartage Policy Case

Punjab & Haryana High Court quashed FIR holding that allegations of fraud and corruption in the implementation of the Punjab Foodgrains Labour & Cartage Policy, 2020-21, lacked legal and factual basis. Justice Mahabir Singh Sindhu emphasized that the criminal proceedings initiated by the Vigilance Bureau amounted to an abuse of process, particularly in a contractual dispute.

"Criminal Allegations Cannot Be Used to Mask Contractual Disputes," Rules High Court
The FIR, lodged in August 2022 at Vigilance Bureau, Ludhiana, accused multiple individuals, including former Punjab Minister Bharat Bhushan Sharma @ Ashu, of amending the cartage policy to favor select contractors, thereby reducing competition and causing financial loss to the state. M/s Jagroop Singh & Sandeep Kumar, one of the contractors awarded tenders under the revised policy, were accused of colluding with the minister and supplying fake vehicle registration details.

1.    Alleged Amendment to Favor Select Contractors:
o    The FIR alleged that the "minimum turnover" clause added in the policy for 2020-21 excluded fresh participants. The petitioners contended that the policy was applied uniformly and approved at multiple administrative levels, including the state cabinet.
o    Justice Sindhu observed:“Merely because a policy amendment excludes certain participants does not imply mala fide intent, particularly when it has been upheld by a Division Bench of this Court.”
2.    No Evidence of Loss to State Exchequer:
o    The petitioner demonstrated that the food grains were transported properly using trucks, and any discrepancies in vehicle registration numbers were typographical errors.
o    The court noted: “There is no material to show that the government exchequer suffered any loss or that the petitioner acted with mala fide intent.”
o    Political Vendetta Allegation:The petitioners argued that the case was politically motivated to target Bharat Bhushan Sharma, a minister from the previous government. The court acknowledged this contention, referencing the lack of substantive evidence against the petitioners.
o    Comparison with Co-Accused:The court quashed the FIR against co-accused Paramjit Chechi on similar grounds in an earlier order. Noting that the allegations and role attributed to the petitioners were identical, the court held that their case warranted the same relief.
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Quashing the FIR
The court concluded that the criminal proceedings were initiated without proper verification of facts and lacked evidence of criminal intent or harm caused.

“Launching of prosecution ... amounts to misuse of powers by the Bureau for reasons unknown to law.”

1.    FIR No. 11/2022, registered under Sections 409, 420, 467, 468, 471, 120-B of IPC and Sections 7, 8, 12, 13(2) of the Prevention of Corruption Act, 1988, was quashed against the petitioners.
2.    All consequential proceedings arising from the FIR were set aside.
This ruling underscores that allegations of corruption and fraud must be substantiated with clear evidence, especially when they stem from contractual or administrative disputes. The court reinforced the principle that criminal law cannot be weaponized to settle political scores or contractual disagreements.

Date of Decision: December 20, 2024