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Synopsis

The High Court of Jammu and Kashmir and Ladakh dismissed a petition from M/S Trinity Re-Insurance Brokers Limited seeking to quash an FIR filed by the Central Bureau of Investigation (CBI) and clarified that the CBI has jurisdiction to investigate cases in the erstwhile State of J&K and the objection to it, is unfounded.

The Court, presided over by Justice Rajnesh Oswal, delivered the verdict stating that, the contention raised by the learned senior counsel during the arguments, however, not pleaded in the petition is liable to be dismissed in light of judgments from the Coordinate Bench of the same court.

The Court relied on the cases titled “Kumar Avinav vs. Union of India, 2023(1) [Crimes J&K 455], and Major. General V.K Sharma & Anr. vs. C.B.I [CRMC No. 248/2016], decided on February 07, 2024.

The court further held “the High Courts should refrain from interfering with the investigation when the facts are hazy and not clear. The investigation should not be scuttled at the initial stage and quashing of FIR/complaint is not a rule but an exception.”

The FIR pertained to accusations of irregularities in the tender process for the group medical insurance scheme for government employees in J&K.

The Central Bureau of Investigation (CBI) had filed two FIRs based on corruption allegations made by former Jammu and Kashmir Governor Satya Pal Malik. These allegations concern the contract awards for the group medical insurance scheme for government employees and work related to the Kiru hydroelectric power project in the former state.

M/S Trinity Re-Insurance Brokers Limited, led by its director Harshit Jain, filed a petition with the court seeking to invalidate an FIR dated April 19, 2022. This FIR was lodged by the CBI upon the request of the Jammu and Kashmir government. The allegations in the FIR implicate the company under Section 120-B (Criminal conspiracy) and Section 420 (cheating) of the J&K Penal Code (Ranbir Penal Code), as well as under Section 5(2) in conjunction with Section 5(1) (d) of the J&K PC Act.

The company had been chosen by the J&K government to act as a broker for tendering processes. In this capacity, tenders were issued by the company on behalf of the government, and Reliance General Insurance Company Limited (RGICL) was selected as the insurer for the Group Mediclaim Healthcare Insurance Policy for government employees and their dependents. An agreement was reached between the company and the government on November 27, 2017. However, due to a lack of suitable responses, fresh tenders were issued on June 1, 2018.

RGICL emerged as the lowest bidder and was eventually recommended for the contract. Trinity Re-Insurance Brokers Limited clarified that it had received remuneration solely from RGICL as brokerage fees, not from the J&K government, for a three-month period as per the agreement.

The aggrieved broker company's challenge to the FIR was based on several grounds. The company stated that the agreement was abruptly terminated by the J&K Finance Department on November 30, 2018, without justification. Subsequently, an investigation by the Anti-Corruption Bureau (ACB) found no irregularities in the contract award to RGICL.

In response, the CBI alleged that RGICL was selected as the insurer for the Group Mediclaim Insurance of J&K government employees and pensioners in 2018, in violation of financial rules. The CBI further stated that RGICL paid brokerage fees to Trinity Re-Insurance Brokers Limited from the premium received from the government, which was deducted from government employees' salaries and received from pensioners.

The court observed that while there were no direct allegations against the company in the FIR, it couldn't be quashed due to ongoing investigations involving the company and other officials. Additionally, the court dismissed the argument that the FIR shouldn't have been registered by the CBI after previous ACB investigations, stating that the CBI was investigating new aspects. Finally, the court rejected the notion that the FIR's delay warranted its quashing, considering the previous ACB inquiries.

The court after hearing Trinity Re-Insurance Brokers Limited, represented by Senior Advocate Jahangir Iqbal Ganai and the CBI, represented by Deputy Solicitor General of India (DSGI) Tahir Majid Shamsi, held that the case necessitated thorough investigation as allegations were made against the petitioner, other government officials, and RGICL.

The court noted, “It is settled law that FIR is not an encyclopaedia and the purpose of registration of FIR is to only set the criminal law into motion so as to come to final conclusion as to whether an offence has been committed or not and if during the course of investigation…at this stage when investigation has not reached at the final stage and the investigating agency is still in the process of gathering evidence, the FIR cannot be quashed. The facts are still hazy and not clear as such the contention raised by the petitioner-company is misconceived.”

Therefore, the court determined that there were no grounds to grant leniency for quashing the contested FIR. However, the court disposed of the petition with directives to the CBI to expedite the investigation of the case.

 

Cause Title: Trinity Reinsurance Brokers Ltd v CBI [WP(C) No.295/2024]