New GST Registration used to Clear Rs. 37 Lakh Railway Payment After Contractor’s Death: Allahabad HC Refuses Discharge of Co-Accused [Read Order]

In a recent ruling, the Allahabad High Court, Lucknow Bench, refused to discharge a co-accused in a Central Bureau of Investigation (CBI) anti-corruption case, holding that prima facie material existed where a new Goods and Services Tax (GST) registration obtained after the contractor’s death was followed by clearance of a Rs. 37 lakh railway payment, which formed part of the prosecution case at this stage.

Beena Parihar, the revisionist, filed a criminal revision challenging the order passed by the Special Judge, Anti-Corruption, CBI, Lucknow, by which her application for discharge was rejected in a case registered by the Central Bureau of Investigation under provisions of the Indian Penal Code and the Prevention of Corruption Act.

The case arose from a railway contract awarded to a proprietorship firm, Chauhan Constructions, originally owned by Ajit Kumar Singh, the first husband of the revisionist, who died in a road accident on 30 January 2021. After his death, the revisionist took over the proprietorship of the firm and obtained a fresh GST registration in her name on 9 April 2021.

The work under the railway contract was completed in March 2021, and measurements were carried out by railway officials in June 2021. Subsequently, the name of the revisionist was entered in the railway records through an addendum issued in December 2021.

On 14 January 2022, a payment of Rs. 37,11,709 was released by the Railways to the firm’s bank account, out of which Rs. 30 lakh was transferred to the account of another firm jointly owned by the revisionist and her present husband, who is also a co-accused in the case.

The revisionist’s counsel argued that she had no role in the alleged conspiracy or illegal gratification and had been falsely implicated only because of her relationship with the co-accused. They argued that the work was completed and measured before her name was formally entered in the railway records and that she had only signed documents for procedural purposes.

The counsel further argued that the actual handling of the work and follow-up with railway officials was done by her present husband and no material existed to show her involvement in any criminal act.

The CBI’s counsel argued that at the stage of discharge, the court was not required to conduct a detailed examination of evidence. They argued that the material collected during investigation, including documents, call records, receipt of the railway payment and transfer of funds, prima facie showed the involvement of the revisionist in the criminal conspiracy.

The counsel explained that these facts were sufficient to proceed to trial and that the role of the revisionist could not be ruled out at this stage.

The single-judge bench comprising Justice Saurabh Lavania observed that the settled legal position makes it clear that at the stage of discharge, the court must only examine whether the material on record, if left unrebutted, could reasonably lead to a conviction. The court observed that a detailed evaluation of evidence or a mini-trial was not permissible at this stage.

The court observed that the revisionist had become the proprietor of the firm before the payment was released, had received the railway payment, and had transferred a substantial portion of the amount to a firm jointly owned by her and a co-accused. The court also observed that the charge sheets contained material indicating coordination between the accused persons.

The court held that the involvement of the revisionist in the alleged criminal conspiracy could not be ruled out at this stage and that no case for interference with the trial court’s order was made out. The criminal revision was dismissed and the case was directed to proceed in accordance with the law.

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