J&K HC Quashes Embezzlement Case Against Ex-Head Of SMHS Hospital | Says Expenditure Was Motivated By Patient Care And Exigency | Mere Procedural Lapses Without Dishonest Intent Not Corruption
Sanchayita Lahkar
The High Court of Jammu & Kashmir and Ladakh Single Bench of Justice Sanjay Dhar has quashed the criminal proceedings initiated under various provisions of the Jammu and Kashmir Prevention of Corruption Act and Ranbir Penal Code against a former Medical Superintendent. The court concluded that the petitioner, having been exonerated by two separate departmental enquiry committees and the findings having been accepted by the Government, cannot be subjected to criminal prosecution on the same set of charges.
The court observed that the prosecution's allegations cantered on misappropriation of government funds and lack of supervisory diligence. However, the court held that the petitioner had neither drawing and disbursing authority over the embezzled accounts nor was there material to demonstrate dishonest intent. The petitioner’s expenditure of funds during a public emergency had been ratified by competent authorities, and vouchers confirming the expenditure were recovered during investigation. Concluding that the continuation of prosecution would amount to abuse of process, the court allowed the petition under Section 482 CrPC and quashed the FIR and ensuing proceedings insofar as they related to the petitioner.
The petitioner challenged the registration of FIR No. 28/2010 by the Vigilance Organization Kashmir (now ACB) under Sections 5(1)(c) and 5(1)(d) of the J&K Prevention of Corruption Act read with Sections 120-B, 409, 468 and 471 of the RPC. The allegations stemmed from a Joint Surprise Check (JSC) into financial irregularities at SMHS Hospital, Srinagar, during the period between April 2007 and March 2010.
According to the FIR, public revenue from investigation charges, parking fees, and canteen rent was collected by the Deputy Medical Superintendent/Medical Record Officer and handed to the cashier for remittance under three heads: Hospital Development Fund (HDF), 0210 (Government Revenue), and 8443 (Revolving Fund Deposit). The JSC revealed that while revenue under HDF was to be deposited in a J&K Bank branch, the amounts under the remaining heads were to be submitted to Government Treasury, Tankipora, Srinagar. The Accounts Officer acted as the DDO for head 0210, and the Medical Superintendent was the DDO for HDF and 8443.
The FIR stated that an amount of Rs. 1,43,89,360/- had been collected but was misappropriated. Of this, Rs. 63,52,514/- was said to have been spent on salary, refunds, and refreshments by Mohammad Amin Nazki, the cashier, without proper authorization. A further Rs. 80,36,846/- remained unremitted for a considerable period, with suspicions of criminal intent. Manipulation of the cash book and allied records was also alleged.
Further investigations confirmed that Rs. 1,02,55,020/- had been embezzled between April 2007 and December 2009, with Rs. 54,10,285/- remitted later, leaving Rs. 48,44,735/- outstanding. Vouchers showed overwriting and cuttings. The prosecution alleged that the petitioner, as Medical Superintendent, had overall control of accounts and was thereby liable.
The petitioner, represented by counsel, argued that he was not vicariously liable for acts of the cashier or other financial staff. He stated the bifurcation of hospital management into administrative and financial wings; the latter being headed by the Accounts Officer. He claimed that departmental proceedings were conducted against him under Rule 33 of the J&K Civil Services (Classification, Control and Appeal) Rules, 1956, and he was fully exonerated from all six charges, which included embezzlement, unauthorized expenditure, and failure to supervise accounts.
A Government Order dated 28.05.2014 appointed Dr. Parvez Ahmad Shah as the initial Enquiry Officer. Upon his exoneration, a further enquiry was conducted by a committee comprising Dr. Samir Mattoo, Dr. Yashpal Sharma, and Mr. Zahoor Ahmad Wani. This committee reiterated that the petitioner bore no responsibility for embezzlement. It observed that, "Dr. Qureshi has not been found responsible for the embezzlement," and noted that his emergency expenditure of Rs. 16.45 lakhs was ratified by the Hospital Development Committee.
The petitioner explained that the expenditure was incurred during curfews and strikes in the wake of the 2008 Amarnath land row. Vouchers for an aggregate amount of Rs. 16,83,913/- relating to expenditures such as taxes, vehicle repairs, and emergency procurement were located, though some originals had been destroyed in the 2014 floods. The Hospital Development Committee, which included MLAs Mubarak Gul and Dr. Sheikh Mustafa Kamal, ratified the expenditure retrospectively.
The respondents submitted status reports asserting that as Medical Superintendent, the petitioner had overall responsibility and had therefore been part of a conspiracy with the cashier. They further argued that recovery of the funds had not been completed and that the matter remained under investigation.
However, it was not disputed that the petitioner’s supervisory role did not include duties as a DDO for accounts 0210 and 8443. The principal allegation against him pertained to the Rs. 16.45 lakh expenditure, which he justified as necessary to maintain hospital operations during the emergency. The Government, while accepting the committee report exonerating him, issued only a warning against future assignments requiring accounting supervision.
The court observed, "From the foregoing analysis of the facts relating to the present case, it is clear that none of the charges leveled against the petitioner including those related to embezzlement of funds have been established during the departmental enquiry conducted against him." It stated that the Government was only dissatisfied with the petitioner’s exercise of supervisory powers but not with any specific act of embezzlement.
Referring to the Judgement in Ashoo Surendranath Tewari v. Deputy Superintendent of Police, EOW, CBI & Anr., the court noted, "In case of exoneration, however, on merits where allegation is found to be not sustainable at all and person held innocent, criminal prosecution on the same set of facts and circumstances cannot be allowed to continue."
It was further observed that, "The petitioner, in view of the material available on record of the Case Diary, though had a supervisory control over the accounts section, yet he was not the drawing and disbursing authority nor the immediate controlling officer of the accounts wing of SMHS Hospital."
In regard to the petitioner’s expenditure during the law-and-order emergency, the court noted: "The action of the petitioner of spending amount of Rs.16.45 lacs out of the Hospital Development Fund on patient care, repairs, expenditure on account fuel etc. for ambulances has been ratified by Hospital Development Committee."
The court found that, "There may be procedural infractions on the part of the petitioner while taking action of incurring expenditure out of the Hospital Development Fund but that, by itself, cannot be a ground to subject him to criminal prosecution."
Quoting the Supreme Court in C. K. Jaffer Sharief vs. State, the court reiterated, "That dishonest intention is the gist of the offence under Section 13(1)(d) is implicit in the words used i.e. corrupt or illegal means and abuse of position as a public servant."
The court recorded, "It is in the face of aforesaid facts and circumstances that both the Enquiry Committees have exonerated the petitioner of the charges levelled against him and the Government has only issued a warning against him on account of his lack of supervision over the accounts wing."
It concluded, "Therefore, the petitioner, on the basis of the material collected by the Investigating agency during the investigation of the case and on account of the fact that he has been fully exonerated by the two enquiry committees in the regular departmental proceedings, cannot be made to suffer the criminal prosecution emanating out of the impugned FIR."
The judgment then stated: "This Court finds the present case as the fit one for exercising its powers under Section 482 of Cr. P. C for quashing the criminal proceedings against the petitioner so as to secure the ends of justice and to prevent abuse of process of law."
Accordingly, "The petition is allowed and the impugned FIR and the proceedings emanating therefrom to the extent of petitioner only, are quashed."
The court also directed: "The Case Diary be returned to learned counsel for respondents."
Advocates Representing the Parties:
For the Petitioners: Mr. Salih Pirzada, Advocate, with Ms. Sharaf Wani, Advocate, Mr. Bhat Shafi, Advocate.
For the Respondents: Mr. Mohsin Qadiri, Sr. AAG, with Ms. Nadiya Abdullah, Assisting Counsel. Mr. Mohammad Saleem Qureshi (Inspector, I.O. ACB, South Wing)
Case Title: Waseem Qureshi v. State of J&K and Another
Case Number: CRMC No. 179/2018
Bench: Justice Sanjay Dhar
