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HC refuses to quash FIR into multi-crore scam of Group Mediclaim Insurance of employees in J&K

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Srinagar: J&K High Court on Wednesday declined to pass any directions for quashing FIR into the multi-crore scam relating to Group Mediclaim Insurance of employees and pensioners of J&K government that involved Reliance General Insurance Company Limited (RGICL), M/S Trinity Reinsurance Brokers Ltd, and officers of the then State of J&K.

Disposing of a petition by the M/S Trinity Reinsurance Brokers Ltd seeking quashment of the FIR, Justice Rajnesh Oswal said “the court does not find any reason to show indulgence for the purpose of quashing the impugned FIR.”

However, the judge directed the Central Bureau of Investigation (CBI) and the Anti-Corruption Bureau (ACB) to conclude the investigation of the case as expeditiously as possible.

It also ordered the M/S Trinity Reinsurance Brokers Ltd to participate in the investigation and enable the CBI to conclude the investigation expeditiously.

According to the FIR “unknown officials/officers of the Government of J&K in conspiracy with M/S Trinity Reinsurance Brokers Limited and M/S RGICL committed criminal misconduct by hiring M/S Trinity Reinsurance Brokers Limited as consultant/intermediary to guide the Finance Department in tendering process”.

M/S RGICL was selected as the insurer for Group Mediclaim Insurance of employees and pensioners of the J&K government in 2018 by “violating” the Financial Rules.

An amount of Rs 61,43,78,800 was released in favour of M/S RGICL before signing of agreement. The company, according to the FIR, was allowed to misappropriate the funds of the J&K government. The premium money had been deducted from the salaries of the State government employees and the pensioners.

M/S RGICL had paid any amount of Rs 4,36,07,033 to the petitioner as brokerage out of the premium received from the government.

The insurance award was later on annulled to the RGICL after the surfacing of irregularities.

The petitioner company was appointed as insurance broker to design and implement the Group Mediclaim Healthcare Insurance Policy for all the State government employees including the employees of PSUs/Autonomous Bodies/Local Bodies/Universities, pensioners and their dependant family members for a period of three years.

RGICL was declared as the lowest bidder and recommended for issuance of Letter of Award.

The ACB which referred the matter to CBI found that a conspiracy had been hatched between unknown public officials of the Government of J&K, petitioner-company and M/S RGICL. They resorted to criminal misconduct to cause pecuniary advantage to themselves and wrongful loss to the state exchequer during the period 2017-18, its report said.

Hearing the argument and the counter, Justice Rajnesh Oswal referred to the principles laid down by the apex court saying “it is clear that 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”.

Citing the official communications, he said there are “certain allegations in respect of award of contract to RGICL without e-tendering process and that changes were made in the agreement with the petitioner after the agreement was signed, have been levelled.”

The bench also said that FIR is not an encyclopaedia and its purpose 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.

There are allegations levelled against the petitioner and other government officials as well as against RGICL which are required to be probed in detail, said the court .

It added “at this stage when investigation has not reached the final stage and the investigating agency is still in the process of gathering evidence, the FIR cannot be quashed.”

The facts, it said, are still hazy and not clear as such the contention raised by the petitioner-company is mis-conceived.

It said the contention that the FIR has been registered after a huge delay, “the same cannot be quashed as earlier the matter was being enquired into by the ACB which submitted its reports on 27.11.2019 and 08.02.2022.”

On the contention of the CBI having no jurisdiction to investigate the cases pertaining to the erstwhile State of J&K, the court said “it is misconceived in view of judgments passed by the Coordinate Bench of this court in cases.”

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