'Threat To Financial Health Of Country': Chhattisgarh High Court Denies Bail To Man Accused In ₹411 Crore Medical Procurement Scam

The Chhattisgarh High Court has denied bail to Shashank Chopda, accused of masterminding a large-scale criminal conspiracy involving fraudulent procurement of medical equipment and reagents under the "Hamar-Lab" scheme, causing a colossal loss worth Rs.411 crores to the State.Noting that an economic offence of such a magnitude poses a threat to the financial health of the country, Chief Justice Ramesh Sinha held,“The present is a case which involves economic offence and which is considered to be more serious than conventional crimes as they affect the entire economy and pose a serious threat to the financial health of the country while shaking public confidence in the financial system. Such crimes committed during the course of economic or business activities cause financial harm and adversely impact the country's economic well- being and financial health. These offences typically involve fraudulent activities that affect both public and private financial interests.”The Court elaborated,“… it is not an ordinary financial crime but a crime in an organized manner. The documents appended with the petition prima facie discloses that the investigation has established that the applicant masterminded an elaborate and well- orchestrated criminal conspiracy by creating multiple fictitious companies in the names of his relatives and close associates. Under the guise of packaging, repair, maintenance, consultancy, and logistics services, he generated fraudulent invoices exceeding Rs.150 Crores…The acts committed by the applicant are not only grave economic offences but also crimes against the welfare of society at large. Granting bail to the applicant at this stage would not only embolden corrupt practices but also send a highly detrimental message to society, undermining public confidence in the justice delivery system.”Facts:The High Court was dealing with a bail application under Section 483 of Bhartiya Nagarik Suraksha Sanhita, 2023 for grant of regular bail in relation to offences committed under Sections 409 and 120B of the Indian Penal Code and Sections 13(1)(A, 13(2) and 7(C) of the Prevention of Corruption Act, 1988.The prosecution alleged that in 2021, under the "Hamar-Lab" scheme, the Public Health and Family Welfare Department had directed the department to purchase medical equipment from Chhattisgarh Medical Services Corporation Ltd. (CGMSCL). It was alleged that CGMSCL, along with the Directorate of Health Services, disproportionately procured the said medical equipment without evaluating the budget or obtaining administrative approval. Prosecution further alleged that the officials entered into a criminal conspiracy with several companies—including Mokshit Corporation, CB Corporation, Recorders and Medicare System, and Shri Sharda Industries, to purchase unnecessary machines and reagents at inflated prices, thereby causing enormous profit to the Companies and subsequently causing a heavy loss of around Rs.411 crores to the State. An FIR was filed against the involved officers of CGMSCL, the Directorate of Health Services, Raipur, and the companies involved in the said conspiracy.Submissions:The applicant alleged that he had no role to play in the alleged offence. He was merely a bidder in the tender floated by the CGMSCL in which he was awarded the order for supply of machines and reagents. It was submitted that the applicant was being made a scapegoat and that it was not the Government but the applicant and the Company which had suffered a loss totalling Rs. 351 Crore. He contended that all processes were transparently recorded, and all documents were submitted online, thereby barring any scope of tampering with the same after submission. He further alleged that the price of EDTA tubes (Rs. 2352 per piece) was a misreading and the correct reading should have been Rs. 23.52 as per official records. Lastly, he sought bail on the ground that while the applicant was accused of conspiracy, a single person cannot conspire alone.Alleging that the applicant was the mastermind of the cartel, the State argued that he influenced the CGMSCL officials to tailor the tender conditions to his suitability, which later led to the State losing Rs. 411 Crores, and the same cannot be construed as an ordinary financial crime but a crime committed in an organised manner. As the investigation was still pending, the State opposed granting bail to the applicant.Court's Findings:At the outset, the Court observed that the present case was largely more serious than any conventional crime, as it had the potential to threaten financial health of the country and shake public confidence in the financial system.Commenting that the nature of the offence does not invite bail, the Court explained,“In the present case, since there is a connivance between a private Companies and the officials of the State, it cannot be ruled out that the applicant would not try to tamper with the evidence or influence the witnesses. Economic offences...

'Threat To Financial Health Of Country': Chhattisgarh High Court Denies Bail To Man Accused In ₹411 Crore Medical Procurement Scam

Saahas Arora

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