High Court Refuses To Quash FIR Against Former J&K Bank Executives In IFFCO TOKIO Insurance Deal Case

Dismissing the plea the court held that while the petitioners' role as members of the bid evaluation committee may need deeper probe, cognizable offences are disclosed at least against some accused and scuttling investigation at this stage would be impermissible.

The Court was hearing a petition filed by Pushap Kumar Tickoo (former Executive President HRD, CPO), Rajesh Kumar Chhiber (former Executive President), Mohammad Younis Pottoo (former President of Insurance Department), and Khan Roshan Khayal (former Vice President Law) of the J&K Bank Ltd.

The petitioners challenged the FIR alleging that the Bank had made an insurance deal with M/S IFFCO TOKIO in violation of norms, in consequence whereof a close relative of the then Chairman of the Bank was employed in the insurance company on a substantially higher salary package.

A Bench of Justice Sanjay Dhar, while examining the scope of jurisdiction under Section 528 of the BNSS to interfere with investigation, observed,

“... Once, prima facie, cognizable offences are disclosed at least against some of the accused involved in the impugned FIR, it would not be appropriate for this Court to quash the proceedings against the petitioners at this stage without permitting the Investigating Agency to have a deeper probe into their role.”

The Court held that scuttling investigation at this stage would amount to quashing a genuine prosecution, which is impermissible in law.

Background:

The FIR was registered on the basis of a source report alleging that the J&K Bank Ltd. had entered into an agreement with M/S IFFCO TOKIO General Insurance Company Ltd. on 12th February 2019 to facilitate appointment of one Asif Manzoor Beigh, son-in-law of the sister of the then Chairman of the J&K Bank, Shri Parvez Ahmad Nengroo.

Prior to the agreement, Asif Manzoor Beigh was working as Deputy Manager in Bajaj Allianz General Insurance Company Ltd. on an annual salary package of Rs.8.75 lakhs. He resigned from Bajaj Allianz on 13th March 2019, a day after the execution of the agreement, and was appointed in IFFCO TOKIO on an annual package of Rs.19,28,886/- – two and a half times higher than his previous package.

The verification also revealed that the selection of IFFCO TOKIO was made by awarding higher points to the company in Power Point Presentation with a view to adjust Asif Manzoor Beigh. The commission earned by the J&K Bank for the first quarter of 2019-20 was less by Rs.71.00 lakhs, causing loss to the Bank.

In September 2018, the Bank issued intimations in leading national dailies inviting Request for Proposals from general insurance companies. Ten RFP documents were received, and the Committee awarded points to each. IFFCO TOKIO secured 85.67 points out of 100, emerging as the highest. The proposal was approved by the Board of Directors on 27th December 2018, and an agreement was executed on 12th February 2019.

The petitioners, who were members of the Committee, constituted to evaluate bids, through counsel Z. A. Shah, Senior Advocate contended that their role was limited to evaluation of proposals and that they had nothing to do with the engagement of Asif Manzoor Beigh. They submitted that the Bank, pursuant to permission from IRDA and a decision of the Board of Directors, decided to engage multiple insurance companies.

Opposing the petition, Mr. Mohsin Qadiri, Senior Additional Advocate General, contended that the investigation disclosed that the petitioners had awarded undue favour to IFFCO Tokio General Insurance Company Limited in the evaluation process, which was followed by the appointment of a close relative of the then Chairman of the Bank in the company, thereby warranting a deeper probe.

He submitted that independent expert evaluation demonstrated undue favour to the company, that reputed insurers were unfairly downgraded, and that the insurance contract was closely followed by the appointment of Asif Manzoor Beigh, a close relative of the former Chairman, on an enhanced salary package as a “special case,” thereby disclosing a prima facie quid pro quo and justifying a deeper probe into the petitioners' role in the alleged conspiracy.

Court's Observations:

The Court first outlined the settled legal position on quashing of FIRs, relying on State of Haryana v. Bhajan Lal (1992 Supp (1) SCC 335) and M/S Neeharika Infrastructure Pvt. Ltd. v. State of Maharashtra (2021) 19 SCC 401. The Court noted that the power of quashing should be exercised sparingly with circumspection, only in rarest of rare cases, and that the court cannot embark upon an enquiry as to the reliability or genuineness of allegations at the investigation stage.

Examining the material collected by the Investigating Agency, the Court found strong circumstances establishing a close nexus between the appointment of Asif Manzoor Beigh with IFFCO TOKIO and the award of the insurance contract.

The Court observed,

“It has come in the statements of witnesses examined by the Investigating Agency during the course of investigation, who are none else than the officers and officials of respondent Insurance Company, that it was quite unusual for the company to revise its decision of offering a particular package to a selected candidate.”

The Court noted that once the Selection Committee had decided to offer a package of Rs.15.35 lakhs per annum to Mr. Beigh which was accepted by him, the circumstances under which he reneged and demanded a higher package which was accepted at the highest level certainly raised eyebrows, particularly when all these things happened in close proximity with the dates on which the deal fructified.

Regarding the petitioners' role as members of the Committee that evaluated proposals, the Court found prima facie merit in their submission that assessment of a proposal by one Expert Committee can differ from that of another, and that even members of the same Committee awarded different points to the same presentation.

The Court observed,

“.. There appears to be, prima facie, merit in the aforesaid submission of the learned Senior Counsel.” The Court also found that the contention regarding the alleged loss in commission being imaginary appeared prima facie well-founded, as the amount of commission would depend upon several factors.

However, the Court held that despite these observations, strong circumstances established on the basis of material collected showed a close nexus between the appointment of Asif Manzoor Beigh and the award of the contract. The Court stated,

“.. Thus, offence of criminal misconduct is disclosed against Shri Parvez Ahmad Nengroo, who has, prima facie, misused his official position to confer benefit upon his close relation, Mr. Asif Manzoor Beigh. The respondent Insurance Company, it appears, has connived in the same.” The Court noted that the petition filed by the Insurance Company challenging the FIR had already been dismissed by this Court on 17th September 2021, and the SLP was dismissed by the Supreme Court.

With respect to the petitioners, the Court held,

“.. So far as role of the petitioners, who have facilitated the selection of respondent Insurance Company as the insurance agent, is concerned, the same needs a deeper probe.”

Thus the Court declined to quash the proceedings at this stage, observing that once cognizable offences are disclosed at least against some accused, it would not be appropriate to quash the proceedings against the petitioners without permitting the Investigating Agency to have a deeper probe into their role.

Accordingly the petition was dismissed leaving it open to the petitioners to approach the Court afresh after the final report is filed by the Investigating Agency before the competent court, or to approach the competent court seeking their discharge in case a charge sheet is filed against them.

Case Title: Pushap Kumar Tickoo & Ors. v. UT of J&K & Ors.

Citation: 2026 LiveLaw (JKL)

Appearances

Petitioners: Z. A. Shah, Sr. Advocate with Roshan Khayal, Advocate

Respondents: Mohsin Qadiri, Sr. AAG with Maha Majeed & Adnan Zahoor; Numan Zargar, Advocate

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