Orissa High Court Quashes FIR Against Punj Lloyd Ltd. Liquidator and Officials: Civil Disputes Cannot Wear Criminal Clothing
Case Reference
Manoj Mamgaine & Anr. Vs State of Odisha & Anr.
Court: Orissa High Court
Sections Involved: Sections 418, 420, 34 IPC | Section 482 Cr.P.C. | Section 528 BNSS | Section 33(1) Insolvency and Bankruptcy Code, 2016 | Section 233 IBC | Rule 37 CGST Rules, 2017
Background and Factual Context
The Principal Contract and CIRP Initiation
The controversy in this case traces its origins to a contract executed on 17.05.2018 between Punj Lloyd Ltd. (PLL) and Gas Authority of India Ltd. (GAIL) for the laying and construction of a steel gas pipeline along with associated facilities for the Dhamra to Angul section of the Jagatisinghpur-Haldia-Bokaro-Dhamra Pipeline Project (JHBDPL) Phase-II (0 to 207 kms).
Shortly thereafter, the National Company Law Tribunal (NCLT) admitted an application on 08.03.2019 initiating Corporate Insolvency Resolution Process (CIRP) against PLL, with Mr. Gaurav Gupta being appointed as Interim Resolution Professional. Subsequently, the Committee of Creditors nominated Mr. Ashwini Mehra as Resolution Professional (RP), an appointment confirmed by the NCLT on 22.05.2019.
The Sub-Contract with DSP Infracon
During the pendency of CIRP, the RP of PLL proceeded to engage subcontractors for executing ongoing project work. Accordingly, on 08.01.2021, PLL issued a Work Order to DSP Infracon Pvt. Ltd. (DSP) for executing steel pipeline laying work from Dhamra to Angul in Odisha. The agreed sub-contract price was INR 20,05,89,089 (excluding GST), with payments to be released on the basis of actual work certified by PLL's representative.
Since no resolution plan was approved for PLL, an application under Section 33(1) of the Insolvency and Bankruptcy Code, 2016 was filed seeking liquidation of PLL as a going concern. The NCLT allowed this application vide order dated 27.05.2022, and the RP was subsequently appointed as the Liquidator of PLL.
GAIL's Disclosure Before NCLT
Importantly, GAIL filed an application before the NCLT Principal Bench on 07.06.2022 seeking certain amounts from the Liquidator. In an Additional Affidavit dated 13.09.2022, GAIL disclosed that it had already paid a cumulative sum of INR 10,71,65,387 to various sub-vendors of PLL, including DSP Infracon, whose dues were stated to have been fully paid.
The FIR and Allegations
Notwithstanding the above, an FIR bearing No. 644 dated 20.12.2024 was registered at Kamakhya Nagar Police Station under Sections 418, 420 and 34 of the IPC against PLL's officials and its Liquidator on a complaint filed by DSP Infracon. The crux of the complaint was:
- An amount of INR 3.28 crores allegedly remained outstanding against work executed by DSP;
- PLL was accused of withholding this amount while simultaneously availing GST input tax credit benefits on the same invoices;
- The Investigating Officer obtained information from the GST Department confirming that the RP had availed net Input Tax Credit of Rs. 18,74,563.40 on an invoice dated 11.03.2022 raised by DSP;
- The GST Department intimated the Investigating Officer that action under Rule 37 of the CGST Rules, 2017 would be initiated against the RP; and
- GAIL had informed the Investigating Officer that the contract between GAIL and PLL contained no clause permitting sub-contracting to third parties.
The petitioners approached the Orissa High Court through multiple CRLMCs seeking quashing of the FIR and all connected proceedings. CRLMC No. 3083 of 2025 was treated as the lead case, with all connected petitions being heard and disposed of together by a common judgment.
Arguments Advanced by the Petitioners
The counsel for the petitioners advanced the following submissions before the Orissa High Court: