The Chhattisgarh High Court has affirmed that the finality of quasi-judicial land acquisition awards under the National Highways Act, 1956 does not immunize individuals from criminal prosecution where allegations of corruption, collusion, or abuse of official position are substantiated. This ruling clarifies the boundary between civil remedies and criminal liability in public infrastructure projects, with significant implications for prosecutors, defense counsel, and public officials involved in land acquisition processes.
Background & Facts
The Dispute
The petitioners, private individuals allegedly acting as agents in land acquisition proceedings for the Bharatmala Project, sought quashing of criminal proceedings initiated against them under Section 7(c) and Section 12 of the Prevention of Corruption Act, 1988, along with multiple sections of the Indian Penal Code. They were not named in the original FIR but were implicated during investigation. The prosecution alleges they facilitated inflated compensation payments by colluding with public officials, receiving commissions of Rs. 5 to 7 lakhs per landowner.
Procedural History
- April 2025: FIR No. 30/2025 registered by Chhattisgarh State Economic Offence Wing alleging corruption in land acquisition.
- October 2025: Special Judge took cognizance and framed charges against the petitioners.
- January 2026: Petitions filed under Section 528 of the BNSS (equivalent to Section 482 CrPC) seeking quashing of proceedings.
- The trial court has not yet concluded evidence; the matter is at the stage of trial.
Relief Sought
The petitioners sought quashing of the charge-sheet and cognizance order, arguing that no prima facie offence was made out, and that criminal proceedings were an abuse of process meant to circumvent statutory remedies under the National Highways Act, 1956.
The Legal Issue
The central question was whether criminal prosecution under the Prevention of Corruption Act, 1988 can proceed against individuals when the underlying compensation awards under the National Highways Act, 1956 have attained finality, and whether allegations of facilitation and receipt of commission constitute a prima facie offence even in the absence of direct demand or acceptance of gratification.
Arguments Presented
For the Petitioner
The petitioners contended that:
- The allegations do not meet the essential ingredients of Section 7(c) of the Prevention of Corruption Act, as there is no allegation of demand or acceptance of illegal gratification by a public servant.
- The compensation awards under Section 3G of the National Highways Act, 1956 are quasi-judicial and final unless set aside by arbitration or writ.
- No challenge was filed against the awards, so their validity cannot be questioned collaterally through criminal proceedings.
- The Collector’s administrative enquiry was ultra vires and cannot form the basis for criminal prosecution.
- Reliance was placed on Rajkumar Tamboli, Dhariwal Tobacco Products Ltd., and Hindustan Lever Ltd. to argue that mere facilitation or presence during disbursement does not constitute criminal conduct.
For the Respondent/State
The State countered that:
- The charge-sheet discloses a broader conspiracy involving public servants and private agents to inflate compensation through collusion.
- The allegations go beyond the quantum of compensation and implicate fraud, criminal breach of trust, and abuse of official position.
- Finality of awards does not confer immunity from criminal liability where the process is tainted by corruption.
- Reliance was placed on Poonam Sethi v. Union of India to establish that criminal investigation is permissible even when statutory remedies are pending.
- The investigation was lawful, and the probative value of evidence is for the trial court to assess.
The Court's Analysis
The Court undertook a rigorous analysis of the Bhajan Lal categories for quashing under Section 528 of the BNSS, concluding that none of the grounds for interference were satisfied. It emphasized that the scope of judicial review at this stage is limited to determining whether a prima facie case is disclosed, not whether the prosecution will succeed.
"Criminal liability operates independently of civil or statutory adjudication. The scope of arbitration under Section 3G(5) is confined to determination of compensation and does not extend to criminal misconduct."
The Court rejected the petitioners’ argument that the Collector’s enquiry rendered the prosecution illegal, noting that the enquiry merely triggered the investigation and did not substitute the statutory adjudicatory process. It distinguished Dhariwal Tobacco and Rajkumar Tamboli on the ground that those cases involved commercial disputes without allegations of corruption or abuse of public office.
The Court affirmed that facilitation, collusion, and receipt of commission in the context of land acquisition - where public funds are involved - can constitute criminal conspiracy and criminal breach of trust, even without direct proof of demand. The absence of documentary evidence was not decisive at the quashing stage, as the charge-sheet contained sufficient indicia of involvement.
The Court also underscored that the matter had already reached the trial stage, and interference at this juncture would amount to pre-empting the adjudicatory process, violating the principle of separation of powers.
The Verdict
The petitioners’ applications were dismissed. The Court held that criminal prosecution under the Prevention of Corruption Act, 1988 is maintainable even where land acquisition awards are final, provided the allegations disclose a prima facie case of corruption, collusion, or abuse of official position. The trial court is to proceed with the case on its merits.
What This Means For Similar Cases
Criminal Conduct Can Be Separated from Statutory Finality
- Practitioners must now argue that finality of quasi-judicial awards does not create a shield against criminal liability.
- Any allegation of fraud, collusion, or illicit gain in the process leading to an award opens the door to prosecution, regardless of whether the award has been challenged.
- Defense counsel cannot rely solely on the pendency of arbitration or lack of challenge to the award as a ground for quashing.
Facilitation and Commission May Constitute Offences
- Merely accompanying landowners during disbursement or acting as an intermediary is not per se criminal, but when coupled with receipt of undisclosed commissions and collusion with public officials, it may satisfy the ingredients of Section 7(c) and Section 120-B IPC.
- Prosecutors may now rely on circumstantial evidence - such as timing of payments, pattern of transactions, and role in mutation proceedings - to establish criminal intent.
- The burden shifts to the accused to demonstrate legitimate agency or service fees, not merely to deny involvement.
Administrative Enquiries Are Not Fatal to Prosecution
- An administrative enquiry by the Collector, even if ultra vires, does not invalidate a subsequent criminal investigation if independent evidence is gathered.
- The source of the complaint (e.g., NHAI’s internal audit) is irrelevant; what matters is whether the investigation reveals criminal conduct.
- Defence challenges to the legality of the enquiry must be raised during trial, not at the quashing stage.
