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Delhi Court grants bail to Matrix Cellular’s Gaurav Khanna, Gaurav Suri in case alleging black marketing of oxygen concentrators

A Delhi Court on Wednesday granted bail to Matrix Cellular CEO Gaurav Khanna, Vice President Gaurav Suri and two others in a case registered against them after their entire stock of oxygen concentrator was seized by Delhi Police from locations in Lodhi Colony and Mehrauli last week.

Bail was granted subject to a personal bond of Rs. 50,000 and surety of the like amount.

The order was passed by Arun Kumar Garg, Chief Metropolitan Magistrate, Saket Court.

Order on bail plea by accused Hitesh will be pronounced tomorrow.

All five accused persons were arrested by Delhi Police last week soon after the raids.

FIR was registered for the alleged commission of offences under Section 3 of the Epidemic Act, Section 3 read with Section 7 of the Essential Commodities Act and Sections 188/420/120B of the IPC.

As per the prosecution case, the accused had “hatched a conspiracy” to wrongfully make money by “inducing” the public and selling imported oxygen concentrators at an “exorbitant rate” amid a raging pandemic.

Seeking bail in the case, counsel for the five arrested persons had argued that there was no “black marketing” and in the absence of any government order capping the sale price, the MRP was being fixed after considering the various costs incurred by Matrix Celluar while importing and selling the equipment.

It was inter alia argued that the investigation was only a “fishing and roving inquiry” and the mobile app, XFactor that was used for sale of the oxygen concentrators had been in place since 2016.

It was also pointed out that the oxygen concentrators were imported not only from China but Europe as well.

The Court, in its 20-page order, stated that firstly, even if all the averments in the FIR were “presumed to be gospel truth”, no prima facie case under section 420 IPC (cheating) was made out, at least from the contents of the FIR.

“..at the best a case of breach of contract is made out and no prima facie case for cheating u/s 420 IPC is made out against the accused more so when the allegations are specifically against co-accused Navneet kalra and not against the present accused..”, the Court opined.

While the Court clarified that the Investigating Officer was free to continue the investigation and to add more charges as and when evidence emerges, it expressed it displeasure on the arrests in the absence of a prima facie case under Section 420 IPC.

It remarked,

“..it can’t be appreciated that an FIR is registered first incorporating the nonbailable offences such as Section 420 IPC and accused are arrested without even a prima facie case u/s 420 IPC even as per averments made in the tehrir and thereafter the efforts are being made to collect evidence to support the said charge. I want to say no more at this stage except emphasizing once again that it is duty of the IO under the law to investigate the case dispassionately in transparent and efficient manner.”

After analysing a series of government orders and Rules, the Court also held that for want of any capping on the MRP of oxygen concentrators, manufacturer/importer were “free to fix any MRP for the said devices subject of course to the cap of not more than 10% increase in MRP every year in terms of para 20 of DPCO (Drugs Price Control Order)“.

The Court observed,

Despite repeated directions by Hon’ble High Court of Delhi, the govt. is not coming forward to cap the price of essential medical devices. Nor any regulation has been made by the govt. for sale of the same by the importers to the Govt. for its equitable distribution to the needy persons for reasons best known to the Govt. Mere booking of the manufacturers/importers under the criminal law without a regulatory regime in place and without any evidence just to show that the state is concerned about the problems of citizens in procurement of life-saving medical devices, in my considered opinion, will be counter-productive and shall create a further scarcity of already scarce medical devices as it will discourage the manufacturers and importers from pushing their resources so as to make the essential medical devices available to the needy citizens.”

Further, no evidence seemed to have been collected by the Investigating Officer with respect to the violations such as black-marketing and hoarding till date, the Court stated.

The Court ultimately opined that the accused were entitled to bail at this stage.

While reserving the order in the bail petitions, the Court had pulled up the State for the arrest of private persons who were selling imported oxygen concentrators at an “exorbitant rate” to consumers when it had itself not regulated the sale price.

The Court had remarked that each business was based on a “cost-benefit analysis” and the State ought to be fair to them.

Matrix Cellular’s petition to immediately release the seized oxygen concentrator stock was pending before the Delhi High Court.

The accused were represented by Senior Advocates Mohit Mathur, Trideep Pais and Advocates Samudra Sarangi, Sherbir Panag with Advocates Shruti Raina, Srishti Khare, Abhilasha Khanna, Moha Paranjape, Nishtha Agarwal, Nitya Jain.

Advocate Vineet Malhotra appeared for Hitesh.

Additional Public Prosecutor Atul Srivastava appeared for State.

 

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