Pvt firm director, his associate get 2-yr jail for fraudulent high sea sale

By, Panchkula
Oct 03, 2023 09:56 AM IST

Two senior citizens have been sentenced to two years in jail for the alleged high sea sale of naphtha, a gasoline used in chemical industries. They were convicted of cheating, fraud, forgery, and violation of the Essential Commodities Act. The court also imposed fines on the company and the individuals involved. The investigation found that the naphtha material was black marketed by several companies in different states.

The director of a company and his associate, both senior citizens, have been awarded two-year jail for the alleged high sea sale of naphtha, which is a gasoline distilled from crude oil and used as raw material in chemical industries.

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They were convicted of cheating, fraud, forgery and violation of Essential Commodities Act.

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The court of special magistrate, CBI, Haryana, at Panchkula, Vinod Kumar, said, “The aspect of just sentencing is an integral part of fair administration of criminal justice. Thus, considering the entire facts and circumstances of the case, as well as conduct of the convicts, and the fact that they have scrupulously attended the entire trial proceedings over a period of more than seven years, Ram Niwas Jain, 63, director of compliant Sidh Petro Chem Private limited, Panipat, and his associate Baljeet Singh, 79, are awarded two-year jail.”

The court, in its order pronounced on September 26, made available now, had also imposed a fine of 5,000 on the company Sidh Petro Chem Pvt. Ltd, 7,000 fine on Ram Niwas Jain and 10,000 fine on Baljeet Singh. The fine has been paid by all the accused.

HC orders led to CBI probe

CBI had conducted preliminary inquiry following the orders of Gujarat high court passed in a special civil application filed by Saurin Rasik Lal Shah of Ahmedabad. The petition had sought directions to the CBI to inquire into the allegations that naphtha, which was being imported through Mundra and Kandla ports as fuel for power generation, was being diverted to the various outlets for adulteration against the laid down directions and legal provisions. The HC by its order on October 19, 2001, had directed the CBI, Gandhinagar, to inquire into the matter. After the completion of the preliminary inquiry, CBI had registered the FIR on February 21, 2004 in New Delhi.

Naphtha material was black marketed: CBI

As per the CBI, in 2001, JB Overseas, New Delhi, had imported 5147.677 MTs naphtha from Glencore International, Switzerland, and 2301.253 MTs of naphtha from Golden Crown Shipping Company (LLC), Dubai. The imported material was to be used as fuel for power generation but JB Overseas sold it on high seas sale basis and transfer of ownership basis to purchasers of Maharashtra, Haryana and UP. High sea sale is the sale and purchase of a consignment before its shipment reaches a seashore.

As per the CBI, Sidh Petrochem Pvt Ltd., had its factory at Gohana Road, Panipat, where the naphtha purchased from JB Overseas was unloaded and from where the same was black-marketed. The investigation revealed that Naphtha was a restricted item and Government of India had issued various guidelines to regulate its use.

The CBI chargesheet said that accused Ram Niwas Jain, Director of Sidh Petrochem Private Limited, Baljeet Singh and accused Sidh Petrochem Private Limited entered into a criminal conspiracy with each other to cheat the government by importing naphtha and earning profit by black-marketing the same. In furtherance of their criminal conspiracy, accused Sidh Petrochem Private Limited purchased naphtha from JB Overseas on high sea purchase.

CBI investigation found that naphtha purchased by Sidh Petrochem Pvt. Ltd. was transported from Kandla to the factory of Sidh Petrochem Pvt Ltd at Panipat through tankers. Sidh Petrochem Pvt. Ltd. fraudulently showed that it processed and converted the naphtha, purchased from JB Overseas, into industrial thinner and industrial solvent and fraudulently sold it to different companies. CBI investigations revealed that the naphtha material was black marketed by many companies situated in different states.

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