BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 17/09/2010
CORAM
THE HONOURABLE MR.JUSTICE S. PALANIVELU
Criminal Appeal(MD)No.437 of 2006
Criminal Appeal(MD)No.445 of 2006
and
Criminal Appeal(MD)No.469 of 2006
A.Srinivasulu ... Appellant in
Crl.A.No.437 of 2006/A1
1.R.Thiagarajan
2.K.Chandrasekaran ... Appellants in
Crl.A.No.469 of 2006/
A3 and A4
N.Raghunath ... Appellant in
Crl.A.No.445 of 2006/A7
Vs.
The State,
rep.by the Inspector of Police,
Central Bureau of Investigation,
Special Police Establishment,
Anti-Corrpution Branch,
Chennai Unit,
Shastri Bhavan,
Third Floor,
Haddows Road,
Chennai-600 006. ... Respondent in all Crl.As.
PRAYER
Criminal Appeals filed under Section 374 of the Code of Criminal
Procedure filed against the common judgment and order dated 08.09.2006 passed in
C.C.No.9 of 2002 on the file of the Principal Special Judge for CBI Cases at
Madurai.
C.A.No.437 of 2006
!For A.1 … Mr.S.Venkatraman
Senior Counsel for
Mr.S.Ilangovan
C.A.No.445 of 2006
For A.7 … Mr.Habibullah Basha
Senior Counsel for
Mr.V.S.Venkatesh
C.A.No.469 of 2006
For A.3 … Mr.S.Kalyanam for
Mr.A.Saravanan
For A.4 … Mr.K.Reghunathan for
Mr.A.Saravanan
^For Respondents … Mr.S.Rozario Sundararaj
(in all appeals) Spl.Public Prosecutor
for CBI Cases
:COMMON JUDGMENT
Since the issues involved in these appeals are one and the same,
they are taken up together and disposed of by this common judgment.
2. The following is the factual matrix of the prosecution case:-
2.1. Based upon a source information, CBI lodged FIR to the effect that
during 1992-1994, A.1 to A.4 had entered into criminal conspiracy to do an
illegal act viz., to cheat M/s.Bharat Heavy Electricals Ltd (for short ‘BHEL’)
and criminal misconduct in the matter of award of contract for construction of
building and other facilities for Reverse Osmosis Desalination Plants (ROD) in
various places in Ramnad District of Tamil Nadu, that in pursuance of the said
conspiracy, A1 to A3 called for only limited tenders from seven agencies
including the firm of A.4 and four other bogus agencies, that fraudulently and
dishonestly awarded the contract to A.4’s firm, namely, M/s.Entoma Hydro
Systems, that in pursuance of the conspiracy, A.1 to A.3, by misusing and
abusing their official position by corrupt or illegal means sanctioned and paid
a total sum of Rs.4.32 crore as interest free advance to A.4 knowing full well
that A.4 is not capable of doing the work, that A.4 in pursuance to the
conspiracy failed to execute the said contract and thereby, they caused wrongful
loss to the extent of Rs.4.32 crores to M/s.Bharat Heavy Electricals Ltd and
that prima facie commission of offences punishable under Section 120-B, r/w.420
and 420 IPC and Sec.13(2) r/w.13(1)(d) of PC Act 1988, have been committed by
the appellants and the same has been marked as Ex.P.87.
2.2. In the FIR, the first accused is P.W.16 who turned as approver. A1,
A6 and A7 were included in the case during investigation. A.1 was functioning as
the Executive Director of the Public Sector Undertaking, namely, M/s.Bharat
Heavy Electricals Ltd, Trichy. P.W.16 was serving as the General Manager (F&P)
of BHEL, Trichy during the relevant period. The third accused and the fourth
accused were working as Assistant General Manager of Finance and Senior Manager
in BHEL, Trichy respectively. The fifth accused Mohan Ramanth is the Proprietor
of M/s.Entoma Hydro Systems. His father NRN Ayyar is A.6 and the 7th accused is
the brother of A.5.
2.3. During 1991-1992, the Tamil Nadu Water Supply and Drainage Board,
(for short ‘TWAD’ Board), a Government of Tamil Nadu undertaking, was
considering to set up Reverse Osmosis Desalination Plants (ROD) to provide
potable water to drought-prone areas in Ramnad District. The construction of a
ROD plant is very complex and highly technical work which involves civil,
mechanical and electrical works such as construction of bore wells to meet the
requirement of raw water output including supply and erection of water drawal
system carrying out yield tests, chemical analysis to determine the feasibility
of desalination, construction of roads, fences for desalination plants and
installation of high pressure pumps. The said work requires expertise and prior
experience in all the above fields.
2.4. When that being the position, all the accused entered into a
criminal conspiracy between 1991 and 1992 at Madras, Tiruchirapalli and other
places to commit criminal misconduct and to cheat BHEL in the matter of award of
contract for the above said work. A.5 was not at all eligible for the award of
such work and in furtherance of the criminal conspiracy, A.1 instructed P.W.16
to invite limited tenders without pre-qualification of prospective tenderers
before inviting limited tenders and without selecting contractors out of
approved list of contractors maintained by BHEL.
2.5. The following is the list of firms which the first accused dictated
to P.W.16.
1)East Coast Construction Company,
No.15, Lloyds Road, 1st Lane, Chennai.
2)Turn Key Construction Company,
No.87/3, Arcot Road, Chennai-26.
3)Raghava Engineers & Builders,
No.37-A, Velacherry High Road,
Chennai-600 042.
4)Mercantile Construction Company,
No.105, Mount Road, Chennai-42.
5)M/s.Entoma Hydro Systems,
No.16, II Street,
Gopalapuram South,
Chennai-600 086.
Out of the said five firms, Sl.No.1 to 4 are bogus firms which were floated by
the fifth accused for the purpose of showing competition. The second accused in
the case, one R.Krishna Rao who has been acquitted by the trial Court, the then
General Manager (F&P) BHEL by abusing his official position, recommended the
above said note prepared by P.W.16 dated 25.11.1992 on the same day knowing full
well that the firms were bogus which were neither pre-qualified nor selected
from approved list of contractors maintained by BHEL, forwarded to the first
accused, who in turn directed calling for limited tenders so as to enable A.5 to
enter into the competition and ensure to get the contract.
2.6. A.1, the competent authority, approved the proposal for limited
tender on 27.11.1992. He also made a false note on his letter that “discussed
with CMD, we have to send limited tenders” with dishonest intention to cheat
BHEL and to award contract to A.5. A.5 responded to the tender on behalf of
M/s.Entoma Hydro Systems on the one hand and in the names of other bogus firms
such as M/s.East Coast Construction Company, M/s.Raghava Engineers & Builders,
M/s.Turn Key Construction and M/s.Mercantile Construction Company through A.7
who applied and obtained demand draft for Rs.20,000/- each in favour of BHEL in
the names of bogus firms by remitting Rs.20,000/- each in Indian Bank,
Royapettah, State Bank of India, Valacherry, State Bank of Mysore, T.Nagar and
Bank of Madura, Mount Road respectively and by writing the demand draft
application and signing in the names of bogus firms knowing full well that no
such firms were existing in the said address and they were created just to get
award of contract in favour of A.5. The demand drafts obtained by A.7 were
submitted to BHEL as EMD along with forged and false tender documents.
2.7. The tender committee consisting of P.W.16, A.3 and A.4 processed the
names of the above said bogus firms and recommended the name of A.5 for the
award of contract for construction of desalination plants. They have given
false justification that the selection of contractors had to be limited to those
who would be efficient in work and would be in a position to deliver the goods
in time and therefore, the names of the firms in limited tenders were obtained
from reliable sources, namely, from TWAD Board. They have offered such false
justification in the proceedings knowing fully well that all the firms were
bogus just to facilitate the award of contract to A.5 by fraudulent means.
2.8. Tender committee members, A.3 and A.4 should ensure the fair
selection of most suitable tenderers for the award of work. As per the
“instructions to tenderers” contained in the tender documents, every
participating tenderer has to submit two experience certificates and a
Certificate from bank regarding financial capacity of the tenderer, but both of
them did not deliberately obtain such experience certificate from tenderers
knowing full well that firm of A.5 is not at all eligible for such a highly
technical contract. The firm of A.5 for the first time got the contract from
BHEL.
2.9. They have also given false justification in the tender committee
proceedings that all the bogus firms were highly competent and experienced in
the fields and their names were obtained from the reliable sources. The firm of
A.5 is only a pesticide and agrochemical merchant. Both A.3 and A.4 recommended
sanction of 30% interest-free advance to A.5 in violation of existing practice
of payment of 5% to 10% mobilisation advance without interest to cause pecuniary
advantage to A.5. Hence, total mobilisation advance of Rs.4,32,00,000/- was
paid to A.5 and A.7 without interest which is a wrongful loss to BHEL. The
amount was deposited in A.5 firm in the Account No.3084 in Indian Bank, Ethiraj
Salai Branch, Chennai and out of which, Rs.1.5 crore was diverted to another
sister concern of A.5, M/s.Insecticides and Allied Chemicals, Chennai, in which
A.5 to A.7 are partners.
3.0. Thus, A.5 to A.7 caused wrongful loss to BHEL by cheating BHEL in
conspiracy with A3 and A4. Since A.5 did not have the expertise and experience
to execute the contract, he did not complete the work in time and thereafter, it
was executed by BHEL itself. The address of bogus firm M/s.Raghva Engineers and
Builders belongs to the property owned by A.6. The postal acknowledgment card
pertaining to the despatch of tender enquiry to this bogus firm bears the
signature of A.6 for having received the tender documents from BHEL. Two tender
documents sent by BHEL to bogus firm were received by A.6 for A.5 and hence, A.6
created false evidence by filing income tax returns assessment for the year
1993-1994 and 1994-1995, on 17.10.1997 showing as if he received rental income
of Rs.1,600/- for one year from the non-existing firm. Hence, A.5 in conspiracy
with A.6, floated a bogus firm and also created false evidence showing as if
M/s.Raghava Engineers existed as his tenants.
3.1. The technical examiner of Central Vigilance Commission inspected the
construction work at Ramnad and submitted a report to the Central Vigilance
Commission stating that the work was awarded without pre-qualification of the
firms and a predetermined agency by BHEL officials with mala fide intention and
a major work costing Rs.14.41 crores was awarded arbitrarily to a single agency.
3.2. P.W.16 gave a confessional statement under Section 164 Cr.P.C.
before the XVIII Metropolitan Magistrate, Saidapet, Chennai which is Ex.P.44 and
he was tendered pardon under Section 306 Cr.P.C by the Special Judge for CBI
cases, Madurai. It is Ex.P.51. He was treated as an approver. A.1 and A.2
abused their official position as public servants and showed undue favour to A.5
to A.7 without any public interest in conspiracy with A.3 and A.4 in the matter
of award of construction of desalination plants to A.5 for which he is not at
all eligible. Thereby, A.1 to A.7 committed offences as follows:-
a) A1 to A7: Under Section 120-B r/w.420,468,471 r/w 468, 193 IPC and
13(2) r/w 13(1)(d) of PC Act,1988.
b) A1&A2: Under Section 13(2) r/w. 13(1)(d) of PC Act 1988 and 109 IPC
r/w.420,468,471 r/w.468, 193 IPC.
c) A3&A4: Under Section 109 IPC r/w.420,468,471 r/w.468, 193 IPC
d) A5,A6 & A7: Under Section 420,468,471 r/w.468,193 IPC and 109 IPC
r/w.13(1)(d) of PC Act,1988.”
Since CMD (Chairman and Managing Director) and BHEL refused to accord sanction
for the prosecution of Shri.R.Thiagarajan (A3) and Shri.Chandrasekhar (A4) under
Section 13(1)(2) of PC Act in spite of CVC’s advice, they are not prosecuted for
offences under P.C.Act,1988. Shri.Srinivasalu (A1) and Shri.R.Krishna Rao(A2)
had already retired from service. Hence, sanction for prosecution is not
required for them for offences under P.C.Act,1988 .
4. The above said events and the particulars are found in the charge
sheet laid by the Inspector of Police, CBI, Chennai. The prosecution marked as
many as 94 exhibits and marched 44 witnesses to establish the guilt of the
accused. When the accused were questioned under Section 313 Cr.PC as to the
incriminating materials available as against them, they denied complicity in the
offences under Section 303 Cr.P.C.
5. The first accused has filed a written statement under Section 313
Cr.P.C. stating that in Ex.P.35, it is mentioned as “discussed with CMD we have
to send limited tenders” and should be read distinctly and not conjointly.
Because going for the limited tender is within the powers of A.1 and he need not
consult with his superiors and the endorsement “discussed with CMD, we have to
send limited tenders” is nothing but a decision to send for limited tenders.
It is for technical tie up, actual tender proceedings were started on
25.11.1992. This accused was promoted and transferred to BHEL, New Delhi on
18.08.1994. The mobilization advance was not paid from the funds of BHEL. In
the documents furnished to the accused under Section 207 of Cr.P.C, it is stated
that Rs.7,45,91,400/- was paid by TWAD to BHEL. The second accused has also
given a written statement under Section 313 Cr.P.C stating that FIR did not
contain his name, that he had no authority to call for limited tenders and he
never had any correspondence or interaction with regard to tender and he was
neither a member of tender committee nor negotiation committee.
6. A.3 and A.4 have given separate written statements under Section 313
Cr.P.C which contain identical contents. They have stated that they are not
members of tender committee but they are members in the negotiation committee
alone. The evidence of P.W.16 that both the tender committee and negotiation
committee are the same is incorrect. There was no impediment as per the BHEL
Work Policy to pay 30% as mobilization advance. These accused have no role in
selection of A.5 for award of contract. A.7 has stated that he is unaware of
the tender in question and that he has been wrongly and falsely implicated in
the case.
7. A5 and A6 died pending trial of the case and the charges against them
abated.
8. The learned Special Judge for CBI cases, Madurai, acquitted A2 under
Section 255(1) Cr.P.C of all charges and found the accused 1,3,4 and 7 guilty
and imposed sentences on them as follows:
(a) A-1 convicted and sentenced to undergo R.I. for 3 years and to pay a
fine of Rs.2000/- and in default to undergo R.I. For 6 months for the offence
under Sections 120-B r/w 420 and R.I. for 3 years and to pay a fine of Rs.2000/-
in default to undergo R.I. for 6 months for the offence under Section 468 IPC,
and R.I. for one year for the offence under Section 193 IPC and R.I. for 3 years
and to pay a fine of Rs.2000/- in default to undergo R.I. for 6 months for the
offence under Section 13(2) r/w 13(1)(d) of the Prevention of the Corruption Act
1988 and R.I. for 3 years and to pay a fine of Rs.2000/- in default to undergo
R.I. for 6 months.
(b) A-3 convicted and sentenced to undergo R.I. for 2 years and to pay a
fine of rs.1000/- in default to undergo R.I. for 6 months for the offence under
Section 109 r/w 420 IPC, and R.I. for 2 years and to pay a fine of Rs.1000/- in
default to undergo R.I. for 6 months for the offence under Section 468 IPC and
R.I. for 2 years and to pay a fine of Rs.1000/- in default to undergo R.I. for 6
months for the offence under Section 471 r/w 468 IPC and R.I. for one years for
the offence under Section 193 IPC.
(c) A-4 convicted and sentenced to undergo R.I. for 2 years and to pay a
fine of Rs.1000/- in default to undergo R.I. for 6 months for the offence under
Section 109 r/w 420 IPC, and R.I. for 2 years and to pay a fine of Rs.1000/- in
default to undergo R.I. for 6 months for the offence under Section 468 IPC and
R.I. for 2 years and to pay a fine of Rs.1000/- in default to undergo R.I. for 6
months for the offence under Section 471 r/w 468 IPC and R.I. for one year for
the offence under Section 193 IPC.
(d) A-7 convicted and sentenced to undergo R.I. for one year and to pay a
fine of Rs.1000/- in default to undergo R.I. for 3 months for the offence under
Section 471 r/w 468 IPC and R.I. for one year and to pay a fine of Rs.1000/- in
default to undergo R.I. for 3 months for the offence under Section 109 IPC
r/w13(2) r/w 13(1)(e) of Prevention of Corruption Act 1988.
It is also directed that the above said sentences on each of them shall run
concurrently.
Aggrieved by the judgment, A1, A3, A4 and A7 are before this Court with these
appeals.
9. The point for consideration is, “whether the charges framed against the
accused have been established by the prosecution beyond all reasonable doubt?”
Point: As regards complicity of A.1, A.3 and A.4.
10. The first accused was functioning as the Executive Director of BHEL,
Trichy, during 1992-1993. The allegation against him is that he facilitated the
award of contract for putting up of Reverse Osmosis Desalination Plants in
favour of A.5, causing wrongful loss to BHEL, in a dishonest manner. P.W.1 was
the Senior Manager (Vigilance) BHEL who handed over relevant files Exs.P.1 to
P.10 and P.11 Work policy of BHEL and Ex.B.12 copy of Partnership letter of the
firm, namely, M/s.Insecticide and Allied Chemicals.
11. It is the allegation against the first accused that he has violated
the existing procedure of BHEL by calling for limited tenders instead of open
tenders. P.W.8 was the technical examiner in the Central Vigilance Commission.
The Central technical examiner Organisation is one of the wings of CBI which
directed him to examine the present case. P.W.8 inspected the plant works and
other records and came up with report Exs.P.18 and 19 stating that open tenders
were not called for, that payment of 30% mobilization advance was excessive,
that normally it would be 5% to 10% and the advance was paid free of interest
that the contractor failed to execute the work in full, that it was not possible
for a single agency to execute such a herculean task and variety of activities
and that the contractor selected was pre-determined.
12. In this regard, the oral account of P.W.16 the approver plays a vital
role. It is his definite version that the first accused was telling that A.5 is
a dynamic, resourceful person, go-getter and an achiever and that he gave
dictation to P.W.16 to write the following five agencies. They are as follows:-
1.M/s.Entoma Hydro Systems,Madras
2.M/s.East Coast Builders, Madras.
3.M/s.TurnKey Construction Company,Madras.
4.M/s.Raghava Engineers & Builders,Madras.
5.M/s.Mercantile Construction Company, Madras .
P.W.16 deposes that for such type of work, normally open tender should have been
called for, but A.1 told that there would be unhealthy competition from various
walks of people to grab the work from TWAD Board and if BHEL lost this work, it
would be losing glorious opportunity to enter into such field, that he told that
while he had discussion with the Chairman he told him that single tender was not
advisable and limited tender was okay. Consisting of himself, (P.W.16,) A.3 and
A.4 the Committee also acted as negotiating committee, that he (P.W.16)
recommended the contract to be awarded to A.5 firm, because A.1 wanted the same
and that A.5 was in the habit of frequently meeting A.1 and A.1 who had shown
some interest for A.5 for getting the mobilization advance quickly.
13. The prosecution has examined the witnesses to show that there was no
company nor business establishments as enlisted in previous paragraph.
14. As far as M/s.East Coast Builders is concerned, P.W.6 Commercial Tax
Officer has stated that no such firm has been registered with his office, in the
name of M/s.East Coast Builders in No.15, First Land Llyods Road, Madras-14,
coming under Royapattah – II assessment circle from 1996 onwards and that
verification of records for the period from 1991 to 1995, no such firm was found
registered with them. In the cross-examination, he would say that the said
address is within Royapettah-II Circle office. P.W.9 is the brother-in-law of
A.6. He says that A.5 asked him to hand over a letter addressed to M/s.East
Coast Builders to him, if he received a letter in the above said address. P.W.9
is resident of the above said address. He further adds that he received an
envelope after three or four days in his address in the name of M/s.East Coast
Builders and he has passed it on to A.5 which came from BHEL, Trichy and at no
point of time, such a firm in the name of M/s.East Coast Builders was
functioning in his address.
15. The above said circumstances would clinchingly show that no firm or
company under the name and style of M/s.East Coast Builders was functioning or
in existence in the above said address.
16. As regards M/s.Turn Key Construction Company, the evidence of
P.Ws.15 and 26 are pertinent. P.W.15 is a Clerk in Asian Paints Pvt Ltd,
Chennai since 1972. He says that the Company has godown at No.87/3, Arcot Road,
Vadapalani, that he was in charge of godown from 1991 to 1997 and that no such
Company in the name of M/s.Turn Key Construction Company was functioning in the
said address.
17. P.W.26 is working as Customers Service Coordinator in M/s.Hindustan
Lever Ltd, where he was working as Sales Executive in M/s.Quality Ice Creams,
Madras in No.87/6, Arcot Road, Madras during the relevant period. One Zambu
Prasad was the owner of the premises. Door No.87/3 premises was also occupied by
M/s.Quality Ice Creams. One Mr.Iyer was the owner of the said premises. Adding
further, he would depose that at no point of time M/s.Turn Key Construction
owned by one Majid was in existence in that premises. The above evidence of
both the witnesses would candidly show that no company as M/s.Turn Key
Construction was functioning in the above said address.
18. P.Ws.5 and 10 would depose about M/s.Mercantile Corporation Company.
P.W.5 is the Commercial Tax Officer in Anna Salai I Circle. He says that no such
firm under the name and style of M/s.Mercantile Corporation, at Door No.105,
Anna Salai was registered with their office for the period from 1991 to 1995.
P.W.10 is a close relative of A.5 to A.7. P.W.9 is the paternal uncle of
P.W.10. A.6 is the maternal uncle of P.W.10. P.W.9 has been running chemical
business agency at Old No.15, New No.20, Anna Salai, Chennai. He says that A.5
told him that an envelope from BHEL would come to his address in the name of
M/s.Mercantile Corporation and if so, to receive it and hand over the same to
him and that he received two covers from BHEL with the said name and he
delivered them to A.5. He has categorically stated that there was no such
concern by name M/s.Mercantile Corporation in Anna Salai in the address
mentioned above. The above said materials would clarify that there was no
Company in the name of M/s.Mercantile Corporation in the above said address.
19. P.Ws.7 and 21 would speak about M/s.Raghava Engineers & Builders.
P.W.7 is the Commercial Tax Officer in Velacheri Assessment Circle. He says
that no such firm by name M/s.Raghava Engineers & Builders, No.37-A was
registered with their office for the year 1991-1994. P.W.21 worked as the Senior
Assistant in the State Bank of India, Velacheri Branch during 1993 which is in
Door No.37 A, Velacheri Main Road. He states that during his tenure from 1993
to 2001, no such Company in the name of M/s.Raghava Engineers & Builders was
functioning in the above-said premises when State Bank of India was there. From
their evidence, it is shown that there was no business establishment as
M/s.Raghava Engineers & Builders, in the address noted above.
20. It is to be noticed that the oral accounts of witnesses, whose
evidence have been appreciated in paragraph Nos.10 to 13.1 as to the four firms,
could not be shattered in their cross-examination. Their evidence have brought
the fact to light that there were no business concerns as mentioned in serial
No.2 to 5 in paragraph No.9.
21. The Work Policy of BHEL has been marked as Ex.P.11 in which the
following are the relevant clauses as far as the tender system prevailing in the
establishment is concerned:-
“4.1.1.Open tender:-
Under this system tenders are invited in most open and public manner
possible. Tenders called for (i) by advertisement in newspapers and/or (ii)
from all registered contractors are treated as open tenders. Tenders may be
called by advertisement in atleast three or four leading English or local
language newspapers of good repute for the specific work/supply of material.
4.1.2. As a rule open tender system is to be adopted in all cases
involving award of work exceeding Rs.1 lakh each. Adequate notice is to be
given to the tenderers to offer their quotations and the period should not be
less than one month except in the case of minor works where local contractors
only would be interested.”
However, in paragraph No.4.2.1, it is stipulated that even in cases for more
than Rs.1 lakh, if it is felt necessary to resort to restricted tender due to
urgency or any other reasons, it is open to the General Manager or other
officers authorised for this purpose to do so after recording the reasons
therefor.
22. Ex.P.27 is the note of approval by the General Manager (F&P) and
Executive Director, the second accused and the first accused respectively. By
means of this, it was proposed to invite limited tenders from seven agencies
which are as follows:-
1.M/s.Entoma Hydro Systems,Madras
2.M/s.Larsen & Toubro Ltd, Madras
3.M/s.East Coast Builders, Madras.
4.M/s.Turn Key Construction Company, Madras.
5.M/s.Raghava Engineers & Builders, Madras.
6.M/s.Mercantile Construction Company, Madras.
7.M/s.Geo Miller & Co.Pvt.Ltd.
23. Ex.P.30 is the tender committee proceedings. It does not contain
signature of any official. It provides that the choice had to be restricted to
contractors with adequate rural based experience, allied expertise and
organizational capability.
24. Ex.P.35 is the letter from Senior Manager, BHEL in which the first
accused has endorsed as “Discussed with CMD. we have to send limited tenders”.
But the then Managing Director, examined as P.W.28, would say that as per
Ex.P.36 at page No.4, it was mentioned that this was also discussed with the
Chairman and Managing Director (P.W.28 himself), who also advised to go in for
limited tenders only. But, he would say that he had never stated so and the
statement mentioned above by A.1 is not correct and it is upto A.1 either he
would go for limited tenders or open tenders.
25. Ex.P.36 is the tender committee proceedings dated 30.12.1992. It is
signed by P.W.16, A.3 and A.4 who were referred to as the Tender Committee
Members in the first page in Ex.P.36. In the tender Committee proceedings, the
tender process and procedures have been elaborately dealt with. It contains 13
pages. It is mentioned that since the work involved is not purely civil work
alone, choice had to be restricted to contractors with adequate experience,
allied expertise and organisational capability, not only in civil work but more
in various other types of work and responsibilities, that calling of open tender
was deliberately avoided as a business strategy since on one hand, it would
throw open the field for all types of undesirable and incompetent agencies and
more importantly on the other, it would result in wide publicity for the work
which in turn may create possibilities of influential competitors directly
approaching the customers to snatch the business away from BHEL and that this
was also discussed with Chairman & Managing Director of BHEL who also advised to
go in for limited tender only.
26. By saying so, the tender committee has also recommended payment of 30%
mobilization advance. At the end of this proceedings, it is mentioned that
Executive Director (A.1) may accord approval on the above terms and conditions
to M/s.Entoma Hydro Systems. Finally, it was left to the discretion of the
first accused. Even though as afore-noted in Ex.P.36 categorically that choice
had to be restricted to contractors with adequate experience, allied expertise
and organisation capability, the tender committee does not appear to have taken
into consideration the said norms.
27. A.3 and A.4 would contend in a same tone that they came to the
picture only on 23.12.1992 when the negotiating committee was formed, that they
did not play any role in selection of the contractors, that they negotiated with
M/s.Entoma Hydro Systems for the reduction of the tender amount and that they do
not have any connection with the alleged offences. The contentions could not be
countenanced for the following reasons.
28. Firstly, even though they stated that the tender committee and the
negotiating committee are different, Ex.P.36 would vividly show that P.W.16, A.3
and 4 were the tender committee members and tender committee proceedings was
also drafted with minute details with reference to the cost of work leaving the
approval with the Executive Director (A.1). Hence, it is futile to contend that
tender committee was not constituted and that they were not members in the
tender committee.
29. It is stated that the tender committee has to verify and ascertain
the previous experience and organisational capability for the proposed contract,
but Ex.P.36 proceedings is silent about the previous experience of the proposed
contractor, namely, M/s.Entoma Hydro Systems. They have recommended the name of
M/s.Entoma Hydro Systems only because the said company quoted the lowest tender
offer. What had prevented or hampered A.3, A.4 and P.W.16 while selecting
M/s.Entoma Hydro Systems, in seeing the credentials of the firm and their
previous experience is not divulged. The duty of the tender committee is not
only to negotiate with the proposed contractors but also to see the previous
experience and credentials of the firm in the proposed work so as to produce the
desired result. The tender Committee has not ascertained these norms.
30. Nextly, the explanation for avoidance of open tender in Ex.P.36
proceedings is not convincing and satisfactory, since P.W.28, the then Chairman
and Managing Director disclaimed that he advised to go in for a limited tender
only. The reason, that if open tenders were called for, it would throw open the
field for all types of undesirable and incompetent agencies and more
importantly, it would result in wide publicity for the work which in turn may
create possibilities of influential competitors directly approaching the
customers to snatch the business away from BHEL appears to be unreal perception
and such premise is alien to competitive business field and it does not sound
good.
31. In the considered view of this Court, the above-said explanation is
not at all persuading and satisfactory for avoiding the open tender. If it is
so, no Public Limited Company can call for open tender and they have to make
their own provisions to go in for limited tenders alone, entertaining
illusionary apprehensions, which could be conceptually misconceived. The tender
committee has woefully failed to ascertain the following aspects for award of
contract:-
(i)Credentials of the firm
(ii)Previous experience of the proposed contractor in the same field which the
work involved.
(iii)The viability of financial capacity of the proposed contractor.
32. It is stated by the officials of BHEL that only from 1997 onwards,
list of contractors was maintained in BHEL. But the TWAD Board officials say
that they did not give any list of contractors to BHEL.
33. This being entirely new venture of project and also hitherto not
adopted in this country and as one is uncertain regarding the nature of teething
troubles during the actual execution and running of the plants after its initial
installation and trials as rightly provided in Ex.P.36, the members of tender
committee should have taken abundant care in selecting the contractor. It is to
be noted that Ex.P.36 is silent as to the registration of M/s.Entoma Hydro
Systems. The above said proceedings were simply and mechanically approved by
the first accused without considering or keeping in mind the necessary norms or
acceptable standards. He has not adverted to the above said requirements to be
followed prior to awarding of contract.
34. In this connection, it is to be seen that the contractor was
predetermined by A.1 himself which is evident from the oral testimony of P.W.36
who was the then Managing Director. He says that on 01.10.1993, the Minister
for Local Administration held a meeting with regard to the project with BHEL
officials and the State Government officials, that he participated along with
the Executive Director in that meeting in which A.5 also participated, that when
there was no Senior Manager in the name of Ramanath or Mohan Ramnath in BHEL,
Trichy, he did not know how the said Ramnath participated in the official
meeting, that he was not invited that at the end of the meeting, he asked the
Executive Director A.1, who was the gentleman for which he replied that he was
the prospective contractor and that later the fact came to his knowledge after
his retirement that the work was alloted to A.5.
35. This portion of evidence would candidly depict that A.1 had taken
A.5 to the official meeting without authority and he allowed him to participate
in the meeting. The holding of meeting is evident from Ex.P.81 regarding of
discussions, in which the Finance Secretary, A.1, P.W.36 and other Officials of
BHEL and other Officials of the State have participated. It was held on
01.10.1993. This record of minutes and discussions do not show the
participation of A.5. However, it is brought to notice that he was also present
since he was taken by A.1.
36. It is strongly agitated on behalf of A.1 that he did not dictate
Ex.A.26 list as stated by the approver. But P.W.16 would say that on the
dictation of A.1, he prepared the list. It is to be noted that the list was
written in a piece of paper which does not form part of any of the files of
BHEL. Hence, it is incumbent upon the prosecution to establish that A.1 was the
author of the list. Excepting ipsi dixit of P.W.16, there is no other material
forthcoming to establish the allegation. This Court is of the view that the
version that A.1 dictated Ex.A.26 list remains unproved.
37. It is stated that the list of contractors was given by TWAD Board.
But the Chief Engineer of the TWAD Board, P.W.27 would say that the names of
M/s.Raghava Engineers & Builders, M/s.Mercantile Corporation and M/s.East Coast
Buildings were not suggested by the regional officials of TWAD Board for calling
limited tenders and that the Board is maintaining the approved list of
contractors for civil and other related works. It is also the evidence of
P.W.23 who worked as Chief Engineer in TWAD Board during 1998 that higher
officials of the department informed him that those companies (as stated above)
were not registered with the TWAD Board.
38. P.W.38, the then Managing Director of TWAD Board would say that TWAD
Board has not given any names of contractors to BHEL, that he never heard the
name of the said companies during his tenure as Managing Director. He was
holding the position as such from 29.11.1993 to 27.05.1996. P.W.42 is the Chief
Head Draftsman of TWAD Board. He has also stated that the said companies were
not in the approved list of contractors of TWAD Board even in Western region
also and they were not approved contractors of TWAD Board. P.W.43 was working
as Joint Chief Engineer in TWAD Board, who also came out with same version. But
his statement under Section 161 Cr.P.C was not recorded.
39. The evidence of P.Ws.23, 27 and 38 would go to show that the list of
contractors was not suggested by the TWAD Board. It goes without saying that the
list originated only among BHEL authorities. As far the mobilization advance,
it is the opinion of the Executive Engineer in CPWD P.W.8 that payment of
mobilization advance as 30% is excessive and that normally it would be in the
range of 5% to 10%, but the tender committee has recommended payment of 30%
without any justification at all. It is to be noticed that no suggestion was
put to him that his evidence as to the percentage of mobilization advance is
incorrect. Since the execution of work was delayed and there was poor
performance of the contract, the contract with M/s.Entoma Hydro Systems was
terminated on 04.10.1996 as per Exs.P.77 and 78 dated 04.10.1996 by P.W.35
Assistant Manager (Civil).
40. In view of the above said discussions obtained from the appreciation
of oral evidence as well as the documents, the charges framed against A.1, A.3
and A.4 have been established before the Court.
41. It is strongly contended on behalf of the accused that BHEL had not
suffered any loss in awarding contract to M/s.Entoma Hydro Systems. BHEL, on
27.09.1996 issued a letter to the Indian Bank stating that since M/s.Entoma
Hydro Systems has committed breach of contract, they invoked the bank guarantee
to the tune of Rs.4,84,13,851/-. It is an admitted fact. But initially BHEL
sustained loss but it was compensated by invocation of bank guarantee on a later
occasion. M/s.Entoma Hydro Systems gave bank guarantee to BHEL. On 07.10.1996
Indian Bank, Ethiraj Salai Branch, Chennai sent a communication to BHEL stating
that they are enclosing a demand draft dated 07.06.1992 for a sum of
Rs.4,84,13,851/- in honour of their guarantee and on payment of that amount,
their liability against those guarantees are discharged. They required BHEL to
return the original guarantee bonds. The receipt of demand draft was
acknowledged by BHEL on 28.10.1996. Since BHEL was made good loss, it is
contended that there was no loss to the BHEL. Even though the loss sustained by
BHEL was compensated on a later occasion, it could not be stated that offences
as against the accused are not proved. Wrongful loss was caused to HEL and
thereafter, bank guarantee was invoked.
42. In the considered view of this Court, even if the BHEL were
compensated at a later point of time, the offences committed by the accused
would entail penal action.
Point: As regards the nexus of A.7 with the offence:-
43. The allegation against A.7 is that he took four demand drafts each
for Rs.20,000/- by applying, obtaining and sending them to BHEL to participate
in the tender process for various bogus companies with dishonest intention,
knowing full well that such companies were not in existence for which he is
punishable. In this regard, come to the consideration of the Court Exs.P.66 and
P.76, P.90 and P.92. The following are the particulars of these exhibits.
(i) Ex.P.66 is the application for demand draft for Rs.20,000/- dated
17.12.1992 applied in the name of one M.Raghavan presented in Royapettah,
Chennai. As regards this document, P.W.22, the Senior Manager of Indian Bank
was examined. It is argued by A.7 that it is given by one M.Raghavan and A.7
has no connection with the said M.Raghavan.
(ii) Ex.P.76 is the application for demand draft of Rs.20,000/- given by
Mr.N.Ragunath, before the State Bank of India, Velacherry, Chennai. As regards
this document P.W.32, the then Branch Manager of the said bank was examined.
But he did not work in the said branch during the relevant period.
(iii) Ex.P.90 is application for demand draft dated 17.12.1992 for
Rs.20,000/-. It was given by one V.K.Eswar before the Bank of Madura. P.W.40,
the then Manager was examined. However, his statement under Section 161 Cr.P.C
was not recorded by the investigation officer.
(iv) Ex.P.92 is an application for demand draft for Rs.20,000/-
dated 17.12.1992 which was presented into the State Bank of Mysore, T.Nagar
Branch, by Mr.N.Ragunath. P.W.41 was brought to box to say about this. He was
not enquired by the investigation officer at the time of investigation and no
statement was recorded from him under Section 161 Cr.P.C.
44. The expert has given Nos.Q.169, Q.174, Q.175 and Q.172 in the
abovesaid documents. Though handwritings in Ex.P.66,76,90 and 92 respectively
were marked by him as above, he has not furnished any opinion in his report as
to their comparison.
45. By production of all the four applications for demand drafts and
examination of the concerned Managers who were working in the respective banks,
the prosecution claims that they have been proved. It is pertinent to note that
even though the investigation officer got the sample handwritings and signatures
of A.7 under Ex.P.75 series, they were not compared by the handwriting expert,
P.W.30. He compared and gave opinion Exs.P.68 and 69 as regards handwritings of
the other accused, who are no more. He has not compared the admitted and
disputed handwritings and signatures of A.7. His report does not contain any
opinion as to the handwritings and signatures of A.7.
46. The trial Court Judge has observed that P.W.30 has not mentioned
about Ex.P.75 series in relation to demand draft application in the report,
Ex.P.69. However, in the following paragraphs of the judgment, he has recorded
finding that A.7 cannot disclaim knowledge about the diversion of funds into the
account of M/s.Insecticide and Allied Chemicals, in which firm, he is also one
of the partners.
47. Ex.P.12 is the Partnership Deed brought about among the family
members of A.5 to 7 for the constitution of M/s.Insecticide and Allied
Chemicals. It is stated that it pertains to 1977 and at that time, both 5th and
7th accused were minors. However, Ex.P.65 is the details of transaction in the
Account No.3084 relating to M/s.Entoma Hydro Systems for the period from
01.08.1994 to 31.12.1994. On 04.08.1994, a sum of Rs. 4,23,34,500/- was
credited which was received as mobilization advance from BHEL. There is no
material to show that A7 was minor during relevant period and there was no
question put to witnesses as to this aspect.
48. Ex.P.65 transactions shows diversion of funds to M/s.Insecticides &
Allied Chemicals on three occasions i.e. Rs.2,50,000/- and Rs.72,00,000/-, both
on 09.08.1994 and Rs.78,00,000/- on 12.08.1994 totalling a sum of
Rs.1,52,50,000/-. Within one week, out of the advance amount received from
BHEL, to the tune of Rs.1,52,50,000/- has been diverted to M/s.Insecticides &
Allied Chemicals which is the family firm of A.5 to A.7. Hence, A7 cannot plead
ignorance of receipt of such a hefty amount in the account belonging to
M/s.Insecticides & Allied Chemicals. It could be seen that he knew very well
about existence of M/s.Entoma Hydro Systems run by his brother A.5. This is a
piece of evidence to infer the dishonesty on the part of A.7.
49. It is true to say that the admitted handwriting and signatures were
not compared by the handwriting expert. But, on this score alone, it cannot be
stated that the link for proof is missing in this case. Section 73 of the Indian
Evidence Act empowers the Court to compare disputed signatures and handwritings.
Without the aid of the handwriting expert, the Court of its own can compare
handwritings and signatures and definite conclusion could be arrived which is
permissible in law. So far as the present case is concerned, the admitted
handwritings and the signatures of A.7 were obtained by the investigating
officer, which are available for comparison with Exs.P.66, 76, 90 and 92.
50. In view of this Court, as the handwriting and signature of A.7 are
unique and peculiar in nature they could be easily compared with the writings
and signatures in the disputed records, in the backdrop of other circumstances
of this case. This Court has no hesitation to hold after taking a careful
comparison of the admitted handwritings and signatures of A.7 with disputed
handwritings and signatures reportedly put by A.7, that the disputed signatures
and the handwritings belong to A.7. Even though A.7 has signed in Ex.P.76 and
P.92 in a different manner which do not tally with his admitted signature,
handwritings found in all the four applications for demand draft would
clinchingly expose resemblance as his handwriting is unique in appearance, that
could be discerned from comparison. Ex.P.66 was given in the name of one
N.Ragunath in the same name (of A7) with different address. The investigation
officer should have taken initiatives during his investigation to ascertain the
persons available in the addresses found in the four Exhibits.
51. Section 73 of the Indian Evidence Act reads as follows, which
enables the Court to compare the handwriting and signatures while dispute arises
as to the genuineness of the handwriting and signature challenged before the
Court.
“73. Comparison of signature, writing or seal with others admitted or proved –
In order to ascertain whether a signature, writing, or seal is that of the
person by whom it purports to have been written or made, any signature writing
or seal admitted or proved to the satisfaction of the Court to have been written
or made by that person may be compared with the one which is to be proved,
although that signature, writing or seal has not been produced or proved for any
other purpose.
The Court may direct any person present in Court to write any words or
figures for the purpose of enabling the Court to compare the words or figures so
written with any words or figures alleged to have been written by such person.
This section applies also, with any necessary modifications, to finger
impressions.”
52. The Supreme Court is of the view that there is no impediment for the
Court to exercise the power conferred upon it to compare the signatures and
handwritings for which the aid of handwriting expert is not at all essential.
When the Court is of the opinion that even without the opinion of the
handwriting expert before it, it can compare the disputed handwritings and
signatures with those of admitted ones, it can do. When the report of the
expert is placed before the Court, it has to decide whether the expert’s opinion
has to be corroborated or not. Even if there were no opinion of the expert,
Section 73 of the Act paves way to the Court for comparison. Irrespective of an
opinion of the handwriting Expert, the Court can compare the admitted writing
with disputed writing and come to its own independent conclusion. Such exercise
of comparison is permissible under Section 73 of the Evidence Act. The following
are the decisions of the Apex Court relating to these positions.
1. (1999) 6 Supreme Court Cases 104,
K.B.Satyanarayana Vs. V.R.Narayana Rao,
2. 2003 (3) CTC 494, Lalit Popli Vs. Canara Bank
and others,
3. 1980 (1) SCC 704, Murari Lal Vs. State of
Madhya Pradesh,
4. Division Bench decision of this Court in
2006 (3) CTC 39, Central Bank of India V
Antony Harware Mart
53. This Court compared the hand writings and signatures, exercising the
power vested by Section 73 of the Evidence Act. It has also considered another
circumstance where diversion of funds to M/s.Insecticides & Allied Chemicals
from BHEL. It cannot be said that A.7, being one of the partners in the said
firm, had no knowledge about diversion of funds in favour of the firm. He
cannot plead ignorance of the fund diversion. When this instance is considered
during the process of comparing, it comes to light that A.7 is the author of the
writings in the disputed documents. In other words, the circumstance of
diversion of funds from BHEL to the firm would support the opinion of this Court
obtained in the of comparison of disputed writings with admitted writings.
54. The seventh accused has not only given wrong addresses while he
applied for demand draft in different banks but also affixed his signatures in
all the four application forms in different fashions. Further, he has taken
the risk of applying in imaginary names and addresses. The above said acts of
the seventh accused could easily be brought under the purview of the provisions
of Sections 468 and 471 IPC. Even if the evidence of concerned bank officials
were not there, it is found that the disputed handwritings in the above said
four exhibits certainly belong to the seventh accused by a careful and cautious
comparison by this Court. The connection of A-7 with offences has been proved.
55. The learned Senior Counsel appearing for the first accused would
place reliance upon a decision of the Supreme Court reported in 2008 (1) SCC
(Cri) 573 [Anil Ritolla alias A.K.Ritolia v. State of Bihar and another] wherein
Their Lordships have observed that the prosecution has to show that the accused
had mala fide intention that he has induced the complainant to enter into the
transaction so as to deceive him with a view to cause unlawful losses to them
and to make unlawful gain.
56. It is his contention that since there was no wrongful loss to the
BHEL, no dishonest intention could be inferred on the part of the first accused.
But the fact remains that he was instrumental in calling for the limited tenders
from the firms which are not in existence and his nexus with A.5. Somehow or
the other, the list of contractors was known to A.1 being superior and deciding
authority, who asked P.W.16 to arrange for calling for the tenders. At the time
of approval of the tender committee minutes, just like A.3 and A.4, the first
accused has also ignored the procedures to be followed in the matter of awarding
contract to the contractor who was a new entrant to execute the work awarded to
them.
57. A.1, A.3 and A.4 had no concern and not been attentive to the
credentials of the firm, previous experience, the working efficiency, financial
capacity, capability and registration of the contractors. A deep analysis of the
concerned materials would amply amplify their connection with the contractor who
did not know even a little in the filed of desalination, who proceeded to award
contract in his favour without any basis.
58. The learned Senior Counsel for A.1 also placed reliance upon a
decision of the Supreme Court reported in (2008) 1 Supreme Court Cases (Cri)
578, Thelapalli Raghavaiah Vs. Station House Officer, wherein it is observed
that though a case of breach of trust may be both a civil wrong and a criminal
offence but there would be certain situations where it would predominantly be a
civil wrong and may or may not amount to a criminal offence. A careful scrutiny
of the materials shows that ingredients in relevant provisions under which A1 is
charged are attracted.
59. The learned Senior Counsel appearing for A.3 and A.4 cites a
decision rendered a learned single Judge of this Court in Crl.O.P.No.24756 of
2008 dated 23.12.2008, wherein it is observed as follows:
” 22. Another factor to be taken into consideration is that admittedly
there is no dispute at all between the petitioners herein and the second
respondent and even before any dispute was raised, the entire loan amounts with
interest have been admittedly paid and without claiming any concession
whatsoever and only thereafter the First Information Report has been registered
that too not at the instance of the second respondent, but on the basis of an
oral anonymous information.”
60. The above said circumstance was considered by this Court on a
different occasion while quashing of a First Information Report. Further the
facts available in this case are different. Even though F.I.R was registered
under source information, leads obtained by the investigator during the
investigation were abundant which were placed before the court during the trial,
those were appreciated and a judgment of conviction has been rendered by the
trial Court. This Court is also of the view that the informations contained in
F.I.R are supported by ample evidence available on record. Hence, the above said
decision is not applicable to this case.
61. In the above said case, a decision of the Supreme Court reported in JT
2008 9 SCC 192 [Nikil Merchant v. Central Bureau of Investigation & Anr.]
wherein it is held as under:
“21. The basic intention of the accused in this case appears to have been
to misrepresent the financial status of the company, M/s. Neemuch Emballage
Limited, Mumbai, in order to avail the credit facilities to an extent to which
the company was not entitled. In other words, the main intention of the company
and its officers was to cheat the Bank and induce it to part with additional
amounts of credit to which the company was not otherwise entitled.
22…
23. In the instant case, the disputes between the Company and the Bank
have been set at rest on the basis of the compromise arrived at by them
whereunder the dues of the Bank have been cleared and the Bank does not appear
to have any further claim against the Company. What, however, remains is the
fact that certain documents were alleged to have been created by the appellant
herein in order to avail the credit facilities beyond the limit to which the
Company was entitled. The dispute involved herein has overtones of a civil
dispute with certain criminal facets.
24. …. keeping in mind the decision of this Court in B.S.Joshi’s case
(supra) and the compromise arrived at between the Company and the Bank as also
clause 11 of the consent terms filed in the suit filed by the Bank, we are
satisfied that this is a fit case where technicality should not be allowed to
stand in the way in the quashing of the criminal proceedings, since, in our
view, the continuance of the same after the compromise arrived at between the
parties would be a futile exercise”
In the aforestated case there was a compromise between the parties and the
Supreme Court observed that continuance of the proceeding after the compromise
would be a futile exercise. But the facts in this case are otherwise. No
compromise was ever entered into between the parties. BHEL invoked bank
guarantee since the funds were wrongfully lost by it. In invocation of funds
from the bank by the BHEL, the accused had no hands. The Supreme Court has
referred to another decision in (2003) 4 SCC 785 [B.S. Joshi v. State of
Haryana] wherein it is observed as follows:
“(iii) Judgment, dated 16.10.2008 of the Hon ‘ble Apex Court rendered in
the case of Manoj Sharma v. State and others in Crl.A.No.1619 of 2008 (SLP (Cri)
No.5265 of 2007. In this case the very question which came up for consideration
before the Hon ‘ble Apex Court was that whether a First Information Report under
Sections 420, 468, 471, 34, 120-B IPC can be quashed either under Section 482 of
the Cr.P.C. or under Article 226 of the Constitution, when the accused and the
complainant have compromised and settled the matter between themselves. The Hon
‘ble Apex Court while considering the aforesaid question basing reliance on the
decision rendered in the case of B.S.Joshi v. State of Haryana and reported in
(2003) 4 SCC 675 and Nikhil Merchant’s case and the facts of that case, held as
under:-
“8. …. Once the complainant decided not to pursue the matter further,
the High Court could have taken a more pragmatic view of the matter. We do not
suggest that while exercising its powers under Article 226 of the Constitution
the High Court could not have refused to quash the First Information Report, but
what we do say is that the matter could have been considered by the High Court
with greater pragmatism in the facts of the case. As we have indicated
hereinbefore, the exercise of power under Section 482 Cr.P.C. or Article 226 of
the Constitution is discretionary to be exercised in the facts of each case.
9. In the facts of this case we are of the view that continuing with the
criminal proceedings would be an exercise in futility.””
62. As adverted to supra, the Apex Court has held that when the accused
and complainant have compromised and settled the matter between themselves,
there is no question of further proceeding with the criminal action and hence
the powers under Section 482 of Cr.P.C could be exercised. But in this case, as
already stated, no such compromise is involved. Hence the accused could not
derive any benefit from the above said decisions.
63. The learned Senior counsel for A3 and A4 also pointed out that BHEL
administration had refused to accord sanction to prosecute A.3 and A.4 and the
letter in this connection dated 24.11.2000 by the Chairman and Managing Director
to the Chief Vigilance Commissioner would show that both A.3 and A.5 are
meritorious officers with an unblemished record, that despite mental tension
suffered by them since the filing of the FIR in January,1997, these two officers
have been performing their duties with whole hearted devotion and in the best
interests of the company and while Thyagarajan has been ably heading the
finance function of a large unit such as Trichy with operations of over Rs.1500
Crores worth specially highlighting, in respect of Chandrasekharan in his
current assignment of modernising BHEL Trichy’s facilities under BHEL Board
approved schemes with sanctioned costs totalling about Rs.185 crores, he has
succeeded in getting the best prices and terms for the benefit of BHEL Trichy.
64. Their administration might have refused to give sanction for
prosecution against them, but it could not constitute a ground to reject the
prosecution case which is based on the records for which they are the authors.
The said letter does not form part of records.
65. On behalf of the 7th accused, the following decisions were relied
upon:
65.(1) In AIR 1980 SC 499 [Abudlla Mohammed Pagarkar etc., Vs. State
(Union Territory of Goa, Daman and Diu)], while dealing with the offences under
Sections 420, 468, 471 I.P.C and Section 5(1)(d) of Prevention of Corruption
Act, the Supreme Court has held as follows:
“15. Learned counsel for the State sought to buttress the evidence which we have
just above discussed with the findings recorded by the learned Special Judge and
detailed as Items (a) to (e) in para 9 and Items (i) and (iii) in para 10 of
this judgment. Those findings were affirmed by the learned Judicial Commissioner
and we are clearly of the opinion, for reasons which need not be restated here,
that they were correctly arrived at. But those findings merely make out that the
appellants proceeded to execute the work in flagrant disregard of the relevant
rules of the G.F.R. and even of ordinary norms of procedural behaviour of
government officials and contractors in the matter of execution of works
undertaken by the Government. Such disregard however has not been shown to us to
amount to any of the offences of which the appellants have been convicted. The
said findings no doubt make the suspicion to which we have above adverted still
stronger but that is where the matter rests and it cannot be said that any of
the ingredients of the charge have been made out.”
65.(2) In AIR 1979 SC 1890 [Chatt Ram v. State of Haryana] the Supreme
Court has observed as follows:
25. Even if it is assumed for the sake of argument that the number on Ex.
P-3 had been forged, that by itself would not show that Chatt Ram, appellant
forged it or participated in its forgery. Nor would the mere fact that Chatt Ram
presented this ticket before the officers concerned and claimed the special
prize on its basis, necessarily stamp him with the knowledge or belief of its
forged character.
26. Nor were the two circumstances pointed out by the counsel for the
State such as would unerringly raise an inference that the appellant possessed
the mens rea requisite for an offence under Section 471 of the Penal Code, when,
he presented Ex. P-3 to the officers concerned for claiming the special prize.
These two circumstances (which have been set out in a foregoing part of this
judgment), at the most raise a suspicion about the requisite guilty knowledge or
belief on the part of the appellant. But suspicion is no substitute for proof.
27. To sum up, even if the evidence of PWs 6, 12, 22, and 26 was assumed
to be admissible under Section 45 of the Evidence Act, it was not sufficient to
establish beyond reasonable doubt that the ticket Ex. P-3 was a forged document.
Further, even on the assumption that the ticket Ex. P-3 was a forged document,
the evidence on the record did not indubitably lead to the conclusion that the
appellant Chatt Ram was concerned in forging it or had the requisite guilty
knowledge of its forged character when he presented it and claimed prize on its
basis before the officers concerned. It is immaterial if at any subsequent point
of time he came to know of its forged character.”
But in the case on hand, it has been shown that A7 has participated in forging
of Exs.P.66, 76, 90 and 92. Hence he could not take recourse to the advantages
of the above said decisions.
65.(3) In 2004 Crl.L.J.4075 [Dhara Ram v. State of Rajasthan] it is held
that even if the offences are alledged under Section 419, 467, 471 and 120-B
I.P.C., it is not sufficient that the accused indulged any dishonest act but
mens rea on his part shall also be established. In the present case, the mens
rea on part of A7 is the discernible from the circumstance where he presented
the applications for obtaining demand drafts from four banks with fictitious
names and addresses on a same day and on the subsequent occasion, he maintained
silence even though he very well knew about the accumulation of considerable
funds in the account of M/s.Insecticides and Allied Chemicals.
65.(4) In AIR 1979 SC 826 [S.P. Bhatnagar v. State of Maharashtra] it is
held that circumstantial evidence adduced by prosecution does not lead to
unerring certainty that appellant No.1 and 2 acted with any dishonest intention
or corrupt motive or abused their position; that the position of A-2 is also not
materially different as in his case also the prosecution has not been able to
show that he derived any monetary gain out of the transaction. But the facts in
the present case are distinguishable. Being one of the partners in
M/s.Insecticides and Allied Chemicals, A7 was fully aware that funds got
diverted into its account and he was fully conscious of the said accumulation.
65.(5) Two unreported decisions rendered by a learned single Judge of this
Court were also cited on behalf of A-7, which are common judgments in
Crl.A.Nos.253, 254, 287, 298, 313 and 381 of 2000 [Selvaraju and others v.
State, Addl Deputy Superintendent of Police] dated 24.8.2009 and in
Crl.A.Nos.452 to 458 and 498 of 2000 [Sathiamurthy and others v. State of
Tamilnadu and others] dated 21.8.2009. In both the judgments the discussion
proceeds to the effect that the prosecution has miserably failed to establish
the guilt of the accused beyond all reasonable doubts. So far in this case,
there are direct evidence to connect A-7 in the offence.
66. In 2003 SCC (Crl) 1121, Hira Lal Hari Lal Bhagwati V. CBI, it
is observed that to constitute offence under Section 420, existence of
fraudulent or dishonest intention must be necessary at the time of making
promise or representation. In order to constitute the offence against A.7 under
Section 109 IPC read with Section 13(1)(d) of the Prevention of Corruption Act,
it must be shown that he abetted the other accused to commit the offence. It is
argued by the respondent that inaction on his part even after knowing that the
amount as afore-mentioned have been deposited into the firm of M/s.Pesticides
and Allied Chemicals would show that he had cheated BHEL. He got wrongful gain
and obtained pecuniary advantage dishonestly. Hence, the above said charge has
been proved against him. As far as presentation of Exs.P.66, 76, 90 and 92 into
the respective banks is concerned, the act of the seventh accused could be
brought within the purview of Sections 468 read with Section 471 IPC. The
prosecution has brought home guilt of the accused beyond all reasonable doubt.
This point is answered in the affirmative.
67. A conspectus of the materials available in this case would pave
way to conclude that the charges under which the accused have been convicted and
sentenced by the trial Court have been established by the prosecution beyond
reasonable doubt. This Court does not find any infirmity either legally or
factually in the judgment challenged before this Court. The ingredients of the
provisions of law under which the accused have been charged have been proved.
There is no valid ground to modify or set aside the conclusion arrived at by the
trial Court. The conviction and sentence recorded by the trial Court need not
be disturbed. The judgment challenged before this Court deserves to be
confirmed and accordingly, it is confirmed. These appeals have to suffer
dismissal.
In the result, all the three appeals in Crl.A.Nos.437,445 and 469 of
2006 are dismissed. The trial Court is directed to issue warrant to commit the
appellants/accused to prison to suffer the remaining portion of sentence.
ssm/ggs
To
The Principal Special Judge for CBI Cases
Madurai.