REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 350 OF 2006
V.S. Achuthanandan .... Appellant(s)
Versus
R. Balakrishna Pillai & Ors. .... Respondent(s)
J U D G M E N T
P. Sathasivam, J.
1) The challenge in this appeal, by special leave, is to the
legality of the order dated 31.10.2003 passed by the High
Court of Kerala at Ernakulam allowing Criminal Appeal Nos.
822, 823 & 824 of 1999 filed by the accused setting aside the
order dated 10.11.1999 passed by the Special Judge
Idamalayar Investigations, Ernakulam in C.C. No. 1 of 1991
convicting all the accused for the offences punishable under
Sections 120-B and 409 of the Indian Penal Code (in short
`IPC’) and Sections 5(1)(c) and 5(2) of the Prevention of
Corruption Act, 1947 (Act 2 of 1947) (hereinafter referred to as
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`the P.C. Act’) and sentencing them to undergo rigorous
imprisonment.
2) Brief Facts:-
(a) Idamalayar Hydro Electric Power Project, a multi-purpose
power project in Kerala was conceived and completed in the
year 1985. The project report was approved by the Central
Water and Power Commission in 1973.
(b) After the completion of the Dam, the remaining
construction work relating to the power tunnel and surge
shaft, which are integral part of the water conductor system of
the project, was awarded on contract basis to one K.P. Poulose
(A4), as per the decision of the Kerala State Electricity Board
(hereinafter referred to as the “Board”), on 19.11.1982. The
work relating to power tunnel was awarded at 188% above the
Probable Amount of Contract (PAC) and the work relating to
surge shaft and allied works at 162% above the estimated
amount with many special conditions, as requested by the
contractor, involving heavy financial implications/advantages
to him at the expense of the Board. Further, there was
inordinate delay in completion of the work.
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(c) During the trial run, on 15.07.1985, several leaks and
cracks were noticed in the tunnel lining which was a matter of
great public concern and caused considerable anxiety and fear
among the public and State as well. Discussions and debates
were held in this regard in the State Legislative Assembly.
There was a public outcry for a judicial probe in this matter.
Extensive rectification work to remedy the defects in the
tunnel lining and surge shaft was undertaken at a
considerable cost which was to the tune of Rs. 1.75 crore.
(d) On 02.08.1985, the Public Undertaking Committee of the
State Legislature inspected the site and submitted its report
recommending a judicial probe. The State Government
appointed a sitting Judge of the Kerala High Court as
Commissioner of Inquiry to conduct the probe. The
Commission recorded its enquiry, collected considerable
evidence and submitted its report in June, 1988. The
Commission came to the conclusion that materials placed
before it prima facie disclosed commission of offences
punishable under I.P.C. and P.C Act against persons
responsible for the same and recommended for investigation
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into these offences. The State Government accepted the
recommendations and constituted a special team, headed by
Superintendent of Police for Investigation. The report of the
special squad was filed in the Court of Special Judge on
14.12.1990 in Crime No. C.C. No. 1 of 1991.
(e) During pendency of the case, an application for
withdrawal of the prosecution against accused No. 5 – G.
Gopalakrishna Pillai, who was the Secretary to the Kerala
Government, Irrigation and Power Department was made by
the then Special Public Prosecutor on 24.08.1992 under
Section 321 of the Code of Criminal Procedure (in short
`Cr.P.C.’) on the ground of absence of any material to sustain a
successful prosecution of offences alleged against him. At this
stage, the appellant herein – V.S. Achuthanandan, the then
Opposition leader in the Assembly, in public interest, filed
statement of objections against the move for withdrawal of the
case against G. Gopalakrishna Pillai (A5). After full fledged
enquiry, the application filed by the Special Public Prosecutor
was dismissed by the Special Judge on 16.10.1992.
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(f) On 03.02.1993, Criminal Revision Petition No. 762 of
1992, filed by the State against the order of Special Judge was
allowed by the High Court. On the strength of the
observations made in the order of the Kerala High Court, the
State Government took the decision to withdraw the criminal
case against all other accused.
(g) The appellant challenged the above order of the High
Court in Criminal Appeal No. 122 of 1994 before this Court
which set aside the order of the High Court and restored the
order of the Special Judge declining consent for withdrawal
[vide V.S. Achuthanandan vs. R. Balakrishna Pillai & Ors.,
(1994) 4 SCC 299]. Subsequently, the matter was further
proceeded in the Court of Special Judge.
(h) During trial, Accused No. 22, Paul Mundakkal became
insane and the case against him was allowed to split, Accused
No.4 – K.P. Poulose, Contractor, died, Accused nos. 11 and 14
to 21 were discharged by the Court of Special Judge in the
final report holding that there was no prima facie case made
against them.
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(i) On 14.12.1995, charges were framed against other
accused for various offences under Sections 120-B, 409, 430
and 201 IPC and Section 5(2) read with Section 5(1)(c) and (d)
of the P.C. Act. This order of the Special Judge was confirmed
by the High Court, but found that the charge under the P.C.
Act is not sustainable against A5 and A8 for want of proper
sanction as per the orders passed in Criminal Revision
Petitions filed by the accused in the High Court. Charge was
amended accordingly and the accused were rearranged as A1
to A11. In the meantime, A7 died.
(j) The Special Court, after analyzing the oral and
documentary evidence on record, vide its judgment and order
dated 10.11.1999 found R. Balakrishna Pillai (A1), P.K. Sajeev
(A3) and Ramabhadran Nair (A6) guilty of the offences
punishable under Section 120-B and 409 IPC and Sections
5(1)(c) and 5(2) of the P.C. Act read with Section 120-B of IPC.
They were sentenced to undergo rigorous imprisonment for a
period of five years for the offence punishable under Section
120-B of IPC and to undergo rigorous imprisonment for a
period of four years each under Section 409 IPC and Section
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5(2) of the P.C. Act read with Section 120-B IPC and to pay a
fine of Rs.10,000/- each, in default, to undergo simple
imprisonment for one year each. However, A1, A3 and A6
were acquitted of the charges under Sections 161, 201 and
430 IPC read with Section 5(1)(d) of the P.C. Act. It was also
directed that the sentences shall run concurrently. Accused
Nos. 2,4,5,8,9,10 and 11 were found not guilty of the offences
and they were acquitted of all the offences with which they
were charged.
(k) Aggrieved by the order of conviction and sentence, all the
three accused i.e. (A1), (A3) and (A6) filed separate appeals
before the High Court of Kerala at Ernakulam. By the
common impugned judgment dated 31.10.2003, the High
Court set aside the conviction and sentence of all the three
accused and acquitted them from all the charges levelled
against them.
(l) Questioning the order of acquittal, the appellant –
V.S. Achuthanandan, filed special leave petition against the
common impugned judgment and, this Court, by order dated
27.03.2006, granted leave to appeal.
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3) Heard Mr. Shanti Bhushan, learned senior counsel for
the appellant, Mr. U.U. Lalit, learned senior counsel for
R.Balakrishna Pillai (A1), Mr. Amarendra Sharan, learned
senior counsel for P.K. Sajeev (A3), Mr. S. Gopakumaran Nair,
learned senior counsel for Ramabhadran Nair (A6) and Mr.
R.S. Sodhi, learned senior counsel for the State of Kerala.
Submissions:
4) Mr. Shanti Bhushan, learned senior counsel for the
appellant after taking us through the entire materials relied on
by the prosecution, stand taken by the defence, elaborate
reasonings of the trial Court in convicting the accused and the
reasonings of the High Court in acquitting them, raised the
following submissions:-
i) There was enough material to show that (A1) was very much
interested in favour of (A3) and with the
connivance/assistance of the Board officials, more particularly
through (A6) Member of the Board, made the Board to accept
the tender offered by K.P. Poulose (A4) at an exorbitant rate
with various special conditions.
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ii) The criminal breach of trust has been committed by the
accused in the following ways:-
(a) By awarding both the works of Idamalayar at a very high
and exorbitant rate with special conditions having heavy
financial implications.
(b) By reducing the retention and security amount.
(c) By allowing the contractor to return only fifty per cent of
the empty cement bags.
(d) By accepting the special condition for the sale of T & P
items (tools & plants) which could not be sold as per the
general conditions of the contract
iii) Contrary to the norms and circulars/procedures of the
Board, in order to favour K.P. Poulose (A4), who was a friend of
(A1), the Board has accepted all the conditions just to favour
(A1) and (A3).
5) Mr. U. U. Lalit, Mr. Amarendra Sharan and Mr. S.
Gopakumaran Nair, learned senior counsel appearing for (A1),
(A3) and (A6) respectively supporting the ultimate decision of
the High Court submitted that:
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i) The outcome of the contract in favour of K.P. Poulose (A4)
was based on a “collective decision” by the Board and there
was no external pressure from anyone including (A1).
ii) All the decisions taken were in terms of rules/norms
applicable to the contract including accepting special
conditions.
iii) Mere acceptance of higher rate would not amount to
criminality.
iv) There is no allegation that by awarding contract in favour
of K.P. Poulose (A4), (A1) was monetarily benefited.
v) No material to show that there is any wrongful loss to the
Board.
vi) Inasmuch as the High Court acquitted all the accused in
respect of all the charges on appreciation of oral and
documentary evidence, interference by this Court is very
limited. In the absence of perversity in such conclusion,
normally, this Court would not interfere with the order of
acquittal.
vii) In any event, inasmuch as the State has not challenged
the order of acquittal, the present appellant being neither a
10
complainant or heir nor a party to any of the proceedings is
not entitled to pursue the present appeal. Accordingly, the
appeal is not maintainable and on this ground liable to be
dismissed without going into the merits of the claim.
6) We have carefully analysed the materials placed by the
prosecution, the defence, the decision and reasonings of the
trial Court and High Court and considered the rival
contentions.
Interference by this Court in an order of acquittal
7) Learned senior counsel for the respondents by drawing our
attention to the reasoning of the High Court and in respect of
all the charges leveled against acquitting them submitted that
in the absence of perversity in the said decision, interference
by this Court exercising extraordinary jurisdiction is not
warranted. It is settled principle that an Appellate Court has
full power to review, re-appreciate and reconsider the evidence
upon which the order of acquittal is founded. The Code of
Criminal Procedure (in short `Cr.P.C’) puts no limitation,
restriction or condition on exercise of such power and an
Appellate Court is free to arrive at such conclusion, both on
11
questions of fact and of law. An Appellate Court, however,
must bear in mind that in case of acquittal, there is double
presumption in favour of the accused. The presumption of
innocence is available to a person and in the criminal
jurisprudence that every person shall be presumed to be
innocent unless he is proved guilty by a competent court of
law. It is also settled law that if two reasonable conclusions
are possible on the basis of the evidence on record, the
Appellate Court should not disturb the finding of acquittal
recorded by the trial Court. Keeping the above principles in
mind, let us discuss the charges leveled, materials placed by
the prosecution in support of those charges, reasoning of the
Special Court convicting the accused and impugned order of
the High Court acquitting all the three accused in respect of
the said charges.
Statutory Provisions
8) The Electricity (Supply) Act, 1948 (in short `the Act’) was
in force at the relevant time. Section 5 of the Act mandates
each State to constitute State Electricity Board for the
management and supply of electricity. As per Section 78A,
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which was inserted by Act 101 of 1956 and came into force
w.e.f. 30.12.1956, in discharge of its functions, the Board shall
be guided by such directions and questions of policy as may
be given to it by the State Government. As rightly pointed out
by Mr. Shanti Bhushan, learned senior counsel for the
appellant that except on policy matters, the State Government
has no role in the affairs of the Board. In view of the charges
levelled against A1 who was the Minister for Electricity,
Government of Kerala, we adverted to these statutory
provisions.
A1’s interference in the affairs of the Board:
9) It is the case of the prosecution that A1 while he was
holding office of the Minister for Electricity, Government of
Kerala was interfering in the day-to-day affairs of the Board
including transfers, promotions, appointment of employees,
granting electric connection to consumers by giving directions
to the Board officers. It is also alleged that A1 used to
interfere even in awarding of contracts of the Board during his
period as Minister for Electricity. One of the main charges
leveled against A1 and others is that he, in his capacity, as
13
Minister for Electricity intended to settle contracts of the
Board in the name of his favourites or persons of his choice at
exorbitant rates with the ulterior object of making illegal profit
either to himself or to his favourites. With regard to the above
claim, the prosecution has produced evidence through
Kuriakose Chennakkadan (PW-64), Jagannad Prasad (PW-66),
Managing Partner, C.S. Company, Kottayam, Alexander
Vellappally (PW-138), Managing Director, Asian Tech and
Kamalasanan (PW-146), Managing Director of M/s We-Build.
According to Kamalasanan (PW-146), though he was one of the
tenderers for surge shaft work, quoted acceptable rates, could
not get the contract work because of the interference of A1. He
deposed that, the then Chief Engineer, late Bharathan
recommended his work for acceptance by the Board, but he
was further told by Shri Bharathan that he should meet A6
and also to give 5% of PAC as procuring expenses and if the
said amount is not given, the work could not be awarded,
hence he met A6 who told him that the rate quoted by him is
very low and advised him to settle whether it is workable or
not. He further deposed that at the time when A1 was the
14
Minister, A6 was a Member of the Board who was very
powerful having influence over the Minister. According to him,
the voice of A1 is reflected through A6 with regard to the
affairs of the Board.
10) Shri Alexander Vellappally (PW-138), Managing Director
of Asian Tech, in his evidence deposed that he was asked by
A1 to quote for the Lower Periyar Project Headrace Power
Terminal in 1980-81 when the pre-qualification system was
introduced in the Board. The tender of Shri Alexander
Vellappally was qualified and the lowest when it was
evaluated. However, he was informed that further steps for
negotiation and discussion regarding the acceptance of the
tender would take place only with the concurrence of the
Minister. He further deposed that he met A1 several times and
also sent letters to him and one letter sent by him to A1 is
marked as Ext. P-544. According to him, though he was the
lowest tenderer, the work was not awarded to him, but given to
HCC. He also explained that pre-qualification bid system was
misused by the Board officers, more particularly, in the case of
Lower Periyar Works.
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11) The next witness who highlighted the above issue is
Kuriakose Chennakkadan (PW-64). According to him, the
Minister used to interfere in the award of contracts and when
he met A6, he was asked to meet A1. He also deposed that A1
was interested for one K.P.Poulose (A4). His work was
terminated and it was re-tendered and awarded to K.P.Poulose
(A4).
12) Jagannad Prasad (PW-66), Managing Partner of M/s C.S.
Company deposed before the Court that while he was doing
the contract work of a tunnel for Kakkad Hydro Electric
Project, he approached the Chief Engineer Bharathan, who
told him that the work could be awarded only as per the
directions of the Minister (A1). He further deposed that he had
executed a promissory note for Rs.5,30,000/- in favour of one
Yackochan, who acted as a middle man for the commission
payment. He informed the Court that this contract was
terminated by the Board.
13) It was highlighted on the side of the appellant that it was
during that period, when A1 was Minister for Electricity, the
tender process of Idamalayar Tunnel and its concrete lining
16
and surge shaft work was started. It is relevant to note that
R. Balakrishna Pillai (A1) was the Minister for Electricity from
27.01.1980 to 21.10.1981, 26.05.1982 to 05.06.1985 and
25.05.1986 to 25.03.1987. The tender for surge shaft was
invited and awarded to one E.M. Varkey at 21% below
estimated rate. The estimated rate was Rs 74 lakhs for surge
shaft. However, the work was abandoned on 28.03.1981 due
to labour strike. Thereafter, tenders were invited again for the
surge shaft and four persons submitted their offers for
tenders. The lowest rate was quoted by M/s We-Build Pvt.
Ltd. and the next lowest rate was by E.M. Varkey at 57% above
PAC. It is pointed out that though the work was recommended
to be awarded, the Board decided to re-tender the work.
Accordingly, the tenders were invited again and E. M. Varkey
alone quoted for the work. His tender was not accepted since
he quoted exorbitant rate. In the meanwhile, pre-qualification
bid system was introduced in the Board which is evident from
Ext. P-576 dated 24.09.1981, which was made applicable to
Idamalayar contract works. Thereafter, tender for both the
works were invited by Shri Bharathan, the then Chief Engineer
17
which is evident from Ext. P-46 dated 05.06.1981. However,
the tender was cancelled by him which is also clear from Ext
P-47 dated 22.10.1981. The Chief Engineer extended the
validity of the tender upto 29.04.1982 and after his demise,
the then Chief Engineer (PW-7) extended the validity upto
30.06.1982. During that time, two tenders were received, one
by K.P.Poulose and other by Kuriakose Chennakkadan (PW-
64), quoting special conditions. The cover containing the
conditions and deviations was opened on 30.06.1982, when
K.P.Poulose was present in the Board’s Office. However,
Kuriakose, the other tenderer was not informed and later on
09.09.1982, K.P.Poulose was pre-qualified and Kuriakose was
disqualified which, according to him, was without notice. The
contract for the balance power tunnel and concrete lining work
of Idamalayar works was ultimately awarded to K.P.Poulose at
188% of the above estimated rate and the surge shaft work
was also awarded to him at 162% above the estimated rate.
14) It is clear from the above materials that the process of
tendering of Idamalayar works was interrupted on several
18
occasions mainly by the Board by cancelling the tenders and
ordering re-tender and by extending the period of validity of
tenders more than once. It was on the last date of extension of
the validity of the tender i.e. on 30.06.1982, K.P.Poulose
appeared and submitted his tender with special conditions
which was later accepted in the Board’s meeting dated
19.11.1982. The Special Judge, basing reliance on Board’s
resolution (Ex. P550(a)), has rightly concluded that there was
inordinate delay in awarding the work which reasoning was
not accepted by the High Court. The materials placed clearly
show that it was nearly three years to take a decision. It is
also clear from the evidence of PWs 64, 66, 138 and 146 which
clingingly established the circumstances under which A1
conceived the idea for fixing contract of the Board at
exorbitant rate in order to derive monetary benefits. From the
above, the contrary conclusion arrived by the High Court,
according to us, is not in terms of the evidence led in by the
prosecution.
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Whether Idamalayar contract was awarded at exorbitant
rate causing loss to the Board
15) The basic stand of the prosecution is that A1 entered into
criminal conspiracy to award the disputed contract involving
heavy financial gain to K.P.Poulose (A4) and the conspiracy
and abuse of power by certain officials enabled the
conspirators to earn a pecuniary advantage of
Rs.2,39,64,253/-, in addition to the financial loss caused to
the Board. It is the specific case of the prosecution that rate
awarded in both the contracts is exorbitant. It is not in
dispute that the contract was awarded at 188% above PAC in
the case of tunnel work and 162% above PAC for the surge
shaft work. Verification of Ext. P-52(b) shows that the
sanctioned estimate for the tunnel work was
Rs.1,17,20,633.90. On the other hand, the accepted tender
amount as per the award of contract was Rs.2,45,80,796/-
which is clear from Ext P 52. It is further seen as per Ext P-68
agreement, the sanctioned estimate for surge shaft was Rs. 74
lakhs and it was awarded for Rs.1,42,94,901/- The estimate
for floor concreting was Rs.479.5 per M3 and the estimated
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rate for sides and arches was Rs.476.20 per M3. All the above
details were highlighted in the evidence by PW-151 a
competent Engineer. Likewise, the rate for floor concreting
awarded to K.P.Poulose was Rs.825.47 per M3. In fact, the
calculations made by PW-151 were not seriously disputed by
the defence.
16) In order to appreciate the stand that the estimated rate
and the tender quoted by K.P.Poulose was exorbitant was
demonstrated by Mr. Shanti Bhushan by taking us through
the estimated cost of the work awarded to skilled workers
brought from Kulamavu and Moolamattom, who were awarded
the tunnel driving work on piece rate basis. It is seen that the
tunnel driving work was awarded to them at the rate of Rs.
1,250/- per M3 which was enhanced later, and finally, at the
time, when the workers stopped the work, the rate was Rs.
1,900/- per M3. This is clear from the settlement
memorandum Ext. P-212 signed between the labourers and
the Board. This fact was highlighted in the oral evidence of
PW-7, Chief Engineer of the Board. In his evidence, he
explained that the rate awarded to workers will be Rs. 2,500/-
21
per M3 including cost of materials. PW-156, the Investigating
Officer, also gave evidence on the basis of records collected
during his investigation. Ext.P-52 agreement shows that the
estimated rate for driving one meter tunnel was Rs. 4,090/-.
Ext. P-19/Contract Certificate of the Power tunnel shows that
the amount paid to the contractor for 24 meters tunnel driving
was Rs. 2,39,961/-. It was highlighted that when the total
work was done by the labourers at piece rate basis, they were
given Rs. 2,500/- only per M3. The remuneration for 24
meters driving tunnel would come to only Rs.60,000/- the
difference i.e. Rs.1,79,961 (2,39,961-60,000) would show that
the tunnel driving work was given to K.P.Poulose (A4) at an
excessive rate.
17) It is pointed out that there is enough material to show
that the labourers, who did the tunnel work, were prepared to
carryout the balance work of the tunnel at the estimated rate
of Rs. 4,090/-. At the relevant time, the representatives of the
workers made a representation to the then Minister for
Electricity, namely, R Balakrishna Pillai (A1) informing him
that they are prepared to do the tunnel work and allied works
22
at the estimated rate. Divakaran Kutty (PW-24),
Vadayattupara Radhakrishnan (PW-33), Sasidharan Nair (PW-
34) and Muraleedharan Pillai (PW-46) have given evidence that
they represented before the Minister as well as the officials of
the Board and informed their preparedness to do the work at
the estimated rate and also requested for absorption in the
Board’s service. In this regard, Mr. Shanti Bhushan, learned
senior counsel appearing for the appellant heavily relied on the
evidence of PW-46 who had gone to meet A1 along with (late) N
Sreekantan Nair and submitted a Memorandum Ext.P-287
dated 01.06.1982. It is relevant to note the response of the
Minister (A1) for the above said request. PW-46 stated that A1
told them that there is no question of giving the works to the
workers and he wants to give the work to K.P.Poulose. This
instance pointed out that A1 had personal interest in
K.P.Poulose and had decided to entrust the contract to him,
though at that time, the said K.P.Poulose did not submit the
tender for the work. We have already noted that K.P. Poulose
submitted his tender only on 30.06.1982 i.e. a month after the
memorandum dated 01.06.1982 submitted by PW-46. In
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support of the same, the evidence of PW-122, T.M. Prabha, the
then President of the Kerala Construction Labour Union that
he met A1 and gave representations and requested for award
of work to the workers at estimated rate and also absorption of
the workers in the Board’s service on permanent basis is also
relevant. Here again, it is relevant to note that PW-122 was
also informed that there is no question of awarding work to
workers, but the work had to be given to K.P.Poulose. The
evidence of PWs-46 and 122 and the statement made by A1 to
both of them clearly show that K.P. Poulose was the contractor
chosen in advance by A1 and other accused who were also
interested in him. As rightly pointed out by Mr. Shanti
Bhushan, this evidence should be connected with the
conspiracy to award the work to K.P.Poulose at exorbitant rate
originated even prior to the submission of tenders to the work
by K.P.Poulose and other tenderers. The contrary conclusion
arrived at by the High Court justifying the award at higher rate
to K.P.Poulose cannot be legally sustained. The Board is
empowered with the authority to award contracts and has
discretion to accept and being an authority constituted under
24
the Statute and a Pubic Undertaking is not expected to accept
tenders at exorbitant rates with financial implications causing
loss to the Board. The Board is always expected to protect its
financial interest while awarding contracts. The Board mainly
relied on the labour problem that was prevailing at the
relevant time. In this regard, it is relevant to point out that
the tender for the Idamalayar work was invited in March, 1982
and four persons, namely, Kamalasanan (PW-146), Managing
Director, We-Build, C.K. Verghese, E.M.Varkey and V.A.
Thankachan submitted tenders vide Exts. P78 series dated
21.03.1982. It is true that the tunnel workers went on strike
on 20.04.1981 and the contractors submitted their tenders
when there was labour unrest. However, the reason attributed
for the delay cannot be accepted. As rightly pointed out, there
were procedural irregularities and omissions by the Board
authorities in the manner of dealing with tenders submitted by
K.P.Poulose and Kuriakose, which ultimately eliminated
Kuriakose from the scene, keeping K.P.Poulose as the sole
tenderer, qualified by pre-qualification Committee of the Board
and hasty steps were taken by the Board in awarding contract
25
in favour of K.P.Poulose in the meeting held on 19.11.1982
lead to the conclusion that the award of contract in favour of
K.P.Poulose was an exorbitant one. It is relevant to point out
that the Special Judge, by adverting to Ext 550(a) expressed
that the reasons stated by the Board in awarding contract in
favour of K.P. Poulose at exorbitant rates are not acceptable.
No serious discussion by the Board
18) It is pointed out and in fact taken us through evidence
that there was no serious discussion in the Board meeting
held on 19.11.1982 and the minutes of the Meeting were
prepared as dictated by A7, the then Chairman of the Board. It
is the responsibility of the members, more particularly, full
time members of the Board, who were responsible for the
scrutiny of the deviations and conditions suggested by the
contractor which involved huge financial implications to see
that all transactions are beneficial to the Board and within the
permissible limit. Mr. Lalit and Mr. Sharan, learned senior
counsel appearing for A1 and A3 respectively heavily
contended that it was a collective decision of the Board and
there was no external pressure from anyone including A1. It is
26
relevant to point out that the decision ultimately taken for
awarding the contract with special conditions, which we will
discuss in the later paras, as suggested by the contractor,
involved huge financial implications at the risk and loss of the
Board. Though the High Court has concluded that the part-
time members who were signatory to Ex550(a) had approved
the minutes, subsequently, the Special Court made a
distinction between the responsibility of full-time members
and that of part-time members in the matters of awarding of
contract. It is true that all the members present subscribed
their signature in the minutes in awarding contract to
K.P.Poulose. It was highlighted that in evidence, A8, the
Financial Adviser to the Board, in his report has stated that
the rates awarded to the contractor are very high. The letters
sent by A8 were marked as Exs. P-415 and 416. It is also
relevant to point out that the then Law Secretary, Shri
Viswanathan Nair also conveyed his opinion during the
meeting of the Board that the rates are exorbitant. These
aspects were taken note of by the Special Court while
considering the culpability of the accused and the High Court
27
was not serious about their views. In other words, the High
Court has concluded that the award of contract to K.P.Poulose
was a collective decision of the Members of the Board. The
High Court also pointed out which was again highlighted by
the learned senior counsel appearing for the accused that
majority of the Members of the Board were highly qualified and
responsible officers and it cannot be said that they were only
mute witnesses to the decision of the Board. In this regard, it
is relevant to point out that the Special Court has rightly
concluded that there was no serious discussion in the Board
Meeting dated 19.11.1982 when the question of award of
contract was taken up and the minutes of the meeting were
prepared as dictated by A7, the then Chairman of the Board.
The then Deputy Secretary of the Board, R. Sankaran was
examined as PW-140, also admitted this aspect and stated
that there was no serious discussion in the meeting held on
19.11.1982. He explained that Ex.550(a) minutes of the
meeting is a reproduction of the dictation given by the
Chairman of the Board (A7).
28
19) The High Court has pointed out that the prosecution has
not produced any contemporaneous agreement for proving the
rates prevalent during the relevant period of award of the
contract. The High Court found that the contract was
awarded at 188% above PAC for the tunnel work and 162%
above PAC for the surge shaft work. It was pointed out from
the side of the Board that the estimate rate was prepared
taking into account the prevalent PWD rates for similar items
of work like tunnel driving, concrete lining, earth work, cost of
materials, labour charges, transportation charges of materials
to worksite etc. It is not in dispute that the contractor was
also given opportunity to conduct site inspection and decide
other aspects connected with the execution of the works for
submitting his tender rate. Though contractor can also quote
special conditions involving financial implications and other
conditions in the contract, which is usually settled by
negotiations, but the general conditions of contract shall not
be superseded while accepting special conditions to the
detriment of the Board. The Special Judge had noted that the
rate quoted by N.K.Kuriakose (PW-30) for tunnel driving and
29
surge shaft work was below 21.75% of the estimated rate and
there was much difference in the rate quoted by K.P.Poulose
and Kuriakose. It is further seen that the work was awarded
to Kuriakose at the rate of Rs. 1,092.3 per M3 for sides and
arches. The work awarded to Kuriakose was abandoned by
him since the Board did not provide him with necessary
materials for proceeding with the work as per the agreement.
He adduced evidence for the said abandonment and also
suffered loss in that regard for which Board was subsequently
held liable and he was paid compensation as per the Court
orders. The work was awarded to N.K. Kuriakose in 1979.
The Special Court has pointed out that even though there was
an increase of 25% of the actual rate awarded to Kuriakose,
still there was wide difference between the rates at which the
two works were awarded and on this ground also, the Special
Court held that the works for floor concreting and for sides
and arches were awarded to K.P.Poulose at a higher rate.
However, the High Court disagreed with the conclusion of the
Special Court. In this regard, it is useful to refer Ext.P174(2),
which is a report with regard to the rate of award of
30
Idamalayar contract. It was stated in the report that the
estimate was prepared with the scheduled rate of 1980 which
had been enhanced by 25% on labour to obtain 1982 schedule
and the work was awarded after the enhancement of the
scheduled rates. It is further seen that the estimate was
prepared with the scheduled rate of 1980 for the purpose of
obtaining the rate of 1982 i.e. increase of 25% in the rate was
given in 1980. The High Court has justified the increase of
25% by pointing out the increase mentioned in Ext.P299
which relates to contractor’s profit of 10%, overhead charges of
10% and 5% for labour benefits. Though the High Court has
agreed with the 25% increase in the rate of 1980-82, no
acceptable evidence was adduced over-riding the documentary
evidence furnished by Ext.P-299 and P174(2).
Award of contract to K.P. Poulose (A4)
20) It is the argument of Mr. Shanti Bhushan, learned senior
counsel for the appellant that the tendering process adopted
by the Board was with a view to eliminate other tenderers and
to choose the tenderer of their choice, namely, K.P.Poulose.
This was elaborated by pointing out that Kuriakose was
31
disqualified without giving him adequate opportunity to
present before the pre-qualification Committee and ultimately
K.P.Poulose was declared as qualified. In the said meeting,
only A6 and A7 were present and A8, and another member of
the pre-qualificaton Committee was not present. Pursuant to
the decision that Full Board meeting should be held on
19.11.1982 to decide the question of award of Idamalayar
contract, PW-7 was directed to issue notice to all the
tenderers. The materials relied on by the prosecution shows
that on 18.11.1982, notices were issued to HCC, E.M.Varkey,
Sunny K. Peter and K.P.Poulose. It is seen that only
K.P.Poulose was present on 19.11.1982. Sunny K. Peter PW-4
sent a telegram on 19.11.1982 stating that he is not physically
well. HCC conveyed their inability to the Board by their letter
which was received in the office of the Chief Engineer on
22.11.1982 stating that there was no sufficient time given to
attend the Board Meeting on 19.11.1982. Without verifying
the fact that whether all the other tenderers were ready, a
decision was taken on 19.11.1982 itself by accepting the offer
of K.P.Poulose with special conditions. As rightly pointed out,
32
the Board being a statutory authority, ought to have waited for
a reply from the other tenderers to ascertain whether they
actually received notices and reason for their inability to
attend. It was demonstrated that it was a pre-planned attempt
to award the work to K.P.Poulose alone and the notices issued
to other tenderers were in the form of an ultimatum. It was
also pointed out that for the negotiation on 04.11.1982, i.e.
prior to 19.11.1982, held by PW-7, with the tenderers, in the
office of the Board only K.P.Poulose and Sunny K. Peter were
present. It is further seen that E.M. Varkey and HCC were not
invited. The fact remains that PW-7 did not invite E.M.Varkey
who quoted less rate and HCC, a reputed construction
company for the second negotiation. Though a telegram was
sent on behalf of E.M.Varkey, one of the tenderers that since
he was away and request was made to fix another date, it was
recorded that the tenderer had already lost his opportunity
offered. This has been demonstrated by the appellant that the
Board was not prepared to allow the request of E.M. Varkey for
a discussion. It is useful to refer here that the pre-
qualification Committee, headed by A7, gave chances to
33
K.P.Poulose to correct the errors and mistakes in the tender
form submitted by him for the impugned works, on the other
hand, such concession was not afforded to the other
tenderers, more particularly, E.M. Varkey. Both Sunny K.
Peter and Kuriakose were examined as PWs-4 and 22
respectively. The evidence of Kuriakose shows that he was an
experienced contractor, quoted 124% above PAC for the work
and submitted his tender on 30.06.1982. According to him,
he was not invited for any discussion. He was disqualified on
09.09.1982 and was not invited for being present for opening
his deviations and conditions in the tender. In the same way,
the evidence of Sunny K. Peter PW-4 also highlighted how he
was discriminated, though he has quoted only 135% above
PAC, he was not given opportunity to consider the
reasonableness of the rates quoted by him. According to him,
he received notice only at 2.40 p.m. on 18.11.1982 and
because of his illness, he could not attend the meeting on
19.11.1982. The fact remains, the Board has not considered
his request and finalised the contract on 19.11.1982 in favour
of K.P.Poulose.
34
21) Another aspect highlighted by the learned counsel for the
appellant relates to the conduct of A1 with regard to
settlement of labour dispute. The evidence shows that there
was labour strike in the tunnel area which started in April,
1981 and continued from the time of inviting tenders on
05.06.1981 till the time of award of contract. It was
highlighted that there was no effort on the part of A1 to settle
the labour dispute before tendering process was initiated. We
have highlighted the Memorandum submitted by the labourers
to A1 on several occasions requesting for settlement of labour
problems. It was not settled and the matter was kept alive till
the tender was fixed in the name of K.P.Poulose on
19.11.1982. It was only after the award of the contract, A1
took initiative to settle the labour dispute, more particularly,
when he came to know that K.P.Poulose cannot enter the site
because of the obstruction of the workers to begin the contract
work. It is relevant to point out that PW-7 informed A1 and A6
more than once that in case the labour dispute could be
settled in advance, the contract could be awarded at a
35
reasonable rate. The evidence of PW-7 clearly shows that his
request was not accepted by A1 and A6.
22) The evidence discussed above show that the rate quoted
by Sunny K. Peter (PW-4) vide his evidence in Court, was
135% above PAC, which was less than 188% above PAC,
quoted by K.P. Poulose and approved by the Board. The High
Court failed to take note of the importance of evidence of PW-4
and justified the action of the Board in not pursuing the
tender submitted by Sunny K Peter (PW-4) with a lesser rate
on the ground that his tender is liable to be rejected since he
wanted an arbitration clause in the agreement. Further,
though PW-4 has quoted lesser rate than K.P. Poulose, in his
evidence, he has highlighted that he was not given an
opportunity to consider the reasonableness of the rate quoted
by him i.e. 135% above PAC. The High Court has not only
ignored his assertion but found that the rate quoted by him for
the surge shaft work is not a lesser rate when compared to one
quoted by K.P. Poulose i.e., 188% above PAC. Though the
Special Court has correctly found that Sunny K. Peter quoted
less than the rate quoted by K.P. Poulose, the High Court, on
36
erroneous assumption found fault with the finding of the
Special Court which correctly appreciated prosecution case.
Acceptance of Special Conditions & Concessions
23) With regard to allegation of the prosecution that certain
Special Conditions were accepted by the Board (Ex. P588)
involving huge financial commitments favourable to the
contractor causing loss to the Board, it is relevant to mention
that one of the special conditions, is condition No. 4 which
relates to tools and plants sold to the contractor in violation of
the General Conditions of the contract. These special
conditions along with other conditions were accepted by the
Board superseding corresponding agreement provisions. Ex
P52 (c) is the general conditions of contract and instructions to
the contractors issued by the Board. Among various clauses,
Clause E1-091 in Ex. P52(c) deals with tools and plants issued
to the contractors. This clause provides that the Board is
bound to make available to the contractors only such tools
and plants listed in the Schedule attached thereto, that too
subject to availability. Such items of tools and plants which
are listed in Ex. P52 agreement marked as Ex. P52(d) shows 8
37
items of tools and plants which can be hired out to the
contractors if requested on the specified rates. In Ex. P58,
deviations and conditions submitted by the contractor as Item
No 4, stated that such tools and plants listed in Ex. P52(d)
shall be sold to him on outright sale at book value deducting
depreciation and the cost may be recovered on prorata basis
from his bills. The full Board, in its decision dated
19.11.1982, had accepted the above special condition of the
contractor. It is relevant to point out that these items includes
tipper wagons loco, louder, existing truck lines and pipes,
items which can only be hired to the contractor as per clause
E1-091 of the General Conditions of the contract. It is the
case of the prosecution that it was the decision of the Board to
sell those items of tools and plants which includes very costly
foreign imported materials. The official examined on the side
of the prosecution pointed out that there is no provision in the
general conditions of the contract enabling the Board to effect
sale of those tools and plants to the contractor. However,
certain materials belonging to the Board mentioned in Clause
E1-093 and not covered by the list mentioned in Clause E1-
38
091 could be sold to the contractors if available to the Board.
The evidence led in clearly shows that the sale of materials
listed in Clause E1-093 supersedes the general conditions of
contract. In other words, it is clear from the evidence that
those materials which were not mentioned in the Special
Conditions were sold to the contractor on outright sale. In this
regard, it is useful to refer the evidence of Udayabhanu
Kandeth PW-136, Auditor attached to the Accountant General
Office which shows that 126 items of tools and plants were
sold to the contractor of which the cost of 117 items was Rs.
16.5 lakhs. The Auditor of the Board, who was examined as
PW-130, also explained about the sale of tools and plants to
the contractor, which was not provided in the agreement. It is
clear from the evidence that the sale of tools and plants which
could only be hired to the contractor as per the list in E1-091
was against the objections raised by A8, the Financial Advisor
and Chief Accounts Officer of the Board during the relevant
period. In his report, A8 had noted that the financial
implications involved in the sale of items of tools and plants
were not considered either by the Board or by the officers of
39
the Board at the time when the full Board decided to sanction
the above special condition No. 4 of the contract. These
aspects have been duly considered by the Special Court,
namely, that the tools and plants which are only to be hired as
per Clause E1-091 to the contractor, however, the Board
permitted outright sale which is detrimental to the financial
interest of the Board. These important aspects have been
overlooked by the High Court while upsetting the decision of
the Special Court.
24) In addition to the same, the prosecution has led in further
evidence to show that the contractor was favored in several
aspects. PW-128, V. Ramanarayanan, Superintending
Engineer, in his evidence has stated that pental placer, an
imported item not included in the list for issue on hire, was
sold to the contractor, the sale value of which was Rs. 4 lakhs
and according to him only lump sum recoveries were made
from the CC bills of the contractor, instead of prorata recovery
as provided in the agreement. This also caused loss of interest
on the sale price of materials. He further deposed that 30
items of spares were issued to the contractor costing Rs. 6
40
lakhs and when he calculated the total value of spares and
materials issued to the contractor it came around Rs. 36
lakhs, out of which, only a portion was recovered by the Board
from the contractor vide Ex P517-P519. This witness has also
pointed out that there were several items sold to the contractor
without obtaining sanction of the Board.
Return of empty cement bags by the Contractor
25) Another special condition sanctioned by the Board in
favour of the Contractor relates to the return of empty cement
bags. This special condition provided that the Contractor shall
return only 50% of empty cement bags in good condition. Ext.
P-33, Audit Enquiry Report of Idamalayar Project Circle states
that the Contractor had to return 65,100 empty cement bags,
the value of which was calculated at more than Rs.1 lakh.
According to the Auditor, because of the special condition, the
Board had sustained a loss of Rs.1,08,879.75. The Financial
Advisor and Chief Accounts Officer, who arrayed as A8, had
stated in Ext. P-416 that without evaluating the exact financial
implications, sanction was accorded by the Board to the
special condition regarding return of empty cement bags to the
41
advantage of the Contractor for getting financial gain. Though
it is stated that the condition only provides for return of 50%
empty cement bags in good condition and for the remaining,
the rate provided by the general conditions of contract could
be realised from the Contractor, the fact remains, the special
condition which we are concerned does not provide for the
realisation of value of the remaining unreturned cement bags.
26) With regard to special conditions, the High Court has
held that inasmuch as there is a provision in tender to enable
the Contractor to get special conditions, it cannot be said that
the special conditions and deviations of the Contractor should
not be accepted. Here, the High Court has missed the real
issue as to whether all special conditions as requested by the
Contractor can be sanctioned by the Board in violation of
general conditions of contract, which is the standing order of
the Board applicable to all contracts and the policy adopted by
the Board. Simply because there is a provision to enable the
contractor to suggest special conditions advantageous to him,
it does not mean that the Contractor can suggest any special
condition which involved financial implication to the detriment
42
of the Board. As correctly found by the Special Court, the
special condition No.4 relating to sale of tools and plants is a
favour done by the Board to the Contractor for obtaining
financial gains at the risk of Board’s loss. The Special Court
has substantiated its finding on the point based on evidence
furnished by the auditors. However, the High Court relying on
Ext D-28 provided for recovery of balance 50% of empty
cement bags not returned or returned in damaged condition
and recovery will be effected as stipulated in the tender
condition, erroneously concluded no loss could be sustained to
the Board. It is relevant to point out that the special condition
No.10 clearly states that the contractor is bound to return only
50% empty cement bags in good condition. To make it clear,
this condition supersedes the corresponding general condition
of the contract. Therefore, the Contractor is bound to return
50% of empty cement bags in good condition and there is no
need to pay the price of balance 50%. Accordingly, the Board
can act only on the basis of the special condition No.10
regarding the return of empty cement bags and is not entitled
to recover the value of balance 50% of unreturned cement
43
bags. The contrary conclusion arrived at by the High Court
relating to return of empty cement bags cannot be accepted.
Fixation of security and retention:
27) Yet another special condition involving financial
implications sanctioned to the Contractor is with regard to the
fixation of security and retention amount. Special Condition
No.1 of Ext.P-588 deals with this subject. It is the prosecution
case that restriction of security and retention amount is in
violation of the provisions contained in the general conditions
of the contract and it is a favour shown to the Contractor to
make illegal gains at the expense of the Board. Clause E1-008
of Ext. P52(c) is the provision relating to security deposit of the
Contractor which states that for major works where the cost of
construction exceeds Rs.25 lakhs, the security deposit should
be 2% of the PAC. In the case on hand, the PAC of Idamalayar
contract works exceeds Rs.25 lakhs. There is no dispute for
the same. The security for both works should be fixed at 2%
of the PAC. Clause E1-011 of ExtP-52 is the general
conditions of contract and instruction to the tenderers dealing
with retention of the money from the bills payable to the
44
Contractor. As per this clause, from each bill of the
Contractor 10% should be deducted towards additional
security. However, the retention was not to exceed 5% of the
PAC where cost of work exceeds Rs.25 lakhs. Therefore, 5% of
PAC is to be retained as retention amount for both these
works. In this regard, it is relevant to refer the special
condition. In the case of tunnel work, the retention and
security is limited to Rs.5 lakhs which is clear from Ext.P-71.
Likewise, in the case of surge shaft, security is limited to Rs.1
lakh as evidenced by Ext.P-69. This is also strengthened from
the evidence of PW-8 who was the Executive Engineer in the
Idamalayar project. He explained that the security amount
and retention amount due from the contractor would come to
Rs.12 lakhs. Inasmuch as the PAC for both works would come
to Rs.2,45,80,796/-, the retention amount in the case of surge
shaft work would come to Rs.7.2 lakhs, which is 5% of the
PAC. PW-8 has explained that the restriction of retention
amount is a benefit shown to the Contractor. In Ext.P-65,
report of PW-7, also calculated financial loss that will be
sustained by the Board in limiting security and retention
45
amount of the Contractor. In the same report, PW-7 also
mentioned the loss of interest for the same. It is also pointed
out that due to restricting the security and retention amount
as per the special condition No.1, sanctioned to the
Contractor, the liquidated damages payable by the contractor
shall not exceed the whole amount of retention plus security
deposit. The result of restriction of security and retention is
that the liquidated damages payable by the Contractor is also
automatically restricted accordingly. In that event, the Board
is not entitled to recover any amount by way of liquidated
damages even if the Contractor is guilty of negligence or
default. All these aspects have been properly scrutinized by
the Special Court. No doubt, the High Court relied on the
evidence of Madhavan Potti (PW-5) that acceptance of special
conditions in a contract is a normal procedure. In the same
way, the High Court has also placed reliance on the evidence
of Ramanarayanan (PW-21) that reduction of security and
retention amount is also a normal procedure. A perusal of
Kerala State Electricity Board Tender Regulations show that
the reduction of security deposit is permissible only in the case
46
of established firm/Company and that the security deposit of a
new contractor shall not be reduced. The course adopted by
the Board is contrary to the condition contained in Regulation
No.25(c) of the Board’s Regulations. Though the High Court
has observed that in all major contracts, it is an accepted
practice to put a ceiling on the security and retention amount
and there is no acceptable evidence to support such a finding,
we are unable to accept the observation of the High Court that
“for the success of execution of major contract works,
small favours are inevitable”. We conclude that the above
observation of the High Court is based on a general opinion
not supported by any material or evidence on record.
Criminal Conspiracy
28) On this aspect, the Special Court has analysed the
evidence of witnesses and considered the documents produced
and marked by the prosecution and concluded that there is
sufficient evidence for finding that a criminal conspiracy was
hatched out at the instance of A1 (R.Balakrishna Pillai, the
then Minister for Electricity) and P.K. Sajeev (A3) who was a
close associate and political ally of A1. This was strengthened
47
by the evidence of I.K. Prabhakaran, Assistant Engineer,
Quality Control, Idamalayar project who was examined as PW-
21 and other witnesses. Nobody has challenged the
relationship between A1 and A3. It is the case of the
prosecution that a conspiracy was hatched out at the instance
of A1 and others with the illegal object of getting the
Idamalayar project fixed on one among themselves at
exorbitant rates and make illegal profits. It is also the definite
case of the prosecution that though the work was awarded in
the name of K.P.Poulouse, one of the accused, it was actually
executed by A3 and another accused Paul Mundakkal
(deceased). It has come in evidence that the amount of work
was invested and payments were made by Paul Mundakkal
and A3. As rightly observed by the Special Court, the
relationship between A1 and A3 is a relevant factor in arriving
at the circumstances leading to the formation of the
conspiracy. The evidence led in normally show that A3 was an
intimate friend of A1 and very closely moving with him who
was the Minister for Electricity during the relevant period.
PW-21, in his evidence, has stated that A3 was an active
48
member and leader of Kerala Congress Party led by A1 at the
time when works were allotted. PW-3, who was a watchman of
the Inspection Bungalow at Idamalayar was examined on the
side of the prosecution has stated that A1 and A3 used to
come and stayed in the Inspection Bungalow. He further
asserted that it was A3 and the deceased Paul Mundakkal,
who were supervising the work at site. In addition to the
evidence of PW-3, the evidence of PWs 6, 7 and 8 who were
Engineers at the relevant time at Idamalayar worksite and
supervising execution of works corroborated the evidence of
PW-3. PWs 24, 25 and 26 also supported the above claim of
the prosecution. PW-25, one of the workers at Idamalayar also
deposed that he was working with A6, who was managing
Idamalayar works. PW-26, another worker also stated that
when he went to the house of A3, he saw A1 in his house.
29) The prosecution has established the relationship and
friendship between A1 and A3 by placing acceptable evidence.
The nomination of A3 to Board’s Consultative Council was
made at the instance of A1. Under Section 16 of the Electricity
(Supply) Act, 1948, the Constituting Authority is the State
49
Government. The evidence led in by the prosecution shows
that A1 took initiative to include the name of A3 in the list of
nominees for constituting the Consultative Council. The
evidence of PWs 18, 27 and 51 and Ext.180(c) establish the
case of the prosecution. The evidence further shows that the
mandatory requirements contemplated under Section 16 of the
Act regarding the constitution of Consultative Council was not
adhered to by A1 who wanted to include A3 in the panel which
states that the State Government may constitute the
Consultative Council considering all representatives of power
generating companies and other persons in consultation with
the representative bodies of various interests, namely,
industry, commerce, agriculture, transport etc. It makes it
clear that consultation with the representative bodies of
various interests is a mandatory condition precedent for
appointment of a Member by the Government in the Board’s
Consultative Committee. But in the case on hand, from the
evidence, it is clear that there was no such consultation by the
Government before making nomination of A3 who was the
Secretary of Kothamangalam Bus Owners Association. It was
50
pointed out that usually the representatives of State Level
Organisers representing various interests alone were
nominated after consultation by the Government with such
bodies. Admittedly, A3 was not representing any State Level
Bus Owners Association. This is evident from the evidence of
PWs 31 and 16. It has also come in evidence that on
30.07.1983, in a Conference held on Idamalayar Inspection
Bungalow, attended by various officers of the Board and
others connected with the execution of Idamalayar work, A1
declared in public that A3 was his bosom friend and requested
everybody to cooperate with him for the successful completion
of the project work.
30) The prosecution has established the relationship of A1
and K.P Poulose even before awarding of contract. In
November 1982 itself, A1 had chosen K.P. Poulose as
prospective contractor for execution of the work which fact is
spoken to by T.M. Prabha (PW-122) and also by
Muraleedharan Pillai (PW-46). We have already adverted to
the evidence of PW-46 in detail in the earlier paragraphs.
Their evidence shows that when they met A1 requesting for the
51
award of the tunnel driving work to the workers at Idamalayar,
who were brought from Idukki, Kulamavu etc, A1 told them
that the execution of the Idamalayar work is proposed to be
given to K.P. Poulose. This was on 29.06.1981 i.e. well prior to
the execution of the contract, and indicate that there was prior
contract between A1 and K.P. Poulose regarding the award of
contract work at Idamalayer.
31) The role played by A3 in fixing the contract to K.P. Poulose
is also relevant to infer the formation of agreement between
himself and A1, the Minister for Electricity. In addition to the
same, the prosecution has adduced acceptable evidence that a
company by name Hydro Power Construction Company was
registered as a partnership firm with K.P. Poulose as Managing
Partner and A3 and Paul Mundakkal as Working Partners.
Further, close relatives of K.P. Poulose, A3 and Paul
Mundakkal were parties to the partnership deed. The object of
the partnership was to execute the Idamalayar tunnel work
and also the surge shaft work in the name of the Company.
The said firm was an assessee under the income tax Act which
is evident from Ex. P245, the income-tax assessment of the
52
firm in the year 1984-85 and 1985-86. K.P. Poulose, A3 and
Paul Mundakkal were submitting income tax returns and this
is evident from the evidence of PW-123, an Income-tax
practitioner. In addition to the same, when A3 was questioned
under Section 313 Cr.P.C., he admitted that he invested good
amount for the work and visited the site to watch the progress
of the work. The fact that A1, while as a Minister for
Electricity, interfered with the award of the contracts of the
Board were spoken to by PW-64, PW-66, PW-138 and PW-146
which we have already discussed in the earlier paragraphs. It
is also clear that A1 was awaiting for a probable contractor of
his choice to undertake the Idamalayar works at exorbitant
rates.
32) There was labour agitation prevailing at Idamalayar work
site. The workers brought from Moolamattom, Kulamavu etc.
went on strike demanding execution of the work on piece rate
basis and also for absorption in permanent service of the
Board. At the time, when the tendering process of the work
was started by the Chief Engineer, Bharathan, strike situation
was pending at Idamalayar which continued till the work was
53
awarded in 1982. It is in evidence that after execution of the
agreement of the Idamalayar work by K.P. Poulose, there was
obstruction from the striking workers preventing him from
entering the worksite and consequently A1 interfered and
settled the labour dispute by awarding a compensation of Rs.
11 lakhs to the striking workers and the worksite was made
clear free of any labour unrest. It is the prosecution’s case
that this was done to help the contractor, a party to the
conspiracy for execution of the work and make illegal profit
therefrom. The evidence of PW-7, Chief Engineer and other
witnesses stated that the awarding of Idamalayar work at
exorbitant rate could have been avoided in case the labour
issue was settled earlier. The prosecution has also highlighted
labour unrest at Idamalayar which was kept pending at the
instance of A1 and other interested parties so as to make it
appear that no contractor will come forward to undertake the
contract, so much so that there is possibility of choosing a
contractor of their choice for the execution of the work at
exorbitant rate.
54
33) The prosecution has also highlighted that to achieve the
illegal object of finding the contract in the name of K.P.
Poulose at exorbitant rate, the pre-qualification system was
introduced by the Board vide order Ex. P576 dated
24.09.1981. This was after tendering process has started for
the Idamalayar work. One Alexander Vellappally, who was
examined as PW-138, explained before the Court that pre-
qualification bid system was misused by the Board to
safeguard vested interest by choosing contractors of their
choice. From the proceedings initiated by the Board on
19.11.1982, passing a resolution to award the work to K.P.
Poulose, a scheme of pre-qualification bid was successfully
operated by the Board authorities at the instance of A1 for
paving the way clear to K.P. Poulose to get the work at a very
high rate.
34) With regard to the relationship between A1 and A3, the
prosecution has relied on the evidence of PW-19, receptionist
of the Paramount Tourist Home who has stated that A3 was
occupying a room on 17.11.1982 and 19.11.1982 on rent at
Paramount Tourist Home. Exs. P185, 186 and 187 are
55
registers maintained in the Tourist Home and relevant entries
therein were marked and proved by PW-19. According to him,
A3, took a room in the Tourist Home at 11:50 a.m. on
17.11.1982 and vacated the room on 5:00 p.m. on 19.11.1982.
The Special Court noted the significance of his stay during the
above period at Thiruvananthapuram. A3, in all probability,
was at Thiruvananthapuram to meet A1 and also to meet PW-
7, Chief Engineer, A6 and A7, to work out the scheme for
getting the contract in favour of K.P. Poulose at a higher rate
after avoiding other tenderers. It is further evident that A3
took the room on 17.11.1982 when the Full Board meeting
was considering the tender of K.P. Poulose and left the room
on 5:00 p.m. on 19.11.1982 after the tender was awarded to
K.P. Poulose. The close intimacy of A3 with A1 is well known
and his influence over A1 might have persuaded A6 and A7 to
fix the contract on K.P. Poulose. PW-7, Chief Engineer has
deposed before the Court that A3 met him on 04.11.1982 and
requested him to make a recommendation for awarding the
contract to K.P. Poulose. A3 also told PW-7 that when A1 was
talking over phone to PW-7, while in the office of the Chairman
56
of the Board, the witness was present in the chamber of A1
and asked PW-7 what was the difficulty in recommending the
contract even after A1 directed him to do so. The Special
Court, after analysing the evidence in detail found that A3 is
the man behind the manuring for getting the contract awarded
to K.P. Poulose. K.P. Poulose, however, was only a benamidar
and A3 and Paul Mundakkal were the beneficiaries though the
work was awarded in the name of K.P. Poulose. The
prosecution has also highlighted and proved that A1 was
awaiting for a better contractor, who would quote higher rate,
when PW-146 Kamalasanan, Managing Partner, We-Build was
not willing to quote a higher rate as desired by A1. The role
played by A6 in the matter of hatching out the conspiracy and
the fulfillment of the unlawful object is proved by evidence,
particularly, from the evidence of PW-7. From the above
materials, it is clear that a criminal conspiracy among A1, A3
and A6 can be inferred. A1, as Minister for Electricity is all in
all dealing with the efforts of the Board including the awarding
or cancellation of the contracts. The officers and the Board
members were under his pressure and fear which clearly seen
57
from the statements of prosecution witnesses, namely, PWs 8,
36, 60, 62, 138, 140, 64, 66 etc. It is also relevant to point out
that A6 and A7 avoided considering the request of PW-4 in his
telegram sent to the Board. We have already adverted to the
fact that it was Sunny K. Peter, PW-4, who quoted a lesser rate
than K.P. Poulose. He quoted only 135% above PAC. By
arranging the Board meeting on 19.11.1982, with short notice
of less than 24 hours, the intention was to avoid other
tenderers and to achieve the object of conspiracy to award the
contract to K.P. Poulose who alone was present on 17.11.1982
and 19.11.1982. The request of E.M. Varkey for fixing another
date for participating in the discussion for award of the
contract was also rejected. From these materials, as rightly
concluded by the Special Court, it leads to a conclusion that
several out of way methods were adopted by the Board at the
instance of A1 for achieving the object of conspiracy.
35) As rightly pointed out by the Special Court, the
confirmation of Hydro Power Construction Company
consisting of A3, A4 and Paul Mundakkal and their close
associates and relations for execution of Idamalayar contract
58
work, A3 supervising the execution of the contract work and
the visit of A4 at the worksite only on rare occasions, the
payment of wages to the labourers by A3 and Paul Mundakkal
are all proved various circumstances that the conspiracy
among the accused continued to operate even after the award
of the contract. The High Court failed to consider various
instances and materials placed by the prosecution in respect
of charge relating to conspiracy. According to the High Court,
“the proved circumstances are not sufficient to hold that
there was conspiracy as alleged by the prosecution or as
found by the Special Court.” Before us, it was demonstrated
that several material aspects have not been considered by the
High Court, for example, the stay of A3 at Paramount Tourist
Home, Thiruvananthapuram on the crucial dates i.e., on
17.11.1982 to 19.11.1982 has not been considered by the
High Court in the correct perspective. As pointed out by the
appellant, the High Court ought to have found that the
evidence relating to A3 at Paramount Tourist Home is only to
bring out one of the circumstances leading to the formation of
criminal conspiracy hatched out by the accused. In fact, A3
59
has admitted his stay in his Section 313 Cr.P.C. statement at
Thiruvananthapuram on those dates, hence, finding by the
High Court on this aspect, faulting with the Special Court
cannot be sustained. Even though, the High Court has
admitted that A1 and A3 belonged to the same political party
and close relationship exists between the two, the nomination
of A3 in the Consultative Council of the Board as evidenced by
Ex.P-180 was unfortunately not recognised by the High Court
as a material evidence proved by the prosecution. Insofar as
claim of PW-3 that it was he who settled the bill in the
inspection bungalow, the perusal of his entire oral evidence
clearly supports the case pleaded by the prosecution insofar as
the close association between A1 and A3 during their visit to
the worksite. PW-7, former Chief Engineer, a most reliable
witness was examined in the presence of A3 on 04.11.1982 in
the Board’s office. There is no necessity to corroborate or
further material in addition to the oral evidence of PW-7. As
rightly analysed and concluded by the Special Court, there is
no infirmity in the evidence of PW-7 merely because there is no
documentary evidence in respect of the presence of A3 at the
60
Board’s meeting. The evidence of PW-7 cannot be ignored.
36) The High Court very much accepted the stand of the
accused that it was a collective decision of the Board, we have
already discussed the reasons stated in Ex P-550(a) for
awarding contract in favour of K.P. Poulose at exorbitant rate.
The reasons relied on by the Board exposes the omission and
negligence on its part in fixing the contract with PW-146
Kamalasanan or E.M. Varkey or with Kuriakose PW-22 or PW-
4 Sunny K. Peter, who quoted lower rates then K.P. Poulose.
Even before us, learned senior counsel appearing for the
accused reiterated that it was a collective decision of the
members of the Board to award the contract in favour of K.P.
Poulose. We have already highlighted the reasoning of the
Special Court relating to the important fact that contract was
awarded at exorbitant rate, reduction in retention and security
amount, return of 50% empty cement bags and also
acceptance of special conditions for the sale of tools and
plants. In the instant case, all the ingredients of criminal
conspiracy are satisfied for convicting A1, A3 and A6 for the
offence charged against them.
61
Special mention about PW-7, retired Chief Engineer of the
Board & PW-46
37) The High Court as well as learned senior counsel
appearing for the accused commented the evidence of PW-7 by
saying that there are inherent improbabilities and
inconsistencies and his evidence is not cogent and convincing
whereas among several witnesses examined, prosecution
heavily relied on the statement of PW-7, a retired Chief
Engineer. He retired from service on March 1985. He joined
the service of the Board on July 1954 as Junior Engineer and
prior to that he was in the Electricity Department. It has come
in evidence that he gained vast experience since he worked in
various projects such as Chakulam project, Neriyamangalam,
Idukki, Kakakd and Idamalayar project. It is also seen from
his evidence that he participated in four major projects. He
first examined on the side of the prosecution on 28.03.1996
and at that time he was 66 years old. In this background, let
us test his evidence as discussed in the earlier part of our
order. The prosecution heavily relied on his evidence and, in
fact, Mr Shanti Bhushan in support of his argument mainly
62
relied on the evidence of PW-7. By his rich experience and
worked as a Chief Engineer at the relevant time, namely, when
Idamalayar project was commissioned, PW-7 furnished all the
details with reference to various documents such as his report,
opinion, minutes of the meeting of the Board with reference to
Idamalayar project. No doubt, all the three senior counsel
appearing for the accused A1, A3 and A6 severely criticized his
conduct in not answering many of the questions in his cross
examination. It is true that in chief-examination, PW-7
highlighted various aspects with reference to documents such
as opinion, report and Board’s proceedings and minutes
thereon. From the perusal of his cross-examination, it cannot
be concluded that he didn’t answer or elaborate any of the
question put by the counsel for accused. It is true that for
certain questions he answered that he has to verify from the
records and for certain questions he didn’t answer or
answered stating that “he do not remember”. It is relevant
to point out that he retired from service in March 1985 and he
was called upon to give evidence only in March 1996 nearly
after 15 years of the commissioning of the Idamalayar project.
63
If we consider all these aspects, there is no reason to reject his
entire evidence as claimed by the respondents/accused. In his
evidence, he has mentioned that on the submission of tender
by K.P. Poulose, it was noted that he quoted 189% above PAC.
Agreement submitted by K.P. Poulose has been marked as Ex.
P-52 and in that Paul Mundakkal was signed as witness. It is
further seen that as Chief Engineer, he sent letters to K.P.
Poulose and Kuriakose who was another persons submitting
tenders on 28.07.1982. He made a note that the tender is not
in proper form and it contains many mistakes and requested
them to rectify the mistakes within a time schedule. In this
regard, it is useful to refer his categorical statement which, he
deposed before the Court that “I considered it as a special
case because the engineer member Mr. Ramabhadran Nair
(A6) informed me that Mr. Balakrishna Pillai (A1) has a
special interest to award this work to Mr. K.P. Poulose
(A4), hence the mistakes happened in the tender should be
rectified with K.P.Poulose himself and make a
circumstance to award the work to K.P. Poulose…” About
the disqualification of tender offered by Kuriakose, PW-7
64
deposed the decision was taken by a committee because he
could not rectify the mistakes as directed by him. In respect of
a question put to PW-7 about the response of A6 and A7, he
answered “they stated that they are happy in disqualifying
Mr. Kuriakose”. It is also seen from his evidence that after
noting that the rate quoted by K.P. Poulose is higher rate, he
forwarded the said information for remarks of FA and CAO.
He also asserted that A6 told him that A1-Minister
Balakrishna Pillai is very much particular to award both the
works to K.P. Poulose. It is further seen that he highlighted
that without solving the problem of tunnel workers no
contractor can do the work. According to him, because of this
reason he informed A6 to take steps to solve the problem of
workers and in fact PW-7 met A6 at his office on 04.11.1982 at
11:00 a.m. When the issue relating to labour problem was
under discussion, according to PW-7, the P.A. of Board
Chairman Sankaran Nair approched him and informed that
Minister Balakrishna Pillai is willing to talk to me through
telephone of the Board’s Chairman. In view of the same,
according to PW-7, he suddenly entered into the cabin of
65
Board’s Chairman which is the next room and took the
telephone. He introduced himself through the phone and
according to PW-7 “A1 asked him why you were not
recommended the tenders of Idamalayar tunnel and surge
shaft to the Board. I replied to A1 I am going to talk about
it with the contractor today and I am having same
problem in this matter. There is only one tender
submitted by K.P. Poulose, the rate is very exorbitant, if
the work is awarded without solving the problem of tunnel
workers, K.P. Poulose cannot start the work. A1 replied
that you don’t look upon it, K.P. Poulose will purchase all
these workers, we granted this higher rate for that also,
hence you recommend the Board to award both the works
to K.P. Poulose without any delay. Then the conversation
was concluded. I immediately visited the room of A6. I
told to A6 about the call of Minister and my reply and
difficulties. At that time A6 told him that the Minister
directly asked you, so you do it as he say.” The following
statement is also relevant about the conduct of A1 and how
much he was interested in awarding contract in favour of K.P.
66
Paulose. PW-7 deposed “the face of A1 shows much anger.
He explained A1 that if tenders are invited after solving
the problem of tunnel workers, rate will be reduced, that is
profitable to the Board. A1 replied with higher anger that
I know how to look after the Board, I do not want any
advice from your people, are you approaching me with
intimate talks, after this, I had no talk anything about it.”
It is further seen that thereafter a note was sent by
Sreedharan Pillai and Unnikrishnan to recommend for
awarding both the works to K.P. Poulose. According to him, he
received all the documents as per the direction of A1. Though,
several reports and minutes of the Board meeting were pressed
into service by the respondents/accused in order to strengthen
their case that all important decisions accepting the contract
in favour of K.P. Poulose including several special conditions
etc., it is clear that due to the pressure of A6, the then
member of the Board, who was close to A1, as well as the
desire of A1 in awarding the contract in favour of K.P. Poulose
with higher rate, PW-7 had no other option except to execute
the directions of A6 and A1.
67
38) Another incident which is relevant about the performance
of PW-7 and response from A1 and A6, in his evidence, he
explained that since the progress of both the works were very
slow, he inspected the site on 23.09.1983. Due to slow
progress in the works, he castigated Paul Mundakkal who
conducted the works. After few days, A3 and Paul Mundakkal
came to his house and A3 told him that he is disturbing them
without any reason by way of sending letters and reports, A3
further warned that if it continues, it will be harmful to them.
He also informed him that the Minister agreed to avoid
concrete lining works of surge shaft but only PW-7 opposed it.
He also assured that if PW-7 gives his consent, they are ready
to give anything. He further explained that he informed them
that it is impossible for him because the technical design is his
duty, being a Chief Engineer. After few days from this
incident, on 13.10.1983, he was transferred and appointed as
an Advisor of Electricity Board in respect of Hydroelectric
Projects. He further explained that such a Post was not there
and his transfer order was signed and taken on 13.10.1983 at
8.00 p.m. in a lodge where he was residing at
68
Thiruvananthapuram. He highlighted that for the post of
Advisor, except chair, table, no other facilities including
telephone facility, official vehicle steno and typist were
provided. After him, A2 was appointed as Idamalayar Chief
Engineer. He also informed the Court that he believed that he
was transferred due to the difference of opinion with P.K.
Poulouse, A3 and Paul Mundakkal
39) As regards the decision of the Board and his role, he has
stated that the Chief Engineer has no right to question the
Board’s decision. However, he clarified that when he was
asked to give his opinion or report, he is bound by the said
direction. ExP-65 is the note submitted by him in connection
with the work. P-64 is the note submitted by him in
connection with the surge shaft work which is also dated
06.11.1982. Thereafter, in 1982, he was transferred
40) With regard to his financial and family position, he
answered that he built two-storied building having built-up
area of 2700 sq. ft. in 1965 after taking loan from the Board
and he sold this building and property after his retirement. He
69
is having six daughters. He constructed a shop room having
15 ft. length and 12 ft width.
41) The analysis of the evidence of PW-7 coupled with the
other prosecution witnesses and other notes and report
prepared for the Board clearly indicate that though he
reminded that certain things are not permissible, because of
the fact that the beneficiaries of the contract are known to A1
and A6, he has no other option except to prepare notes in
such a way and ultimately the Board accepted the same.
42) We have already pointed out the statements of PW-46
who was a member of RSP, a political party. According to him,
the workers of Idamalayar have a Union. The name of the said
Union is Kerala Construction Labour Union and he was the
General Secretary of that Union. In his evidence, he has
informed the Court that the labourers who were doing tunnel
work in Idamalayar became jobless from 10.04.1981. They
were skilled labourers and had good experience from projects
like Idukki, Kulanam etc. He, as the President and others
decided to file a memorandum before the Minister Balakrishna
Pillai. The memorandum was prepared in the letter pad of
70
Kerala Construction Labour Union. PW-46 and Srikantan Nair
signed the said memorandum. It has also come in his
evidence that at the time of submission of his memorandum
PW-46 and others requested the Minister to give work to the
poor labourers at least on piece rate basis for which A1 replied
“no question of giving work to the labourers. It was given
as contract to K.P. Poulouse….” The prosecution has
highlighted the above statement of PW-46 to the effect that A1
decided and determined to award Idamalayar contract to
group of persons headed by K.P.Poulouse and not to the
workers who prepared to work on piece-rate basis.
About maintainability of the appeal by the present
appellant:
43) Mr. Lalit and Mr. Saran at the end of their arguments
submitted that the appellant being a third party unconnected
with the Board or the State is not entitled to challenge the
decision of the High Court acquitting the accused from all the
charges levelled against them. In support of the above claim,
they very much relied on the decision of this Court dated
23.07.2010 rendered in SLP Criminal No 2506 of 2009 –
71
National Commission for Women vs. State of Delhi and
Another 2010 11 Scale 17. In this case, one Sunita then aged
21 years, committed suicide by consuming Aluminium
Phosphide tablets on 14.04.2003. She left behind a suicide
note wherein it was stated that she had taken tuitions from
the accused, Amit, at her residence in Rajgarh Colony and
during that period she had developed a deep friendship with
him leading to physical relations as well. The accused also
held out a promise of marriage but later backed off. She also
stated in her suicide note that not only the accused continued
to have sexual relation with her but also compelled her to have
sexual relation with others as well, which was the reason for
committing the suicide. The trial Judge relied on the dying
declaration, which was the suicide note, convicted the accused
under Section 306 IPC and sentenced him to undergo rigorous
imprisonment for 10 years with a fine of Rs.5000/- and also
imprisonment for life under Section 376 IPC and a fine of
Rs.5000/-. Questioning the above order of conviction and
sentence, the accused preferred an appeal before the High
Court. The High Court ultimately found that as the case
72
under Section 306 was not made out confirmed the conviction
under Section 376 IPC. Taking note that the accused had
already undergone imprisonment for 5 years and 6 months
and his entitlement for remission on account of his conduct in
jail, his term of imprisonment for life has been modified to one
that of period already undergone. Neither the State nor the
complainant or her relatives has chosen to file an appeal to
this Court. However, National Commission for Women (in
short `NCW’) filed a special leave petition against the order of
the High Court reducing the term of life imprisonment to that
of period already undergone in respect of the conviction and
sentence awarded by the High court under Section 376. The
question in that case was whether the NCW is competent or
entitled to file an appeal in this Court against the conviction
and sentence imposed by the High Court. This Court, after
adverting to the relevant provisions namely, Section 377 Cr.PC
and other decisions and finding that neither the State, which
is the complainant, nor the heirs of the deceased have chosen
to file a petition in the High Court or in this Court dismissed
the SLP filed by NCW as not maintainable and revoked the
73
permission to file SLP vide this Court’s order dated
02.04.2009.
44) In the above referred NCW’s case, admittedly the
complainant was the State and neither the State nor the heirs
of the deceased filed any appeal/petition before the High Court
for enhancement of punishment or challenged the same by
way of SLP before this Court.
45) In our case, certain special features exist. Though we
discussed earlier, it is apt to quote once again. During the
pendency of the trial before the special Judge, an application
for withdrawal of the prosecution only against G.
Gopalakrishna Pillai – accused No.5 was made by the Special
Public Prosecutor on 24.08.1992 under Section 321 Cr.P.C.
which was registered as Criminal Appeal No. 79 of 1992 in CC
No. 1 of 1991. The main ground for such withdrawal was that
with the available material successful prosecution against G.
Gopalakrishna Pillai – accused No. 5 cannot be launched,
hence, the trial against him will be unnecessary and the State
also is of that opinion that the prosecution of A-5 may not be
sustainable. With this information, the Special Public
74
Prosecutor requested that by virtue of provisions contained in
Section 321 of the CrP.C, necessary consent may be granted to
withdraw the prosecution against the 5th accused – G.
Gopalkrishna Pillai and the said accused may be discharged.
The Special Judge considered the issue at length and after
analyzing the entire material and finding that there are enough
materials to proceed against A-5 refused to give consent for
withdrawal. This was taken up by way of revision before the
High Court. The High Court set aside the aforesaid order
passed by the Special Judge in the revision filed by the State
of Kerala represented by the Superintendent of Police. The
said order of the High Court was challenged by the present
appellant namely, V.S. Achuthanandan, to this Court by way
of special leave petition. After granting leave, the said special
leave petition was converted into Criminal Appeal No. 122 of
1994. After adverting to the elaborate reasonings of the
special Judge and the conclusion of the High Court, this Court
concluded that “there was no ground available to the High
Court to set aside the well reasoned and justified order of the
learned Special Judge rejecting the application of the Special
75
Public Prosecutor and declining to give consent for withdrawal
of prosecution. We may also add that there is nothing in the
impugned order of the High Court which provides any legal
basis for interfering with the aforesaid order made by the
Special Judge. The High Court’s order must obviously be set
aside.” By setting aside the order of the High Court, this Court
restored the order of the Special Judge and declined to give
consent for withdrawal of the prosecution and permitted the
Special Judge to proceed further. It is not in dispute that
when the very same appellant, namely, V.S. Achuthanandan
filed special leave petition and later leave was granted, the very
same respondent-accused parties in the said appeal did not
raise any objection as to the maintainability of the appeal at
the instance of V.S. Achuthanandan. Further though the
State has not filed any appeal against the impugned order of
acquittal by the High Court being arrayed as one of the
respondents reported by a senior counsel to highlight its
stand, in fact, Mr. R.S. Sodhi, learned senior counsel for the
State highlighted and supported the ultimate conviction and
sentence imposed by the Special Judge and informed this
76
Court that if this Court permits, they are ready to file an
appeal with an application for condonation of delay. While
appreciating the prayer made by Mr. R.S. Sodhi, we are not
inclined to entertain such request at this stage. However, the
fact remains that taking note of the importance of the issue,
allegations against the Minister and higher officials of the
Board in respect of award of contract with the ulterior motive,
the appellant approached this Court on earlier occasion when
the State wanted to close the prosecution against all the
accused including the Minister based on the order of the High
Court in respect of G. Gopalakrishna Pillai, A-5. Further when
the very same appellant filed special leave petition before this
Court and later leave was granted by this Court neither of
these respondents raised any objection as to the
maintainability of the petition. On the other hand, a Bench of
three Judges accepted the appellant’s claim and set aside the
order of the High Court based on which the Special Judge
proceeded further and ultimately convicted and sentenced A-1,
A-3 and A-6. In view of these factual details, learned senior
counsel for the respondents-accused were not serious in
77
projecting the issue relating to maintainability as their first
objection. We hold that the decision in NCW’s case (supra)
which was disposed of at the special leave petition stage is not
applicable to the case on hand.
46) For the same reasons, the decision of this Court in Lalu
Prasad Yadav & Anr. Vs. State of Bihar & Anr., (2010) 5
SCC 1 is also not applicable to the case on hand since in the
said decision, the question was whether the State Government
(of Bihar) has competence to file an appeal from the judgment
dated 18.12.2006 passed by the Special Judge, CBI (AHD),
Patna, acquitting the accused persons when the case has been
investigated by the Delhi Special Police Establishment (CBI)
and this Court held that the appeal at the instance of the State
Government is not maintainable. In view of the special
circumstances highlighted in the case on hand, we reiterate
that the present appeal by the appellant – V.S.
Achuthanandan against the order of acquittal by the High
Court is maintainable. Our view has been strengthened by a
decision of this Court in K. Anbazhagan vs. Superintendent
of Police and Others (2004) 3 SCC 767. Accordingly we
78
reject the contention raised by the learned senior counsel for
the respondents.
Conclusion
47) The analysis of the materials placed by the prosecution,
the plea of defence by the accused, the decision of the Special
Court and the reasoning of the High Court, we are satisfied
that the prosecution has established the following aspects
insofar as the accused (A1), (A3) and (A6) are concerned:-
a) By awarding both the works of Idamalayar at a very
high and exorbitant rate with special conditions
having heavy financial implications.
b) By reducing the retention and security amount.
c) By allowing the contractor to return only fifty per
cent of the empty cement bags.
Having arrived at such conclusion, we are of the view that the
High Court failed to appreciate in its proper sense the
materials placed by the prosecution and brushed aside several
important items of evidence adduced by the prosecution.
Equally, we are unable to accept the conclusion of the High
79
Court, namely, “the proved circumstances are not sufficient
to hold that there was conspiracy as alleged by the
prosecution”. On the other hand, we are satisfied that the
Special Court after framing various points for consideration
and after thorough discussion has accepted the case of the
prosecution insofar as the work of driving the surge shaft,
lining the surge shaft, balance driving the power tunnel and
other allied works of Idamalayar Hydro Electric Power Project
at a higher or exorbitant rates to the contractor K.P. Poulose
and the accused persons have abused their official positions.
The Special Court has also accepted the prosecution case
founding that A1 along with K.P. Poulose, Paul Mundakkal
and other accused persons entered into criminal conspiracy
and rightly convicted them. In our considered view, the High
Court committed a grave error in acquitting the accused
without adverting to the reliable and acceptable evidence
adduced by the prosecution.
48) Now, coming to the sentence part, it is relevant to note
that the contract was awarded to K.P. Poulose, (since
80
deceased) the fourth accused, as early as on 19.11.1982. After
various agitations, discussions in the Assembly, appointment
of a Commission by the Government and based on the report
of the Commission, the State Government initiated a
prosecution which resulted in C.C. No. 01 of 1991 and trial
prolonged upto November 19, 1999. Thereafter, the matter
was kept pending at the High Court from 1999 to October
2003, when the High Court pronounced its order acquitting all
the accused and the matter was taken up to this Court by the
present appellant initially by way of special leave petition in
2005, leave was granted in 2006 and it was kept pending till
this date, we feel that all the three accused have undergone
agony of these proceedings for nearly two decades, we are of
the opinion that ends of justice would be met by awarding
rigorous imprisonment for one year with fine of Rs. 10,000/-
each, and the same shall be paid within eight weeks, in
default, to undergo simple imprisonment for one month each.
49) Before winding up, it is our duty to point out in all the
cases in which charges relating to corruption by public
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servants are involved, normally, take longer time to reach its
finality. The facts and figures, in the case on hand, which we
have already mentioned clearly show that the contract relates
to the year 1982 and the State Government initiated
prosecution in 1991, however, the trial prolonged for nearly
nine years and the Special Court passed an order convicting
the accused only on 19.11.1999. When the matter was taken
up by way of appeal by the accused to the High Court even in
1999 itself, the decision was rendered by the High Court
acquitting all the accused only in 2003. In the same manner,
though the appellant challenged the order of the High Court
acquitting all the accused before this Court even in 2005, it
has reached its finality only in 2011 by the present order.
Though the issue was handled by a Special Court constituted
for the sole purpose of finding out the truth or otherwise of the
prosecution case, the fact remains it had taken nearly two
decades to reach its finality. We are conscious of the fact that
the Government of India, Department of Law & Justice is
making all efforts for expeditious disposal of cases of this
nature by constituting Special courts, however, the fact
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remains that it takes longer time to reach its destination. We
are of the view that when a matter of this nature is entrusted
to a Special Court or a regular Court, it is but proper on the
part of the court concerned to give priority to the same and
conclude the trial within a reasonable time. The High Court,
having overall control and supervisory jurisdiction under
Article 227 of the Constitution of India is expected to monitor
and even call for a quarterly report from the court concerned
for speedy disposal. Inasmuch as the accused is entitled to
speedy justice, it is the duty of all in charge of dispensation of
justice to see that the issue reaches its end as early as
possible.
50) Considering all the materials and in the light of the above
discussion, we agree with the conclusion arrived at by the
Special Court and hold that the High Court has committed an
error in acquitting the accused persons. Accordingly,
R. Balakrishna Pillai (A1), P.K. Sajeev (A3) and Ramabhadran
Nair (A6) are awarded rigorous imprisonment for one year with
fine of Rs. 10,000/- each, and the same shall be paid within
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eight weeks, in default, to undergo simple imprisonment for
one month each. All the three accused are entitled remission
for the period already undergone, if any, by them. The
criminal appeal is allowed to the extent indicated above.
……………………………………J.
(P. SATHASIVAM)
…………………………………….J.
(DR. B.S. CHAUHAN)
NEW DELHI;
FEBRUARY 10, 2011
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