2003 (2) TMI 483 - SC - Indian Laws

Summary

Issues Involved:

1. Illegal sale of electricity by abusing official position.
2. Absence of written agreement and lack of government sanction.
3. Pecuniary advantage to M/s. Graphite India Ltd. (M/s. GIL).
4. Alleged scarcity of electricity in Kerala.
5. Compliance with Section 43 of the Electricity (Supply) Act, 1948, and Rule 68 of Kerala State Electricity Board Rules, 1957.
6. Mens rea and intention in criminal misconduct.

Detailed Analysis:

1. Illegal Sale of Electricity by Abusing Official Position:
The appellants, during their tenure as Minister for Electricity and Chairman of the Kerala State Electricity Board (KSEB), were accused of illegally selling 1,22,41,440 units of electricity to M/s. GIL, resulting in a pecuniary advantage of Rs. 19 lakhs. The prosecution alleged that the appellants abused their official positions to facilitate this transaction. However, the court found no evidence that the appellants gained any personal benefit from this transaction. The defense argued that the electricity was supplied to Karnataka based on a state-level decision and that no specific quantity was earmarked for M/s. GIL. The court concluded that the electricity was supplied to Karnataka and not directly to M/s. GIL, and there was no evidence of the appellants abusing their positions.

2. Absence of Written Agreement and Lack of Government Sanction:
The prosecution highlighted the absence of a written agreement and government sanction for the supply of electricity to M/s. GIL. The court noted that while it would have been proper to have a written agreement, the absence of one did not constitute a criminal offense. The supply of electricity was negotiated at the ministerial level between the states of Kerala and Karnataka, and the rate of 42 paise per unit was agreed upon. The court found no violation of Section 43 of the Electricity (Supply) Act, 1948, or Rule 68 of the Kerala State Electricity Board Rules, 1957, as the arrangement was made at a higher governmental level.

3. Pecuniary Advantage to M/s. GIL:
The prosecution claimed that M/s. GIL received electricity at a lower rate (64 paise per unit) compared to other consumers (80 paise per unit), resulting in a pecuniary advantage. The court found that the rate was fixed by the Karnataka Electricity Board (KEB) and not influenced by the appellants. The decision to supply electricity at a lower rate was a matter of KEB's policy and not attributable to any actions by the appellants. The court concluded that the appellants did not cause any pecuniary advantage to M/s. GIL.

4. Alleged Scarcity of Electricity in Kerala:
The High Court had found that there was a scarcity of electricity in Kerala during the relevant period. However, the Supreme Court noted that there was no evidence to substantiate this claim. The defense argued that there was no scarcity of electricity in Kerala during the relevant period, and the court found that the prosecution failed to prove this allegation.

5. Compliance with Section 43 of the Electricity (Supply) Act, 1948, and Rule 68 of Kerala State Electricity Board Rules, 1957:
The court examined whether the supply of electricity violated Section 43 of the Electricity (Supply) Act, 1948, and Rule 68 of the Kerala State Electricity Board Rules, 1957, which require government consent for the sale of electricity outside the state. The court found that the arrangement for the supply of electricity was made at the ministerial level between the states of Kerala and Karnataka, and therefore, the provisions were not applicable. The court concluded that there was no violation of these provisions.

6. Mens rea and Intention in Criminal Misconduct:
The court emphasized the necessity of mens rea (guilty mind) and intention for criminal misconduct under Section 5(1)(d) of the Prevention of Corruption Act, 1947. The court found no evidence of any effort or initiative by the appellants to sell electricity to M/s. GIL or to cause any pecuniary advantage to M/s. GIL. The appellants' actions were in response to requests from the state of Karnataka, and there was no element of corrupt or illegal means. The court concluded that the prosecution failed to prove the necessary mens rea and intention for the offense.

Conclusion:
The Supreme Court allowed the appeals, setting aside the conviction and sentence of the appellants under Section 5(2) read with Section 5(1)(d) of the Prevention of Corruption Act, 1947. The court found that the prosecution failed to prove the charges against the appellants, and there was no evidence of illegal sale of electricity, pecuniary advantage to M/s. GIL, or violation of legal provisions. The appellants were acquitted, and their surety bonds were discharged.