2016 (5) TMI 1568 - SC - Indian Laws

Works contract - Framing of charges against the accused persons - allegation is that the false stage certificate was issued as 25% of the work had not been completed - HELD THAT - It is not in dispute that two works were awarded to A-3 one was known as JRY-consignment semi permanent building in Vandiperiyar and other was known as JRY-construction of permanent building in Vandiperiyar . In the present case, we are concerned with release of payments to A-3 in respect of second work contract. As is clear from the nomenclature of these two contracts, they were under JRY. The Commissioner, Village Development, Thiruvananthapuram had issued Circular No. 14514/J.R.Y. 1/91/C.R.D. dated 23.04.1991 which prescribes the procedure for implementation of JRY and contains certain suggestions. The prosecution has sought to cover the case of the Appellant under Sub-clause (ii) and not under Sub-clause (i) and Sub-clause (iii). Insofar as Sub-clause (ii) is concerned, it stipulates that a public servant is said to commit the offence of criminal misconduct if he, by abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage - It was not even the case set up by the prosecution that Appellant had taken that money from some person and had obtained any pecuniary advantage thereby. It was the obligation of the prosecution to satisfy the aforesaid mandatory ingredients which could implicate the Appellant under the provisions of Section 13(1) (d)(ii). The attempt of the prosecution was to bring the case within the fold of Clause (ii) alleging that he misused his official position in issuing the certificate utterly fails as it is not even alleged in the chargesheet and not even iota of evidence is led as to what kind of pecuniary advantage was obtained by the Appellant in issuing the said letter. In C. CHENGA REDDY AND ORS. VERSUS STATE OF ANDHRA PRADESH 1996 (7) TMI 596 - SUPREME COURT , this Court held that even when codal violations were established and it was also proved that there were irregularities committed by allotting/ awarding the work in violation of circulars, that by itself was not sufficient to prove that a criminal case was made out. The prosecution has miserably failed to prove the charge beyond reasonable doubt and the courts below have not looked into the matter in a proper perspective - the Appellant is already on bail. His bail bonds shall stand discharged - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Validity of the conviction under Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988.
2. The role of the Appellant in the disbursement of funds.
3. The interpretation and application of the Jawahar Rozgar Yojana (JRY) guidelines.
4. The nature and impact of the document Ex.P/16(a) (termed as 'stage certificate').
5. Whether the prosecution proved the essential ingredients of Section 13(1)(d)(ii) of the PC Act.

Detailed Analysis:

1. Validity of the Conviction under Section 13(2) read with Section 13(1)(d) of the PC Act:
The trial court convicted the Appellant under Section 13(2) read with Section 13(1)(d) of the PC Act, sentencing him to two years of rigorous imprisonment and a fine of ?75,000. The High Court upheld this conviction. However, the Supreme Court found that the prosecution failed to prove beyond reasonable doubt that the Appellant abused his official position to obtain any pecuniary advantage for himself or others. The court emphasized that the prosecution did not establish the essential ingredients of Section 13(1)(d)(ii) of the PC Act.

2. The Role of the Appellant in the Disbursement of Funds:
The Appellant, an Assistant Engineer in the Public Works Department, was accused of issuing a false stage certificate (Ex.P/16(a)) to facilitate the disbursement of funds to A-3. The Supreme Court noted that payments were made both before and after the issuance of Ex.P/16(a), and the document itself did not state that 25% of the work was completed but only mentioned the "valuation cost." The court found no causal connection between the release of payment to A-3 and the letter Ex.P/16(a).

3. Interpretation and Application of the JRY Guidelines:
The Supreme Court examined Circular No. 14514/J.R.Y. 1/91/C.R.D. dated 23.04.1991, which allowed Panchayats to release 50% of the estimated cost of the project as advance payment once the work had started. The court found that the Panchayat was empowered to release up to ?2 lakhs (50% of the estimated cost) in advance, and the payments made to A-3 were within this limit. The court concluded that the JRY guidelines were not violated by the Appellant.

4. Nature and Impact of the Document Ex.P/16(a):
The document Ex.P/16(a) was a letter written by the Appellant on the request of the Panchayat President, mentioning the "valuation cost" of the project as 25%. The Supreme Court clarified that this letter was not a stage certificate and did not indicate the completion of 25% of the work. The court found that the High Court erred in treating it as a stage certificate and concluded that the letter did not serve as a basis for the disbursement of funds.

5. Whether the Prosecution Proved the Essential Ingredients of Section 13(1)(d)(ii) of the PC Act:
The Supreme Court emphasized that for a conviction under Section 13(1)(d)(ii) of the PC Act, the prosecution must prove that the public servant abused his position to obtain a pecuniary advantage for himself or others. The court found no evidence that the Appellant obtained any pecuniary advantage or that the letter Ex.P/16(a) was used to facilitate such an advantage. Consequently, the court concluded that the prosecution failed to prove the charge beyond reasonable doubt.

Conclusion:
The Supreme Court allowed the appeal, set aside the conviction of the Appellant, and discharged his bail bonds. The court found that the prosecution did not prove the essential elements of the offense under Section 13(1)(d)(ii) of the PC Act, and the lower courts had not properly considered the evidence and the relevant guidelines.