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TMI Blog2023 (6) TMI 1351X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the Company, the very same act of the co-conspirators fell in the realm of commercial wisdom, it is inconceivable that the act of A-1, as part of the criminal conspiracy, fell outside the discharge of his public duty, so as to disentitle him for protection Under Section 197(1) of the Code - the contention advanced on behalf of A-1 is upheld, that the prosecution ought to have taken previous sanction in terms of Section 197(1) of the Code, for prosecuting A-1, for the offences under the Indian Penal Code. Revolving around grant of pardon - HELD THAT:- The approver was examined as PW-16 during trial and he was cross examined on the contents of the confession statement. The Magistrate who recorded the confession was examined as PW 17 and the Additional Chief Judicial Magistrate who granted pardon was examined as PW-18. The proceedings before the XVIII Metropolitan Magistrate, the petition Under Section 306 of the Code and the proceedings on tender of pardon were marked respectively as EXX. P-50, 51 and 52. All the Accused were given opportunity to cross examine these witnesses both on the procedure and on the contents - there was no violation of the procedure prescribed by Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re acquitted of all the charges - Appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... B read with 420, 468, 471 read with 468 and 193 Indian Penal Code and Section 13(2) read with 13(1)(d) of the PC Act. Nil Acquitted of all charges A3 R. Thiagarajan, Assistant General Manager of Finance Section 120B read with 420, 468, 471 read with 468 and 193 Indian Penal Code and Section 13(2) read with 13(1)(d) of the PC Act. Section 109 Indian Penal Code read with 420, 468, 471 read with 468 and 193 Indian Penal Code. Not convicted for offences under the PC Act, since the competent authority refused to grant In addition, he was charged also Under Section 109 Indian Penal Code. sanction for prosecution against him. Not found guilty of Section 120B. A4 K. Chandrasekaran, Senior Manager in BHEL Section 120B read with 420, 468, 471 read with 468 and 193 Indian Penal Code and Section 13(2) read with 13(1)(d) of the PC Act. In addition, he was charged also Under Section 109 Indian Penal Code. Section 109 read with 420, 468, 471 read with 468 and 193 Indian Penal Code. Sanction for prosecution was not granted by the competent authority for the offences under the PC Act. Not convicted for offence Under Section 120B. A5 Mohan Ramnath, proprietor of Entoma Hydro Systems ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted/restricted tenders, BHEL awarded the contract to one Entoma Hydro Systems. (iii) A Letter of Intent was issued to the said Company on 06.07.1994 and on 02.08.1994, an interest free mobilisation advance to the tune of Rs. 4.32 crores was released to M/s. Entoma Hydro Systems. (iv) But subsequently, the contract was also cancelled on 04.10.1996; the bank guarantee furnished by the Contractor was invoked on 27.09.1996; and a payment of Rs. 4,84,13,581/- was realised by BHEL. (v) Thereafter, on 31.01.1997, CBI registered a First Information Report in Crime No. RC 8(A) of 97 against four individuals, three of whom were officials of BHEL and the fourth, the contractor. It was alleged in the First Information Report that the three officials of BHEL and the contractor entered into a criminal conspiracy to cheat BHEL and caused loss to BHEL to the tune of Rs. 4.32 crores by awarding the contract to the aforesaid concern. The FIR was for offences Under Section 120B read with 420, Section 420 Indian Penal Code and Section 13(2) read with Section 13(1)(d) of PC Act. (vi) In November 1998, the person first named in the FIR namely K. Bhaskar Rao, DGM, was arrested and released on bai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing trial and hence the charges against them were abated. (xii) By a judgment dated 08.09.2006, the Principal Special Judge for CBI cases acquitted A-2 but convicted A-1, A-3, A-4 and A-7 for various offences indicated in Column No. 4 of the Table under paragraph 4 above. (xiii) Challenging the conviction and punishment, A-1 filed a separate appeal in Criminal Appeal No. 437 of 2006 on the file of the Madurai Bench of the Madras High Court. A-3 and A-4 joined together and filed a common appeal in Criminal Appeal No. 469 of 2006. A-7 filed a separate appeal in Criminal Appeal No. 445 of 2006. (xiv) By a judgment dated 17.09.2010, the Madurai Bench of the Madras High Court dismissed all the three appeals. (xv) Therefore, A-1, A-3, A-4 and A-7 filed four independent appeals before this Court respectively in Criminal Appeal Nos. 2417, 2443 and 2444 of 2010 and 16 of 2011. But A-3, the Appellant in Criminal Appeal No. 2443 of 2010 died pending appeal and hence his appeal was dismissed as abated. Therefore, we are now left with three appeals filed by A-1, A-4 and A-7 arising out of concurrent judgments of conviction. 7. In brief, the case of the prosecution was that A-1 to A-7 e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Prosecution alleged that by these actions, A-1 to A-7 committed the offences charged against them. 8. As stated in para 6 above, the Prosecution examined 44 witnesses, which included the Approver, who was examined as PW-16. 94 documents were marked as exhibits on the side of the prosecution. One witness was examined on the side of the defence as DW-1 and 6 documents were marked as exhibits Ex. D-1 to D-6. 9. In its judgment dated 08.09.2006, the Special Court brought on record the charges, the evidence and the rival contentions from paragraphs 1 to 60. The actual discussion and analysis by the Court began from paragraph 61. 10. To begin with, the Special Court took up for consideration the contention of the Accused that BHEL did not suffer any wrongful loss and that, therefore, the charge Under Section 420 Indian Penal Code does not lie. But this contention of the Accused was rejected by the Trial Court on the ground that the entire interest free mobilisation advance of Rs. 4.32 crores was deposited in the account of M/s. Entoma Hydro Systems with Indian Bank and that out of the same, a sum of Rs. 1,52,50,000/- was transferred to a firm by name M/s. Insecticides & Allied Chemic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to A-5 and created circumstances and records to show as though proper procedure was followed and that therefore A-1 was guilty of the charges. 15. Coming to the charges against A-2, the Special Court held that the only role played by him was to prepare the Approval Note dated 25.11.1992 and that in view of the overwhelming evidence against A-1, the contract would have, in any case, been awarded to the firm in question. Therefore, the Special Court came to the conclusion (in paragraph 79 of the judgment) that A-2 was merely asked to sign in Exhibit P-27, only to give credibility to the list prepared by A-1 and the Approver acting in conspiracy. After reaching such a finding, the Special Court acquitted A-2 of the charges framed against him. 16. Insofar as A-3 and A-4 are concerned, it was argued that they came into the picture only after 23.12.1992, when the Negotiation Committee comprising of A-3, A-4 and the Approver was formed. But this argument was rejected by the Trial Court by holding that what was constituted was a Tender Committee, as seen from Exhibit P-36 (proceedings of the Committee) and that therefore if they were innocent, they should have questioned and sought deta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not furnished any opinion in his report as to the comparison of the writings found in Exhibit P-75 with the demand draft application forms Exhibits P-66, P-76, P-90 and P-92. The High Court also found (in paragraph 49 of the impugned judgment) that the admitted handwritings and the signatures were not compared by the handwriting expert. After recording such a finding, the High Court took upon itself the task of making a comparison by itself, by invoking Section 73 of the Evidence Act. By so invoking Section 73, the High Court came to the conclusion that the signatures found in the demand draft applications were that of A-7 and that the diversion of funds to M/s. Insecticides & Allied Chemicals is a circumstance which corroborated the same. 22. It was argued before the High Court on behalf of A-3 and A-4 that BHEL Administration had refused to accord sanction to prosecute them for the offences under the PC Act and that therefore they cannot be held guilty of other offences. But this contention was rejected by the High Court, on the ground that the decision taken by the Management of the Company cannot have a bearing upon the prosecution case. 23. On the basis of the above findings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that they acted in the best commercial interest of the Company; and (x) that once A-4 is not held guilty of the offence Under Section 120B, it was not possible to convict him for the other offences, especially in the facts and circumstances of the case. 26. Appearing on behalf of A-7, it was contended by Shri S. Nagamuthu, learned Senior Counsel: (i) that the confession statement of PW-16 was recorded by the XVIII Metropolitan Magistrate, Chennai, but pardon was granted by the Additional Chief Judicial Magistrate, Madurai and the final report was filed directly before the Special Court for CBI cases; (ii) that since the Additional Chief Judicial Magistrate granted pardon in this case, this case is covered by Sub-section (1) of Section 306 and hence the prosecution ought to have followed the procedure prescribed Under Section 306(4)(a) of the Code; (iii) that there is no particular reason as to why the petition for pardon was made before the Additional Chief Judicial Magistrate, when the confession statement was recorded by the Metropolitan Magistrate and there is no reason why the prosecution chose to file the final report directly before the Special Court Under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sanction to prosecute Under Section 197(1) of the Code is necessary only when the act complained of is in the discharge of official duties; (vi) that an offence of cheating cannot by any stretch of imagination be seen as part of official duties; (vii) that the power to grant pardon is available concurrently to the Chief Judicial Magistrate/ Metropolitan Magistrate as well as the Court of Session; (viii) that therefore there was nothing wrong in the Additional Chief Judicial Magistrate, Madurai granting pardon; and (ix) that therefore the concurrent judgments of conviction of the Appellants do not warrant any interference. 28. We have carefully considered the rival contentions. For the purpose of easy appreciation, we shall divide the discussion and analysis into three parts, the first dealing with the contention revolving around Section 197 of the Code, the second dealing with the correctness of the procedure adopted while granting pardon Under Section 306 of the Code and the third revolving around the merits of the case qua culpability of each of the Appellants before us. Discussion and Analysis Part-I (Revolving around Section 197 of the Code) 29. There is no dispute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in service, he could not have been prosecuted for the offences punishable under the PC Act, in view of the stand taken by BHEL. 33. It appears that BHEL refused to accord sanction by a letter dated 24.11.2000, providing reasons, but the CVC insisted, vide a letter dated 08.02.2001. In response to the same, a fresh look was taken by the CMD of BHEL. Thereafter, by a decision dated 02.05.2001, he refused to accord sanction on the ground that it will not be in the commercial interest of the Company nor in the public interest of an efficient, quick and disciplined working in PSU. 34. The argument revolving around the necessity for previous sanction Under Section 197(1) of the Code, has to be considered keeping in view the above facts. It is true that the refusal to grant sanction for prosecution under the PC Act in respect of A-3 and A-4 may not have a direct bearing upon the prosecution of A-1. But it would certainly provide the context in which the culpability of A-1 for the offences both under the Indian Penal Code and under the PC Act has to be determined. 35. It is admitted by the Respondent-State that no previous sanction Under Section 197(1) of the Code was sought for prosecu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ung and Gurushidayya Shantivirayya Kulkarni v. King-Emperor. In another group, more stress has been laid on the circumstance that the official character or status of the Accused gave him the opportunity to commit the offence. It seems to me that the first is the correct view. In the third group of cases, stress is laid almost exclusively on the fact that it was at a time when the Accused was engaged in his official duty that the alleged offence was said to have been committed [see Gangaraju v. Venki, quoting from Mitra's Commentary on the (Criminal Procedure Code). The use of the expression "while acting" etc., in Section 197 of the Code of Criminal Procedure (particularly its introduction by way of amendment in 1923) has been held to lend some support to this view. While I do not wish to ignore the significance of the time factor, it does not seem to me right to make it the test. To take an illustration suggested in the course of the argument, if a medical officer, while on duty in the hospital, is alleged to have committed rape on one of the patients or to have stolen a jewel from the patient's person, it is difficult to believe that it was the intention of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e act and the performance of the official duty, the excess will not be a sufficient ground to deprive the public servant of the protection. 40. The above decision in State of Orissa (supra) was followed (incidentally by the very same author) in K. Kalimuthu v. State by DSP (2005) 4 SCC 512 and Rakesh Kumar Mishra v. State of Bihar (2006) 1 SCC 557. 41. In Devinder Singh v. State of Punjab through CBI (2016) 12 SCC 87, this Court took note of almost all the decisions on the point and summarized the principles emerging therefrom, in paragraph 39 as follows: 39. The principles emerging from the aforesaid decisions are summarised hereunder: 39.1. Protection of sanction is an assurance to an honest and sincere officer to perform his duty honestly and to the best of his ability to further public duty. However, authority cannot be camouflaged to commit crime. 39.2. Once act or omission has been found to have been committed by public servant in discharging his duty it must be given liberal and wide construction so far its official nature is concerned. Public servant is not entitled to indulge in criminal activities. To that extent Section 197 Code of Criminal Procedure has to be co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en in cases involving more than Rs. 1,00,000/- if it is felt necessary to resort to Restricted Tender due to urgency or any other reasons it would be open to the General Managers or other officers authorised for this purpose to do so after recording reasons therefor. 45. Two things are clear from the portion of the Works Policy extracted above. One is that a deviation from the Rule was permissible. The second is that even General Managers were authorised to take a call, to deviate from the normal Rule and resort to Restricted Tender. 46. Admittedly, A-1 was occupying the position of Executive Director, which was above the rank of a General Manager. According to him he had taken a call to go for Restricted Tender, after discussing with the Chairman and Managing Director. The Chairman and Managing Director, in his evidence as PW-28, denied having had any discussion in this regard. 47. For the purpose of finding out whether A-1 acted or purported to act in the discharge of his official duty, it is enough for us to see whether he could take cover, rightly or wrongly, under any existing policy. Paragraph 4.2.1 of the existing policy extracted above shows that A-1 at least had an argu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was reasonably connected with the discharge of official duty and an act which was merely a cloak for doing the objectionable act. Interestingly, the proposition laid down in Rakesh Kumar Mishra (supra) was distinguished in paragraph 49 of the decision in Parkash Singh Badal, before the Court made the observations in paragraph 50 extracted above. 51. No public servant is appointed with a mandate or authority to commit an offence. Therefore, if the observations contained in paragraph 50 of the decision in Parkash Singh Badal are applied, any act which constitutes an offence under any statute will go out of the purview of an act in the discharge of official duty. The requirement of a previous sanction will thus be rendered redundant by such an interpretation. 52. It must be remembered that in this particular case, the FIR actually implicated only four persons, namely PW-16, A-3, A-4 an A-5. A-1 was not implicated in the FIR. It was only after a confession statement was made by PW-16 in the year 1998 that A-1 was roped in. The allegations against A-1 were that he got into a criminal conspiracy with the others to commit these offences. But the Management of BHEL refused to grant sanct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Additional Chief Judicial Magistrate, the prosecution examined him as PW-16 before the Special Court for CBI cases and marked (i) the statement of K. Bhaskar Rao Under Section 164 of the Code as Exhibit P- 44; (ii) the copy of the petition filed Under Section 306 of the Code dated 22.06.2000 as Exhibit P-51; and (iii) the proceedings dated 17.07.2000 and 18.07.2000 of the Additional Chief Judicial Magistrate, Madurai, relating to the tender of pardon, as Exhibit P-52. 55. Appearing on behalf of A-7, Shri S. Nagamuthu, learned Senior Counsel assailed the procedure so followed. According to the learned Senior Counsel, the Chief Judicial Magistrate/Metropolitan Magistrate is empowered to grant pardon during investigation, inquiry or trial and a Magistrate of first class is empowered to grant pardon while inquiring into or trying an offence. This is by virtue of Sub-section (1) of Section 306 of the Code. In the case on hand, the Additional Chief Judicial Magistrate granted pardon at the stage of investigation. Therefore, it is contended by the learned Senior Counsel that the approver, in cases covered by Section 306(1), should be examined twice, once before committal and then at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... committed to it by any Magistrate. The provisions of Section 193 of the Code thus stand excluded in their application. The Special Court is thus conferred by Section 5(1) of the PC Act, original jurisdiction to take cognizance. This principle has been recognized by this Court in Bangaru Laxman v. State (through CBI) (2012) 1 SCC 500, wherein it was held that the Special Judge has a dual power, namely that of a Court of Session and that of a Magistrate. Relying upon the decision in Harshad S. Mehta v. State of Maharashtra (2001) 8 SCC 257 and the decisions in P.C. Mishra v. State (Central Bureau of Investigation) (2014) 14 SCC 629 and State through Central Bureau of Investigation, Chennai v. V. Arul Kumar (2016) 11 SCC 733, the learned Senior Counsel contended that the request for pardon should have been made in this case at the stage of investigation only before the Special Court. Even assuming that it was a curable defect, there must be an evidence of good faith on the part of PW-18 (the Additional Chief Judicial Magistrate). In the absence of such an evidence, it is contended that the testimony of the approver was liable to be eschewed in this case. 58. We have carefully consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exclusively by that Court; (b) in any other case, make over the case to the Chief Judicial Magistrate who shall try the case himself. 307. Power to direct tender of pardon.-At any time after commitment of a case but before judgment is passed, the Court to which the commitment is made may, with a view to obtaining at the trial the evidence of any person supposed to have been directly or indirectly concerned in, or privy to, any such offence, tender a pardon on the same condition to such person. 60. Section 5 of the PC Act reads as follows: 5. Procedure and powers of special Judge.- (1) A special Judge may take cognizance of offences without the Accused being committed to him for trial and, in trying the Accused persons, shall follow the procedure prescribed by the Code of Criminal Procedure, 1973 (2 of 1974), for the trial of warrant cases by the Magistrates. (2) A special Judge may, with a view to obtaining the evidence of any person supposed to have been directly or indirectly concerned in, or privy to, an offence, tender a pardon to such person on condition of his making a full and true disclosure of the whole circumstances within his knowledge relating to the offence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Act, 1952 and to any offence punishable with imprisonment which may extend to seven years or more. (iv) Sub-section (3) of Section 306 obliges the Magistrate tendering pardon, not only to record reasons for doing so but also to state whether the tender was accepted by the person to whom it was made; (v) Sub-section (4) of Section 306 makes it mandatory that every person accepting a tender of pardon made Under Sub-section (1) shall be examined as a witness both in the Court of the Magistrate taking cognizance and in the subsequent trial. Sub-section (4) also imposes an additional condition that the person accepting a tender of pardon shall be detained in custody till the termination of the trial, except when he is already on bail. (vi) A careful look at Clauses (a) and (b) of Sub-section (4) shows that the procedure prescribed therein is applicable only to cases covered by Sub-section (1). (vii) Sub-section (5) prescribes that once a person has accepted a tender of pardon Under Sub-section (1) and has been examined Under Sub-section (4) then the Magistrate taking cognizance should commit the case for trial either to the Court of Session or to the Court of Special Judge. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nizance is taken. 65. In contrast, Section 5(2) of the PC Act does not speak about the stage at which pardon may be tendered by a Special Judge. This is perhaps in view of the express provisions of Sub-section (1) of Section 5 which empowers the Special Judge himself to take cognizance without the Accused being committed to him for trial. But the second part of Sub-section (2) of Section 5 of the PC Act creates a deeming fiction that the pardon tendered by the Special Judge shall be deemed to be a pardon tendered Under Section 307 of the Code. However, as rightly contended by the learned Senior Counsel for A-7, this deeming fiction is limited for the purposes of Sub-sections (1) to (5) of Section 308 of the Code. 66. It appears that before the advent of the Code of Criminal Procedure, 1973, the Courts were taking a view that the Magistrates had the power to tender pardon even after the commitment of the case for trial to the Court of Session/Special Judge. This was because of the way in which Section 338 of the Code of Criminal Procedure, 1898 was worded. A comparison of Section 307 of the Code of Criminal Procedure, 1973 with Section 338 of the Code of Criminal Procedure, 1898 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e condition indicated in Sub-section (1) of Section 306, namely, on the Accused making a full and true disclosure of the whole of the circumstances within his knowledge relating to the offence and to every other person concerned, whether as principal or abettor, in the commission thereof. According to the learned Counsel, Sub-section (4) of Section 306 is not a condition for tendering pardon but is merely a procedure which has to be followed when a person is tendered pardon by a Magistrate in exercise of power Under Section 306. Since after a case committed to the Court of Session pardon is tendered by the court to whom the commitment is made, it would not be necessary for such court to comply with Sub-section (4)(a) of Section 306. Mr. Murlidhar, the learned Counsel appearing for the Appellants, on the other hand contended, that the object and purpose engrafted in Clause (a) of Sub-section (4) of Section 306 is to provide a safeguard to the Accused who can cross-examine even at the preliminary stage on knowing the evidence of the approver against him and can impeach the said testimony when the approver is examined in court during trial, if any contradictions or improvements are ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Court of the Magistrate taking cognizance of the offence and in the subsequent trial, if any. Sub-section (5) further provides that the Magistrate taking cognizance of the offence shall, without making any further enquiry in the case commit it for trial to any one of the courts mentioned in Clauses (i) or (ii) of Clause (a) of Sub-section (5), as the case may be. Section 209 of the Code deals with the commitment of cases to the Court of Session when offence is tried exclusively by that court. The examination of accomplice or an approver after accepting the tender of pardon as a witness in the Court of the Magistrate taking cognizance of the offence is thus a mandatory provision and cannot be dispensed with and if this mandatory provision is not complied with it vitiates the trial. As envisaged in Sub-section (1) of Section 306, the tender of pardon is made on the condition that an approver shall make a full and true disclosure of the whole of the circumstances within his knowledge relating to the offence. Consequently, the failure to examine the approver as a witness before the committing Magistrate would not only amount to breach of the mandatory provisions contained in Cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irregularity even at the threshold and hence remanded the matter back to the Magistrate for recording the evidence of the approver. Thus the defect got cured before trial and hence this Court held in paragraph 31 of the decision that eventually no prejudice or disadvantage was shown to have been caused to the Accused. 72. Thus, there were two distinguishing features in Suresh Chandra Bahri. The first was that the Chief Judicial Magistrate who tendered pardon in that case committed the case to the Court of Session for trial (unlike the case on hand) without examining the approver as a witness in the Court. The second distinguishing feature was that the Court to whom the case was committed for trial noticed the defect and hence remanded the case back to the Court of Chief Judicial Magistrate. Therefore, this Court applied the prejudice test in that case. 73. But more importantly, what was held in Suresh Chandra Bahri to be vitiated, was the committal order. Therefore, it was concluded eventually in Suresh Chandra Bahri that the moment the defect in the committal order is cured before trial, the trial does not get vitiated. 74. But in cases where a Special Court itself is competen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision. Section 5(2) is to be read in conjunction with Section 5(1) of the PC Act, 1988. The aforesaid legal position would also answer the argument of the learned Counsel for the Respondent based on the judgment of this Court in A. Devendran [A. Devendran v. State of T.N., (1997) 11 SCC 720 : 1998 SCC (Cri) 220]. In that case, this Court held that once the proceedings are committed to the Court of Session, it is that court only to which commitment is made which can grant pardon to the approver. The view taken by us is, rather, in tune with the said judgment. 75. In other words, this Court recognised in Arul Kumar two types of cases, namely (i) those which come through the committal route; and (ii) those where cognizance is taken directly by the Special Judge Under Section 5(1) of the PC Act. In the second category of cases, the Court held that Section 306 of the Code would get by-passed. 76. Therefore, it is clear that when the Special Court chooses to take cognizance, the question of the approver being examined as a witness in the Court of the Magistrate as required by Section 306(4)(a) does not arise. Shri Padmesh Mishra, learned Counsel for the Respondent is therefore right i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h his case on merits to see if the offences under the Indian Penal Code or under the PC Act stood proved beyond reasonable doubt. 81. To recapitulate, the allegations against A-1 are (i) that by entering into a criminal conspiracy to cheat BHEL and award the tender to A-5's firm and by instructing PW-16 to go in for limited tenders without following the procedure of pre-qualification of prospective tenderers and without selecting any one from the approved list of contractors, he committed various offences punishable under the Indian Penal Code; and (ii) that by abusing his official position and awarding the contract to A-5, he caused a wrongful loss to the tune of Rs. 4.32 crores to BHEL. 82. For proving the allegations with regard to the criminal conspiracy and for establishing that A-1 decided to go in for Restricted Tender for the purpose of awarding the contract to a chosen firm and also for showing that A-1 directed the inclusion of four bogus firms, the prosecution relied upon its star witness, namely PW-16. But PW-16 was the first-named Accused in the FIR, who later turned approver by giving a confession statement. 83. As rightly contended by Shri Huzefa Ahmadi, learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated in material particulars. 85. Keeping the above principles in mind, if we turn our attention to the evidence of PW-16, it will be seen that he was trying to shift the burden on A-1, to save his own skin. The following admissions made by him during the cross-examination showed that he was unworthy of credit: (i) There was no approved list of contractors maintained at BHEL, Trichy, till 1994; (ii) It is not correct to say that open tender system was not at all resorted to by Civil Engineering Department in BHEL, Trichy till 1994. I cannot recollect single instance of open tender as I have forgotten; (iii) During my tenure I did not initiate anything to cancel the award of contract to Entoma Hydro Systems. It is true that I did not take steps to annul the contract as the circumstances did not warrant that; (iv) I am the competent person to call the tenderers for negotiation and in that capacity I wrote several letters to the contractors; (v) Exhibit P-55 is the letter dated 02.01.1993 by me to Entoma Hydro Systems asking them to send fresh offer before 07.01.1993; (vi) Exhibit P-53 is one such letter dated 31.12.1992 written by me to Mercantile Construction Corporatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me and told me that these two companies may also be included. 87. But in cross-examination, he admitted that Exhibit P-33 was a letter dated 22.10.1992 written by one Sri Kantarao, Manager (Civil/Design) to Ganesan (PW-14) and that there was a note in that letter to the effect that Ganesan has discussed this matter with DGM, Civil. PW-16 further admitted that it was possible that Ganesan might have discussed with him. 88. The above statement in cross-examination shows that the discussion between PW-16 and PW-14 took place on 22.10.1992. But the discussion with A-1 and the dictation of five names took place even according to PW-16, only in November, 1992. In fact, Exhibit P-33 letter which was dated 22.10.1992, according to PW-16 dealt with inviting limited tender. 89. If discussions had taken place between PW-16 and someone else in October, 1992 and a decision taken in that meeting to go for limited tender, it is inconceivable as to how the original sin can be attributed to A-1, especially when the discussion between PW-16 and A-1 took place only in November, 1992 wherein the dictation of four bogus names and that of the prospective contractor allegedly took place. 90. PW-16 ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .. 97. Two things are borne out of the above admission made by PW-24. The first is that even at the time of investigation, PW-24 had provided to the I.O., a detailed accounts copy showing that BHEL had not suffered any loss and that on the contrary, a sum of Rs. 2.60 crores was payable to Entoma. But for some inexplicable reason, the copy of the said accounts statement was not produced by the CBI before the Court. The same had to be marked as Defense Exhibit D-1 while cross-examining PW-24. Therefore, it is clear that this statement of account was burked, so that a picture is painted as though BHEL suffered wrongful loss. 98. The second thing that flows out of PW-24's cross-examination extracted above, is that even after invoking the bank guarantee and appropriating the same towards the monies already paid, BHEL was still left with the contractor's money of Rs. 1,61,86,234/- apart from an amount of Rs. 98,52,286/- payable to A-5 by BHEL towards the work done. 99. Therefore, it is clear that it was A-5 who actually got into a mess, both financially and legally, by bagging the contract. Rather than making any gain much less unlawful gain, the contractor has lost the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two companies were intended to be a make belief affair, A-1 would not have taken the risk of sending the letter and that too to a company like L&T. Therefore, we are of the view, (i) that the evidence of PW-16 was not worthy of credit; (ii) that even assuming that it has some credibility, his statement that "he recommended the contract to be given to A-5 not because of A-1's interest", made the whole edifice upon which the case of the prosecution was built, collapse; and (iii) that there was no other evidence to connect A-1 with the commission of these offences. 103. In fact, the only person found by both the Courts to be guilty of the offence Under Section 120B was A-1. Therefore, an argument was advanced that a single person cannot be held guilty of criminal conspiracy. But this contention was repelled by the Courts on the ground that PW-16 was the second person with whom A-1 had entered into a conspiracy. In other words, the reasoning adopted by the Trial Court and the High Court was that only A-1 and PW-16 were part of the conspiracy. Such a reasoning was a huge climbdown from the original charge that A-1 to A-7 entered into a criminal conspiracy, to cause wrongf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he three Explanations Under Section 193. But unfortunately, the Trial Court found A-4 guilty of the offence Under Section 193, without there being any specific allegation in the charge-sheet and without there being any specific finding on merits. 108. As rightly contended by Shri S.R. Raghunathan, learned Counsel for A-4, no Court shall take cognizance of any offence punishable Under Section 193 Indian Penal Code, except on a complaint in writing of that Court or of some other Court to which that Court is subordinate. This bar is found in Section 195(1)(b)(i) of the Code. No complaint was ever made by any Court or by any officer authorized by any Court that A-1 or A-3 or A-4 committed an offence punishable Under Section 193 Indian Penal Code. But unfortunately, the Trial Court convicted A-1, A-3 and A-4, of the offence Under Section 193 without any application of mind and the same has been upheld by the High Court. 109. Even according to the prosecution, the only role played by A-4 was that of being a member of a Committee constituted on 23.12.1992. Much ado was sought to be made, about the nature of the Committee and as to whether it was a Tender Committee or Negotiation Committ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were completed as early as in January, 1993 letter of intent came to be issued only in July 1994 i.e. after 18 months. It is true that because of the efforts of the negotiation committee the contractor was persuaded not to hike the rate because of the delay of 18 months in issuing the work order. 112. Despite the above assertion on the part of PW-16 giving a clean chit to A-3 and A-4, the Trial Court found both of them guilty on a convoluted logic that they were part of a Tender Committee and that "every word and every description in Exhibit P-36 (Tender Committee proceedings) had been written by them with a view to cheat BHEL" and that "if A-3 and A-4 were innocent they should have questioned and asked for details regarding the contractors." Such a reasoning given by the trial Court and approved by the Trial Court and approved by the High Court was completely perverse. 113. As rightly contended by the learned Counsel, A-4 had no role in choosing the tenderers, but entered the picture only after the offers were received from the tenderers. Admittedly, A-4 was subordinate to both PW-16 and A-3. 114. At the cost of repetition, it should be pointed out that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... branch. I did not compare the specimen signature with the signature in the DD Application. When I was examined by CBI, I did not ask for the specimen signature of the applicant. 119. PW-40 through whom Exhibit P-90 was marked, did not say anything in the chief-examination that A-7 signed the application form for demand draft. He merely identified the demand draft application form and the party on whose behalf the demand draft was taken. In other words, PW-40, like PW-22 did not implicate A-7 as the person who signed the application for the issue of demand draft on behalf of some bogus firms. 120. PW-41 through whom Exhibit P-92 was marked, merely stated as to who obtained the demand draft. He did not also specifically name A-7 as the person who signed the application form or who received the demand draft. 121. In fact, PW-40 stated that no statement Under Section 161 of the Code was recorded by the I.O. though he was examined. Similarly, PW-41 stated that he was examined by the Inspector, CBI but he did not know whether a statement Under Section 161 was recorded. 122. Thus, three out of four bank officials examined by the prosecution to show that A-7 applied for demand drafts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hus, there was a colossal failure on the part of the prosecution to establish that Exhibits P-66, P-76, P-90 and P-92 were in the handwritings/signatures of A-7. This is despite the prosecution examining the bank officials as PW-22, PW-32, PW-40 and PW-41 and the handwriting expert as PW-30. 129. Unfortunately, the Trial Court adopted a very curious reasoning in paragraph 91 (the only paragraph in which the reasons were given in this regard) that since he was a beneficiary of the money diverted to the account of Insecticides & Allied Chemicals, he must have had participation and knowledge that the demand drafts were purchased to cheat BHEL. Such a reasoning is wholly unacceptable in view of the fact that A-7 was Accused of forgery and charged Under Section 468 Indian Penal Code, in relation to these very same applications for demand drafts. Therefore, it was necessary for the prosecution to prove forgery and also to show that the purpose of such forgery was cheating. Both were absent. 130. The High Court fortunately realised the pitfall in the reasoning of the Trial Court. But in an over-anxiety to somehow convict A-7, the High Court adopted a very peculiar route, namely that of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove, the finding recorded by the Trial Court and the High Court as though A-7 committed forgery and cheating by making applications for the issue of demand drafts in the names of bogus firms is wholly unsustainable. 138. The only connecting link pointed out against A-7 was the transfer of money to the total extent of Rs. 1,52,50,000/- to the account of a firm of which he was a partner. This by itself will not constitute any offence. Therefore, the charge that A-7 abetted the commission of the crime by the other Accused, should also fail. This is especially so when A-5, whose proprietary concern bagged the contract, not only lost the contract but also allowed the bank guarantee to be invoked by BHEL and in addition, left a huge amount of Rs. 2.60 crores still with BHEL. Therefore, the conviction and sentence awarded to A-7 cannot be sustained. Conclusion 139. In the light of the above discussion, all the appeals are allowed and the judgment of the Special Court for CBI cases convicting the Appellants for various offences and the judgment of the High Court confirming the same are set aside. The Appellants are acquitted of all the charges. The bail bonds, if any, furnished by them ..... X X X X Extracts X X X X X X X X Extracts X X X X
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