TaxTMI 
TaxTMI 
2009 (8) TMI 1210
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....ai was Minister for Water Resources of the State of Madhya Pradesh. Respondent No. 2 D.V.S.R. Sarma and the respondent No. 7 S.W. Mohgoankar were the Secretary to the Government of Madhya Pradesh. Respondent No. 3 P.V. Srinivasaiyah was the Engineer-in-Chief and the respondent No. 4 A.S. Laxminarsimhaiya was the Deputy Secretary in the Government of Madhya Pradesh. Respondent No. 5 V.R.B. Gopal and the respondent No. 6 M.N. Nadkarni were the Chief Engineers, Hasdeo Bango Project. Respondent No. 11 R.P. Khare was the Secretary, Control Board for Major Projects. 5. Appellant under the aegies of the World Bank undertook construction of the Hasdeo Bango Masonry dam project. For the aforementioned purpose, the respondent Nos. 8, 9 and 10 herein, viz.,M/s Progressive Constructions Pvt. Ltd., M/s Prasad & Company, M/s SEW Construction Co. (hereinafter referred to as "the contractors") were awarded contracts in terms whereof they were required to excavate stones etc. from Therma Pahar Quarry, which was situate at only 12 kms. away from the site, for use of the stone to be extracted therefrom for construction of masonry spillway. 6. One of the terms of the said contract is as under: ....
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....er by a letter dated 16.10.1983, stating: "...Adequate quantity of rubble is not available from Therma quarries of Forest Department acquired for this purpose and Geologist, Geological Survey of India had intimated that about one lakh cum. of rubble can only be extracted from Therma quarries. For completion of this major dam about ten lakh cum. rubble & metal are needed. Out of which 1 lakh cum. can be extracted from Therma quarry, about three lakh cum. can be used out of the stone received from excavation of foundation of dam, remaining 6 (six) lakh cum. is required from adjacent stone quarries like Katghora, Hukra & Maheshpur. Hence, I have requested in my letter cited above (copy enclosed) to additional Collector, Korba, to reserve rubble quarries in the surroundings of the above villages so that rubble from these quarries can be extracted for completion of the Bango Dam in time. Now I understand that you have proposed the above quarries for auction on 20th & 21st Oct.'83. I request to delete the rubble quarries situated in the surrounding of Katghora, Hukra & Maheshpur from the purview of auction and transfer to Irrigation Department. Depending upon the quantity....
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....he yield of useful stone to be very much less. The details enclosed at Annexure A. Even the quantum of stone available is less, when compared to the requirement. 3. It was reported that the quantum of useful rubble available in the entire Therma Pahad Hills is to the tune of one lakh cum. against the total requirement of 8 lakh cum. for the entire dam. This was based on the detailed investigations and report of the Resident Geologist. Even this quantity can be extracted with much difficulty. Therma Pahad Quarry on the visual appearance and the random bore holes, initially appeared to be good. As such this was declared as quarry for masonry stone and accordingly estimates prepared and designated as the specified quarry in the quarry map enclosed along with the agreements. The contractors naturally could not have investigated the quarry by actual opening/ operation, and have inspected the quarry with the data available to them. Therefore neither department nor the contractor could have foreseen the non availability of useful stone in the required quantity from the designated quarry." It was requested: "It is therefore requested that the sanction may be obtained f....
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....y control work of masonry dam. Early reply is solicited." 16. In view of the aforementioned development, the Chief Engineer of the Project brought the same to the notice of the Secretary of the Major, Medium and Minor Irrigation Department, Bhopal by a letter dated 11.01.1985 inter alia making the following recommendations: "(i) Permitting the Chief Engineer for declaring Katghora quarry as an additional quarry for balance quantity of rubble quarry for rubble for masonry dam other than one lakh cubic meter of rubble, as assessed by the geologist to be extracted by the contractors from Therma Pahad quarry as far as possible in the contracts mentioned in this letter. (ii) To allow payment of additional leads from Katghora quarry for cum of masonry at the rates detailed in table at para 5.3 above." Along with the said letter, various other documents were enclosed as specified therein including a letter dated 4.05.1990, wherein it was inter alia stated: "10. In view of the above, the Chief Engineer submitted proposals on 4.07.85 for Government Orders. According to the above proposals sanction to pay extra lead amounting to Rs. 1,23,23,767/- has been sou....
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....ter of 14/2/85 had suggested that the matter be resolved within contractual limits. 30. In view of the above, the Committee did not examine the proposal of Chief Engineer and refrained from giving any comments in the matter at this stage." 19. However, the contractors invoked the arbitration agreement contained in the said contract in the year 1987 and an ad hoc settlement was proposed. 20. The matter was placed before the Financial Adviser. The Financial Adviser in his note dated 4.01.1991 to the Secretary, while stating that the Financial Adviser functions as a consultant offering comments on cases referred to him in the light of his background, experience and expertise and going by the facts placed before him which may not be treated as a substitute for vetting by the Finance Department wherever such vetting is required under the rules of governmental business, inter alia made the following comments: "...However, since the whole contract action was based on the presumption that the required quantity of material of required specification would be available from a quarry with in 12 KM of the work site, it can be reasonable assumed that the contractors have ....
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....to the extent of actual quantity brought from the quarries be made." The proposals of the Chief Engineer, the quantities under each agreement, the rate and the amount were also noticed. It was proposed: "Therefore, it is proposed to approve payment for actual quantity and the Chief Engineer may be informed to take undertakings from the contractors before making the payment." The Financial Adviser was asked to examine the said proposal in details. Some discussions apparently were held and it was found necessary to obtain the following information before taking decision at the government level: "1. After the inspection of the Geologists how much quantity has been brought from Therma Pahad by each contractor. 2. How much quantity has been brought from Katghora quarry. 3. How the records are kept by the Department about the quantity of stones brought from different quarries." A draft letter was also prepared. 23. On or about 6.04.1991, one Shri Uday Shinde in his note stated that the Chief Engineer had not sent any detail in regard to Block 31-38 as in the agreement only Therma Pahar quarry had been shown for the balance work ....
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....hat much of the quantities, the materials have been brought from a quarry at more distance, it is proper to make payment for that much excess distance." 27. The respondent No.1 approved the said note of the respondent No. 2 on or about 20.01.1992 whereupon the amount in question was sanctioned. 28. Thereafter, the accounts were audited and one Shri G.K. Shukla, Deputy Accountant General reported: "a) The clause of the agreement noted above and the quarry chart clearly bring out that in the event of change of quarry on whatever reasons no claim will be entertained and contractor should before quoting rates, visit the quarry site and satisfy himself regarding quantity and quality of the material available. Thus, the sanction appears a negotiated settlement beyond the contractual provisions, for which concurrence of Finance Department ought to have been obtained. b) The PRC considered this as a claim case which was to be decided by Arbitrator under M.P. Adhikaran Adhiniyan, 1983. c) The Member, World Bank suggested to resolve the matter within the contractual limits. d) The Secretary Irrigation had earlier rejected the case as it was not admis....
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....ix thousand two hundred rupees was made to the Contractors towards extra lead. Hence, you while holding the post of public servant misusing the position of the post provided financial benefit to the Tender Contractors without public interest. Your above act being offence under Section 13(1)(D)(ii-iii), the Prevention of Corruption Act, 1988 is punishable under Section 13(2) the Prevention of Corruption Act, 1988. In the alternative, you in criminal conspiracy with Shri D.V.S.R. Sharma, Secretary, working in the Ministry of Water Resources, Government of Madhya Pradesh and other employees and contractors acted as mentioned above, which is punishable under Section 13(1)(D)(ii and iii) read with Section 120B IPC, which is within the jurisdiction of this Court. Hence, I hereby direct that you will be tried for the offence mentioned above by this Court." 33. Aggrieved by and dissatisfied therewith, the respondents filed revision applications before the High Court, which by reason of the impugned order have been allowed. The State is, thus, before us. 34. Mr. K.T.S. Tulsi, learned senior counsel appearing on behalf of the appellant, in support of the appeal, inter alia wou....
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....cedure, 1973. (viii) The Indian Institute of Technology having tested the rocks excavated from Therma Pahar Quarry and having opined that they can safely be used for rubble masonry as well as for coarse and fine aggregate, any opinion rendered contrary thereto or inconsistent therewith should have been ignored. 35. Mr. U.U. Lalit and Mr. Vivek Tankha, learned senior counsel appearing on behalf of the respondents, on the other hand, urged : (i) The court at the stage of framing of charge and consequently the High Court in exercise of its jurisdiction under Sections 397 and 401 of the Code of Criminal Procedure were entitled to consider the entire materials on record for the purpose of arriving at a finding as to whether the contents thereof, even if taken to be correct in their entirety, constituted a prima facie case against the accused or not. (ii) It would not be correct to contend that although all the documents collected during investigation form part of the final report submitted by the Special Police Establishment in terms of Sub- section (5) of Section 173 of the Code of Criminal Procedure, for the purpose of framing of charge or otherwise the p....
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.... been brought on record to show that any conspiracy was entered into by the respondents inter se. (ix) Assuming that the respondents have arrived at a wrong conclusion, the same would only constitute an error of judgment and not a criminal misconduct. (x) The malafide attitude on the part of the State would be evident from the fact that the respondents herein who were members of the Committee have also been roped in although they had made fair, proper and impartial recommendations which could have been accepted or rejected. Even the respondent No. 1 in his note dated 4.11.1991 did not issue any direction to make payment but merely asked the respondent No. 2 to have a re-look at the entire matter as prior to the purported opinion of Mr. Billore, as contained in his note dated 1.05.1991 he had opined otherwise, viz., not in the tune of the recommendations made by the Quality Control Department, i.e., in favour of the contractors. (xi) There is nothing on record to show that the respondent Nos. 1 to 7 herein have done any act which was beyond their official duty and hence, the impugned judgment is unassailable. 36. The question raised before us is require....
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....int out that stones of requisite strength were not available at Therma Pahar Quarry. The quantum of stone required was eight lakh cubic meters and only one lakh cubic metres was available thereat. The balance seven lakh cubic meters of stone was, thus, required to be obtained from the quarries situated at villages villages Katghora, Hunkra and Maheshpur. 41. Stone is a minor mineral within the meaning of the provisions of the Mines and Minerals (Regulation and Development) Act, 1957 and the Minor Mineral Concession Rules framed by the State. Lease and/ or licence for extraction thereof is to be granted by the Collector. Although the Mines Department of the State intended to grant `Quarry lease' in favour of others having regard to the requirements of the State, the said quarries were reserved, subject to certain conditions. 42. The respondent Nos. 8 to 10, in view of the provisions of the Mines and Mineral (Regulation and Development) Act, 1957 and the Madhya Pradesh Minor Mineral Concession Rules could not have on their own undertaken mining operation for the purpose of extracting the said minor mineral. They could have done so only on a licence granted in their favour b....
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....l has been brought on record to show that they did so for causing any wrongful gain to themselves or to a third party or for causing wrongful loss to the State 48. Section 13 of the Act provides for criminal misconduct by a public servant. Such an offence of criminal misconduct by a public servant can be said to have been committed if in terms of Section 13(1)(d)(ii-iii) a public servant abuses its position and obtains for himself or for any other person any valuable thing or pecuniary advantage; or while holding office as a public servant, obtains for any person any valuable thing or pecuniary advantage without any public interest. Sub-section (2) of Section 13 provides that any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall be not less than one year but which may extend to seven years and shall also be liable to fine. 49. Criminal conspiracy has been defined in Section 120A of the Indian Penal Code, 1860 to mean: "When two or more persons agree to do, or cause to be done,-- (1) an illegal act, or (2) an act which is not illegal by illegal means, such an agreement is designated a criminal conspira....
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....ecting the purpose for which the conspiracy is formed, nor in attempting to do them, nor in inciting others to do them, but in the forming of the scheme or agreement between the parties. Agreement is essential. Mere knowledge, or even discussion, of the plan is not, per se enough" In State (NCT) of Delhi v. Navjot Sandhu @ Afsan Guru [(2005) 11 SCC 600], this Court stated the law, thus: "101. One more principle which deserves notice is that the cumulative effect of the proved circumstances should be taken into account in determining the guilt of the accused rather than adopting an isolated approach to each of the circumstances. Of course, each one of the circumstances should be proved beyond reasonable doubt. Lastly, in regard to the appreciation of evidence relating to the conspiracy, the Court must take care to see that the acts or conduct of the parties must be conscious and clear enough to infer their concurrence as to the common design and its execution." We may also notice that in Ram Narayan Popli v. CBI [(2003) 3 SCC 641], it was held: "...Law making conspiracy a crime is designed to curb immoderate power to do mischief which is gained by a combinati....
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....ndependent officer like Financial Adviser need not be acted upon. It was for the State to take a decision. Such a decision was required to be taken on the basis of the materials available. In Inspector Prem Chand v. Govt. of N.C.T. of Delhi & Ors. [2007 AIR SCW 2532], this Court observed: "In State of Punjab and Ors. vs. Ram Singh Ex. Constable [1992 (4) SCC 54], it was stated: "Misconduct has been defined in Black's Law Dictionary, Sixth Edition at page 999, thus: 'A transgression of some established and definite rule of action, a forbidden act, a dereliction from duty, unlawful behaviour, wilful in character, improper or wrong behaviour, its synonyms are misdemeanor, misdeed, misbehavior, delinquency, impropriety, mismanagement, offense, but not negligence or carelessness.' Misconduct in office has been defined as: "Any unlawful behaviour by a public officer in relation to the duties of his office, willful in character. Term embraces acts which the officer holder had no right to perform, acts performed improperly, and failure to act in the face of an affirmative duty to act." In P. Ramanatha Aiyar's Law Lexicon, 3rd ....
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....aonkar, Superintending Engineer who worked till 19.06.1989 have been made accused but, on the other hand, those who were one way or the other connected with the decision, viz., Shri J.R. Malhotra and Mr. R.D. Nanhoria have not been proceeded at all. We fail to understand on what basis such a discrimination was made. 57. In Soma Chakravarty (supra), whereupon strong reliance has been placed by Mr. Tulsi, this Court opined: "23. In a case of this nature, the learned Special Judge also should have considered the question having regard to the "doctrine of parity" in mind. An accused similarly situated has not been proceeded against only because, the departmental proceedings ended in his favour. Whether an accused before him although stands on a similar footing despite he having not been departmentally proceeded against or had not been completely exonerated also required to be considered. If exoneration in a departmental proceeding is the basis for not framing a charge against an accused person who is said to be similarly situated, the question which requires a further consideration was as to whether the applicant before it was similarly situated or not and/or whether the ex....
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....ers [(1996) 4 SCC 659]}. 60. This leaves us with the question as to whether an order of sanction was required to be obtained. There exists a distinction between a sanction for prosecution under Section 19 of the Act and Section 197 of the Code of Criminal Procedure. Whereas in terms of Section 19, it would not be necessary to obtain sanction in respect of those who had ceased to be a public servant, Section 197 of the Code of Criminal Procedure requires sanction both for those who were or are public servants. 61. Strong reliance has been placed by Mr. Tulsi on a judgment of this Court in Centre for Public Interest Litigation and Another v. Union of India and Another [(2005) 8 SCC 202]. In that case, it was held: "9. The protection given under Section 197 is to protect responsible public servants against the institution of possibly vexatious criminal proceedings for offences alleged to have been committed by them while they are acting or purporting to act as public servants. The policy of the legislature is to afford adequate protection to public servants to ensure that they are not prosecuted for anything done by them in the discharge of their official duties without....
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.... complaint case. 10. Use of the expression "official duty" implies that the act or omission must have been done by the public servant in the course of his service and that it should have been in discharge of his duty. The section does not extend its protective cover to every act or omission done by a public servant in service but restricts its scope of operation to only those acts or omissions which are done by a public servant in discharge of official duty. 11. If on facts, therefore, it is prima facie found that the act or omission for which the accused was charged had reasonable connection with discharge of his duty then it must be held to be official to which applicability of Section 197 of the Code cannot be disputed." 62. Were the respondent Nos. 1 to 7 required to act in the matter as a part of official duty? Indisputably, they were required to do so. Be he an Executive Engineer, Superintending Engineer, Chief Engineer, Engineer-in-Chief, Secretary or Deputy Secretary, matters were placed before them by their subordinate officers. They were required to take action thereupon. They were required to apply their own mind. A decision on their part was requ....
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....fficial duty are so inter-related that one can postulate reasonably that it was done by the accused in the performance of the official duty, though possibly in excess of the needs and requirements of the situation. In Hori Barn Singh v. Crown Sulaiman, J. observes: "The section cannot be confined to only such acts as are done by a public servant directly in pursuance of his public office, though in excess of the duty or under a mistaken belief as to the existence of such duty. Nor is it necessary to go to the length of saying that the act constituting the offence should be so inseparably connected with the official duty as to form part and parcel of the same transaction." The interpretation that found favour with Varadachariar, J. in the same case is stated by him in these terms at p. 187: "There must be something in the nature of the act complained of that attaches it to the official character of the person doing it." In affirming this view, the Judicial Committee of the Privy Council observe in Gill case: "A public servant can only be said to act or purport to act in the discharge of his official duty, if his act is such as to lie within the scope of his officia....
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....llai v. State of Kerala and Another [(1996) 1 SCC 478] In Rakesh Kumar Mishra v. State of Bihar and Others [(2006) 1 SCC 557], this Court held: "12. It has been widened further by extending protection to even those acts or omissions which are done in purported exercise of official duty; that is under the colour of office. Official duty, therefore, implies that the act or omission must have been done by the public servant in the course of his service and such act or omission must have been performed as part of duty which further must have been official in nature. The section has, thus, to be construed strictly, while determining its applicability to any act or omission in the course of service. Its operation has to be limited to those duties which are discharged in the course of duty. But once any act or omission has been found to have been committed by a public servant in the discharge of his duty then it must be given liberal and wide construction so far its official nature is concerned. For instance a public servant is not entitled to indulge in criminal activities. To that extent the section has to be construed narrowly and in a restricted manner. But once it is establi....