TaxTMI 
TaxTMI 
2011 (12) TMI 759
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts in Crl. A. Nos. 536 and 482 of 2002 respectively, additionally for the substantive offence under Section 13(1)(d) read with Section 13(2) Prevention of Corruption Act, 1988. The Appellants (hereafter referred to by their names, for convenience) also challenge the order sentencing them to periods of two and three years? rigorous imprisonment ( "RI") and fine of Rs. 1 lakh, in default of which they were to further undergo simple imprisonment ( "SI") for six months for the offences. The appeals were received by the Division Bench, upon a reference regarding the correct interpretation of Section 13(1)(d) of the Prevention of Corruption Act 1988 (hereafter "the 1988 Act"). 2. Before proceeding it would be necessary to extract the relevant portions of the order (dated 24.09.2009) referring the appeals to the Division Bench. It reads as follows: The issues that arise 30. In the present case the evidence is essentially in the form of notes on file dated 25th May and 24th July 1993 of Smt. Ghosh and the notes dated 31st August, 19th November and 13th December 1993 of Sri Sukh Ram. There are cases under the PC Act 1988 in which a trap is laid to gather evi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... offence cannot be made out without the existence of mens rea, 'unless from a consideration of the term of the statute and other relevant circumstances it clearly appears that that must have been the intention of Parliament.' The formulations of the rule of construction which have been accepted by the Privy Council and the Supreme Court are those stated by Wright, J. in Sherras v. De Rutzen, and by Goddard, C.J. in Brend v. Wood. Wright, J. expressed the rule in these words: 'There is a presumption that mens rea an evil intention, or knowledge of the wrongfulness of the act, is an essential ingredient of every offence, but that presumption is liable to be displaced either by the words of the statute creating the offence or by the subject-matter with which it deals and both must be considered.' And, the formulation by Goddard, C.J. is to the following effect: 'It is of the utmost importance for the protection of the liberty of the subject that a court should always bear in mind that unless a statute either clearly or by necessary implication rules out mens rea as a constituent part of a crime a defendant should not be found guilty of an offence against the crimin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd (iii) PC Act 1988 beyond reasonable doubt. It was urged that the fact that the price as demanded by M/s. ARM was restored to it by the MoS (C) overriding the advice of his subordinates, which has a financial implication of Rs. 1.86 crores for the government was sufficient in itself to characterize the said action as an "abuse " of official position for the purposes of section 13(1)(d)(ii) and as being "without public interest " for the purpose of Section 13(1)(d)(iii) of the PC Act. The questions that arise in this context are in a government run essentially by an Executive with a Minister heading a Department, and where decisions involving financial implications are taken routinely, when can a decision be said to constitute an "abuse " of official position" What can be said to be a decision that is not in 'public interest'? 34. The importance of the above questions becomes apparent on a comparison of the earlier provision i.e. Section 5(1) (d) PC Act, 1947 with Sections 13(1)(d) (i), (ii) and (iii) of the PC Act 1988: Section 5(1)(d) PC Act, 1947 5. Criminal Misconduct Section 13(1)(d) (i),(ii) and (iii) PC Act, 1988 13. Criminal miscond....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion in any of the cases cited at the bar particularly in the context of the PC Act 1988. There is no authoritative pronouncement on the above aspects of the law. Given the importance of the questions and the implications it has for numerous other cases that may be pending at various stages, it is considered appropriate to direct that these appeals should be decided by a larger bench of two Hon'ble judges. It is clarified that the submissions of the counsel for the parties on the evidence in the case and the correctness of the findings of the trial court have not been discussed in this order. Those will also have to be examined notwithstanding the answers to the above questions. The appeals may be placed on 9th October 2009 before the appropriate Division Bench subject to the directions of Hon'ble the Chief Justice. S. MURALIDHAR, J. SEPTEMBER 24, 2009 The Facts 3. Mr. Sukh Ram was the Union Minister of State for Communications [MoS (C)] with independent charge for the period of 18th January 1993 to 16th May 1996. Ms. Runu Ghosh was the Director (FA-V) in the Department of Telecommunications (DoT) at that time. Mr. P. Rama Rao was the Managing ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the Shyam Make Shared Radio System, which explained its advantages over the crystal based system. Pending the finalization of the award of contract pursuant to the tender of 13th January 1992, a provisional purchase order (PO) dated 31st December 1992 for supply of 300 systems of 2/15 MARR was placed by the DoT on M/s. ARM. A similar order for 200 systems was placed on M/s. Shyam. 7. The Union Budget was announced and on 16.04.1993, M/s. ARM wrote a letter to the Member (Production) (i.e. Member of the Telecom Commissioner) DoT (marked Ex. PW-3/K14 during the trial) informing him inter alia that due to Budget concessions, it was able to lower the price of the system: due to various duty concessions given by the Government and quality measures successfully adopted by us, we could bring down the price of each 2/15 MARR Shared Radio Systems from Rs. 3,54,500 to Rs. 3,45,000 passing on a net benefit of Rs. 9,500 to DoT. M/s. ARM further informed DoT that the above benefit of Rs. 9,500 "would apply to our synthesized version of 2/15 also. " 8. The Director (MMC), Mr. Ujjagar Singh, prepared a note dated 26.04.1993 proposing to procure 2500 systems from the ven....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h those of the synthesized version, Ms. Runu Ghosh was of the view that these aspects were not discussed at the meeting but on the other hand, the facts appeared to have been gathered subsequently. She accordingly declined to sign the minutes of the PNC. In the report, marked as Ex. PW 3/K35, the PNC recommended price of Rs. 3,40,750/- per system together with one duplicate unit each of LNA and Power supply, for synthesized version of 2/15 MARR system. The report observed that crystal based systems were inferior (to the synthesized version) and suffered from serious limitations of delay in dial tone during installation or replacement of RSU unit, which might involve to and fro visits between RSU and BSU, which was not so in the synthesized version. The report also stated that the crystal version did not have the facility of changing subscriber units" identification code and therefore needed stocking of comparatively large quantities of spare units and parts for maintenance with added resultant cost. The Committee therefore recommended that crystal version should be bought for a further discounted price. PW-3 Sri N.C. Gupta by a detailed note dated 13th July 1993 proposed (by Ex. PW....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 26th July 1993 Sri Rakesh Aggarwal, the Director (TR) and the Member of the Technical Group of the TEC, wrote to Ms. Runu Ghosh confirming that "the design, concept and application of hand held VHF trans receivers are entirely different from 2/15 MARR and is not proper to compare. " (Ex. PW-D2-2). As regards cost comparison between the crystal versions with that of the synthesized version, he stated that the TEC did not have any data on costing. However, this depended "upon the design, concept & types of components used and is not susceptible to cost comparison as is being attempted. " Meanwhile, the file traveled from desk to desk. The Adviser (P) who saw it next agreed with the suggestion of Sri N.C. Gupta that the price should be reduced by Rs. 37,170 per system (Ex. PW-3/K-40). The file was sent to the office of Mr. Sukh Ram, who had asked for it, on 23.07.1993. It was returned, since he was pre-occupied with other work, on 02.08.1993 (note exhibited as Ex. PW3/K-44). It was requisitioned and submitted to the minister, by Ms. Runu Ghosh, on 05.08.1993 (note exhibited as Ex. PW-3/K-45). 13. The file was placed before Mr. Sukh Ram, the MoS (C), on 15th August 1993. He noted (....
X X X X Extracts X X X X
X X X X Extracts X X X X
....its. The DoT, however, did not agree. By its letter dated 17th September 1993 (Ex. PW3/K-102) it informed M/s. ARM to give a clear acceptance of the APO within the time frame indicated otherwise it would reserve the right to procure the item "of the synthesized version from any of the sources available to DoT. " On 20th September 1993 M/s. ARM wrote to the DoT (Ex. PW-3/K-100) furnishing a bank guarantee for 300 crystal systems for the reduced price. 15. On 11.09.1993 M/s. ARM made a detailed representation to the Minister, Mr. Sukh Ram (Ex. PW-3/K-76) requesting amendments to the APO as regards (a) enhancement of quantity of order for crystal controlled version of 2/15 from 300 to 450 systems; (b) 2) equalization of price of crystal version with that of the synthesized version; (c) Since requirement of spares was not spelt out in the NIT it was to be deleted; (d) Treatment of sales tax, as excluded from the basic price of the system and be treated extra as other statutory levies like excise duty. On the representation of 11.09.1993 the MoS (C) Mr. Sukh Ram, made the following noting (Ex. PW-3/K-77) by hand: How are we offering two rates against the same tender....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted that in view of the perceived inferiority of the crystal version it would be necessary to make suitable adjustment in the prices though crystal controlled 2/15 MARR systems of M/s. ARM were "stated to fully meet DoT specifications and these systems are working satisfactorily in the field. " The note also suggested that the Chief/Sr. Cost Accounts Officer of the Ministry of Finance assisted by a representative of the Member (Services) and/or Member (Technology) should undertake a quick study of the relative merits of the 2 sets as well as their costs. 18. The matter was again placed before the MoS (C), Mr. Sukh Ram who on 13.12.1993 reiterated (by note Ex. PW-3/K-89) his earlier view. He pointed out that in view of the observations of the TEC, the basic premises for cost reduction for crystal versions were wrong and "we should not persistently repeat that a crystal version is inferior and therefore, its cost should be less than that of synthesized version. " He further wrote that the "perceived inferiority" was merely a matter of opinion of one or two officers and unsubstantiated by any comparative data in the actual working of crystal and synthesized version in the field. Th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....also produced exhibits. By the impugned judgment and order, the Trial Court held the Appellants guilty of the offences in the manner described above. The Court held that the entire conspectus of circumstances proved that the Tender Notice had clearly indicated that the preferred product of procurement was the synthesized version, which despite availability, was not sought to be purchased. Though the order placed for the first 500 included some versions of the crystal type, by the time the rest of the order could in fact materialize, the Department had the option to procure the preferred technology. Ms. Runu Ghosh's notes questioning the action of senior officers in regard to the costing of the crystal version, despite overwhelming opinion of all officials with technical expertise, her correspondence with ARM, the manner in which she advocated its cause, and the recovery of ARM's signed and blank letterheads from her official desk, proved her prominent role in the ultimate price reduction ordered by Mr. Sukh Ram, in November, 1993. As regards Mr. Sukh Ram, the Court, after considering all the nothings, and in particular his observations on 15.08.1993 and 31.08.1993, held tha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cing, by the exercise of personal influence, any public servant to do any of the things mentioned in the previous things, and makes such acts or omission, punishable. Section 10 punishes the crime of abetment by anyone, of the offences in Sections 8 or 9. Section 13, which is material for the purposes of this judgment, reads as follows: 13. Criminal misconduct by a public servant.-(1) A public servant is said to commit the offence of criminal misconduct,- (a) if he habitually accepts or obtains or agrees to accept or attempts to obtain from any person for himself or for any other person any gratification other than legal remuneration as a motive or reward such as is mentioned in Section 7; or (b) if he habitually accepts or obtains or agrees to accept or attempts to obtain for himself or for any other person, any valuable thing without consideration or for a consideration which he knows to be inadequate from any person whom he knows to have been, or to be, or to be likely to be concerned in any proceeding or business transacted or about to be transacted by him, or having any connection with the official functions of himself or of any pub....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s missing from the charges. In these circumstances, stated counsel, the conviction of Mr. Sukh Ram and Ms. Runu Ghosh was not sustainable. Elaborating on this, counsel urged that the charge framed was that the public servants acted against the advice of the officials, resulting in pecuniary advantage to the extent of Rs. 1.68 crores to ARM. The charge nowhere reflected the elements of obtaining pecuniary advantage, to a third party "without public interest ". The omission of these from the charges framed, prejudiced the trial, and consequently, urged counsel, the impugned judgment was liable to be set aside. Reliance was placed on judgment in Nanak Chand v. State of Punjab AIR 1955 SC 274. The omission to state the necessary ingredients and the supporting facts, in the submission of counsel, contravened Sections 212 and 213, Cr. P.C, which were incurable. Relying on the decision reported as Chittaranjan Das v. State of WB AIR 1963 SC 1696, it was urged the trial and conviction were vitiated. 25. It was argued next, by counsel for all the Appellants that mens rea, or criminal intent, has to be construed as an integral part of Section 13(1)(d)(iii). In support of the submission, i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Statutes are to be construed strictly, that is to say, the Court must see that the thing charged as an offence is within the plain meaning of the words used, and must not strain the words on any notion that there has been a slip, that there has been a casus omissus, that the thing is so clearly within the mischief that it must have been intended to be included if thought of. On the other hand, the person charged has a right to say that the thing charged although within the words, is not within the spirit of the enactment. But where the thing is brought within the words and within the spirit, there a penal enactment is to be construed, like any other instrument, according to the fair common sense meaning of the language used, and the Court is not to find or make any doubt or ambiguity in the language of a penal statute, where such doubt or ambiguity would clearly not be found or made in the same language in any other instrument. In our view this passage, if we may say so, restates the rule of construction of a penal provision from a correct perspective. As we will presently show the case of the appellant on the facts found clearly falls not only within the words of cl....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... it connotes also an element of effort on the part of the receiver. One may accept money that is offered, or solicit payment of a bribe, or extort the bribe by threat or coercion; in each case, he obtains a pecuniary advantage by abusing his position as a public servant. The word "obtains" is used in Sections 161 and 165 of the Penal Code. The other words "corrupt or illegal means " find place in Section 162. Apart from "corrupt and illegal means ", we have also the words "or by otherwise abusing his position as a public servant ". If a man obtains a pecuniary advantage by the abuse of his position, he will be guilty under sub clause (d). Sections 161, 162 and 163 refer to a motive or a reward for doing or forbearing to do something, showing favor or disfavor to any person, or for inducing such conduct by the exercise of personal influence. It is not necessary for an offence under clause (d) to prove all this. It is enough if by abusing his position as a public servant a man obtains for himself any pecuniary advantage, entirely irrespective of motive or reward for showing favor or disfavor. To a certain extent the ingredients of the two offences are common, no doubt. 28. Relianc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nu Ghosh, that the prosecution in the present case was unable to prove any of the charges, pertaining to the offences embodied in Section 13(1)(d), i.e. of obtaining through "corrupt or illegal means" or by "abuse" of office, or "obtaining" for someone else, a valuable thing, or pecuniary advantage, with loss to public interest. Counsel submitted that the prosecution in this case did not prove that the crystal version, procurement of which was approved, -a fact not disputed-either caused pecuniary advantage of such a kind to ARM as to make the said two Appellants criminally responsible, nor loss to public interest. In this context, it was submitted that often public servants, including officers and ministers, are called upon to take decisions which are not popular, or are unpalatable. Such decisions cannot ipso facto result in prosecution, unless the mental element of dishonesty, to cause advantage (of an unwarranted variety) to another, and loss to the public interest is proved. Counsel relied on the following observations of the Supreme Court in Tarlochan Dev Sharma v. State of Punjab, (2001) 6 SCC 260: An honest though erroneous exercise of power or an indecision ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e bidders who had type approval as on that date, and constitution of a PNC. These revealed extensive consultations in the light of new developments and the possibility of favorably using them to benefit the procuring department. It was pointed out that the letter to the bidders was issued on 07.06.1993 (Ext. PW3/K-26). PW-4 N.C. Gupta stated in his cross-examination that the PNC met once before actual negotiation; however that is not borne out by the record. The decision on the file by higher authorities was to negotiate only with M/s ARM who was the lowest bidder. The decision to call 3 bidders was taken only by Sri N.C. Gupta and Sri Ujjagar Singh. It was further argued that there was no discussion about crystal and synthesized versions in the PNC (which was indeed outside their terms of reference) as pointed out in Ms. Ghosh's penciled note sent to Sri N.C. Gupta. At no stage, in the file was this observation contradicted by Sri. N.C. Gupta, or PW-3 Sri Ujjagar Singh. It was urged that the PNC was not competent to say which version was better - in fact that was outside their terms of reference. 33. Counsel for Mr. Sukh Ram and Ms. Runu Ghosh argued that the T.E.C had draw....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rd established that both the crystal and the synthesized version were procured together, in the first lot, under the same tender. It was highlighted that when the orders for the first lot were placed, no deficiency or defect, or variation between the conditions of NIT was noticed or felt, and everyone in the DoT - including PW-3 Sri Ujjagar Singh, as well as PW-4 Sri N.C. Gupta - were satisfied on due consideration of all materials that the order for the crystal version complied with the requirements. In the light of these facts, there was no occasion for anyone to re-visit the issue, and the only reason for fresh thinking was because of the price reduction offered by ARM on account of customs duty relief announced in the new Budget. 35. It was also urged that neither the PNC terms, nor the intimation to manufacturers, inviting them to meet the PNC, in June, 1993, indicated that the members would consider the relative technical merits or even the pricing of the two products. No prosecution witness indicated that there was any discussion about the technical reasons for superiority of the synthesized technology, as compared with the crystal version. On the other hand, submitted co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he credibility of PW-4 on other issues, it was submitted that his experience was limited to seeing the crystal version at few places. He could only mention, generally about some alleged design limitations of the crystal version. If that were really the position, he could not explain why the crystal version passed muster, when the first order was placed on ARM in December 1992, for 500 pieces. Furthermore, argued counsel, the witness admitted ignorance about the procedures and manuals governing the question of equipment testing and procurement procedures applicable to the DoT. 38. Counsel urged that after ARM offered reduction in price, and the file was sent to Ms. Runu Ghosh, she proposed award of contract for 1500 units to the concern (by note 37/N, Ex. PW-3/K-19, on 25.05.1993). When the file went to PW-3, Sri Ujjagar Singh, he merely mentioned about the need to have a PNC, and nowhere discussed the so called inferiority of the crystal technology or the need for further price reduction of that product, in Ex. PW-3/K-21. The understanding at that stage was to award the bulk of the order to ARM, as reflected in the note of Sri U.S. Naik, (Ex. PW-3/K-24) that 1000 units should be....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssed a letter to her, without communication from her, by speed post. But all firms based outside Delhi had local officers in Delhi who used to chase the file. In this context, it was urged that PW-3"s note of 17.8.1993 proposed for orders on Natelco saying they had the synthesized version, whereas Natelco's letter to MOS (C) informing the DoT regarding type approval has been marked by M(P) to DDG (1) on 16.08.1993. It, was therefore, not possible for the letter to have reached Mr. Ujjagar Singh on 17.08.1993 when he wrote the note. Therefore, urged counsel, the letter must have been hand delivered or faxed, as was apparently the practice. In the circumstances, the Court ought not to have held that Ms. Ghosh wrote notes unilaterally based on letters written directly to her, by ARM. 41. Ms. Runu Ghosh challenged the Trial Court's finding that it is not borne out that the synthesized version of ARM had some additional features since Rakesh Aggarwal did not specifically say so. He deposed that each system (including ARM's Synthesized version) might have additional features not covered by specifications; in her letter to TEC. Ms. Ghosh had asked about additional features ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rious suppliers and the price proposed for crystal/ synthesized version. By his note (Ex. PW-3/K-60) dated 31.08.1993 Mr. Sukh Ram concurred with the prices suggested in the preceding note. Some minor changes were made by him by way of deducting 200 systems from PUNWIRE and allotting 100 each to M/s Shyam and M/s ARM. Significantly 100 systems were given to ARM of the synthesized version. It was argued that if he had been in conspiracy with ARM, or wanted to confer pecuniary advantage to that firm, he would have allotted all the 200 systems to ARM for the crystal version. He had occasion to consider the file and other documents, after the orders were placed, and in the context of ARM's representation to do away with the discriminatory pricing vis-à-vis their crystal versions. At the time, Mr. Sukh Ram was unaware and was kept in the dark about the circumstance that the firm had accepted the offer, and furnished the bank guarantee. Counsel for Mr. Sukh Ram submitted that the handwritten portions in Sri Ujjagar Singh's note of 04.10.1993 Ex. PW-3/K-79 were inserted later, contrary to previous practice. That the learned Judge ought to have appreciated that each circumst....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ved in para 6 of his note Ex. PW-3/K-87 as follows: in case, maintenance of price parity is not considered discriminatory and adjustment on account of difference in performance, etc. is necessary, the question of cost determination would come. As rightly mentioned by Hon'ble MOS (C), the TEC has clearly mentioned that hand-held VHF trans-receivers are completely different from our 2/15 MARR systems in respect of design, concept and even application. Reduction worked out on the basis of difference in the price of crystal and synthesized version of hand held VHF transreceivers may not, therefore, be correct. However, in view of the observations of Member (Services) and member (Technology) as mentioned in para 4 above, suitable adjustment in the prices on account of the perceived inferiority of the crystal version would appear to be necessary even though crystal controlled 2/15 systems of M/s ARM are stated to fully meet DoT specifications and these systems are working satisfactorily in the field. 45. Sri Nigam urged that Mr. Sukh Ram, while deciding that the crystal version should be purchased at a rate on par with the synthesized version was guided by the repor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he technical aspects with Sri. Muthuswamy, that in respect of performance output, the two versions were comparable, no exception could be taken if Mr. Sukh Ram in fact decided that ARM could supply crystal versions of the quantity mentioned, for the same price as the synthesized version. It was submitted that the later note dated 12.01.1994 (Ex. PW-3/K-93) of Sri Vittal after he again discussed the matter with Mr. Sukh Ram did not in any way differ from the earlier view. 48. Counsel for Mr. Sukh Ram argued that the conviction of conspiracy as far as the Appellant is concerned, is totally unjustified. The record and findings reveal that ARM made its representation on 11.09.1993, which he was bound to consider and dispose of. He was unaware, at that stage that the firm had been asked to furnish the bank guarantee for 5% of the Purchase Order amount; he was also not made aware of it in any specific file noting in that regard. The Trial Court's findings (that Ujjagar Singh's note of 04.10.1993, with the handwritten interpolation pointed to this fact, was not correct; the interpolation was apparently especially for the purpose of this case) in this regard were unjustified. It....
X X X X Extracts X X X X
X X X X Extracts X X X X
....stablished practice of loading the established supplier with the order; here, ARM was the established supplier. Each one of the notes written by her was based on some rationale, and in the exercise of her responsibilities as Director Finance. Furthermore, nothing was shown during the course of the trial to prove that she flouted established procedures in insisting on TEC evaluation of the merits of the two technologies either for comparison, or for the purpose of price determination. The last time she made any noting or recommendation was on 23.07.1993. The hierarchy had three levels of senior officers, who took the ultimate decision. In these circumstances, there was no reasonable basis even to assume, or charge her for the crime of conspiracy. 49. Mr. Nigam, on behalf of Mr. Sukh Ram, argued that there was no prima facie evidence to reasonably conclude that he acted in furtherance of any conspiracy or common objective with either Ms. Runu Ghosh or Mr. Rama Rao. Counsel argued that the check period in this case, covered March 1993 onwards, when Mr. Sukh Ram was not even in the know of the file. It was submitted that his note of 31.08.1993 established that on the other hand, he ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1993. Till then, the DoT had placed a composite order for 500 systems, which included the crystal version, on the basis of the same price. The subsequent constitution of the PNC, was pursuant to internal decision making processes of the Government; all vendors who had offered their products, and fulfilled certain criteria, were called for price negotiation. In the price negotiation, held in June, 1993 none of the firms were in fact queried on the superiority of one technology over the other; nor were they told that the entire process would be followed by the DoT's fresh determination of prices, based on perceived comparative merits. Thus, when the Purchase Order was issued in early September, 1993, ARM, for the first time, became aware of this aspect. The Government's insistence that if it did not accept the offer, and furnish a bank guarantee, would result in cancellation of order, and a claim for liquidated damages, left it with no option but to comply. Yet, in exercise of its legitimate entitlement to seek internal justice, ARM represented to the appropriate authorities and the Minister, eliciting his second look into the matter, and review of the original decision, on 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....break the law or otherwise to do wrong, or not... 52. Being an enactment meant to stamp out corruption, containing several stringent provisions, including presumptions which the court can draw, as well as curtailing normally available remedies, during the trial, to ensure that the guilty are brought to book, the Act had to be necessarily given a purpose or objective based interpretation, having regard to its express words. The courts cannot adopt a doctrinaire approach, by insisting that proof of intent, where the law does not mandate it, is required, as that would result in limiting the scope, of the concerned provision, if not altogether defeating it. In a similar vein, reliance was placed on the judgments reported as Dineshchandra Jamnadas Gandhi v. State of Gujarat 1989 (1) SCC 420 and Radhey Shyam Khemka v. State of Bihar 1993 (3) SCC 54, Y.S. Parmar v. Sri. Hira Sikngh Paul 1959 Supp (1) SCR 213 and Gopaldas Udhavdas Ahuja v. Union of India 2004 (7) SCC 33. The learned ASG submitted that the statute in the case, at least of a corrupt practice of the kind in hand, does not concern itself with any question of intention. 53. Dealing with the submission about omission to fr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er part was suppressed, or significantly omitted by Ms. Runu Ghosh, in her note. 55. It was argued that Ms. Runu Ghosh's noting, dated 23rd of July, 1993 was marked to DDG (DF) who was her immediate senior; yet, deliberately the file was not sent to DDG (DF). The file containing this note was directly sent to MoS the same day. The note of PS to MoS regarding return of file to Ms. Runu Ghosh as he was preoccupied and could not see the file, along with the file was received by Ms. Runu Ghosh on 3rd August, 1993. The file was intentionally kept by her for two days which were working days, i.e. 3rd and 4th August, 1993 so that her senior could not see the note made by her. The file was resubmitted as desired by MoS on 5th August, 1993. PW 16 Sri US Prasad, DDG (PF) who was Ms. Runu Ghosh's immediate senior deposed that the movement of file was that the junior would submit the file to his next superior and on return the file would be marked to his immediate junior. It was also urged that the noting of 23rd July, 1993 mentioning additional features in the ARM's synthesized version, also showed Ms. Runu Ghosh's intention to favor that concern, because by then, no such a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r would be placed elsewhere. It is in this backdrop that the action and conduct of the accused, particularly Mr. Sukh Ram and Mr. Rama Rao had to be seen. The Trial Court according to counsel, correctly dealt with this issue in its judgment. It is urged that in fact there was no new material before Mr. Sukh Ram to change his previous views, contained in the note dated 31st August, 1993, (by which he had accepted the price differential for the two products) as it was clear that the letter of Rakesh Aggarwal dated 26th of July, 1993 was on the file, prior to note dated 31st of August, 1993 as well as an unsigned note which talked about the said TEC letter and was seen by Mr. Sukh Ram in August, 1993 itself. 58. It was next argued that pursuant to the note of Mr. Sukh Ram, dated 19th of November, 1993, U.S. Prasad, DDG (PF) proposed an alternative (note dated 09.12.1993, Ex. PW-3/K-87) to work out the reduction of cost of the crystal version, which could be fair to the firm as well as the department. He proposed to seek assistance from Secretary (Expenditure) to direct Chief/ Sr. Cost Accounts Officer of the Main Ministry of the Finance assisted by the representative of the member ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....9, dated 13th July, 1993, which elaborately indicated the costing of the crystal version, was approved by the Advisor Planning, Sri M.G. Kulkarni (by Ex. PW 3/K40). Sri Ujjagar Singh therefore, acted within his rights in accepting this costing, by Ex. PW 3/K-41. It was argued that the nothings of Sri M.G. Kulkarni, Sri R.G. Bansal, and Sri Rastogi, on separate occasions (by Ex. PW 3/K-50, by Ex. PW 3/K51, by Ex. PW 3/K-52 and by Ex. PW 3/K-59) made it amply clear that these high ranking technical officers, holding positions of Members of the Telecom Commission, concurred with the price differential proposed by Sri N.C. Gupta, in Ex. PW 3/K-39. Mr. Sukh Ram had occasion to see this not once, but three separate times; after due deliberation and application of mind, he approved the price differential, on 31.08.1993, by Ex. PW 3/K-60. The deliberation and application of mind, was apparent, from the specific quantities, pertaining to ARM-his note said clearly that the firm was to receive order to supply 300 crystal systems, and 600 synthesized systems. He could also not be said to be unaware about the price differential, since he said that he had "perused the preceding note ". The note ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ld also not take refuge of ignorance because his official order dated 16.07.1993 had made it clear that all developments after purchase orders were issued, were to be made known to him. In this case, the party had furnished bank guarantees, thus accepting the offer unconditionally. The alteration of the price, post acceptance of the offer, was to the detriment of the Government, which had to shell out huge amounts to ARM. This reversal of the previous decision was completely unreasonable, and not justified by any reason, except to favor ARM, at its behest. Therefore, Mr. Sukh Ram too was a conspirator, and equally culpable. Analysis of the provisions 62. It would be, necessary, before proceeding to analyze and record the findings, to discuss two legal issues which arise for consideration. The first pertains to whether the failure of the Trial Court, in not specifically mentioning certain details in the charges framed, against each accused, (as it did not advert to the offence under Section 13(1)(d)(iii)), or the ingredients of the offence, i.e. obtaining by someone of a valuable thing, contrary to public interest, vitiated the trial. The second pertains to the true interpreta....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to vitiate a trial. An irregularity is not regarded as fatal unless it results in substantial prejudice to the accused. This was stated in Willie (William) Slaney V. The State of Madhya Pradesh AIR 1956 SC 116, by the Supreme Court, which stated that: If he does, if he is tried by a competent court, if he is told and clearly understands the nature of the offence for which he is being tried, if the case against him is fully and fairly explained to him and he is afforded a full and fair opportunity of defending himself, then, provided there is substantial compliance with the outward forms of the law, mere mistakes in procedure, mere inconsequential errors and omissions in the trial are regarded as venal by the Code and the trial is not vitiated unless the accused can show substantial prejudice. xxxxxxxxx xxxxxxxxx xxxxxxxxx But when all is said and done, what we are concerned to see is whether the accused had a fair trial, whether he knew what he was being tried for, whether the main facts sought to be established against him were explained to him fairly and clearly and whether he was given a full and fair chance to defend himself. If all ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pecific sub clause of Section 5 of the (old) 1947 Act. The Mysore High Court, held that: All the particulars necessary to make the accused understand that he was being tried for the offence of criminal misconduct in the discharge of his official duties on grounds failing under clauses (a) and (d) of subs.(1) of S. 5, have been set out in the charge. We are satisfied that there has been no prejudice to the accused, by the mere non-mention of the specific clauses of sub-s.(1) of S. 5 in the charge. For these reasons, this Court is of opinion that the omission to mention certain details, or omission to mention the ingredients of the offence or some of the words in the provisions, or omission to outline the provision cannot be considered fatal; there was a reference to Section 13(1)(d), and the general facts relating to the charges were narrated. This question is therefore, answered in the negative; there was no failure of justice, or prejudice to the Appellants flowing from omission in the framing of charges. Interpretation of Section 13(1)(d) (ii) and (iii) 66. This question lies at the core of the reference to this Division Bench. The material ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lic servant has been retained, in Section 13(1)(d)(ii). A new offence (or sub-species, of the existing offence) has been carved out, in Section 13(1)(d)(iii) which criminalizes, as "criminal misconduct" the act of a public servant, holding office, which results in someone else ( "any person ") benefiting by getting a valuable thing or pecuniary advantage, "without any public interest " There is no doubt that Parliament created this new offence of criminal misconduct, where abuse of office, or use of corrupt or illegal means by a public officer, is inessential to prove the crime. What the prosecution has to establish, in accordance with law, is that the public officer, obtained for someone else - not necessarily by abusing his office, or using corrupt or illegal means - pecuniary advantage or a valuable thing - without public interest. 67. It is not as if Parliament had changed the law, for the first time. The legislative history of Section 5 would reveal that it was amended repeatedly. The first amendment, in 1952, introduced Section 5 (4) which clarified that the provision was in addition to, and not in derogation of any other existing law; the second amendment substituted Sect....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r to expedite the proceedings, provisions for day-to-day trial of cases and prohibitory provisions with regard to grant of stay and exercise of powers of revision on interlocutory orders have also been included. 4. Since the provisions of Sections 161 to 165-A are incorporated in the proposed legislation with an enhanced punishment, it is not necessary to retain those sections in the Indian Penal Code. Consequently, it is proposed to delete those sections with the necessary saving provision. 5. The notes on clauses explain in detail the provisions of the Bill. 69. The reference order relies on various materials, such as G.P. Singh's Principles of Interpretation of Statutes, (9th edition, pp.779-780). The passage extracted referred to the judgment of Lord Goddard, in Brend v. Wood (1946) 62 T.L.R. 462 to the effect that mens rea must be inferred in every penal statute if it does not expressly provide it, unless it is ruled out by necessary implication. The passage is as follows: It is in my opinion the utmost importance for the protection of the liberty of the subject that a court should always bear in mind that, unless the statute....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Supreme Court had previously interpreted Section 5(1)(d) so as to mean the existence of criminal motive (dishonest intent). This was stated in Narayanan Nambyar's case (supra) as follows: The gist of the offence under this clause is, that a public officer abusing his position as a public servant obtains for himself or for any other person any valuable thing or pecuniary advantage. "Abuse " means misuse i.e. using his position for something for which it is not intended. That abuse may be by corrupt or illegal means or otherwise than those means. The word "otherwise " has wide connotation and if no limitation is placed on it, the words "corrupt ", "illegal ", and "otherwise " mentioned in the clause become surplus age, for on that construction every abuse of position is gathered by the clause. So some limitation will have to be put on that word and that limitation is that it takes color from the preceding words along with which it appears in the clause, that is to say something savoring of dishonest act on his part.... Similarly, the other cases cited, i.e. S.P. Bhatnagar ( "whether the accused abused their position and acted dishonestly or with a corrupt or o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... i.e. known to the prosecution and (4) it must prove, quite objectively, that such resources or property found in possession of the accused were disproportionate to his known sources of income... It is clear therefore, that mens rea or criminal intent does not have to be proved in the case of a charge under Section 13(1)(e); it is enough for the prosecution to establish the four ingredients of the offence. As noticed earlier, the setting of this provision too needs to be taken into account, along with the legislative history (of Section 5 of the earlier Act, with its amendments, and the new Section 13(1)(d) re-cast in a totally different manner) -it appears immediately after another offence of criminal misconduct (Section 13(1)(d)(iii)) that does not textually allude to or require intent, or mens rea. 72. A multitude of precedents was relied upon by Counsel on either side, to deal with the question. The Supreme Court, noticing most of the earlier decisions, on the issue, and also the approach adopted by Courts in England, said, in Nathulal v. State of M.P., AIR 1966 SC 43 that: ....it is a sound rule of construction adopted in England and also accepted in India....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ons of the Act must receive such construction at the hands of the court as would advance the object and purpose underlying the Act and at any rate not defeat it. If the words of the statute are clear and unambiguous, it is the plainest duty of the court to give effect to the natural meaning of the words used in the provision... Now, the absence of any words or terms in Section 13(1)(d)(iii) cannot drive the Court to hold that proof of criminal intention is a sine qua non for conviction of an accused. This is one instance where the object of the enactment, the purpose which it seeks to achieve, and the prevailing social evil which is sought to be erased become important. In this context, the need for such purposive approach, rather than adopting a "liberal" approach, based on the doctrine that every offence carries within it the presumption that mens rea is a necessary ingredient, was emphasized in his inimitable style by Krishna Iyer, J, in Murlidhar Meghraj Loya v. State of Maharashtra, (1976) 3 SCC 684: the Supreme Court observed: It is trite that the social mission of Food Laws should inform the interpretative process so that the legal blow may fall on every ad....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is sheer violence to common sense that the legislature intended to punish the corporate bodies for minor and silly offences and extended immunity of prosecution to major and grave economic crimes. 24. The distinction between a strict construction and a more free one has disappeared in modern times and now mostly the question is "what is true construction of the statute? " A passage in Craies on Statute Law, 7th Edn. reads to the following effect: The distinction between a strict and a liberal construction has almost disappeared with regard to all classes of statutes, so that all statutes, whether penal or not, are now construed by substantially the same rules. ... They are construed now with reference to the true meaning and real intention of the legislature. At p. 532 of the same book, observations of Sedgwick are quoted as under: The more correct version of the doctrine appears to be that statutes of this class are to be fairly construed and faithfully applied according to the intent of the legislature, without unwarrantable severity on the one hand or unjustifiable lenity on the other, in cases of doubt the courts incl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al interest whereas the State while exercising its powers and discharging its functions, acts indubitably, as is expected of it, for public good and in public interest. The impact of every State action is also on public interest. This factor alone is sufficient to import at least the minimal requirements of public law obligations and impress with this character the contracts made by the State or its instrumentality. It is a different matter that the scope of judicial review in respect of disputes falling within the domain of contractual obligations may be more limited and in doubtful cases the parties may be relegated to adjudication of their rights by resort to remedies provided for adjudication of purely contractual disputes...To this extent, the obligation is of a public character invariably in every case irrespective of there being any other right or obligation in addition thereto. An additional contractual obligation cannot divest the claimant of the guarantee under Article 14 of non-arbitrariness at the hands of the State in any of its actions. In a later decision, LIC of India v. Consumer Education & Research Centre, (1995) 5 SCC 482, it was held that: publ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tional offices there is a requirement that before their appointment, each of them has to subscribe to an oath of office and secrecy according to the form set out in the Schedule, to the Constitution of India by which holders of such offices are required to take oath that he or she would discharge her or his duties in accordance with the Constitution and the law without fear or favor, affection or ill will. This requirement is a constant reminder to the holder of that office that she or he is a trustee and custodian of public interest, and all decisions taken in that capacity are to be based on that factor alone. Holders of other public offices, under the State (a compendious term) are equally bound by such a condition. To ensure that they are afforded the amulet protection and immunity, the Constitution has mandated some safeguards (in the case of members of a service or holders of office under a State or the Union, the protection from arbitrary loss of employment, under Article 311, and the protection of status accorded by virtue of rules or enactments made, pursuant to Article 309 of the Constitution of India). There is an added layer of immunity in the form of requirement of san....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... purpose, and a sense of direction, under rules or sense of priorities. The purpose must be genuine in a free democratic society governed by the rule of law to further socio-economic democracy. ... 12. ... If the Minister, in fact, is responsible for all the detailed workings of his department, then clearly ministerial responsibility must cover a wider spectrum than mere moral responsibility: for no Minister can possibly get acquainted with all the detailed decisions involved in the working of his department... 77. The court, as a consequence has to determine the objective criteria by which acts (of public servants) "without public interest ", are to be judged, if mens rea (to obtain pecuniary advantage or valuable thing to another) is not a necessary ingredient. This exercise is essential because in the absence of mens rea (which has been ruled out) the court has to say what "acts" resulting in someone obtaining pecuniary advantage or valuable thing are "without public interest". Obviously the mere fact that a third party obtains pecuniary advantage, or a valuable thing, is insufficient; a supplier of equipment to public servants or offices, a travel agent who ma....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dicial to public interest, can be the subject matter of judicial review. In those cases, courts consider whether the decision maker transgressed the zone of reasonableness, or breached the law, in his action. However, it is only those acts done with complete and manifest disregard to the norms, and manifestly injurious to public interest, which were avoidable, but for the public servant's overlooking or disregarding precautions and not heeding the safeguards he or she was expected to, and which result in pecuniary advantage to another that are prosecutable under Section 13(1)(d)(iii). In other words, if the public servant is able to show that he followed all the safeguards, and exercised all reasonable precautions having regard to the circumstances, despite which there was loss of public interest, he would not be guilty of the offence. The provision aims at ensuring efficiency, and responsible behavior, as much as it seeks to outlaw irresponsibility in public servant's functioning which would otherwise go unpunished. The blameworthiness for a completely indefensible act of a public servant, is to be of such degree that it is something that no reasonable man would have done,....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... or her manifest failure to observe those reasonable safeguards against detriment to the public interest, which having regard to all circumstances, it was his or her duty to have adopted. 82. It would be useful to in this context, take recourse to certain examples. For instance, in not adopting any discernable criteria, in awarding supply contracts, based on advertisements calling for responses, published in newspapers having very little circulation, two days before the last date of submission of tenders, which result in a majority of suppliers being left out of the process, and the resultant award of permits to an unknown and untested supplier, would result in advantage to that individual, and also be without public interest, as the potential benefit from competitive bids would be eliminated. Likewise, tweaking tender criteria, to ensure that only a few applicants are eligible, and ensure that competition (to them) is severely curtailed, or eliminated altogether, thus stifling other lines of equipment supply, or banking on only one life saving drug supplier, who with known inefficient record, and who has a history of supplying sub-standard drugs, would be acts contrary to publi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ability of withstanding wide variation of input DC voltage would be preferred. 35 Tenders were received, in response. A tender Evaluation Committee, constituted for the purpose, opened tenders on 18.03.1992. M/s Indotronix Computer Pvt. Ltd offered the lower price -Rs. 3,54,500/- per unit. ARM's quoted price was higher; yet it was the only concern which had type approval for the equipments being supplied. Such type approvals were necessary, to make supplies to the DoT. After some discussion, within the department, about imposition of conditions vis-à-vis orders for pending supplies, DoT decided to place an order on 500 units of the crystal version which ARM manufactured, for which it had type approval; this was at the rate offered by Indotronix, i.e. Rs. 3,54,500/- per unit. This decision was taken on 27.11.1992. By then, M/s Shyam Telecom obtained type approval for the, i.e., the synthesized version, on 25.11.1992. This was taken into consideration, and the decision to place an order for 500 units was changed; ARM was asked to supply 300 units (of its crystal version) and Shyam was given the order to supply 200 units of its synthesized version. The price at which both c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and a similar offer should be extended to PUNWIRE for its response. The Minutes of meeting (Ex. PW-3/K-35) recorded the crystal based frequency system was inferior to the synthesized version designed by PUNWIRE and Shyam and that the equipments supplied by ARM and MACE Ltd suffered from serious limitation of delay in dial tone during installation and entailed many visits between the RSU and BSU, a feature absent in the synthesized versions offered by PUNWIRE and Shyam. This part of the minutes, and the penultimate paragraph, proposing a costing exercise to work out the discounted cost of the crystal version, was objected to by Ms. Runu Ghosh, in her note Ex. PW-3/K-36 of 18.06.1993. She made some penciled notes on the margin; there is some dispute about what these notes were. However, what is of importance is that she refused to sign the Minutes, and made her separate noting, (Ex. PW-3/K-36) outlining the points of disagreement on 18.06.1993. These were that ARM had offered to pay liquidated damages @ 23% in case of delayed supply (by it) beyond a particular date, if the order was placed within a date specified. The other disagreement was with regard to the enumeration of advantage....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s was not envisaged during the current year owing to the decision having been taken already in File No. 80-143/92-MMC(Pt) for purchasing only Versatile Synthesized Version MARR Systems with improved facilities which are not available in the market to meet the requirements. However, the reduction in the price of Crystal Version 2/15 MARR System may be summed up as follows, if still required: 1. Reduction in actual price of equipment A copy of DGS&D Rate Contract No. EI-6/RC-2773/Transreceivers/9293/COAD/1070 dated -9-1992 is placed in the file at Sl.172/c. It would be seen from the prices given in Schedule II under items (1) and (1)(a) that a Crystal Version Transreceiver in VHF range with 2 Switchable radio channels is cheaper by Rs. 2010.00 [11250-(10380-4 x 285)] 2/15 MARR System comprises of 17 such Transreceivers and the price reduction works out to be Rs. 2010 x 17= Rs. 34170.00 per system. 89. This price reduction proposal was acceptable to the Advisor (P) as is evident from Ex. PW-3/K-40. Sri Ujjagar Singh by his note Ex. PW-3/K-41 dated 19.07.1993, in the light of this development proposed that the revised price....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... are comparable, regarding manufacture and design technology with the 2/15 MARR equipment used by DoT for our specialized requirement. The matter was discussed with Sr. DDG (TEC) over phone and he also confirmed that these two are not comparable at all. It would not be in order to work out a higher price for the synthesized versions of M/s Shyam, vis-à-vis the crystal version of M/s. ARM on the basis of DGS&D rate contract without seeking clarification on the matter from TEC who is issuing the type approval for both systems and accordingly a letter (copy placed at flag 'Z') has been addressed to Sr. DDG (TEC). Till the reply is received from TEC, the price reduction of Rs. 34,170 per system worked out on the basis of the rate contract cannot be accepted. A further reduction in prices for the crystal controlled versions of Rs. 3000 per system (in addition to Rs. 34,170) has been suggested by DDG (RN) on account of the fact that some additional facilities like order wire and traffic measurement are available in the synthesized version supplied by M/s. Shyam but absent in the crystal version of M/s. ARM. Since the crystal version supplied by M/s. ARM conf....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as intimated that they are charging ST at 2% instead of 4% being charged by other vendors so that an additional cost benefit of Rs. 7837 per system will be available to DoT on account of this. Hence at the ordering stage this has to be kept in mind and this vendor should be loaded to full of his capacity which, as per his offer is 1500 systems, which will result in a benefit of about Rs. 10.17 crores. 90. The Trial Court's findings were sought to be attacked by counsel. The main grounds urged here were that the crystal version of which 522 units were been supplied earlier, before the orders were placed pursuant to the NIT, were tried and tested. There was ample documentary evidence suggestive of its being used in the field satisfactorily. Counsel highlighted that first batch of orders placed i.e. 500 units of crystal version, were pursuant to the same NIT. At that stage, no difference in quality was perceived; in fact the enter lot was to be awarded to ARM; however since Shyam Telecom claimed that it had received type approval, the order was split. In these circumstances, it was unfair at a much advanced stage for the officials at the lower and middle levels to start a campa....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that there could be two views about the efficacy of the synthesized version. Having regard to these, the Trial Court was not justified on the basis of sketchy and vague evidence in concluding that the crystal version was inferior to the synthesized version. The existence of two views in this regard meant that the Appellants Ms. Runu Ghosh and Mr. Sukh Ram could not be convicted. 93. The prosecution's case is that the synthesized version of 2/15 MARR was superior to its crystal version. The Appellants urge that there was no such superiority. The admitted fact is that DoT tendered for supply of 3000 2/15 Shared Radio VHF systems. Clause 1.1.10 of the specifications, (Ex. PW 3/D) prescribed that equipment with local oscillators and synthesized frequency control capable of withstanding wide variations of DC input were preferred. No plea that any accused was unaware of this condition (clause 1.1.10) was advanced. PW4 N.C. Gupta is a Telecom Engineer who joined as Deputy Director General (Rural Network), of DoT in 1990. His job was to ensure public rural telephony. His department was responsible for providing 2/15 MARR systems for rural telephony. The witness deposed about certai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....unwire had also secured type approval. PW-4 N.C. Gupta alone noted this development i.e. that only the synthesized version should be purchased in the year 1993-94. N.C. Gupta, as PW-4 pointed out limitations of crystal version. He also enumerated the additional features of the synthesized version. The Chairman of Shyam Telecom, Rajiv Malhotra deposed, as PW 9 and elaborated about such additional features. 96. The deposition of PW-4 as regards various features of the synthesized version, are now discussed. The first of these is regarding the change of frequency. PW-4 stated that the function of an oscillator is to generate the frequency in which a particular system is to operate. The synthesized version provided for frequency control though a synthesizer. The crystal version depended on frequency control through a crystal. The important limitation of the crystal based technology version was that it could operate only on a fixed frequency. The DoT used to supply frequencies to the manufacturers and the system used to confirm to that frequency. However, in case of the synthesized version, the frequency could be changed with a dipswitch. Such change of frequency, in the case of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., despite his conflict, as he had previous official dealings with ARM. DW-2 admitted that change of frequency entailed not only crystal replacement but also needed amplifier and receiver tuning. He admitted that in case of the synthesized version, frequency change through dipswitch was possible. DW-2"s evidence also establishes that change of location required frequency change because generally different frequencies are allotted locations. Shift of unit from one locale to another, was not possible for the crystal version, without first transporting the unit to the workshop, changing its crystal and tuning the amplifier and transmitter to the new frequency. DoT had planned induction of new technologies, such as CDMA. That would have meant redundancy of such units wherever new technology had to be installed. However, the advantage for the synthesized version, was that the surplus unit could be used at some other locale, where the new technology was not inducted. The frequency change mechanism posed serious limitations in the crystal version; such restrictions did not apply for the synthesized version. This was a distinct advantage or technological improvement, benefiting the DoT. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....DW-2 admitted that the user would not know the identification code of his unit and it had to be opened to ascertain the (identity) code and that could have been done only by a technical man. However, no such suggestion was given to PW-4, in cross-examination. This too was an additional feature of some utility. 102. As far as documentary evidence goes, Ex. PW-4/A, dated 3rd May, 1993 stated that due to availability of the synthesized version, the "use of crystal based MARR Systems is not favored due to inherent limitation of flexibility in re-using on introduction of other technologies viz. TDMA, CDMA etc and difficulties in substitution of spare units in the event of a fault... " Sri U.V. Naik, the Member (of the Telecom Commission) approved the note (by Ex. PW-4/E), however, sounding a note of caution that all vendors may not have been ready with the synthesized version. The Adviser (P) was asked to see this aspect; the latter asked DD (RN) to look into this aspect. DD (RN) by Ex. PW-4/F (07.05.1993) stated that ARM was likely to get type approval for the synthesized version in July, 1993, and Shyam as well as PUNWIRE had obtained it. The note of US Prasad (Ex. PW-3/K-20, dated....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eptable, though the number of crystal version purchases to be made was unclear; different officers proposed different quantities. In this background, PW-3/K-42 dated 23.07.1993 was written by Ms. Runu Ghosh, stating that price reduction for the crystal version (of ARM) was not justified, and would be discriminatory. She also mentioned that ARM had volunteered to bear 23% liquidated damages if it could not supply the equipment in a timely manner, agreed by it, and further referred to the reduced sales tax burden if ARM were placed with the order for the 1500 crystal based systems. She proposed that the matter should await clarification by TEC. The letter, of Sri Rakesh Aggarwal, (TR) PW-4/DZ-2 dated 26.07.1993, apart from making comments about the price differential aspect, clarified that TEC issued type approval to only manufacturers whose products met with all specifications, and no two equipments were exactly same, in view of different manufacturers. All these materials were on record, when the approval for the price differentiation was given by Mr. Sukh Ram, in his note Ex. PW-3/K-60. 104. Apart from the above nothings and oral testimony of witnesses, after the orders were pl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e crystal version were repeated and recorded in several places and several file nothings. There cannot be any doubt that such was the contemporaneous thinking. Equally, the fact that an order was placed on 300 crystal units in December, 1992 cannot be proof that the other technology was not superior. In fact the initial decision in end November 1992 was to purchase the entire first 500 lot of units (crystal based) from ARM; this was changed because Shyam received type approval and communicated DoT about this, on 25th November, 1993. As far as Mr. N. Vittal, PW-17, who was at that time the Chairman of the Telecom Commission is concerned, he noted, in PW-3/93 that Mr. Sukh Ram had been told that there is difference in technology which necessitated price differential, but also added that since the minister said that he had gone through all aspects, and decided that the same price was to be paid, that decision had to be implemented. In his deposition, he testified that the crystal version was inferior to the synthesized version, and that the Minister had the last word on all aspects relating to equipment procurement. 107. Having regard to all the above materials, this Court is of op....
X X X X Extracts X X X X
X X X X Extracts X X X X
....It is at this stage that the price differential controversy arose along with the perceived inferiority of the crystal systems. N.C. Gupta, PW-4 in one of his nothings stated that it was essential to work out the costing of the crystal systems having regard to the offer made (as exhibited by PNC) in principal for procuring systems at a reduced price of Rs. 3,40,700/- per unit. It has to be kept in mind that barring ARM the other vendors had type approval for synthesized version and not the crystal version. This proposal was approved and Sri N.C. Gupta went ahead with his costing exercise. During his cross-examination as well as in the arguments before the Court considerable attention was given to the fact that Mr. N.C. Gupta's costing exercise besides being unilateral was contrary to the established procedure and also that it was not endorsed by the TEC and for which the Appellant relied upon Sri Rakesh Aggarwal's letter dated 26.07.1993 (Ex. PW 3/DZ2). 109. The Trial Court has noted that Sri N.C. Gupta, in aid of his costing exercise, went through the rate contract and produced Ex. PW4/X. The crystal controlled transreceiver was priced at Rs. 10,380/- ; the synthesized t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e in its crystal version in synthesized version but was not available in crystal version. According to Mr. N.C. Gupta order wire facility was for 16 hand -sets and no hand held set was available in less than Rs. 200, but, taking a lower figure he valued order wire facility at Rs. 2000 which included the cost of circuit. According to him synthesized version of 2/15 MARR was having 16 hand-sets in each system and those hand sets were part of order wire facility. 110. As noticed earlier in the discussion as regards the official view on the superiority on the synthesized version there was no disagreement with the costing undertaken by N.C. Gupta. The Trial Court noted that Advisor (P) Mr. M.G. Kulkarni (who went on to become Member Telecom Commission) in his deposition as PW-20 stated that synthesized version was superior to the crystal version and that the latter deserved a reduced price. The apprehensions expressed by Ms. Runu Ghosh that the costing exercise was unjustified and resulted in a charge of arbitrariness (and discrimination) on the ground that during price negotiations no such offer was made, was also considered by the other superior officers. This aspect was highlighte....
X X X X Extracts X X X X
X X X X Extracts X X X X
....In fact Rakesh Aggarwal acknowledged that the Technical evaluation committee (of which NC Gupta was a member) would be competent to state about the merits of the two technologies. For these reasons, this Court concludes that the costing of the synthesized version carried out by N.C. Gupta, and which was accepted by all, including Mr. Sukh Ram, by his note dated 31.08.1993, cannot be faulted. Issue of the Purchase order to ARM and Trial Court's findings regarding Mr. Sukh Ram's culpability in directing cost parity 112. Ms. Runu Ghosh's note dated 23.07.93, (Ex. PW-3/K-42), points out that in the year 1992-93 the DoT had placed an order for 300 systems from ARM and 200 on Shyam and the price was Rs. 3,54,500 per system. She also noted that since for the present procurement they were operating on last year's tender, it would be incorrect to operate on two rates for the same tender and fixing a higher price for synthesized version as opposed to crystal version. 113. The evidence on record would show that as on 13.07.1993 when N.C. Gupta made his noting Ex. PW-3/K-39, type approval for ARM's synthesized version had not been obtained. The file was....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rder was also approved by the same note. It was in this background Mr. Sukh Ram approved the distribution of the order after stating in his note Ex. Pw-3/K-60 on 31.07.1999 that "I have perused the preceding note ....". This note of Mr. Sukh Ram observed that Natelco and Punwire had not proved themselves in the field and therefore he doubted whether they could complete the large supplies of the systems. In these circumstances his final decision was to increase the order for Shyam Telecom and ARM to 900 each; (in the case of ARM the order was to be split into 300 crystal systems and 600 synthesized based systems); M/s Punwire was to be given an order for 250 units and M/s Natelco, was to be an order for 450 units. He also recorded "rest as proposed ". It was in the light of these facts that the APO was issued to ARM on 02.09.1993. The order (Ex. PW-3/K-67) indicated in the terms and conditions annexed that the synthesized version was to be supplied at a total price inclusive of sales tax, of. Rs. 3,35,639/- and the 300 crystal version units were to be supplied for a total price of Rs. 2,98,469/- inclusive of sales tax. The terms and conditions also clearly stated that performance ba....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d by ARM and bank guarantee had been issued. This note (Ex. PW-3/K-79) was sent by Member (P) to Member (F) by his note Ex. PW-8/5 of 9.10.1993. Mr. M.G. Kulkarni by his note after considering the observations in the other notes, Ex. PW-8/3, Ex. PW-8/5, Ex. PW-8/6 and Ex. PW-8/7 (which had marked, the note of Ujjagar Singh for consideration), observed that: as mentioned notes at p.54/n when I was Adviser (P), a large number of crystal version MARR equipments were working in the field as the firm had already produced 450 systems as per their letter, we may accept 450 systems as a special case, instead of 300 systems mentioned earlier. Other price conditions may remain same. 115. This note Ex. PW-3/A-18 dated 13.10.1993 and was by Mr. S.M. Prasad as Member (P). Mr. S.M. Prasad, Member (T) by his note Ex. PW-3/K-81 on 13.10.1993 reiterated the overwhelming view of the department that the synthesized versions had serious limitations in that it was site specific which inhibited its redeployment to other stations whereas no such restrictions applied in the case of the synthesized version. For the price, he left it to be decided by Production Cell. On this, Mr. R.S. Bans....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nimum among the vendors approval for order. Submitted please. (Ujjagar Singh) Director (MMC) 15-11-1993 116. When the file was sent to the Minister, Mr. Sukh Ram, he stated that after having gone through the nothings on the file as well as all the comments, it would be appropriate to increase the quantity of the crystal versions to 450 systems as recommended by Member (S) while adhering to the overall limit of procuring 900 systems (from ARM). He also stated that the policy on sales tax inclusion or exclusion should be uniform and since the purchase orders did not include spare modules as compulsory procurement, reference to that could be deleted from the Purchase Order. It was noted importantly that: I have examined all the nothings on the price issue. I find that the very premises on which the cost is based are incorrect. The basis of the reduction is the price difference between crystal and synthesized versions of hand-held VHF trans-receivers but TEC has clearly mentioned that these trans-receivers are completely different from our 2/15 MARR systems in respect of design, concept and even application. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....RR systems in respect of design, concept and even application. Reduction worked out on the basis of difference in the price of crystal and synthesized version of hand-held VHF trans-receivers may not, therefore, be correct. However, in view of the observations of Member (Services) and Member (Technology) as mentioned in para 4 above, suitable adjustment in the prices on account of the perceived inferiority of the crystal version would appear to be necessary even though crystal controlled 2/15 systems of M/s ARM are stated to fully meet DoT specifications and these systems are working satisfactorily in the field. This note also recommended that the Secretary (Expenditure) could ask the Chief or Senior Cost Accountant of the main Ministry to be assisted by representative of Member (Services) or Member (Technology) to undertake a quick study of the merits of the two sets as well as their cost. He highlighted that this might be put up for reconsideration to avoid audit para since the financial implication is as large as nearly Rs. 1.67 crores excluding ED 117. This recommendation, however, was rejected by the Appellant, Mr. Sukh Ram on 15.12.1993 by Ex. PW-3/K-89. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uld be much higher. I therefore see no reason to reconsider my earlier decision and amendment, as ordered, should be issued at the earliest, as should have been done in the first place instead of putting up the file again with flimsy reason for not complying with my orders. In the light of the above, when the file was put up to other senior officers such Member (F), Senior DDG (Tec), etc., none of them took the matter further. Mr. N. Vittal, PW-7, Chairman of the Telecom Commission by note Ex. PW-17/2 desired that the matter should be discussed urgently. By the note Ex. PW-3/K-91 dated 23.12.1993 he observed that both sets were comparable; yet he wished to see the file and accordingly the same was sent to him. After considering the file, Sri Vittal apparently discussed the matter with the Minister Mr. Sukh Ram, evident from his noting Ex. PW-3/K-93 dated 12.1.1994. This note specifically stated that there can be difference of view because technically the crystal and synthesized versions were different and there had to be a price differential. The Minister told PW-17 that there has been certain degree of injustice done to ARM and in view of specific orders given in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ether the decision made by Mr. Sukh Ram on 19.11.1993, Ex. PW-3/K-86 and reiterated on 13.12.1993, Ex. PW-3/K-89 directing the same cost or price parity for the crystal and synthesized versions and also directing increase in quantity to be ordered from ARM, was a reasonable or bona fide one. The Trial Court concluded that the decision resulted in pecuniary advantage to ARM by abuse of Mr. Sukh Ram's position as a public servant and also that it was an offence under Section 13(1)(d)(iii) as it obtained pecuniary advantage to ARM without public interest. 120. Counsel for Mr. Sukh Ram had argued that since he took charge as Minister on 18.01.1993, his only concern was to speed up the decision making process - evidenced by his noting of 15.08.1993, stressing on urgency to meet the targets, which reflected his concern for quick follow up and delivery. When Mr. Sukh Ram had occasion to consider ARM's representation on 11.9.1993 at no stage was he made aware that the firm had submitted the bank guarantee pursuant to the DoT's insistence through its letter dated 17.9.1993. In this regard, it was emphasized that Ujjagar Singh's note, Ex. PW-3/K-79 in fact contained hand-w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ision taken by him on 31.08.1993 was after consideration of the entire materials on the record. This decision was after Ms. Runu Ghosh's reservation in her note dated 23.07.1993 as well as "opinion" of Sri Rakesh Aggarwal, Ex. PW-3/DZ-2, vis-à-vis the wisdom of price differential as well as the technological inferiority of the crystal based system. Despite this, Mr. Sukh Ram, in Ex. PW-3/K-77, expressed his ignorance about the issue. Mr. Sukh Ram's note was referred again to Ujjagar Singh and other officers who, as noted in earlier, maintained their views about the inferiority of the crystal version vis-à-vis the synthesized version. Ujjagar Singh's note, Ex. PW-3/K-79 also mentioned that ARM had furnished the bank guarantee and accepted the purchase order. This part of the note was by hand. Mr. Sukh Ram's counsel complained that the hand-written portions in fact did not exist on the file when he took the decision directing price parity. On this, the Trial Court noted that there were other portions in the entire file containing nothings where Ujjagar Singh had written his comments by hand. This part of the discussion and findings may be found in para 5....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ement, and NIT); he was asked to determine a suitable price for the crystal version. He, arrived at a price reduction of Rs. 37,170/- for the crystal version (as compared to the synthesized version). The price differentiation so determined was not arbitrary; it was premised on adopting a notional value of order wire and traffic management facilities, which were not available in crystal version. Ex. PW-3/4A indicated that on 14.07.93 Advisor (P) suggested reduction in price of crystal version by Rs. 37,000 per system along with a condition that ARM should supply additional spares. On 25.08.1993 the Member (Finance) approved price the Rs. 2,98,469 worked out by Director (MMC) for the crystal version. This price was approved by Mr. Sukh Ram on 31.08.93. 124. After Mr. Sukh Ram's query pursuant to ARM's representation dated 11-09-1993, on 04.10.1993, Ujjagar Singh's note, (Ex. PW-3/79) observed that there were established advantages of the synthesized version as compared to the crystal version. It is a matter of record that unlike in December 1992 (when only ARM had type approval,-for the crystal version-and was the established supplier and Shyam had just received type a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... be requested to undertake a quick study of relative merits of the two sets as well as their cost. The Member (F) as well as Member (P) agreed with this. The file was then marked to Mr. Sukh Ram. He stuck to his previous decision of 19-11-1993 and rejected all proposals, insisting that to call the crystal version "inferior" would not be correct. 126. An important argument on behalf of Mr. Sukh Ram was that when he directed price parity, and increase in the crystal version quantities for procurement from ARM, it was in legitimate exercise of his decision making power as Minister, in a bona fide manner, to avoid the odium of discrimination and possible litigation. As Minister of State of Communications, Mr. Sukh Ram unquestionably had authority to take an independent decision, and overrule other officials lower in the hierarchy. As long as any decision of a Minister or executive agency is based on reason, and is not arbitrary, or does not suffer from the odium of ulterior motives, or is not based on irrelevant considerations, courts will not question its wisdom. However, the test always in such cases is whether the decision was such as someone acting reasonably, on the basis of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... could be used on 6-7 frequency pairs, but only after frequency change. The Member (T) noted that the synthesized version could be used anywhere whereas redeployment of the crystal version to different places was restricted and cumbersome. There were other additional features in the synthesized version, i.e. duplicate LNA and power supply, order wire facility and traffic measurement device. There was no delay in dial tone and it had facility of changing the code of subscriber unit. The view of Mr. Sukh Ram, therefore, that there was no difference between the two versions, was not a mere difference of opinion or perception; in any case, such a view could not reasonably have been taken by him, on the basis of the existing materials. Therefore we agree with the Trial Court's finding that no reasonable person could have taken a view that the crystal version was at par with synthesized version. 128. As regards the criticism that the first batch of 500 units under the same NIT was procured with the same price for the two systems, which meant that the Minister, Mr. Sukh Ram, merely followed that principle of price parity, is concerned, ex-facie, the argument seems attractive. Yet, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s bound to purchase crystal version even in the year 1993-94, at the price paid by it in the year 1992-93. The Trial Court also held that internal departmental guidelines - relied on by the Appellants, could not be relied on to say that price parity was to be maintained, even if the systems were not the same, in the sense that one of them had additional facilities and features as compared to the other one. A system with additional features, and several utilitarian values, deserved better price as compared to one which did not have such additional features and facilities. Conversely a system with certain limitations, (absent in the other technology, as in the case of the crystal version) had to be priced lower. 129. The Trial Court has found that Mr. Sukh Ram is said to have abused his office, so that ARM could obtain pecuniary advantage (and was guilty of the offence punishable under Section 13(1)(d)(ii); a finding that he was also guilty for the offence punishable under Section 13(1)(d)(iii) has been recorded. The Court also recorded that all the accused acted in concert, and were guilty for the offence under Section 120-B read with the other provisions; Mr. Sukh Ram and Ms.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... crystal and the synthesized versions. However, his opinion changed thereafter, once ARM represented seeking price equalization. Despite nothings and observations by several middle and senior level officers, including Member Telecom Commission level officers, (all of which have been dealt with at some length in the preceding portions of this judgment), without any change in circumstances, or without examining any new material as to the comparative technical merits of the two technologies, Mr. Sukh Ram concluded that the differences were only a matter of perception, and further directed that there ought to be price parity. He was fully aware that this would result in only ARM obtaining pecuniary advantage; indeed his decision was conscious about that aspect, and he wanted benefit to go to ARM. He therefore, clearly possessed the requisite dishonest intent, and "abused" his office, for that purpose. His decision could not also be explained in any manner other than to "obtain" to ARM pecuniary advantage, without any public interest. Had he followed the predominant technical opinion that the crystal version was inferior to the synthesized version and had to be priced less, the DoT woul....
X X X X Extracts X X X X
X X X X Extracts X X X X
....conspiracy is hard to come by. When such agreements are made, people are not expected to commit themselves in writing; nor are all conspirators necessarily aware of the entire plan, which may be known only to a handful. However, for the Court to draw a conclusion that there was criminal intent, and meeting of minds, there has to be strong circumstantial evidence pointing to the conspiracy. Here, the only act which has any bearing is the representation of ARM dated 11-09-1993 (Ex. PW-3/K-76). Mr. Sukh Ram acted on it, and sought views. While there is no doubt that his subsequent actions in reviewing the price issue benefited ARM and no one else, that factor alone is insufficient to conclude a concert, and meeting of minds, between Mr. Rama Rao, Mr. Sukh Ram, and Ms. Runu Ghosh, as found by the Trial Court. While Ms. Runu Ghosh's note might have provided the grist, the ammunition, for reversal of the initial decision, regarding price parity, the fact remains that her role ended after the note dated 23-071993. Mr. Sukh Ram had not acted on it; therefore, the finding his guilt under Section 120-B IPC with Ms. Runu Ghosh is not justified. Similarly, the evidence at best points to su....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ware of the materials on record she honestly and bonafide suggested that technical inferiority of the crystal system as made out, could be accepted. Her note Ex. PW-3/K-42 highlighted this and stated that further decision ought to await the report of TEC and that she also alluded to ARM's offer for charging lower sales tax which would result in substantial savings. This was based on ARMs letter dated 21.07.1993 i.e. Ex. P/A-16. 135. It was argued that with the note Ex. PW-3/K-42 Ms. Runu Ghosh's limited role ended and she did not pursue the matter any further; no other material was in fact relied upon by the prosecution or by the Trial Court. In fact the record even revealed that her view was not accepted, by Mr. Sukh Ram. As regards the recovery of ARM's blank signed letterheads and the Trial Court's conclusion that she acted in conspiracy to further the interests of ARM, Learned Counsel argued that when her recommendations were not accepted in the first instance, there was no question of any conspiracy either with Mr. Rama Rao or with Mr. Sukh Ram. It was further argued that in order to constitute a criminal conspiracy findings cannot be based on so called susp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....esized version was undergoing field testing. If one were to view Ms. Runu Ghosh nothings in the background of these circumstances, it would be doubtful whether the view and noting recommending the case for ARM and procurement of 1500 systems of the crystal version was honest and prudent. 137. ARM's offer to reduce the price was considered further by various officers - by the DDG(PF), Ex. PW-3/K-20; by the Member (F) - Ex. PW-5/9 and the DDG(MMC) Ujjagar Singh, PW-K-3/K-21. His recommendation for constitution of a new PNC to negotiate with the eligible bidders was ultimately accepted and the PNC constituted. Ms. Runu Ghosh was the Member of this Committee. 138. Another aspect which assumes great significance - and which was highlighted was that before recording of this note, DoT had already placed order for purchase of 200 synthesized version from M/s Shyam; Ms. Runu Ghosh's noting admits 114 systems had been already supplied by M/s Shyam. No suggestion was made by her to negotiate with vendors so as to obtain a favorable price for the department. No suggestion was made by her to verify how much was the actual advantage derived by ARM on account of duty concessions ann....
X X X X Extracts X X X X
X X X X Extracts X X X X
....de his endorsement dated 19.7.93. Therefore, the file would have been received by accused Runu Ghosh towards the evening of 19.7.93 or on 20.7.93. Ex. PA 16 is a letter dated 21.7.93 written by ARM to accused Runu Ghosh and purporting to be sent by speed post. The point emphasized in this letter finds mention in the note of accused Runu Ghosh dated 23.7.93. There is no explanation as to how ARM, having its office in Hyderabad came to know within one or two days, that the file was lying with accused Runu Ghosh. No official intimation was given to ARM that the file was lying with accused Runu Ghosh. Therefore, without communication from accused Runu Ghosh, ARM could not have known that the file was lying with her and she was expected to record a note on it. Letter Ex. PA 16 does not have any diary number, which rules out its having been delivered by hand. It purports to have been sent by speed post. However, no envelope is available on the file. Keeping in view the fact that the file was received by accused Runu Ghosh either towards the evening of 19.7.93 or on 20.7.93 and the letter Ex. PA16 was written on 21.7.93, there was no intimation to ARM that the file was being examined by a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the basis for the assertion by Ms. Runu Ghosh that ARM's synthesized version had certain unique additional features - noted by her on 23rd July, 1993. 141. The Trial Court inferred that after recording her note on 23-07-1993, Ms. Runu Ghosh returned the file; it was sent back to her on 2.8.93 with a note that the Minister could not see it due to preoccupation. The impugned judgment held that the file was received by Ms. Runu Ghosh on 3.8.93, and that despite 3.8.93 and being 4.8.93 were working days, she did not submit the file DDG (PF), to whom her note was marked, and instead, on 5.8.93 sent the file directly to the Minister. The trial court held that Ms. Runu Ghosh held on to the file without processing either on 3.8.93 or on 4.8.93, till it was submitted to MoS (C) on 5.8.93. She had signed her note dated 23.07.93 and had already marked it to DDG (PF), she did not have to do anything but merely send the file to DDG (PF); this could have been done on 3.8.93 itself. This conduct, was also held to be due to her anxiety to ensure that ARM was favored, because if the file were forwarded earlier, there was a risk of other officers overruling her. this Court is of the opinion ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uld lead to normal channels of official communication, and the system of decision making being bye passed, at the whim and humour of different officers. 143. The next incriminating circumstance is ARM's letter Ex. PA-16 (dated 21-071993). It apparently did not have any diary number, indicating the possibility of its hand delivery to Ms. Runu Ghosh. The file was received by Ms. Runu Ghosh sometimes in the latter half of on 19.07.93 or on 20.07.93. The letter Ex. PA16 was written on 21.07.93. ARM was not informed that the file was being examined by Ms. Runu Ghosh. The sales tax reduction indicated by ARM, in the letter, i.e. 2 % instead of 4% for the orders placed on it, were reflected in Ms. Runu Ghosh's note, Ex. PW3/K-42 - she even calculated the benefit at Rs. 1.17 crores, if 1500 systems were procured. These circumstances can lead to a reasonable inference that Ms. Runu Ghosh was in active communication with ARM, and Mr. Rama Rao; her notes therefore, reflected that firm's concerns and its desire to push its product. The Trial Court considered yet another circumstance, i.e. recovery of blank, signed letter heads, from Ms. Runu Ghosh's office. During search of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....om No. 304 in Sanchar Bhawan was locked when the CBI, team with witnesses went there. There was no occasion for CBI officials to "plant" the letterheads in the drawer of Ms. Runu Ghosh's table. Therefore, these blank, but signed letter heads of ARM, (signed by Mr. Rama Rao) were proved to have been recovered from Ms. Runu Ghosh's possession. It was argued by Counsel for Mr. Rama Rao that ARM Ltd. came into existence much after December 1993 when the matter relating to purchase of 2/15 MARR system was finalized. PW-14 S. Hemlata, Vice President of ARM Ltd. in her deposition, stated that that the name of Advance Radio Masts Ltd. was changed to ARM Ltd. and Mr. Rama Rao continued as its Managing Director till he resigned on account of the company being blacklisted by BSNL. These facts reveal the proximity or nexus between ARM and Ms. Runu Ghosh. Her conduct in highlighting ARM's offer (by its letter dated 21-07-1993, in her note of 23-07-1993) and not pointing out in her previous note that ARM's previous offer was conditional upon placement of order for the synthesized systems, even when it did not have type approval for it, can, therefore be explained by her acting vi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... ARM had volunteered to change the frequency of the crystal version, in situ, for a period of three years, free of cost. While this seems innocuous, the circumstance has to be viewed in the larger context of Ms. Ghosh's advocacy for ARM's products at all costs; (4) All vendors were called for negotiation by PNC on 10-06-1993. Ms. Ghosh was a member. Each one of the vendors brought detailed notes, and letters, advocating the technological features of their products; ARM's letter was Annexure 1 to Ex. PW-/K-29. In that, Mr. Rama Rao offered to bear 23% liquidated damages if an order for 1500 systems (450 crystal based and 1050 synthesized version) was placed before 10-07-1993. Ms. Runu Ghosh was aware of this condition, since she was part of PNC; yet, she merely highlighted ARM's offer to pay 23% liquidated damages, as a positive aspect, on 23-071993, (in Ex. PW-3/K-42) in case of delayed delivery by ARM - an offer which had not been acted on (since no order was placed before 10-07-1993) and had therefore lapsed; moreover, that offer, when made, could not have been acted upon, because ARM did not possess type approval for the synthesized version (in Jun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oduct. Ms. Runu Ghosh acted as the mouthpiece of ARM, which in turn acted through the Appellant Mr. Rama Rao. She clearly abused her office as a public servant, to obtain pecuniary advantage to ARM. Though her acts seemingly did not benefit ARM, since Mr. Sukh Ram initially accepted the decision regarding price differentiation for the crystal and the synthesized version, ultimately her nexus with ARM, and her notes formed the basis of his deciding that price parity was essential. But for her acts, and her proximity with ARM's Mr. Rama Rao, it would not have been possible for the latter to sell the crystal version of the product at the same price as the synthesized version. Her action resulted in ARM obtaining pecuniary advantage, without public interest. Having regard to the totality of all these facts and circumstances, we are of the view that there is no infirmity in the Trial Court's findings, convicting the Appellant Ms. Runu Ghosh, for the offences under Section 13(1)(d)(ii) and Section 13(1)(d)(iii) read with Section 13(2) of the Prevention of Corruption Act. Her conviction with Mr. Rama Rao, under Section 120-B, IPC, read with Section 13(1)(d)(ii) of the Prevention o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....standing that the Appellant Mr. Rama Rao's conduct has too been scrutinized. 150. Mr. Rama Rao's counsel had contended that that despite the note of Ms. Runu Ghosh dated 23.07.1993, (Ex. PW-3/K 42) Mr. Sukh Ram approved the reduced price for the crystal version (Ex. PW-3/K-60) on 31.07.1993, which disclosed that he (Mr. Rama Rao) was not a party to any criminal conspiracy as made out, and that the Trial Court fell into error in holding that the charge was established. The fact that Mr. Sukh Ram was not a conspirator, would only mean that he was not a party to the agreement between the others. Yet, that is not conclusive as to whether there was a compact between Ms. Runu Ghosh and Mr. Rama Rao. The entire correspondence between various officials of the Central Government, DoT and Mr. Rama Rao, disclose that he was the spokesman for ARM, and its voice. He more than anyone else had a vital stake in seeing that the stocks of the crystal version of the tendered equipment that were with ARM (a fact evident from the letter written by that concern, on 22.04.1993; his partly signed, partly handwritten letter handed over to the PNC on 10.06.1993 - in which he offered to pay 23% L.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s and pointers to the existence of an agreement between Ms. Runu Ghosh and Mr. Rama Rao, the object of which was to ensure that 450 units of the crystal version of ARM"S equipment was procured by DoT, at price equal to the synthesized version. That this effort failed in the first instance when the price disparity was agreed to by Mr. Sukh Ram on 31st of August 1993, is of no consequence, because the essence of the crime of conspiracy lies in the agreement by two or more persons to do or cause to be done, an act which is not illegal, but by illegal means. As noted earlier in the portion dealing with Ms. Runu Ghosh's role, her file nothings provided invaluable assistance to ARM when Mr. Sukh Ram had to consider the latter's representations, post 11.09.1993. ARM had a vital economic interest in ensuring that its products were somehow procured in the teeth of all opposition from middle and senior ranking officers in the DoT. Mr. Rama Rao relentlessly pursued its interests with the Department, primarily through Ms. Runu Ghosh. A very important piece of evidence produced by the CBI during the trial was in the nature of two blank letterheads signed by Mr. Rama Rao, which were foun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent for which is imprisonment or fine or both in the discretion of the court. The essence of the offence of conspiracy is the fact of combination by agreement. The agreement may be expressed or implied or in part express and in part implied. But the conspiracy arises and the offence is committed as soon as the agreement is made; and the offence continues to be committed so long as the combination persists, that is until the conspiratorial Egremont is terminated by completion of its performance or by abandonment or frustration or however it may be. The actus reus in a conspiracy is the agreement to Exh. you to the illegal conduct, not the execution of its. It is not enough that two or more persons pursued the same unlawful object at the same time or in the same place; it is necessary to show a meeting of minds, a consensus to effect an unlawful purpose. It is not however, necessary that each conspirator should have been in communication with every other. 152. Criminal conspiracy is likened to a march under a banner, with the conspirator as a participant, who may continue or choose to opt out of the march, at some stage, or join at another, without changing the word....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ces. this Court is convinced that such charge is indeed proved if there is a clear link between the two, i.e. Ms. Runu Ghosh and Mr. Rama Rao to further the interests of ARM to the detriment and harm to public interest if the object of that unlawful agreement was to be achieved by Ms. Runu Ghosh's abuse of official position. The tone and tenor of each noting made by Ms. Runu Ghosh, stridently advocating the purchase of ARM's crystal-based equipment despite its not being the preferred technology in express terms of the advertised criteria; her deceptive nothings in the file, in the form of strong recommendations to procure 1500 systems in May, 1993 from ARM (even type approval for the synthesized version had not been given to ARM by DoT); the noting dated 18.06.1993 expressing disagreement with the recorded minutes of meeting of the PNC; her disagreement with the costing exercise carried out by Mr. N.C. Gupta, by his detailed and reasoned note dated 13.07.1993, her writing directly to the TEC - without furnishing any particulars about the technology concerned or the costing exercise carried out by Sri. Gupta (in the letter dated 20.07.1993, i.e. Ex. P-13); her incorporation ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....legislative and executive branch need balancing of myriad choices, and accommodating several interests, even while taking into account future possibilities. And the added duty of taking decisions with the dispatch and expedience that the circumstance warrants. Legislators and executive decision makers are protected from needless attack, as long as their actions remain within the bounds of their power, and within the zones of reasonableness. When public officials (the term public servant is widely defined) step out of such limits, protection ceases. When the degree of injury is shown to harm society and also result in unwarranted private gain, the criminal law operates. 157. The previous Act was brought into force in the flush of the country's Independence; Parliament, after having the experience of working with that law for four decades, re-visited it, and enacted a more comprehensive law, in 1988. 158. When talking of corruption in government or public life, generally, it is tempting to echo the usual cliches about moral squalor in general, and the amoral abyss reflected in public life. History tells us that corruption has been almost the alter ego, of public life; it af....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d criteria for public procurement decisions, in order to facilitate the subsequent verification of the correct application of the rules or procedures; 160. The Convention was cited only to emphasize that grappling corruption in any society cannot be a one-time exercise; it is an ongoing one. The legislation in this country, in the form of the previous enactment and the 1988 Act, is comprehensive, and designed to tackle all manner of questionable behavior of those holding public office. What is necessary is to strengthen the mechanisms for its effective and timely implementation. Closer attention to ways of injecting independence, professionalism and speed, in investigation, prosecution and decision making under the Act, are to be explored. Having regard to the wealth of experience gained by the courts and the executive, it may be worthwhile to explore the practicality and need to put in place a professionally trained prosecutorial cadre, and an investigative and enforcement wing, exclusively dedicated to dealing with cases relating to corruption, and possibly economic offences, in the lines of All India Services. It is of vital importance that these services are assured function....