http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 18  

PETITIONER: A.JAYARAM & ANR.ETC.ETC.

       Vs.

RESPONDENT: STATE OF ANDHRA PRADESH BYC.B.I.

DATE OF JUDGMENT13/07/1995

BENCH: RAY, G.N. (J) BENCH: RAY, G.N. (J) FAIZAN UDDIN (J)

CITATION:  1995 AIR 2128            1995 SCC  Supl.  (3) 333  JT 1995 (5)   238        1995 SCALE  (4)393

ACT:

HEADNOTE:

JUDGMENT:                THE 13TH DAY OF JULY, 1995 Present:           Hon’ble Mr. Justice G.N.Ray           Hon’ble Mr. Justice Faizan Uddin Mr.K.T.S.Tulsi, Additional Solicitor General, Mr. K.Madhava Reddy and Ms.Amreshwari, Sr. Advs., Mr.K.R. Choudhary, Mr.G.Narasimhlu, Mr. V.V.Vaze Mr.D.Satyanarayan, Mr.R.P. Srivastava, Mr. Hemant Sharma, Mr. W.A.Quardi, Mr. P.Parmeswaran and C.B.Babu, Advs. with them for the appearing parties.                     J U D G M E N T      The following Judgment of the Court was delivered:               IN THE SUPREME COURT OF INDIA               CRIMINAL APPELLATE JURISDICTION               CRIMINAL APPEAL NO. 310 OF 1989 A.Jayaram and Anr.           Versus State of Andhra Pradesh By C.B.I. WITH Criminal appeals Nos.308 and 309 of 1989, 311 to 317 of 1989, 163 to 166 of 1994 and Criminal Appeals Nos. 184 to 185 of 1994.                     J U D G M E N T G.N. RAY.J.      All  the   aforesaid  appeals  were  heard  analogously because the  criminal  proceedings  instituted  against  the appellants in these appeals, being the officers of the State Government of  Andhra Pradesh  and dealers of fertilizers in the State of Andhra Pradesh related to an alleged scandal in transporting imported  fertilisers from  the ports  of Tamil Nadu and  Andhra Pradesh  to       different destinations in the State  of Andhra Pradesh. A tabular statement indicating the numbers  of the  appeals in  this  Court,  corresponding numbers of  the appeals in the Andhra Pradesh High Court and corresponding numbers  of the  criminal cases  in the  trial

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 18  

court out  of which  the appeals  in the High Court arose is given below: Government and others are dealers.      The  Special  Judge  for  Fertilizers  Transport  Cases (A.P.) acquitted  all the  accused  in  the  criminal  cases instituted against the officers and dealers.  But on appeals by the  State of  Andhra Pradesh,  the High  Court of Andhra Pradesh by  the impugned  judgments reversed  the orders  of acquittal and  convicted all the appellants. As the Criminal Appeal No.  310 of  1989 was  taken up first for hearing and was argued  at length as the main appeal and learned counsel appearing  for   the  appellants   in  the   other   appeals supplemented the  arguments by  drawing  attention  of  this Court to  the special  facts relating  to such  appeals,  we propose to  deal with  the arguments  advanced  in  Criminal Appeal No. 310 of 1989 at length.      Criminal Appeal  No. 310  of 1989 has been preferred by Accused No.  2 District  Agricultural Officer Nandiyal (DAO) and Accused  No. 3  Assistant Agricultural  Officer Nandiyal (AAO) Accused  No.1 who  was a dealer in fertiliser was also convicted by  the High  Court. Both  A-2 and  A-3 have  been convicted by  the High  Court under  Section 120B  read with Section 420  I.P.C. and  sentenced to pay a fine of Rs.100/- and in  default to  undergo rigorous  imprisonment  for  one month. They  were further  convicted under Section 5(2) read with Section  5(1) (d)  of prevention  of Corruption Act and sentenced to  pay a  fine of  Rs.100/-  and  in  default  to undergo rigorous  imprisonment for one month. They were also sentenced to  imprisonment till the rising of the Court. The dealer accused No.1 was however convicted under Section 477- A I.P.C.  and was  sentenced to  pay a  fine of  Rs.100/- in default to  unergo rigorous  imprisonment for  one month. He was also  sentenced to  detention till  the  rising  of  the Court. It may be indicated here that the Government Officers in the  other appeals  were sentenced  similarly on  similar evidence.  Accordingly   submissions  on   behalf  of   such appellants were also more or less on similar terms.      The impugned  judgments of the High Court reversing the orders of  acquittal and  convicting the appellants in these appeals have  been assailed  by the  learned counsel for the appellants by  contending that  although an  appellate Court has jurisdiction  to interfere  with the finding of fact and reverse such  finding on  proper  appreciation  of  evidence adduced in the trial, as a rule of prudence, court of appeal should not  interfere with  the order  of acquittal  are not perverse of against the weight of the evidence addced in the case and  the basis  of judgment  is founded  on a reasoning which can  not be held to be one of the possible views which may be  reasoning which  can not  be held  to be  one of the possible views  which may  be reasonably taken by the Court. The learned  counsel have  submitted that  the guidelines or the principles  justifying  interference  by  the  Court  of appeal against  an order of acquittal have been well settled by a number of decisions of this Court indicating that rules of prudence  dictate that  unless a  very  strong  case  for interference against  a well  reasoned order of acquittal is made out,  the court  of appeal will refrain from making its own assessment  of  the  evidence  for  taking  one  of  the possible views,  different from  the view taken by the trial court. It  has been  submitted that  although High Court has rightly pointed  out the  principles justifying interference against the  order of  acquittal it failed to appreciate the facts and  circumstances of  the  cases  and  the  evidences adduced in  the trial  and has reversed the decisions of the trial court  cotrary  to  the  well  established  principles

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 18  

justifying such  interference. The contention of the learned counsel appearing  for the appellants in Criminal Appeal No. 310 of 1989 are to the following effect:-      (a) The  High Court  in  this  case  has      totally ignored the reasons given by the      Trial Court  and totally  overlooked the      several   admissions    made   by    the      prosecution witnesses  in  their  Cross-      examination which  wholly demolisnes the      value of  their evidence in examination-      in-chief. Except  discussing one aspect,      namely that  owners  of  the  shops  are      competent  witnesses   to  identify  the      handwriting of their clerks who made the      entries in  the account  books, there is      no discussion  regarding  several  other      reasons given by the Trial Court for not      accepting   the    evidence    of    the      prosecution witnesses.      (b) The High Court has gone by surmises.      The High  Court has,  in  reversing  the      Trial  Courts   Judgement  of  acquittal      nowhere  found   that  on  the  evidence      adduced the  view  taken  by  the  trial      court could  not have  been  taken.  The      High Court, sitting in appeal, ought not      to have  reversed the  acquittal without      displacing the  findings  of  the  Trial      Court merely  because a  different  view      was also  possible. The  High Court  has      nowhere considered how the officers, A-2      and  A-3,   could  be   held  guilty  of      conspiracy without a categorical finding      that no  fertilizer was  received by the      AAD (A-3).  It has  not adverted  to the      admissions  made   by  the   prosecution      witnesses  in  their  cross  examination      which were  referred  to  by  the  Trial      Court for acquitting them.      (c) The  High Court has failed to notice      that  not   a  single   witness  of  the      prosecution has stated that there was no      stock of  fertilizers on the day when it      was recorded in the stock register by A-      3.      (d) The  High Court  failed to  see that      upto  the   date  of   issuance  of  the      impugned  certificates,   there  was  no      obligation to  verify  the  registration      numbers  of  the  trucks  in  which  the      fertilizers were transported.      (e) The  High Court  failed to  consider      that the  District Agricultural  Officer      in  Nandiyal   which   is   in   Kurnool      District, has  neither jurisdiction  nor      the  staff   to   monitor   each   lorry      transporting  fertilizers   lifted  from      Kakinada port  which is  five  districts      away at  a distance  of nearly  600 kms.      from his  place of posting. He (A-2,DAO)      was to take the certificate given by A-3      (AAO) and  issue a certificate verifying      the distance  and reasonableness of Rate      after verifying  the stock which he did.      There is no evidence to the contrary.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 18  

    (f) The  High Court has erred in nothing      the DAO’s (A-2) contention. It was never      argued for A-2 that he had no obligation      to verify the stock.      (g) The High Court failed to notice that      there is  an entry in the stock register      of   the   respective   stock   on   the      particular day  and A-(3) (AAO) gave the      certificate.   Prosecution    has    not      examined any witness even to say that no      truck  came   and  no   fertilizer   was      delivered to A-2 on that day.      (h) No  witness was  examined  to  prove      that on  the day the entry was made, any      inspection was  done either  on that day      or within  a reasonable  time thereafter      to hold  that no  stock was received and      certificate given  by A-2  and  A-3  are      false.      (i) No witness was examined to show that      attempt was  made to  ascertain  if  any      stock     was      in     the     godown      contemporaneously with  the date  of the      entry  in  the  stock  Register  or  the      issuance of  the  certificate;  nor  was      there any  specific  complaint  to  this      effect.      No one  was examined to prove that there      was no stock on the relevant date.      (j) The  High Court  totally ignored the      evidence  of   PWs.  13   and   15   who      categorically  stated  that  fertilizers      were  freely  available  in  the  market      which fact  was specifically referred to      and relied  upon by  the Trial  Court to      acquit the  appellant. With  the limited      jurisdiction of  A-2 and  A-3 they could      only verify  the stock  brought to  them      and enter  in the  stock register.  They      had no  machinery to  verify whether  it      was the self same stock which was lifted      by  A-1  from  Kakinada  or  some  other      stock. For that purpose A-2 was required      only  to   verify  the   port  documents      showing lifting  at this port. It is the      admitted case of prosecution that Dealer      A-1 did  lift fertilizer  from Kakinada.      Hence some  fertilizer was  delivered to      A-2. Even  if it  was not  the same, A-2      and  A-3   were  bound   to  issue   the      certificates. Hence  they cannot be held      guilty.  There   is  no   evidence  that      fertilizer was  not  delivered  at  all.      When fertilisers  were freely  available      the dealers  could  even  after  selling      away fertilizers  lifted at  port  could      very  well  have  purchased  fertilizers      locally and  delivered it to A-2. Unless      this   hypothesis,   which   is   highly      probable   is   excluded   by   positive      evidence A-2  and A-3  cannot  be  found      guilty.      (k) The  trial court  further held  that      the alleged  sales by  dealer  (A-1)  at      Bubbili and Sompeta was not established.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 18  

    The  trial  Court  also  held  that  the      identify of  the fertilisers sold is not      established.  In  the  absence  of  such      evidence, the  trial  court  refused  to      believe that  the fertilisers  were  not      transported from  Kakinada to  Allagadda      in Kurnool  District. Dealing  with this      aspect, the High Court has observed that      the  partner   of  the   shop  has  been      examined and  in some  cases  clerk  has      been examined  and accounts in which the      sale transactions are entered are proved      and hence  sale by  A-1  is  proved.  In      coming  to  that  conclusion,  the  High      Court failed to notice that:      i) day  books were  not filed  and  only      ledgers were filed.      ii) In  the ledgers there is no entry of      A-1 selling the fertilisers.      iii) There  is also no entry to identify      the fertilisers  sold, nor  even that it      was imported  fertiliser taken  delivery      of at  Kakinada by  A-1. The day book in      which such entries are said to have been      made was not produced.      iv)  That  the  registration  number  of      trucks were  not entered  in the  ledger      and are said to have been entered in the      day book  but  that  day  book  was  not      produced.   The    witnesses    examined      admitted that they did not travel in the      trucks which transported the fertilisers      purchased by them.      v) The drivers were not examined.      vi) The  trip sheets  of the trucks were      not filed. A few filed are loose sheets.      Witnesses admitted  that they  were  not      maintained for  all trips.  Refering  to      the decision  in State  of Kerala versus      Thomas Alias  Boby (1986 (2) SCC 411) it      was contended  that trip sheets were not      worthy of  credence because loose sheets      properly maintained  and kept not in any      book form, have no evidentiary value. No      liability can be imposed on the basis of      mere entry in the account books and such      trip sheets.  All these facts were taken      note of  by the  trial court  in holding      the sales not proved.      vii) The  High Court  in  reversing  the      findings  has   only  made   a   general      reference to the examination-in-chief of      those witnesses  and wholly  ignored the      damaging admissions  made by each one of      the witnesses in cross-examination.      viii) The  High Court  has only  pointed      out that  partners  of  the  firm  which      purchased  fertilisers   were  competent      witnesses to  identify the  signature of      the clerks  who made these entries. That      by  itself   does  not   establish   the      identity of  the fertilisers lifted from      Kakinada port nor does it establish that      A-1 had sold those fertilisers.      ix) The  High Court  has placed reliance

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 18  

    on entries  at the check posts. Judicial      notice of  the fact  could be taken note      of that  for several  trucks  moving  on      road there  are no  entries in the check      post regions. When these fertilisers are      admittedly not  liable for sales tax. If      no  entries   are  made,   no  inference      adverse to the accused could be drawn.      1)  The   ingredients  of  the  offences      charged against  the appellants have not      been  established   for  the   following      reasons:      a) A-2  and A-3  are  charged  with  the      offence of  giving  false  certificates.      For bringing  home the  charge of  120-B      read with  420 against  A-2 and A-3, the      prosecution in  this case must establish      that they  had  conspired  with  A-1  to      cheat. There  is no  direct evidence  on      this  aspect.   Of  course,  it  can  be      established by  circumstantial evidence.      The most  essential  ingredient  of  the      offence of  cheating  is  deceiving  any      person  and   inducing  that  person  to      deliver any property. In this case there      is  no   proof  of   non   delivery   of      fertiliser. The certificate issued by A-      2 and  A-3, could  be said  to be  false      only if no fertiliser was received by A-      3 and  yet  A-3  entered  in  the  stock      register  and  issued  the  certificate.      There is  no finding  of the  High Court      that the  stock of  fertilisers was  not      received. It  may be noted that there is      no duty  cast upon A-3 to certify that a      particular type  of fertiliser  has been      received or imported fertiliser has been      received or  the very  same stock lifted      from Kakinada  port was received by him.      A-3 was  only to certify the quantity of      fertiliser received.  It was  not within      the  power   of  A-3   to  monitor   the      transport all  the way  from Kakinada to      Allagadda over  a distance  of 600  kms.      His jurisdiction  is limited  to one  of      the  several  talukas  of  the  district      while   the   fertiliser   was   to   be      transported  over   5  districts.   When      fertiliser was  freely available  in the      market, it  may very  well be  that  A-1      disposed of  the fertiliser  lifted from      Kakinada at  Kakinada or  at  any  other      place    nearby,     purchased     other      fertilisers  freely   available  in  the      market and  delivered to A-3 and A-3 who      having received  the same entered in the      stock   register    and    issued    the      certificate. The  certificate so  issued      could not  be said  to be false or given      to   deceive   anyone   unless   it   is      established that  no fertiliser  at  all      was received  on the  particular  day  a      certificate issued  cannot be said to be      false. There  is no such evidence; hence      A-3 cannot be held guilty.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 18  

    b)   A-2,    DAO,   issued   certificate      certifying the distance from Kakinada to      Allagadda and  the reasonable rate which      could be  paid per ton of fertiliser per      km.  It   is  not   the  case   of   the      prosecution  that   the  certificate  of      distance and  reasonable price  is false      or  untrue.   The  case   is  that   the      fertilisers were  not transported at all      and that  no fertiliser  was reversed on      the day when it was entered in the stock      register.   A-3    was   to   give   the      certificate certifying  the distance and      the rate  for transport  after verifying      the   stock    after    obtaining    the      certificate  issued   by  A-3.   If  the      certificate issued  by A-3 is not false,      as submitted  above, when  there  is  no      evidence that  DAO A-2  has not verified      the  stock,  A-2  also  cannot  be  held      guilty.  Even   assuming  that  A-1  has      disposed of  the fertiliser  lifted from      Kakinada at  any other place and did not      actually transport  it to  Allagadda, so      long as  it is  not established  that on      the day  when the  entry is  made in the      stock  register,   there  was  no  stock      received by  A-3 neither A-2 nor A-3 can      be  held  guilty.  The  prosecution  has      failed to  prove positively  that  there      was no fertiliser on the relevant date.           The prosecution  however wants  the      court to  draw an  inference against the      accused  on  the  evidence  of  sale  of      certain fertilisers  by A-1  the dealer,      at some  other place.  There is no basis      for such  an inference  especially  when      plenty  of   fertilisers   were   freely      available in  the market  and even after      disposing  of   the  fertilisers   at  a      different place,  the dealer (A-1) could      have  purchased   fertiliser  from   the      nearby market  and delivered the same to      A-3. A  certificate  issued  by  A-3  on      receiving  such  fertilisers  cannot  be      said to be falsely issued with an intent      to  deceive  the  government  to  secure      benefit for  A-1.  A-2  also  could  not      therefore be found guilty.           The prosecution, however, says that      in  the   circumstances  only   negative      evidence   could    be   adduced    that      fertiliser were  disposed  of  elsewhere      and positive  evidence of fertiliser not      having been  delivered on  the  relevant      date to  A-3, could not be adduced. This      contention  cannot   be   accepted   for      several reasons.      i) The  evidence of anyone who inspected      the godowns  as they  are expected to be      inspected periodically  could have  been      adduced. Not  a single  witness has been      examined by  the  prosecution  to  prove      this.      ii) Evidence  of persons of the locality

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 18  

    where the  godown  was  situated,  could      have been adduced to show that no trucks      came and no fertilisers were received at      that godown  on that day or a day or two      earlier or later.      iii) A-3  had certified  that A-1 dealer      has taken  delivery at  Kakinada as  per      port documents and that he has delivered      certain quantity of fertiliser.      iv) The  conspiracy is said to be of the      DAO (A-2) and AAO, (A-3) with the dealer      (A-1). The conspiracy is not between any      officer above  the level  of DAO and yet      none of  those higher officers have been      examined to  show that  in or  about the      relevant date,  these  fertilisers  were      not available in the godown.      v) While  the offence is alleged to have      taken place  in october  1968.  FIR  was      registered   on    24.6.1970   and   the      chargesheet was laid in 1973. The charge      sheet does  not  say  that  any  Officer      higher in hierarchy to A-2 was involved.      Yet none  of them  has been  examined to      prove that  fertilisers were  not in the      godown  on   the  day   when  they  were      purportedly received by A-2.      It has  been very  strongly contended  by  the  learned counsel for  the appellant  that the  prosecution pleaded an excuse for  not leading better evidence to establish all the ingredients of the offence on account of inordinate delay in making proper  investigation and filing the charge sheet and contended that adverse inference should be drawn against the accused.  The   learned  counsel   for  the  appellants  has contended that  such contention being against all cannons of criminal jurisorudence  should not have been accepted by the Court. It was the unfailing obligation of the prosecution to lead convincing  and unimpeachable  evidence  to  prove  the charges  levelled   against  the  accused.  Failure  of  the prosecution  to   establish  such   charge  for  any  reason whatsoever cannot  but ensure  to the benefit of the accused particularly when  the delay  in investigating  the case and filing chargesheet was not attributable to the accused.      It has  also been  contended that  the  conviction  was sought to  be based  on  circumstantial  evidence  are  well settled by  decisions of  this Court  in a  catina of cases. Referring to  the decision  made by  this Court in Janar Lal Das versus  State of  Orissa (1991  (3) SCC 27), the learned counsel has  submitted that this court has indicated that in order to  sustain  conviction  on  circumstantial  evidence, three conditions must be fulfilled namely;      (i)  the  circumstances  from  which  an      inference  of  guilt  is  sought  to  be      drawn,  must   be  cogently  and  firmly      established.      (ii)  those   circumstances  should   be      definite unerringly pointing towards the      guilt of the accused:      (iii)    the     circumstances,    taken      cumulatively, should  from  a  chain  so      complete that  there is  no escape  from      the conclusion  that  within  all  human      probability the  crime was  committed by      the accused and none else, and it should      also be  incapable of explanation on any

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 18  

    other hypothesis  than that of the guilt      of the accused.      In   cases    depending   largely   upon      circumstantial evidence  there is always      a danger  that conjecture  or  suspicion      may take  the place  of legal proof. The      Court must  satisfy itself  that various      circumstanced in  the chain  of evidence      should be  established clearly  and that      the completed  chain must  be such as to      rule out  a reasonable likelihood of the      innocence of  the accused. When the main      link goes,  the chain  of  circumstances      gets  snapped  and  other  circumstances      cannot in any manner establish the guilt      of the  accused  beyond  all  reasonable      doubts. It is at this juncture the court      has to  be watchful and avoid the danger      of allowing  the suspicion  to take  the      place  of   legal  proof  for  sometimes      unconsciously it  may  happen  to  be  a      short step  between moral  certainty and      legal proof.  At times  it can be a case      of ‘may  be true’.  But there  is a long      mental distance  between ‘may  be  true’      and ‘must  be true’ and the same divides      conjectures from sure conclusions.        It has been contended that there is no convincing and unimpeachable evidence  which unerringly  points out  to the guilt of  the accused  and in  the facts  of  the  case,  no conclusion other  than complicity  of the  accused  for  the offence charged,  is  possible.  Hence,  conviction  of  the appellant on  proobability, surmise  or conjecture  was  not warranted. The learned counsel for the appellant has submitted that the appellants had no special knowledge as to whatroute had been actually followed  by the  dealer or transporter in bringing the fertilisers to government godown. The appellants had the duty to  certify shortest route between the point of lifting and point  of delivery  and certify  reasonable rate  on the basis of such shortest route. It has  been contended  that the appellants being government officers responsible at the receiving point were required to ensure  that  fertilisers  had  in  fact  delivered  at  the receiving  point.   On  receiving   the   fertilisers,   the appellants have  discharged their  duties in  certifying the receipt  of  fertilisers.  Nobody  had  verified  the  stock received at the godown on the day of delivery or even within a reasonable  time. If  a dealer  or transporter disposes of fertilisers lifted  at  port  on  route  and  brings  a  new consignment  of   fertiliser  by  procuring  elsewhere,  the government officers at the receiving and had nothing to do. If  on   receipt  of   the  fertilisers   delivered  at  the destination,  such  officers  had  issued  certificates,  no offence charged  against them  could be  held to  have  been established.      Circulars issued subsequent to 1.11.68 would go to show that A-2  (DAO) nor  A-3 (AAO)  were required  to verify the Registration number  of trucks in which the fertilisers were actually transported  to Allagadda. That was prescribed only subsequent to  the date  of the  alleged offence.  Under the earlier circulars  there was  no such  requirement. Reliance was placed  by the  prosecution on  circular dated 5.2.68 at page 29  to 31  of paper  book, Vol.II which require the A-2 (DAO) to conduct physical verification of stocks received in

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 18  

the district  and the manure mixing firm and report the same in a cover addressed to the Director of Agriculture by name.       There was no failure to verify on the part of A-2 when he issued such a letter. That letter is extracted at page 70 of the  High Court judgment, Ex.P-87. No evidence is adduced by the prosecution to show that no stock was received by A-3 and that  A-2 did  not physically  verify the stock. Not one witness has so stated. The prosecution only insists upon the court to draw adverse inference against the accused from the fact that  A-1 had disposed of some fertilisers somewhere at Kakinada, Bubli,  or Sompeta  after lifting  from  Kakinada. When  several   complaints  were  made  that  officers  were delaying in  issuing  the  certificates  the  procedure  was modified by circulars dated 27.6.1966 Ex.P-1 at page 149 and circular  dated   12.3.1968  Ex.D-48   page   155.   Ex.D-48 specifically says  that DAO  (A-2) should  ensure  that  the parties have  actually moved  the stock and for this purpose the DAO  may obtain  the certificate  of  verification  from Agricultural Extension  Officer (A-3). A-2 has obtained such certificate. Further, the Agricultural Extension Officer (A- 3)  should  furnish  the  stock  book  entry  of  the  depot concerned. Admittedly  such an  entry is  found  and  it  is furnished by  A-3 to  A-2 and  A-2 in turn has forwarded the same  to   the  higher  authorities.  Further,  Agricultural Extension Officer  (A-3) is  required to make the stock book entry basing  on the material furnished in proforma 1 issued at the  ports. It  is the  admitted case  of the prosecution that proforma  1 issued at the ports was so furnished. Hence the certificate  issued by  A-3 cannot  be said  to be false when for  the purpose of ensuring actual movement of stocks, these alone  were to  be taken  into account. As regards the certificate to be issued by A-2 (which is at page 152 of the Special  Leave   Petition  paper   book),   circular   dated 27.6.1966, states that in view of the clarification given by the  Government   of  India,   the  following  procedure  is prescribed for  certification regarding  rates and distance. That procedure  was followed.  There is  no evidence  of the prosecution that  that procedure  was not followed. There is no allegation  that distance  and rates  certified  are  not correct.        Circular  dated 5.2.1968 only emphasises the physical verification.  There   is  no   evidence  that  he  has  not physically verified  issuing the certificate of distance and route in  the covering  letter addressed  to the Director of Agriculture. It  does not  prescribe verifying  Registration Number of trucks.        The  learned counsel appearing for the appellants who are government  officers have submitted that charges against the government  servants could  not be  established. Even if the transporters  or dealers  in fertilisers  had  committed guilt they  were liable  to be convicted for the part played by them  but on  account of  any guilt  on the  part of  the dealers, the  officers could not be prosecuted. Hence, there was no  occasion to  convict such  officers by reversing the orders of acquittal.        The  learned counsel  for other  appellants  who  are government  officers   have   submitted   that   facts   and circumstances in  other cases  are more  or less similar. No varification of  stock at  the receiving  and had  been done immediately after  receipt of  the goods  or even  within  a reasonable time.  Therefore, the  appellants for the grounos indicated in  Criminal  Appeal  No.310  of  1989  should  be acquitted by  setting aside the unjust and improper order of conviction and sentence passed by the High Court.      The learned counsel appearing for the dealers in their

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 18  

appeals have submitted that it was alleged that the dealers, pursuant to the conspiracy with other accused namely the government officers had preferred false claims for reimbursement of the road transport charges. It has been contended that the dealers had obtained certificates about the receipt of the goods transported at the destination issued by the competent government official. It had not been established that such goods had in fact not been received by leading any convincing positive evidence about the stock position at the relevant time. No one had verified the stock at the receiving end either on the date of delivery or within reasonable time thereafter. Hence, it cannot be contended that goods in question had not been transported at all but false claim for such transportation charge had been made. It has been contended that the High Court allowed the appeals against the dealers mainly on the ground that there were no entries at the checkposts and that there was evidence of sale of some fertilisers. Absence of entries in chekposts ipso facto did not establish that the lorries did not ply through the routes in question. It could not be established beyond all reasonable doubts that invariably in all cases appropraite entries in checkposts had been made. It has been established that checkpost entries had not always been properly maintained. Hence, absence of entry in the checkpost could not be held to be conclusive evidence about non transportation of goods.      It has also been contended that transportation of goods by alternative route was not prohibited. The only embargo was that transportation charge should be paid on the basis of shortest route certified by competent government official. The learned counsel have contended that evidence about sale of fertilizers at some places had been led by the prosecution. Such fact ipso facto, does not establish conclusively and beyond reasonable doubt as to whether the goods to be transported had been sold and as such the same had not been delivered at the destination. No proof has been given by the prosecution as to what quality of fertilisers had been sold. There is also no evidence that no fertiliser was available in the market in the entire region. It has been contended by the learned counsel for the appellants that after a long lapse of time, an uproar was made in the State Assembly and in the media about large scale manipulation in the transportation of fertilisers. It was only because of public pressure that long after transportation was effected enquiries were sought to be made. It was unfortunate that the government could not place reliance on the State’s police and because of public uproar, C.B.I. was entrusted to cause enquiry into the allegation of scandal with the transportation of fertilisers. Admittedly, such enquiry had been made at a very belated stage when hardly there was any material or evidence to substantiate the charges against the accused. It has been contended that knowing fully well that such allegations about the scandal in dealing with fertilizers could not be established for want of proof, the government in order to pacify public demand initiated the criminal cases against the appellants. The trial court by giving detailed reasons acquitted all the accused in the criminal cases instituted against them. But as aforesaid, the High Court reassessed the findings of the trial court and convicted the appellants mainly on the basis of suspicion, surmise and conjectures. It has been contended that the token punishment given by the High Court amply demonstrates that the High Court also entertained a feeling that the guilt had not been established in a fully convincing manner. In the aforesaid facts, the learned

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 18  

counsel have submitted that the impugned decisions of the High Court have occasioned grave injustice and should be set aside by this Court.      The learned counsel appearing for the State of A.P. in these appeals have, however, seriously disputed the contentions made on behalf of the appellants. The learned counsel for the State in Criminal Appeal No.310 of 1989 has contended that transportation of fertilisers had to be made from the port of Kakinada to Allagadda in Karnool District. It is the prosecution case that such fertiliser had not been transported to the destination but the goods were sold at Kakinada itself and at some intermediate places and the dealers made a false claim of transportation charge for a sum of Rs.13,972.50. A-3 who was the Agricultural Assistant Officer and consignee of the goods made a false entry in the stock register to the effect that the fertilizers were received at Allogadda and on the oasis of certificate used by A-3 since endorsed by A-23, the District Agricultural Officer about actual transportation of the fertilizers through shortest route, the claim of the dealer was allowed by the government. The prosecution alleged that there had been conspiracy and connivance between A-2 and A-3 and A-1 to defraud the Government.      Learned counsel for the State respondent in support of the judgment has submitted that the prosecution in support of its case examined the owners of the lorries alleged to have transported the goods from Kakinada to Allagada as PWs. 6,7,8,16 and 22. It is the prosecution case that the fertilisers stated to have been carried to the destination at Allagada had been disposed of at Kakinada. Such purchasers of fertilisers were examined as PWs. 1-4, 13-15, 21, 24, 29, 30, 34 and 35. The officials of the check post on the regular route between Kakinada and Allagada were also examined by the prosecution being PWs. 26-28 and 31. It has been contended by the learned counsel for the respondent that unfortunately after long laspe of time it was not possible to lead direct evidence about the actual position of stock of fertilisers at the destination point on the date of alleged receipt of fertilisers or immediately thereafter. It has been submitted that it was a large scale scandal in the matter of transportation of imported fertilisers at various destinations at State of Andhra Pradesh and because the fraud was perpetrated with the active connivance of the government officials entrusted to receive the fertilisers at the destination, such fraud could not be detected immediately. He has submitted that it is unfortunate that the C.B.I. had to be entrusted for causing enquiry because effective enquiry could not be made by the State agencies. Such enquiry had been held long after the incident of fraud. Naturally, the C.B.I. was handicapped to a great extent but despite the same the C.B.I. has done excellent job and by examining the lorry owners, the persons purchasing the fertilisers stated to have been transported and the officials in the check post. It has been conclusively established from depositions of such witnesses that the fertilisers in question had in fact not been transported to destination. The learned counsel has submitted that once this fact is clearly established that the fertilisers which had been lifted at the port and was scheduled to be transported at the destination Allagada had not been transported by the lorries through which it was said to have been transported and it is also proved that fertilisers had in fact been sold elsewhere and such lorries did not pass through the usual route to be followed for such transportation, there will be no difficulty in holding that

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 18  

the certificate which was issued by the government officials about the actual transportation of the said fertilisers by the shortest route was false and fabricated and such certificate had been issued without actually receiving the goods. On the basis of such evidences since accepted by the High Court, the order of conviction by the High Court by reversing improper judgment of acquittal passed by the trial court is wholly justified and no interference is called for. The trial court proceeded on surmise and conjecture. The learned counsel has submitted that the High Court was fully aware of the appeal court’s responsibilities and duties in dealing with the judgment of acquittal. Since the finding of the trial court was completely against the weight of the evidence and such finding could not be held to be based on a reasonable view which could be taken on the basis of evidence adduced in the case, the High Court felt that such order of acquittal could not be sustained. Accordingly, the impugned orders of conviction of sentence have been passed. It has been submitted by the learned counsel for the respondent that the trial court erred in drawing adverse inference against the prosecution case because the drivers of the lorries had not been examined but only the lorry owners were examined. The trial court also draw an adverse inference because the clerks of the lorry owners who made entries about the movement of the lorries in question had not been examined. The learned counsel has submitted that such view of the trial court was wholly erroneous and unjustified. The lorry owners were competent to say whether the lorry owned by them had been engaged for the transportation of the fertilisers in question and it was not necessary to examine the drivers who actually drove the lorries. The owners of the lorries were expected to know the hand writings of the clerks engaged by them in the registers maintained in their office. To prove such entries about the movement of lorries, the clerks were not required to be examined and no adverse inference was required to be drawn for not examining the clerks. It has been submitted that the High Court observed that there were several Circulars issued prior to March 12, 1968 and subsequent to March 12, 1960 and such circulars only indicated the responsibilities of the Agricultural Officer. It has been submitted that the High Court elaborately dealt with the circulars and held that despite specific guidelines given, the accused A-2 and A-3 deliberately failed and neglected to perform their official duties. The learned counsel has submitted that in a case governed by the circumstantial evidence it is often very difficult to prove when the minds of the accused met and it is only from the facts proved, the reasonable inference can be drawn about the collusion between A-2 and A-3, namely, the government officials and the dealer in fertilisers A-1. It has been contended by the learned counsel for the respondent that the owner of lorry PW.6 was examined by the prosecution. The said owner was the best person to speak about the fact whether his lorry had been taken on hire at the relevant time for transporting the goods. The lorry owner is not expected to maintain the trip sheets written some time in 1968 when he was examined after several years. P.W 35 the clerk in the shop of G. Surya Narayana stated that he had purchased 340 bags of urea from PW 30 Bhoja Dharam Raju & Company, Kakinada and by making an entry he took delivery of the said 340 bags of urea. PW 30 was also examined to prove that Bhoja Dharma Raju and Company had sold 340 bags of urea. Ex.P.164 and P.167 are the sale bills issued by Dharma Raju. Ex.P.65 and P.67 are the two sale bills which were also sent with the lorries and by which the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 14 of 18  

stocks were sent. Such bills clearly established that the lorry did not proceed on the same date to Kakinada and any statement to that effect was false. Ex.P.164 is the seal of Ramabhadrapuram check post entry. It has been contended by the learned counsel for the respondent that if the lorry in question had in fact travelled by any other route, such fact was within special knowledge of the accused trader. In that event, the burden shifts to the accused to prove the special facts within his knowledge. The owner of the lorry had been examined as PW 7 and the said owner had proved the entry Ex.P.20 in the day book maintained by him on 9.10.1968. The trip sheet Ex.P.21 dated 11.10.1968 shows that the lorry made a trip from Kakinada to Sompeta. Sompeta is situated within Srikakulam District which is at one end of the State of Andhra Pradesh touching the border State of Orissa. It has been established by examining the officials of the check posts that there is no entry in any of the check posts between Kakinada and Allagada in respect of the lorry in question namely lorry bearing No. A.P.W.4926. Ex.P.39 is the account book dated October 10, 1968 showing that fertilizers belonging to A-1 were loaded in the said lorry. The account book of P.W.30 shows that they purchased the fertilisers on October 10, 1968 and the trip sheet shows that the fertilisers had in fact been transported to a different place. From such evidences a reasonable conclusion can be drawn that the said lorry did not reach the destination. P.W.1 is the husband of the owner of lorry No. APP 8379. The said witness has stated that Ex.P.1 is the trip sheet and his lorry did not transport any fertiliser to Allagadda and he does not know whereabout of his driver Rama Rao. P.W.22 is the clerk who identified the signatures of Rama Rao, Driver. P.W.33 gave evidence to the effect that the lorry made a trip from Kakinada to Amatalagalsa and identified Ex.P.58 the way bill and stated that the vehicle did not transport any fertiliser for Thallam Trading Company namely A-1 from Kakinada to Allagadda on October 10, 1968. So far as the transporter of fertilisers of lorry No. APV 7335 is concerned, the owner of the lorry P.W 24 has proved that the Ex.P.28 is the trip sheet dated January 10, 1968 which shows that the lorry transported from Kakinada to Rajam. Rajam is in Srikakulam District. Such fact clearly indicates that the fertiliser in question had not been transported by lorry No. APV 7335. The learned counsel has submitted that even if transportation by one of the lorry appears to have not been conclusively proved, there is no difficulty in convicting the accused if non delivery of the fertiliser at the destination on other occasions is established. The learned counsel has submitted that ingenuous plea has been taken for raising unfounded doubts to the effect that the case had not been established beyond all reasonable doubts. Accordingly, the benefit of doubt should go to the accused. Such case of the accused, however, should not be accepted for the simple reason that the prosecution has established by examining the purchasers of fertilisers, the lorry owners, the officials of the check posts that such lorries had not transported the fertiliser at the destination and the lorries had in fact transported different goods at other destinations. On the basis of such evidence, only conclusion can be drawn that a false certificate was procured by the dealer A-1 and false certificates were given by the local government officials, A-2 and A-3 in perpetrating a deep rooted conspiracy to defraud public exchequer. It has been contended that the learned counsel for the State that the Assistant Agricultural Officer was the consignee of the goods. He was required to make an entry in the stock register after

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 15 of 18  

physically verifying that the goods had in fact been transported. It was on the basis of such receipt of goods that he was required to issue certificate that the goods had reached the destination. The other accused namely the District Agricultural Officer had to satisfy himself about the physical arrival of goods for the purpose forwarding the claim of the dealer for payment.      The learned counsel has further submitted that several circulars were issued from time to time by the competent authorities with regard to the verification of stocks and certificate to be issued on the genuineness of the claim. Between 1958 and 1968, different circulars have been issued on different dates. The subsequent circulars issued after the commencement of offence however need not be considered for these appeals Ex.P.83, the circular dated June 24, 1964 requires that the Assistant Agricultural Officer should satisfy himself that the goods were actually transported by shortest route through the mode of transport claimed in the bill and the rates mentioned said Assistant Agricultural Officer had verified the same and found correct. Such certificate only points out that he was a party to conspiracy and when the goods had in fact not reached the destination, he issued a false certificate only for the purpose of defrauding public exchequer. It has been also submitted by the learned counsel for the respondents that the trial court failed to consider some of the relevant materials and it had also considered some materials improperly. It is because of such errors and omissions that the High Court was fully justified in considering the evidences and setting aside the orders of acquittal passed against the weight of the evidence. It has been submitted by the learned counsel for the State that a very lenient sentence by the High Court has been passed but such lenient sentence by no means establishes that the accused are not guilty. The Court in awarding sentence takes mitigating circumstances into consideration. The case continued for long because large number of documents had been exhibited and large number of witnesses were examined. The Government officials had to suffer because of the pendency of criminal cases. Considering such mitigating circumstances, it is quite likely that a lenient sentence has been passed by the High Court. The learned counsel for the respondent submits that there is no merit in the appeals and the same should be dismissed.      The facts and circumstances of the case in the other appeals are more or less the same. The prosecution by examining the purchasers of the fertilizers the owners of the transport, officials of the check posts on usual routes, tried to establish that the fertilisers in question had not in fact been carried to the destination. Hence, no bill for such transportation could be presented by the dealers and no certificate about transportation of such goods by the shortest route at a reasonable cost could be issued by the government officials. Accordingly, it was contended by the learned counsel for the state that the conviction in all the cases should be upheld and this Court should dismiss the appeals preferred by the accused.      After giving our anxious consideration to the facts and circumstances of the case and considering the judgments by both the courts and evidences adduced in the case through which we have been taken by the learned counsel for the parties, it appears to us that a large scale fraud had been committed in the matter of transportation of fertilisers from the ports of arrival to various destinations in the State of Andhra Pradesh. Such fertilisers had been brought

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 16 of 18  

at a point of time when the State was in dire need of good quality of fertilisers for cultivation. It is the case of the prosecution that large scale fraud had been committed by a large number of government officials in conspiracy with the dealers in fertilisers who were entrusted to take the fertilisers from the port to various government godowns. The prosecution case is because there was a conspiracy involving reasonable government officials, the fraud could not be detected earlier. Thereafter, when the State Police was entrusted with the enquiry, for some inexplicable reasons, the enquiry appeared to be tardy. In the meantime, uproar was made in the State Assembly and the newspapers published the news of large scale scandal relating to transportation of fertilisers. The embarrassed State Government thereafter entrusted the C.B.I. to make enquiries. The C.B.I. made enquiries and charge sheets were filed. There is no manner of doubt that by that time it was quite late and the C.B.I. was handicapped in causing more effective enquiry. Despite such fact, it appears to us that the C.B.I. has done excellent job by examining the lorry owners, the clerks of the lorry owners, the officials of different check posts and also the purchasers of fertilisers at different places for the purpose of showing that the fertilisers lifted from the port and stated to have been transported at different destinations had in fact not been transported in the manner alleged but on the basis of false entries made by the government officials and also by issuing false certificate of such transportation payments had been made. Unfortunately, no evidence has been led whether fertilisers in fact had not been delivered on the relevant date at the destination by proving the stock register at the relevant time. It is really unfortunate that in a case of such magnitude senior officials of the concerned department were not examined. No witness from the locality of the godown was also examined to show that on the relevant dates no delivery of fertiliser at the destination had taken place. Unless by unimpeachable and convincing evidence, the factum of non delivery of such fertilisers with reference to actual stock position on the relevant date can be clearly established, in our view, it becomes very difficult to proceed on the footing that the concerned government officials issued false certificate about receipt of the goods on the dates in question. There is force in the contention of the learned counsel for the appellants that it was not unlikely that some fertilisers had in fact been delivered to the government officials at the destination. On the basis of such delivery, the certificates had been issued by them. It 0is not the case of the prosecution that the quality of the fertilisers was required to be examined by the officers at the receiving end and they had proper infrastructure to make such exercise. It has been rightly contended that it was not established that the fertilisers was not available anywhere in the locality so that it was not possible to replace the quantity of fertiliser after selling the original consignment. Simply on the basis of evidence given by lorry owners that their lorries did not carry the fertiliser or such lorries had gone to different places and some fertilisers were sold by the dealers to other persons, non delivery of fertiliser at the destination by other means can not be fully ruled out. The circumstances are undoubtedly very intriguing and raise considerable doubt but in the absence of unimpeachable direct evidence about the actual stock position at the receiving end, the indirect circumstantial evidences, in our view do not establish the prosecution case beyond all reasonable doubts. It is true

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 17 of 18  

that there is no absolute standard of proof in a criminal trial and the court should not nurture fanciful doubts by exaggerated devotion to the rule of benefit of doubt but in a case of circumstantial evidence all the links in the chain of events from which irresistible conclusion about the guilt of the accused for the offence alleged can be drawn, must be established beyond the pale of reasonable doubt. The court has to be watchful and avoid the danger of allowing suspicion to take the place of legal proof. Conviction can not be based on circumstances indicating that the prosecution case is quite likely to be true. For basing the conviction in a case governed by circumstantial evidence, the facts established must rule out any likelihood of innocence of the accused. The exact stock position on the alleged date of delivery of fertiliser which would have repelled any other possibility is unfortunately not forthcoming. It does not appear that any attempt to establish the actual stock position of fertiliser in the godown in question on the relevant date or soon thereafter with reference to register of stock or any other contemporaneous document has been made. It is only through negative and indirect evidence the prosecution is attempting to establish that the fertiliser had not been delivered. Such evidence would have been very convincing to corroporate the direct evidence about the stock position in the event the correctness of such stock position was challenged. So long the possibility of some other conclusion cannot be fully ruled out, the prosecution case remains in the realm of probability.      In the facts of the case, we are of the view that the government officials who are appellants in some of these appeals cannot be held to be guilty with all certainty and they are entitled to get the benefit of doubt. The appeals, preferred by the government officials therefore, should be allowed by setting aside the conviction of sentence passed against them by the High Court. It appears to us that although the High Court reversed the orders of acquittal in convicting the government officials, the High Court perhaps felt that some convincing evidences were lacking and it is not unlikely that for the said reasons, although the High Court convicted the government officials for serious offences charged against them only a token sentence of fine of Rs.100/- and detention till the rising of the Court had been passed which sentence normally should not have been passed.      So far as the appeals preferred by the dealers of the fertilisers are concerned, it appears to us that direct and positive evidences have been led by the prosecution to show that the fertilisers were not transported by the dealers in the manner alleged by them. If the dealers had transported the fertilisers by a different route or by any other transport and if they had sold different fertilisers, such facts were within their special knowledge and in the facts of the case, the dealers ought to have satisfied the court that the fertilisers had in fact been transported by other transports and in a manner different from what was mentioned in the bills. The evidence adduced by the prosecution by examining lorry owners, clerks of such owners, officers of the check posts on the usual routes convincingly point out that the fertiliser was not transported in the way it appeared in the bills since certified by the government officials at the destination. If some fertilisers of equal quantity had been handed over at the destination, it was not unlikely that the government officials having taken delivery of such fertilisers without appreciating the fraud and with

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 18 of 18  

reference to the record of loading of the fertiliser at port, would be justified in issuing certificate about transportation at reasonable rate by the shortest route. As the possiblity of delivering fertiliser of similar quantity which may not be qualitatively same, by procuring them locally, when non availability of fertiliser in the region had not been established by the prosecution, cannot be fully ruled out, the government officers, in our view, were entitled to benefit of doubt. But in the facts of the case, such benefit will not be available to the dealers. We, therefore, do not find any reason to interfere with the orders of conviction passed against the dealers and their appeals being Criminal Appeals Nos.163,165,166,184 and 185 of 1994 are dismissed. Criminal Appeal No.164 of 1994 has been preferred both by the dealers and the government officials. Such appeal stands allowed in part and conviction and sentence passed against the government officials being appellants Nos. 3 to 5 stand set aside and they are acquitted. But the appeal preferred by appellants Nos. 1 & 2 stands dismissed.      It is  really unfortunate that in fertiliser scandal of such magnitude,  appropriate steps at the right time had not been taken  and for  want of  convincing  and  unimpeachable evidence, the  accused who  were government  officials  have been acquitted  by giving  them benefit of doubt. It appears to us that such large scale scandal in transporting imported fertiliser would  not have  occurred  if  larger  number  of government officials  and others  than prosecuted  were  not involved.  It  is  not  unlikely  that  superior  government officials had  also played  a vital role in perpetrating the said fraud  or concealing the same. The tardy enquiries made by the  State police thereby necessitating an enquiry by the C.B.I. at  a belated  stage is  only a sad commentary on the efficiency of  the police  administration. We  may only hope that in future there will be proper vigilance and scandal of this type may not take place.