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PETITIONER: S. P. BHATNAGAR ETC.

       Vs.

RESPONDENT: STATE OF MAHARASHTRA

DATE OF JUDGMENT04/01/1979

BENCH: SINGH, JASWANT BENCH: SINGH, JASWANT REDDY, O. CHINNAPPA (J)

CITATION:  1979 AIR  826            1979 SCR  (2) 875  1979 SCC  (2) 535

ACT:      Prevention of  Corruption Act,  1947 s.  5(1) (d)  & s. 5(2)-Scope  of-Proof   of  guilt   based  on  circumstantial evidence-Tests for deciding.

HEADNOTE:      Both  the   appellants  were  officers  of  Indian  Oil Corporation.   The    Corporation   invited   tenders   from experienced  contractors   for  rock  cutting,  filling  and levelling of  certain land  acquired by  it. On the notified date it opened the tenders received from eleven contractors. But  in   the  meantime  since  it  made  a  change  in  the specification of  work to  be done it asked the tenderers to submit revised tender. The direction to submit fresh tenders was restricted only to the original 11 tenderers. Even so it was alleged  that a tender form was issued by the appellants to A-4, who was not one of the 11 tenderers. there was again a change  in the specification of the work to be done at the suggestion of  foreign collaborators.  The  appellants  were alleged  to   have  asked  the  concerned  officers  of  the Corporation to  make a  fresh survey along with A-4, keeping in  view   the  suggestion  of  the  foreign  collaborators. Eventually the  contract was  given to  A-4. The prosecution alleged that  (1) the conduct of the appellants showed their keenness to  have the  contract entrusted  to A-4.  (2)  the issue of  work order  was inflated  with figures relating to rock cutting  and filling;  and (3)  the appellants  removed certain original  documents from  the departmental files and substituted in their place fabricated material.      The appellants  who were charged with offences under s. 120B and  s. 109 IPC and s. 5(2) read with s. 5(1)(d) of the Prevention  of  Corruption  Act,  1947  were  convicted  and sentenced to undergo imprisonment.      On the question whether the appellants had been rightly convicted under  s. 5(1)(d)  of the Prevention of Corruption Act.      Allowing the appeals, ^      HELD: 1.  An analysis  of the  circumstantial  evidence adduced by  the prosecution  did not  lead to  the  unerring certainty that  the appellants  acted with  any dishonest or corrupt motive or abused their position. [904 F]

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    2. (a)  It is  well settled  that abuse of position, in order to  come within the mischief of s. 5(1)(d) of the Act, must necessarily  be dishonest so that it may be proved that the  accused  caused  deliberate  loss  to  the  department. Further it  is for  the prosecution  to prove  affirmatively that the  accused, by corrupt or illegal means or by abusing his position,  obtained any  pecuniary  advantage  for  some other person. [892 G; 893 A].      (b) Again,  the fundamental  rule relating to the proof of guilt  based on  circumstantial evidence is that there is always danger  that conjecture  or suspicion  might take the place of  legal proof. In such cases the mind is apt to take a pleasure in adapting circumstances to one another and even in straining them a 876 little, if  need be  to force  them to  form  parts  of  one connected whole  and the  more ingenious  the  mind  of  the individual the  more  likely  it  is,  in  considering  such matters, to  over-reach and  mislead itself  to supply  some little link  that is  wanting, to take for granted some fact consistent with  its  previous  theories  and  necessary  to render them complete. [893 B-D].      (c) In  cases where the evidence is of a circumstantial nature, the circumstances from which the conclusion of guilt is to  be drawn  should  in  the  first  instance  be  fully established, and  all the  facts so  established  should  be consistent only  with the  hypothesis of  the guilt  of  the accused. Again,  the circumstances should be of a conclusive nature and should be such as to exclude every hypothesis but the one  proposed to be proved. In other words there must be a chain  of evidence  so far  complete as  not to  give  any reasonable ground  for  a  conclusion  consistent  with  the innocence of the accused and it must be such as to show that within all  human probability the act must have been done by the accused. [893 D-F].           M. Narayanana  Nambiar v.  State of Kerala, [1963]      Supp.  2  SCR  724;  Major  S.  K.  Kale  v.  State  of      Maharashtra,  AIR   1977  SC   822;   Hanumant   Govind      Nergundkar v.  State of M.P., [1952] SCR 1091, AIR 1952      SC 343;  Palvinder Kaur  v. State of Punjab, [1953] SCR      94: AIR 1952 SC 354; Charan Singh v. State of U.P., AIR      1967 SC 529; referred to.      (d)  The   principle  that  inculpatory  fact  must  be inconsistent with the innocence of the accused and incapable of explanation  on any  other hypothesis  than that of guilt does not  mean that  any  extravagant  hypothesis  would  be sufficient to sustain the principle, but that the hypothesis suggested must be reasonable. [893 G].           Govinda Reddy  v. State of Mysore, AIR 1960 SC 29;           referred to.      In the  instant case  the conduct  of the appellants in preferring A-4  to any  new contractor  did  not  savour  of dishonest intentions  on their part. Although the notice was sent by  registered post  to the 11 original tenderers there is nothing  in that  notice or  elsewhere on  the record  to indicate  that   other  contractors   were  precluded   from submitting their  tenders or  that the corrigendum extending the date  for submission of the tenders was neither intended to be  published nor  was it  actually published.  The  High Court had missed this fact. The High Court was also wrong in thinking that  out of  the nine  contractors  who  submitted their revised  tenders eight  were from  the  original  nine tenderers and  the ninth  was  A-4.  In  fact  five  of  the contractors that  submitted the  fresh  tenders  were  fresh tenderers. Moreover  none of the officers of the Finance and

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Engineering Department  of the  Corporation who  handled the file relating  to the  grant of  contract  ever  raised  any objection regarding  the improper reception or entertainment of A-4’s  tender. This  showed that  there was nothing wrong about the  issue of  tender Form to A-4 or its entertainment by the  appellants. The  contract  in  question  was  not  a specialised job  requiring any extra ordinary skill. A-4 was the  Corporation’s   old  and   tried  contractor   who  had previously  executed   a  number  of  works  including  rock cutting.      (2) Though  it  cannot  be  gainsaid  that  the  second appellant had  been extremely  negligent in not scrutinising the papers,  he affixed his signature in a routine manner to the  work   order  prepared   by  his  subordinates  without realising 877 the importance  of his  act, placing  implicit faith  in the integrity of the latter. [900 E-F]      (3) There  is no  clear, cogent and convincing evidence to show that the appellants had a hand in the removal of the level plans  from the  departmental  file  relating  to  the contract and substitution of the faked plans. [900 G].

JUDGMENT:      CRIMINAL APPELLATE  JURISDICTION: Criminal  Appeal Nos. 346 and 387 of 1975.      Appeals by  Special Leave  from the  Judgment and Order dated 6-8-75 of the Bombay High Court in Criminal Appeal No. 1005 and 1006 of 1973.      Lalit Chari,  P. R.  Guna, A.  K. Srivastava and Vineet Kumar for the Appellant in Crl. A. No. 387/75.      R. L.  Kohli, P. P. Rao, R. C. Kohli and R. Nagarathnam for the Appellant in Crl. A. No. 346/75.      V. S.  Desai, H.  R. Khanna  and M.  N. Shroff  for the Respondent in both the appeals.      The Judgment of the Court was delivered by      JASWANT SINGH,  J.-The above noted two criminal appeals which are  directed against  the common  judgment and  order dated August  6, 1975  of the  High Court  of Judicature  at Bombay affirming  on appeal  the judgment  and  order  dated August  6,  1973  of  the  Special  Judge,  Greater  Bombay, convicting S. P. Bhatnagar, appellant in the aforesaid first appeal, (hereinafter  described as  A-1) under  s. 120B read with sections  409 and  109 of  the Indian Penal Code and s. 5(2)  of   the  Prevention  of  Corruption  Act,  1947,  and sentencing him  to six months simple imprisonment on each of the  said   two  courts   as  well   as  convicting   A.  S. Krishnaswamy,  appellant  in  the  aforesaid  second  appeal (hereinafter described  as  A-2)  under  the  aforesaid  two counts  but   reducing  his   sentence  from   nine  months’ imprisonment to  six months  simple imprisonment on each one of those counts, shall be disposed of by this judgment.      Briefly put the case as set up by the prosecution was:      In  1964,   the  Indian  Oil  Corporation  (hereinafter referred to  as ’the  Corporation’) which  is  a  Government owned company,  decided to  purchase 13  acres and  odd of a hilly tract  of land  situate in  village Mahul  in  Trombay (Bombay) from  the Tatas  for the  purpose of erecting black furnace oil storage tanks and construction of administrative buildings. After  the area was taken over by the Corporation Varandani (P.  W. 20),  Junior Engineer  of the  Corporation surveyed the  land in October, 1964, under the directions of A-1 and  A-2, the  Engineering Manager  and Senior  Engineer

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respectively of the Engi- 878 neering  Department   of  the   Marketing  Division  of  the Corporation with  a view  to find  out the  extent  of  rock cutting and  filling which  might be required to be done for levelling the area of 7 acres out of the said tract of land. The kacha  level plan  (Exh. 125) and worksheets prepared by Varandani  on   October  13,   1964  and  November  3,  1964 respectively during  the  course  of  his  aforesaid  survey (which were  signed by  A-1 and  A-2, showed  that 16,80,000 cft. of  rock cutting work and 8,00,000 cft. of filling work would have to be done to suit the purpose for which the land was acquired.  Estimate  (Exh.  27)  prepared  by  Varandani indicated that  expenditure at  the rate of Rs. 30/- per 100 cft. for  rock cutting and Rs. 10/- per 100 cft. for filling would have  to be incurred. Pucca tracing (Exh. 34) of level plan (Exh.  125) and  copies thereof  signed by A-1 and A-2, and contour  plan prepared  by  Varandani  and  approved  by Engineering Manager were kept on the record. On the basis of the  survey   and  the   estimate  of  expenditure  made  by Varandani,  notice   (Exh.   28)   inviting   tenders   from experienced civil  contractors for rock cutting, filling and levelling of  the land  in question  was prepared  by A-2 on February 2,  1965, and  was forwarded (under his signatures) by A-1 to the Finance Department for approval on February 5, 1965. After  the approval  of the  Finance  Department,  the Public Relations  Officer of  the Corporation  by his letter (Exh. 29)  dated February 11, 1965 requested Times of India, Indian Express  and Free  Press to publish the tender notice (Exh. 28)  wherein it  was stated  that  the  tenders  which should reach  the Corporation  by 2.30 P.M. on March 2, 1965 would be  opened at  3.00 P.M.  on that date. In response to this notice  eleven firms of contractors including Ram & Co. submitted their  tenders. N. N. Desai (hereinafter described as A-4) however abstained from submitting his tender. In the meanwhile, it  was decided  that  instead  of  having  stack measurement as provided in Exhibit 28, it would be desirable to have the measurements on the basis of differences between the existing  and finished  levels. Accordingly, on March 5, 1965, the  aforesaid eleven  tenderers were  asked to submit revised tenders on the basis of the amended tender notice by March 15, 1965.      Although fresh  tenders were restricted to the original eleven tenderers,  a  tender  form  was  issued  to  A-4  in response to the application made by him on March 8, 1965. On opening the  tenders on  March 15,  1965, it  was found that five out  of the eleven original tenderers and four new ones including A-4  had submitted  their tenders, that the tender of Ram  & Co. whereby it had quoted Rs. 28/-per 100 cft. for cutting work and ’nil amount for filling was the 879 lowest and  that the second lowest tender was of A-4 who had quoted Rs. 26/- per 100 cft. for cutting and Rs. 6/- per 100 cft. for  filling work.  Thus,  the  actual  amount  as  per quotation of  Ram &  Co. was  Rs. 4,70,400/- and that of A-4 was Rs.  4,84,800/- for  16,80,000 cft.  of cutting work and 8,00,000 cft.  of filling  work.  On  discovering  that  the tender of  his firm was the lowest, Roshan Lal, a partner of Ram &  Co. addressed  communication dated  March 20, 1965 to the Managing Director of the Corporation requesting him that the aforesaid  job of  rock cutting and filling be entrusted to his  firm in  view of  its  working  experience  detailed therein but  handed over  the same  to A-1. At or about this time, Messrs Labitos Oil Fields Limited, a British firm whom the Corporation  was trying  to collaborate  in its  project

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advised  the   Corporation  that  instead  of  three  levels (steppings) which  had been planned as per cantour map (Exh. 34) there should be a single level and instead of the survey being on  the basis  of 100  ft. spacing  as done earlier by Varadani, it  should be  on the  basis of  10  ft.  spacing. Accordingly A-1  and A-2  told Varadani  (P.W. 20) and S. D. Vaidya, another Assistant Engineer (hereinafter described as A-3) to  make a  fresh survey alongwith A-4 according to the advice of  Messers Labitos Oil Fields Limited as it had been almost  decided  to  entrust  the  aforesaid  work  to  A-4. Pursuant to  the instructions of A-1 and A-2, B. N. Desai, a representative of A-4 was associated with the revised survey which was  carried from  March 21  to March  26, 1965.  As a result of  the joint  survey, kacha level plan (Exh. 22) and work-sheet  (Exh.   23)  were  prepared  by  A-3  under  the directions of  Varandani. As a result of this survey, it was found that rock cutting and filling would have to be done to the extent of 23,30,454 cft. and 31,500 cft. respectively as against 16,80,000  cft. and  8,00,000 cft.  respectively  as found as a result of the earlier survey. Notwithstanding the large variations  in the  cutting  and  filling  work  which required to be done as a result of the revised joint survey, the Engineering  Department did not invite fresh tenders but instead prepared  another comparative statement on the basis of the  rates quoted  by Ram  & Co. and A-4 in their tenders opened on  March 15, 1965 and showed therein that the tender of A-4 had turned out to be the lowest and that of Ram & Co. to be  the second  lowest. On  April 7,  1965, A-2  drew  up tender committee  proceedings (Exh.  16) as reproduced below and  got   them  signed   by  A-1   in  the  hope  that  the recommendations  made   therein   would   be   accepted   by Srivastava, (P.W. 5) the Financial Controller and Patel, the Operation Manager  of the  Corporation, who  were the  other members of  the Tender  Committee, in  addition to  A-1  and finally by  Gopal Krishan,  the then Chairman of the Company :- 880 "Ref. No. ENG/ASK/Q 250 April 7, 1965. Subject : Tender Committee  proceedings for the finalisation           of rock  cutting, levelling  of plot,  taken  over           from M/s. Tata at Bombay.           (1) We had taken over 13.5 acres of land from M/s.      Tata Power  House at  Trombay. It was intended to level      this plot  of land and recover about 7 acres of land by      cutting and  levelling in  order to  put up  our  Black      Storage tanks  and other  allied facilities. Due to the      uneven terrain, it was decided to have two steppings so      that the  storage tanks  may be  installed at  a higher      level and  the remaining  administrative  blocks,  were      house stores  etc.,  at  a  lower  level.  Accordingly,      Public  Tenders  were  invited  for  rock  cutting  and      filling this area on 100 cft. basis.           (2) Subsequently, M/s. Lobitos Oil Fields Ltd.      Ellesmere Port, Wirral, Cheshire, had negotiations with      us for  putting up  a Transformer Oil Blending Plant at      this site. The representatives of the above firm during      their discussions  with C.  & S.  M. and M. E. (accused      No. 1)  stated, that they would like to have only plain      piece of land instead of steppings as was decided by us      previously. This  will entail  additional  cutting  and      minimise the quantity of filling.           (3)  Our   estimated   quantity   previously   was      16,80,000 cft. of cutting and 8,00,000 cft. of filling.      As per  the revision  in the levels to be maintained at      this site  that the  total quantity of cutting comes to

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    23,30,456 cft.  The quantity of filling comes to 31,500      cft. The total estimated cost for the original work was      Rs. 6,13,200/-.      A comparative  statement has  been  drawn  as  per  the tendered  rates  quoted  by  the  various  parties  and  the position of the first three is as follows:- ____________________________________________________________ S. Name of Contractor   Qty.     Rate       Amount   Total No.                              %Cft. ____________________________________________________________ 1  N.N. Desai           Cutting  23,30,450                                  26/- Sd.   605917   607807                         Filing   31500 Cft.   1890                                  6/- 2  Ram & Co.            Cutting  2330450    652526    652526                                  28/- Cft.                         Filing   31500         -                                  Cft. free 3  Library Construction Cutting  2330450    652526                                  28/- Cft.            655676                         Filing   31500 Cft.   3150 ____________________________________________________________ 881      M/s. N. N. Desai, Contractor are the lowest. The Tender      Committee therefore  recommends that  this work  may be      allotted to  M/s. N.  N.  Desai,  Contractor  at  their      quoted  rate   of  Rs.   6,07,807/-  being  the  lowest      tenderer.           Sd/- (S. P. Bhatnagar)     M. E.                                           (A. K. Srivastava)                                                 F.O.                                                (H. B. Patel)                                                  O.M.      Approved      (P. A. Gopalakrishnan)                                                   Chairman."      Contrary to the expectations of A-1 and A-2, Srivastava (P.W. 5)  refused to  be a  party to  the  Tender  Committee recommendations.  Ignoring   not  only   the  opposition  of Srivastava and the suggestion of the Accounts Officer of the Finance Department  and the  Assistant Finance Controller of the  Corporation   made  vide  Exhibit  68  and  Exhibit  31 respectively   while   processing   the   tender   committee proceedings that  in view of the fact that both the quantity and value  of the  work had  increased  substantially  as  a result of the revised survey, it would be fair and proper to ask all  the contractors  who had  responded to  the  tender notice to re-submit their quotations but also the offer made by Ram  & Co.  (which  possessed  the  requisite  skill  and equipment) to execute the contract at the lower rates of Rs. 20/- per 100 cft. for rock cutting and Rs. 15/- per 100 cft. for filling  as well as the flat refusal to reduce his rates given by  A-4  during  the  negotiations  conducted  at  the suggestion of  the Accounts Department of the Corporation on April 17,  1965 with  the  three  contractors  mentioned  in Exhibit 16,  A-2 carried  on, in pursuance of the conspiracy entered  into   between  himself   and  A-1  and  A-4  fresh negotiations with  A-4 on  or about  April 20,  1965 without associating  any   member  of  the  Finance  Department  and persuaded him  to accept the lowest revised rates offered by Ram  &  Co.  although  he  did  not  possess  the  requisite experience in and equipment for rock cutting and filling and by passing  the Financial Controller forwarded the papers to

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the Operation  Manager who  not being  conversant  with  the proceedings supported A-2 for entrusting the contract to A-4 at the  lowest rates  offered by  Ram &  Co. On  the  Tender Committee  recommendations   reaching  him  in  circulation. Srivastava put  on record  his bold and emphatic protest but eventually reluctantly gave his con- 882 currence  to   the  recommendations  made  by  A-1  and  the Operation Manager as is evident from the concluding sentence of the Note:           "The case  is recommended  for acceptance  of  the      Chairman  only  because  the  Engineering  Manager  has      certified that  he would  not be  able  to  accept  any      responsibility about  the deadline if work is not given      to Desai."      Although according  to A-2’s note (Exh. 33) dated April 19, 1965, the Coordinator and Sales Manager was keen to have the site  developed as early as possible, the latter held up the matter  for nearly  three months in the vain expectation that the  work would  be done  free of  cost either  by  the Government of  Maharashtra or  the Bharat Sevak Samaj and it was not before July 15, 1967 that he gave his approval to A- 1’s  proposal  to  award  the  contract  to  A-4  whereafter accepting the  said proposal  the Managing  Director of  the Marketing Division and Chairman of the Board of Directors of the Corporation  accorded sanction to the entrustment of the work to  A-4. On  receipt of the sanction, A-1 forwarded the papers with  his endorsement  to the Financial Controller on July 29,  1965. On  July 30,  1965,  work  order  (Exh.  19) manifesting quantity of rock cutting work as 29,30,450 cft., filling work  as 90,000  cft. and  value of  the work as Rs. 5,99,590/- as against the corresponding figures of 23,30,450 cft.,  31,500   cft.  and  Rs.  4,70,000/-  respectively  as specified in  the final  sanction which  was  based  on  the aforesaid level statement (Exh. 22) and work sheet (Exh. 23) was prepared  and handed  over by  A-2 to A-4. Copies of the work order were also endorsed by A-2 to the Bills Section of the Engineering  Department and  the Accounts Section of the Finance Department  of the  Corporation with the endorsement "the above  has Chairman’s  approval on  our  note  of  even reference dated  7th April  1965. Please  have the agreement executed. Earnest  money of  unsuccessful tenderers may also please be refunded early." On July 30, 1965, formal contract (Exh. 74)  mentioning only  the number  and date of the work order in  the blank columns of the printed form was prepared and signed  by A-4  and a representative of the Company. The joint level  statement Exhibit 22 and the work sheet Exhibit 23 in  respect of the joint survey made between March 21 and 26, 1965  for ascertaining  the extent  of rock  cutting and filling which formed the basis for invitation of tenders and the final  sanction in  favour of  A-4 were  not  only  left unsigned by the concerned but were actually removed from the file and  were substituted  by spurious level plan (Exh. 24) and its  copy (Exh.  38) which  were fabricated  by  A-3  to justify the  inflated figures  of rock  cutting and  filling work mentioned in the work order (Exh. 19) dated 883 July 29/30, 1965. On August 19, 1965, fabricated level plans (Exhibits 24  and 38)  prepared by  A-3 were  sent to A-4 as annexures to Exhibit 106 which ran as under:-      "We are  enclosing herewith two prints of spot level of      land area  to be  dressed and  levelled at  our Trombay      plot.           The whole  plot should  be brought  to a  level of      102.00 as directed.

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         Please return  to us  a copy  of  the  Blue  Print      showing  spot   levels  duly   signed  as  a  token  of      acceptance of the same for payment."      While A-4  retained one  of  the  spurious  plans  viz. Exhibit 38  with himself, he returned the other viz. Exhibit 24  after  putting  his  initials  thereon.  Thereafter  A-3 endorsed on the letter Exhibit 106 that ’the print signed by A-4 should be filed by Sukhtankar (P.W. 13) who is in charge of  the   filing  section.’  Accordingly,  Sukhtankar  filed Exhibit 106  alongwith Exhibit  24 in  the Bill Section. The actual rock  cutting operations  commenced with  effect from August 1,  1965 and  on August  27, 1965,  A-4 prepared  and submitted the  first running  bill (Exhibit  51)  indicating that 8,00,000  cft. of  cutting  work  and  80,000  cft.  of filling work  had been  completed. This bill was accompanied by the certificate of A-3 reading as under :-           "The measurements  on which  column No.  3 of this      bill are based were taken by me on 24-8-65 and recorded      at pages of MMC No. 7201. Certified that the quantities      of work  actually executed as shown in column No. 4 has      actually been  done and  in no  case less  than the  on      account payments claimed."      The above  certificate  was  countersigned  by  A-2  on August 26,  1965. A-2,  A-3 and  A-4 also signed measurement certificate (Exhibit 52) which read as follows:-           "We certify  that the measurements given above are      the actual  works carried  out in  accordance with  the      drawings and  specifications as  indicated in  the work      order referred to above."      On the  basis  of  these  certificates,  the  first  on account running bill was passed and paid for. Thereafter the second and  third running bills and measurement certificates Exhibits 53 and 54 dated Septem- 884 ber 16,  1965 and  November 17,  1965 respectively  claiming that the  additional  cutting  work  of  5,00,000  cft.  and 8,00,000 cft.  had been  done were  likewise prepared by A-4 and signed  by A-3  and counter-signed  by A-2.  The  fourth running bill  and measurement  certificate (Exh.  55)  dated February 22,  1966 claiming  that  additional  work  to  the extent of  7,00,000 cft.  had been  done was prepared by A-4 and signed  by A-3.  This bill which was countersigned by K. S. Joshi,  another Senior  Engineer who  was put incharge of the Project  in the  absence of A-2 who had been transferred to Delhi was also paid.      On November  8, 1966,  one Gurunath  Naik (P.W. 17) who was working  as a Junior or Assistant Engineer for some time in Bombay  and for the remaining period at Allahabad, Kanpur and Mugalsarai  was called  by A-1  and asked to see Ramrao, the then  Junior Engineering  Manager. Accordingly  Naik met Ramrao who directed him to go to the spot and have the level drawings. Pursuant  to this direction, Naik went to the site for spot verification and reported to Ramrao vide Exhibit 18 that excepting  at one  place where  he got a level of 102-9 nowhere else  did he  get a level of 102. Naik also reported that as  against an  area of  7.4  acres  which  had  to  be levelled hardly  an area  of 4.8  acres was  attempted to be levelled. On December 30, 1966, A-4 submitted his final bill (Exh. 56)  claiming to have completed the work by August 11, 1966. This bill bore the certificate dated December 29, 1966 of A-3  to the  effect that the measurements on which column No. 3  of the  bill was based was taken by him on that date, and had  been recorded  in the  measurements of the M.B.M.C. book. A-3  also recorded a further certificate to the effect that the  work had  been completed  100%  according  to  the

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specifications and  drawings. This  certificate of  A-3  was followed by  another certificate of A-4 that he accepted the above certificate  and certified  that the amount of payment which he  received on  that bill  would be in full and final settlement  of  all  his  claims  in  respect  of  the  work excepting the  refund of his security deposit. By this bill, A-4 claimed  to have  done 3,84,720 cft. of cutting work and 18,200 cft.  of filling work in addition to the work covered by the  four earlier running bills. Thus A-4 claimed to have done 31,84,720  cft. of rock cutting work and 98,200 cft. of filling work.  On this  bill, which bore the certificates of A-3 and A-4 was countersigned by Ramrao on December 30, 1961 and wherein  it was falsely claimed by A-4 that the work was completed on  August 11,  1966-although that  date was  also much beyond  the stipulated  date-A-3 recorded the following note:- 885           "The final  bill amounts  to Rs. 6,51,674/- and is           in excess  of work  order amount  by  Rs.  52,084.           Since this  excess is  within 10%  of the  ordered           amount, M.E. may kindly approve."      Accordingly  the   papers  were  laid  before  A-1  who accorded the  desired approval  the moment the bill was laid before him  and sent  it for payment to the Accounts Officer ignoring  the   practice  which   required  all  such  bills involving an  excess of 10% over the sanctioned amount to be submitted to  the Chairman  for sanction. On the bill coming before the  Accounts Department for scrutiny, it pointed out that since the actual work exceeded the sanctioned amount by Rs. 52,084/-  for  which  originally  the  approval  of  the Chairman was  taken, the  excess needed to be regularised by obtaining his  sanction. It was also pointed out that as the contractor had  not completed the work within the stipulated time, the question of imposition of penalty also required to be considered.  On the  pay  order  being  returned  to  the Engineering Department,  Ramrao, the then Deputy Engineering Manager, submitted the following reply vide Exhibit 59 dated January 12, 1967:-           "The work is now completed as required. However to      acquire the  required level  and gradient, the quantity      of work  has increased.  The party  has  now  submitted      their  final  bill  for  this  work  amounting  to  Rs.      6,51,674/- which  is in excess by Rs. 52,084/- than the      original amount of work order.           The excess is within 10% of the original estimate,      M.D. is  therefore  requested  to  kindly  approve  the      excess work  done and  to pass  the final  bill for Rs.      6,51,674/-.           As  per  the  work  order,  the  work  was  to  be      completed within  4 months (120 working days). However,      the Contractors  could not complete this work including      the disposal  of the  excavated stuff  within this time      limit due  to the  fact  that  there  was  no  approach      available to  this plot.  The party  has completed  the      work expeditiously,  after the  approach was  given  to      them by M/s. Tatas.           M. D.  is therefore,  requested to  consider  this      aspect and  approve the time limit extension upto 11-8-      1966, the  date on  which the  party has  completed the      work." 886      On the  matter coming  back to  the Finance Department, Shende (P.W. 16) pointed out that not only the quantities of rock cutting  and filling  work which were found as a result of the  survey made  between March  21 and 26, 1965 had been

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enormously inflated  in the  work order but the work claimed to  have  been  done  also  exceeded  the  inflated  figures mentioned in  the work  order. He, therefore, suggested that the Department might agree to the payment of extra amount to A-4 subject  to A-1’s  obtaining the  Board’s  ratification. Sometime before March 28, 1967, Krishnaswamy Rajam (P.W. 1), the Chief  Internal Auditor,  was summoned  by the  Managing Director and  the General  Manager and  was asked  to have a personal talk  with A-3  in connection  with the  matter. On P.W. 1’s  questioning A-3 on March 28, 1967, the latter made confessional statement  (Exh. 21)  which is reproduced below for facility of reference:-           "Regarding rock  cutting and  filling  at  Trombay      site I  wish  to  bring  to  your  kind  attention  the      following:                     I was  assigned to  this job  after  the                work was  started at site by M/s N. N. Desai.                The  original   estimates  for   cutting  and                filling were 16,80,000 cft. and 8,00,000 cft.                respectively.  It   was  later   revised   to                23,30,450 cft.  and 31,500  cft. for  cutting                and filling. I have got the workings for this                revision with  me at Ahmedabad. (He refers to                the genuine  level statements  and plans  and                worksheets Exs. 22 and 23 which were prepared                by him  under  the  directions  of  Varandani                between 21st and 26th March, 1965).                     Later on  I was  advised by my superiors                to  give  a  still  further  upward  revision                giving the  quantities as  29,30,450 cft. for                cutting and 90,000 cft. for filling. The work                sheets  prepared   by  me   and   signed   by                contractor only  (N. N. Desai) has no bearing                to actual  quantities involved.  I had merely                acted as  asked by  my superiors in preparing                worksheets accordingly  which has resulted in                this  upward  revision.  I  have  also  given                measurement certificates  in this  regard  in                line with  the revised  wrong  quantities.  I                realise  now  this  has  resulted  in  making                excess payments  to the  contractor. I beg to                be excused for having done such a thing which                was  done   solely  at  the  instance  of  my                superiors in Engineering Depart- 887                ment. E.M.  (accused No.  1) and Dy. E.M. are                aware of this."      Thereupon P.W.  1 put up the papers before the Managing Director and  the General  Manager who  advised him to start investigation on  particular lines. During the course of the inquiry, A-2 told P.W. 1 that the work order which as far as he remembered  was prepared  by A-3  was cursorily signed by him due  to heavy  rush of  work and that while checking the running bills submitted for payment, he normally checked the percentage of  progress of  work certified  by the Assistant Engineer. On further investigation made on April 1, 1967, A- 3 produced  the genuine  level statement  (Exh. 22)  and the work sheet  (Exh. 23)  before P.W.  1 and  told him that the substitution of  the fabricated  level  statement  and  work sheet relating  to rock  cutting and  filling at Trombay was done at  the instance  of Joshi,  A-2 and  A-1 and that they were aware  of the  same. To the further question as to what was the basis for the work order for the figure of 29,00,000 cft. of  rock cutting  and 90,000  cft. of filling, A-3 told P.W. 1  that there  was no  basis for the work order and the

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quantities were  fixed to suit sanctioned amount. On a query being made  by P.W.  1 from Ramrao regarding the final bill, he  admitted   that  he   had  not  personally  checked  the calculations and  had counter-signed the bill relying on the accuracy of  the measurements  shown in  the bill  which was prepared  by   A-3.  He  further  stated  that  he  had  not personally checked  the calculations based on the final bill and initialled  joint levels  which according  to  him  were normally done  by the  Assistant Engineer. During the course of this  inquiry, Murthy  (P.W. 18)  was deputed  by A-1 and Krishnaswamy (P.W.  1) to  go to  the spot  and find out the work which  had actually  been done. Thereupon, Murthy (P.W. 18) submitted  his interim  report on April 6, 1967 pointing out that  at  only  one  place  the  level  was  103.94  and elsewhere it  remained much  more. By his final report (Exh. 44) dated  April 20, 1967, Murthy (P.W. 18) pointed out that actually on  the spot only 9,73,000 cft. of rock cutting and 50,000 cft.  of filling  had been  done. After recording the statements of  A-2,  A-3  and  A-4,  Krishnaswamy  (P.W.  1) submitted a  detailed report  (Exh. 25)  on April 8, 1967 to the Managing  Director through  the Financial Controller. In his report, P.W. 1 also pointed out that contour plan/levels statement which in case of this nature are jointly signed by the contractor  and the  representative of  the  Engineering Department were  not  available  in  the  instant  case  for inspection and  that A-3  had  produced  a  level  statement alleged to  have been  processed by  him and Varandani which was not signed by any body including A-3’s superiors. P.W. 1 also 888 pointed out  in the course of the report that the quantities of rock  cutting and  filling shown  in the  work order were 29,30,450 cft.  and 90,000  cft. respectively and that there was  an   increase  of   6,00,000  cft.   of  rock   cutting straightaway. Krishnaswamy  (P.W. 1)  also mentioned  in his report that according to A-3, the level statement giving the figure of  29,30,450 cft.  for cutting  and 90,000  cft. for filling had been signed by A-4.      On the  report being  put up  before the then Financial Controller, he  directed that  before  proceeding  with  the matter, it  was necessary  to call  for the comments of A-1. Thereupon after  calling for  a report from Ramrao, A-1 gave his comments  vide Exhibit  178 dated April 17, 1967 wherein after doubting the competence and qualification of P.W. 1 to hold the investigation, he offered to send one of the senior engineers from  Western Branch  to carry  out an independent survey to  find out  the quantity  of work  done by  A-4 and suggested that  measurements might  be made  by reference to the kacha  level statement  (Exh. 125), the work sheet (Exh. 126) and the contour plan (Exh. 34) which were checked by A- 2 and approved by him and which must be with the department. On April  18, 1967,  A-1 sent  for A-3 and questioned him in regard to  the  matter.  In  the  statement  penned  by  A-3 himself, he  stated that he changed the levels of drawing of Trombay plot  regarding rock  cutting and filling job at the instance of A-2 and KSJ (i.e. Joshi) but did not inform A-1.      On May  3, 1967,  A-1 issued  show cause notices to A-2 and A-3  with a  view to  hold departmental  enquiry against them. By  his reply  dated May  20, 1967  to the  show cause notice, A-3  stated that he had changed the original contour plan at the instance of A-2.      On getting  information on  July 15,  1967 that A-4 was having some rock cutting done on the site although he had in his final  bill claimed that he had fully completed the work on August  11, 1966, A-1 and A-2 visited the site along with

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Lakshmanan, the Operations Manager and finding that the work of rock cutting was still going on and that the claim of A-4 as certified  by A-3  and countersigned  by Ramrao about the work having been completed on August 11, 1966 was apparently false had  the measurements of rock cutting and filling work taken by  Ganapathy. As  the measurements  taken by Ganpathy were on  the basis of level plans prepared by Tatas in which the bench mark was 94.5 as against the bench mark of 100 for the survey  in  question,  the  Managing  Director  had  the measurements taken  by M/s  R. L.  Dalal & Co. The report of Dalal &  Co. showed  that the  rock cutting  work  done  was 9,60,000 cft. and filling work was 1,96,000 cft. only. 889      On July 28, 1967, the Managing Director issued a charge sheet to  A-1, A-2,  A-3 and  Ramrao. In  his reply (Exh.64) dated August 4, 1967 to the charge sheet, A-3 submitted that whatever he  did was  under the orders of A-1 and the Deputy Engineering Manager.  This time he did not mention A-2 to be responsible for  anything done  by him. On the same day i.e. August 4, 1967, A-1 sent for A-3 in his cabin and questioned him in  the  presence  of  three  other  officers  viz.  Roy Chowdhary (P.W.2),  who was the Deputy Financial Controller, Shriyan (P.W.23),  the Assistant  Engineer,  and  Vora,  the Senior  Engineer.  On  this  Occasion,  A-3  allegedly  made statement (Exh.43)  absolving A-1  and throwing  the  entire responsibility on A-2. While the three other officers and A- 1 signed the statement (Exh.48) made by A-3, A-3 declined to sign it  and fled  away from  the chamber on some excuse and rushed  to  the  chamber  of  Krishnaswamy,  Chief  Internal Auditor whereupon Roy Chowdhary (P.W.2) also followed A-3 to the chamber of Krishnaswamy. In the chamber of Krishnaswamy, A-3  resiled  from  the  statement.  Having  regard  to  the position  adopted  by  A-3  in  resiling  from  his  earlier statement  of  that  very  day  before  A-1,  Roy  Chowdhary reminded him  that in  the morning  in his  presence, he had stated that it was A-2 who was responsible for asking him to change the  drawing and  increase the  quantities.  To  this question of Roy Chowdhary in the chamber of Krishnaswamy, A- 3 replied in the negative and stated that A-1 called him and Joshi  into  his  room  and  instructed  him  personally  to increase the  quantity. When  questioned by Roy Chowdhary as to why he did not come out with that truth in the room of A- 1 in  the presence of Roy Chowdhary, A-3 replied that he did not do so out of fear or A-1.      In his  reply to  the charge  sheet, Ramrao  inter alia stated that  he signed  the bill  (Exh.56)  relying  on  the certificate of  A-3 who  had been  assigned to  the job  and added that  according to  the  practice  prevailing  in  the Corporation, Senior  Engineers were  not expected  to verify the measurements.  Elaborating his  explanation,  he  stated that just  as Senior  Engineer, Doraiswamy could not proceed to a  BPI nor Senior Engineer Vora nor Senior Engineer Chari could proceed  to an  installation just to verify the billed quantities in  view of  the fact that there were a number of bills on  each work  order and  so many work orders for each location. Similarly  in the  Branches, Senior  Engineers who were  controlling   the  work   for  so   many  depots   and installations were  not expected to verify the quantities in each bill;  that however,  if there  was a  dispute with the contractor or  there was  some other  reason  to  doubt  the correctness of  the Assistant  Engineer’s  certificate,  the Senior 890 Engineer might  either take measurements himself or get them taken by  another Assistant Engineer; that subsequent to the

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counter signature  by the  Senior  Engineer,  the  bill  was passed on  to the  Engineering Bills Section where the bills were checked  by  the  Accountant  against  sanctions,  work order, rates  and amounts, deductions for cement A.C. sheets or other  materials supplied and security; deposit etc; that the Accountant  prepared the  pay  order  giving  all  these details for  signature  by  a  Senior  Engineer  as  far  as possible other than the countersigning Senior Engineer; that the bill  then went  to the Accounts Department where it was subjected to  further detailed scrutiny before payment; that on December  30, 1966  Vaidya brought  the bill  for  Rs.79, 674/- dated  December 30, 1966 to him for counter signature; that it  would have  normally been put up to K. S. Joshi but was brought  to him as he was not available; that Vaidya was the Assistant  Engineer who  had handled  that contract from the time  of placing  the work  order; that the bill was for the work  carried out  by the  Contractor subsequent  to the previous  ’on   account  bill’  21-2-66  (nearly  10  months earlier) i.e. about 3.18 lakhs cft. at Rs. 20/- per 100 cft. of cutting  and 18,200  cft. of  filling at Rs. 15/- per 100 cft;  that  he  had  visited  Trombay  number  of  times  in connection with  other works  during the  period  commencing from August,  1966 and  was aware  that the  Contractor  had carried out  approximately that  much work during 1966; that the extra quantity required sanction of competent authority; that the previous bills passed showed that the major portion of the  work was  carried out  during the  period August  to December, 1965  and about  7 lakhs  CFT  of  cutting  during December, 1965  to February,  1966; that  A. S. Krishnaswamy who placed  the work  order had  countersigned bills upto 21 lakhs cft. of cutting and 80,000 cft. of filling as early as November  17,   1965  and   subsequently  K.  S.  Joshi  had countersigned a  bill for  an additional  7  lakhs  cft.  of cutting and  the contractor  had already  been paid Rs. 5.72 lakhs   less    security   deposit;   that   he,   therefore countersigned the bill dated December 30, 1966 and passed it on to  M.E. for  approval of  the extra quantity of cutting; that M.E.  approved on  the same date and the bills was sent to Engineering  Bills for  scrutiny  by  the  Accountant  in respect of  sanctions, work  order terms  etc; that  he also particularly instructed  that the bill should be shown to K. S. Joshi  before the pay order was issued since normally the bill should have gone to him for counter signature; that the Accountant carried  out his  instructions; that  the counter signature did  not denote  final passing  of a bill but only that it  might be proceeded further and subjected to all the necessary  administrative   and  financial   checks   before payment; that  all the bills for the work had been certified by the  Assistant Engineer  incharge who  was fully familiar with work and the previous bills had been counter- 891 signed by  colleagues of status equal to him; that he had no reasons to   suspect  any malpractice  or mistakes  and also there was  no dispute  with contractor; that he had exercise the normal technical checks which were the functions denoted by counter signature as per the prevailing practice and that countersignature did not imply correctness of the quantities certified  by   the  Assistant   Engineer  (who   alone  was responsible for  the correctness)  in either  the current or previous bills.      When  the  matter  was  thus  pending,  a  confidential information  reached  Rege,  the  Deputy  Superintendent  of Police, C.B.I. (P.W. 27) who registered the case on December 27, 1967. During the course of investigation, he visited the office of  the Corporation, took charge of all the concerned

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documents, had  the site measured by Shivashankar, Technical Examiner, Central Intelligence Service, (P.W.4) according to whom the cutting and filling work done by the contractor was to  the   extent  of   9,61,000  cft.   and  1,50,000   cft. respectively and  after  securing  the  requisite  sanction, prosecuted A-1,  A-2 and  A-3 and  also submitted the charge sheet against  A-4 with the result that all the four accused were convicted.      In these  appeals, we have had the advantage of hearing full  dressed   arguments  of  counsel  on  both  sides  who diligently prepared the case and put across their respective contentions with great ability.      We must point out at the outset that although the trial court had  clearly acquitted A-1 of the charge under section 409 read  with section  120-B and  section 109 of the Indian Penal Code it unfortunately forgot to keep that fact in mind with the  result that  while concluding its judgment it held him guilty  on that charge as well. In the circumstances, it was not  open to  the High  Court in the appeal by A-1 to go into that  charge and reverse the findings arrived at by the trial court.  We will  accordingly  be  concerned  with  the question of  validity of A-1’s conviction under section 5(2) read with  section 5(1)(d)  of the  Prevention of Corruption Act only  but so  far as  A-2 is  concerned, we will have to examine  the  validity  of  his  conviction  under  all  the charges. Before  examining the  sufficiency or  otherwise of the material  bearing,  on  the  charges  against  both  the appellants, we consider it necessary to have a clear concept of the  meaning and  ambit of the phraseology "by corrupt or illegal means or by otherwise abusing his position as public servant" used  in  section  5(1)(d)  of  the  Prevention  of Corruption Act,  1947 (hereinafter referred to as ’the Act’) for the  contravention of  which the  appellants  have  been convicted. It  will be  advantageous in  this connection  to refer to two decisions rendered by this 892 Court in  M. Narayanana  Nambiar v.  State of  Kerala(1) and Major S.  K. Kale  v. State  of Maharashtra.(2) In the first case, Subba Rao, J. (as he then was) while construing clause (d) of sub-section (1) of section 5 of the Act observed:-      "The pharaseology ’by otherwise abusing his position as      public servant’  covers acts  done  otherwise  than  by      corrupt or  illegal means  by an  officer  abusing  his      position. 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 surplusage,      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 colour  from the preceding words along with which      it appears  in the  clause, that  is to  say  something      savouring of  dishonest act on his part. The contention      of the  learned counsel  that if  the clause  is widely      construed  even  a  recommendation  made  by  a  public      servant for  securing a job for another may come within      the clause  and that  could not have been the intention      of the  Legislature. But in our view such inocuous acts      will  not   be  covered   by  the   said  clause.   The

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    juxtaposition of  the word  otherwise’ with  the  words      "corrupt or  illegal means"  and the dishonesty implict      in the  word  "abuse"  indicate  the  necessity  for  a      dishonest intention on his part to bring him within the      meaning of  the clause.  Whether he abused his position      or not depends upon the facts of each case."      Following the decision in M. Narayanan Nambiar v. State of Kerala  (supra), it was held by this Court in Major S. K. Kale v.  State of  Maharashtra (supra)  that the  abuse of a position in order to come within the mischief of the section must necessarily  be dishonest so that it may be proved that the accused caused deliberate loss to the department. It was further held  in this case that it is for the prosecution to prove affirmatively  that the  accused by corrupt or illegal means or  by abusing  his position  obtained  any  pecuniary advantage for some other 893 person. It  would, therefore,  be necessary  to find  out in this case  as to  whether the  accused abused their position and acted dishonestly or with a corrupt or oblique motive in having the  contract in  question entrusted  to A-4.  As the courts below  have rested their judgments on a constellation of circumstances,  it would  be well  to bear  in  mind  the fundamental rule  relating to  the proof  of guilt  based on circumstantial evidence  which has  been settled  by a  long line of  decisions of  this Court. The rule is to the effect that in cases depending on circumstantial evidence, there is always the  danger that conjecture or suspicion may take the place of  legal proof. In such cases the mind is apt to take a pleasure  in adapting  circumstances to  one another,  and even in  straining them  a little, if need be, to force them to form parts of one connected whole; and the more ingenious the  mind   of  the  individual,  the  more  likely  it  is, considering such  matters to cover reach and mislead itself, to supply  some little  link that  is wanting,  to take  for granted some  fact consistent with its previous theories and necessary to render them complete.      In cases  where the  evidence is  of  a  circumstantial nature, the circumstances from which the conclusion of guilt is to  be drawn  should  in  the  first  instance  be  fully established, and  all the  facts so  established  should  be consistent only  with the  hypotheisis of  the guilt  of the accused. Again,  the circumstances should be of a conclusive nature  and   they  should  be  such  as  to  exclude  every hypothesis but  the one  proposed to  be  proved.  In  other words, there  must be a chain of evidence so far complete as not  to  leave  any  reasonable  grounds  for  a  conclusion consistent with  the innocence of the accused and it must be such as  to show  that within  all human probability the act must have  been done  by the  accused. (See  Hanumant Govind Nargundkar v.  State of  M.P.,(1) Palvinder Kaur v. State of Punjab(2) and Charan Singh v. State of U.P.(3).      The   principle   that   inculpatory   fact   must   be inconsistent with the innocence of the accused and incapable of explanation  on any  other hypothesis  than that of guilt does not  mean that  any  extravagant  hypothesis  would  be sufficient to sustain the principle, but that the hypothesis suggested must be reasonable. (See Govinda Reddy v. State of Mysore(4). 894      Keeping in  view the  aforesaid construction  placed on section 5(1)(d) of the Act and the principles with regard to proof of  guilt based on circumstantial evidence, let us now turn to  the various  circumstances which  have been  relied upon by  the High Court in holding the appellants guilty and

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see whether  they factually exist and if so whether they are of such  a character  as to  be wholly incompatible with the innocence of  the appellants  and consistent only with their guilt. In  so doing,  we purpose  to  divide  the  aforesaid circumstances under  the following broad heads and deal with them seriatim:-           1.   The  conduct  of  the  appellants  evidencing                their keenness to have the contract entrusted                to A-4.           2.   Issue of  work order  (Exh. 19) with inflated                figures relating to rock cutting and filling.           3.   Removal of  statement of level plan (Exh. 22)                and   work   sheet   (Exh.   23)   from   the                departmental   file   and   fabrication   and                substitution in their place of the fabricated                ones by A-3.           4.   Despatch on August 19, 1965 of spurious level                plan (Exh.  24) and its copy (Exh. 38) by A-2                to A-4 as annexures to Exhibit 106.           5.   Counter-signing of the on running bills by A-                2.           6.   The initialling of the final bill by A-1.      The first circumstance relied upon by the High Court in this behalf  is that  though the  revised tender  notice was limited  to   the  eleven  contractors  who  had  originally submitted their  tenders in  response to  the Tender  Notice (Exh. 28),  the appellants  improperly  got  a  tender  form issued to A-4 and entertained by the Tender Committee. It is true that  the copies of Exhibit 15 on which the prosecution has sought  to rely  were sent  by registered  post  to  the eleven original  tenderers by  the Engineering Department of the Corporation  but it  cannot be  overlooked that there is nothing in  Exhibit 15 or elshhere on the record to indicate that other  contractors were precluded from submitting their tenders or  that the  corrigendum  extending  the  date  for submission  of  the  tenders  was  neither  intended  to  be published nor  was it  actually published. It seems that the attention  of   the  High   Court  was   not  drawn  to  the communication (Exh.  29) dated  March 9,  1965 addressed  by Ranganath, Public Relations 895 Officer, to  the Advertisement  Manager, Times  of India and others and  the corrigendum  forming annexure  thereto which ran as under:-    " INDIAN OIL CORPORATION LIMITED (MARKETING DIVISION)                 Clarke Road, Mahalaxmi, Bombay-34, WB, India              IN REPLY PLEASE REFER TO PR 31 317                       9th March, 1965 To           The Advertisement Manager,           The Times of India, (Bombay)           The Indian Express, (Bombay)           Free Press Journal, (Bombay) Dear Sir,           Subject: Tender No. 249/65 Corrigendum      Attached is  text of  an  advertisement  for  IMMEDIATE Publication  utilising  the  minimum  possible  space  under Public Notice/Tenders or in its appropriate place.      We would  appreciate  your  treating  this  request  as URGENT. Thanking you.                                            Yours faithfully,                                                         Sd/-                                            (B. V. Ranganath)                                     Public Relations Officer Encl: One.

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         c.c. Engineering  Manager, H.O.  with reference to           their inter-office  memo No-  Eng/ASK  dated  9-3-           1965. We  are trying  to get it published on March           10.       INDIAN OIL CORPORATION LTD. (MARKETING DIVISION)           Corrigendum to Public Tender No. 249/65           The last  date for  receiving this Tender has been           extended to 15th March, 1965 at 2-30 P.M. and will           be opened the same day at 3-00 P.M." 896      The attention  of the  High Court also does not seem to have been invited to the above noted endorsement at the foot of Exhibit 29.      The High  Court also seems to be wrong in thinking that out of  the nine  contractors who submitted their tenders in response to  the revised  tender notice, eight were from the original nine tenders and the ninth was A-4. A comparison of the two  lists viz.  the one of the original tenders and the other of  those contactors  who submitted  their tenders  in response to  the revised  tender notice  would make it clear that five  contractors appearing  in the  second  list  were fresh tenderers.      The Financial  Controller’s note  (Exh. 17) dated April 2, 1965  which appears  to be  the outcome  of some personal pique itself  shows that  it was only on April 15, 1965 that it was  agreed between  the members  of the Tender Committee that the  grant of the contract would be confined to one the of the three lowest tenderers, one of whom was A-4.      The fact  that none  of  the  eleven  officers  of  the Finance and  the Engineering  Department of  the Corporation who handled  the file  relating to the grant of the contract in question ever raised any objection regarding the improper reception  or   entertainment  of   A-4’s  tender   by   the Engineering Department  is a proof positive of the fact that there was nothing wrong about the issue of tender form to A- 4 or its entertainment by the appellants.      Thus it  is clear  that the  first circumstance  relied upon by  the High  Court had  no factual existence and could not be pressed into service against the appellants.      The next finding of the High Court that while Ram & Co. was best  fitted for entrustment of the contract in question in view  of the  vast experience  and equipment possessed by it, A-4  did not  have any  such merit.  It is  a matter  of common knowledge  that rock cutting is not a specialised job and no  extra-ordinary skill  or experience  is required for the same  and that  every civil  construction involves  some sort of  rock cutting.  It is  also in evidence that A-4 who was  the   Corporation’s  old   and  tried   contractor  had previously executed 98 works including the one on the An-top Hill  in   Bombay  for   the  Corporation   to  its   entire satisfication, and  out of  the aforesaid works many related to installations  which  were  more  complicated  than  rock cutting and  filling. It  would also  be noticed that in the notes put up 897 by  them   neither  Srivastava   (P.W.  5)  nor  Shivananda, Superintendent, nor  Khurana, Assistant Financial Controller of the  Finance Department,  nor the  Operation Manager ever pointed out  that A14  lacked the  requisite  experience  or competence  which  disentitled  him  to  the  grant  of  the contract. In fact Shivananda and Khurana had suggested as an alternative to  inviting fresh  tenders that  A-4 should  be asked to  reduce his rates in view of the revised figures on account of  which the  value of  the contract  had  gone  up considerably.

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    It would  also be  noticed that  the High  Court  while rightly holding that Exhibit 122 was not delivered to A-1 by Roshan Lal (P.W. 19) tell into an error in observing that A- 1 had a hand in suppressing it. It seems to have escaped its notice that  at the negotiations conducted on April 17, 1965 with the  three lowest  tenderers viz.  Ram and Co., Liberty and Co.,  and A-4  by the  Tender Committee, of which P.W. 5 was a  prominent member,  Roshan Lal  was present  and while pressing his  firm’s claim  to the  grant of the contract he did draw  the attention  of the  members of the Committee to the contents  of Ext.  122 sent  earlier by  his firm to the Corporation. This is evident from Roshan Lal’s own admission that he  informed the  corporation  in  writing  as  to  his experience in  the line  and whatever  he had written he had also told  the concerned  officers who  were two or there in number. If A-1 would have had a hand in suppressing Ext. 122 he would  not have allowed it is to remain on the file. That apart a  bare perusal  of report  Ext. 33  which  is  fairly detailed is  enough to  show that  neither A-1  nor A-2  was interested in  suppressing or  distorting any material fact. There was,  therefore,  hardly  any  justification  for  the observation in question.      The third finding of the High Court that the appellants told Vrindani (P.W. 20) and Vaidya (A-3) that it had already been decided to entrust the contract to A-4 and in order not to loose  time, a  joint survey  should  be  made,  is  also erroneous. It is unbelievable that A-1 and A-2 who were pre- occupied with  several projects  would go  and tell Vrindani who was  three or  four steps  below them and was admittedly not a  member of  the conspiracy  nor concerned  with policy matters that  it had  been already  decided  to  assign  the contract to  A-4. The  aforesaid briefing  attributed to the appellants also  seems to  be incredible in view of the fact that it  was only  on the  basis of  the level  measurements taken by  P.W. 20  and A-3  during the  survey made  by them between March  20 and 26, 1965 that A-4 turned out to be the lowest tenderer and at the time when the briefing is alleged to have been given the lowest tender was of Ram & Co. 898      The insinuation  implicit in  the fourth finding of the High Court  that Exts.  16, 17,  30-33 and  123 led  to  the inference that  A-1 was  the author  and  architect  of  the proposal  for   acceptance  of   A-4’s   tender,   is   also unwarranted. There  is nothing  in these documents which can be interpreted  to indicate  that the appellant was actuated by any  ulterior or  corrupt motive or that he was guilty of any  mis-demeanour,  irregularity  or  impropriety.  On  the contrary the  said documents  particularly Exts.  16 and 33, which like  an open  book fairly  set-out all  the facts and circumstances bearing  upon the allotment of the contract in question including  the claim  thereto of Ram & Co. not only manifest, that  the procedure  referred to  by P.W. 1 in his deposition for  inviting  and  finalizing  the  tenders  was meticulously  followed   in  the   present  case,  but  also establish A-1’s  bona fides. It has also to be borne in mind that the  Tender Committee  which comprised of the Operation Manager and  the Financial Controller in addition to A-1 had only an  advisory role  to play  and the decision to entrust the  contract  to  a  particular  contractor  lay  with  the Chairman of  the Board of Directors in consultation with the coordinator and  Sales Manager  who  was  above  the  Tender Committee. That  the appellant’s  proposal favouring A-4 was in the  interest of  the corporation  both from the point of view of economy as well as speedy and satisfactory execution of work  and was solely inspired by his concern to avoid the

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sad experience  which the corporation had in respect of rock cutting work at An-top hill with the Kore Brothers which was a new  party is  evident from the following endorsement made on A-33 by H. B. Patel, Operation Manager:-           "In view  of the  urgency and  our past experience      with a  new party  at An-top  hill, I  agree to  Senior      Engineer’s proposal  that we give the job to M/s. N. N.      Desai at the lowest tendered rates."      The fifth finding of the High Court that the appellants had negotiations  on their  own with  A-4  with  a  sinister object is  also against  the weight  of the  material on the record. The  act of  the appellants  in trying  to ascertain from A-4  whether he was prepared to reduce his rates to the level of  M/s. Ram  & Co.  which seems to have been taken in consultation and  agreement with P.W. 5 was, in our opinion, guiltless, It  would be  well to remember in this connection that Shrivastava  P.W. 5  himself admitted  in the course of his deposition  that there was practice in their corporation of asking the second lowest tenderer to match his rates with the lowest  tender. The proposal about the allotment of work in favour  of A-4  was, therefore,  not only consistent with the  practice   but  was   also  in   the  interest  of  the corporation. 899      In view  of the foregoing we are inclined to think that the conduct  of the  appellants in  prefering A-4 to any new contractor did not savour of dishonest intention.      Re. 2:  Coming to  the work  order (Exh. 19) containing inflated  figures   which  is   the  corner   stone  of  the prosecution case, it may be pointed out that the prosecution has not  been able  to  produce  any  evidence  showing  the circumstances under  which it  was prepared. The observation od the  High Court  that the work order must be the creation of not  only A-2  but of  A-1 as well seems to be based upon mere conjecture.  It would  be noticed  that the  work order does not  bear the signatures of A-1 and there is nothing to show that  in the  normal course, the work order had to come to A-1  before being  issued to  A-4 We  cannot also in this connection afford  to lose sight of the observations made by the trial  court at page 279 of the Paper Book that ’it is a common ground  that accused  No. 1 is not concerned with the making of the order and that it is also a common ground that a work  order is  issued by the Engineer Incharge’. In these circumstances, it  is difficult  to understand  how the High Court came  to the  conclusion that the work order (Exh. 19) was the  creation of  not only  A-2 but  of A-1  as well. It seems that  the finding  of the High Court was influenced by its finding  with regard  to Exhibits  16 and  33. In  view, however, of  our finding  with regard to Exhibits 16 and 33, the observation  of the  High Court  that the work order was also the  creation of  A-1 cannot  be substained.  We  will, accordingly advert to the material on the record with a view only to see how far it reflects on the bonafides of A-2. The prosecution has  not led  any evidence  to  prove  that  A-2 dictated or  prepared the  work order. The proven facts show that according  to the  normal  practice  prevalent  in  the department it  is not the Senior Engineer like appellant No. 2 who  is incharge of the Project that prepared a work order but an  assistant or  Junior Engineer  in charge of the work working under  him. Although  Varandani has in the course of his deposition  tried to  suggest that  the work  order  was prepared by A-2, his suggestion cannot be relied upon in the face of  Exhibit 67  wherein he  told P.W.  1 that  the work order was  presumably prepared  by Vaidya, A-3. It is highly improbable that on the very day of the grant of the sanction

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of the  contract in  question A-2  would take  the extremely hazardous step  of inflating  the figures  to  obtain  undue advantage for  A-4 specially  when he  knew that  the  fraud would be  at once  discovered by  reference to  the sanction which had been transmitted to the Finance Department.      The prosecution  theory  that  the  work  order  giving inflated figures  was not  only signed but was also prepared by A-2 is also negatived 900 by the  following endorsement  on the copy of the work order sent to  the Bills  and Accounts Sections of the Engineering Department of the Corporation:           "The above  has Chairman’s approval on our note of      even reference  dated 7th  April, 1965. Please have the      agreement  executed.   Earnest  money  of  unsuccessful      tenderers may be refunded early."      The above  quoted endorsement completely demolished the prosecution case.  If A-2 had been the author of Exhibit 19, or had  suspected that  his subordinate  would have dared to inflate the quantities of the work, it is inconceivable that he would  have made  the above  quoted insertion  giving the particulars of  the  above  mentioned  note  meant  for  the Chairman’s aproval  in the  copy of the work order addressed to  the   Bills  and  Accounts  Sections  which  would  have furnished a  valuable clue  for the  speedy detection of the fraud that is alleged to have been perpetrated.      Again if  A-2 were really a conspirator who had falsely inflated the figures of rock cutting and filling in the work order  he   would  have   seen  to  it  that  the  potential documentary evidence  embodied in  Exhibit 125  which showed the genuine  levels on  the spot  was destroyed or done away with. The  fact that  he did  not do  anything of  the  kind raises a strong doubt about his culpability.      Thus though  it cannot  be gainsaid  that A-2  has been extremely negligent in not scrutinising the papers, it seems to us  that he affixed his signatures in a routine manner to the work  order prepared by his subordinate engineer without realizing the  importance of  his act placing implicit faith in the integrity of the latter.      Re.  3:  There  is  no  clear,  cogent  and  convincing evidence to  show that  A-1 or A-2 or both had a hand in the removal of  the level plan (Exh. 22) or the work sheet (Exh. 23) from  the departmental  file relating to the contract in question and  substitution in their place of the faked level plan  (Exh.   24)  and  work  sheet  (Exh.  38)  which  were admittedly fabricated  by A-3. The statements made from time to time  by A-3  in  this  behalf  being  contradictory  and discrepant as would be evident from the following table: ____________________________________________________________ S.  Date       No.of           Text of the statement No             the Exhi-                bit ____________________________________________________________ 1   28-3-1967   21      The Original estimates for cutting                         and filling were 16,80,000 cft. and                         8,00,000 cft. respectively. It was                         later revised 23,30,450 cft. and                         31,500 cft 901 ____________________________________________________________ S.  Date       No.of            Text of the statement No             the Exhi-                bit ____________________________________________________________                         for cutting and filing.. Later on I

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                       was advised by my superior in Engg.                         Dept., E and Dy. E.M. to give a                         still further upward revision                         giving the quantities as 29,30,450                         cft. for cutting and 90,000 cft.                         for filling. 2  1-4-1967      36     ASK, KSJ and SPB asked me to substi-                         tute SHS relating to rock cutting &                         filling at Trombay which was                         resulted in larger quantities of                         cutting and filling and they are                         fully aware of it. 3  18-4-1967  39 & 41   I told R. Krishnaswamy when he                         called me on 29-3-1967 that A.S.                         Krishnaswamy and K.S. Joshi told                         me to change the levels of drawings                         of Trombay plot regarding rock                         cutting/filling job . In reply to                         the further query of R. Krishna-                         swamy, I told him that I did not                         inform M.E. about this and that he                         might be knowing. 5  20-5-1967    69      In addition to the statement dated                         18-4-1967, I have to submit that I                         was asked to change the original                         contour, place by A.S. Krishnaswamy,                         Senior Engineer. 6  4-8-1967     43      Sometime in September, 1965, A.S.                         Krishnaswamy told me to increase                         the levels at random and bring the                         quality to about 30 lakhs cft. I did                         so accordingly. 7  4-8-1967      42     The Engineering Manager called me                         and Shri Joshi into his room one day                         and instructed me personally to                         increase the quantity. ____________________________________________________________ the prosecution  ought to  have made  a serious  attempt  to produce K.  S. Joshi  whose testimony was essential to clear up the  mystery in  which the  whole affair is shrouded. The non-production of  K. S.  Joshi who appears to have been one of the  main actors  in the drama has left a lacuna which is very difficult  to bridge. In the present state of evidence, it  is   inconceivable  that   A-1  who   admittedly  had  a meritorious record of service, had won commendation from the Board  of   Directors  for   designing  a  tank  and  saving considerable sums  of money  and who  was the  only Head  of Department to  be given  three advance  increments  for  his integrity and  efficient work  and who  had no  are to grind would be a party to the unholy conspiracy for the removal of genuine level  plan and work sheet and their substitution by spurious ones  simply to obtain some pecuniary advantage for A-4 who was neither his friend nor relative. The position of A-2 is also 902 not materially different as in his case also the prosecution has not  been able to show that he derived any monetary gain out of the transaction.      Re. 4  :-A  bare  perusal  of  statement  contained  in Exhibit 43  which according  to H.N.  Roy Chowdhary (P.W. 2) and C.  L. Shriyan (P.W. 23) was voluntarily and without any pressure made  by A-3  is enough  to show  that  it  was  in September, 1965  that A-3  increased the levels shown in the original drawings  and  brought  up  the  quantity  of  rock cutting to  30 lakhs  cft. This statement totally knocks the

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bottom out  of the  prosecution case that the spurious level plan and the work sheet were despatched to A-4 on August 19, 1965 as  annexures to  Exhibit 106. If the spurious plan and the work sheet came into existence in September, 1965, it is difficult to  understand how they could be despatched to A-4 alongwith Exhibit  106 on  August 19,  1965. The conclusion, therefore, is irresistible that when the communication (Exh. 106) was  despatched to  A-4,  it  was  not  accompanied  by fabricated level plan (Exh. 24) and work sheet (Exh. 38) but by the  genuine ones viz. Exhibits 22 and 23 and that it was later on  that the genuine ones were removed and retained by A-3 who  during the course of the enquiry by R. Krishnaswamy (P.W. 1) brought them from Ahmedabad and handed them over to P.W. 1.  The ommission  on the part of Shriyan who claims to be certain  that A-3  got the  tracings Exhibits  24 and  38 prepared by him in April/May, 1965 to contradict A-3 when he made the  aforesaid statement  (Exh. 43)  is also intriguing and lends assurance to the correctness of our conclusion.      Re. 5:-The  first thing to be borne in mind with regard to the measurement certificates on the running bills is that it is  the Assistant  Engineer incharge  of the  work who is responsible for taking measurements of the actual quantities of the work executed by the contractor for entering the same in the measurement book and for recording a certificate that the measurements  given in  the bill  are of the actual work carried out  on spot  in accordance  with  the  Department’s drawings and  specifications. It  has also  to be remembered that A-1  had to  look after  the Corporation’s projects and installations all  over India  and A-2 had to look after and supervise a large number of the Corporation’s projects under the  Western   Branch  which   included   installations   at Sabarmati, Ahmedabad,  Okha and Kandla in Gujarat and Sewri, Wadala and  Trombay  in  Maharashtra  and  parts  of  Madhya Pradesh. It cannot also be ignored that according to Ganpati (D.W.  3)  when  a  Senior  Engineer  visits  the  site,  he determines the  progress of  the work  by visual  inspection determining visually the approximate 903 quantity of the work done. All this apart, an examination of the running  bills (Exhibits  51, 53,  54, 55  and 56) shows that all  of them  bear the  certificates as referred to and reproduced at  page 11  of this  judgment. It would be noted that whereas  first three  of these  bills bear the counter- signatures   of    A-2,   Bill    (Exh.   55)    bears   the countersignatures of  K. S.  Joshi, Senior Engineer and Bill (Exh. 56)  bears the  counter-signatures of  Ramrao, another Senior  Engineer,  who  was  absolved  in  the  departmental enquiry. Now the fact that A-2 countersigned the first three bills does  not  appear  to  be  material  in  view  of  the following statement made by Ramrao vide Exhibit 107:-           "I had  no reason  to doubt Shri Vaidya’s figures.      Countersignature  of  a  bill  as  per  our  prevailing      practice is  not indicative  of verification  but  only      indicates  that   there  is  no  reason  to  doubt  the      correctness of the figures."      The fact  that  K.  S.  Joshi,  Senior  Engineer,  also countersigned the  bill (Exh.  55) which  contains  inflated figures and  no action  was taken  against  him  also  lends assurance to  the inference that the counter-signatures were appended merely  as a  routine by  the Senior  Engineers who seem to  have reposed  blind and  unflinching faith  on  the honesty of their subordinates.      Now if  Ramrao who  countersigned the  bill  (Exh.  56) showing the  quantity of  cutting work  as 31 lakhs cft. was exonerated in  the departmental  enquiry and  no action  was

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taken against  K. S. Joshi who made the wrong endorsement in respect of the measurement on Exhibit 55 or against Vora who had prepared  the note  (Exh. 58)  showing that the work had been completed,  it is difficult to understand how A-2 could be treated  differently and criminal intention attributed to him. The  finding of  the High Court in respect of the third running bill  (Exh. 54)  that the  very defence of A-2 would itself furnish the best evidence of the conspiracy involving A-1 is  not correct  for apart  from other  infirmities from which if  suffer, it  is well settled that the defence taken by one  accused cannot in law be treated as evidence against his co-accused.      Re. 6  :-The finding  of the High Court that A-1 signed the bill  (Exh. 56)  and sanctioned  excess amount  involved knowing full well that the bill was not true is also against weight of the evidence on the record. It cannot in the first instance be  forgotten that it was on July 29, 1965 that A-1 could have  had occasion  to see the figures of the work for which sanction  was granted  by the Chairman of the Board of Directors and the bill (Exh. 56) was put up to him on 904 December 30, 1967. In the absence of the sanction from which the genuine figures could have been gleaned, it would not be reasonable to  expect A-1 to remember the sanctioned figures after the  lapse of  17 months specially when it is admitted on  all  hands  that  being  the  head  of  the  Engineering Department, he  had to tour extensively to supervise several projects spread  all  over  the  country  and  to  discharge multifarious duties  in connection  therewith. The  bill, it would be  noted was prepared by A-3 and was countersigned by no less  a functionary  than the Deputy Engineering Manager, Ramrao, who  was next  below A-1  in the  hierarchy  of  the Department. In  the note prepared by him, it was not pointed out by A-3 that the bill had to go to the Managing Director. The evidence  in the  case  also  shows  that  A-1  was  not expected  to   meticulously  scrutinize  the  bill  but  was concerned only  with  the  initialling  of  the  note  which although  it  had  passed  through  several  hands  did  not indicate that  the competent authority to grant sanction for the  excess   amount  was  the  Chairman  of  the  Board  of Directors.      It will  also be  wrong to  hold  A-1  responsible  for simply initialling  the note contained in Exhibit 56 without examining Ramrao  who approved  the bill  including the note and also countersigned the measurement certificate before it came to  A-1. In  the circumstances, the mere initialling by A-1 of the bill alongside the note marked for him by A-2 is, therefore not  a circumstance which can unmistakably be said to point to the guilt of the appellant.      An analysis  of the  circumstantial evidence adduced by the prosecution  does not in our opinion lead to an unerring certainty that  A-1 and  A-2 acted  with  any  dishonest  or corrupt motive or abused their position.      In  conclusion  we  cannot  help  observing  that  non- examination by  the prosecution  of Ramrao,  Joshi, Vora and Patel who  were material  witnesses for the unfolding of its case has  left some  yawning gaps  in the  evidence which we have found  very difficult  to bridge.  If these persons had been produce  many of the points which have remained obscure and hidden up would have been cleared up.      For the  foregoing reasons,  we allow  the appeals, set aside the  convictions of  the appellants  and the sentences imposed upon them and acquit them of the offences with which they were charged. P.B.R.                                      Appeals allowed.

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