Dr. Kamal Gurung vs State Of Sikkim on 9 June, 2015

[Cites 12, Cited by 2]

Sikkim High Court

Dr. Kamal Gurung vs State Of Sikkim on 9 June, 2015

1. This appeal seeks to assail judgment dated 24.03.2014 of the Special Judge, Prevention of Corruption Act, 1988, (in short "P.C. Act") East Sikkim at Gangtok in Sessions Trial (Vig) Case No. 1 of 2011, by which the Appellant/Accused was convicted under Section 420 read with Section 120B IPC and Section 13(1)(d)(ii) punishable under Section 13(2) of the P.C. Act, 1988, and sentenced to undergo simple imprisonment for one year and to pay a fine of Rs.5000/- (Rupees five thousand) only for the offence under Section 13(1)(d)(ii) of the Act and, in default of payment of fine, to undergo further simple imprisonment of five months. For the offence under Section 420 of the Indian Penal Code, 1860 (for short "IPC") the Appellant/Accused along with two other accused persons, namely, Accused No.2 B.K. Rai and Accused No.3 S.K. Pradhan, were sentenced to undergo simple imprisonment of 4 (four) months and to pay a fine of Rs.1,000/- (Rupees one thousand) each and, in default of payment of fine to undergo further simple imprisonment of Crl. A. No. 09 of 2014 Dr. Kamal Gurung vs. State of Sikkim 3 one month and, for the offence under Section 120B of the IPC, the Accused/Appellant and each of the other two Accused persons, B.K. Rai and S.K. Pradhan, were sentenced to simple imprisonment of 4 (four) months. The sentences were directed to run concurrently.

2. The gravamen of the prosecution case is that a preliminary inquiry into a source information that a Maruti Alto (LXI) vehicle, bearing Registration No.SK-02/A-0524, belonging, to the Sikkim Milk Union (in short "SMU"), Tadong, East Sikkim, which had run only for two years was disposed of for a sum of Rs.1,01,000/- (Rupees one lakh and one thousand) only by the Appellant who was the Managing Director of SMU, resulted in a Regular Case bearing No.RC- 4/2007 dated 01.05.2007 being registered by the Sikkim Vigilance Police suo moto against the Appellant/Accused under Section 13(2) read with 13(1)(d)(ii) of the P.C. Act, and investigation taken up.

3. It was revealed during the investigation that Maruti Car Alto (LXI) Car, purchased by the SMU in November, 2004 at a cost of Rs.3,17,931/- (Rupees three lakhs seventeen thousand nine hundred and thirty one) only, was disposed of in February, 2007, at a consideration value of Rs. 1,01,000/- Crl. A. No. 09 of 2014 Dr. Kamal Gurung vs. State of Sikkim 4 (Rupees one lakh and one thousand) only to Smt. Mamta Gurung P.W. 10, wife of the Accused/Appellant, without following proper procedure thereby causing pecuniary loss of Rs.1,28,705/- (Rupees one lakh twenty eight thousand seven hundred and five) only, to the SMU.

4. Investigation further revealed that the SMU is a registered Cooperative Society under the Sikkim Cooperative Societies Act, 1978, being provided with financial aid by the Government of Sikkim. The Accused/Appellant, a Member of the State Veterinary Services, was posted on deputation to the SMU by the State Government as its Managing Director in February, 2004. The questioned vehicle SK-02/A-0524 purchased in November, 2004, for official work of the Managing Director, had undergone only minor repairs.

5. In February, 2007, before being repatriated to his parent Department, the Accused/Appellant entered into a Criminal conspiracy with Accused no.2, B.K. Rai and Accused no.3, S.K. Pradhan, the Accountant and Joint General Manager respectively of the SMU, to acquire the vehicle at a cost lower than its disposal value without putting it up for public auction. By doing so, the Accused/Appellant intended to cheat the SMU and obtain for himself undue pecuniary advantage by abusing Crl. A. No. 09 of 2014 Dr. Kamal Gurung vs. State of Sikkim 5 his position as a public servant. In furtherance to this conspiracy, the Accused/Appellant arranged for three quotations for purchase of the vehicle, out of which the highest price of Rs.81,000/- (Rupees eighty one thousand) was quoted by his wife P.W.10, and the other two from his neighbours, namely, one B.B. Subba P.W.9, and Tika Gurung P.W. 27 for Rs.75,000/- (Rupees seventy five thousand) and Rs.65,000/- (Rupees sixty five thousand) respectively. The Accused no.2 B.K. Rai, processed the file for disposal of the vehicle fraudulently and dishonestly projecting the vehicle to be in a poor condition requiring thorough overhauling and assessed the depreciation value of the vehicle at Rs.2,72,000/- (Rupees two lakhs seventy two thousand) only.

6. The said Accused no.2 then submitted the proposal to the Accused no.3 S. K. Pradhan, the then Joint General Manager of SMU who although was fully aware of the exercise, recommended the proposal to the Chairman, P.W.5, SMU, for his approval knowing fully well that under the Bye-Laws of the SMU the Chairman was not empowered to grant such approval. The technical valuation carried out during the investigation estimated the value of the vehicle at the time of Crl. A. No. 09 of 2014 Dr. Kamal Gurung vs. State of Sikkim 6 disposal at Rs.2,29,705.15/- (Rupees two lakhs twenty nine thousand seven hundred five and paisa fifteen) only.

7. Sanction required under Section 19 P.C. Act, 1988 to prosecute the Accused no.2 B. K. Rai and Accused no.3 S. K. Pradhan, having been refused by their appointing authority, the Board of the SMU, Charge-sheet was submitted against the Accused/Appellant under Section 120-B read with Sections 420 IPC and Sections 13(1)(d)(ii) read with Section 13(2) of the P.C. Act, and, against the Accused persons, B.K. Rai and S. K. Pradhan, under Section 120B read with Section 420 IPC.

8. The trial against them for the offences resulted in their conviction and being sentenced in the manner as already disclosed earlier.

9. Mr. N. B. Khatiwada, Learned Senior Counsel appearing on behalf of the Accused/Appellant at the outset contended that the primary charge against the Accused/Appellant under Section 420 IPC was not at all made out from the facts and circumstances of the case as the essential ingredient for offence of cheating which is "dishonestly induces the person to deliver any property to any Crl. A. No. 09 of 2014 Dr. Kamal Gurung vs. State of Sikkim 7 person" has not been made out. The element of inducement, the crucial requirement of the offence, is completely missing as can be gathered from the entire procedure followed in the file pertaining to the questioned vehicle marked Exhibit 8 (Collectively) but, would rather demonstrate that and requisite procedures had been followed giving reasons for putting the vehicle on sale, working out its depreciated cost and in justifying the offer made to the highest bidder, P.W.10, at a negotiated rate.

10. After satisfying himself of the entire proposal put up by the Accused no.2, it was forwarded by the Accused no.3 to the then Managing Director, the Accused No.1 who is the Appellant herein. He in turn submitted it to the Chairman, SMU, and the Chairman after due consideration approved the proposal. That since the Chairman is competent to grant such approval under Clause 22 of the Bye-Laws of the SMU, no illegality could be attached to the entire transaction.

11. The fact that there was no inducement exercised by the Appellant, as per the Learned Counsel, would also be revealed by the evidence of Man Bir Rai P.W.5, the Chairman, who in his evidence has confirmed that the Board had refused sanction for prosecution against the Accused Nos. 2 and 3 and Crl. A. No. 09 of 2014 Dr. Kamal Gurung vs. State of Sikkim 8 that he had no grievance against them. He has also confirmed that under the Bye-Laws it is neither mandatory to advertise before auctioning a vehicle nor is it compulsory for the valuations to be done by the Sikkim Nationalised Transport Department (SNT). It is also categorically stated by him in his evidence that he had approved the proposal after having perused and understood the contents of the note.

12. Mr. N. B. Khatiwada, goes on to submit that when the SMU which is said to have suffered pecuniary loss, has itself not accepted this charge thereby negating the element of inducement, no case under Section 420 IPC can be said to have been made out. Against the allegation of fraud and dishonesty, it is contended despite the fact that the vehicle was little more than two years old after its purchased, the proposal of Accused No. 2, B. K. Rai, reflects that, since it was not in a proper condition due to major engine break down requiring thorough overhauling, it would preferable to get it auctioned rather than getting it repaired. That the evidence of the Chairman of the SMU P.W.5, would also reveal that the vehicle attached to Managing Director has to run in all Districts of Sikkim except, the North District under which circumstance, as per Learned Counsel, a small vehicle like an Alto car would Crl. A. No. 09 of 2014 Dr. Kamal Gurung vs. State of Sikkim 9 certainly not last thereby adding credibility to the proposal of the Accused No.2.

13. It is pointed out that D.W.1, Bhanu Bhakta Chettri, Secretary of the Milk Collection Centre, Assam Lingzey, Gairi Gaon, in his evidence has disclosed that the Accused/Appellant used to go to the Centre in a small car driving on the impitched rough road leading to the centre which later began to give problems requiring at times to help the Accused/Appellant push to get it started and, that on several occasions the vehicle would not start and had to be towed. These, as per the Learned Senior Counsel, would undoubtedly prove that the questioned vehicle was indeed in a rundown condition.

14. It is further submitted that the evidence of the Assistant Engineer (Mechanical), Sikkim Nationalised Transport Department (SNT), P.W. 12, was not reliable as admittedly he had not inspected the engine, the gear box and the chassis except for checking the lubricant. P.W.13, General Manager, Sikkim Nationalised Transport Department (SNT), who was one of the Members of the Committee set up for valuation of the questioned vehicle, was unaware as to how the Assistant Engineer, P.W.12, inspected the vehicle to arrive at the Crl. A. No. 09 of 2014 Dr. Kamal Gurung vs. State of Sikkim 10 valuation. Both P.Ws. 12, and 13, did not see the log book of the vehicle. In fact P.W. 12, was not aware of the noting of the Accused No.2 that the vehicle required thorough overhauling and its engine repaired. In fact, the evidence of P.W.13, is of no value at all as he was not physically present when P.W.12 was carrying out the work of valuation contrary to what was stated by P.W.12. It was contended that the unreliability of the evidence of both P.Ws. 12 and 13 rendered the valuation arrived at by P.W.12, seriously doubtful.

15. It was next contended from the very evidence of (1) Shri Tika Gurung P.W.27, (2) Shri B. B. Subba P.W.9 and (3) Smt. Mamta Gurung P.W. 10, who submitted the three quotations it is manifest that they had done so after they had heard of the questioned vehicle being auctioned. The prosecution which produced these witnesses, did not at all been question them as to how they had submitted the quotations on days earlier than 15.02.2007 when the decision was taken. P.W.10, Mamta Gurung, has not been made an Accused although she is the beneficiary of the alleged misconduct on the part of the Accused/Appellant.

16. It is thus submitted that the Prosecution has failed to make out any case against the Accused/Appellant under Crl. A. No. 09 of 2014 Dr. Kamal Gurung vs. State of Sikkim 11 Section 420 IPC and, therefore, the impugned judgment deserves to be set aside.

17. Mr. Karma Thinlay Namgyal, Learned Additional Public Prosecutor, supporting the impugned judgment contended that firstly, it had been falsely made out in the note of the Accused no.2 that the vehicle was in a state of disrepair when the vehicle was only just over two years old after its purchase. The file Exhibit 8 (Collectively) would show that the notes preceding that of the Accused No.2 dated 15.2.2007 at page 12, reflected only minor expenses incurred towards small repairs of the vehicle which clearly belies the proposal of Accused No.2.

18. Secondly, the applications making offers of purchase submitted by P.Ws.9, 10, and 27, a few days before the date of the note at values just below the ultimate price of Rs.1,01,000/- (Rupees one lakh one thousand) only, negotiated in favour of the Mrs. Mamta Gurung P.W.10, would clearly reveal that the entire exercise was a fraud played upon the SMU to cheat it and cause it pecuniary loss by the Accused/Appellant by abusing his position in connivance with the Accused Nos. 2 and 3. This would also be apparent, as per him, when it has been revealed that the P.W.9, B.B. Subba, Crl. A. No. 09 of 2014 Dr. Kamal Gurung vs. State of Sikkim 12 and P.W. 27, Tika Gurung are neighbours of Mrs. Mamta Gurung, P.W.10, the wife of the Accused/Appellant.

19. It was then contended that the illegality of the transaction in question would be revealed even from the past practice adopted by SMU as would appear from Exhibit A, a table showing such practices. As per the Bye-Laws, it was the Board and not the Chairman, which had the power to approve the proposal of the kind involved in the present case. Reference in this regard is made to clause no. 21.2.15 of the Bye-Laws. As per him, even if the decision was taken due to emergent necessity, the matter ought to have been placed before the next General Meeting of the Board. That was not complied with as would appear from the minutes of the 85th Board meeting held on 10.01.2007 and the 86th Special Board Meeting held on 22.02.2007 which are dates before and after 15.02.2007 when the offending decision was taken.

20. The facts and circumstances, therefore, would indicate that there was a blatant violation of the Bye-Laws and the procedures in the entire exercise committed by the Accused/Appellant and the Accused Nos.2 and 3. Crl. A. No. 09 of 2014 Dr. Kamal Gurung vs. State of Sikkim 13

21. I have considered the rival contentions placed by the Learned Counsels. I have also examined the entire records and the evidence.

22. The foundation of the case of the Prosecution is that the proposal dated 15.02.2007 was a result of a criminal conspiracy entered into between the Accused No.1, Appellant herein, and the Accused Nos. 2 and 3. This, as per the prosecution, was revealed by the Accused persons having contravened the procedure and the Bye-Laws. Their case is that as per the Financial Rules governing the State Government, it was incumbent upon the Accused persons to have first of all got the vehicle valued by the Sikkim Nationalised Transport Department (SNT) and thereafter ought to have put it on auction by publication in the newspapers. Non-compliance of the procedures by the Appellant and the Accused Nos.2 and 3 reveals the criminal intent on their part to commit the offence charged against them.

23. I am, however, not convinced by this. In the first place, the allegation only appears to be of contravention of procedure. It is a legally accepted principle that procedural errors alone would not necessarily attract criminal offence. The note dated 15.2.2007 containing the proposal of the Crl. A. No. 09 of 2014 Dr. Kamal Gurung vs. State of Sikkim 14 Accused No.2 would reveal that the vehicle was first valued at Rs.2,72,000/- (Rupees two lakhs seventy two thousand) only against the original cost of Rs. 3,17,931/- (Rupees three lakhs seventeen thousand nine hundred thirty one). There is clear justification given in the note as to why the valuation should pragmatically be fixed at Rs.1.01,000/- (Rupees one lakh one thousand) only. The condition of the vehicle has also been reflected which is supported by the evidence of D.W.1, Bhanu Bhakta Chettri. Apart from the fact that the prosecution not only has failed to contradict these evidence, no convincing evidence have been produced by them as proof to the contrary. The entire charge against the Accused/Appellant appears to be assumptions based upon the proposal dated 15.02.2015.

24. The evidence of P.W. 12 on the valuation of the vehicle is not at all convincing. Although he claims to have applied the format applicable for such valuation no document indicating the method applied by him was produced. Most surprisingly he did not inspect engine, gear box and chassis of the questioned vehicle which are the most vital parts, particularly, when it has been stated in the questioned proposal that it was the engine which required through Crl. A. No. 09 of 2014 Dr. Kamal Gurung vs. State of Sikkim 15 overhauling. The evidence of P.W.13, who is the Member of the Committee for valuation set up for the purpose, does not support the evidence of P.W.12 in as much as he was not at all present when the P.W.12 was conducting the exercise of valuation and was also not aware as to how such valuation was arrived at.

25. Next that seriously impairs the case of the Prosecution is the evidence of P.W.24, P. Senthil Kumar, the successor to the Appellant/Accused as Managing Director. It has come in his evidence that the Government of Sikkim Financial Rules does not apply to the SMU as it follows its own procedure. That under Clause 22.0 of the Bye-Laws, the Chairman disposes of matters requiring immediate decision on behalf of the Board. That there was no irregularity in the manner in which the file was processed by the Accused Nos.2 and 3 pertaining to the disposal of the vehicle. These have been substantially corroborated by the Chairman P.W.5. The prosecution has completely failed to dislodge these evidence.

26. The other aspect which throws considerable doubt on the Prosecution case is the fact that the Chairman P.W.5, SMU, who approved the recommendation of Accused No.2, was not made an accused. The fact that no criminality was Crl. A. No. 09 of 2014 Dr. Kamal Gurung vs. State of Sikkim 16 attached to his action would imply that the approval accorded by him was valid and as per the powers vested in him by the Bye-Laws of the Sikkim Milk Union. It would also lead one to reasonably conclude that the proposal approved by him was also legal and valid.

27. The imputation being drawn on the wife of the Accused/Appellant No.1, Mamta Gurung, P.Ws. 10, 9 and 27 submitting their offers earlier to the date of finalisation of the proposal of Accused No.2 also does not appear to be the convincing. If it is the case of the prosecution that these witnesses including P.W.10, were in connivance or in conspiracy with the Accused persons, it was expected of the prosecution to have made P.W.10 atleast to have been made an Accused in the case being the benefactor of the alleged abuse of power by the Appellant/Accused No.1. She has rather been made a witness for the Prosecution, and that too, curiously to the seizure of her own hand writing and finger prints. On the application submitted by her, she is found to have answered in the affirmative in her examination-in-Chief to the effect that she had made an application to the Chairman P.W.5, Sikkim Milk Union, for purchase of the questioned vehicle on auction. Nothing further has come out of it. In my Crl. A. No. 09 of 2014 Dr. Kamal Gurung vs. State of Sikkim 17 view this is a circumstances which also seriously erodes the case of the Prosecution.

28. Even the other applicant P.W.9, on his part has deposed in his statement-in-Chief that he had come to know of a vehicle of the SMU being auctioned as a condemned vehicle and, being interested to purchase it, he had also made an application addressed to the Appellant/Accused No.1. Similar is the statement of P.W.27. All that he has proved are, as in the case of P.Ws. 9 and 10, his own specimen signature and hand writing and answering affirmatively to the question as to whether he had quoted his offer for purchase of the questioned vehicle.

29. From the entire facts and circumstances and evidence, it is quite apparent that criminality against the Accused persons is being imputated only on account of their alleged contravention of the procedure and the Rules. Considering the evidence of the Chairman P.W.5, Sikkim Milk Union, and the present Managing Director P.W.24, P. Senthil Kumar, even the allegation of contravention of rules does not appear to be negated and, therefore, non-existent. Crl. A. No. 09 of 2014 Dr. Kamal Gurung vs. State of Sikkim 18

30. The note dated 15.2.2007 of the Accused No.3, clearly reflects the deliberative process preceding the ones that led to the said proposal. The run down condition of the question vehicle could not be displaced by the Prosecution. The value fixed at Rs.1,01,000/- (Rupees one lakh one thousand) only, also has been justified satisfactorily as being pragmatic. Considering the market value, offer of Rs.81,000/- (Rupees eighty one thousand) made by Mamta Gurung P.W.10, wife of the Appellant/Accused No.1, being the highest, she was asked to pay the upward negotiated price of Rs. 1,01,000/- (Rupees one lakh one thousand) only to which she had agreed. These were officially processed and put up by the Accused No.2, to the Joint General Manager, the Accused No.3, who then placed it before the Accused No.1, the Appellant, and finally to the Chairman P.W.5, who, after considering the entire notes, accorded his approval. Simply because there was some digression from the earlier procedure as pointed out by the Learned Additional Public Prosecutor would not, in my view, by itself give any reason to attach criminality to the process followed by the Accused persons. Crl. A. No. 09 of 2014 Dr. Kamal Gurung vs. State of Sikkim 19

31. In C. Chenga Reddy and others vs. State of Andhra Pradesh: AIR 1996 SC 3390; in a similar circumstance as the ones before as observed as follows:-

"52..............................................There have been some irregularities committed in the matter of allotment of work to the appellant for breach of codal provisions, circulars and departmental instructions, for preparation of estimates etc. and those irregularities give rise to a strong suspicion in regard to the bona fides of the officials of the department and their link with the appellant, but that suspicion cannot be a substitute of proof. The Courts below appear to have drawn inferences by placing the burden of proving innocence on the appellant which is an impermissible course. In our opinion none of the circumstances relied upon by the prosecution against the appellant can be said to have been proved satisfactorily and all those circumstances, which are not of any clinching nature, even if held to be proved do not complete the chain of evidence so complete as to lead to an irresistible conclusion consistent only with the hypothesis of the guilt of the appellant and wholly inconsistent with his innocence. The prosecution has not established the case against the appellant beyond a reasonable doubt. ................................."

53.......................................................................................

54....................................................................................... "55..................................The courts below have also found that the officials had committed serious administrative irregularities and lapses. Reference has been made both by the trial court and the High Court to the codal provisions i.e. A.P. PWD Code, A. P. Financial Code etc. and the circulars and instructions issued from time to time which were respected in their breach by the official accused. We have not found it possible to take a view different than the one taken by the courts below in this regard though in our opinion the breach of codal provisions or violation of the circulars and instructions and commission of administrative irregularities cannot be said to have been done by the officials concerned with any corrupt or dishonest intention. Learned counsel appearing for all the Crl. A. No. 09 of 2014 Dr. Kamal Gurung vs. State of Sikkim 20 appellants also during the course of their arguments were unable to point out any error in those findings and according to them in the established facts and circumstances of the case, the irregularities, administrative lapses, and violation of the codal provisions, could only have resulted in a departmental action against the officials but criminal prosecution was not justified..........................."

32. Similarly, in G. Narasimha Murthi, Formerly Sub- Registrar Prakasam Vs. State of Andhra Pradesh 2014:

CRI.L.J.2687 (Andhra Pradesh), it has been held that-

"15. Now it has to be seen when the explanations of A.O. are found satisfactory whether the charge of criminal misconduct under Section 13(1)(d) of P.C. Act is still attracted. A careful perusal of Section 13(1)(d) of P.C. Act, would show that mere deviation from a rule or procedure by a public servant will not attract the charge of criminal misconduct. To attract the said charge, the prosecution shall establish that - a public servant has derived pecuniary advantage for himself or any other person; such deriving is by employing corrupt or illegal means or by abusing his position as public servant; and without any public interest. It must be noted that prosecution must establish all the ingredients by cogent evidence and the presumption under Section 20 of P.C. Act has no application to the offence under Section 13(1)(d) of P.C. Act. ............................... The phraseology such as "corrupt or illegal means", "abusing his position as public servant" employed in Section 13(1)(d) of P.C. Act indicates that the prosecution needs to prove the mens rea or dishonest intention coupled with deriving pecuniary advantage to himself or others, to bring home the charge of criminal misconduct."

33. We may also usefully refer to the case of C. K. Jaffer Sharief vs. State: 2013 CRI.L.J.341 (Supreme Court) on this, more particularly, paragraph 17.

Crl. A. No. 09 of 2014

Dr. Kamal Gurung vs. State of Sikkim 21

34. These decisions would apply in full force to the case at hand having regard to the similarity in the facts and circumstances.

35. For the aforesaid reasons, I am inclined to allow the Appeal and is accordingly allowed.

36. The Appellant/Accused is hereby acquitted of the charges and stands discharged from the bail bond.

37. A copy of this judgment and the original case records be transmitted forthwith to the Court of the Special Judge, Prevention of Corruption Act, 1988, East Sikkim at Gangtok, for its due compliance.

( S. P. Wangdi ) Judge 09-06-2015 Approved for reporting : Yes Internet : Yes to/ds

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