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This Order Shall Govern The Disposal Of ... vs State By D.S.P on 31 May, 2010

                                      1

                IN THE COURT OF SH. RAJNISH BHATNAGAR
                  SPECIAL JUDGE 01 CBI : ROHINI : DELHI

CBI No. 44/2008

C.B.I.

Vs.

Mahesh Chander Sharma Etc.                           ......Accused

ORDER

1. This order shall govern the disposal of an application moved by accused Mahesh Chander Sharma U/s 197 Cr.P.C. contending therein that the acts and omissions attributed to him were strictly done in the discharge of his official duty as Chief Controller of Government Opium & Alkaloid Factories, Gwalior (M.P.).

2. It is submitted that at the material time, the petitioner / accused was a Government Servant holding office of Chief controller of Government Opium & Alkaloid Factories, Gwalior M.P under the Ministry of Finance, Department of Revenue, of the rank of a joint secretary to the Government of India and as such could not have been removed from his Contd...

office without the sanction of the Central Government and in the absence of such sanction no cognizance could have been taken against the accused.

3. The applicant / accused has relied upon: K. Kalimuthu Vs. State by D.S.P., 2005 AIR 2005, State of Maharashtra Vs. Dr. Budhikota Subharao JT 1993 (3) 389 and B. Saha & Others Vs. MS Kochar 1979 AIR 1841.

4. The application has been contested by the CBI by filing the reply. It is submitted in the reply that offence U/s 120-B IPC r/w 420 IPC and Sec. 420 IPC alleged to have been committed by the applicant / accused was allegedly committed in his individual and personal capacity and not as a public servant in the discharge of his official duty. As such, the sanction for prosecution of the applicant u/s 197 Cr.P.C was not required to be obtained. It is further submitted that by moving this application, the applicant / accused wants to delay the trial of the case.

5. In brief the case of the prosecution is that certain Contd...

officials of Govt. Opium & Alkaloid Factory (GOAF) Gwalior and National Chemical Laboratory (NCL) Pune alongwith the Private Firm M/s Filtron India Pune during the period 1984- 1986 had entered into a criminal conspiracy with the object to cheat the GOAF Gwalior and in pursuance to the said conspiracy the public servants namely A-1 MC Sharma, Chief Controller of GOAF, A-2 P. Mandal Chief Financial Advisor, GOAF, A-3 PD Gule, Administrative Officer, GOAF, and A-5 S.P Mukherjee Dy. Director NCL Opune abused their official position and caused pecuniary benefits for themselves and to M/s Filtron India Pune of whom A-6 Sadanand G. Hegde was the Proprietor in the matter of purchase of High Performance Liquid Chromatograph (HPLC), Centrifugal Clarifier (CFC), Centrifugal Decanter (CFD), Pulsed Extraction Column(PEC) and Thin Film Evaporators.

6. The above procurement was made as part of the modernization programme of the GOAF for Neemuch and Contd...

Gazipur and for the purpose of providing consultancy, NCL Pune was appointed as consultant for GOAF Gwalior which invited tenders on behalf of GOAF in June 1984 for procurement and supply of afore-mentioned imported machines.

7. M/s Filtron India Pune submitted quotations for the items i.e CFC and CFD; the last date of receipt of tenders was 30-06-1984; the late tenders were however accepted and opened on 08-08-2004 but the comparative statement was not prepared; M/s Filtron India Pune was allowed to submit a revised quotation for the aforesaid CFC and CFD by interchanging the earlier quoted prices and also enhance the quoted value by 8% vide letter dated 03-09-1984 and the same was dishonestly accepted by the then Deputy Director Dr. N.R. Iyengar (since expired) and Sh. S.P. Mukherjee another Deputy Director of NCL Pune on 08-09-1984 duly signed by A-1 MC Sharma, A-2 P. Mandal and A-5 S.P. Mukherjee and comparative statement was prepared on the Contd...

same day and the offer of the firm was accepted; purchase order drafted by A-3 P.D. Gule was issued by A-1 MC Sharma to A-6 M/s Filtron India through Sadanand Hedgde; the equipments so purchased were found to be deficient in quality as well as unsatisfactory in performance; till date the equipments purchased i.e. CFC and CFD could not be successfully installed or commissioned due to inherent defects in the machines resulting in total mis utilization of funds for procurement of these equipments.

8. Investigation has revealed that as per the office order No. 7 dated 01-01-1998 issued by DGS& D, New Delhi for making purchase of any item of the estimated value of Rs. 50,000/- or above, open tender should be obtained in normal cases; in no case late /revised tenders from any firm should be accepted and they are classified under three heads (i) where the Govt. gains and no one suffers; (ii) where the Govt. gains but some one suffers and (iii) where the Govt. does not gain and someone suffers.

Contd...

9. In the present case the above procedures laid down by the DGS & D were not followed by the accused persons. It has been alleged that A-5 S.P. Mukherjee on hos own short listed 11 firms and invited their tenders on 18-5-1984 to 21-5-1984; no letters inviting such tenders for these equipments were issued toM/s Paschedag of West Germany or to its Indian Agent M/s Filtron India Pune; the last date for submissions of quotations for CFS and CFD was 30-6-1984; M/s Vulcanlaval had quoted on behalf of M/s Alfalaval vide its letter dated 20-6-1984 but there is no record to indicate the date of receipt of quotation by the concerned firm; M/s Filtron India Pune on behalf of M/s Paschedag Germany submitted its quotation vide its letter dated 18-7-1984 and the same was revised vide its letter dated 3-9-1984; no comparative statement was prepared either on 30-6-1984 or on 18-7-1984; however the comparative statement was prepared only on 8-9-84 after receipt of revised quotations from M/s Filtron India on 03-9-1984; the rates for per unit of Contd...

CFC and CFD of M/s Filtron India were DM 73,850 and DM 86,295 respectively which were changed to CFD = DM 73,850 and CFC = DM 86,295 in the revised quotation dated 03-9-1984; they also increased the quoted price by 8% as commission payable by the customer i.e. GOAF.

10. No purchase committee was constituted for the process of these tenders which was the collective responsibility of A-1 MC Sharma, A-4 NR Iyengar and A-5 S.P. Mukherjee being representative consultants of NCL.

11. It has been alleged that A-1 had accepted the quotations prepared by A-4 and A-5 both of NCL Pune who had recorded that the units of M/s Paschedag is cheaper than M/s Westfalia and M/s Alfalaval; M/s Alfalaval offer for Decanter and Clarifier was not for gas tight execution and hence could not be compared; M/s Westfalia offer for Decanter is for gas tight execution while that for Clarifier is not for gas tight execution and also could not be compared.

12. Investigation has further revealed that after receiving Contd...

the late tender document dated 18-7-1984, it was signed on 8-8-1984 by A-1 MC Sharma, Chief Controller of GOAF Gwalior , A-2 Panchanan Mandal Chief Financial Advisor GOAF, A-3 Prabhakar D. Ghule, Administrative Officer GOAF, A-4 Dr. N.R. Iyengar Deputy Director NCL Pune, A-5 S.P. Mukherjee Deputy Director NCL Pune; the comparative statement was prepared only on 8-9-1994 when the revised quotations dated 3-9-1984 of M/s Filtron India was received and signed by A-1, A-2, A-4 and A-5.

13. Investigation has further revealed that A-1, alongwith A-5, TRS Krishnan, Dr. GR Venkatakrishnan visited the prospective suppliers in the USA, France and Germany and finally recommended acceptance of the offer of the equipment manufactured by M/s Paschedag of West Germany through their Indian Agent M/s Filtron India; order was accordingly placed for the supply of two units each of CFC and CFD alongwith spares at a total cost of DM 3,47,080 thereby accepting the revised rates of M/s Filtron Contd...

India dated 3-9-1984, GOAF had paid 81.5% of the CIF price as custom duty and 8% as commission thereby incurring an expenditure of Rs. 25,55,506/- towards the procurement of above equipments; the job of installation and commissioning of the said equipments in the factories of GOAF at Neemuch and Ghazipur was entrusted to M/s Filtron India who were the agents of M/s Paschedag in India; the equipment was first installed at GOAF Neemuch as it was decided that after its successful commissioning the other set of equipments will be installed at GOAF Ghazipur; when these two machines were installed at Neemuch for trial they failed to function and since then have been lying idle till date; the two machines at Ghazipur were never installed and are lying in packed condition till date; a wrongful loss has thus accrued to the Govt. and a wrongful gain to the accused persons.

14. I have heard the arguments and gone through the records of the case and I have also perused the written Contd...

arguments filed on behalf of the applicant / accused.

15. Before proceeding further let me now examine the law on the subject and find out if acts committed by the accused were in discharging of his official duties and if protection U/s 197 Cr.P.C is available to the accused. The relevant law on the subject is as follows:-

In Raghunath Anant, 2008, Cr. L.J. 2054, the Apex Court concluded that it is no part of duty of a public servant while discharging his official duty to enter into a criminal conspiracy or indulge in criminal mis-conduct, application of sanction U/s 197 of Cr.P.C is, therefore, no bar for his prosecution. The court ruled that the contention of the respondent that for offences U/s 408 and 409 R/w Section 120 B of the Penal Code, sanction U/s 197 Cr.P.C of the code is a condition precedent for launching the prosecution is equally fallacious.

In Bakshish Singh's Case, AIR 1983 SC 257, it was observed by the Hon'ble Supreme Court that the Court Contd...

has to make a balance between the protection granted to the public servants and the safeguard available to the citizens against the excess of public servants. Further more in the matter of protection for the offence of conspiracy, forgery, cheating and bribery, no sanction u/s 197 of the Code is required, since the Apex Court has ruled that it is not the part of the duty of the public servant while discharging his duty, to enter into a criminal conspiracy or indulged in criminal mis-conduct or to commit offence of forgery, cheating and bribery.

In Harihar Prasad (1972) 3 S.C.C. 89, it was held that "as far as the offence of criminal conspiracy punishable U/s 120 B R/w section 409 of the IPC and also U/s 5 (2) of the Prevention of Corruption Act are concerned, they cannot be said to be of the nature mentioned in section 197 of the Code of Criminal Procedure. ''

16. In Dharambir Khattar Vs. CBI decided on 5-5- 2009 in criminal revision petition No. 340 of 2008 by the Contd...

Hon'ble High Court of Delhi, it was observed as follows :-

"The matter can be looked at from another angle as well. The petitioners have been charged with the offence of criminal conspiracy U/s 120 B IPC. U/s 3 of P.C. Act, the Special Judge is empowered to try "not only any offence punishable under this code" but U/s 3 (1) (b) any conspiracy to commit or attempt to commit or any abetment of the offences specified in clause (1)".

Under section 40 IPC, it has been mentioned that in chapter V A and in sections 109, 110 IPC the word "offence" denotes an offence punishable under this code, or under any special or local law as hereinafter defined. Under Section 41 IPC, a special law has been defined as " a law applicable to a particular subject". So in terms of sections 40 IPC and 41 IPC, the PC Act would be a special law. Therefore, the offence U/s 120 B IPC in chapter V A IPC would also become punishable under the P.C Act which is the special enactment for that purposes. So once sanction Contd...

U/s 19 PC Act has been obtained, there is no need to obtain a special sanction U/s 197 Cr.P.C for prosecuting the accused for the offence U/s 120 B IPC.

Thus, the Hon'ble High Court in its order dated 5-5- 2009, has categorically observed the offence u/s 120 B in Chapter VA IPC would also become punishable under the Prevention of Corruption Act and hence once sanction U/s 19 of Prevention of Corruption Act has been obtained no sanction U/s 197 Cr.P.C would be required. Similar view has been taken in Kaushal Kumar Vs. CBI 2009 (1) RC 56, Delhi.

17. Ld. Sr. P.P. has also relied upon Prakash Singh Badal Vs. State of Punjab (2007) 1 S.C.C. 1 to contend that the acts attributed to the accused can hardly be termed as part of his administrative duties and the protection U/s 197 Cr.P.C is only meant for honest employees.

18. The Ld. defence counsel has relied upon K. Kalimuthu Vs. State by D.S.P., 2005 AIR 2005, State of Contd...

Maharashtra Vs. Dr. Budhikota Subharao JT 1993 (3) 389 and B. Saha & Others Vs. MS Kochar 1979 AIR 1841. The facts in the instant case are different than the facts in the cited cases. The law laid down is that of the act is in discharge of duty then sanction is required.

19. From the law cited hereinabove, what has been enunciated is that while considering requirements of sanction, as contemplated by section 197 of Cr.P.C, the court has to make a balance between protection granted to the public servant and the safeguard available to the citizens against excess of erring public servants.

20. As per the allegations accused Mahesh Chander Sharma who being a public servant while working as Chief Controller of Government Opium and Alkaloid Factory ( GOAF), entered into criminal conspiracy during the year 1984 with other co-accused persons and in violation of rules, established norms and procedures, accepted late tender dated 18-07-1984 and also accepted revised tender Contd...

(Quotation) dated 3-9-1984 of M/s Filtron India, and also placed orders on M/s Paschedag, Germany through its Indian agent M/s Filtron India for procurement and supply of imported machines i.e. Centrifugal Clarifier (CFC), Centrifugal Decanter (CFD) & Pulsed Extraction Column (PEC) and thereby incurred an expenditure of Rs. 22,55,506/-. It is further alleged that the applicant / accused by abusing his official position and by corrupt and illegal means obtained for Shri Sadanand G. Hedge, the supply order for supply of Centrifugal Clarifier, Centrifugal Decanter and Pulsed Extraction Column. It is further alleged that the applicant / accused was also the part of technical evaluation team which went abroad and confirmed the order of M/s Paschedag, Germany through its agent M/s Filtron India. The machines were not suitable for the produce and were not functional after installation at Neemuch and in this manner, the applicant / accused cheated the Government Opium and Alkaloid Factory (GOAF) dishonestly induced the Contd...

government to place an order for the sum of Rs. 22,55,506/- on M/s Filtron India, Pune.

21. So it can be safely said that all the aforesaid acts of accused Mahesh Chander Sharma were beyond the purview of discharge of his official duties and hence he is not entitled to protection U/s 197 Cr.P.C. The application moved by the accused is, therefore dismissed.

(Announced in the open Court on 31-05-2010) (RAJNISH BHATNAGAR) SPECIAL JUDGE 01 CBI ROHINI COURT : DELHI Contd...

IN THE COURT OF SH. RAJNISH BHATNAGAR SPECIAL JUDGE 01 CBI : ROHINI : DELHI CBI No. 44/2008 C.B.I. Vs. Mahesh Chander Sharma Etc. ......Accused ORDER

1. The applicant / accused Mahesh Chander Sharma has filed an application U/s 4 (2) R/w section 13 of the Prevention of Corruption Act 1988 challenging the territorial jurisdiction of this court. It is averred in the application that none of the alleged acts of omission / commission specified in the charge framed against the accused on 13-8-2007 was committed or its consequences ensued within the territorial jurisdiction of this court.

2. It is averred that all the alleged acts of omission / commission mentioned in the charge relates to Gwalior / MP where the office of the accused / petitioner was situated and to Neemuch (M.P.) and Gazipur (U.P.) where the Contd...

Government Opium and Alkaloid factories alleged to have been cheated are situated.

3. It is further averred that the procurement action for the impugned equipment, namely CFDs and CFCs were instituted at Pune by the consultants to the Government and completed at Gwalior (M.P.)

4. The alleged defective equipments were received at U.P and Neemuch (M.P.). Payments to the German supplier of equipments were made from Neemuch and Gazipur as a result, none of the allege acts were committed or its consequences ensured at Delhi.

5. The accused has relied upon C.B.I., A.H.D. Vs. Braj Bhushan Prasad, 2001 SOL case No. 586.

6. The application has been contested by the CBI by filing its reply. In reply, the CBI has raised preliminary objection that the charge was framed on 13-08-2007 but the accused did not challenge the jurisdiction at that time.

7. I have heard the applicant in person and also Contd...

perused the written submissions filed by the applicant / accused.

8. In brief the case of the prosecution is that certain officials of Govt. Opium & Alkaloid Factory (GOAF) Gwalior and National Chemical Laboratory (NCL) Pune alongwith the Private Firm M/s Filtron India Pune during the period 1984- 1986 had entered into a criminal conspiracy with the object to cheat the GOAF Gwalior and in pursuance to the said conspiracy the public servants namely A-1 MC Sharma, Chief Controller of GOAF, A-2 P. Mandal Chief Financial Advisor, GOAF, A-3 PD Gule, Administrative Officer, GOAF, and A-5 S.P Mukherjee Dy. Director NCL Opune abused their official position and caused pecuniary benefits for themselves and to M/s Filtron India Pune of whom A-6 Sadanand G. Hegde was the Proprietor in the matter of purchase of High Performance Liquid Chromatograph (HPLC), Centrifugal Clarifier (CFC), Centrifugal Decanter (CFD), Pulsed Extraction Column(PEC) and Thin Film Contd...

Evaporators.

9. The above procurement was made as part of the modernization programme of the GOAF for Neemuch and Gazipur and for the purpose of providing consultancy, NCL Pune was appointed as consultant for GOAF Gwalior which invited tenders on behalf of GOAF in June 1984 for procurement and supply of afore-mentioned imported machines.

10. M/s Filtron India Pune submitted quotations for the items i.e CFC and CFD; the last date of receipt of tenders was 30-06-1984; the late tenders were however accepted and opened on 08-08-2004 but the comparative statement was not prepared; M/s Filtron India Pune was allowed to submit a revised quotation for the aforesaid CFC and CFD by interchanging the earlier quoted prices and also enhance the quoted value by 8% vide letter dated 03-09-1984 and the same was dishonestly accepted by the then Deputy Director Dr. N.R. Iyengar (since expired) and Sh. S.P. Mukherjee Contd...

another Deputy Director of NCL Pune on 08-09-1984 duly signed by A-1 MC Sharma, A-2 P. Mandal and A-5 S.P. Mukherjee and comparative statement was prepared on the same day and the offer of the firm was accepted; purchase order drafted by A-3 P.D. Gule was issued by A-1 MC Sharma to A-6 M/s Filtron India through Sadanand Hedgde; the equipments so purchased were found to be deficient in quality as well as unsatisfactory in performance; till date the equipments purchased i.e. CFC and CFD could not be successfully installed or commissioned due to inherent defects in the machines resulting in total mis utilization of funds for procurement of these equipments.

11. Investigation has revealed that as per the office order No. 7 dated 01-01-1998 issued by DGS& D, New Delhi for making purchase of any item of the estimated value of Rs. 50,000/- or above, open tender should be obtained in normal cases; in no case late /revised tenders from any firm should be accepted and they are classified under three heads (i) Contd...

where the Govt. gains and no one suffers; (ii) where the Govt. gains but some one suffers and (iii) where the Govt. does not gain and someone suffers.

12. In the present case the above procedures laid down by the DGS & D were not followed by the accused persons. It has been alleged that A-5 S.P. Mukherjee on his own short listed 11 firms and invited their tenders on 18-5-1984 to 21-5-1984; no letters inviting such tenders for these equipments were issued toM/s Paschedag of West Germany or to its Indian Agent M/s Filtron India Pune; the last date for submissions of quotations for CFS and CFD was 30-6-1984; M/s Vulcanlaval had quoted on behalf of M/s Alfalaval vide its letter dated 20-6-1984 but there is no record to indicate the date of receipt of quotation by the concerned firm; M/s Filtron India Pune on behalf of M/s Paschedag Germany submitted its quotation vide its letter dated 18-7-1984 and the same was revised vide its letter dated 3-9-1984; no comparative statement was prepared either on 30-6-1984 or Contd...

on 18-7-1984; however the comparative statement was prepared only on 8-9-84 after receipt of revised quotations from M/s Filtron India on 03-9-1984; the rates for per unit of CFC and CFD of M/s Filtron India were DM 73,850 and DM 86,295 respectively which were changed to CFD = DM 73,850 and CFC = DM 86,295 in the revised quotation dated 03-9-1984; they also increased the quoted price by 8% as commission payable by the customer i.e. GOAF.

13. No purchase committee was constituted for the process of these tenders which was the collective responsibility of A-1 MC Sharma, A-4 NR Iyengar and A-5 S.P. Mukherjee being representative consultants of NCL.

14. It has been alleged that A-1 had accepted the quotations prepared by A-4 and A-5 both of NCL Pune who had recorded that the units of M/s Paschedag is cheaper than M/s Westfalia and M/s Alfalaval; M/s Alfalaval offer for Decanter and Clarifier was not for gas tight execution and hence could not be compared; M/s Westfalia offer for Contd...

Decanter is for gas tight execution while that for Clarifier is not for gas tight execution and also could not be compared.

15. Investigation has further revealed that after receiving the late tender document dated 18-7-1984, it was signed on 8-8-1984 by A-1 MC Sharma, Chief Controller of GOAF Gwalior , A-2 Panchanan Mandal Chief Financial Advisor GOAF, A-3 Prabhakar D. Ghule, Administrative Officer GOAF, A-4 Dr. N.R. Iyengar Deputy Director NCL Pune, A-5 S.P. Mukherjee Deputy Director NCL Pune; the comparative statement was prepared only on 8-9-1994 when the revised quotations dated 3-9-1984 of M/s Filtron India was received and signed by A-1, A-2, A-4 and A-5.

16. Investigation has further revealed that A-1, alongwith A-5, TRS Krishnan, Dr. GR Venkatakrishnan visited the prospective suppliers in the USA, France and Germany and finally recommended acceptance of the offer of the equipment manufactured by M/s Paschedag of West Germany through their Indian Agent M/s Filtron India; order Contd...

was accordingly placed for the supply of two units each of CFC and CFD alongwith spares at a total cost of DM 3,47,080 thereby accepting the revised rates of M/s Filtron India dated 3-9-1984, GOAF had paid 81.5% of the CIF price as custom duty and 8% as commission thereby incurring an expenditure of Rs. 25,55,506/- towards the procurement of above equipments; the job of installation and commissioning of the said equipments in the factories of GOAF at Neemuch and Ghazipur was entrusted to M/s Filtron India who were the agents of M/s Paschedag in India; the equipment was first installed at GOAF Neemuch as it was decided that after its successful commissioning the other set of equipments will be installed at GOAF Ghazipur; when these two machines were installed at Neemuch for trial they failed to function and since then have been lying idle till date; the two machines at Ghazipur were never installed and are lying in packed condition till date; a wrongful loss has thus accrued to the Govt. and a wrongful gain to the Contd...

accused persons.

17. I have perused the record and the judgment relied upon by the accused.

18. In the judgment reported as C.B.I., A.H.D. Vs. Braj Bhushan Prasad, 2001 SOL case No. 586 relied upon by the accused the Hon'ble Apex Court was dealing with a case which has been filed U/s 13 (1) C and d of the PC Act and the Hon'ble Apex Court has held that 36 cases involved pertain to withdrawal of crores of rupees from the treasuries located in the territories of Jharkhand area. So Jharkhand Court would have the jurisdiction to try these offences.

19. It has also been held by the Apex Court that in those cases it was an undisputed fact that the main offence was U/s 13 (1) C and 13 (1) d of the PC Act and the alleged acts in that case were completed when the money had gone out of the public treasuries and reached the hands of the persons involved, as such for an offence U/s 13 (1) C and Contd...

13 (1) d of the PC Act the places where the offences were committed could easily be identified as the place where the treasury concerned was situated and in those cases, the undisputed fact being that the treasuries were situated within the territories of Jharkahdn State so Jharkahnd Court was held to have the requisite territorial jurisdiction to try the cases.

20. From the facts of the present case as per D-8, accused / petitioner as Chief Controller had sent a letter dated 1-1-1985 from his office situated at Saraswati House (5th) Floor, 27 Nehru Place, New Delhi-110019 to the State Bank of India, Parliament Street, New Delhi. Vide this letter a request was made by him to the Chief Manager, S.B.I. Overseas, Branch Parliament Street, New Delhi for opening of letter of credit for purchase of equipment in question and the payment was released from S.B.I. India, Overseas Branch, Parliament Street, New Delhi.

21. So as the money was paid from the State Bank of Contd...

India, New Delhi, the Delhi Courts have jurisdiction to try the present case. The application is, therefore, dismissed. (Announced in the open Court on 31-05-2010) (RAJNISH BHATNAGAR) SPECIAL JUDGE 01 CBI ROHINI COURT : DELHI Contd...