Telangana High Court
The State, Rep. By Inspector Of Police, ... vs Sri P.Padmanabham 9 Others on 19 November, 2018
THE HON'BLE SRI JUSTICE U.DURGA PRASAD RAO
Criminal Appeal No.907 of 2006
JUDGMENT:
Aggrieved by the judgment dated 16.07.2005 in C.C.No.12 of 1999 passed by the learned Special Judge for CBI Cases, Visakhapatnam, in acquitting the accused for the offences under Sections 120B, 420 and 477-A IPC and Section 13(2) r/w 13(1)(d) of Prevention of Corruption Act, 1988 (for short "P.C.Act"), the State preferred the instant appeal.
2) The factual matrix of the case is thus:
a) The Inspector of Police (SPE), CBI, Visakhapatnam, filed charge sheet against A.1 to A.11 for the offences under Sections 120-B, 420, 477-A IPC and Section 13(2) r/w 13(1)(d) of PC Act. The averments of the charge sheet are that the Material Organization, Visakhapatnam (MOV) functions under Eastern Naval Command (ENC), Visakhapatnam for planning and provisioning material for the establishments like Naval Dockyard Ships etc. The MOV consists of Controllerate of Material Planning (CMP) to plan for material;
Controllerate of Procurement (CPRO) which looks after procurement of material; and Controllerate of Warehousing (CWH).
b) A.1 was the Senior Storekeeper, local purchase cell and A.2 was Storekeeper in Naval Stores during 1994 and their duty was to raise demand on receipt of the requisitions from the Users Sections and to register the demands in Demand Register and place before Section 2 Officer for approval and then forward the same to Controllerate of Material Planning of MOV.
c) A.3 and A.4 were the Assistant Storekeeper and UDC/Section-in- charge of CMP and their duties were to prepare Local Purchase Requisitions (LPRs) as per demands received from the User Sections and put up the LPRs to the concerned Section Officer.
d) A.5 was the Deputy Controller of Material Planning and Section Officer of Naval Stores of CMP. His duties were to verify the information provided in LPRs and authorize the same and forward to CMP for approval.
e) A.6 was the Controller of Material Planning and his duty inter alia was to approve LPRs.
f) A.7 worked as Office Superintendent of SCON Section, Controllerate of Procurement (CPRO) and her duties were that on receipt of LPRs from CMP, enter the same in LPR Register and prepare Vendors List from the list of Manufacturers and Authorized Agents available in the Section and puts up before JC PRO for vetting.
g) A.8 was the UDC/Dispatch Clerk of CPRO and her duty was to dispatch tender enquiries and other correspondence to the Vendors under Certificate of Posting.
h) A.9 was the Deputy Controller of Procurement/Joint Controller of Procurement (DCPRO/JCPRO) and his duties were to coordinate Naval 3 Storerooms and also to approve the Vendors List giving due importance to the Manufacturers and Authorised Agents of the particular item going to be procured by CPRO.
i) A.10 was the Controller of Procurement of CPRO and his duties were overall administration of CPRO and to procure items based on LPRs raised by CMP and to place Purchase Order for a value upto Rs.1,00,000/- without any financial concurrence from Joint Controller of Defence Accounts, Navy and Material Superintendent.
j) A.11 is the Proprietor of M/s. Febanard Instruments and Controls, Visakhapatnam and supplier of engineering and general items to MOP.
k) As per Standing Orders of Navy, LPRs for nil pattern items cannot be raised by CMP without the approval of headquarters ENC. LPRs cannot be raised without any demand/requisition from the User Department. However, during the year 1994, A.1 to A.11 entered into a criminal conspiracy to cheat the Material Organisation and in pursuance thereof, A.1 and A.2 knowing fully well that no demand is in existence from User Departments, with a dishonest and fraudulent intention, raised demand No.C2458 dated 22.07.1994 for 3000 numbers of Crucibles on Material Organisation. A.3 to A.6 knowing fully well that no demand was in existence and no repeat LPRs can be raised for nil pattern items, with a fraudulent and dishonest intention, raised 3 LPRs by making false entries vide Nos.SHE/0473/3295/V/1993-94 dated 15.03.1994 for 400 nos; SHE/N4/0473/00859/0098 dated 27.06.1994 for 400 nos; SHE/N4/0473/01425/N4150 dated 29.07.1994 for 400 nos and 4 further, A.4 and A.5 raised 4th LPR with false entries vide No. SHE/N4/0473/1724/N4195 dated 06.09.1994 for 400 nos of crucibles, so as to avoid concurrence of Material Superintendent and Audit Department. In that process, to facilitate A.11, to get repeat Purchase Orders at exorbitant rate of Rs.245/- per crucible as against Rs.29.50/- per crucible procured in 1993 from A.11, the accused have cheated the Organisation. Further, they prepared Vendors List without Manufacturers or Authorised Agents or Registered Vendors of CPRO and sent tender enquiries to only four firms to avoid competition. By all such misdeeds, the accused have caused a wrongful loss to the Material Organisation of ENC to a tune of Rs.3,92,000/- and caused corresponding wrongful gain to A.11.
Hence the charge sheet.
l) On appearance of accused, the Trial Court framed charges under Sections 120B and 420 r/w 120B IPC against A.1 to A.11 and charges under Sections 477-A IPC and Section 13(2) r/w 13(1)(d)(i)(ii)(iii) of PC Act against A.1 to A.10.
3) A.1 died when the matter was coming up for trial. 4) During trial, PWs.1 to 31 were examined and Exs.P.1 to P.67
were marked on behalf of prosecution. Exs.D.1 to D.5 were marked on behalf of defence.
5) On appreciation of oral and documentary evidence, learned Trial Judge arrived at the following findings:
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i) The sanctioning authorities have issued sanction beyond the permitted period of three months as stipulated in the judgment of Apex Court reported in Vineet Naraian vs. Union of India1 and since the sanction orders were not issued within three months from the date when the materiel to accord sanction was supplied by the CBI, A.2 to A.10 are entitled to acquittal.
ii) Sanction under Section 197 Cr.P.C for prosecuting the accused under Sections 120B, 420 IPC r/w 120B IPC and Section 477-A IPC was necessary to prosecute A.2 to A.10 and the Investigating Officer did not make any attempt to obtain sanction order.
iii) The evidence shows that apart from A.11, two others submitted quotations to Material Organisation to supply crucibles @ Rs.249/- and Rs.260/- each respectively and since A.11 being the lowest tenderer @ Rs.245/- each, the MPRO had no alternative than to accept the tender of A.11. LWs.28 and 30 gave their quotations but PW.31 did not produce their quotation documents and did not examine them without assigning any reason. Their quotations were @ Rs.249/- and Rs.260/- per crucible respectively and when compared, A.11's quotation was the lowest one.
iv) PW.1 was not the person concerned to find out whether stock was available or not and he was not concerned with Ex.P.1(a) and another Assistant Manager, who raised Ex.P.1(a) was still in service. He stated that crucibles can be procured even without requisition from the Central Dockyard Laboratory. As could be seen from the evidence of PW.1, he 1 AIR 1998 SC 889 6 was not concerned with Ex.P.1(a) and Ex.P.1(b) and another Assistant Manager of Central Laboratory was concerned but he was not examined and so the evidence of PW.1 was of no consequence. Thus Ex.P.1(a) and Ex.P.1(b), remained on record as unproved document.
v) The evidence of PW.1 in cross helps the accused to prove the contest that, crucibles can be procured even without requisition from Central Dockyard Laboratory, as could be seen from Ex.D.3 and from the evidence of PW.2.
vi) Prosecution failed to adduce evidence to prove the alleged acquaintance and conspiracy among A.1 to A.11, so as to cause wrongful gain to A.11.
vii) PW.2--Deputy G.M. Laboratories, stated that he recommended Ex.P.1(a) and P.1(b) and the same were approved, however, during 1994 and 1995, he did not recommend for purchase of crucibles on any indent. The crucibles are consumables and recurring. In the cross, he stated that there was no occasion to reject the crucibles on the ground that they were excess or not required by the Department. So his evidence gives a lethal blow to prosecution case and supports the accused that the crucibles being consumable and their expenditure being recurring, they have to be procured periodically and to be maintained to meet their demand as and when arises. Further, though PW.2 stated that there is a Register showing the average consumption of crucibles during the relevant period, the same was not placed before Court to prove that 7 the average consumption during the relevant period was not to the extent of the quantity procured through A.11.
viii) PW.3--the Deputy General Manager (Materiel) has not worked during the relevant period of 1994 but worked in 1996 and though he deposed about general procedure for procurement of material, he admitted that he was not aware of the norms during the period before he joined. Hence his evidence is of no use.
ix) PW.4--Deputy Manager (Materiel) during 1993-94 admitted in the cross that Manager (Materiel) is the Central Agency for dealing with the Material Organization on behalf of all the shop floors and departments and when once the demand from him has been received, it will not be the responsibility of Material Organisation, to check whether there was any internal demand within the Dockyard. The Navy Order (STR-III) 1994 dated 07.03.1994 is binding on all the Naval establishments pertaining to non-pattern or NIL pattern items. From the said Order, it is deducible that the NIL pattern items should be procured even without raising the requisition or demand. In order to maintain the stock to meet future demand, it can be procured. Hence the allegation of prosecution that raising LPRs without requisition from the User Department is illegal, has no legs to stand.
x) The evidence of PWs.5, 6 and 9 is of no use as PW.5 is not the author of the document seized by the CBI Inspector; PW.6 is the Auditor of A.11 through whom Xerox copies of the sales of A.11 for 1994-95 were sought to be produced and PW.9 though stated that the 8 Proprietor of M/s.New Way Engineers, Visakhapatnam, wrote a letter but the said Proprietor was not examined to prove the contents.
xi) PW.7 was examined to prove Exs.P.18 to P.21--LPRs but his evidence is a lethal blow to prosecution case because he stated that those LPRs are not complete documents and he was not the person concerned with LPRs.
xii) PW.8 has nothing to do with Exs.P.18(a), P.19(a) and P.21(a), as he admitted that he never dealt with those documents.
xiii) The evidence of PW.10--Storekeeper is not helpful because he does not know the details of discussion between A.1 and Sai Kumar, Manager (Materials), regarding crucibles. Thus there is no documentary evidence to prove the demand said to be raised by A.1 and A.2, for purchase of 300 carbon and Sulphur free combustion crucibles.
xiv) The evidence of PW.11 is of no consequence. He only took Exs.P.18 to P.21 to CBI office after they were seized.
xv) PW.12--Assistant Controller, Material Planning stated in the cross-examination that depending on urgency and available stock position, they raised LPRs without firm demand and if the user department did not generate a demand and if supply is made, it will automatically reject the materials. However, other evidence shows that materials were not rejected even if procured without demand. 9 xvi) The evidence of PW.13 through whom Exs.P.27 to P.32 were marked, would show he is not competent to speak about those exhibits as he was not working during the relevant period.
xvii) PWs.14 to 17 and 30, who are said to be registered suppliers for materials were examined to show that without calling for quotations and sending the tender documents, procurement was done. However, in the cross-examination they stated that they never supplied crucibles earlier.
Further, generally the tender documents would come to them by ordinary post and at times they were asked to collect the tender documents from concerned departments and if they were not interested to submit quotations, they simply ignore it. Hence their evidence does not reveal that they did not receive tender enquiries. xviii) The evidence of PW.19 is also not helpful to show that Exs.P.18 to P.20 were written in the handwriting of A.3 and A.4 because he never dealt with LPRs and he never sat along with A.3 and A.4. xix) The evidence of PW.27 would show that for a demand to be raised, there should be LPR or requisition of User Department. Therefore, it can be concluded that the alleged raising of demand by A.1 and A.2 for procuring 3000 crucibles is based on LPRs and as per Ex.D.3, it authorizes Naval Dockyard to raise demand on NIL pattern items.
xx) Basing on the above findings, the Trial Court held that prosecution failed to prove that A.2 to A.10 willfully falsified the 10 records for purchasing the crucibles and accordingly, acquitted the accused.
Hence the appeal by State.
6) Heard arguments of Sri K.Surender, learned Special Public Prosecutor for CBI and Sri K.A.Narasimham, learned counsel for respondents/accused.
7 a) Severely fulminating the judgment of the Trial Court, learned Spl.P.P. would argue that the specific case of prosecution is that the crucibles which are NIL pattern items were not required during 1994 and no indent was placed by user departments but were purchased on the basis of spurious documents created by A.1 to A.10 by making split purchases at inflated prices. In this process, all the accused conspired together and A.1 to A.10 were responsible for raising of demands without requisition from User Departments and they made split purchases without following tender process and thereby they caused wrongful loss to the Material Organisation of ENC to a tune of Rs.3,92,000/- and created wrongful gain to A.11. For non-pattern items, the question of maintaining reserve stock does not arise and the purchase could be made only on requirement by User Department. However, the Trial Court misconceived that even non-pattern items also could be procured without demand or requisition and on such misconception, held that the purchases were made by the accused from A.11 for maintaining the reserve stock of crucibles and erroneously acquitted the accused. Learned Spl.P.P further argued that the Trial 11 Court erred in observing that the conspiracy should be proved by direct evidence and the prosecution failed to prove the same. In this regard, the Trial Court has not properly appreciated the evidence on record particularly that of PWs.3 to 6. It is further argued that the Trial Court failed to see that the entry in the demand register made by A.1 and A.2 for 3000 crucibles is a false entry without User Department, asking for them and A.3 and A.4 prepared LPRs and that too repeat LPRs to enable A.10 to violate financial instructions.
b) Nextly, he argued that the Trial Court wholly misconceived in holding that the sanction orders were invalid as they were passed more than three (3) months after the material was sent to the Sanctioning Authority. The Trial Court also erred in holding that prosecution of the accused for the offences under IPC is invalid without obtaining sanction of the Government under Section 197 Cr.P.C. He would argue that sanction under Section 197 Cr.P.C is not necessary to prosecute public servants who committed offences of cheating, criminal conspiracy and falsification of records as such acts fall outside the purview of their official duty. Further, A.2 to A.5 and A.7 to A.9 are not removable only by GOI. He thus submitted that the prosecution amply proved its case and prayed to allow the appeal.
8) Per contra, while supporting the judgment learned counsel for respondents would submit that the prosecution except harping that NIL pattern items should not be procured without a demand from concerned department, could not establish the said fact. On the other hand, the 12 evidence of some of the witnesses clearly showed that reserve stock can be maintained even in respect of NIL pattern items. He further argued that the conspiracy among the accused to create unlawful gain to A.11 could not be established since the crucibles were purchased by following due process of tender procurement, wherein A.11 stood as lowest tenderer. Hence, none of the offences alleged could be established and the sanctioning was also not proper, as is rightly held by the Trial Court. He thus prayed to dismiss the appeal.
9) The points that arise for determination in this appeal are:
i) Whether NIL pattern items like crucibles cannot be procured and maintained as reserve stock by MOV without a clear demand by the User Departments of ENC?
ii) If point No.1 is held affirmatively, whether prosecution by reliable evidence could establish that all the accused conspired and falsified the accounts and raised demands for split purchases at inflated price and thereby caused wrongful loss to ENC and wrongful gain to A.11 and thus committed offences with which they are charged?
iii) Whether the finding of the Trial Court with regard to the sanction for prosecution is correct?
iv) Whether the judgment of the Trial Court is factually and legally sustainable?
10 a) POINT No.1: The case is all about crucibles which are being used in the Central Dock Yard Laboratory of Naval Dock Yard, Visakhapatnam for analysis of steel and other alloys. The melting point of steel is 1400 degrees centigrade and therefore, according to PW1-- 13 Scientific Officer all crucibles must withstand more than that temperature. So, in common parlance, crucibles are the containers used as a tool in defence laboratory. As per PW2--Deputy General Manager, Laboratories (NDL) one crucible will be used for one test only for analysis of one material. One officer will use as many as 5 to 7 numbers of crucibles to take the average value. He would state that the number of crucibles required for sample may vary from case to case ranging between 5 and 7 for one test. The average use of crucibles per year as per PWs.1 and 2 is between 2000 and 2500. This is all about crucibles which are the bone of contention in this case.
b) The case of prosecution is that the crucibles are nil/non-pattern items and therefore, they cannot be procured without there being a demand from the concerned user department. In other words, they shall not be procured and stored as a reserved stock by the CMP and CPRO. The prosecution alleged that contrary to this sacrosanct standing order and convention, during 1994, A1 to A10 who were the employees in different sections of Naval Dock Yard, Visakhapatnam conspired with A11 who was the material supplier and falsified the documents and raised demands of LPRs. And made split purchases at inflated rate of Rs.245/- per crucible and thus caused wrongful loss to ENC and wrongful gain to A11 to the tune of Rs.3,92,000/-. Whereas the defence of the accused is that crucibles being recurring consumables depending upon their average consumption, reserved stock can be maintained and so the LPRs. were raised for 1600 crucibles and acquired through tender 14 process. In the entire exercise there was no conspiracy or causing loss to the organization as alleged.
11) In the light of above scenario, I explored the evidence both documentary and oral to find out whether any exhibit contains rule/circular order vivifying that nil pattern items shall not be procured and stored as a reserve stock without there being actual demand from concerned department, in spite of the fact that crucibles are recurring consumables and their average use per year varies from 2000 to 2500. It must be held that the screening of documentary evidence did not shed any light depicting that procuration of crucibles by raising LPRs. without a corresponding demand from the concerned department is an actionable wrong or taboo. As rightly observed by the trial Court, most of the exhibits were marked without proper proof from concerned persons who dealt with them. Albeit, I tried to know whether they contain a mandate against procurement of crucibles without demand from user department.
a) Ex.P2 is the Demand Register which contains an entry relating to 3000 numbers of crucibles. However, this Demand Register does not contain any rule or circular order relating to purchase of crucibles with or without demand from user sections.
b) Ex.P23 is the book styled as Controller of Material Planning Standing Orders. The preamble of the book reads that the instructions contained in this book will, in their operation, be restricted to the activities and functions of the Controllerate of Material Planning (CMP) 15 only and the orders lay down broad guidelines for the activities of the personnel of CMP. In page-1, the duties of Deputy Controller of Material Planning (Naval Stores) were enunciated, as per which, the Deputy Controller will exercise supervision on operational demands and scrutinize most expeditiously and authorize the issue of items which are readily available and those which are out of stock, he shall make necessary provision/procurement action. Guide line--4 in page No.2 would show that the Controller shall exercise check and control on LPRs. which are raised on CPRO (V) with particular reference to the requirement vis-à-vis the financial restrictions and limits and from inventory control angle duly considering whether a requirement exists and if so, whether it is operational nature or is to meet dues-out and to bring stocks of MSL level. In Page-27 under the heading LP Requisitions, it is stated that LPRs. are to be raised with extreme care and the columns of the existing proforma are to be correctly and completely filled-in. It is essential that last source of supply and rate should invariably be indicated in every requisition. Requisitions for items upto an estimated value of Rs.10,000/- per requisition will be signed by ACMs while requirements above this range are to be countersigned by CCMP(RS)/CMP. Thus, Ex.P23 contains various Standing Orders for the Controller of Material Planning. Some of the Standing Orders incidentally dealt with the method of processing LPRs. There is no other information in Ex.P23, particularly, with regard to the mandate that LPRs. should not be raised without corresponding demand from user section. Though Ex.P23 was marked through PW8, who was 16 the Deputy Controller of Procurement, Material Organization, he had not pinpointingly projected any specific Standing Order which we are looking for. He only stated that he handed over Ex.P23 to the CBI Inspector under Ex.P22--seizure memo. The other exhibits relate to some other facts and they are of no relevance to Point No.1. 12a) Then, the scrutiny of oral evidence shows PW1 the then Junior Scientific Officer in the Central Dockyard Laboratory, Naval Dockyard, Visakhapatnam deposed that the crucibles will be used in the laboratory for analysis of steel and other alloys and should withstand the temperature of 1400 celsius He is the user of crucibles and his duty was to analyze ferrous and non-ferrous alloys and other material components for the elemental composition. He stated they raise indent (LPR) for supply of crucibles whenever they are required. Ex.P1 file relating to Manager, Materials Department for procurement of crucibles wherein there was LPR for 3000 crucibles. He stated that 3000 crucibles were supplied by A11. Subsequently another requisition was made for supply of 1600 crucibles. The aforesaid 1600 crucibles were also supplied by A11. He specifically stated during 1994-95 they did not make any requisition for supply of crucibles, after receiving 3000 plus 1600 crucibles. In the cross-examination he categorically admitted that he did not know the procedure how the material required is to be procured for repair of the ships. Dockyard has its own department called Material Department raising demands for spares on Controllerate of Material Planning, Visakhapatnam. They have powers to procure. Generally, 17 Manager, Materials procure the items for the laboratories. He further stated that they raise LPRs. when the stock is not available and draw their requirement from the available stock. He further admitted that he was not the person concerned to find out whether stock was available or out of stock, any items are required by them. He is not concerned with Ex.P1A. At the relevant time there was another Assistant Manager who raised Ex.P1 indent and he is in service. The Manager, Materials is the competent person to speak about LPRs. He further admitted use of crucibles is recurring in their laboratory. Their requirement is raised on Manager, Materials (MMAT) through LPRs. There is no requirement of Central Dockyard Laboratory to raise direct demand on Material Organization, Visakhapatnam. The crucible items are non-pattern items. He admitted that on 15.12.1993 crucibles were procured on repeat order basis. Most importantly, he admitted that they will be keeping the stock of crucibles in view of their requirement being frequent. He admitted that he stated before the Board of Enquiry that the annual consumption of crucibles was around 2500 and it depends on work load.
b) Thus, a careful scrutiny of testimony of PW1 would show that crucibles are used in Naval Dockyard Laboratory, they are non-pattern items, they are recurring consumables; their average consumption is 2500 per year and may vary depending upon the requirement and work load. Above all, the material department will be keeping the reserve stock of crucibles in view of requirement being frequent. PW1 is the concerned with the method and manner of raising LPRs. and procuring 18 materials. Hence, the evidence of PW1 smacks a blow on prosecution case. While prosecution contends that non-patterns items cannot be procured without requisition from user department, his evidence shows that they can be procured and kept as reserved stock in view of their frequent use.
13) PW2 is the Deputy General Manager, Laboratories. Previously worked as Principal Scientific Officer in 1982. He stated that crucibles are consumables and recurring in nature and they are required in Central Laboratory. One crucible will be used in one test only. For analysis of one material, one may use as many as 5 to 7 crucibles to take the average value. The average consumption of crucibles per year was approximately 2000 pieces. Exs.P1A and P1B are prepared and approved by him. In the cross-examination he stated that crucibles are not permanent items and they are treated as shelf life items. After 1994- 95, they have not demanded crucibles nor received and as per his remembrance, there was no occasion to reject the crucibles on the ground that they were excessive or not required by the department.
14) Thus, the evidence of PW2 also in tune with PW1 inasmuch as, PW2 also says that crucibles are recurring consumables and for one test about 5 to 7 crucibles will be used in laboratory and their average consumption per year is 2000. However, the evidence of PWs.1 and 2 will not help prosecution to hold that without a demand from the user section, crucibles cannot be procured and stored as reserve stock. 19 15a) PW3 is the DGM, Materials at Naval Dockyard. He stated CDL being the user department, raises the requisition for local purchase on material supply department. For raising a demand by MMAT Department on MOV, there is a requirement of requisition from the user department (CDL). However, in the cross-examination he admitted that Manager, Material can maintain reserved stock on and above the actual requirement based on the past consumption pattern. He admitted that he joined in June, 1996 and he cannot say the procedure prevailing prior to 1996 personally.
b) As can be seen, the evidence of PW3 ultimately leads to the point that the Manager, Material can maintain reserve stock. 16a) PW4 who was the then Deputy Manager, Materials in Naval Dockyard during 1993-94, in his chief examination he stated that as per Store Keeping Manual, the procedure for procuring any material is that there should be LPR originated from the end user and it which should be approved by the General Manager (Technical) or General Manager (Refit) depending on the group. Then he spoke about Ex.P2--Demand Register, Exs.P1, P1(C) and P1 (D). During cross-examination when Ex.D3 which is a book styled as 'Navy Order' (Starred) 3 of 94 relating to naval stores, demands, accounting, economy and survey was shown to the witness he stated that the Navy Order was issued by Head Quarters, New Delhi on 07.03.1994 which is binding on all Naval Establishments. The said Navy Order pertains to non-pattern or nil- pattern items. After going through Ex.D3 he stated that Naval Dockyard 20 can make demand on MOV but it has to be intimated Eastern Naval Authority. If a demand meets under the said Naval Order, MOV can proceed with the processing of the demand for nil pattern items once the demand has been received from MMAT. He could not show any order there from prohibiting material department from purchasing nil pattern items without demand from concerned user section. On the other hand, in his further cross-examination he admitted that Manager, Materials maintains the stock over and above the actual requirement projected by the department including CDL in fast moving items i.e. recurring items. He further stated that fast moving items are grouped as ASD (critical list) and for the items mentioned in critical list, no users demand is necessary. He also stated that there was a periodical audit and inspection in their department and during his tenure no objection was raised by the audit in its inspection. He also stated that since requirement of crucibles had arisen within three months from the date of earlier demand, no separate NAC was obtained from CMP for 1600 crucibles. Similarly, they have not obtained separate sanction from Eastern Naval Command for those 1600 crucibles. He stated since source of supply of 3000 crucibles was already zeroed and febnard in order to have certainty of supply in short duration, they placed the order on A11 for 1600 crucibles also treating as non-PAC item.
b) Thus, the evidence of PW4 will not help the prosecution to establish its case. On the other hand, his testimony further strengthens the version of accused that for recurring items like crucibles no user 21 demand was necessary and Manager, Material can maintain stock over the above actual requirement projected by the CDL.
17) PW12 is the then Assistant Controller, Material Planning, Material Organization during 1994-95. In the cross-examination he stated that when demand was received by CMP from MMAT, it was not his duty to check whether there was any internal demand within the dockyard. He further stated Financial Regulation Part-I, Volume-1, Rule 131 permits items with shelf life should be procured in smaller lots. He also stated that depending upon urgency available stock position they raise LPRs. without firm demand. He stated that if the user department did not generate a demand and supply was made to it, it will automatically reject the receipt of the materials. His evidence too would project that depending upon the urgency they raise LPRs. without firm demand and as per Financial Regulations, shelf life items like crucibles can be procured in smaller lots. It is to be noted that his evidence goes against prosecution allegation that without user demand the accused made split purchase at inflated rate.
18) PW27--the-then Assistant Manager, Materials, Naval Dockyard in his chief examination stated that for a demand to be raised there should be LPRs. or requisition of user department. However, in the cross-examination he made interesting admissions. He admitted that Ex.D3 authorizes Naval Dockyard to raise demands of nil-pattern items on MOV. He further admitted that for consumable items illustrated in ASD critical list, demands are raised based on annual consumption 22 without any requisition. Thus, needless to emphasize, his evidence also treads the path of other witnesses.
19) A conspectus of oral and documentary evidence do not emphatically say the crucibles being non/nil pattern items should not be procured and stored as reserve stock without demand from user sections and such advance procurement is severely wrong as per the Standing Orders or some other Circulars. On the other hand, the evidence only shows that generally the LPRs. will be raised on demand from concerned user sections. However, basing on the consumption pattern of previous period, MMAT can maintain reserve stock of crucibles. There is a vast difference between governing the rule saying that a particular thing has to be done in a particular manner and a rule mandating procedural deviation as criminal offence. As already stated, the evidence in this case, at best, says that LPRs. can be raised on demand from user sections. At the same time, the evidence on record equally says that the crucibles being recurring consumables and nil pattern items can be procured and stored without demand from user sections. So, with the nature of evidence on hand, in my considered view, no criminal liability can be fastened on the accused for mere procurement of 3000 plus 1600 crucibles during the relevant period.
Point No.1 is accordingly answered against the appellant.
20) It has now to be seen in the Point No.2 infra, whether A1 to A10 conspired with A11 in the course of raising LPRs. and procuring the crucibles and thus committed offence.
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21) POINT No.2: Exs.P18 to P21 are the LPRs. said to be raised by accused pursuant to conspiracy.
a) PW7 was examined to prove the LPRs. However, in his cross- examination he unequivocally stated that those LPRs. are not complete documents and some more documents constituting those LPRs. are not with them and he was not the person concerned with those LPRs. and he has nothing to do with those LPRs. his evidence would show that LPRs. in full form are available with CMPR. As rightly observed by the trial Court his evidence is lethal blow to the prosecution case. So, it can only be held Exs.P18 to 21 are not complete documents and they were not proved by prosecution by examining the author of those documents.
b) Similarly Exs.P18(A), P19(A), P20(A), and P21(A) were also not dealt with by PW8 who stated that he never dealt with those documents. On the other hand, PW8 admitted in the cross-examination that in 1994 the Controller of Procurement was competent to sign the purchase order upto Rs.1,00,000/- without the financial concurrence under N.I. 1/S/81.
c) Then, the evidence of PW10 is of no avail to the prosecution because, there is no documentary evidence to prove the allegation that demand was raised by A1 and A2 on 22.07.1994 for purchase of 3000 carbon and sulphur free crucibles.
d) Then, to establish the allegation that without calling for quotations and sending tender documents to registered suppliers and manufacturers, the prosecution examined PWs.14 to 17 and 30 who are 24 the registered suppliers of materials to Eastern Naval Command, Visakhapatnam. No doubt, in their chief examination they stated as if they did not receive tender enquiry with regard to crucibles in question however, in their cross-examination they stated that they never supplied crucibles earlier. They further stated that generally the tender documents would be sent by ordinary post and some times they or their representatives would collect the tender documents from the concerned department and if they consider it not necessary to submit quotations they would simply ignore those tender enquiries. Hence, their evidence is not helpful to conclude that no tender enquiries were supplied to them in respect of impugned crucibles. On the other hand, the record shows that tenders were called for supply of crucibles for which quotations were submitted by LW28 and LW30 at the rate of Rs.249/- and 260/- per crucible respectively. Whereas A11 submitted his quotation at Rs.245.30 ps. His being the lowest tender, the same was accepted. In that view, the prosecution allegation that A1 to A10 conspired together and created wrongful gain to A11 and wrongful loss of Rs.3,92,000/- to the department do not stand to scrutiny. In this regard, the trial Court on threadbare analysis of evidence on record has rightly held prosecution has failed to prove the charges brought against the accused. I find no illegality or perversity in the evidence recorded by the trial Court.
Hence, Point No.2 is held against the appellant.
22) POINT No.3: In view of the findings in points 1 and 2, which disclose that the prosecution failed to bring home the guilt of the 25 accused in respect of the charges levelled against them, the contention of the appellants in respect of the finding of the Trial Court relating to sanction aspect is only an academic one and holds no much conviction.
This point is answered accordingly.
23) In the result, this Criminal Appeal is dismissed by confirming the acquittal recorded by the Trial Court in its judgment in C.C.No.12 of 1999.
As a sequel, miscellaneous applications pending if any shall stand closed.
_________________________ U. DURGA PRASAD RAO, J Date: 19.11.2018 Scs/Murthy