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Delhi District Court

(1) S.P. Chengalvaraya Naidu (Dead) By ... vs . Jagannath on 1 November, 2014

       IN THE COURT OF SHRI L.K. GAUR, SPECIAL JUDGE
                   P.C. ACT (CBI­09), CENTRAL DISTRICT, 
                         TIS HAZARI: DELHI 
CC No. 71/11
R.C. No. 3(A)/98
ID No. 02401R0118902000


Central Bureau of Investigation

                                               Versus


1.     Shri Dilbagh Singh Kanwar
       S/o Late Shri Surjit Singh
       R/o 9/9778, Vasant Kunj,
       New Delhi.


2.     Sh. Md. Dilawar Mir
       S/o Sh. Ghulam Rasool Mir,
       R/o A­9, Gandhi Nagar (Govt. Quarters)
       Jammu.


3      M/s Good Friends Agencies,
       95, Qutab View Apartments, 
       Shaheed Jit Singh Marg, 
       New Delhi.


Date of Institution                           :   01.03.2000
Date of reserving Judgment  :   12.05.2014
Date of Pronouncement                         :   27.09.2014

C.C. No. 71/11                                                                            
 JUDGEMENT 

Preliminary Accused Sh. Dilbagh Singh Kanwar, who was working as General Manager (Marketing and Personal Administration) with National Fertilizer Limited (hereinafter referred to as 'NFL') at the relevant time i.e. 1993­96 and Sh. Mohd. Dilawar Mir proprietor of M/s Good Friends Agencies were sent up for trial under Section 120B IPC read with Section 420 and Section 13(2) read with 13(1)(d) of the Prevention of Corruption Act ( hereinafter referred to as 'Act' )and under Section 420 read with Section 511 Indian Penal Code ( hereinafter referred to as ' Code').

Facts

2. As per the allegations leveled in the charge sheet, findings of a preliminary inquiry revealed that accused Sh. D.S Kanwar along with other officials of NFL namely Sh. M.A Sarma and Sh. Anil Kumar Sharma had entered into a criminal conspiracy with the accused Mohd. Dilawar Mir proprietor of M/s Good Friends Agencies during C.C. No. 71/11 the period 1993­96 at New Delhi for cheating NFL and caused undue loss to NFL and corresponding gain to themselves.

3. It is further alleged that pursuant to the said criminal conspiracy accused Sh. D.S. Kanwar had awarded to Mohd. Dilawar Mir of M/s Good Friends Agencies a Handling and General Services contract for sale of urea at exorbitant rate in the State of Haryana and Punjab without inviting tenders or obtaining the concurrence of Finance and Management. Further pursuant to the said conspiracy Sh. D.S Kanwar in conspiracy with Sh. Anil Kumar Sharma and Sh. M.A Sarma had paid Rs.30 lacs to Mohd. Dilawar Mir of M/s Good Friends Agencies without it having fulfilled any contractual obligation and also knowing that M/s Good Friends Agencies had submitted false bills at the Zonal office, Chandigarh for claiming payments.

4. It has further been alleged that according to the investigation carried out this contract begins with a communication received from the Hon'ble Union Minister of State for Chemicals and Fertilizers during May 1993 enclosing therewith a request of M/s Good Friends Agencies for their appointment as Handling and General Services C.C. No. 71/11 Contractor. Thereafter Sh. D.S Kanwar awarded this contract to M/s Good Friends Agencies without involving any other official of NFL in processing and finalization of the contract except his Personal Secretary for typing out the contract. While doing so Sh. D.S Kanwar also exceeded his powers because he could have entered into contracts on behalf of NFL only up to Rs.50,000/­ in each case and here the contract had financial implications much beyond his powers. As noted above, he did so without concurrence of finance. It has also been alleged that this contract was awarded by Sh. D.S Kanwar despite knowing the fact that all the activities referred to in the contract were being performed either by the NFL officials or by their already appointed Handling Agents/Contractors and, therefore, this contract was not necessary.

5. As per the investigation M/s Good Friends Agencies had submitted the bills for payment of remuneration at Zonal Office, NFL at Chandigarh without having performed any work. The payments, however, could not be released to him because the Area Managers were not inclined to certify those bills for payment as was required by the procedure being followed. When accused Mohd. Dilawar Mir of M/s Good Friends Agencies failed to get any payments from Zonal C.C. No. 71/11 Office, Chandigarh, he had approached Sh. D.S. Kanwar at New Delhi for release of payments. Despite knowing the fact that no job had been performed as per the terms and conditions of contract by M/s Good Friends Agencies, accused Sh. D.S Kanwar had exerted pressure on his subordinates and made Sh. Anil Kumar Sharma, the then Dy. Manager to put up a note of 01.06.1994 recommending release of Rs.30 lacs as ad­hoc payment to which Sh. M.A Sarma Dy. General Manager could not dare object. Sh. D.S Kanwar approved the proposal for the release of Rs.30 lacs as payments on 01.06.1994 itself. It has also been stated that Sh. D.S Kanwar could not have released such a huge amount to a party without the bills having been processed for payment and such payment, if any, was to come from Zonal office, Chandigarh. Accused Sh. D.S Kanwar did not even wait for the bills to come from Chandigarh though he had instructed the Zonal Manager Sh. R.K. Khanna to come with the pending bills of M/s Good Friends Agencies on 31.05.1994 and proceeded to make the payment, as stated above, of Rs.30 lacs on 01.06.1994. In order to cover up his act of showing favour on 01.06.1994 Sh. D.S Kanwar instructed and pressurized Sh. R.K. Khanna, Zonal Manager on his arrival at New Delhi on 03.06.1994 to C.C. No. 71/11 initiate a note mentioning the date of 31.05.1994. Thus, on 03.06.1994 he signed the note dated 31.05.1994 inter­alia stating that he was seeking the advice and guidance of Central Marketing Office in respect of the bills submitted by M/s Good Friends Agencies, since the modalities had not been formulated for the execution of the contract with M/s Good Friends Agencies so that it may enable the Zonal Office to process/scrutinize the bills. It was indicated therein that from October 1993 to May 1994 what had been the quantum of sales to Institutional buyers. This note was placed before Sh. M.A Sarma Dy. General Manager who instructed Sh. A.K. Asija to process the contract. Sh. A.K. Asija had highlighted the services which had not been rendered by M/s Good Friends Agencies. Three officers including Sh. A.K. Asija and Sh. Anil Kumar Sharma worked out that after recoveries Rs.8.03 percent may be payable to M/s Good Friends Agencies after verification of the work done by the field staff of NFL on the bills of M/s Good Friends Agencies and after settling the recoveries due, if any, from M/s Good Friends Agencies as per the contract. This apparently was made the basis for the release of above advance of Rs.30 lacs. According to the case of the prosecution though M/s Good Friends C.C. No. 71/11 Agencies had not performed any work but accused Sh. D.S Kanwar instead of canceling the contract had extended the same vide his letter dated 19.05.1994 for another period of four years and six months.

6. Since despite after the release of ad­hoc amount of Rs.30 lacs on 01.06.1994 by Sh. D.S Kanwar to M/s Good Friends Agencies the field staff of NFL continued to refuse to certify the bills for payment because of not performing any job as per the contract, Sh. D.S Kanwar in order to overcome such hindrances on 07.04.1995 reduced the scope of work of M/s Good Friends Agencies granting a st flat remuneration of Rs.15 per metric ton from 1 April 1995 up to 30.09.1998.

7. In the charge sheet there is also a reference made to the fact that if one were to go by the terms and conditions of the contract the following amounts were recoverable from M/s Good Friends Agencies :

(1) Rs.132.82 lacs by way of interest on defaulted payments from Institutional Agencies.

C.C. No. 71/11

(2) Rs.1566.90 lacs by way of margins allowed to Institutional Agencies over and above standard margins.

8. As per the conclusions reached after the investigation, Sh. D.S Kanwar had abused his position as public servant to favour Mohd. Dilawar Mir and as a result of a criminal conspiracy between the two, they had defrauded NFL a Government owned Company to the tune of Rs.30 lacs and attempted to cheat NFL to the tune of Rs. 6,78,24,203.45/­.

Prosecution Evidence

9. The prosecution to prove its case in all had examined 47 witnesses.

PW­1

10. Witness PW1 Sh. Visambher Lal Arora had deposed that in the year 1990 he was working as contractor for the internal handling of urea bagging and loading with NFL at Bhatinda branch. He had worked for NFL at Panipal from 1991 to 1994. His main job as contractor for NFL was to bag the material from the factory and handle it at various stages like loading the bags in trucks and C.C. No. 71/11 wagons. As per his testimony during his working at NFL plant at Panipat, he had never seen any representative of M/s Good Friends Agencies. According to him during the year 1991 to 1999 it was his firm M/s Vishambhar Lal Arora H&T Contractors and M/s H.L Bhatia who had been doing all the works for NFL at Panipat Plant. PW­2

11. Witness PW2 Sh. Jagdish Chand Arora had deposed that he had been working as contractor for Transporting and Handling urea fertilizer during the period 1991 to 1998 in the State of Punjab for NFL and for some other government agencies. He had explained the entire procedure as to how they were working. According to him Officers of NFL used to handover GRs (Good Receipts) of railways after making endorsement on them. On the basis of the said GRs they used to get urea from the railway rakes at railway station Jalandhar. Thereafter they used to get the urea unloaded and get counted by some officer of NFL. After the counting was over, as per the directions of the officers of NFL they used to transport the urea to the destinations, after loading them into trucks, in Districts, C.C. No. 71/11 Jalandhar, Hoshiyarpur, Kapurthala and Nawa Sahar. After having delivered the urea at different destinations, as per the directions of the Officers of the NFL, they used to bring back the receipts of delivery of urea and prepare a statement of such receipts received and submit to the NFL. In respect of M/s Good Friends Agencies he had deposed that during the period from 1993 to 1995 some representative of that company had approached him 3­4 times and demanded the statement of the fertilizer movement to which he had replied that he had already forwarded the same to the NFL. As per his testimony M/s Good Friends Agencies had not worked as transporter in that area for NFL.

PW­3

12. Witness PW3 Shri Sumer Pathak had deposed that from 1992 to till 1995 he was posted as Area Manager, Patiala and there were six districts under his jurisdiction. There were 14­15 persons working under him. His main job was selling NFL products for which he used to collect orders from private parties and Institutional Agencies and C.C. No. 71/11 also collect payments from them. His job also involved sending relevant information to the Manager from time to time. In respect of M/s Good Friends Agencies the witness had deposed that in 1997 there was an Agreement received in his office signed by the then General Manager (Marketing) witjh M/s Good Friends Agencies. Under the contract M/s Good Friends Agencies was required to perform certain jobs, but M/s Good Friends Agencies had not performed any of the jobs mentioned in the contract but had submitted the bills at Zonal office, Chandigarh for payment. The said bills were forwarded to his office for verification but the bills were not verified by them because no work had been done by M/s Good Friends Agencies.

13. The document D­11 (Ex.PW3/A) a note on the subject of apportionment of remuneration was shown to the witness. This witness had identified the said note which had been signed by him at point A as Dy. Manager (Institution) and submitted the same to Group Manager (Marketing). The witness had deposed that with regard to the points raised in the note Ex.PW3/A there was a three member committee constituted for apportionment of remuneration to C.C. No. 71/11 be paid to M/s Good Friends Agencies. The witness had identified the recommendations of the said Committee D­10 Ex.PW3/B bearing the signatures of Sh. R.K. Khanna at point A, Sh. Pradeep Dey at point B and Sh. V.K. Kataria at point C and further of Sh. D.S. Kanwar at point D having approved the said recommendations of the Committee.

14. The witness had further identified the document D­56 Ex.PW3/B, an inter­office memo dated 4.6.96 addressed to Zonal Manager NFL, ZO Chandigarh bearing his signatures at point A as Dy. Manager (Marketing) whereby he had proposed termination of contract with M/s Good Friends Agencies, which was endorsed by Sh. J.C Chhibber and putting his signatures at point B. PW­4

15. Witness PW4 Ms. Rashmi Kataria had deposed that she was running a transportation business in the name and style of M/s Manak Enterprises. They had been given work of transportation of Fertilizer and Urea by NFL after participating in the tendering C.C. No. 71/11 process. They were given the work of transportation of NFL, Kurukshetra District. The material was unloaded at railway rakes and transported to different destinations as informed by Officers of NFL or KRIBCO. After transporting the material they used to submit the bills of handling and transportation to the Field Officers of NFL who used to supervise their work at railway heads. When she was asked about M/S Good Friends Agencies having visited at rake point at Kurukshera in 1998­99, she had deposed that she did not know any person of M/s Good Friends Agencies face to face and she was also not in a position to say if anyone had visited her along with the Officer of the Company (NFL) to make inquiries about M/s Good Friends Agencies.

The witness was cross­examined by the Ld. Prosecutor on certain points.

PW­5

16. Witness PW5 Sh. R.K. Khanna had deposed that in 1994 he was promoted as Zonal Manager and posted at NFL, Chandigarh. C.C. No. 71/11 He had succeeded Sh. O.P. Kaviraj, though Sh. Kaviraj had not handed over the charge to him. Sh. Kaviraj had left for Delhi office prior to his joining at Chandigarh. He did not have any talk with Sh. Kaviraj with regard to the files etc. The files which were pending for clearance were lying with the P.A of Sh. Kaviraj. There were some confidential papers which were lying in the drawer of the office table under the charge of Sh. Kaviraj. He had telephoned Sh. Kaviraj to send the keys to him. He was assisted by his P.A one Mr. Bhandari in clearing some of the pending dak. In the dak he had found a bunch of bills related to M/s Good Friends Agencies. He had learnt that M/s Good Friends Agencies had been appointed as Contractor for handling and to liaison with institutions etc. The contract was for the purpose of Handling cum General Service relating to supply of urea to institutional agencies in Punjab and Haryana. He had requested Mr. D.S. Kanwar G.M., NFL, New Delhi to provide him guidelines and detailed copy of the contract. He, however, did not receive any details for carrying out different works in terms of his request.

C.C. No. 71/11

17. He had further deposed that since he was not supposed to do anything on the said bills, therefore, he had not taken any action. Accused Mr. Mir had visited him for payment of those bills which he had submitted earlier. He had informed the accused Mr. Mir that on the basis of the said bills no payment can be made because those bills should have been forwarded through the field staff and also because those bills had not come through proper channel. He had been informed by the field staff that M/s Good Friends Agencies had not done any work. He was also informed that organization was having sufficient contractors and no fresh contractor was required. Mr. Mir had come to meet him twice or thrice in this regard over a period of time. Those bills remained with him for about one and half or two months. During the period Mr. Mir was pressing for payment of bills, he had received a call from Delhi Marketing Office, G.M Secretariat that those bills be sent to Delhi. As far as the witness could remember, he was supposed to sent the bills on 31st May. On 1st June he had received a call to produce those bills in Delhi office himself. He had visited Delhi on 2nd June along with the bills. Though he was not sure but according to him he was given C.C. No. 71/11 instructions to produce the bills either by Sh. Anil Sharma or by Sh. D.S. Kanwar.

18. Witness had identified Seizure Memo D­27 by which the documents related to his TA bills had been handed over to the I.O by Sh. Y.P. Bhola Dy. Manager (F&A). He had further identified the ticket Ex.PW5/C for undertaking the journey from Chandigarh to New Delhi on 2.6.1994 and the ticket Ex.PW5/B for undertaking journey on 4.6.1994 from Delhi to Chandigarh and also the fare bill Ex.PW5/D submitted by him under his signatures at point A to his Department for reimbursement.

19. In respect of the note dated 31.5.1994 D­3 (Ex.PW5/E) the witness had deposed that though this note bears the date 31.5.1994, but it was actually signed by him on 2.6.1994. It had been prepared by Dy. Manager (Accounts) Mr. Kataria and given to him for being signed.

20. According to the witness on the instruction of New Executive Director a Committee was formed for the apportionment of C.C. No. 71/11 remuneration which included Mr. P.K. Dey from Central Marketing Office, Mr. Kataria from Central office and himself. He had identified his signatures on the said document Ex.PW3/B and also that of other signatories. The witness had also identified his signatures on the note relating to the constitution of Committee for apportionment of remuneration on the notes of 9.4.1996 and 4.5.1996 Ex.PW5/F. The witness had further identified his signatures on a note of 26.9.1996 on the subject regarding confirmation of original documents of M/s Good Friends Agencies, whereby the witness on 27.9.1996 had informed inter­alia that no original papers pertaining to M/s Good Friends Agencies were available with him.

21. The witness had further identified his signatures on the following documents :

i) Note addressed to Executive Director dated 5/8­7­96 D­55, Ex.PW5/F­2, whereby he had informed the Executive Director that no offer letter/ acceptance letter was available at the Zonal Office Chandigarh relating to M/s Good Friends Agencies and also there was no record available that the case was processed from Zonal Office, Chandigarh.

C.C. No. 71/11

ii) Note dated 5.7.1996 D­55 Ex.PW5/F­3 whereby the witness had commented on the note of one Raj Kumar Group Manager clarifying his position that at no point of time there was pressure for verifying the bills on him and he had been merely asked to comment as to whatever he wanted to give on the body of bills in order to submit the bills to the other section.

iii) Reply dated 4.7.1996 to a fax message to Executive Director (Vigilance) in reply to a fax message dated 1.7.1996 D­55 Ex.PW5/F­4 stating inter­alia that the files in respect of M/s Good Friends Agencies have already been submitted to the auditors through Central Marketing Office and no payment had been released to the party from Zonal Office, Chandigarh.

iv) Letter dated 24.6.1996 of Sh. R.K. Khanna addressed to the Executive Director Ex.PW5/F­5 giving comments to some audit objection stating inter­alia that there was no apportionment of the work order. The basis of the calculation of this amount was as per the contract and quantity supplied to institutions of Punjab and Haryana during the year 1994­95.

C.C. No. 71/11

v) It is a note dated 13.6.1996 Ex.PW5/F­6 submitted to the Executive Director (Marketing P&A) stating inter­alia that discontinuation of the contract with M/s Good Friends Agencies will not affect their performance in any way.

vi) Note dated 13.6.1996 Ex.PW5/F­7 submitted to the Regional Manager (Punjab) asking inter­alia the Regional Manager (Punjab) to submit its comment with regard to the performance of M/s Good Friends Agencies.

vii) Letter dated 21/24.5.1996 Ex.PW5/F­8 addressed to the Regional Manager, NFL, Regional Office observing inter­alia that as per the observations given by the field staff no work had been performed by M/s Good Friends Agencies and to invite the comments of the Regional Manager as to whether it will be in the interest of the organization to continue with the present arrangement with M/s Good Friends Agencies.

viii) Note dated 18.1.1995 Ex.PW5/G submitted to Group Manager forwarding along with it photocopy of letter from M/s Good Friends C.C. No. 71/11 Agencies and the indents claimed to have been obtained from Punjab Agro Industries Corporation and also informing no cognizance on the said indent had been taken because they had not been signed by any authorized representative from Punjab Agro Industries Corporation.

ix) Note dated 16.1.1995 submitted to Group Manager Ex.PW5/G­1 forwarded along with it photocopy of the letter received from M/s Good Friends Agencies intimating/forwarding indents from Institutions also informing inter­alia that no indent has been received by them from any institution at the standard margins fixed by Government of India.

x) Note dated 16.1.1996 Ex.PW5/G­2 submitted to the Group Manager forwarding along with it photocopy of the letter received from M/s Punjab Agro Industries Corporation, Chandigarh intimating non­availability of any of the representatives of M/s Good Friends Agencies at their office.

C.C. No. 71/11

xi) Letter addressed by Sh. R.K. Khanna, Managing Director (F&A) dated 2.12.1994 Ex.PW14/A introducing M/s Good Friends Agencies to it and stating inter­alia that it would be carrying out activities mentioned therein relating to supply of urea fertilizer to HAFED in the State of Haryana.

xii) Letter dated 2.12.1994 Ex.PW5.G­4 addressed to Managing Director MARKFED introducing M/s Good Friends Agencies to it stating inter­alia that they will carry out activities mentioned in the letter pertaining to supply of urea fertilizer in the state of Punjab.

xiii) Letter dated 2.12.1994 Ex.PW5.G­5 addressed to Managing Director Punjab Agro Industries Corporation introducing M/s Good Friends Agencies to it stating inter­alia that they will carry out activities mentioned in the letter pertaining to supply of urea fertilizer in the state of Punjab.

xiv) Letter dated 2.12.1994 Ex.PW5.G­4 addressed to Managing Director Haryana Agro Industries Corporation introducing M/s Good Friends Agencies to it stating inter­alia that they carry out activities C.C. No. 71/11 mentioned in the letter pertaining to supply of urea fertilizer in the state of Punjab.

PW­6

22. Witness PW6 Sh. Vijay Singh Sangwan had deposed that he was working as Development Officer at NFL, Bhiwani from 1993 to 1996. His main job was to sell urea to institutional agencies as well as private traders of Bhiwani district. In April 1995 he had received a circular from Area Manager NFL intimating him that M/s Good Friends Agencies has been appointed as Handling and General Services contractor for supply of urea fertilizer to institutional agencies for Punjab and Haryana states. He was approached by one Mr. G.S Gogi and one another person from M/s Good Friends Agencies during October 1995 to March 1996. They used to visit him for collecting information relating to requirement of supply for urea fertilizer agency­wise and to institutions. To this effect there was also a joint verification report signed. In the course of testimony the witness had deposed that the representatives of M/s Good C.C. No. 71/11 Friends Agencies used to remain at the platform at the time of unloading of material and its dispatch only for the purpose of collecting the rake disposal data relating to the quantity, on the basis of which a Joint Verification Report was prepared by M/s Good Friends Agencies and they used to get his signatures on the same. According to him he had signed the said Joint Verification Report because of a letter he had received from the Area Manager stating therein that M/s Good Friends Agencies had been appointed as contractor and in this letter duties of M/s Good Friends Agencies had also been defined such as supervision at rake points, collection of orders from Government agencies and after dispatch getting the confirmation from the Government agencies as to the receipt of the fertilizer. According to him besides collecting the data M/s Good Friends Agencies was not doing the job of Handling and General Services. He had also clearly deposed that from 1993 to 1996 he had been collecting the order of fertilizer from Government institutions and private traders, he was collecting acknowledgements from them as to the receipt of fertilizer at their end and also collection of payment from private traders. According to him the payments from the Government institutions were directly collected by the Zonal C.C. No. 71/11 Office on the basis of the acknowledgments he used to send to Zonal Office through the Area Office.

PW­7

23. Witness PW7 Sh. Parveen Kumar had deposed that from 1994 to 1997 he was posted as Development Officer in the office of NFL at Karnal. His main job was to market urea fertilizer to institutional agencies as well as private traders. The witness had described the main jobs of "Handling Transport and General Services Contract" as to collect bulk orders of urea from institutions; collect railway receipt from units; supervise loading operations in the unit; supervise rail handling and transportation at rake points; liaison with field staff and institutions regarding supply indents as well as acknowledgement from institutions. As per his testimony the job of handling and transportation involved proper handling of rake of urea i.e. counting of bags, unloading and loading of rakes and disposal of the material within the stipulated time allowed by railways without any wharfage/ demurrage. According to him M/s Good Friends Agencies had not C.C. No. 71/11 done any of the said jobs. He had disclosed that it was one M/s R.R Enterprise or R.R Company which had been appointed as regular H&T Contractor by NFL at Karnal rake point. As per his testimony representatives of M/s Good Friends Agencies had met him 2­3 times at rake point only to get the details of rakes handled by H&T contractor of NFL from him and he had provided the details to him. He had also put his signatures on the proforma given by the representative of M/s Good Friends Agencies in confirmation of actual quantity of urea handled in the rake which was called 'Joint Verification Report'. He had given the reason for doing so as, that he had instructions from the Management that the representative of M/s Good Friends Agencies will be visiting the rake point for supervision of rakes. Since the representative of M/s Good Friends Agencies was present at a few rakes, therefore, the disposal of rake quantity was signed jointly by him and the representative of M/s Good Friends Agencies. But besides it the representative of M/s Good Friends Agencies had not performed any type of supervision at the time of handling of rakes. He had further stated in his testimony that he was collecting the orders from private dealers as well as institutions and their payments and acknowledgements were also C.C. No. 71/11 collected by him and as far as the handling of transportation was concerned, this job was being done at Karnal rake point during 1994 to 1997 by R.R and Company or M/s R.R Enterprises, the witness was not sure about the exact name.

PW­8

24. Witness PW8 Sh. Anil Kumar Sharma had deposed that in 1994­95 he was working as Additional Manager (Marketing). Some time in 1994 he was called by Sh. D.S. Kanwar in his chamber and told him about the contract between NFL and M/s Good Friends Agencies signed in 1993 and also asked him to release ad­hoc payment of Rs.30 lacs. According to this witness he had argued that ad­hoc payments can only be released on the basis of bills. On this he was informed that Sh. R.K. Khanna the then Zonal Manager Chandigarh would be coming the next day with bills. There was a document handed over by Sh. D.S Kanwar to him for release of payment which he had signed and handed over to Sh. M.A Sarma who was then working as Dy. General Manager. He had identified C.C. No. 71/11 the said note Ex.PW8/A bearing his signatures at point A in the Court including the signatures of Sh. D.S. Kanwar, Sh. M.A Sarma and Sh. Kataria appearing at points B, C and D. At the time when this note was signed, there were actually no bills. The bills were brought by Sh. R.K. Khanna after one or two days. This payment of Rs.30 lacs was finally approved by Sh. D.S Kanwar. Sh. D.S Kanwar had also instructed him that this payment was to be released immediately as there were directions. When he had told him that the cheque is to be issued from Zonal Office, Chandigarh, he insisted that there was pressure to release the payment immediately from the Managing Department. The Accounts Department was responsible for issuing the cheque. Sh. D.S Kanwar had directly personally collected the cheque of Rs.30 lacs.

25. This witness had further deposed that he was instructed by Sh. D.S Kanwar to formulate the guidelines for contract. A note was initiated by Sh. R.K. Khanna in his presence along with the bills to formulate the guidelines. The same was then marked to Sh. A.K. Asija who had submitted the report that most of the jobs were being done by NFL officials. As such necessary instructions were made C.C. No. 71/11 out to recommend that out of total amount of Rs.100 per MTR only a payment of about Rs.8 per MT be made. The bills received were not verified by the field staff NFL. This fact had also been brought to the notice of Sh. D.S Kanwar. Payment @ Rs.8 per MT was approved by Sh. D.S Kanwar. This amount was later increased to Rs.15 per MT most likely after the superannuation of Sh. D.S Kanwar. The witness had identified the note of Sh. R.K. Khanna bearing the date of 31.5.1994. He had deposed that though this note was dated nd rd 31.5.1994 but the same was signed by Sh. R.K. Khanna on 2 or 3 of June 1994 when he came from Chandigarh and he was told by Mr. D.S Kanwar that it was to be processed showing date of 1.6.1994 as the payment was released on 1.6.1994 itself and it may lead to audit objections. Witness had identified his initials in the circle B and had also identified the signatures of Sh. A.K. Asija on page 2 of this note at point 'B'. He further identified his own signatures at point 'B' on page no.3, signatures of Mr. Kataria at point D and also of Sh. A.K. Asija and Sh. D.S Kanwar on page 3 of this note at points C and E. He has also added that Sh. D.S Kanwar did not have the power to release a payment of Rs.30 lacs. As per his testimony the proposal for contract with M/s Good Friends Agencies was not initiated by his C.C. No. 71/11 Department and in this case while awarding the contract Sh. D.S Kanwar had exceeded his powers.

PW­9

26. PW9 Sh. M.A Sarma had deposed that he had joined NFL as Assistant Manager (Marketing Research) in the year 1978. Sh. D.S Kanwar was the General Manager (Marketing) and In­charge of the Marketing Division. In 1994 Sh. D.S Kanwar had called him to his office regarding some ad­hoc payments to be made to M/s Good Friends Agencies. He had identified the note Ex.PW8/A regarding which he was called by Sh. D.S Kanwar and also his signatures appearing on it at point C. The witness had also identified his signatures on document D­3 running into three pages with his initials F1 on pages 1, 2 and 3 collectively Ex.PW9/A. As per the testimony of this witness Sh. D.S Kanwar was whole sole and one man show. He was enjoying all the powers delegated or not delegated. He did not have the power to release the payment of Rs.30 lacs. C.C. No. 71/11 PW­10

27. Witness PW10 Sh. M.L. Jain had deposed that the account of M/s Good Friends Agencies at Bank of Baroda, Bhikaji Cama Place was opened on 02.06.1994. It was introduced by Sh.R.S Sharma proprietor of M/s Rajasthan Fertilizers Trading Corporation also having a current account in the same branch. The witness had identified the Account Opening form of M/s Rajasthan Fertilizers Trading Corporation Ex.PW10/A and also the specimen signature card Ex.PW10/B, letter of the bank Ex.PW10/C addressed to Sh. R.P. Aggarwal, S.P CBI forwarding to him along with it certain documents, letter written by the bank to Sh. R.S Sharma of M/s Rajasthan Fertilizers Trading Corporation thanking for introducing the account of M/s Good Friends Agencies, cheques D­14 to D­24 Ex.PW10/F1 to F11 issued from the account of M/s Good Friends Agencies during the period from 10.6.1994 to 14.2.1995 which were seized by the Investigating Officer Sh. O.N. Kaul by memo Ex.PW10/E. C.C. No. 71/11 PW­11

28. Witness PW11 Sh. Harish Kumar Arora had deposed that he remained posted as Manager, Bank of Baroda, Bhikaji Cama Place, New Delhi. Witness had identified the same documents as identified by the witness PW10 Sh. M.L. Jain and in addition to it he had also identified the document i.e the cheque dated 1.6.1994 Ex.PW11/A of Rs.30 lacs deposited in the account of M/s Rajasthan Fertilizer Trading Corporation on 2.6.1994 i.e on the same day when the account was opened.

PW­12

29. Witness PW12 Sh. Anil Motsara had deposed that he was working as Assistant Manager in the Logistics Section. The main job of the Logistics Section was to appoint handling and transportation contract and to finalize the warehouse arrangements. According to him the H&T Contractors were finalized in two ways. One was to appoint the regular contractors after being finalized through press and notice inviting tenders and second was to appoint ad­hoc C.C. No. 71/11 contractors without inviting contractors i.e through spot quotations. He had deposed that generally ad­hoc contractors were appointed for a period of six months which was extendable for another six months in emergency cases. In respect of M/s Good Friends Agencies he had deposed that he was not aware of the details of M/s Good Friends Agencies. He came to know about the contract with M/s Good Friends Agencies at the termination of the said contract somewhere around 1996 that M/s Good Friends Agencies was appointed for seeking orders from institutional agencies for sale of urea. The contract was signed by Sh. D.S Kanwar on behalf of NFL. He had not received any paper with regard to this contract in his department. According to him it was basically Sales and Distribution Department dealing with the contract and generally it was the advance payments which were being handled by the Logistics Department to H&T Contractors which were made with the approval of the General Manager. As per his testimony, General Manager (Marketing) could make advance payment up to Rs.50,000/­ in ad­ hoc contracts, however, in cases of regular contracts he could make full payment. He denied having any knowledge of making any advance payment to M/s Good Friends Agencies.

C.C. No. 71/11 PW­13

30. Witness PW13 Sh. O.P Kaviraj had deposed that he was working as Assistant General Manager (Marketing) in 1996. One Sh. N.K. Gupta was his Predecessor. He became General Manager (Marketing) in 1996 in the same office. In September he was posted at Chandigarh and at that time there was a contract between NFL and M/s Good Friends Agencies entered into but he did not know who had signed/entered into this contract on behalf of NFL. The witness was cross­examined by Ld. Prosecutor for CBI. In the cross­ examination it was admitted by him that the contract was signed by Sh. D.S. Kanwar on behalf of NFL with M/s Good Friends Agencies. The contract related to sale of urea fertilizer to institutional agencies in Haryana and Punjab and that after having gone through the record he had informed the CBI officials that Sh. D.S Kanwar had violated the rules and regulations while entering into the said contract. He had also admitted that he had given the statement to CBI that the contract was entered without following the tendering process and that Sh. D.S Kanwar did not have the power to enter into a contract on C.C. No. 71/11 behalf of NFL as per the delegation of powers. He had further stated that as per the office order dated 22.6.1990 Ex.PW18/1, para 3 all the powers involving financial implications were to be exercised in prior consultation with the Head of the Finance Department. General Manager (Marketing) could enter into a contract for sale of products etc in case the financial expenditure involved was less than Rs. 50,000/­. He had added that the delegation of power of General Manager was upto Rs.50,000/­ as per the prescribed procedure and vetted by finance department. As per this witness, Sh. D.S Kanwar was not competent to enter into a contract because it involved expenditure of more than Rs.50,000/­. He had added that when a contract is entered, the question arises as to how the necessity arose for entering into such a contract. Such necessities arise at the level of Zonal office which are conveyed to the Central office informing as to what kind of services they would need so that the contract with the vendors could be entered into. He had deposed that M/s Good Friends Agencies had entered into a contract without prior approval of the Director (Finance). Proprietor of M/s Good Friends Agencies Mohd. Dilawar Mir had presented certain bills at Zonal office, Chandigarh when he was posted as General Manager during the C.C. No. 71/11 period 1993­94 but he had not taken cognizance of the same and kept them pending because he could not understand as to why this contract was at all made. The witness had volunteered, as at that time there was shortage of urea, demands were more and supplies were less and because of it advance cash sales were going on. Witness had identified the documents Ex.PW13/PX4, a letter by which some information he had provided to CBI and had sent documents Ex.PW17/22, Ex.PW17/22A (Colly), Ex.PW17/23 having the details of the institutional sales in the region of Punjab and Haryana. He had also identified the letter Ex.PW13/X5 bearing his signatures by which he had supplied certain information to S.P, CBI after collecting the same from the Zonal Office and also forwarded the letters Ex.PW13/PX6 and Ex.PW13/PX7.

31. The witness had referred to the writ petition filed by M/s Good Friends Agencies Ex.PW13/PX9 before the Hon'ble High Court and the counter affidavit to the same filed on behalf of NFL Ex.PW13/PX8. According to him during his tenure from 1.10.1993 to March 1994 none of the field staff had verified the bills of M/s Good Friends Agencies. According to him as per the record, the payment C.C. No. 71/11 of Rs.30 lacs as an advance to M/s Good Friends Agencies was made by Sh. D.S. Kanwar without verification.

PW­14

32. Witness PW­14 Sh. Raj Kumar had deposed that during 1993­1995 he was posted as Assistant Personal Officer with NFL and attached to Sh. D.S Kanwar the then General Manager (Marketing). His duties as Private Secretary were to attend his phone calls, visitors, taking dictation, typing etc. As per his testimony in the year 1993 M/s Good Friends Agencies had entered into a contract with NFL. Mr. Mir was the proprietor of M/s Good Friends Agencies. He used to come to their office quite often. He had deposed that he had not dispatched the copy of the contract entered into between NFL and M/s Good Friends Agencies to Zonal Manager, NFL, Chandigarh. He had also stated that during that period Mr. Edwardo Flerio was the Minister of State for Chemicals and Fertilizers. But he denied that there was any letter of recommendation received from the Minister in favour of M/s Good C.C. No. 71/11 Friends Agencies. He had stated that P.S of the Minister, Sh. Amar Sinha sometimes used to make calls to Sh. D.S Kanwar.

33. The witness had identified the signatures of Sh. D.S. Kanwar on Ex.P4 addressed to M/s Good Friends Agencies dated May 19, 1994 intimating that the Company was in the process of verifying the extent of services rendered by M/s Good Friends Agencies to NFL. Inter­alia in the said letter there had been reproduction of the contract entered into between NFL and M/s Good Friends Agencies. He had also identified the letter/inter office memo dated 19.5.1994 Ex.P­3, signed by Sh. D.S Kanwar addressed to the Zonal Manager, Northern Zone, Chandigarh, letter dated 19.5.1994 Ex.P­2 signed by Sh. D.S Kanwar addressed to the General Manager Nangal/Panipat/Bhatinda and letter dated 9.9.1993 Ex.P­1 addressed to M/s Good Friends Agencies appointing M/s Good Friends Agencies as the H&T Contractor for a period of five years with the qualification that the same would be provisional for a period of six st st months i.e from 1 October 1993 to 31 March 1994 and the contract being extentedable thereafter based on the review of the performance in the said six months.

C.C. No. 71/11

34. The witness had further identified the letter of Sh. R.K. Khanna dated 2.12.1994 Ex.PW14/A addressed to the Managing Director HAFED, Chandigarh inter­alia introducing M/s Good Friends Agencies as its contractor and also the similar letters addressed to Markfed, Punjab Agro Industries Corporation and Haryana Agro Industries Corporation. The witness had further identified the document D­3 a note dated 31.3.1994, already Ex.PW9/A, bearing the signatures of Sh. R.K. Khanna at point A and also of other Officers Sh. A.K. Asija, Sh. Anil Sharma, Sh. M.A Sarma and Sh. D.S Kanwar.

PW­15

35. Witness PW15 Sh. P.P Suneja had deposed that from 1996 to 1999 he was posted as Assistant General Manager, State Bank of India, Lajpat Nagar, Ring Road Branch, New Delhi. He had identified Seizure Memo Ex.PW15/A dated 22.12.1998 by which the cheque Ex.PW11/A issued in favour of M/s Good Friends Agencies was seized. According to him this cheque was presented for encashment C.C. No. 71/11 in their branch through clearing from Bank of Baroda, Bhikaji Cama Place, New Delhi and this cheque was honoured by his branch. He had further identified the Statement of Account of M/s NFL Ex.PW15/B making a reference to the cheque Ex.PW11/A of Rs.30 lacs in the Statement of Account at point X to X. He had further clarified that at the time when this cheque was presented for encashment, he was not posted in the branch.

PW­16

36. Witness PW16 Sh. N.K. Gupta had deposed that he was st nd working as Executive Director with NFL from 1 January to 22 February in the year 1996 at Bhatinda branch. Thereafter he was posted as Executive Director (Marketing) and Personnel st Administration at Corporate Office at Delhi. Thereafter from 1 October till the end of December he was posted as Executive Director at Vijay Pur Fertilizers Plant of NFL. The witness had identified the contract Ex.P­1 signed by Sh. D.S Kanwar on behalf of NFL with M/s Good Friends Agencies with the title "Handling cum C.C. No. 71/11 General Services Contract for NFL supplies to co­operatives and other institutional agencies in the States of Punjab and Haryana - Appointment thereof." When the witness was questioned as to why the payments had not been made of the bills of M/s Good Friends Agencies, he had deposed that on inquiry from the dealing officers regarding clearing of bills he came to understand that the Agency had not carried out the activities stipulated in the contract. The activities referred to in the contract were not required to be given to any outside agency as the same were being carried out by the staff of NFL posted at Zonal office, Regional office and the field offices and there was no justification in certifying the bills either partly or fully.

37. The witness had identified the note dated 18.07.1996 Ex.PW12/D­1 which was put up before him for approval with regard to the termination of contract of M/s Good Friends Agencies which had been initiated by Sh. Anil Motsra Assistant Area Manager and had reached him through proper channel. He had terminated this contract as it was not a valid contract.

C.C. No. 71/11 PW­17

38. Witness PW17 Sh. Raj Kumar had deposed that in the year 1993­94 he was posted as Additional Manager (Marketing) at Chandigarh. He had identified the note Ex.PW17/1 in his writing and bearing his signatures for being put up before the Dy. General Manager (Marketing), Noida through Group Manager, Noida for submission of carbon copies of the bills and letter mentioned therein. The witness had identified the documents Ex.PW17/2 to 17/21 including the carbon copies of bills, letter from M/s Good Friends Agencies and the envelopes in which the said bills were received in his office. As per this witness he had only received copies of the bills and not the originals. The letters Ex.PW17/4, Ex.PW17/8, Ex.PW17/12, Ex.PW17/15 and Ex.PW17/18 by which the said bills were sent to the General Manager (Marketing), New Delhi with copies thereof being marked to Additional Manager, NFL, Chandigarh i.e. to him. He had sent those bills further to Dy. General Manager (Marketing). He had done so because those bills were of the period when the said Dy. General Manager was the Incharge of the Zonal Office at Chandigarh.

C.C. No. 71/11

39. The witness had also seen the originals of the said bills in the Court but had stated that he had seen those original bills for the first time in the CBI office in October 1999. The witness after seeing the photocopies of bills Ex.PW17/A1 to A236 had deposed that these were not received in his office at Chandigarh during the said period. The originals of the said bills, however, had been marked through him by the Zonal Manager Sh. R.K. Khanna to the staff of the Institution Section in February 1995 for comments on the questions as to whether the indents were collected by NFL staff or M/s Good Friends Agencies; whether the payments were realized by NFL staff or M/s Good Friends Agencies and whether the material was sold on standard terms so that it may become clear whether the work was executed by NFL staff or M/s Good Friends Agencies, The comments were accordingly submitted. The comments which had been sent by the staff were to the effect that the indent were collected by NFL staff and the payments were also received by NFL and material was not sold on standard terms.

40. The witness had identified the documents Ex.PW17/22, Ex.PW17/22A and Ex.PW17/23 bearing his signatures giving therein C.C. No. 71/11 the details of the material/urea having been supplied to the institutions and also reflecting the margins and rebates allowed to those institutions on the sale of urea. The statements also included the calculations of interest on delayed payments. These statements were prepared by the qualified staff of Finance Department, Chandigarh and signed by the Head of the Finance Department Sh. Y.P Bhola, Dy. Manager (Finance) on the request of CBI through Central Marketing Office, Noida. The witness had identified the signatures of Sh. Y.P Bhola appearing on each sheet of the said documents. As per the calculations made from October 1993 to March 1995 interest on the delayed payments against all the institutions was Rs.1,32,82,000/­. The additional margin/rebate given to the said institutional buyers as per the said statement was Rs. 15,66,90,000/­.

PW­18

41. Witness PW18 Sh. Sahib Singh had deposed that in the year 1990 he was working as Private Secretary to Director (Finance) Sh. C.C. No. 71/11 C.K. Ramakrishnan who also happened to be the acting Managing Director, Corporate Office, New Delhi. The witness had identified the signatures of Sh. Ramakrishnan appearing on the office orders dated 22.6.1990 and 26.6.1990, Ex.PW18/1 and Ex.PW18/2 respectively, with regard to sub­delegation of powers to the General Manger (Marketing). As per this witness there was schedule Ex.PW18/3 attached to the office order showing the delegation of such powers. By the second office order dated 26.6.1990 i.e Ex.PW18/2 there were certain amendments carried out stating inter­ alia that the powers delegated to the General Manager (Marketing) would thereafter be exercised by DGM (Marketing) - Incharge. As per this witness, para no.3 of Ex.PW18/1 related to the powers of financial implication to be exercised subject to prior consultation with Head of Finance Department and the para 2.3 of Ex.PW18/3 related to exercise of full powers by General Manager (Marketing) in respect of dealership contracts etc. PW­19

42. Witness PW19 Sh. Pradip Kiran De had stated that in the year C.C. No. 71/11 1995 he was shifted to Delhi from Bhopal where he was posted as Additional Manager. After he was shifted to Delhi in 1995 he got to see the bills of M/s Good Friends Agencies. Since he wanted to know as to what were those bills about, he had called for the contract. He had seen two contracts in the file, one for Rs.65 per metric ton for some services, about a dozen of them, to be rendered by M/s Good Friends Agencies. The second contract related to same subject matter except that the rate was reduced from Rs.65 to Rs.15 per metric ton for doing only three jobs and the remaining were dropped. He had examined the bills and also discussed the matter with the Law Officer at that time. According to him the payments could be made against the said bills only if they had been verified by the field staff and the field staff was required to verify those bills only after verifying the services rendered in its entirety. According to the witness there was no necessity of entering into the contract Ex.P1 by NFL with M/s Good Friends Agencies as NFL had its field staff everywhere and also according to him Sh. D.S Kanwar could have entered into this contract after having sought the approval of the competent authority i.e the Managing Director. He had, however, not seen any such approval on the file. As per his testimony though he C.C. No. 71/11 did not remember exactly but the powers of Sh. D.S Kanwar to enter into a contract was limited to only Rs.50,000/­.

43. The witness had identified his noting dated 7.5.1996 Ex.PW19/A according to which while awarding the contract no procedure had been followed and his views were agreed to by the then Executive Director (Marketing) Sh. N.K. Gupta. Based on the views of the Zonal Manager, Chandigarh in order to sort out the issue Sh. N.K. Gupta had constituted a Committee to apportion rate of Rs. 15/­ per metric ton for three services depending upon the importance of services rendered. This Committee comprised of Sh. R.K. Khanna Zonal Manager, Chandigarh, Mr. P.K Kataria Addl. Manager (Finance), Delhi and himself. Based on the importance of work they had broken down the rate of Rs.15 for the three services and the Committee had submitted its report. The witness had identified the nothing Ex.PW19/B of 25.4.1996 in the hand writing of Sh. N.K Gupta by which the above Committee was constituted. The witness had also identified the recommendations Ex.PW3/B made by the Committee. According to him the report did not refer to any payment to be made in respect of any of the bills of M/s Good Friends C.C. No. 71/11 Agencies, but it dealt with only with the issue of apportionment of the rates. The witness had identified the bills Mark PW17/A1 to A236 and deposed that these bills had been examined by him but since they had not been verified by the field staff and the field staff was also not inclined to verify the same as they felt that this agreement was not necessary as they were already doing this work. It was thereafter the decision was taken to cancel the contract by Sh. N.K. Gupta the then Executive Director (Marketing). The cancellation was accordingly communicated to the party.

44. The witness had also identified the copy of the letter dated 6.8.1996 Ex.PW19/C written by him to M/s Good Friends Agencies intimating the cancellation of the contract. According to him this letter was issued after being seen by the Executive Director. He, however, had denied the knowledge of any payment of Rs.30 lacs being made to M/s Good Friends Agencies.

PW­20

45. Witness PW20 Sh. Ramesh Chander posted as Sr. Field Assistant at Sonepat in 1998 had deposed that his job was to market C.C. No. 71/11 the products of NFL i.e to supply urea to institutional agencies like Hafed, Haryana Agro and also to make the supplies to dealers appointed by NFL referred to as private dealers. Once the orders had been obtained, NFL contractors were required to supply the urea. The acknowledgements of the urea delivered was also taken by them from the institutions or the private dealers to whom the urea had been supplied. The job of loading and unloading of urea at the railway rakes although was the job of the contractor, but it was done under their supervision.

46. The witness with regard to M/s Good Friends Agencies had deposed that there was one representative of M/s Good Friends Agencies who used to visit the railway rakes at Sonepat who used to just sit there and actually do no work. The actual work was being done by one contractor by the name of Satish who had been appointed by NFL.

PW­21

47. Witness PW21 Sh. M.S Rattan had deposed that during C.C. No. 71/11 1993­96 he had been working as Dy. Manager, In­charge Area Office, Moga and his basic job was of sales and distribution of urea in the area including district Moga, district Firozpur, district Muktsar, district Bhatinda and district Mansa. The distribution of urea was handled by their own contractors for handling and transportation. He did not remember the names of those contractors. According to him the urea was distributed/sold through Government institutions like Markfed, Punjab Agro and other private dealers. On being further questioned he had stated that he can recollect the name of one such contractor M/s Truck Union Moga.

48. In respect of M/s Good Friends Agencies he had deposed that there was a contract entered with M/s Good Friends Agencies at a higher level. It was assigned the job of collecting orders from Government institutions and supervision of rake points. Its job also involved loading of urea from rake points on trucks for being transported to the Government agencies such as Markfed etc. The urea which was unloaded at rake points thereafter used to be delivered at various units such as Bhatinda, Panipat, Nangal etc. He had deposed that during his tenure M/s Good Friends Agencies had C.C. No. 71/11 done no work. He also denied M/s Good Friends Agencies actually had undertaken any work of collecting orders from Government agencies for supply of urea and subsequently supplying urea to such agencies and also unloading the urea at rake points. He had added that rarely the representatives of M/s Good Friends Agencies used to visit the rake points that too just for collecting the data. The purpose of collecting the data was to get the information as to how much urea arrived at the rake points and unloaded. He had stated that he had never verified the bills of M/s Good Friends Agencies though it was part of his duty to verify the bills of handling and transportation contractors because according to him there was no question of verifying the bills of M/s Good Friends Agencies as they had never done any work for them.

49. The witness had identified the note sheet dated 11.6.1996 Ex.PW21/A bearing his signatures and signatures of one Sh. Avijit Roy the then Area Manager, Jalandhar and Sh. Sunil Ghai the then Area Incharge, Patiala. He had deposed in respect of this note that the jobs which had been assigned to M/s Good Friends Agencies had been done by their staff and other contractors. The note was C.C. No. 71/11 prepared to bring it to the notice of the Management that M/s Good Friends Agencies had done no work and also to make the Management aware of this fact so that the bills of M/s Good Friends Agencies may not be cleared.

50. After going through the document Ex.PW5/F8 shown to the witness, he had deposed that this letter dated 21/24.5.96 was referred to in the above note Ex.PW21/A at point X1. PW­22

51. Witness PW22 Sh. Avijit Roy had deposed that in the year 1993 he was transferred to Jalandhar as Area In­charge from Bilaspur and had continued to work at Jalandhar as Area In­charge till 1997. As the Functional Head of the area office his job was to look after the sales in the districts of Jalandhar, Gurdaspur, Amritsar, Hosiyarpur and Kapurthala falling within the jurisdiction of NFL Area Office at Jalandhar. His job also involved looking after the day to day work and reconciliation, recovery of outstanding and other C.C. No. 71/11 administrative functions both in case of private as well as institutional sales such as Punjab Markfed and Punjab Agro Industries.

52. In respect of M/s Good Friends Agencies he had deposed that in 1994 in one of the regular area level meeting at Chandigarh he was informed about the contract with M/s Good Friends Agencies having been appointed to do to do all the works for institutional supplies right from getting the orders and to the execution of the same, though the copy of the contract was not supplied. The witness had further deposed that M/s Good Friends Agencies had done no work as was outlined during the course of the meeting at Chandigarh except that their representative visited the office and rake points about 5­6 times. He had clarified that the orders were taken by them and the execution of the orders was also done by their own contractors. The representatives of M/s Good Friends Agencies were visiting only to take the details of dispatches at railway heads at different Markfed centers. M/s Good Friends Agencies was supposed to procure the orders for different Markfed Centres and also they were supposed to get them the acknowledgement of the receipts of the materials from the concerned centres, but M/s Good C.C. No. 71/11 Friends Agencies had neither submitted any acknowledgement receipt nor supplied urea to any Government institution. The witness had identified his signatures on the document D­58 Ex.PW21/A. He had explained that this note was generated as a reference to one Internal Office Memo mentioned in the note for extension of contract of M/s Good Friends Agencies for further period. This joint note was from all the three In­charges of Punjab, which was put up before the then Regional Manager, Punjab informing that M/s Good Friends Agencies had done no job that had been assigned and for continuation and discontinuation of the contract, the Management should take a decision The witness after having seen the document Ex.PW5/F8 had stated that it was the same Internal Office Memo which had been referred to in the note Ex.PW21/A. He had further clarified that the bills of M/s Good Friends Agencies were neither verified nor paid from his area office, Jalandhar. PW­23

53. Witness PW23 Sh. Dhir Singh had deposed that he was working as Area Manager from October 1993 to 1997 and posted at C.C. No. 71/11 Hissar. The districts of Hissar, Sirsa and Jind were under his jurisdiction. He had explained that his responsibility as the Area Manager was to lookafter the sales activities of the Company in the said area.

54. In respect of M/s Good Friends Agencies the witness had deposed that he came to know about M/s Good Friends Agencies in a meeting in 1994 called at Chandigarh Zonal Ofice where all the Area Managers of Punjab and Haryana were called including himself. In this meeting they were informed that at the Head office there was a contract entered between NFL and M/s Good Friends Agencies to handle the work of sale of urea to institutional agencies such as Hafed and HAIC (Haryana Agro Industrial Corporation). They were orally informed that M/s Good Friends Agencies was to handle the rakes and collect orders from institutional agencies and ensure the acknowledgement of material at their end and to also ensure timely collection of payments from such institutions. There was, however, no clarification as to the terms and conditions at which M/s Good Friends Agencies had to work. He had further deposed that M/s Good Friends Agencies had never done any work of NFL in his area. C.C. No. 71/11 The work in his area was being handled by duly appointed H&T contractors. The supply orders were being taken by their own officers posted in the districts from different institutional agencies. The acknowledgements with regard to supply and receipt of the urea by institutional agencies were also been collected by their staff. Though he was not sure that what was the exact procedure followed with regard to the payments made by the institutional agencies, but he was clear in saying that these payments were ultimately made to the Zonal office where their accounts were maintained. The bills of M/s Good Friends Agencies were neither verified by him or by any Officer working in his office or by any officer working in any of the district nor there was any payment made to M/s Good Friends Agencies by the Hissar Area Office. He had stated that since M/s Good Friends Agencies had not done any work of NFL their bills were not verified by them. He had added that some time they used to get some information from the rake points that someone from M/s Good Friends Agencies had gone there and collected some information.

C.C. No. 71/11 PW­24

55. Witness PW24 Sh. Mukesh Sharma had deposed that during 1993 to 1996 he was posted at Chandigarh as Company Secretary cum General Manager - Finance, Haryana Agro Industries Corporation Limited. As per his testimony during that period M/s Haryana Agro Industries Corporation Limited used to purchase urea from various vendors including NFL. The witness had identified the letter D­51 Ex.PW5/G6 being written to M.D of M/s Haryana Agro Industries Corporation Limited by Sh. R.K. Khanna Zonal Manager, NFL introducing M/s Good Friends Agencies to M/s Haryana Agro Industries Corporation Limited. According to this letter M/s Good Friends Agencies was supposed to carry out certain activities like organizing procurement of bulk indent for NFL urea both by rail and road dispatches on standard financial parameters laid down by the Government of India for the purpose from the agencies. It was also the job of M/s Good Friends Agencies to collect the payment from institutions on behalf of NFL against the supply of material duly signed by the authorized representative of the institutions and submit C.C. No. 71/11 the same to NFL for raising of timely invoices. After the receipt of the said letter representatives of M/s Good Friends Agencies had visited his office till 1996 3­4 times. They had visited to collect the details of the material supplied by NFL to M/s Haryana Agro Industrial Corporation Limited. He had added that so far as he could recollect certain details were provided to them about the material supplied by NFL to Haryana Agro Industrial Corporation Limited. PW­25

56. Witness PW25 Sh. P.K. Kataria had deposed that he had been working as Additional Manager (Finance & Accounts) in the Marketing Division of NFL during the period from 1993 to 1996. As per his testimony he knew Sh. D.S. Kanwar, who was the Executive Director at NFL and Head of Marketing Division. He was highest Officer as far as the Marketing Division was concerned. He was directly reporting to the Managing Director. The witness after having seen document D­8 Ex.PW8/A had deposed that this document related to release of ad­hoc payment of Rs.30 lacs against the C.C. No. 71/11 handling cum general services contract entered into between NFL and M/s Good Friends Agencies, to M/s Good Friends Agencies, New Delhi. He was directed by Sh. D.S Kanwar, as per this note, to release the payment to M/s Good Friends Agencies. He was personally asked to release the payment. Sh. D.S Kanwar had come and asked him to release the payment as that the party was pressing hard for the payment and he was being pressurized from different corners for making the payment. According to him normally such payments were released by the respective Zonal offices, but in certain special cases handled by the Central Marketing office, ad­hoc payments used to be released from Head office as well. At the time note Ex.PW8/A was given to him by Sh. D.S Kanwar, the other officers namely Sh. Anil Sharma, Dy. Manager (Marketing) and Sh. M.A Sarma DGM (Marketing) were present. He had identified their signatures on the said note as well as signatures of Sh. D.S Kanwar with regard to his approval for release of payment. He had accordingly given directions to the Assistant Accounts Officer Sh. J. Ramesh for preparing the voucher and releasing the payment. The witness had identified the said voucher Ex.PW25/A signed by Sh. J. Ramesh and also by him. The witness had also identified the C.C. No. 71/11 cheque Ex.PW11/A bearing his signatures at point A. As per his statement he had personally handed over this cheque to Sh. D.S Kanwar for being further handing over to the party i.e M/s Good Friends Agencies. According to the witness the payment in this case was released only on the basis of the note sheet Ex.PW8/A without being accompanied by any document or evidence. According to him, Sh. D.S Kanwar had asked Sh. Anil Sharma, Sh. A.K. Asija and him to work out the modalities so that in future there should not be any problem in releasing the payment from the Chandigarh office. In order to work out these modalities Sh. R.K. Khanna Zonal Manager Chandigarh was asked to bring all the bills to his office and to provide the same to the Central Marketing officials along with his comments so that the modalities could be worked out and guidelines issued to Chandigarh office. Sh. Khanna had brought the said bills along with a hand written note, but in the mean time he had also prepared a note on his behalf as a covering note to the bills for handing over to the marketing officials for further action. He had identified the said note Ex.PW5/E (within Ex.PW9/A), which was to be signed by Sh. Khanna. The bills had been attached with this note. The witness had pointed out that the bills those which were C.C. No. 71/11 attached with this note could not be find at that moment when the witness was examined in the Court. He had drawn the attention of the Court to the perforations of all­pins and stapler pin marks on the note indicating that the bills were attached to the said note. As per the communication to him, Sh. Khanna was to visit his chamber and use the note which was prepared by him as a cover to the bills he was to provide. After reading the note Sh. Khanna had found everything to be okay and then signed it which he had handed over to Sh. M.A Sarma DGM (Marketing), who had also put his signatures on the note at point F. The note thereafter was processed by the marketing officials. Once the note by the marketing officials was ready, he, Sh. Anil Sharma and Sh. A.K. Asija had sat together to workout the amount payable after reducing the services not performed by the agency. Since there was no break up available in the contract for the jobs listed in the contract, a modality was recommended to release the total payable amount by an alternative method of effecting the recoveries for jobs not performed by M/s Good Friends Agencies. As per this the total amount recoverable became Rs.91.97 paise per metric ton and the resulted payable amount came to Rs.8.03 per metric ton as against Rs.100 per metric C.C. No. 71/11 ton mentioned in this contract. Even in this payable amount of Rs. 8.03 the demurrage/wharfage, if any, paid by the NFL to the Railways as per the contract, was not included.

57. Witness had explained that as per the contract M/s Good Friends Agencies was to obtain sales orders on standard sale terms whereas during this period NFL had extended extra rebates to institutional buyers. This provision was also not considered at the time of working out the recoveries listed in the note which was signed by all of them. There was no identified job for which the left over amount of Rs.8.03 could be attributed. The witness had referred to portion X2 to X2 of the note Ex.PW9/A in the hand writing of Sh. Asija wherein he had listed all the jobs not performed by M/s Good Friends Agencies which became the basis for the final recommendations/ modalities which had been worked out. The recommendations were placed before Sh. D.S Kanwar who had accorded approval to the same by putting his signatures below the note Ex.PW9/A. This was conveyed by the marketing division to the Chandigarh office.

C.C. No. 71/11

58. The witness had further in his testimony identified the documents Ex.PW18/1 to 18/3 i.e office orders sub delegating the powers to General Manager (Marketing) providing that the General Manager (Marketing ) had full powers to enter into contract with regard to rates and terms and conditions of contract involving expenditure of Rs.50,000/­ or above in each case. According to him the contract Ex.P1/1 signed by Sh. D.S Kanwar as General Manager (Marketing) addressed to M/s Good Friends Agencies could not have been signed by Sh. D.S. Kanwar without having the necessary approval of entering into this contract. As per the delegation of powers, he could not have entered into this contract without the necessary approval of Director (Finance)/ M.D. He, however, had clarified the statement by saying that by merely looking at the contract it was not possible for him to comment as to whether the contract was signed by Sh. D.S Kanwar after having necessary approval or not. In respect of the powers for releasing the payment he had stated that once the contract had been signed, Sh. D.S Kanwar had the full powers to release the payment. He had explained the procedure for releasing the payments to the contractors in the Accounts Department of Marketing Division by C.C. No. 71/11 saying that the bills duly verified received in the accounts department were checked for arithmetical accuracies and verification of quantities along with terms and conditions of the contract and finding the same to be in order or after carrying out the necessary corrections, the vouchers were made in the cash department for release of payment to the party. The payments to the contractors working in the jurisdiction of zonal offices were paid directly by the concerned zonal offices. In respect of the payment of H&T Contractors employed by NFL he had deposed that at every rake point there is a H&T contractor appointed by the NFL by a procedure which is followed for awarding any other contract by the tendering process. He had deposed that as far as M/s Good Friends Agencies was concerned, the contract was not awarded by a tendering process. He had further stated that there was a procedure that in case of awarding the contract the concurrence of the Financial Department was obtained. In this case, however, no such concurrence was taken. With regard to the bills submitted by M/s Good Friends Agencies he had stated that so far as his knowledge goes no verified bills were received in the Finance Department. Further in respect of the payment of Rs.30 lacs to M/s Good Friends C.C. No. 71/11 Agencies he had stated that the Finance Department had not taken any objection to the advance payment of Rs.30 lacs to M/s Good Friends Agencies. According to him in cases where approval of the Executive Director (Marketing) for making the payment has been given, normally no objection was taken by the Finance Department. After going through the note D­3 Ex.PW5/E he had deposed that the said note did not anywhere mention that M/s Good Friends Agencies had performed the jobs as envisaged in the contract. The witness had also identified the document D­10 Ex.PW3/B i.e the note whereby the Committee was constituted for the apportionment of the remuneration to be paid to M/s Good Friends Agencies of which he was also a member. He had identified his signatures appearing on the said document i.e Minutes of the decision of the said committee. It was placed for the consideration of the Executive director Sh. N.K. Gupta who had then approved the recommendations of the Committee.

PW­26

59. Witness PW 26 Sh. Charanjit Singh Grewal had deposed that C.C. No. 71/11 during the period from 1993 to 1997 he was working as Chief Manager (Inputs) at Markfed, Chandigarh Head Quarter. His job was to procure fertilizers and distribute it through their branches. Mainly they were purchasing fertilizers from Government agencies like NFL, IFFCO, KRIBCO etc. They used to directly deal with NFL and decide terms and conditions before the start of season i.e Khraif and Rabi and also used to decide month wise supplies which were to be effected through suppliers. They used to directly place orders with the manufacturers such as NFL and there was no intermediary involved in the purchase of fertilizer.

60. With respect to M/s Good Friends Agencies he had deposed that Mr. Mir (referring to the accused Mohd. Dilawar Mir) had met him once and he wanted him to place orders through his agency as they had been appointed by NFL. He had explained to Mr. Mir that they were directly dealing with NFL and placing their requirement/orders at the start of season in a joint meeting with Sr. Officers of NFL. According to him as far as he remembered there was no order given to Mr. Mir of M/s Good Friends Agencies by them. As per his testimony Mr. Mir had once asked him for data of receipts or urea C.C. No. 71/11 from NFL which he had refused because those bills were prepared by Fertilizers Branch at Head Quarter and the payments were also made accordingly to NFL.

PW­27

61. Witness PW 27 Sh. Atul Kapoor had deposed that he had served for 10­12 years as Executive Director with Punjab Agro Industries Corporation which was in the business of supplying agricultural inputs such as tractors, diesel, petrol, fertilizers, agricultural implements etc to the farmers of Punjab. In addition Agro Industries Corporation also promoted projects in the filed of agriculture like processing of Kinu etc. with public participation. He had explained that during his tenure fertilizer was a controlled item by the Government of India and the Ministry of Agriculture used to make allocation to many suppliers like NFL, KRIBCO, IFFCO etc for the supply of fertilizer. They had been purchasing fertilizer from NFL directly. They used to place orders for supply of fertilizers to Zonal Office of NFL at Chandigarh. With regard to M/s Good Friends C.C. No. 71/11 Agencies he had stated that Mr. Mir representative of M/s Good Friends Agencies had met him to inform him that he had been appointed as handling agent for NFL. He also suppled to him NFL letters signed by Mr. Khanna indicating that they were the authorized representative. Thereafter nobody met him personally from M/s Good Friends Agencies. After having seen the document D­50 Ex.PW5/G5 the witness had stated that though he did not remember but it appeared to be the letter which had been supplied to him by Mr. Mir. According to him so far as he could recollect the orders were directly placed on NFL by them and copy thereof was endorsed to authorised representative of NFL i.e M/s Good Friends Agencies. He also stated that he did not remember if there was any data personally supplied by him to M/s Good Friends Agencies with regard to procurement of fertilizers from NFL.

PW­28

62. Witness PW28 Sh. S.K. Patra working as Director (Marketing) with NFL from 1998 to 2000 had deposed that during that period he C.C. No. 71/11 was posted at Corporate office, New Delhi. He had searched for the original bills of M/s Good Friends Agencies at various corporate offices of NFL but the said documents could not be traced relating to M/s Good Friends Agencies. The witness had identified the letter dated 22.04.1999 written by him to Inspector of CBI Ex.PW28/A by which he had communicated that the bills of M/s Good Friends Agencies could not be traced from any of their offices namely Central Marketing Office and the Old Office of NFL. In this letter he had also mentioned that from the Zonal office at Chandigarh also no bills could be recovered. He had further stated that he had made inquiries about the original bills of M/s Good Friends Agencies from the concerned officers i.e the officials of Marketing Department as mentioned in the letter. After the said bills of M/s Good Friends Agencies could not be traced, there was a departmental inquiry instituted to investigate the matter. As per his testimony he had made all the efforts and searched all the places/offices wherever there was a possibility of finding the original bills of M/s Good Friends Agencies but could not find the same.

C.C. No. 71/11 PW­29

63. Witness PW29 Sh. Yashpal Bhola who was working as Dy. Manager (Finance & Accounts) in the year 1998 ­99 at Zonal Office, Chandigarh had deposed that it was in the mid of 1998 he was transferred from Delhi to Zonal office, Chandigarh. This post was subsequently upgraded to Manager (Finance & Accounts). After seeing the documents Ex.PW17/22 and PW17/22A he had identified his signatures thereon and stated that in the document Ex.PW17/22 details at different pages had been given of supply of urea to institutional buyers within the State of Punjab and State of Haryana and also the margins given to them over and above the standard margins. Similarly he had also identified the document D­12 Ex.PW17/23 bearing his signatures wherein statement of calculations of interest for supply of urea to Markfed, Punjab Agro Industries Corporation, HAFED and Haryana Agro Industries Corporation had been given.

64. According to the witness in the said documents relevant details had been given for the period October 1993 to March 1995, prepared C.C. No. 71/11 by the concerned dealing officials working under his control and supervision on the basis of "Party's Ledger" i.e statement of account of the above institutional buyers. The witness had identified the signatures of different officials appearing on this document also the Seizure Memo D­27 Ex.PW5/A bearing his signatures by which the said documents were being handed over to the CBI. PW­30

65. Witness PW30 Sh. S.P. Nakra had deposed that in the year 1998 he was working as Assistant Chief Vigilance Officer and was posted at Noida office of NFL. He had identified the Seizure Memo Ex.PW30/A by which he had handed over the files relating to M/s Good Friends Agencies Ex.PW30/B having documents D­54 and D­58 to CBI.

PW­31

66. Witness PW31 Sh. S.C Bhatia had deposed that he was working as Manager (Marketing) from 1993 to 2000 at Noida office. C.C. No. 71/11 Initially in 1993 he was given the Sales and Distribution Department and in 1994 he was moved to Logistics Department as its Head at Central Marketing Office, New Delhi. He had explained that Logistics Department was responsible for arranging all kinds of transportation and forwarding of the goods from the rake points to various dealer points and go­downs for storage. According to him movement of material was not possible without the involvement of the Logistics Department. Even in the case where handling and transportation contracts were involved there was a role for the Logistics Department. He had explained that as and when there was a demand generated by the field staff of Zonal Office, demand is sent to the Logistics Department through the G.M's office. The Logistics Department initiates the action for the finalization of the contractors through advertisements or in­house notices served in the concerned office for demand of contractors at stipulated places. The quotations were invited from them. The parties were short listed and after having been found suitable financially, socially and also on the basis of their experience related jobs. Recommendation of the Committee was sent for final approval to the General Manager and contractor used to be issued accordingly for a specified station and period and C.C. No. 71/11 concerned related jobs and mentioning therein contract value in terms of per metric ton. In respect of M/s Good Friends Agencies he had deposed that he had not dealt with any file of M/s Good Friends Agencies for logistics and other works for the State of Punjab and Haryana. As per his testimony the case was to originate from Zonal office Chandigarh and there was no request received from Zonal office Chandigarh for appointment of such type of contractor for the State of Haryana and Punjab.

67. The witness had further deposed that Executive Director (Vigilance) desired the file of M/s Good Friends Agencies to be forwarded to them for inspection. Since they did not have any document of the party with them, Zonal Office Chandigarh was requested to provide the necessary files and related papers. They had received a file of M/s Good Friends Agencies from G.M (Marketing), Delhi office. The said papers were forwarded by them to Executive Director (Vigilance). After going through the files 11, 12 and 13 having the photocopies of the bills of M/s Good Friends Agencies the witness had deposed that he had neither received these files nor had forwarded them to Executive Director (Vigilance). C.C. No. 71/11 He had at the end clarified that Logistics Department of Chief Marketing Office, Delhi was not involved in the above contract to M/s Good Friends Agencies.

PW­32

68. Witness PW32 Sh. Anjani Kumar Asija who was working as Area Manager at the corporate office in April 1993 had deposed that at the time of his joining the office Sh. D.S Kanwar was the General Manager (Marketing). He was posted in the sales and distribution section of corporate office and was given to look after Northern Region comprising of Chandigarh Zone having jurisdiction of Punjab, Haryana, Himachal, J&K and Rajasthan. According to him Sh. Anil Sharma was either Dy. Manager or Additional Manager. He was reporting to Sh. Anil Sharma. The witness after having seen D­3 Ex.PW9/A had deposed that the note X2 to X2 in the said document was in his hand writing bearing his signatures at point C. He had prepared the said note on perusal of certain bills with respect to a copy of contract stated to have been entered with M/s Good Friends C.C. No. 71/11 Agencies in regard to handling and general services concerning supply of urea to institutions in the States of Punjab and Haryana. He had prepared this note after being instructed by Sh. Anil Sharma after going through the bills with regard to the above contract and giving his report. He had added that this whole thing started after a request had been received from the Zonal Manager Chandigarh Sh. R.K. Khanna requesting for proper guidelines in respect of above bills of M/s Good Friends Agencies. The dilemma of Sh. R.K. Khanna was that as to how he should process the said bills as most of the activities which were assigned to the contractor (referred to M/s GFA ) to perform were actually not been performed prima facie by the contractor for which the bills had been raised. The witness had identified the said request as Ex.PW5/E (within Ex.PW9/A). In his note he had noted that the activities for which bills had been raised had not been performed by the contractor. He had mentioned so after having checked the same with the respective Area Managers. The bills had not been verified by the Area Manager/field staff. He had then submitted a note to his controlling officer Sh. Anil Sharma. The witness had then identified the note in the hand writing of Sh. Anil Sharma from point X3 to X3 on the note Ex.PW9/A. Sh. C.C. No. 71/11 Anil Sharma had submitted this note to Sh. M.A Sarma Dy. General Manager (Marketing). As per the testimony of this witness, on the basis of his note Sh. M.A Sharma had constituted a committee of Sh. Anil Sharma, Sh. P.K. Kataria and of this witness. In the meeting they had perused the bills in respect of the jobs identified in the contract viz a viz actual performance undertaken by the party i.e. M/s Good Friends Agencies. As per the information derived from the field, they had noted that the activities for which the bills had been raised had not been performed by M/s Good Friends Agencies. By the method of elimination i.e by referring to the works which had been performed on the field by the other contractors to whom for the same work payment had been released along with the service charges. According to his testimony as per this method of elimination they found that the jobs worth Rs. 92 per metric ton had not actually been carried. The other aspects such as imposition of demmurages and wharfages and interest accrued on the delayed realization of payments from the institutions could not be quantified at that point of time because of lack of information. He had clarified that as per the the terms of the contract there were other liabilities also which the contractor was to bear such as any imposition of demurrage or C.C. No. 71/11 wharfage by railways during handling of rakes and interest charges accrued on delayed payments by institutional agencies as the contractor was also responsible for collecting the payments from the institutional buyers and in case of any late collection of the payment an amount of interest was chargeable thereon on the contractor by way of deducting the amount due to be paid to the contractor. He had added that in this case they could not quantify the amount relating to the interest chargeable as they could not collect the inputs from the Zonal/field staff. As per his information the field staff was not aware of entrusting any such responsibility for awarding, handling and service contract as being assigned to M/s Good Friends Agencies. At that time the decision was given by the Committee, the Committee was not in a position to say if there had been any work performed by M/s Good Friends Agencies. The witness had identified the signatures of the Officers namely Sh. P.K. Kataria and Sh. Anil Sharma appearing on the Minutes of the said Meeting. He had further identified the signatures of Sh. D.S Kanwar appearing on the said document of being approved the said note. The witness had also clarified that though below the signatures the date of 1.6.1994 th was given but this note was prepared on3rd or 4 of June 1994. He C.C. No. 71/11 had been told by his controlling officer that an amount of Rs.30 lacs had already been released to M/s Good Friends Agencies and any other date of processing of note shall invite audit objection. The witness had been shown the photocopies of the bills which were available on record. The witness had stated that during the course of the meeting of the Committee he had occasion to go through the bills but he was not sure that if the bills been shown form part of the same bunch. According to him as per the procedure the bills were to be verified by the supervising staff and submitted for concurrence by the Accounts Department before the payment was to be made. On examination of the said bills (Mark P17/A1 to Mark P17/A236) he had stated that the bills had neither been verified nor there was any concurrence accorded by the Finance Branch on the same, therefore the said bills did not qualify for payment. As per his testimony in the said bills the particulars of the depot from where the urea had been supplied, types of services rendered by the contractor, railway rake numbers and supply period were also required to be mentioned. According to him in the absence of the said particulars the field staff could not have verifed the said bills. Those particulars had not been mentioned in the bills Mark P17/A1 to Mark P17/A236. C.C. No. 71/11

69. In respect of the role of the Marketing Department in the awarding of contract for handling/transportation and general services, the witness had deposed, that Marketing Department had definite role in the awarding of such contracts in terms of identifying the rake destinations where handling and transportation services were to be rendered and general services to be provided in terms of the market functions already defined for field staff posted at various locations. According to him it was the job of the field staff to generate the demand and place indent for supplies through proper distribution channel from the nearest production unit. It was only in the case of field staff not being capable of generating the demand there was any question of appointing a contractor to render such general services. In case of such necessity being there the same would be placed before the General Manager (Marketing) who would then take the steps for awarding such contracts. He had added that such assessment could be made both by the zonal office as well as central marketing office. The zonal office would pass on such assessment to the central marketing office and then central marketing office will put up this matter before the General Manager (Marketing). According to him sales and distribution department at C.C. No. 71/11 the central marketing office was not involved in the processing of the contract. As per his testimony he came to know about this contract when the papers related to it were brought by the Zonal Manager Sh.

rd th R.K. Khanna on 3 or 4 of June 1994 which was assigned to him for processing.

PW­33

70. Witness PW 33 Sh. Hanuman Singh who was posted as Sr. Field Assistant during the period from 1995 to 1998 at Rewari, Haryana had deposed that his job involved sending the demand of products marketed by NFL to Area Office Rohtak, sale of NFL products to Institutions like HAFED, Haryana Agro Industries Corporation and private dealer­network and realization of payment through demand draft from the private buyers. The collection of payment from the institutional buyers was directly made by the zonal office. With regard to the question as to how the work was handled at rake points the witness had deposed that his Company had appointed H&T contractor at Rewari rake point through whom rake C.C. No. 71/11 received at Rewari was handled. The railway receipt received by them through special messenger from Dispatch and Co­ordination Cell was used to be endorsed by them to H&T Contractor to enable him to take delivery from the railway rake point and then to dispatch the material as per the dispatch instructions. He used to remain present at the rake point to supervise the loading and unloading. He used to get the bags counted after being unloaded from rake. He had given the name of the H&T and General Services Contractor as one Ranbir Yadav. He could not, however, give the complete name of his firm. In respect of M/s Good Friends Agencies he had deposed that he was informed by his Area Manager that someone will come from M/s Good Friends Agencies at the rake point for counting the bags and thereafter wagon­wise a Joint Inspection Report would be prepared which would be signed by him and also the said representative of M/s Good Friends Agencies. According to him M/s Good Friends Agencies had not carried out any work at the said rake point though only for a few rakes the representative of M/s Good Friends Agencies had come. At that time witness had asked him to count bags. He had counted the bags and noted the same in a note book. He thereafter came with bills of 3­4 rakes which also C.C. No. 71/11 included the rakes when he had not come. He had asked the witness to verify all the bills. He had told him that he would only verify those bills when he had come to the rake point. At the last he had deposed that he had signed the Joint Inspection Report. He was asked to explain the difference between a bill and Joint Inspection Report. He had stated that the same were different and added that he did not recollect that the document which the said representative had brought for verification was in the shape of a bill or Inspection Report. On further questioning, he had stated that what he had signed was a Joint Inspection Report and not a bill. The witness was asked as to why he had signed the Joint Inspection Report to which the witness had stated that the representative of M/s Good Friends Agencies had visited him with a bunch of papers having bills of different rakes and had asked him to sign the same. He had told him that he would sign only those papers and the reports relating to 2­3 rakes. He had accordingly signed the same. He had added that he had signed those Joint Inspection Reports because he had counted the bags on his instructions which he had given after he had come to the rake point.

C.C. No. 71/11 PW­34

71. Witness PW34 Sh. K.R Puri who was posted as Supervisor Accounts from 1984 to 31.10.2003 at Chandigarh Zonal office had deposed that his duty as Supervisor Accounts was to do accounting of sale of urea to Institutional buyers of Punjab and to make payments to contractors for transportation of fertilizer. As per his testimony no payment had been made to M/s Good Friends Agencies from his office as the bills of M/s Good Friends Agencies had not been verified by the Area office. When he was asked as to on what basis the advance payment is made to a party he had stated that the request of the contractor would come through area office along with verified bills to the Zonal office and thereafter the competent authority at Zonal office gives an approval for the same. PW­35

72. Witness PW35 Sh. Gurmej Singh had stated that from 1989 to 2000 he was posted at District Office Yamuna Nagar as Assistant Development Officer. His job involved sale and marketing of NFL C.C. No. 71/11 products . The rake point of his district was at Jagadhri and his job involved to look after and supervise the working on the said rake point. He had deposed that M/s Good Friends Agencies had not done any work either at district office Yamuna Nagar or at the rake point at Jagadhari except for sometimes its representative Sh. Avdhesh Kumar used to visit the rake point. According to him he had visited the rake point 4­5 times. On 2­3 occasions he had visited the rake point when the material had already been dispatched. He had also visited the District office once or twice after almost ten days of dispatch of the material from the rake point. According to his testimony this person never used to do anything and all the work was done by them. The order of material in respect of HAFED and HAIC was procured by them. The loading and unloading of the material was done by NFL H&T contractors. The railway receipts of the rake material was received from NFL unit by them and also acknowledged by them. Most of the material used to be dispatched from Panipat and sometimes also from Nangal as well as Bhatinda. They also used to collect the receipts of the material from HAFED and HAIC. From the rake point at Jagadhari most of the dispatches were made to private dealers in Yamuna Nagar and sometimes also to HAFED C.C. No. 71/11 and HAIC. He had named in his testimony one Sh. Harbans Lal as H&T contractor working at the said rake point. For the delivery to the Institutional buyers they used to collect the acknowledgment of the material delivered from the concerned rake point and used to send this receipt along with the delivery order of the said material to the Zonal office. In respect of Sh. Avdhesh Kumar representative of M/s Good Friends Agencies he had deposed that he used to visit the rake points/district office during the period from April 1995 to November 1995. During this period material from 4­5 rakes had been dispatched to the Institutional buyers i.e HAFED and HAIC. He had visited the District office after one week of the dispatch of the rake material. There was a Joint Inspection Report with regard to the dispatch of the material signed by him and Avdhesh Kumar. Two or three times he had got the proforma of the Joint Inspection Report filled at the Area Office Kurukshetra and had brought the same to the district office and he had signed the same. As per his testimony Joint Inspection Report reflected date of the arrival of the material at the rake point, the quantity of the material and date of dispatch of the same to the Institutional buyers. When he was asked what was the purpose of getting those Joint Inspection Reports signed, the witness C.C. No. 71/11 had explained that he had spoken to the Area Manager, Kurukshetra and he was informed that General Services Contract of M/s Good Friends Agencies had been signed by their Head Office at Delhi they will perform some services and supervise the rake material of the Institutional buyers. They will collect the orders from the Institutional buyers as well as they will collect acknowledgement of the receipt of the material from the Institutional buyers. He had asked him to sign the Joint Verification Report by saying that it was of no consequence and therefore, he had signed the same. According to him M/s Good Friends Agencies had not rendered any services. PW­36

73. Witness PW36 Sh. Prem Dass Gera had deposed that he had joined the Panipat Marketing Division in the year 1997. He had seen the records of Panipat Division. As far as his knowledge was concerned, as per the records M/s Good Friends Agencies had not done any work/job in Panipat Division. According to him at the Panipat Division mainly they used to dispatch urea on the basis of C.C. No. 71/11 the orders received from the Area Office/Zonal Office and even from the District Office PW­37

74. Witness PW37 Sh. Ashok Kumar had deposed that he had served as Development Officer at the office at Kurukshetra as District Incharge during April 1992 to April 1997. His job was of sales and marketing. During his tenure M/s Good Friends Agencies had not performed any job. He had signed two Joint Inspection Reports with the representative of M/s Good Friends Agencies in the year 1996. In the said Joint Inspection Reports only details of quantity of urea received at rake point Shahabad and perhaps also at Kurukshetra had been given. The details therein were also mentioned of the Institutional buyers and private buyers to whom supplies had been dispatched from the rake point. He had signed the Joint Inspection Report after receiving the instructions from the Area Manager. He had clarified that though he had signed those reports, but M/s Good Friends Agencies had not done any work.

C.C. No. 71/11 PW­38

75. Witness PW38 Sh. Ravinder Nath Joshi had deposed that in the year 1997 he was working as Director (Finance) with NFL Limited. At that time Chairman cum Managing Director was the highest official of NFL and there were three Directors working under him viz Director (Project), Director (Finance) and Director (Marketing). The General Managers were next in the hierarchy. As Director (Finance) his ob was to control the finances of the organization, arrange for the funds, control the costs and ensure that the production of the units go uninterrupted. He had deposed that NFL was a Company owned by the Government of India incorporated under the Companies Act. The Government was holding more than 90% of the shares in the Company. The witness had identified the document Ex.PW18/1 showing the sub delegation of the powers of Chairman cum Managing Director to the General Manager (Marketing). He had deposed that the powers mentioned therein had been delegated to the Chairman cum Managing Director by the Board of Directors who had further delegated the same to the C.C. No. 71/11 General Manager (Marketing). The Chairman cum Managing Director could have only sub delegated the said powers to the General Managing (Marketing) and no one else. The sub delegation was made by the then acting Chairman cum Managing Director Sh. C.K. Rama Krishnan as per Ex.PW18/1. The witness had further identified another document Ex.PW18/3 schedule of sub delegation of powers to General Manager (Marketing. As per this document power to enter into a contract relating to the maintenance, repairs, material handing etc was available with General Manager (Marketing subject to concurrence of Associate Finance of the Marketing Division. However, if the value of the job was more than Rs.50,000/­, then prior approval of the Director (Finance)/ Managing Director was required. This all was subject to availability of budget. The budget was allocated in the beginning of the year and it was ensured that the expenditure was within the amount as stated in the budget. He had given the procedure with regard to the approvals or proposals like this. According to him initially when the budget is prepared it goes to the CMD for approval. Once it is approved, the same budget is followed throughout the year. There is an Officer in the Finance Department who keeps track of all the expenditures made and also C.C. No. 71/11 inform as to whether the proposal has exceeded the budget or not. It meant that all the proposals before being approved would first go to the Finance and it is only after it is cleared by the Finance, the proposal would proceed further. In case there was difference of opinion between the General Manager (Marketing) and Finance Department, then it was put to the Director Finance/ MD for consideration. He had added that at that time Sh. C.K. Rama Krishnan was Director (Finance) as well as also acting MD. He could sub delegate his powers as per Ex.PW18/1 and Ex.PW18/3.

76. After going through the contract Ex.PW1/1 and also the schedule of sub delegation Ex.PW18/1 and Ex.PW18/3 he had deposed that after going through the contract it was possible to make out that the amount involved was more than Rs.50,000/­ meaning thereby as per the sub delegation of powers Ex.PW18/1 and Ex.PW18/3 it would have required the approval of the higher authorities i.e. Director (Finance)/ Managing Director. C.C. No. 71/11 PW­39

77. Witness PW39 Sh. Rajbir Kajal had deposed that during the period from 1990 to 1992 he served as Field Assistant at Kurukshetra. He was thereafter transferred to Udaipur and from there to Saharanpur under area office Meerut. Again he was posted at Ambala under area office Kurukshetra in November 1994 as Sr. Field Assistant. Both while working as Field Assistant and Sr. Field Assistant his duties were to look after the sales and marketing of NFL fertilizers to private dealers as well as Institutional buyers like HAFED and Haryana Agro Industrial Corporation. He had explained that his job included issuing NFL products to private parties, collection of payments from private parties, Handling and supervision of fertilizers at the rake points, sending order to Panipat unit for direct road supplies to private parties, issuing of material to Institutional buyers from warehouses and collection of orders from the Institutional buyers etc. He had added that as far as the payment from the Institutional buyers were concerned they were directly handled by the Zonal office. According to him there was only one C.C. No. 71/11 rake point under his supervision which was at Ambala Cantonment. He could not give the name of the Handling, Transportation and General Services Contractor during the period of his posting at Ambala but he had stated that he was some contractor from Ambala.

78. For the period 1990 to 1992 as per his deposition, when he was posted as Field Assistant at Kurukshetra he was looking after the work at Kurukshetra rake point. He could not give the name of the Handling, Transportation and General Services Contractor at that time at Kurukshetra but he had stated that he was also some local Contractor. He had then clarified that in fact there were 2­3 contractors who had been engaged to handle the work over a span of two years but all of them were from Kurukshetra. He had further deposed that neither at Kurukshetra nor at Ambala during the tenure of his posing at the said stations there had been no Handling, Transportation and General Services Contractor by the name of M/s Good Friends Agencies.

79. According to his testimony when he was at Ambala, he had come to know from the Area Office Kurukshetra that there was one C.C. No. 71/11 supervising agency by the name of M/s Good Friends Agencies engaged which was going to handle the supervision at Ambala rake point. He had explained that there were not too many rakes placed at Ambala rake point. They were not more than 2 or 3 in a year. With regard to representative of M/s Good Friends Agencies he had stated that they might have visited the Ambala rake point some time and so far as he could recollect someone from M/s Good Friends Agencies had visited the Ambala rake point one or two times and left after sitting with him for 1­2 hours but done no work. According to him he may have visited him sometime in 1995­1996. As far as the question of handling and transportation was concerned, as per his testimony it was done only by the local contractor under the supervision of the Field Officer.

PW­40

80. Witness PW40 Sh. Dharampal Jakhar had deposed that he was posted as Field Assistant/ Sr. Field Assistant/ Assistant Development Officer during the period from 1989 to 1998 at Dabwali, Haryana. His job at Dabwali involved supervision of rakes, collecting C.C. No. 71/11 orders from private dealers and State co­operatives such as HAFEd, collection of payments from the private dealers, collection of sale related documents from HAFED and other agricultural promotional activities. He used to supervise the rake point at Mandi Dabwali. That was the only rake point in his area. During his tenure at Dabwali from 1993 to 1996 there was one agency by the name of Haryana Warehousing Agency which was the handling contractor at Dabwali rake point and he was the only contractor at the said rake point. In respect of M/s Good Friends Agencies he had deposed that he had heard the name of M/s Good Friends Agencies and had come to know that this agency was supposed to help in collection of orders from Government agencies, lifting certificates and payment collections. M/s Good Friends Agencies had not done any such work. They had also not done any work at rake point. He had stated that he had not singed any Joint Verification Report with M/s Good Friends Agencies and also that the representative of M/s Good Friends Agencies had never visited the rake point. C.C. No. 71/11 PW­41

81. Witness PW 41 Sh. M.S. Tolia who was working as Dy. Chief Vigilance Officer at corporate office of NFL had identified seizure memo Ex.PW41/1 and his signatures appearing on the same by which he had handed over a number of files stated therein to CBI including the files mentioned at Sr. No.I to IV, VII, VIII, X and XI i.e Ex.PW41/B1 to Ex.PW41/B8.

PW­42

81. Witness PW42 Sh. Rajender Kumar Narang had deposed that in August, 1998 he was posted at Chandigarh as Sr. Assistant (Accounts). He was looking after the Institutional sales of urea only to HAFED and Haryana Agro Industrial Corporation. He was shown documents D­36 and D­37 Ex.PW41/B4 i.e. various bills and had stated that he had never received those bills at Zonal Office, Chandigarh. He had clarified that the bills which were received in the Accounts Department at Zonal Office were received after due C.C. No. 71/11 verification from the Area Office which then go to the State office of NFL, Haryana located in the same building, then it goes to the Manager (Finance) and thereafter reaches the concerned In­charge of the Accounts Department and finally placed before him. The bills which had been shown to him according to him had never gone through the said process and received by him, therefore, there was no payment made against the said bills.

83. Similarly he had gone through the document (D­38) i.e the bills in the file Ex.PW41/B5 and stated that these bills had also never been received in the Accounts Department, therefore, no payment was made against them and the said bills had not gone through the process narrated by him. Similar was his reply with regard to the bills shown to him from file no.13, Ex.PW14/B6.

PW­43

84. Witness PW43 Sh. Pritam Lal had deposed that he was working as Contractor with NFL from 1980 to 1988 and then again C.C. No. 71/11 from 1995 to 1996 and his job involved handling of urea. He had employed labour to carry out the work of handling of urea. His job was to make available the labour for loading and it was supervised by the staff of NFL and also of CISF. At the plant at Naya Nangal, District Ropar, Punjab he was the only contractor during the said period and there was no other contractor employed at this site. According to him he had never heard the name of M/s Good Friends Agencies as being employed during the said period for loading of urea from that site.

PW­44

85. Witness PW44 Sh. Vidyanand had stated that from May 1994 to January 1998 he was working as Dy. Manager (Finance & Accounts) and was posted at Zonal Marketing Office, Chandigarh, NFL. Sh. R.K. Khanna was the Zonal Manager for Chandigarh office during that time. The witness had identified the documents in his testimony such as the voucher of Rs.30 lacs prepared at Delhi office for making advance payment to M/s Good Friends Agencies on C.C. No. 71/11 01.06.1994 Ex.PW25/A, order of General Manager (Marketing) Ex.PW8/A with regard to the approval of release of ad­hoc payment of Rs.30 lacs to M/s Good Friends Agencies, Minutes of the Committee Ex.PW3/B formed with regard to apportionment of remuneration to M/s Good Friends Agencies and the proposal prepared by the officials of Zonal Marketing Office Ex.PW3/A regarding apportionment of Rs.15 per M.T. with regard to the remuneration to be paid to M/s Good Friends Agencies which became the basis for the recommendations made by the Committee vide Minutes Ex.PW3/B.

86. The witness had further identified the letter of Vigilance office of Chandigarh witness addressed to his Boss Sh. M. Prabhakar, Additional Chief Vigilance Officer Ex.PW44/A. The witness had given the background of the said letter as that there was some controversy between him and Sh. R.K. Khanna, Zonal Manager against the bills of M/s Good Friends Agencies because the same had not been sent duly verified and approved for payment by Sh. R.K. Khanna. It was this information which was given vide the said letter submitted by Sh. Mahender Sharma to his Boss Sh. M. C.C. No. 71/11 Prabhakar, Addl. Chief Vigilance Officer. The witness had also identified the note sheet at page no.5 Ex.PW44/B of file Ex.PW41/B3 having detailed note in his hand in the portion A1 to A1 with which he had enclosed a copy of a fax dated 09.11.1995 Ex.PW44/C he had already sent to General Manager, NFL on 09.11.1995.

87. With regard to the fax message Ex.PW44/C the witness had further clarified that on 09.11.1995 he had received a bundle of another set of bills of M/s Good Friends Agencies from Sh. R.K. Khanna for taking necessary action in the matter with regard to the release of payments. But since these bills were not verified for payment by Sh. R.K. Khanna, he had apprised the same through a fax message to the Executive Director (Marketing and P&A) at CMO, New Delhi i.e Sh. D.S Kanwar, adding that since Sh. R.K. Khanna was at Delhi on 09.11.1995, he may be asked to get the verification done on the bills, which were also forwarded on the same day to Delhi office by special courier. In respect of his nothing in the portion A1 to A1 on Ex.PW44/B he had clarified that this noting was of 27.09.1996 wherein the facts about the contents of the fax written on 09.11.1995 Ex.PW44/C were also mentioned. He had deposed that C.C. No. 71/11 he had not made the payments with regard to the said bills during his tenure.

88. Since the witness had seen the original bundle of bills, he was shown the photocopies of the bills already on record and was asked if he could say after seeing those photocopies if they were the photocopies of the said set of bills of M/s Good Friends Agencies. In answer to this question the witness had explained that on 09.11.1995 he had received a bundle of bills from Sh. Khanna along with an inter office memo written by Sh. R.K. Khanna. Since he could see that there was some political angle involved with regard to those bills, he had immediately after looking at the bills not being verified, had returned the same to Sh. R.K. Khanna's office where he came to know that Sh. Khanna had already left for Delhi. This prompted him to send a fax message, already referred, to Delhi office to Sh. D.S Kanwar G.M. (Marketing) and also simultaneously sent the original bills through courier to the Central office. Thereafter the witness had stated that the bills Mark P17/A1 to P17/A98 collectively Ex.PW44/D1, bills Mark P17/A99 to P17/A178 collectively Ex.PW44/D2 and bills Mark P17/A179 to P17/A236 collectively C.C. No. 71/11 Ex.PW44/D3 were the photocopies of the bills original of which he had sent to Delhi office. (Ld. Defence Counsel had objected to the exhibiting of these documents).

PW­45

89. Witness PW45 Sh. O.N. Kaul had deposed that in the year 1998 he was working as Inspector with CBI and posted at Anti Corruption Unit­I, New Delhi. This case was registered after being converted from a preliminary inquiry in 1998 and entrusted to him for detailed investigation. The FIR Ex.PW45/1 was registered by him on the instructions of the then S.P Sh. Prabodh Kumar. The FIR was registered against Sh. D.S Kanwar of NFL, Sh. Dilawar Mir of M/s Good Friends Agencies, Sh. M.A Sarma Dy. General Manager , NFL, Sh. Anil Kumar sharma Assistant Manager and others. After the investigation of this case was handed over to him, he had prepared a chart as to how he should proceed with the investigation of the case. In connection with the investigation of the case he had visited Chandigarh and other places to record the statements of other C.C. No. 71/11 officers and had collected documents at NFL offices etc. Most of the witnesses denied that Sh. Dilawar Mir proprietor of M/s Good Friends Agencies who was awarded the contract of handling urea at Haryana and Punjab had fulfilled the contract. He had also collected documents relating thereto. During investigation he had also come to know about the release of Rs.30 lacs as an advance for handling of urea by Sh. D.S Kanwar in association with other staff members/officers of NFL namely Sh. Anil Kumar Sharma and others. Sh. Dilawar Mir had withdrawn Rs.30 lacs and had done no work. He had submitted bills for work which he had never performed. He had seized the documents and prepared various seizure memos.

90. The witness had identified the seizure memo Ex.PW30/A (D­40) bearing his signatures by which he had seized three folders relating to M/s Good Friends Agencies including the file no.348/98 having 37 pages already Ex.PW30/B, which had been handed over to him by Sh. S.P. Nakra of Vigilance Department, Marketing, NFL, New Delhi.

C.C. No. 71/11

91. He had identified seizure memo D­13 Ex.PW10/E dated 09.10.1998 bearing his signatures by which he had seized eleven cheques Ex.PW10/F1 to Ex.PW10/F11 (D­14 to D­24) from Sh. M.L. Jain, Branch Manager, Bank of Baroda, Bhikaji Cama Place, New Delhi. He had further identified the seizure memo D­27 Ex.PW5/A bearing his signatures by which he had seized the documents including document Ex.PW45/2, Ex.PW5/B, Ex.PW5/C, Ex.PW5/D i.e. the T.A bills and railway tickets of Sh. R.K. Khanna for traveling to Delhi on 02.06.1994, from Sh. Y.P Bholla Dy. Manager F&A, NFL, Zonal Office, Chandigarh.

92. He had further identified seizure memo D­60 Ex.PW41/A bearing his signatures whereby he had seized the documents including Ex.PW41/B4 (File No.11, D­36 & D­37), Ex.PW41/B5 (File No.12, D­38), Ex.PW41/B6 (File No.13, D­39), Ex.PW41/B8 (File no. 15, D­52 and D­53), Ex.PW41/B2 (File no.2, D­3, D­48 to D­51), Ex.PW41/B1 (File no.1, D­1, D­2, D­4 to D­6), Ex.PW41/B3 (File no. 4, D­8 to D­11) and Ex.PW41/B7 (File no.14, D­40 to D­47) from Sh. M.S Taulia Dy. Chief Vigilance Officer, NFL, New Delhi. He had also identified the seizure memo Ex.PW15/A bearing his signatures by C.C. No. 71/11 which he had seized one document Ex.PW11/A i.e cheque of Rs.30 lacs issued in favour of M/s Good Friends Agencies by NFL, from Lajpat Nagar Branch of State Bank of India.

93. The witness had also identified one letter D­7 Ex.PW45/3 written by Sh. M. Prabhakar, Addl. CVO, NFL, Delhi to SP, CBI along with which he had sent two office orders Ex.PW18/1 and Ex.PW18/2. As per the testimony of this witness the investigation of this case had remained with him till April­May 1999 and thereafter transferred to Sh. S.Q Ali.

PW­46

94. Witness PW46 Sh. S.Q Ali who had taken over the investigation from Sh. O.N. Kaul had deposed that during the period the investigation had remained with him, he had in total examined eleven witnesses and recorded their statements. In case of three witnesses he had recorded their further statements in continuation of their statements already recorded by the previous Investigating C.C. No. 71/11 Officer Sh. O.N. Kaul. He had also seized two records namely Civil Writ Petition filed by the accused Mohd. Dilawar Mir and his Manager in the High Court of Delhi and reply thereto filed on behalf of NFL by Sh. H.L. Verma, Dy. Manager (Law), NFL, Noida. The witness had identified the memo Ex.PW46/A by which he had seized the said petition and reply thereto Ex.PW13/PX8 and Ex.PW13/PX9. The witness thereafter had given the conclusions in his testimony which he had reached after concluding the investigation leading to filing of charge sheet against Sh. D.S Kanwar the then G.M, NFL, New Delhi and Mohd. Dilawar Mir proprietor of M/s Good Friends Agencies. PW­47

95. Witness PW47 Ms. Shabnam from the office of Director Kashmir Bureau of Information at New Delhi had appeared in the Court and had produced one book published by government of J&K with the title "Jammu & Kashmir 50 years" Ex.PW47/A wherein on page no.268 it was mentioned that Sh. Dilawar Mir was the MLA from Rafiabad Constituency, State of J & K in the year 1996. There was, C.C. No. 71/11 however, no information in the book if Sh. Dilawar Mir was the MLC during the period 1993 to 1995, since there was no Assembly in existence during the period from 1990 to 1996.

Defence Evidence

96. The witness Sh. D.S Kanwar had examined nine witnesses in defence.

DW­1

97. Witness DW1 Sh. Surinder Kumar Sr. Manager (Personnel) posted at NFL, Corporate Office at Noida had brought personal file of Sh. O.P Kaviraj. According to his testimony as per the Memorandum dated 12/13.07.1994 Sh. O.P Kaviraj had joined as Dy. General Manager, Corporate Planning at Corporate Office on 05.07.1994 after relieving him at the Central Marketing Office, East of Kailash, New Delhi on 04.07.1994. He had identified the Memorandum dated 01.07.1994 Ex.PW1/B by which Sh. O.P Kaviraj was posted as Dy,. C.C. No. 71/11 General Manager (Marketing) at Central Marketing Office to the Corporate Office as Dy. General Manager, Corporate Planning.

98. He had further identified the joining note of Sh. O.P Kaviraj dated 04.10.1993 Ex.DW1/C by which he had joined as In­charge of Northern marketing Zone at Chandigarh on 04.10.1993 upon his transfer and being relieved from the Zonal Office, Bhopal on 01.10.1993; note Ex.DW1/D by which he had handed over the charge to Sh. P.K. De, Addl. Manager (Marketing), Zonal Office, Bhopal after being relieved from the said office on 01.11.1993 and office order dated 17.06.1993 Ex.DW1/E signed by Sh. D.S Kanwar stating inter­alia that in his absence during the period from 18.06.1993 to 12.07.1993 Sh. O.P. Kaviraj Dy. General Manager (Marketing), Bhopal Zone, Bhopal would be looking after all aspects of the working related to the Marketing Division on day to day basis from New Delhi or Bhopal as per the exigencies of the work. DW­2

99. Witness DW2 Sh. Anil Bansal had deposed that he was not in a C.C. No. 71/11 position to produce the summoned record relating to the year 1993­1994 of TA Bills of Sh. O.P. Kaviraj. He had placed on record one inter office memo Ex.DW2/A showing that the relevant records showing TA Bills of 1993­94 stand destroyed. As per his testimony the said record had been destroyed by the orders dated 27.09.2001 of the Committee constituted for weeding out the records of F&A, CMO. He had produced the photocopies of the said record Ex.DW2/B.

100. The witness had also placed on record attested copy of TDS certificate summoned of M/s Good Friends Agencies dated 09.06.1995 Ex.DW2/C. DW­3

101. Witness DW3 Sh. Tek Chand had produced the extracts of the nd 162 meeting of Board of Directors held on 11.11.1991 Ex.DW3/A. th He had also placed on record the copy of the Minutes of 206 meeting of Board of Directors held on11.12.1995 Ex.DW3/B. The C.C. No. 71/11 witness was shown one photocopy of a document purported to be th the photocopy of 206 meeting of Board of Directors dated 11.12.1995 running into three pages Mark DA and after seeing the same the witness had stated that he cannot produce the original of th the same. So far as the record of the concerned Minutes of 206 meeting of Board of Directors were concerned, he had already placed them on record as DW3/B.

102. Similarly, about the copy of the Agenda Item No. II/208 of 11.12.1995 the witness had stated that as per the records, he had not been able to trace the original of the said documents. According to him, as far as the Department was concerned, the original file had been submitted to the Court on 22.11.2002 and he had placed on record a receipt of the same. He had also placed on record an unsigned copy of the said documents available on his file. The documents were Mark P­45/D and Mark DB.

DW­4

103. Witness DW4 Sh. Narender Singh Manager (Accounts) of C.C. No. 71/11 Punjab Agro Industries Corporation posted at Chandigarh had appeared in the Court and deposed that he had made efforts to trace the letter no. MKTG/FRT/P­10/Urea/Spl­1 dated 24.04.1995 addressed to Zonal Manager, but despite his best efforts he could not trace the same.

DW­5

104. Witness DW5 Sh. Gagan Deep Singh Walia working as Officer on Special Duty Fertilizers with M/s Punjab State Co­operative Supply & Marketing Federation Ltd. had deposed that he had made efforts to search the same document i.e letter no.Fed/Fert/FSO/23 dated 29.11.1995, but the same could not be traced. There was a request made to NFL, Punjab Office, situated at Chandigarh to find out if they had a copy of the same and from there they had received a copy of the said letter by fax along with a covering letter. The covering letter and the faxed copy of the typed copy of the letter were Mark D­5/1 and D­5/2.

C.C. No. 71/11 DW­6

105. Witness DW6 Sh. Rajneesh Sharma working as Additional General Manager (Inputs) HAFED, Panchkula, Haryana had deposed that despite making best efforts he could not trace the office copy of the letter No. Hafed /FT/FA­II/3539 and he had placed on record a certificate Ex.DW6/A given by the concerned officials stating inter­alia that the copy of the said letter could not be traced. In respect of other letter bearing no. Hafed/FT/FA­II/1760 he had deposed that the said letter could be traced and he had brought along with him the original as well as the photocopy of the same. He had identified the signatures of one Sh. I.C Verma the then Manager (Inputs) on the said letter. The letter was given Ex.DW6/B. DW­7

106. Witness DW7 Sh. Arun Kumar Maitra who had been working as Company Secretary and G.M (Law) with M/s NFL was shown the certified true copy of Agenda No.206 of the meeting of Directors C.C. No. 71/11 dated 11.12.1995 and was asked to identify. The witness had identified the same. He had stated that this Agenda was not signed. He had clarified that it was not necessary to sign the agenda note. He had added that the said agenda had not been placed by him. It was a secret item which was directly placed by the then Managing Director Sh. C.K. Ramakrishnan before the Board of Directors, though he had seen the agenda in the records of the Company maintained n the regular course of the business. The Agenda was given the Ex.DW7/A subject to the decision on the objection of Ld. Prosecutor for CBI. The witness had submitted that the Managing Director used to exercise only those powers which were specifically assigned to him by the Board of Directors and this was also true of the contracts awarded to third parties by NFL.

DW­8

107. Witness DW8 Sh. V.K. Bhatia had been asked to produce the number of documents . He had deposed that despite making best efforts and checking from all the concerned Departments, the said documents could not be traced.

C.C. No. 71/11 DW­9

108. Witness DW9 Sh. Kishan Lal had deposed that despite making best efforts letter No.Fert./95/1233 could not be traced. He had placed on record a letter of the F.M. (Finance) Ex.DW9/A to this effect.

Charge

109. Both the accused persons i.e Sh. D.S Kanwar and Mohd. Dilawar Mir proprietor of M/s Good Friends Agencies were jointly charged for committing the offence as punishable under Section 120B IPC read with Sections 420 IPC and also read with Section 13(2) read with Section 13(1)(d) of Prevention of Corruption Act, 1988. Accused Sh. D.S Kanwar was separately charged for committing the substantive offence punishable under Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 and under Section 420 IPC. Accused Mohd. Dilawar Mir had also been separately charged for committing the substantive offence punishable under Section 420 IPC.

C.C. No. 71/11

110. The charge framed against the accused persons is broadly confined to two allegations, one related to the awarding of the contract and the other for the release of adhoc payment of Rs.30 lacs.

Allegations relating to contract Awarding of contract without following the normal process and going beyond the financial competence to award the contract.

111. One of the allegations leveled in the charge sheet is that the contract was awarded without following the usual tendering process. There is not much of dispute on this count. Contract Ex.P1 is an admitted document. As per this document, this document was executed on 09.09.1993. The reading of this document itself would show that before awarding the contract there had been no tendering process followed. The letter itself opens by referring to a communication from M/s Good Friends Agencies received through the office of Union Minister of State for Chemicals and Fertilizers during May 1993, making a request for being appointed as "Handing­ C.C. No. 71/11 cum­General Services Contractor" for fertilizer supplies to cooperatives and other Institutional Agencies in the States of Punjab and Haryana. The opening paragraph of the contract reads as under:

"We refer to your communication of even number and date received through the Office of the Hon'ble Union Minister of State for Chemicals & Fertilizers during May'93, bearing your request for appointment as Handling­cum­General Services Contractors for fertilizer supplies made by National Fertilizers Limited to the Cooperatives and other Institutional Agencies in the states of Punjab and Haryana."

112. In the written arguments submitted also there is no dispute that the contract had been awarded without following the tendering process. It was submitted that Mohd. Dilawar Mir comes from the state of Jammu and Kashmir and had approached the then Minister of State for Chemicals and Fertilizers for his appointment as Handling and Transportation contractor of urea in NFL in 1993 when the militancy in the state of J&K was at its peak. Mohd. Dilawar Mir was looking for rehabilitation outside his state and, therefore, had made representations to the then Minister. There is another C.C. No. 71/11 submission made that the prosecution has not been able to place on record any document which would show that granting of contracts in this manner was prohibited. The prosecution has also not placed on record any circular/office order/guideline/marketing manual on record which could show that the contracts could not be awarded in this manner. The Ld. Defence Counsel had made a reference to the statement of PW8 Sh. Anil Kumar Sharma to submit that in 1993 there was no Marketing Manual in place. He had made reference to the following portion of his testimony :

"It is correct that the powers held by Incharge Units are contained in respective works Manuals which also laid down the broad guidelines for the conduct of business in general by the Unit Heads. Now with the inception of market manual it is defined in the Manual. This is after the registration of the case."

113. He had further added that as per the statement of PW31 Sh. S.C Bhatia that the contracts could be awarded through "in house"

notices as well. He had made reference to the following part of the statement of the witness:

C.C. No. 71/11

"As and when there is demand generated by the field staff of Zonal Office, a demand is sent to the Logistics Department through the GM's office. The Logistics Department initiates the action for the finalization of the contractors through advertisements or in house notices served in the concerned offices for demand of contractors at stipulated places. We invite quotations from them, shortlist them and party found suitable financially, socially and on the basis of their experience in related jobs."

114. To conclude it was submitted by the Ld. Defence Counsel that the process of appointment as narrated by PW31 Sh. S.C Bhatia would show that tendering was not the only mode for appointment of contractors.

115. I would like to point out that the submission of Ld. Defence Counsel that the above portion of the statement of PW31 Sh. S.C Bhatia can be read as awarding contracts without going for the tendering process is not correct. If his statement is read, it only shows that as far as the publication is concerned for finalizing the contractors it could be done through advertisements or in house notices. The words "we invite quotations from them" in itself is C.C. No. 71/11 sufficient to show that it had to go through the tendering process before the contractors could be finalized.

116. It may be noted that awarding of contracts by issuing tenders is a time tested process by which it is ensured by the public departments that the process of awarding contracts is open and fair and there is no favoritism involved in the awarding of contracts by the Government.

117. It is not in dispute that National Fertilizers Limited is a Government Company and it could not have been an exception to the general rule. The Ld. Defence Counsel has submitted that at that point of time in 1993 there had been no Marketing Manual in place and there had been no guidelines of CVC. It really does not matter because broadly the Marketing Manuals of the Government Departments/Government owned Companies or even the CVC guidelines are generally in terms of the General Financial Rules. It cannot be denied that even at that time i.e. 1993 when this contract was awarded, General Financial Rules, 1963 were in place. Even if the same are ignored and not taken into account, no contract could C.C. No. 71/11 have been awarded without following a fair process. One may also add here supposing that this contract was awarded on the instructions of the office of the Minister and in order to rehabilitate accused Mohd. Dilawar Mir, it could have been on some policy decision of the Government and not based on some individual recommendations. Accused Sh. D.S Kanwar was under no obligation to act on such instructions having implications running into crores of rupees.

Decision to award the contract to make payment at the rate of Rs.65 per tonne.

118. There is another aspect of the matter which cannot be overlooked. In the contract it is mentioned that the accused Mohd. Dilawar Mir would be paid for his services at the flat rate of Rs.65 per tonne on the actual quantity of urea supplied by NFL. This amount could go upto Rs.100 per tonne in case in a particular season the physical take off of urea to the Institutional Agencies exceeds 2,00,000 tonnes and could be reduced to Rs.50 per tonne in case of take off being less than 1.5 lac tonnes. It is, however, not explained, C.C. No. 71/11 by the accused Sh. D.S Kanwar that as to how this figure was arrived at and it was in the interest of NFL. It can be said with no difficulty that there is every possibility that the figure was given in the contract which would have been beneficial to the other accused Mohd. Dilawar Mir, because it flowed from the recommendation of the Minister.

Awarding of Contract beyond financial powers

119. According to the allegations of the prosecution this contract had financial implications worth crores of rupees and it could not have been awarded without the concurrence of the Finance Department as well as NFL Management. The powers of Sh. D.S Kanwar for awarding the contracts without the concurrence of Finance was limited to Rs.50,000/­ in each case.

120. On the other hand as per the case of the defence Sh. D.S Kanwar who was working as General Manager (Marketing) had the delegated powers to award such contracts. While referring to the office order of 22.06.1990 Ex.PW18/1 with a schedule attached the C.C. No. 71/11 Ld. Defence Counsel had submitted "the powers which were vested in Director (Finance) were to be exercised by the General Manager (Marketing) is the sum and substance of the office order dated 22.06.1990".

121. As per the submissions made by the Ld. Defence Counsel the powers which could be exercised by the Director (Finance) could all be exercised by the General Manger (Marketing). The prosecution did not place on record the schedule of powers of Director (Finance) which could have shown that upto what level General Manger (Marketing) could exercise such powers. Since the prosecution has not produced the schedule of powers of Director (Finance), there can be a presumption drawn that he had the powers to enter into such contracts. The submissions made in this regard read as under :

"The prosecution has not placed on record the powers of Director (Finance) and has failed to lead evidence on the financial powers of Director (Finance) in awarding such contracts.

The accused argues that the powers of Director (Finance) were delegated to General Manger C.C. No. 71/11 (Marketing) and he had all the powers to enter into such contracts. The prosecution has deliberately not produced the schedule of powers of Director (Finance) and the presumption in fact is that he had the powers to enter into such contracts and schedule of powers of Director (Finance) have been withheld as it would have shown that Director (Finance) had the powers and consequent to the delegation of his powers to General Manager (Marketing), the General Manager (Marketing) would have had the powers to award such contracts."

122. I am of the view that reading of the said document Ex.PW18/1 would itself show that though there had been delegation of his own powers by Director (Finance) to General Manager (Marketing), but the same was not blanket or unqualified. The reading of para 3 of the said office order makes it particularly clear that wherever there were issues relating to financial implications the prior consultation of the Head of the Finance was necessary. There was, however, a leeway given that in case of emergent situations though General Manager (Marketing) could take a decision in situations which were likely to jeopardize Company's interest, but was still required to report the matter immediately to Director (Finance) and also thereafter required to proceed for post facto approval as per the C.C. No. 71/11 prescribed procedure. I am reproducing herein below the first three paragraphs of the said letter which are relevant for our purpose. The same reads as under :

"1. Whereas General Manager (Mktg.) has been exercising the powers of a General Manager and whereas there are certain matters peculiar to Marketing Department, it is considered necessary to specifically describe the powers of General Manager (Mktg.) for the purpose of clarity as per schedule annexed hereto.

2. In discharging the powers sub­delegated above the General Manager (Mktg.) will act on behalf of Director(F) and shall ensure due compliance with such directions and instructions as may be issued by him from time to time.

3. All powers involving financial implications will be exercised in prior consultation with the Head of Finance Department following the prescribed rules and procedures and subject to budget provisions. In the event of any difference of opinion between the General Manger (Mktg.) and the Finance Department, the matter will be referred to the Director (Finance) who will issue appropriate instructions after following the prescribed procedure. In emergent cases, where in the opinion of the General Manager C.C. No. 71/11 (Mktg.) the delay in referring the matter etc. is likely to jeopardise Company/s interest he may take a final decision at his own discretion and on his own responsibility and shall make an immediate report to the Director Finance of such cases. Such cases shall however be processed post facto as per the prescribed procedure. (Emphasis supplied)"

123. The above also needs to be read with schedule attached with the above office order and in particular items at Sr. no.2.2 and 2.3 which relate to awarding of contracts. The same read as under :

"NATIONAL FERTILIZERS LIMITED Schedule of Sub­delegation of Powers to General Manager (Mktg.), Corporate Office.

Sl. No.                Nature of Power          Extent        General Conditions
(1)                    (2)                      (3)           (4)

1.0             ...
1.1             ...

2.0             ...
2.1             ...

2.2 Power to enter into Full. 1. Subject to financial contracts and work orders concurrence and allocation for maintenance, repairs, in the budget. erection, paintings, 2. Subject to prior approval of material handling, standard­ DF/MD with regard to rates C.C. No. 71/11 isation of materials, trans­ and terms and conditions of port clearance and Freight. contract involving expenditure of Rs.50,000/­ or above in each case.

2.3 Power to enter into Full 1. Subject to financial dealership contracts, concurrence and contract for sale of allocation in the budget. products, conservancy, 2. Subject to recommendation of the Committee to be constituted for the purpose, in cases involving expenditure of Rs.50,000 or above in each case.

3. Subject to Govt.

instructions & guidelines prescribed by DF/MD/ Board from time to time.

4. As regards prices of products and terms and conditions of sale, prior approval of DF/MD will be required.

2.4 ....

....

..."

124. The reading of para no.3 in particular of the above office order along with the schedule attached makes it absolutely clear that in respect of the contract referred to at Sl. No.2.2 of schedule, where the financial implication was of more than Rs.50,000, the prior C.C. No. 71/11 approval of the Director (Finance)/Managing Director (DF/MD) was necessary with regard to the rates and terms and conditions of the contract. In respect of the contracts referred to at Sl. No.2.3 of the schedule in case of the contract involving the expenditure of Rs. 50,000 above, the same would be subject to the recommendations of Committee to be constituted for the purpose. In any case the present case will fall in the category of contracts referred to in Sl. no. 2.2 "Material handling" and thus, it can be said on the basis of the said office order and the schedule that the Managing Director (Marketing) i.e the accused Sh. D.S Kanwar could not have entered into contract in question Ex.P1 with the accused Mohd. Dilawar Mir proprietor of M/s Good Friends Agencies. This conclusion can be reached even without going through what has been deposed by the witnesses as to the interpretation of the said office order. It may also be added here that the submission of the Ld. Counsel that in the absence of any schedule which may define the financial powers of the Director (Finance), the conclusion cannot be reached that Sh. D.S Kanwar, General Manager (Marketing) did not have the financial powers to enter into this contract in my view has no basis. This conclusion can be reached just on the basis of above office order. C.C. No. 71/11

125. For the sake of record, I would like to note here that the contract here did have the financial implications involving more than Rs.50,000/­. It can be understood with no difficulty after one has examined the terms of the contract. Para no.4 in the said contract Ex.P1 dealing with the question of remunerations lays down that M/s Good Friends Agencies was to be paid at the rate of Rs.65 per tonne and this amount could go upto Rs.100 per tonne where the off­take of the urea may exceed 2 lac tonnes and it could be reduced to Rs. 50 if the take­off was less than 1.5 lac tonnes. Meaning thereby that under the contract if M/s Good Friends Agencies off­take the urea upto 2 lacs it could have received a remuneration of Rs.2 crores. By any stretch of imagination the financial implication could not have been less than Rs.50,000/­. For reference I am reproducing the said clause here as under :

"4. Remuneration :

For the services rendered as enumerated under "3"

above, M/s. Good Friends Agencies shall be entitled to a flat per tonne remuneration of Rs.65.00 (Rupees sixty five) on the actual quantities of Urea billed by NFL to the Cooperatives and the State Institutional Agencies under C.C. No. 71/11 reference during the six monthly period of the Rabi or the Kharif season starting 1st October or 1st April as the case may be. In case, however, the physical off­take of Urea material to the agencies under reference during a particular season exceeds 2.0 lac tonnes, the entire quantities billed by NFL during the season shall attract a flat per tonne remuneration of Rs.100.00 (Rupees one hundred) subject to the proviso that the incremental off­ take over and above the base off­take of 2.0 lac tonnes is not less than 50,000 tonnes. In the event of failure of M/s. Good Friends Agencies to ensure a minimum off­ take of 1.5 lac Mts of Urea material in a particular agricultural season from NFL sources, M/s. Good Friends Agencies shall be entitled to a flat rate service remuneration of only Rs.50.00 (Rupees fifty) per tonne on the quantities of Urea actually billed by NFL to the agencies under reference during the season."

126. I may also refer here that there can be a case here to say that the General Manager did not have any delegated powers of the Director (Finance) to act on behalf of the Director (Finance) because nd the said office order of 22 of June 1990 Ex.PW18/1 was modified th by another office order of 26 of June 1990 Ex.PW18/2, stating inter­ nd alia that the said office order of 22 of June 1990 was modified and the powers delegated to the General Manager (Marketing) were to be C.C. No. 71/11 exercised by the Dy. General Manager (Marketing). The main part of th the said office order of 26 of June 1990 Ex.PW18/2 reads as under :

"The powers delegated to General Manager (Mktg.) at Corporate Office vide office order No. SEC/6.32 dated 2nd June, 1990 shall be exercised by DGM(Mktg.)I/C, till further orders."

127. In any case if one were to assume that the accused no.1 Sh.

nd D.S Kanwar had the delegated powers as per the office order of 22 of June 1990 Ex.PW18/1, still it can be said with no difficulty that he could not have entered into the said contract Ex.P1 without the prior approval of the Director (Finance).

128. It is not even a case put forth by the defence that prior to the awarding of the said contract there had been any approval of the Director (Finance). There is, however, a case built stating that the case of appointment of accused no.2 Mohd. Dilawar Mir was forwarded by then Director (Finance) and acting Managing Director himself and also the agreement was executed on his instructions, there was no further additional requirement of getting his C.C. No. 71/11 concurrence. There is also reference made to a document Ex.PW39/DX2, a note signed by the accused no.1 Sh. D.S Kanwar submitted to the Managing Director referring inter­alia that terms and conditions of the contract had been broadly discussed before entering into the contract. In the left hand margin of the said note there is a diary number given which would show that from the office of accused no.1 Sh. D.S Kanwar the said note was indeed sent to the Managing Director, who was none other than the Director (Finance) who was acting also as Managing Director. This note though is dated 01.06.1994 but below the signatures of Sh. D.S Kanwar the date given is of 11.06.1994. The diary number also bears the date 11.06.1994. The said entire note reads as under :

"An agreement has been entered into with M/s Good Friends Agencies, New Delhi for handling­cum­ General Services for NFL supplies to Co­operatives and other Institutional Agencies in the States of Punjab and Haryana as detailed in the contract (Copy enclosed).

The terms and conditions incorporated in the contract have already been broadly discussed. Though the contract is valid upto September 30, 1998, the gestation period kept was for six months i.e. October 1, C.C. No. 71/11 1993 to March 31, 1994. Since the party has not yet fully geared for rendering the services as envisaged in the contract, the period of gestation is proposed to be extended for a further period of six months i.e. upto September 30, 1994 during which time the performance of the party shall be reviewed.

Submitted for favour of kind approval please."

129. The said note appears to be an office copy. It appears from the above note that though the contract had been awarded, but after the contract had been awarded, post facto approval was being sought from the Managing Director. There is also an indication that there had been some verbal discussion with regard to the terms and conditions incorporated in the contract. First of all I would like to be clear on the point that it does not appear from any angle that it was an emergent situation as envisaged in para no.3 of office order of nd 22 of June 1990 Ex.PW18/1 for which prior approval could have been dispensed with and recourse to post facto approval should have been taken. Secondly I would have appreciated this submission of the Ld. Defence Counsels if there had been a case made out by the defence that in this case after the contract had been C.C. No. 71/11 awarded there had been a post facto approval given by the Managing Director. No where in the case not in terms of any suggestion being made to any witness it has been suggested from the side of the defence that the said note of accused No.1 Sh. D.S Kanwar had been approved by the Managing Director. Defence ­Awarding of contract was no secret

130. It has also been submitted on behalf of the defence that the awarding of contract in this case was not a secret as is being made out by the prosecution. It was in the knowledge of the higher officials of NFL that such a matter was under consideration. The reference was made to a letter of Sh. M.A Sarma dated May 8, 1993. Before proceeding further to consider the submissions made with regard to the said letter, I would like to reproduce the said letter. It reads as under : "May 28, 1993 Shri Amar Sinha, IFS, Private Secretary to Minister of State for Chemicals & Fertilizers, Shastri Bhawan, New Delhi.

C.C. No. 71/11 Dear Sir, Kindly refer to your D.O. letter no.916/MOS/(C&F)/93 dated May 20, 1993 to Shri C.K. Ramakrishnan, our Actg. Managing Director.

The case of M/s Good Friends Agencies is under consideration and we shall revert back to you as and when a decision is taken in the matter.

Thanking you, Yours faithfully, ( M.A. Sarma ) Group Manager (Mktg.)"

131. On the left side of this letter the name of Sh. Kanwar G.M (Marketing) appears in a square bracket and below it there is also mention of "DyM (F&A)" bearing issuing date 1.8.94.

132. After referring to the said letter, following submissions were made on behalf of the defence :

C.C. No. 71/11

(a) The said letter would show that the representations were being made by accused no.2 Mohd. Dilawar Mir to the Minister for being appointed as Handing and Transportation Contractor and the said request had been sent to the then Director (Finance) who was also acting as Managing Director and the issue was being dealt with by Group Manager (Marketing), meaning thereby that the process of awarding the contract was not being carried out secretly.

(b) The name of the accused no.1 Sh. D.S Kanwar on the said letter had been written as an afterthought and in the absence of his signatures possibility of it being tempered cannot be ruled out.

(c) The contract between NFL and M/s Good Friends Agencies was executed with the consent and concurrence of Director (Finance) and acting Managing Director Sh. C.K. Ramakrishnan.

The instructions to appoint M/s Good Friends Agencies as contractor came from the office from which the prosecution is alleging that the concurrence was required.

C.C. No. 71/11

133. It is not the case of the prosecution that the officers of NFL did not know that from the office of the Minister there had been some recommendation made. It has not been explained as to why the said letter should be considered to have been forged. It is difficult to understand that on the one hand the letter is being presented to explain that everyone knew about the recommendation being made by the Minister for appointing M/s Good Friends Agencies as the contractor and on the other hand it is being claimed that the said document is tampered with. It has not been explained that if this document is considered as tampered, what impact would it make on the case. Lastly, it is difficult also to understand that as to how on the basis of the said letter the conclusion can be reached that there had been consent and concurrence of Director (Finance) and Managing Director for awarding of contract. The letter simply states that the case of M/s Good Friends Agencies is under consideration.

134. I am of the view that on the basis of the above letter it cannot be established that there had been consent or concurrence of the Director (Finance)/acting Managing Director to award the contract. It would be of no consequence if someone were to say that there had C.C. No. 71/11 been a letter from the office of the Minister for awarding the contract and this matter was in the knowledge of Officers of NFL and it was not a secret.

Defence­ Non­examination of Sh. C.K. Ramakrishnan as a witness.

135. It has been submitted that prosecution has deliberately not made Sh. C.K. Ramakrishanan the then Director (Finance) and the acting Managing Director as a witness as his presence would have shown that he had actually recommended/concurred to the appointment of M/s Good Friends Agencies as the contractor of NFL.

136. In my opinion this submission of the Ld. Defence Counsel cannot be entertained at this stage without a proper foundation having been laid during the cross­examination of the Investigating Officers. In other words, if the Ld. Defence Counsel, had an issue on this account, he should have put this question to the two Investigating Officers PW45 Sh. O. N. Kaul and PW46 Sh. S.Q Ali C.C. No. 71/11 who had been examined in this case. They were the best persons to explain as to what prevented them from naming Sh. C.K. Ramakrishanan as a witness in this case. If I have to entertain this argument at this stage without an opportunity being given to the prosecution at an appropriate stage to explain its position on this account it would be unfair to the prosecution. In any case, in my opinion, even the defence did not claim at any stage that there had been any express approval by Sh. C.K. Ramakrishnan i.e. Director (Finance) before the contract in question had been awarded by the accused no.1 Sh. D.S Kanwar to accused no.2 Mohd. Dilawar Mir. All the suggestions and submissions made on behalf of the defence have bordered around the claim that Sh. C.K. Ramakrishnan knew what was happening and there had been a tacit consent from him for awarding the said contract. The same certainly cannot be said to be a substitute for the express approval required. Defence­ Record from Minister's office not seized

137. It has been also submitted that the issuance of the above letter C.C. No. 71/11 from the office of the then Minister would have shown that there were representations being made to him. If the record of the office of the Minister had not been secured and no witness from his office had been examined, this should lead to the presumption that the said record had deliberately been withheld and if the same had been produced, it would have demolished the case of the prosecution revolving around secrecy and not seeking concurrence.

138. As far as the question of the secrecy is concerned, it has already been stated above that the allegation of the prosecution is not of this contract had been awarded in secrecy, but the contract having been awarded in violation of rules/procedures for favouring the accused no.2 Mohd. Dilawar Mir proprietor of M/s Good Friends Agencies. It has not been explained that as to how the record of the office of the Minister would have shown that while awarding the contract, the concurrence of the Director (Finance) had been taken as envisaged in office order dated 22.6.1990 Ex.PW18/1. C.C. No. 71/11 Necessity of awarding the contract

139. A contract of such proportions could not have been awarded just on the basis of some recommendation been made by some Minister. It was also essential before awarding the contract that an assessment had been made as to whether awarding of such a contract was at all necessary.

140. Witness PW31 Sh. S.C Bhatia working as Manager (Marketing) from 1993 to 2000, who was posted in 1993 in the Sales and Distribution Department an later on in 1994 moved to Logistics Department as its head had described as to how a contract relating to appointment of Handling & Transportation was to be processed. He had deposed that Logistics Department was responsible for arranging all kinds of transportation and forwarding of the goods from the rake points to various dealer points and go­downs for storage. He had given the entire process as follows :

"As far as the movement of the material is concerned, it cannot be without the involvement of the Logistics Department. Even where the handing and transportation contractors are involved, there is a role for the Logistics C.C. No. 71/11 Department. I would like to explain it like this. As and when there is a demand generated by the field staff of Zonal office, a demand is sent to the Logistics Department through the GM's Office. The Logistics Department initiates the action for the finalization of the contractors through advertisements or inhouse notices served in the concerned offices for demand of contractors at stipulated places. We invite quotations from them. Short list them and party found suitable financially, socially and on the basis of their experience in related jobs. The recommendation of the Committee is sent for final approval of the General Manager and contracts are issued accordingly for a specified station and period and concerned related jobs and their contract value in terms of per metric ton."

141. When he was specifically asked about M/s Good Friends Agencies, he had deposed :

"I had not dealt with any file of M/s Good Friends Agency for logistics and other works for the State of Punjab and Haryana. The case was to originate from Zonal office, Chandigarh. We had not received any request of such type of contractor for the State of Haryana and Punjab. No such request came to us from Zonal office, Chandigarh."

C.C. No. 71/11

142. PW13 Sh. O.P Kaviraj who was posted in September 1993 in Chandigarh was much more forthright in his examination in the Court. In his cross­examination by the Ld. Prosecutor of his own he had volunteered and deposed :

"I would like to add that when a contract is made by any party, the question is as to how the necessity of such a contract. Such necessities are arisen at the instance of the Zonal Office and conveyed to the Central Office informing as to what kind of services they are in need of so that accordingly the contracts with the vendors could be entered into."

143. He had further continued, when he was asked about the bills being presented to him of M/s Good Friends Agencies for payment :

"I had not taken cognizance of the same, however, and had kept them pending with me because I could not understand as to why this contract was at all made. (Vol.) As at that time there was shortage of urea, demands were more and supplies were less and at that time because of it advance cash sales were going on."

C.C. No. 71/11

144. PW19 Sh. Pradeep Kiran Dey who was working as Addl. Manager with NFL at Delhi Office in 1995 had deposed that after he was posted in Delhi office, he got to see the bills of M/s Good Friends Agencies and he wanted to know what were they all about and, therefore, he had called for the files and he had seen two contracts in the file. The first contract was for Rs.65 per metric tonne for some services and there were about a dozen of services to be rendered by M/s Good Friends Agencies. The second related to the same subject matter except the rates were reduced from Rs.65 to Rs.15 per metric tonne for doing only three jobs. Under the revised contract there were only three services to be rendered. He had thereafter during the course of his examination shown the said two contracts. He had then deposed "there was no necessity of having entered these contracts by the NFL as we had Field Staff posted every where."

145. It is apparent that the contract was awarded in favour of M/s Good Friends Agencies by accused no.1 Sh. D.S Kanwar without having made any assessment as to whether there was actually any requirement of awarding of any contract for "Handling­cum­General C.C. No. 71/11 Services Contractor for NFL" and it seems to me logical that the assessment as to the requirement of awarding of such contract should have come from the Zonal Office and thereafter processed step by step and not just been awarded because the accused no.2 Mohd. Dilawar Mir proprietor of M/s Good Friends Agencies wanted a particular kind of contract being awarded to him and it had some recommendation in his favor by the Minister.

146. The testimony of the witnesses PW31 Sh. S.C Bhatia, PW13 Sh. O.P.Kaviraj and PW19 Sh. Pradeep Kiran Dey, who were the responsible officers of the Company and had the opportunity to deal with the issue, had clearly deposed that there was no necessity of entering into this contract. This issue would get further clinched from the discussion to follow under the heading "Non Performance of the Contract" as that would show that for the works assigned under the contract there were already persons employed to do the same job. If there were people already employed to do the same job certainly there could not have any necessity to enter into this contract. C.C. No. 71/11 Non performance of contracts

147. A letter dated 31.03.1995 is an admitted document of M/s Good Friends Agencies (Ex. P­28). The reading of this letter would show that the payments had not been released to M/s Good Friends Agencies of the period Oct. 93 to March, 95. In other words the bills of M/s Good Friends Agencies had not been settled from the day the contract in question Ex. P1 came into existence between M/s NFL and M/s Good Friends Agencies. In this letter there is a clear admission on the part of M/s Good Friends Agencies that it did not perform many of the jobs under the contact. A reading of it would show that besides : (i) Supervision at rail heads for supplies to co­ operatives and institutions in the states of the Punjab and Haryana ;

(ii) procuring orders from institutional agencies and realization of payments therefore, there was no work performed by M/s Good Friends Agencies and in fact thus was prepared to scale down its demand for payments being made against the said bills from Rs. 65/­ per metric ton to Rs. 15/­ per metric ton. It was in this light it desired the further extension of the contract from April 95 only to be confined to the above jobs. It may be noted here that the absence of C.C. No. 71/11 'Transportation of fertilizer material railheads to institutional agencies' and 'undertaking job of Unloading and Loading operations' is conspicuous, the jobs otherwise claimed to have been performed by M/s GFA.

148. The case of the prosecution, however, is that even these jobs had not been performed by M/s Good Friends Agencies firstly there was no necessity for the said jobs being performed because institutional agencies had been directly dealing with the Zonal Office at Chandigarh both in terms of placing the orders and realization of payments and at the rail heads there was staff of NFL deployed to carry out the supervision work. In that sense the awarding of contract for those purposes was even not necessary. Let us see what the witnesses have deposed in this regard.

(a) Non Supervision of Work at Rail Heads

149. According to the letter dated 31.03.1995 Ex.P28 the accused no.2 Mohd. Dilawar Mir had claimed to have performed "Job of C.C. No. 71/11 Supervision at Rail Heads for supplies to Cooperatives and Institutions in the State of Punjab and Haryana as mentioned in the original contract". When I look at the original contract, I find that M/s Good Friends Agencies was supposed to (a) "Arrange Road Dispatches in favour of cooperatives and Institutional Agencies, in truck loads against dispatch instructions for FOR supplies" [clause 3(c)]; (b) "Arrange clearance of fertilizer material from railway platforms within the stipulated time period and ensure acceptance of full responsibility by the NFL agents for payment of demmurage and wharphage accrued on such quantity on account of not being moved out of railway premises within the stipulated time period for any reasons whatsoever" [clause 3(d)]; and (c) For its own good may have liked "to ensure supervision at the loading points by their own authorized representatives" as NFL would not entertain any shortage at the destination points in the field by rail/road because of shortages in the form of full bags or in parts thereof towards cut and torn bags received, if any. [Clause 3(f)].

150. The case of the prosecution, however, is firstly that the services of M/s Good Friends Agencies were not required and in fact those C.C. No. 71/11 jobs of supervision referred above were not performed by M/s Good Friends Agencies. If the representatives visited the rake points, they visited only to collect some data and for getting a "Joint Verification Report" signed by the officials of NFL who seemingly signed the same because they had some information from the respective Area Offices that M/s Good Friends Agencies had been appointed as its Handling and Services Contractor.

151. Before proceeding further I would like to point out that the jobs listed above to be performed by M/s Good Friends Agencies on the face of it also appears to be superfluous for the following reasons :

(I) The reading of the clause 3(d) of the original contract Ex.P1 would give an impression that all the supervisory work at the rail heads was to be undertaken by M/s Good Friends Agencies, making the presence of NFL staff at the rail heads completely unnecessary.

Conversely, if the NFL staff was present at all the rail heads to supervise the said operations, then the presence of M/s Good Friends Agencies was not necessary as there could not have been any requirement of two set of people to do the same job. C.C. No. 71/11 (II) It is unclear from clause 3(b) of the contract Ex.P1 that if M/s Good Friends Agencies was actually required to transport the fertilizer material to the Institutional Agencies or its role was merely confined to "arrange" i.e to plan and ensure the timely and orderly dispatches of fertilizer material to the Institutional Agencies through the NFL appointed Handling and Transportation contractors. The expression "the NFL agents" and "NFL handling agent" in clause 3(b) and "supervision at loading points" in clause 3(f) give an impression as if M/s Good Friends Agencies was not to itself handle the goods at the rake points or transport the same, though the contract has been termed as "Handling­cum­General Services Contract".

(iii) The clause 3 (d) reads as under :

"(d) Arrange clearance of fertiliser material from the railway platforms within the stipulated time period allowed by Railways and ensure acceptance of full responsibility by the NFL agents for payment of demurrage and wharfage accrued on such quantities as could not be moved out of railway premises within the stipulated time period for any reasons whatsoever. In case of failure to C.C. No. 71/11 honour the implications of this clause by NFL handling agents, such payments to railways or other agencies involved in the handling and transportation operations of the fertiliser material shall be taken care of by M/s Good Friends Agencies and NFL shall in no manner whatsoever be responsible for payments to outside agencies in such circumstances."

It shows that M/s Good Friends Agencies was to supervise the job of NFL Handling Agents to ensure that the fertilizer material is removed from the platforms within the stipulated time. One can take note of the fact that there would be a usual clause in all such agreements with the Handling Agents that in case of their not moving out the goods from the railway platforms, they would themselves be liable for demurrages and warphage. Why was it necessary to complicate the whole issue by bringing M/s Good Friends Agencies into it to say that M/s Good Friends Agencies would be liable to make the payment to the railway (outside agency) in case the fertilizer is not moved out in time by the NFL Handling Agent, thereby completely absolving the Handling Agent from its responsibility. In other words, introduction of M/s Good Friends Agencies was completely unnecessary in this whole affair.

C.C. No. 71/11

152. The witnesses examined by the prosecution both who were posted at the rail heads and many of them who were serving as handling and transportation contractors had clearly deposed that there was no work performed by M/s Good Friends Agencies at the rail heads or if I may say so, there was nothing for them to be done at the rail heads. One may go through the deposition of the said witnesses one by one.

153. Witness PW2 Sh. Jagdish Chand Arora who was working as contractor for transport handling urea fertilizers in the State of Punjab had deposed that officers of NFL used to hand over the GRs of railways after making endorsement to them and on the basis of the same they used to get the urea released from railway rakes at railway station, Jalandhar. After the urea had been unloaded the counting was done by the officers of NFL. Thereafter as per the directions of the officers of NFL they used to transport the urea by getting it loaded in the trucks for different destinations. He was categorical that from 1991 to 1998 he was the only transporter in the said districts. In respect of M/s Good Friends Agencies he had deposed that during the period from 1993 to 1995 some C.C. No. 71/11 representatives of M/s Good Friends Agencies had visited him 3­4 times and demanded the statement of fertilizer unit to which he had replied that he had already forwarded the same to NFL.

154. The testimony of the witness PW4 Rashmi Kataria would show that that she was the contractor for handling and transportation in the year 1993 in the Kurukshetra district. She was running her business in the name of M/s Manak Enterprises. The field officers of NFL used to supervise the work at railway heads. She was however not in a position to say if anyone had visited her from M/s Good Friends Agencies or that she had made the statement to CBI that no one from M/s Good Friends Agencies had visited any of the rake points from 1993 to 1998.

155. Witness PW6 Sh. Vijay Sangwan working as Asstt. Development Officer/Development Officer during 1993 to 1996 at NFL, Bhiwani had deposed that a representative of M/s Good Friends Agencies used to be present at the platform at the time of unloading of material and its dispatch only for the purpose of collecting the rake disposal data relating to the quantity. He had C.C. No. 71/11 added that on the basis of this data there was a Joint Verification Report prepared by M/s Good Friends Agencies and thereafter his signatures were taken on the same. Though he did not appear to be sure but he stated to have signed 4­5 such reports. When the witness was asked that why did he sign those reports he had explained that he had received a letter from his Reporting Officer/Area Manager Sh. S.P Bhardwaj wherein there was an instruction informing that M/s Good Friends Agencies had been appointed as Handling cum General Services contractor and it was also described as to the jobs which M/s Good Friends Agencies was to perform. It was on the basis of this letter he had put his signatures on the Joint Verification Report. Though he had stated that he did not remember the names of the contractors at his rake points appointed during the year 1993 to 1996 but he was certain that M/s Good Friends Agencies was not doing the job of handling, transport and general services at the said rake points. When the witness was asked that was it not correct that in the said Joint Verification Report all those jobs were mentioned which were to be performed jointly by him along with the representative of M/s Good Friends Agencies. The witness had explained in the 'Joint Verification Report' so far as C.C. No. 71/11 he could recollect only rake numbers, date of dispatch, date of receipt of rake, quantity - pointing out shortages, if any, and the distribution of net quantity which was mentioned and there was no reference to any job being performed by anyone in the report. During the cross­examination when the witness was asked as to on what basis he was claiming that M/s Good Friends Agencies was not lifting any urea in the absence of any records, the witness had reiterated M/s Good Friends Agencies had not done any work except that their representative used to remain present at the railway heads to collect the data.

156. Witness PW7 Sh. Praveen Kumar who was posted as Development Officer at Karnal office of NFL during the period from 1994 to 1997 had deposed that there was one contractor by the name of M/s R.R & Co. or RR Enterprises who was working as regular H&T Contractor at the Karnal rake point. His testimony would also show that though there were plenty of rakes placed at Karnal rake point during his entire period of posting but representatives of M/s Good Friends Agencies had visited the said rake point 2­3 times that also after the rake was under disposal i.e the unloading was C.C. No. 71/11 complete and loading was in progress, mainly for the purpose of collecting the data only. He admitted the signing of Joint Verification Reports with the representative of M/s Good Friends Agencies, though no work had been performed by it, because there were instructions from the management that the representative of M/s Good Friends Agencies will be visiting the rake points for supervision of rakes.

157. Witness PW20 Sh., Ramesh Chander who was working as Sr. Field Assistant at Sonepat in 1995 had deposed that the job of loading and unloading of urea at the railway rakes was of the contractor. It was, however, done under their supervision. According to him it was one contractor by the name of Satish who used to do the work, though he did not remember the name of his firm. With regard to the representative of M/s Good Friends Agencies visiting the rake point, he had deposed that one representative of M/s Good Friends Agencies used to visit the railway rakes at Sonepat and he used to do nothing except just to sit there. He was, however, not in a position to say as to how many times he had visited the railway rake point, Sonepat. In the cross­examination he admitted about having C.C. No. 71/11 been informed about M/s Good Friends Agencies by the Area Manager Sh. S.P Bhardwaj, but he added that he was not informed as to whether there was any contract between M/s Good Friends Agencies and NFL. The information given to him was only on phone that some representative of M/s Good Friends Agencies would be visiting the railway rake at Sonepat. When in the cross­examination he was questioned about Joint Inspection Report though he did not remember about it but had stated that if he had made any such statement to CBI then it must be correct.

158. Witness PW3 Sh. Hanuman Singh who was posted as Sr. Field Assistant from 1995 to 1998 at Rewari, Haryana had deposed that railway receipt received by them through special messanger from Dispatch and Coordination Cell used to be endorsed by him to the H&T Contractor to enable him to take the delivery from the railway rakes and to further dispatch the material as per the dispatch instructions. According to him one Ranbir Yadav was H&T and General contractor at the said rake point though he did not remember the name of his firm. With regard to M/s Good Friends Agencies he had stated that he was informed bythe Area Manager that someone C.C. No. 71/11 would come from M/s Good Friends Agencies at the rake point for counting of bags and thereafter wagonwise Joint Inspection Report would be prepared and signed by him and also by the representative of M/s Good Friends Agencies. He had further deposed that all the work was being done by Sh. Ranbir Yadav. Representative of M/s Good Friends Agencies had visited only for a few rakes. After he had come, the witness had told him to count the bags. He had noted down the same in a note book. Later he had come with bills of 3­4 rakes which included also the rakes when he had come and requested to verify all the bills. He had however verified only those bills when he had come. He also admitted to have signed Joint Inspection Report which according to him was brought by the representative of M/s Good Friends Agencies. Later he had clarified that it was not the bills but Joint Inspection Reports which he had signed. In the cross­examination "Joint Inspection Report" was referred to as "Joint Verification Report". In the cross­examination also he had reiterated that he had signed the Joint Verification Report on the dates on which the representative of M/s Good Friends Agencies had visited the rake points.

C.C. No. 71/11

159. Witness PW35 Sh. Gurmej Singh who was posted as Assistant Development Officer from 1989 till March 2000 at District Office Yamuna Nagar having its rake point at Jagadhari. He had deposed that his job involved also looking after and supervise the working at the said rake point. As per his testimony M/s Good Friends Agencies had not done any work either at the district office of Yamuna Nagar or at the said rake point except that 4­5 times its representative Awdhesh Kumar had visited the said rake point out of which 2­3 times when he had visited, the material had already been dispatched. He had also visited district office 1­2 times after almost ten days of dispatch of the material from rake points. He never used to do any thing and all the work was done by them. According to him in 1995 at the said rake point there was one Harbans Lal who was working as H&T Contractor. In respect of the Joint Inspection Report he had stated that two or three times he had got the proforma of the Joint Inspection Report filled at the Area Office at Kurukshetra and had brought the same to the District Office and they had signed the same. The Joint Inspection Report reflected the date of the arrival of the material at the rake point, the quantity of the material and date of C.C. No. 71/11 dispatch of the same to the Institutional buyers. When he was asked about the purpose of signing the said Joint Inspection Report, he had replied that he had spoken to Area Manager at Kurukshetra and he was asked to sign the Joint Inspection Report by saying that it was of no consequence. He had, however, clearly stated that M/s Good Friends Agencies had rendered no service. In the cross­examination he had admitted that though there was record maintained regarding the disposal of material at the rake points, but the same was not given to CBI. He also denied that there was any contractor appointed by the name of M/s Good Friends Agencies in his district, although he admitted that there was a copy of contract received in the Area Office, Kurukshetra of the contract with M/s Good Friends Agencies. He also deposed that there was record maintained by H&T Contractors truckwise/partywise of loading. The said details however were admittedly not provided to CBI. The witness had denied the suggestion that the record with regard to unloading/loading of urea and their dispatch was not supplied to CBI as that would have shown the working of M/s Good Friends Agencies. In reply to a question the witness had admitted that the copy of the said bills were not supplied to the CBI similarly he had C.C. No. 71/11 also admitted that the contract which may have been entered by NFL with Sh. Harbans Lal had also not been supplied to the CBI.

160. The witness PW37 Sh. Ashok Kumar who was also posted at Kurukshetra as Development Officer from April 1992 to 1997 had also deposed on the similar lines that M/s Good Friends Agencies during his tenure had not done any work and as per the instructions received from the Area Manager he had signed the Joint Inspection Report carrying the details of quantity of urea received at rake points Shahbad and perhaps also at Kurukshetra and also details of Institutional buyers and private buyers to whom the supplies had been dispatched from the rake points. In the cross­examination he had admitted having not supplied the details of the rake disposal to CBI and also copy of the Joint Verification Report.

161. Witness PW39 Sh. Rajbir Kajal who was working as Sr. Field Assistant and posted at Ambala under the Area Office Kurukshetra in 1995 had deposed that he had also served as Field Assistant at Kurukshetra from 1990 to 1992, but neither at Kurukshetra nor at Ambala there was any Handling, Transportation and General C.C. No. 71/11 Services contractor by the name of M/s Good Friends Agencies. He had though stated that someone might have visited Ambala rake point from M/s Good Friends Agencies sometime, but there was no work done by him. It was being done by the local contractor under the supervision of the Field Officer. He had added that so far as he could recollect someone from M/s Good Friends Agencies had visited the Ambala rake point 1­2 times and left after sitting with him for 1­2 hours, though he had not done any work. In the cross­ examination he admitted that he had signed one or two Joint Inspection Reports with the representative of M/s Good Friends Agencies. According to him the report was prepared by representative of M/s Good Friends Agencies lateron after collecting the details from the actual local H&T contractors. He, however, denied the suggestion that M/s Good Friends Agencies had actually done any work.

162. Witness PW40 Sh. Dharampal Jakhar had deposed that he was posted at Dabwali Haryana from 1989 to 1998 as a Field Assistant/Sr. Field Assistant/Assistant Development Officer. As per his statement Mandi Dabwali was the only rake point in his area and C.C. No. 71/11 during his tenure from 1993 to 1996 it was one M/s Haryana Warehousing Agency which was the handling contractor at Dabwali rake point and it was the only contractor. He admitted that he had heard the name of one M/s Good Friends Agencies which was supposed to help in collection of orders from government agencies etc., but they had not done any such work. According to him they had also not done any work at the rake point. He also stated that neither any representative of M/s Good Friends Agencies had visited the rake point nor had he signed any Joint Verification Report. When the witness was confronted with his earlier statement given under Section 161 Cr.P.C wherein he had stated that the representative of M/s Good Friends Agencies had visited the rake point twice during September 1995, he had stated that lateron he had checked the area office record and found that he had not signed any Joint Verification Report and to this effect he had also written a letter to the Area Manager. He also admitted that in his statement before CBI he had not named M/s Haryana Warehousing Agency.

163. The testimony of the above witnesses are consistent and I find nothing to disbelieve them. They show in no uncertain terms that C.C. No. 71/11 there had been no work done by M/s Good Friends Agencies at the Railheads.

Defence­ Non production of Joint Verification Reports ( JVRs)

164. As one would notice the witnesses did speak about the Joint Verification Reports. According to Ld defence counsel the these JVRs if had been produced would have shown that the M/s Goods Friends Agencies did perform its part of the contract.

165. Copies of those JVRs , it seems, were not collected during the investigation but certainly not produced in the Court. In the absence of the said JVRs it would not be possible to say as to what was the purpose those JVRs were to serve. Though the defence is silent about the question that what was the exact purpose of those JVRs but the best possible scenario,however, for the accused no. 2 Mr. Dilawar Mir would be that those JVRs were suppose to convey that M/s Good Friends Agencies had done some work at the railway heads. Almost all the witnesses had either stated that no one from C.C. No. 71/11 the M/s Good Friends Agencies had visited the railway heads where they were posted or they had visited in between only a couple of times during the entire duration that too some times when the entire work was already over. They had also given appropriate explanation that as to why they had signed the JVRs. None of them had stated if there had been any work done by M/s Goods Friends Agencies barring collecting data.

166. Thus it is clear from the testimony of all the above witnesses that they may have signed the Joint Verification Reports but actually there was no work done by the representative of M/s Good Friends Agencies at the rail heads. Therefore, even if the Joint Verification Reports had been on record they still could not have taken away the testimony of the above witnesses that at the rail heads no work was done by M/s Good Friends Agencies.

Defence­Non production of documents/log books maintained at the rake points etc.

167. The Ld. Defence Counsel has made reference to portions of the testimonies of different witnesses and submitted that these C.C. No. 71/11 witnesses had admitted that there were records maintained with regard to the contractors visiting the rake points and discharging the job of handling and supplies at the rake points/area offices/zonal offices but not produced. According to him if they had been produced, it can be presumed, they would have demolished the case of the prosecution.

168. The entire submission made by the Ld. Defence Counsel reads as under:

"Supervision & Handling: The contractor was required under the contract to collect railway receipts and take timely delivery at the destination points. Delay in removing the urea from destination points would incur demurrage/wharfage to GFA. It was also required to ensure supervision at the loading points by their own authorized representatives as GFA was made liable for cut and torn bags received at the destination points.

PW­3 Sumer Pathak who had worked as Area Manager, Patiala, when cross­examined, confirmed that "Record was maintained at Railway Rakes with regard to the visit of the contractor who had visited it." He was asked whether these documents were handed over, he had to C.C. No. 71/11 say "As the CBI had not asked about this record, hence I have not shown the same to CBI"

The presumption in fact is that these documents if produced would have demolished the case of the prosecution. These specific documents/ evidences were in possession of the prosecution and have been withheld and not produced.

A specific question was put to Sh. R. K. Khanna, Zonal Manager Chandigarh PW­5:

"Q. Does NFL maintains any documentary proof of the contractor handling the supplies or not? Ans. Yes. It is available at all the Area Offices under whose jurisdiction the goods are received and distributed."

Another specific question was put this witness PW­5 "Q. Was there any system of maintaining a Log Book to record the lifting of the goods off loaded from rake points?

Ans. Yes. Each Area Office maintains a complete record of the off loaded goods at the rake points."

The presumption is that had these documents been produced they would have demolished the case of the C.C. No. 71/11 prosecution. These specific evidences were in possession of the prosecution and have not been produced."

169. It is not clear that in what sense according to the Ld. Defence Counsel the non­production of the said documents would have demolished the case of the prosecution. One may note the entire defence has been built up by the accused no. 2 Mr. Dilawar Mir (Prop. of M/s Good Friends Agencies) that M/s Good Friends Agencies was appointed as the Handling & Transporting contractors (H & T Contractors) therefore, it was its job to unload the fertilizer material from the rakes and to load the same into trucks and transport them in truck loads to the delivery points i.e. the godowns of the institutional agencies. As far as the 'transportation' part is concerned it has already been discussed above that letter of M/s Good Friends Agencies Ex. P­28 make no reference to the transportation of the fertilizer material to the institutional agencies. It has also been referred above that clause 3(d) of the contract Ex. P­1 envisages the presence of an already appointed handling agent of NFL at the rail heads(rake points) and the job assigned to M/s Good C.C. No. 71/11 Friends Agencies under the said clause was that to ensure that this already appointed 'Handling Agent' would remove the fertilizer material from the railway platforms. In other words what the defence is trying to project that it was handling the material at the rake points is not even in the realm of this contract. Therefore, if by the non­ production of the said record the defence wants that it should be presumed in favour of M/s Good Friends Agencies that it was handling the fertilizer material at the rake points and transporting the goods to institutional agencies would be against the contract and also against its own stand in the letter Ex. P­28.

170. The next question is whether it did anything in respect of ensuring the removal of the fertilizer material by the already appointed handling agent at the rake points has not even been put up as a defence in clear terms. It also goes against its own defence because if M/s Good Friends Agencies was the handling agent then surely the question of "ensuring removal of fertilizer material from the platform in the stipulated time" would be meaningless. In other words the accused no. 2 cannot take both the stands at the same time of saying that it was handling the unloading and loading of the fertilizer C.C. No. 71/11 material at the rake points and at the same time also taking the stand that it was ensuring that NFL appointed handling agents were removing the material from the platform within the stipulated time.

171. If I strictly go by the terms of the contract, I am of the view even if the said documents would have been produced there was no possibility of showing M/s Good Friends Agencies as "NFL handling agent" i.e. handling and transportation contractor. Thus on the basis of the non production of the said documents it cannot be presumed that if the said documents had been produced they would have demolished the case of the prosecution. In other words if 1 presumption,if any, under section 114 (g) stand rebutted.

172. In view of the above discussion I am of the view the prosecution has been able to prove that no work had been done by M/s Goods Friends Agencies at the Railheads.

1 114. Court may presume existence of certain facts.­ The Court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case.

­­­­xxx­­­­xxx­­­xx

(g) That evidence which could be and is not produced would, if produced, be unfavourable to the person who withholds it.

C.C. No. 71/11

(b) Procurement of orders from Institutional Buyers and realization of payments from them.

173. There were four witnesses cited from the Institutional Buyers to depose in this regard. One of them namely Sh. Ram Niwas from Haryana Agro Industries Corporation could not be examined as he was reported to have passed away. The remaining witnesses those who were examined were - PW24 Sh. Mukesh Sharma, PW26 Sh. Charanjit Singh Grewal and PW27 Sh. Atul Kapoor.

174. Witness PW24 Sh. Mukesh Sharma, who has been working as Company Secretary cum General Manager(Finance) with M/s Haryana Agro Industries Corporation from 1993­96 deposed that there was a letter dated 02.12.1994 Ex. PW5/G6 written to them by NFL addressed to M.D. of Haryana Agro Industries Corporation introducing M/s Good Friends Agencies to them whereby M/s Good Friends Agencies was supposed to carry out certain activities which included procurement of bulk indents for NFL, collection of payments for institutional agencies and also collecting the acknowledgments after the delivery of material by the authorized representatives of the C.C. No. 71/11 institutions. He had deposed :

"After the receipt of the above letter dated 02.12.1994 Ex. PW5/G6 representatives of M/s Good Friends Agencies had visited my office till 1996 3­4 times. They had visited to collect the details of supplies from NFL to Haryana Agro Industries Corporation."

175. In the cross­examination when a question was put to the witness as to whether any record was being maintained by his organization with regard to issuing of indents to NFL directly or through H&T contractors. The witness had replied categorically " we were issuing the indents directly to NFL only". The witness had denied the suggestions to the contrary that it was M/s Good Friends Agencies who had been collected orders from his organization and also even added a suggestion that M/s Good Friends Agencies had been even supplying the urea to the Godowns of his organization, which could not have been the case of the defence in the light of the letter of M/s Good Friends Agencies Ex. P­28. The witness was asked the question as to whether the record related to the issuance of indents to NFL for supply of urea had been supplied to CBI or not. C.C. No. 71/11 His reply was that as far as he could remember he had not shown such documents to CBI. He also stated that he had no knowledge that if those documents had been supplied by anyone from the organization to CBI. I am of the view that there was an opportunity also for defence to give him some suggestions or put it to him the names of the representatives of M/s Good Friends Agencies who may have visited his office for procuring the indents. There were, however, no such suggestion made to the witness. I am sure that the M/s Good Friends Agencies must have been in possession of some documents or the other relating to collecting the orders from his organization in writing and thereafter having submitted the same to NFL to process it further for arranging supplies. The testimony of the witness would also show that during the entire tenure from 1993 to 1996 the representative of M/s Good Friends Agencies had visited his office only 3­4 times. That too to collect the details of the material already supplied to his organization and not really for procuring any indents. I find nothing to disbelieve his testimony in this regard. He is an independent witness and I see no reason for him to provide the wrong information to the court.

C.C. No. 71/11

176. Witness PW 26 Sh. Charanjit Singh Grewal was working as Chief Manager (Inputs) with Markfed Punjab from 1993­1997, whose main job was to procure fertilizers and arrange there distribution through their branches after having it purchased from Government agencies like NFL, IFFCO, KRIBHCO etc. had clearly deposed :

"we use to directly deal with NFL and decide terms and conditions before the start of season i.e. kharif and rabi and also use to decide month wise supplies which was used to be effective by supplies. We directly use to place the orders with the manufacturers such as the NFL and there was no intermediary involve in the purchase of fertilizers."

177. He even spoke of the accused no 2 visiting him and making a request for placing the orders through his agency but it was explained to him that they use to directly deal with the NFL and place orders for the requirements. His testimony in this regard reads as under :

"Mr. Mir of M/s Good Friends Agencies, I do not remember his full name, had met me once and he wanted me to place orders through his agency as they had been appointed by the NFL. I explained to him that C.C. No. 71/11 we directly deal with the NFL and place our requirement/orders at the start of season in a joint meeting with senior officers of NFL."

178. According to him Mr. Mir of M/s Good Friends Agencies had visited him asking for the data received from NFL but he had refused because those bills were prepared by fertilizer branches of head quarter and payment made directly to NFL. His testimony reads as under :

"As far as I remember we had not given any order to Shri Mir of Goods Friends Agency. He had asked me once for a data of receipts of urea from NFL which I refused because those bills were prepared by Fertilizers Branch at head quarter and payment was being made accordingly to NFL."

179. In the cross­examination the witness was questioned if the terms and conditions agreed between NFL and his organization had been supplied by him to CBI on the date his statement was recorded on 13.10.98. The witness had stated that he did not remember. He had also stated that those terms and conditions agreed for the supply of fertilizers had not been supplied by him to CBI because it was not C.C. No. 71/11 asked for. The witness was asked about a letter dated 29.11.95 stated to have been written by this witness to Zonal Manager, NFL stating inter­alia that one Mr. Nazir Mir of M/s Good Friends Agencies had been visiting his office regularly for obtaining dispatch instructions of urea.

180. In the defence there was a letter of the same date placed on record after being summoned from Markfed Punjab. To begin with I would like to point out if the defence wanted to draw some benefit from the said letter then it should have been put to this witness in the cross­examination. Witness DW5 Sh. Gagan Deep Singh Walia who was examined in defence from Markfed, in any case had deposed that as far as their record was concerned they could not find any such letter. On making inquires they could get one typed copy of the said letter from Zonal Office Chandigarh of NFL. The same was given mark D­5/2. Though in this letter there is a reference that Mr. Nazir Mir of M/s Good Friends Agencies had visited Markfed regularly for obtaining dispatch instructions and also requesting for payments to M/s NFL against the supplies of urea, but the same cannot be read in evidence as having not been proved. Further, I C.C. No. 71/11 have compared this document with copy of writ petition Ex. PW 6/PX8 on record and this document appears to be nothing but a copy of an annexure filed along with the said writ petition. In other words Zonal Office supplied the said document to Markfed from the copy of the writ petition which they were having in their own record filed by none other then the Accused No. 2 Mohd. Dilwar Mir himself alongwith the writ petition. Thus, it is a document probably typed out at the time of the filing of the writ petition by none other than the accused no. 2 Mohd. Dilawar Mir himself. I have another issue here. If he could file copy of this document before the Court as an annexure to the writ petition why he could not have filed original/office copy of the same in his possession, before this Court?

181. I am of the view that the statement of this witness cannot be discarded just because there was no record produced of Markfed Punjab having placed orders on NFL or the terms and conditions and schedule agreed upon for the supply of urea. The other part of the cross­examination relates to assertion on the part of the defence to have supplied the stocks by M/s Good Friends Agencies to Markfed at their godowns. As has already been stated above, it is evident C.C. No. 71/11 from the letter Ex. P­28 of M/s Good Friends Agencies that the job of transporting the urea to the institutional agencies had not been undertaken admittedly by M/s Good Friends Agencies.

182. Similarly PW­27 Sh. Atul Kapoor, who was working as Executive Director with Punjab Agro Industries Corporation, had deposed :

"During my tenure fertilizer was a controlled item by the Government of India and the Ministry of Agriculture used to make allocation to the various suppliers, like, NFL, KRIBHCO, IFFCO etc. for the supply of fertilizer. We had been purchasing the fertilizers from NFL directly. We used to place orders for the supply of fertilizers to the Zonal Officer of NFL at Chandigarh."

183. He admitted having met Mr. Mir who had come to inform him that he had been appointing as the Handing agent of NFL and also giving him copy of a letter signed by Mr. Khanna indicating him to be their authorized representative. So far as the placing of orders is concerned he had again reiterated in his examination in chief that the orders were being placed directly on NFL as far as he could recollect C.C. No. 71/11 and a copy of it was endorsed to M/s Good Friends Agencies. In his cross­examination there is a question put with regard to M/s Good Friends Agencies having delivered fertilizers to his organization. Though the witness had stated that he is not aware of it but again as stated above admittedly M/s Good Friends Agencies had not transported the goods to the institutional agencies.

184. There are other supportive evidences also available on record to support the testimonies of the above witnesses.

185. Witness PW­6 Sh. Vijay Singh Sangwan posted as Assistant Development Officer/Development Officer during the period 1993­1996 at NFL, Bhiwani in his examination in chief had deposed that it was he who had been collecting the order of fertilizers from government institutions and private traders and also the acknowledgements of the receipts of the fertilizers at their end. In respect of collection of payments he had stated that he was collecting the payments from private traders but the payments from the government institutions were directly collected by the Zonal Office on the basis of acknowledgement he used to send them C.C. No. 71/11 through the area office. I have not been able to find any specific cross­examination as far as the said part of the testimony of the witness is concerned.

186. PW­7 Sh. Parveen Kumar posted as Development Officer NFL during 1994­97 at Karnal office of NFL. He had also stated that he had been collecting the orders, from the private dealers as well as the government institutions. In the cross­examination when there was a question put to him as to whether any record was being maintained of the contractors who may have generated the bulk orders from private dealers, the witness has deposed :

"This was the duty of the Field Staff to generate orders of urea from private dealers as well as institutions. Therefore, before the time of placement of rakes, field staff collected the orders in advance and disposed of the quantities within the stipulated period. Therefore, after disposal of the rake the quantity to be sold through private dealers as well as institutions was known actually and that was the final record being maintained by the field staff. Since the job was not handled by the contractors, therefore, there was no question of their record being maintained as far as the question of generation of bulk order is concerned."

C.C. No. 71/11

187. The attention of witness had drawn to earlier part of his statement where he had stated that one of the jobs of the contractors was to also generate bulk orders from the institutions. The witness had stated that later part of the statement given by him was correct. He had clarified that the earlier part of his statement that he had given was with reference to the jobs which M/s Good Friends Agencies was required to perform under the contract. Though it was noted as a court observation that when the earlier reply was given the question put to him was of general nature and not in reference to M/s Good Friends Agencies but it is difficult to rule out the said possibility because when I look at his previous part of examination in chief I do not find that the questions asked before from the very beginning were with reference to M/s Good Friends Agencies. In any case if the answer is to be seen in the light of the other part of his testimony with a focus on M/s Good Friends Agencies it would reveal that M/s Good Friends Agencies had not collected the orders from the institutional agencies but this job was being done by NFL staff including him.

C.C. No. 71/11

188. Witness PW­20 Ramesh Chander posted as Field Officer at Sonipat during 1995 had deposed that "We used to collect the orders from the institutional agencies as well as from the dealers. After getting the orders we used to depute the NFL contractors to supply the urea. The acknowledgement of the urea being delivered was also taken by us from the institution or the private dealer to whom the ureas is to be supplied".

189. In the cross­examination there was a suggestion put to him in this regard and he had replied "It is wrong to suggest that M/s Good Friends Agencies did procure indents from the institutional agencies situated in Sonipat District. (Vol.) They absolutely never used to procure any such indents."

190. Witness PW­21 Shri M.S. Rattan who was posted as Dy. Manager, In­charge Area Office, Moga from 1993 to 1996 had deposed that M/s Good Friends Agencies had not done any work of collection of orders from the Government Agencies for supply of urea. This gets reflected also in his joint note of 11.06.1996 Ex. PW­21/A where it is recorded:­ C.C. No. 71/11 "It is submitted that we are not aware about the circumstances under which the above party was engaged by the company. It is quite evident from the above said IOM received from Zonal Office, Chandigarh about the performance of the party. However, we would like to inform that the jobs assigned to the party are being performed by our field staff and handling contractors. It is in the preview of the management whether to continue or discontinue the services of the above party."

191. The witness had explained that this note was given to bring it into the knowledge of the management that M/s Good Friends Agencies had not done any work and the management is made aware so that its bills may not be cleared. In the cross­examination of the witness the questions were put to him as to whether he had himself examined the records before giving the report. The witness had replied in affirmative. He had also referred to the monthly report submitted to Zonal Office giving therein the works undertaken by the different institutions supported by receipts/acknowledgements of Government institutions. When he was asked that whether he had supplied these reports to CBI. He had denied the same. According to the suggestion given, if the same had been supplied it would have C.C. No. 71/11 shown that M/s Good Friends Agencies had performed his work in accordance with the contract.

192. Similar is the testimony of PW­22 Shri Avijit Roy working as Area In­charge NFL from 1993 to 1997 at Jalandhar who had also signed the said report Ex. PW­21/A. The witness had denied the suggestion that the record had not been forwarded to the Zonal Office as that would have shown that M/s Good Friends Agencies had discharged their obligations under the contract.

193. After going through the testimonies of these two responsible officers, it does not appear to me that there is any reason to disbelieve them. Both on account of the fact that there was no reason to award the contract for the services referred to in the contract Ex. P­1 and repeated in the letter dated 07.04.1995 issued in pursuance to letter of Accused No. 2 Mohd Dilawar Mir Ex. P­28, which inter alia included procuring the orders for indents from the institutional agencies and also collection of payments from them and the said jobs were being performed by the field staff of NFL. C.C. No. 71/11

194. Witness PW­23 Shri Dhir Singh who was posted as Area Manager NFL at Hisar from 1993 to 1997 had deposed that the areas which fell in his jurisdiction were Hisar, Sirsa, and Jind. As an Area Manager his responsibilities were to look after the sales activities of the company. He admitted of having come to know about a contract between NFL and M/s Good Friends Agencies by the Head Office at a meeting called at Chandigarh Zonal Office in 1994 which included the collections of orders from institutional agencies and to ensure timely collection of payments. He had deposed:

"The supply orders were being taken by our own officers posted in the districts from different institutional agencies. The acknowledgement with regard to the supplies and receipt of the urea by the institutional agencies were also being collected by own staff. I do not recollect now exactly what was the procedure followed with regard to the payments which were made by the institutional agencies but these payments were ultimately made to out Zonal Office where their accounts were being maintained". I find nothing in the cross­examination of this witness to disbelieve what had been deposed by this witness in this regard.

C.C. No. 71/11

195. Witness PW­33 Shri Hanuman Singh who was working as Field Assistant from 1995­1998 at Rewari had deposed that his job involved selling fertilizers to institutions as well as private dealers and also collection of payments through demand draft from the private buyers. So far as institutional buyers were concerned he had deposed that the collection of payments were directly made by the Zonal Office. In cross­examination there was no question put to him in this regard that the payments were not being collected at the Zonal Office directly where there was no account of institutional buyers maintained at the Zonal Office and this was the job being done by M/s Good Friends Agencies.

196. Witness PW­35 Shri Gurmej Singh who was posted as Assistant Development Officer from 1989 to 2000 at District Office Yamuna Nagar, in the cross­examination when he was asked about his job at the sales and marketing division of his office, he had deposed that it involved collection of requirement of urea from the private parties as well as institutional buyers in his district and also collection of payment from the private parties. The payments of the institutional buyers were being collected at the Zonal Office, C.C. No. 71/11 Chandigarh for which he used to send the acknowledgement of the delivery of the material to the institutional buyers. His entire deposition in this regard is as under:­ "Q: What all jobs were done in the sales and marketing division of your office?

A: Our job broadly involved in the sales and marketing department was to collect the requirement of urea from the private parties as well as institutional buyers in the district. The information so collected was passed on to the Area Manager at Kurukshetra. This requirement was fulfilled by the Area Manager by placing th order with the dispatching unit which would deliver the same at the rake point as well as by road. We used to supervise the receipt of the material so received and further dispatched the same to the respective private parties and institutional buyers. We used to collect the payment of the same from the private parties and the payment of the institutional buyers was collected at Zonal Office, Chandigarh for which we used to sent the acknowledgement of the delivery of the material to the Zonal Office."

197. When the witness was asked about the records being maintained regarding the procurement form the institutional buyers C.C. No. 71/11 as well as private parties the witness had explained that in respect of the institutional buyers indents of material were received from Zonal Office and sometimes they used to get calls from Area Office with instructions to visit the institutional buyers to get the orders. The orders used to be placed in writing. These orders, however, were not kept in the district office but sent to the area office by retaining the copies thereof. The witness also explained that there was no register/record maintained with regard to the procurement of the orders. They used to collect the indents from the District Manager of the institutional buyers and had added that they, however, used to keep the record of the material supplied to the private parties as well as to the institutional buyers. The witness denied the suggestion to the contrary that there was any record kept relating to the procurement of orders including the names of the person/official/agency who may have procured the orders. According to him in respect of the institutional buyers they used to receive details from the Zonal Office, Chandigarh through area office as to the details of the delivery to be made at the rake points and quantities to be dispatched to the institutional buyers. He had added that in some instances they used to obtain the requirement from the C.C. No. 71/11 concerned district office of the institution buyers. Further, according to him there was a record maintained with regard to the disposal of the materials from the rake points but the same was not handed over to the CBI. CBI had not seen it or collected the same from them. According to him the payments were made to the institutional buyers from the Chandigarh office on the basis of the acknowledgements they used to send to the Zonal Office of the delivery of the material to the institutional buyers. Thus in short his testimony rules out the involvement of M/s Good Friends Agencies in the payments to be made by the institutional buyers to the Zonal Office.

198. PW­39 Shri Rajbir Kajal had deposed that from 1990­1992 he was posted as Field Assistant at Kurukshetra Area Office thereafter he was transferred from there and again posted at Ambala in November 1994 as Senior Field Assistant. He continued to remain posted at Ambala till April 2000. In the description of the duties he was required to perform as Senior Field Assistant he had stated that his job also included collection of orders from the institutional buyers. In respect of the payments to be made by the institutional buyers he had stated that it was being handled directly at the Zonal Office. C.C. No. 71/11 There is no cross­examination of the witness on the aspect if M/s Good Friends Agencies used to collect the orders from the institutional buyers or it had any role to play in respect of payments to be made by the institutional buyers to NFL.

199. Similarly PW­40 Shri Dharampal Jhakar, who worked as Field Assistant/Senior Field Assistant/Assistant Development Officer from 1989­1990 at Dabwali, Haryana had deposed that his job also included the collection of orders from private dealers and state co­ operatives such as HAFED. According to him M/s Good Friends Agencies was supposed to help in collection of orders from Government Agencies, lifting certificates, payment collection but did not do any work. In the cross­examination there are other aspects which have been touched but no question was put to this witness that it was M/s Good Friends Agencies who had been collecting the orders from the state co­operatives such as HAFED.

200. One may also refer here that in the statement of Shri O.P. Kaviraj, Zonal Manager PW­13 posted at Chandigarh who in his deposition had also stated that at the time when this contract was C.C. No. 71/11 entered the position was such that the demands of urea was more and the supplies were less. He had added that at that time advance cash sales were going on. His testimony also gives an indication that there was no requirement of any outside agency to perform the jobs like collection of orders from institutional buyers and to ensure the payments by the institutional buyers to NFL.

201. After having gone through the testimonies of all the above witnesses, it is clear to me that apart from the fact that there was no necessity of entering into the contract by NFL for collection of orders from institutional agencies or to ensure timely payment by institutional buyers to NFL, there was also no such work performed by M/s Good Friends Agencies on the ground except making an attempt to collect the figures from the concerned officers. It also appears to me logical that the institutional agencies herein involved and the NFL are both Government run institutions. They employ a large paraphernalia only to deal with such situations, they have been dealing them for long and there is no reason to believe that they would not have institutional mechanisms in place to deal with each other. If they had been dealing with each other in past, why would C.C. No. 71/11 they suddenly need an intermediary to deal with each other. it does not seem to be logical that they would require services of any third agency for either collection of orders or for that matter somebody to keep visiting the office of the institutional buyers to ensure the payment of the material supplied. That also for me is a good reason to believe what witnesses have deposed in this regard. Defence

202. In order to show that M/s Good Friends Agencies had been generating the bulk indents / collecting orders from the Institutional Buyers, the Ld. Defence Counsel had referred to two letters of 06.12.94, one referring to the demand of urea by Hafed and the other demand of urea by Markfed. He referred to three letters of 23.12.94 referring to Markfed, Punjab Agro Industrial Corp. and Hafed. He also referred to one another letter of 22.01.95 stated to have been sent by M/s Good Friends Agencies for supply of urea to Punjab Agro Industrial Corp. after having discussion by its representative with the Asstt. General Manager of Punjab Agro Industrial Corp. at Chandigarh.

C.C. No. 71/11

203. I have seen the examination of the witness PW5 Sh. R. K. Khanna who had identified his signatures on a note Ex. PW5/G1 by which letters dated 06.12.94, 23.12.94 and 12.01.95 had been forwarded to the Group Manager, CMO, New Delhi and note Ex. PW5/G2 by which another letter of M/s Punjab Agro Industrial Corp. had been forwarded to Group Manager, Head Office, New Delhi intimating non availability of any of the representatives of M/s Good Friends Agencies at their office premises. It may be noted that at the time when the evidence was recorded in the court it was noted down in the examination in chief itself that the photocopies attached with this note sheet had not been proved as per law. The Ld. Defence Counsel did not make the concession that the said documents may be read in evidence. It may also be added that at the beginning of trial there were number of documents which included a number of photocopies which had been admitted by the defence but not these documents. It is, therefore, difficult to say that if these documents can now be allowed to be read in evidence. There can be an argument that since these documents had been filed by the prosecution, therefore, the prosecution cannot deny the existence of C.C. No. 71/11 these documents and therefore, be read in favour of the accused persons. I am, however, not inclined to accept this argument for the simple reason that since the court considered these documents to be not proved the witness did not have the opportunity to offer any explanation as to the said documents. It would, therefore, in my opinion would be unfair to the prosecution if now at this stage the said documents are allowed to be read in evidence. I am, therefore, not inclined to take into account these documents to reach any conclusion either way. In any case the said documents appeared to be some one time effort to collect the orders. I am sure M/s Good Friends Agencies must have been in possession of at least office copy of many such letters and would not have hesitated to produce the same to confront the witnesses or summoned some witnesses from the Institutional Agencies / NFL or at least had called its own employees to prove the same. It at all these documents are to be read, they cannot be read without the covering letter Ex. PW 5/G and PW5/G1. The note Ex. PW5/G would show that witness PW5 had clarified that no notice can be taken of the same for the reasons stated in the note which reads as under :

C.C. No. 71/11

"Enclosed herewith please find photocopy of the letter from M/s Good Friends Agencies alongwith indents claimed to have been obtained from Punjab Agro Industries Corporation (documents not signed by any authorized representative from PAIC). Further, no mention of terms on which the above indent has been received, has been indicated. As such, no cognizance of the indents, thus forwarded, can be taken."

204. Similarly the note Ex. PW5/G1 shows that the demands of indents which had been referred to in the said letter had already been collected by them. Thus what was done by M/s Good Friends Agencies was a meaningless exercise. It had been claimed in the arguments that the covering note by which the letter dated 12.01.95 had been forwarded is a tampered document because there is a overwriting done in the said document. I have examined the covering note PW5/G by which the letter of 12.01.95 of M/s Good Friends Agencies had been forwarded. I find no tampering in this document. I also find no date being mentioned by the author on this note sheet.

205. I accordingly conclude that M/s Good Friends Agencies had not performed the jobs of either collecting the orders from the C.C. No. 71/11 institutional buyers or to assure payments by institutional buyers to NFL as referred to in the letter Ex. P­28 of M/s Good Friends Agencies to NFL.

Other defences to show that the Accused No. 2 indeed performed the jobs.

206. The Ld. Defence Counsel raised two other issues in defence to bring home the point that M/s Good Friends Agencies had indeed performed its part of the contract. They are as follows:

a. Charging of demurrage and wharfage for delay in removal of fertilizer material from railway platforms and interest on late payments by institutional agencies to M/s Good Friends Agencies.

b. Issuance of TDS certificates etc. Let us look at the above defences one by one.

C.C. No. 71/11

Recovery of Demurrage and Wharfage and Interest on delayed payments.

207. Ld. Defence Counsel had made reference to the testimonies of the witnesses PW­25 Sh. P. K. Kataria, PW­32 Sh. Anajani Kumar Asija and PW­29 Sh. Yashpal Bhola and submitted that according to these witnesses the demurrage/wharfage was recoverable from M/s Good Friends Agencies. According to him the question of recovery of demurrage/wharfage and interest on delayed payment could have arisen only if M/s Good Friends Agencies had performed its duties under the contract and not otherwise. The relevant part of the submissions made is being referred as below:

"PW­25 Sh. P. K. Kataria who was the Additional Manager(Finance & Accounts) in the marketing Division during the relevant period stepped into the witness box and deposed that demurrage/wharfage was recoverable from GFA. To this a specific question was put to him, Q. In your examination in chief you have stated that there was demurrage/wharfage recoverable from M/s Good Friends Agencies. Will it not be correct to say that the demurrage/wharfage could be recovered only from a contractor who had actually performed the contract i.e. C.C. No. 71/11 handled the goods at the rake points and delivered to the institutions? To this specific query on performance of the contract by GFA, PW­25 answered A. Yes, it could only be recovered from a contractor who had performed the contract.

PW­29 Sh. Yashpal Bhola confirms the document being Ex.PW17/23 and states that it is the calculation of the interest payable by the Institutions on delayed payments. After being confronted from his testimony u/s 161 Cr. P. C he confirms, ...after going through the above statement Ex. PW­29/DX1 and Ex. PW17/23 I can say that the amount of Rs. 132.82 lakh was recoverable from M/s GFA. The witness refreshes his memory and confirms that in terms of clause 3 (h) interest would be recoverable from the institutional buyers which could be realized from M/s GFA.

PW32 Sh. Anajani Kumar Asija also answers in affirmative stating that he had recommended vide note Ex. PW9/A for recovery of demurrage and wharfage incurred during handling of urea. He further confirms that in note Ex. PW­9/A he had proposed recoveries due to shortage of bags/cut/torn bags received at destinations from M/s Good Friends Agencies. The accused argues that GFA had performed and discharged its duties in terms of the contract. Claim of demurrage/wharfage and interest on delayed payments cannot be alleged to be recovered from a contractor who has allegedly not C.C. No. 71/11 performed any of its duties under the contract. The accused respectfully argues that the entire case revolves around the awarding of the contract and its performance, which could have been proved by direct & positive evidence and adducing oral evidence in the absence of records would render such evidences irrelevant."

208. It may first of all be noted that the question of recovery of demurrage/wharfage and interest on delayed payments arises not from the 'performance' of the contract but from the 'non­performance' of the contract. It is evident from the term of contract 3(d), which requires from M/s Good Friends Agencies to ensure that the fertilizer material is removed by the handling agent of NFL within the stipulated time and if this is not done and it results in demurrage/wharfage, NFL would not be liable to pay for it but M/s Good Friends Agencies. Similarly 3(h) of the contract would show that M/s Good Friends Agencies was to ensure that the payments were made by the institutional agencies in time and in case of delayed payment the same were recoverable from M/s Good Friends Agencies. Thus the argument that the claim for recovering the demurrage/wharfage and interest on delayed payment by NFL would C.C. No. 71/11 mean the 'performance' of the contract is not correct but on the contrary it would mean the 'non­performance' of the contract.

209. In any case the statement of PW25 Sh. P. K. Kataria and PW32 Sh. Anjani Kumar Asija, referred to by the Ld. Defence Counsel cannot be seen in isolation. These are required to be seen in the light of Ex. PW­9/A, a report, submitted to work out the modalities for making payments to M/s Good Friends Agencies on the request of Sh. R. K. Khanna, Zonal Manager, Chandigarh (there are issues related to its date but for the time being I am not going into that). This note would show that Sh. P. K. Kataria PW­25, Sh. Anjani Kumar Asija PW32 and Sh. Anil Sharma PW­8 had sat down to work out the modalities for making the payments to M/s Good Friends Agencies as desired by Dy. G.M. (M). In terms of the contract if M/s Good Friends Agencies had performed its job it was suppose to get remuneration @ Rs. 100/­ per metric ton. As was explained by Sh. Asija in his testimony that the figures mentioned in the said note with regard to the payments to be made to M/s Good Friends Agencies on the basis of the bills raised by process of elimination. This is how he had explained it in his testimony: C.C. No. 71/11

"We had in the meeting perused the bills with respect to the jobs identified in the contract viz a viz actual performance undertaken by the party i.e. M/s Good Friends Agencies as per the information derived from the field. We had noted that the activities for which the bills had been raised had not been performed by M/s Good Friends Agencies by the method of elimination i.e. by referring to the works which had been performed on the field by the other contractors to whom for the same work the payment had been released along with the service charges. By the method of elimination we could reach the conclusion that he jobs worth the Rs. 92 per metric ton were not actually been carried out. Besides, other jobs such as imposition of demurrage and wharfage and interest accrued on delayed realisation of payments from these Institutions which could not be quantified at that point of time because of lack of information. I would like to clarify that as per the terms of the contract there were other liabilities which the contractor was also to bear such as any imposition of demurrage or wharfage by railways during handling of rakes and interest charges accrued on delayed payments by Institutional Agencies."

210. The note would show that the calculations were made assuming that Rs. 100/­ per metric ton had been paid to M/s Good Friends Agencies and thereafter the amount which had been paid to C.C. No. 71/11 the other contractors for the said services were deducted from this amount and finally a figure was reached that Rs. 8.03 per metric ton was payable to M/s Good Friends Agencies. It was also added therein that from this amount demurrage/wharfage was to be deducted, if any, as, as per the testimony of witness PW­32 Sh. Anjani Kumar Asija the figures of demurrage and wharfage paid were not available. Though I have a serious issue with this approach of round about methodology being adopted to determining payment payable. In any case it is evident from the note that it no where says in positive terms if any work had been done by M/s Good Friends Agencies. In negative terms it says almost no work had been done M/s Good Friends Agencies. The payment could have been simply refused as according to this note no work had been done by M/s Good Friends Agencies.

211. As per this note the space for the recovery of demurrage and wharfage was left despite noting down that in actual terms no work had been performed. I also find nothing wrong in the statement of PW29 Sh. Yashpal Bhola where he said that an amount of Rs. 132.82 lakhs were recoverable from M/s Good Friends Agencies on C.C. No. 71/11 account of interest on delayed payments by institutional agencies. It may be noted that officials of NFL were to work out the details in terms of the contract both in terms of the payment to be made and the payment to be recovered on account of failure to perform its obligations in terms of the contract. If there had been delayed payments by institutional buyers then obviously in terms of the contract NFL was liable to be recover the interest on delayed payments. One may note, as stated before, 'interest on delayed payment' shows not the 'work performed' but 'work not performed'. One may say even in terms of what has been submitted on behalf of the Accused No. 2 Mohd. Dilwar Mir that if M/s Goods Friends Agencies had worked i.e. ensured timely payments by institutional buyers there would have been no question of ' interest on delayed payments' thus as corollary one may say it had done no such work.

212. At the end one may say that contract Ex. P­1 had two parts one for which M/s Good Friends Agencies was to be paid for rendering certain services and another to make the recoveries from M/s Good Friends Agencies resulting in loss to NFL for non­performance. In my view M/s Good Friends Agencies was not entitled to receive C.C. No. 71/11 payments for the services not rendered and at the same time was responsible for making good the loss suffered by NFL on account of losses suffered by NFL because of non­performance of M/s Good Friends Agencies in terms of making payments of demurrage/wharfage and suffering loss in terms of interest on delayed payments by institutional agencies.

213. I accordingly conclude that simply because the witness had said the demurrage/wharfage and interest of delayed payments were recoverable from M/s Good Friends Agencies would no way lead to the conclusion that M/s Good Friends Agencies had performed its part of the contract.

Issuance of TDS certificate

214. Ld. Defence Counsel had made reference to a TDS certificate for the month of March 1995 Ex. DW2/C produced by DW­2 Sh. Amit Bansal, Chief Manager(Accounts), NFL. According to him this TDS certificate would show that there was an amount paid/credited in C.C. No. 71/11 favour of M/s Good Friends Agencies as Rs. 10603440/­ and there on a tax of Rs. 204704/­ was deducted. According to Ld. Defence Counsel this certificate nails the lie of the prosecution that M/s Good Friends Agencies was not entitled for any payment as M/s Good Friends Agencies had not performed any work. This certificate is an admission on behalf of NFL that M/s Good Friends Agencies had discharged its duties under the contract for which admittedly an amount of Rs. 10603440/­ was payable to M/s Good Friends Agencies.

215. Tax deduction at source or TDS is one of the modes of collection of revenue by which a certain percentage of amount is deducted by a person at the time of making/crediting certain specific nature of payment to the other person and deducted amount is remitted to the government account. It facilitates sharing of responsibilities of tax collection between the deductor and tax administration (see in context www.incometaxindiapr.gov.in). Section 194(c) of Income Tax Act specifically deals with the deduction of tax at source with regard to the payment made to contractors.

C.C. No. 71/11

216. It may be understood that at a time when tax is deducted, deductor acts on behalf of the tax administration and it cannot afford to postpone the deduction of tax even where there may be some dispute with regard to the fact whether ultimately the payment on which the tax is to be paid is going to be actually paid or not. It may further be added that in India it is the mercantile/accrual system of accounting which is followed wherein accounting entries are made on the basis of amount having become due for payment or receipt and not the cash system of accounting where the accounting entries are made only when cash is received or paid. It may also be taken into account that the tax was deducted at source not from the point of view of NFL as to whether the payment was to be made to the contractor or not but on the basis of what the contractor thought it was entitled to receive or what had accrued to him because the tax which was being deducted was of the payments of the contractor which according to him had accrued to him. It was not a stage for the accounts department to get into the nitty­gritties if the ultimate payment claimed by the contractor would be paid to him or not but to ensure that the tax is deducted on the payment stated to have been accrued to the contractor of his own. The failure to deduct the tax at C.C. No. 71/11 source, for the person who was responsible to deduct the tax could 1 be severe. As per section 271C of Income Tax Act, if the person responsible for deducting the tax had not done so, he could be held liable by way of penalty of a sum equal to the amount of tax if such person had failed to deduct the tax at source. In such circumstances it is expected that the person responsible for deducting the tax will have a defensive approach. He would rather go with the deduction of tax as claimed by the contractor at that stage rather than getting into a detailed analysis as to whether the payments as claimed were due or not. It may also be noted that such tax deducted and paid could be refunded later on, if it was later on found that no payment was to be made or a lesser payment was to be made to the contractor. Therefore, in my opinion, merely deduction of tax on the amount which M/s Good Friends Agencies claimed to have accrued to it was possible and infact mandatory u/s 1271C. Penalty for failure to deduct tax at source. [(1) If any person fails to ­

(a) deduct the whole or any part of the tax as required by or under the provisions of Chapter XVII­B; or

(b) pay the whole or any part of the tax as required by or under­

(i) Sub section(2) of section 115­O; or

(ii) the second proviso to section 194B, then, such person shall be liable to pay, by way of penalty, a sum equal to the amount of tax which such person failed to deduct or pay as aforesaid.] [(2) Any penalty imposable under sub­section (1) shall be imposed by the [Joint Commissioner.]] C.C. No. 71/11 194C of the Income Tax Act. It, however, does not in any way indicates that in real terms NFL was under a liability to pay the amount to M/s Good Friends Agencies on which it had deducted the tax on behalf of the tax department as is being claimed by the Ld. Defence Counsel.

Conclusion

217. In view of the foregoing discussion and the facts and circumstances of the case I conclude that the prosecution has been able to establish that no job had been performed by M/s Good Friends Agencies under the contract and also that for such jobs engagement of M/s Good Friends Agencies was not necessary. Ad ­hoc payment of Rs. 30 Lacs

218. There is an allegation that the payment of Rs.30 Lacs had been made to the Accused No.2 Mohd. Dilawar Mir by Accused No 1 to favour him by having pressurized the officers working under him C.C. No. 71/11 though there was no valid reason for doing so and released the payment by taking an active interest in the matter despite having no authority to do so. He first got the payment released without having the bills on 01.06.1994 and then created the basis for making the payment by calling for the bills from Zonal Office, showing them to have been received on 31.05.1994, though actually received on 03.06.1994, and thereafter having a Committee constituted for laying guidelines for the payment against those bill thus providing a reason for the release of payment which had already been released on 01.06.1994.

219. The allegations in this regard in the charge sheet read as under:

" Sh. D S Kanwar, with the knowledge that M/s GFA had not performed any jobs as per the terms and conditions of the contract, exerted pressure on his subordinates and made Sh. Anil Sharma, the then Deputy Manger, to put up a note on 01/06/94 recommending release of Rs. 30,00,000/­ as adhoc advance to M/s GFA to which Sh. M A Sharma Dy General Manger could not dare to (sic) object. Sh. D S Kanwar approved the aforesaid proposal for release of Rs. 30,00,000/­ on 01/06/1994 itself as adhoc advance to M/s GFA and personally carried the C.C. No. 71/11 same to Mohd. Dilawar Mir, proprietor of M/s GFA."

220. It is further alleged therein:

"Investigation also revealed that Sh. D.S. Kanwar was not competent to release such a huge advance to a party without his bills having been processed for payment and such payment, if any, was to come from zonal Office, Chandigarh. It has revealed that Sh. D. S. Kanwar was so much inclined to show undue favour to M/s GFA that he did not wait for the bills to come from Chandigarh although he had instructed the then Zonal Manager, Sh. R. K. Khanna to come with pending bills of M/s GFA on 31.05.94. In order to cover up his act of favour shown on 1.6.94 Sh. D. S. Kanwar instucted and pressurised Sh. R. K. Khanna, Zonal Manager on his arrival at New Delhi on 3.6.94 to initiate a note mentioning the date as 31.5.94. Accordingly, Sh. R. K. Khanna in his note dated 31.5.94, actually initiated on 3.6.94, submitted that M/s GFA had submitted bills as per the contract initiated on 3.6.94, submitted that M/s GFA had submitted bills as pr the contract between NFL and M/s GFA and since modalities had not been formulated for execution of contract by NFL he sought advice and guidance of central Marketing Office, NFL so as to enable the Zonal Office to process/scrutinise the bills. He also indicated the quantum of sales to institutions during the period Oct. 1993 to May 1994. This note was put up to Sh. M. A. Sharma, Dy. G.M. who instructed Sh. A. K. Asija to process the contract. Sh. A. K. Asija, while processing the contract highlighted the services that had not been rendered C.C. No. 71/11 by M/s GFA. Three officers including Sh. A. K. Asija and Anil Sharma worked out, after recoveries, that Rs. 8.03 may be payable to M/s GFA after verification of the work done b the field staff of NFL on the bills of M/s GFA and after ascertaining the recovery due (if any) from M/s GFA as per the contract."

Was order to release payment beyond his powers?

221. There is no dispute that the payment of Rs.30,00,000/­ was released but the question is, was it beyond the powers of Sh. D.S. Kanwar. The best witness to answer this question was PW 25 Sh. P K Kataria who was posted as Addl. Manager ( Finance and Accounts) during the relevant period. He is also the person who had signed the cheque for the release of Rs. 30 Lacs. When he was questioned about the authority of Sh. D.S. Kanwar of to order for the release of payment, he had deposed " As per the delegation of powers he could not have entered into this contract without necessary approval from the Director ( Finance)/MD. Once the contract was entered, Sh. D S Kanwar had full powers for authorizing the release of payment." There is no cross­examination of the witness by the prosecution on this point. What it would mean is that there could be a question about the authority of Sh. D S Kanwar C.C. No. 71/11 having entered the contract but once the contract was in place he could release the payment. Thus there cannot be anything independently said to be wrong with regard to the release of the payment beyond making an allegation that he had no authority to enter into the contract itself.

Was there any basis of releasing the ad­hoc payment of Rs. 30 Lacs?

222. The witnesses have deposed that ad­hoc payment of Rs.30 Lacs had been released not on the basis of some assessment but at the instructions of Sh. D.S. Kanwar, if one goes by what has been deposed by the witnesses it would show they had been actually forced to not only initiate the process of making the payment but also release the payment without delay. There are two kind of notes on record, one by which the proposal was put for the release of payment by the witness Anil Sharma on 01/06/1994 Ex PW­8/A and the other of 3/06/1994 Ex PW­5/E though stated to have been initiated on paper on 31/5/1994 to serve as an excuse for the payment already made on 01/06/1994. The defence of the Accused No. 1 would show that there had been no manipulation and the payment had been C.C. No. 71/11 indeed released on the basis of the note initiated on 31/05/1994 which culminated into the formation of committee which gave the recommendation as to at what rate the payment could be made to M/s Good Friends Agencies.

223. For the sake of articulating the defence taken by Accused No. 1 Sh. D.S. Kanwar, I am reproducing the defence by him in precise terms from the answers given by him in his statement under section 313 Cr.P.C. in answers to the questions 58 and 59. The same read as under ( relevant parts for emphasis have been underlined) :

"Q. 58 It is further come in evidence against you that sometime in 1994 witness PW­8 Sh. Anil Kumar Sharma, Additional Manager (Marketing) was called by you in your chamber and informed him about a contract signed in 1993 between NFL and M/s Good Friends Agencies and had aked him to release an ad­hoc payment of Rs. 30 lacs. When he had submitted that the payment could be released on the basis of bills he was informed by you that Sh. R. K. Khanna, Zonal Manager, Chandigarh would be coming with the bills on the next day. You handed over one document to him for release of payment for signature which he signed and handed over to Mr. M.A. Sarma, the then Dy. General Manager. He had identified the said note Ex. PW­8/A which you had given to him for signing C.C. No. 71/11 and his signatures on it at point A. At the time he had signed the said note the bills were not there and they had been brought one or two days thereafter by Shri R.K. Khanna, Zonal Manager, Chandigarh. What have you to say?

Ans. The statement is fabricated and is not correct. The basis for release of payment was the recommendation of apportionment committee. His statement is under pressure of CBI. The committee had members even from the Finance and Accounts Department.

Q.59 It is further come in evidence against you that the above payment of Rs. 30 lacs was finally approved by you though you did not have the powers to release payment of release of Rs. 30 lacs and you also instructed PW­8 Shri Anil Kumar Sharma to release the payment immediately as there were such directions. On his being stating that the cheque for payment was to be issued by the Zonal Office, Chandigarh you still insisted that there was pressure to release the payment from the Managing Director. The cheque for Rs. 30 lacs prepared by the Accounts Department was directly personally collected by you. What have you to say?

Ans. The statement is under CBI pressure and against facts. The payment of Rs. 30 lacs was approved for release on the basis of the recommendations of the Special Committee constituted for the purpose under C.C. No. 71/11 directions from the Managing Director. I specifically state that I did not collect the cheque personally from the Finance Department. I had powers to recommend/approve the release of payments, however, the actual release of funds was the responsibility of the Finance Department."

224. Let us examine the evidence which has come on record.

225. To begin with one may note that the note dated 01.06.94 of Sh. Anil Sharma, Dy. Manager(Marketing) makes no reference to any recommendation of any committee. I am sure if the recommendations of the committee as noted in Ex. PW9/A had been the basis of release of Rs. 30/­ lacs as per note Ex. PW8/A then it must have been mentioned therein in clear terms and not only that it would have also been mentioned that as to how the figures of Rs. 40 lacs had been arrived at with respect to the payment recommended @ Rs. 8 per metric ton instead of the actual amount claimed on the basis of the bills. It is also clear from this note that at the time when this note was prepared not even the bills of M/s Good Friends Agencies were there. They were at Zonal Office. The assessment was not made on the basis of the bills but on the basis of the total C.C. No. 71/11 quantum of supplies of NFL urea to the Cooperative Apex Federations and other institutional agencies in Punjab and Haryana. The note reads as under:

"This has reference to handling­cum­general services contract entered into between NFL and M/s Good Friends Agencies dated 9.9.93 (photocopy of agreement enclosed). The party has submitted bills in our Zonal Office, Chandigarh but bills are still under process. On the priliminary assessment of the total quantum of supplies of NFL Urea to Cooperative Apex Federations and other institutional agencies in Punjab and Haryana, the total remuneration payable to the said party works out to about Rs. 40/­ lakhs for the period 1.10.93 to 31.5.94.

The party has been pressing hard for payment and it is, therefore, proposed that pending fulfillment of various formalities, including the approval of competent authority, process and scrutiny of the bills etc., an adhoc advance of Rs. 30/­ lakhs may be released to the above party.

The proposal is submitted for approval please."

226. Sh. Anil Sharma who had signed the above note had deposed that Accused No.1 Sh. D. S. Kanwar had called him in his Chamber and told him about the Contract between NFL and M/s Good Friends C.C. No. 71/11 Agencies and then instructed him to release an ad­hoc payment of Rs. 30/­ lacs. When he asked him that ad­hoc payment is to be released on the basis of the bills he told him that Sh. Khanna would be coming to Delhi with bills on the next day. He handed over him the document Ex. PW­8/A for being signed and he signed it. The relevant part of the testimony of this witness reads as under :

"Somewhere in 1994, Mr. D. S. Kanwar called me in his chamber and told me about the contract between NFL and M/s Good Friends. He told me about the contract which was signed in 1993 and asked me to release an ad hoc payment of Rs. 30 lakhs. I argued that the ad hoc payment is to be released on the basis of the bills. I was told that Shri R. K. Khanna, the then Zonal Manager Chandigarh is coming with the bills tomorrow. Accused D. S. Kanwar, present in the court, was exercising all types of powers, all the contracts etc, were being signed by him. He handed over one document for release of payment for signature, which I signed and handed over to Mr. M. A. Sarma, who was the then Deputy General Manager I have seen D­8. This is the same note which was shown to me by D. S. Kanwar and was asked to sign this so that the payment could be released."

227. As per this witness when he signed the said note there were no bills. The payment of Rs. 30 lacs was approved by Sh. D. S. Kanwar C.C. No. 71/11 telling him that it was urgent and when the witness informed that the payment was to be released form Zonal Office, he insisted that the payment was to be released immediately. After the approval he had directly collected the cheque from the accounts department. The relevant part of the deposition reads as under :

"This payment of Rs. 30 lakhs was finally approved by Sh. D. S. Kanwar. Mr. D. S. Kanwar has told me that payment has to be released immediately as there were directions. While releasing the payment I told him that the cheque is to be issued form Zonal Office Chandigarh but he insisted that the payment is to be released as there is pressure to release the payment immediately from the M.D. The Account Deptt was responsible for issuing of cheque. Mr. D. S. Kanwar directly personally collected the cheque of Rs. 30 lakhs."

228. With regard to the note of Sh. R. K. Khanna dated 31.5.94 which ultimately resulted in the formation of the committee, the witness had deposed:

"Note Ex. PW 5/E at page 1 dated 31.5.94 was the same note which was prepared by Mr. R. K. Khanna. Actually the note was signed on 2 or 3 june, 1994 when Mr. Khanna came from Chandigarh but we were told by Mr. Kanwar it was to be processed on 1.6.94 as the payment C.C. No. 71/11 was released on first June, 1994 itself and because of audit objections."

229. In the cross­examination too the witness had reiterated what he had stated in the examination in chief.

230. With regard to the note dated 1.6.94 related to the release of payment witness PW9 Sh. M. A. Sarma, who was Dy.

Manager(Marketing), next in hierarchy had also identified his signatures as to the approval of the release of Rs. 30 lakhs on paper and had deposed:

"In May 1994 Mr. D. S. Kanwar called me in his office regarding some ad hoc payment has to be made to M/s Good Friends."

231. Witness PW­25 Sh. P. K. Kataria too had deposed that besides approving the ad hoc advance of Rs. 30 Lakhs Sh. Kanwar had also personally asked him to release the payment by giving the reason that he was being pressurized from different corners to make the payment. His deposition in this regard is as under : C.C. No. 71/11

"I was directed as per this note by Sh. D. S. Kanwar to release the payment to M/s Good Friends Agencies. He had also personally asked me to release the payment. The reason which was given by Sh. Kanwar for asking me to release the payment was that the party was pressing hard for the payment and he was being pressurized form different corners for making the payment."

232. He had further added that after the cheque had been prepared and signed by him, he had personally handed over this cheque to Sh. D. S. Kanwar.

233. Witness PW­5 Sh. R. K. Khanna in his deposition also emphasized the fact that the note Ex. PW5/E(PW9/A) though had the date 31.5.94 but the same had been signed by him not on 31.5.94 but on 2.6.94. He had identified his tickets PW5/C of traveling from Chandigarh to Delhi on 2.6.94 and also the tickets of his going back to Chandigarh on 4.6.94 (Ex. PW4/B) for which he had claimed the T.A. by submitting the T.A. Bill (Ex. PW5/D). Thus putting on record that he was in Delhi on 2.6.94 and returned on 4.6.94 in support of his deposition that this note had not been signed by him on 31.5.94. C.C. No. 71/11 He also had stated that he had received a call on 2.6.94 from the co­ ordination department that he was being called by Sh. D. S. Kanwar with the bills of M/s Good Friends Agencies. In the cross­examination when he was questioned on this he had stated that he was first asked to send the bills submitted in Zonal Office on 31.5.94 later on on 1.6.94 he was instructed to reach Delhi on 2.6.94. It was suggested to the witness that he was in Delhi on 31.5.94 but he had insisted that he had traveled Delhi on 2.6.94. There is one thing more which may be noted, according to him that this note had been prepared by Mr. Kataria and the date of 31.5.94 had been put by Mr. Kataria on the said note. This fact has also been corroborated by Mr. Kataria in his testimony that Sh. R. K. Khanna had been asked to bring all the bills received at his office alongwith the comments so that the modalities could be work out and guidelines issued to the Chandigarh office. Sh. R. K. Khanna had brought accordingly the bills along with the hand written note and in the meanwhile he had prepared on his behalf a covering note to the bills and note which he had prepared was given to Sh. Khanna to sign.

C.C. No. 71/11

234. Witness PW32 Sh. A. K. Asija who was part of the team given the task of preparing the guidelines with regard to the payment to M/s Good Friends Agencies after seeing Ex. PW9/A bearing the date of 1.6.94 had stated "although at point C I have given the date of 1.6.94 but as a matter of fact I had prepared this note on 3rd or 4th June, 1994". He had further stated "It was told by my controlling officer Sh. Sharma that they had already released Rs. 30 Lacs to M/s Good Friends Agencies and any other date of processing the note shall invoke audit objections". He had again emphasized the same in cross­examination while answering a question in relation to as to when he came to know about the contract by stating that he came to know about this contract when he was given the note dated '31.5.94' by his controlling officer on 3.6.94. When he was questioned that why he did not make the complaint about having signed the note Ex. PW9/A giving the date of 1.6.94 when it was prepared on 3.6.94, he had given the explanation that he had discussed this matter with his controlling officer Mr. Sharma as well as Sh. Kanwar and he was given to understand that it was being pre­ dated only for the purpose of meeting the audit objections. Once this explanation was given he did not make any complaint to any one. In C.C. No. 71/11 the cross­examination when he was confronted with the dates on Ex. PW5/E(PW9/A) and the dates appearing on Ex. PW8/A, he had stated that it was not correct that the note Ex. PW8/A was prepared after the note Ex. PW9/A.

235. I would also like to mention here that the testimony of Witness Sh. P. K. Kataria in parts goes against the testimony of the above witnesses. His testimony in the cross­examination would show as if the note Ex. PW9/A was prepared first and thereafter the note Ex. PW8/A with regard to the payment was made to the extent that according to him the amount which was worked out as a result of the calculations made on the basis of the recommendations given by the committee was Rs. 40 Lacs but giving a cushion of Rs. 10 Lacs, Rs. 30 Lacs were order to be released. His testimony in this regard reads as under :

"Q. Is it correct that it was the collective decision of Shri Anil Sharma, M. A. Sarma and Sh. R. K. Khanna and yourself to release the ad­hoc payment after scrutinizing the work done by the contractor?

A. It is not correct that the committee and other officials named above had recommended after scrutinizing the work done, the release of ad­hoc payment.

C.C. No. 71/11

Q. On what basis the committee recommended the release of ad­hoc payment of Rs. 30 lacs?

(The witness may answer the question after going through the record.) A. It is a matter of record that minutes of the committee placed at Ex. PW9/A elaborates different reasons for recommending the amount payable to M/s Good Friends Agencies by NFL and it was also recommended that the party may be asked to persue for liquidation of the outstanding with institutional buyers which was still outstanding and is a part of the contract.

Q. What was the basis for arriving at the figure of rs. 30 lacs?

A. It was placed on record that the party has not rendered the services under different clauses of the contract and out of the total amount payable to the contractor the recovery was to be effected on account of those services and after reducing the rates of those services prevalent in the market the net amount payable to the contractor came to Rs. 8 per ton as against Rs. 100 per ton envisaged in the contract. After looking to the quantity sold to the institutional buyers during the period the net amount @ Rs. 8 per ton, the amount worked out to around Rs. 40 lacs. After keeping the cushion for certain recoveries which may come up subsequently the amount of Rs. 30 lacs was recommended for payment."

C.C. No. 71/11

236. I am, however, not inclined to accept the said part of the testimony of the witness Sh. P. K. Kataria. As has been noted above it is unthinkable that this aspect of the proposal being submitted for the ad­hoc release of Rs. 30 lakhs would not have been incorporated therein, in Ex. PW8/A. Secondly, I find from the testimony of Sh. P. K. Kataria himself that the payment was released only on the basis of the note Ex. PW8/A without being accompanied by any document or evidence. In fact as per his testimony the modalities to be worked out were for future and for this purpose Sh. R. K. Khanna was called to Delhi, which would mean that the note with regard to the release of payment Ex. PW8/A had already been prepared and the purpose for calling Sh. R. K. Khanna to work out the modalities for future unrelated to the payments already released. The relevant part of his testimony reads as under :

"(At this stage document D­3, already exhibit Ex. PW9/A is shown to the witness). The payment in this case was released only on the basis of the above note sheet ExPW 8/A without being accompanied by any document or evidences. Sh. D. S. Kanwar asked Sh. Anil Sharma, Sh. A. K. Asija and myself to work out the modalities so that in future there should be no problem in releasing the payment form the Chandigarh office. Sh. A. K. Asija was C.C. No. 71/11 working as Astt. Manager. In order to work out those modalities Sh. R. K. Khanna, Zonal Manager, Chandigarh was asked to bring all the bills received at his office and to provide the same to the Central Marketing officials along with his comments so that the modalities are worked out and guidelines are issued to the Chandigarh office. Sh. Khanna had brought all those bills along with a hand written note, but in the mean time, I had prepared a note on his behalf as a covering note to the bills for handing over to the marketing officials for further action."

237. In the cross­examination of Sh. P. K. Kataria Ld. Defence Counsel had pointed out that the diary no. 772 mentioned on note Ex. PW9/A at point X4 is dated 1.6.94. It was also noted that the diary no. given on the note Ex. PW9/A at point X5 is 791 of 11.6.94 and further the diary no. given on Ex. PW8/A at point X2 was 744 dated 31.5.94. All these diary nos. are of the office of accused no. 1 i.e. General Manager(P&A). The purpose of pointing out the said diary nos. was to first of all show that there was nothing odd in the said diary nos. because the diary no. of 11.6.94 was higher than the diary no. of 1.6.94 which was higher than the diary no. of 31.5.94. The other purpose which was sought to be served by showing the C.C. No. 71/11 said diary nos. was that there is a claim which has been made by the prosecution that the note Ex. PW5/E(PW9/A) was not of 31.5.94 or 1.6.94 but of 2.6.94 and the same cannot be true because had this note be prepared on 2.6.94 then the diary no. also would have given the date of 2.6.94. Since the diary no. appearing on the note Ex. PW9/A is of 1.6.94, it would show that the record is genuine and not antedated.

238. When I look at the diary no. on Ex. PW8/A at point X2, it appears to me that the said diary no. cannot be accepted on its face value as is being made out to be. The note Ex. PW8/A bears the date of 1.6.94 that was the day it was initiated. It was approved on 1.6.94 by the accused no. 1. It is impossible to think that even before this note was initiated on 1.6.94 it had reached the office of the GM(P&A) i.e. the accused no. 1 on 31.5.94. Definitely there is something wrong about it. That being the case I am of the view that just on the basis of those diary nos. it will not be possible to defeat the case of the prosecution.

239. Considering the testimony of the witnesses discussed above and the note Ex. PW8/A itself I am of the view that there was no valid C.C. No. 71/11 basis for release of payment of Rs. 30 Lacs to the accused no. 2 Mohd. Dilwar Mir and this entire exercise was done at the behest of accused no. 1 Sh. D. S. Kanwar and subsequent effort to provide a justification for that by predating the notes reinforces this view.

240. There are other reasons also for me to reach the above conclusion. They are :

(I) if one goes by the assertion of the defence that the records were not antedated than also there was no reason to release the payment because in substance the note Ex. PW9/A says nothing about any job having been done by M/s Good Friends Agencies in positive terms. In fact in negative terms it states that there was no job done by M/s Good Friends Agencies. If that was the case than it was all the more reason to have not released the payment. It was sufficient in itself to put on guard the officials to not to release the payment.

(ii) If one goes by the records as such the committee gives its recommendations stating in negative terms that at best as against Rs. 100 per metric ton. M/s Good Friends Agencies was entitled to C.C. No. 71/11 receive the payment @Rs. 8.03 per metric ton. This note was signed on the face of it on 1.6.94 but it reached the office of Sh. D. S. Kanwar accused no. 1 on 11.6.94, if that was so how could he approve the release of payment on 1.6.94 itself.

Conclusion

241. In view of the foregoing discussions and the circumstances of the case I conclude that the prosecution has been able to prove that there had been no valid reason for release of ad­hoc payment of Rs. 30 lacs to Accused no. 2 Mohd. Dilawar Mir of M/s Good Friends Agencies except for doing favour to him on the specific instructions of the accused no. 1 Sh. D. S. Kanwar.

242. Judgments referred ­ (1) S.P. Chengalvaraya Naidu (Dead) By LRs Vs. Jagannath (Dead) by LRS & Ors. (1994) 1 SCC 1 ­ I have gone through the above judgment. It is a judgment which relates to a decree being C.C. No. 71/11 obtained by fraud. Though there are certain observations made in the said judgment as to what constitutes a fraud on the Court but I would like to examine the said issue strictly in terms of what constitutes fraud/cheating in terms of Section 415 of the Indian Penal Code. In my view the said judgment is not applicable in the present case.

(2) Rasul Mohammed Hanif Gulandaj Vs. The State of Maharashtra (1972) 4 SCC 650 ­ It is a case where the appellant had been convicted for having committed the offence under Section 409 and 477A of the Penal Code. This judgment has been referred by the Ld. Defence Counsel in support of the Defence that the documents which were material, according to the defence, to prove the guilt of the accused persons have not been produced in this case. I have gone through the said judgment and I find that in that case there was a rent receipt which was the subject matter of the trial. There was reasonable ground to say that there was a rent receipt in existence and sent to another Government office from where it was reported that it was not available in that office. It was C.C. No. 71/11 observed by the Hon'ble Supreme Court "the simplest way therefore of establishing the truth of the matter would be to obtain the original receipt from the Accountant General's office. If it was a general receipt issued by the hospital (on whose behalf the receipt was issued) it would only show that the Head Clerk Joshi (who had issued the receipt on behalf of the hospital) must have misappropriated the amount after issuing the receipt. On the other hand if it was not a genuine receipt given by Joshi on behalf of the hospital, the case against the appellant would automatically stand proved (that he misappropriated the amount shown to have been paid as rent to the hospital)". In those circumstances it was noted "in the absence of a very important document which alone could tell us whether Head Clerk Joshi of the hospital is telling the truth or the appellant is telling the truth, it will be impossible to hold that the appellant committed criminal breach of trust."

The appellant was given benefit of doubt and acquitted. It is submitted that the present case stands entirely on a different footing, as the above discussion would show that on the basis of documents whatever were available and the testimony of the large number of witnesses it could still be said that the payment had C.C. No. 71/11 been demanded by the Accused no.2 Mohd. Dilwar Mir without doing any work and Accused no.1 Sh. D.S. Kanwar was instrumental in getting the payments released despite there being clear evidence that no work had been done by the accused no.2 Mohd. Dilawar Mir. The said judgment in my opinion, will have no applicability in the facts and circumstances of the present case.

(3) A. Jayaram & Anr. V/s State of Andhra Pradesh by CBI AIR 1995 Supp. (3) SCC­333 ­ It is a case which involved transportation of imported fertilizers from ports on arrival to various destinations in the State of Andhara Pradesh. The allegation was that though the fertilizer had not been delivered at the destinations but the payments had been released to the dealers on the basis of false entries and false certificates issued by Government officials in conspiracy with the dealers. There was, however, no direct evidence adduced to show non delivery of fertilizer with regard to the actual position of fertilizer, the evidence adduced was merely in the form of evidence of lorry owners for having not delivered the fertilizer at the destinations. The Government officials were given benefit of doubt and acquitted.

C.C. No. 71/11

I may put it here that it is difficult to have a situation where the facts of the two cases and the evidence lead in two cases may be entirely similar. In the present case the above discussion would show that the contract was awarded by accused no.1 Sh. D.S Kanwar to M/s Good Friends Agencies to favour M/s Good Friends Agencies and also subsequently payment was released despite it having not done any work. The evidence which is available on record is not only in the form of oral deposition of witnesses but also documentary evidences including the letter of the Accused no.2 Mohd. Dilwar Mir himself Ex.P28 wherein there is a clear admission of not all the jobs having been performed under the contract and if that was so then there was no reason for the Accused no.2 to have raised bills for having performed the contract in its entirety and raising the bills accordingly and even accepting advance payment of Rs.30 lacs.

(4) Alpana Das Vs. CBI 2006 (90)DRJ 441 ­ I have gone through the said judgment and I find that the reason why the reference to the said judgment has been made is that it was noted in the said C.C. No. 71/11 judgment that there was no question of framing any charge under Section 13(d)(i) punishable under Section 13(2) of the Prevention of Corruption Act because in the said case no valuable thing or pecuniary advantage was found to have been derived by the public servant either for himself or for someone else so as to bring the conduct of the petitioner in that case under Section 13(1)(d) of the said Act. The same, however, cannot be said to be true in the present case. I am of the view that a contract being awarded in favour of the accused no.2 Mohd. Dilawar Mir by the accused no.1 Sh. D.S. Kanwar was a valuable thing and by releasing an amount of Rs.30 lacs in favour of accused no.2 Mohd. Dilawar Mir, in the circumstances narrated above, there was also a pecuniary advantage given to the accused no.2 Sh. D.S. Kanwar. The said judgment in my opinion is not applicable on the present case. (5) State of Haryana Vs. Sarup Singh & Ors. (1997) 2 RCR (Cri) 45 (DB) ­ It is a case where the employees of a Cooperative Marketing Processing Society entered into a criminal conspiracy and showed the sale of fertilizer in the name of some fictitious persons at C.C. No. 71/11 the old rates after having come to know that the rates of urea fertilizer are going to be increased from Rs.54/­ to Rs.103/­ per bag and thus defrauded the Government and embezzled the amount of Rs.86,288.80 for their personal benefit for which they were charged under Section 477A/408/409/120B IPC. It was, however, found during the trial that the fertilizer had been sold in the ordinary course of business and no entries were found that they had deposited the cost of the fertilizer @ Rs.54/­ in the treasury where as they kept the fertilizer with them and sold it afterwards @ Rs.103 per bag and thus deceived the Government. The Trial Court had acquitted the accused persons.

I have not been able to find that as to how the judgment is applicable in the present facts and circumstances of the case. (6) C. Chenga Reddy Vs. State of Andhra Pradesh 1996 Supp. (3) SCR 479 ­ This is a judgment which has been referred to by the defence primarily to bring home the point that mere violation of codal formalities does not constitute a criminal offence by itself. In the overall circumstances of the case where it was found that it was not C.C. No. 71/11 a case where no work had been performed by the contractor or that there had been any manipulation of records etc. the Court had found the appellants not been guilty. This case, however, is different. It is not just a case of violation of codal formalities but a clear case of favouristism where accused No. 1 Sh. D.S Kanwar had favoured Accused accused no.2 Mohd. Dilawar Mir to the extent of awarding the contract which was not even required and subsequently gone to the extent of making the payment, may be ad­hoc, when it was clear that no work had been performed under the contract. Whether offence under section 420 has been committed?

243. There is a substantive charge framed against both the Accused No. 1 Sh. D.S. Kanwar and Accused No. 2 Mohd. Dilawar Mir for having committed an offence under section 420 IPC and also there is common charge framed against them of having entered into a conspiracy to commit the offence punishable under section 420 IPC. The allegation in substance against Accused No. 1 Sh. D.S. Kanwar in this regard is he cheated NFL by first awarding the C.C. No. 71/11 contract in favour of the Accused No. Mohd. Dilawar Mir and then by releasing an amount of Rs. 30 lacs to him without him fulfilling contractual obligations. The allegation against the Accused No. 2 Mohd. Dilawar Mir is on the similar lines that he induced NFL to first award contract to him and then to get an amount of Rs. 30 Lacs released in his favour without carrying out the contractual obligation.

244. It has been submitted by the defence that there no deception on the part of Accused No.1 Sh. D.S. Kanwar or Accused No. 2 Mohd. Dilawar Mir either in respect of awarding of contract or release of payment. It was an open secret and known to everyone. If there was no deception then there was also no question of any contract being awarded as result of any deception or the payment being made. I find force in this argument. Defence has made reference to a judgment of the Hon'ble High Court Gagan Kishore Srivastava V State & Others 1998 ( 47) DRJ ( DB). The position of law as laid down in the said judgment reads as under:

"The question, therefore, arising for our consideration would be that whether the facts, as disclosed in the complaint, constitute an offence of cheating, as defined in C.C. No. 71/11 Section 415 of the Penal Code, punishable under Section 420 IPC. Cheating has been defined in Section 415 IPC as :­ "415. Cheating - Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property to any person, or to consent that any person shall retain any property, or internationally induces the person so deceived to do or omit anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to "cheat".

Illustration (g) to Section 415 says:­ "(g) A intentionally deceives Z into a belief that A means to deliver to Z a certain quantity of indigo plant which he does not intend to deliver, and thereby dishonestly induces Z to advance money upon the faith of such delivery. A cheats;

but if A, at the time of obtaining the money, intends to deliver the indigo plant, and afterwards breaks his contract and does not deliver it, he does not cheat, but is liable only to a civil action for breach of contract."

C.C. No. 71/11 A bare reading of the definition of cheating would suggest that there are two elements thereof, namely, deception and dishonest intention to do or omit to do something. In order to bring a case within the first part of Section 415, it is essential, in the first place, that the person, who delivers the property should have been deceived before he makes the delivery; and in the second place that he should have been induced to do so fraudulently or dishonestly. Where the property is fraudulently or dishonestly obtained, Section 415 would bring the said act within the ambit of cheating provided the property is so obtained by deception."

245. I am of the view in the given facts of the case that there could be some possibility of saying the Accused No. 1 Sh. D.S. Kanwar had committed an offence under section 409 IPC but not under section 420 IPC. Since neither any charge has been framed nor evidence lead keeping that prescriptive in mind, he cannot be convicted for committing the offence under section 409 IPC. Similarly in the case of Mohd. Dilawar Mir it is not the case that for getting the benefit he practiced any 'deception' as envisaged under section 415 IPC but he got the benefits because of the favour shown to him by the Accused No. 1 Sh. D.S. Kanwar.

C.C. No. 71/11

246. Thus neither the Accused No. 1 Sh. D.S. Kanwar nor the Accused No. 2 Mohd. Dilawar Mir can be said to have committed the offence under section 420 IPC or the offence under section 120B IPC read with Section 420 IPC.

Whether offence under section 13(1) (d) (ii)1 punishable under section 13(2) of the offence has been committed by the Accused No. 1

247. For attracting section 13(1)(d)(ii) of the Act what is necessary is that the public servant by abusing his position as public servant had obtained any valuable thing or pecuniary advantage for himself or any other person. What is meant by 'abusing position' as public servant is no longer res ­integra. It was laid down by the Hon'ble Supreme Court in Ram Kishan v State of Delhi 1956 SCR 182, in reference to section 5(1)(d) of the earlier PC Act of 1946 which is same as Section 13(1)(d)(ii) of the present Act, as follows:­ 1 13. Criminal misconduct by a public servant. ­ (1) A public servant is said to commit the offence of criminal misconduct,­ ­­­xxx­­­xxx­­­xx­­­

(d) If he, ­ ­­xxx­­­­xxx­­­xxx­­­

(ii) by abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage without any public interest; or C.C. No. 71/11 "The juxtaposition of the word or otherwise' with the words "corrupt or illegal means" and the dishonesty implicit in the word "'abuse" indicate the necessity for a dishonest intention on his part to bring him within ,the meaning of the clause."

248. There is an argument that the contract was awarded on the instruction of one minister at that time on some broader consideration of rehabilitating the Accused No. 2 Mohd. Dilawar Mir, who comes from the State of Jammu and Kashmir, as at that militancy in the state was at its peak, and the witnesses have stated that the Accused No. 1 Sh. D.S. Kanwar was under pressure from some quarters to release the ad­hoc payment. That is to say there was as such no dishonest intention on the part of the Accused No. 1 Sh. D.S. Kanwar. I have not been shown any such general policy of the Govt to award such lucrative contracts for the sake of rehabilitation or even any guideline in support of this submission. The word abuse has not been defined, but what is meant by ' dishonest' is known to Penal Code. According to Section 24 it means:

C.C. No. 71/11

"Whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person, is aid to do that thing dishonestly".

What is meant by 'wrongful gain' and 'wrong loss' has also been defined in section 23 as follows:

"Wrongful gain" - "Wrongful gain" is gain by unlawful means of property to which the person gaining is not legally entitled.

"Wrongful Loss" ­ "Wrongful loss" is the loss by unlawful means of property to which the person losing it is legally entitled.

Gaining wrongfully, losing wrongfully - A person is said to gain wrongfully when such person retains wrongfully, as well as when such person acquires wrongfully, as well as when such person acquires wrongfully. A person is said to lose wrongfully when such person is wrongfully kept out of any property, as well as when such person is wrongfully deprived of property.

249. Thus what is of importance is the intention to cause wrongful loss or wrongful gain and not what was the source of this intention. Like there was an observation referred to in the said judgment from C.C. No. 71/11 an earlier decision Ram Kishan v State of Delhi ( supra) " It is enough if by abusing his position as a public servant a man obtains for himself any pecuniary advantage, entirety irrespective of motive or reward for showing favour or disfavour."

250. It does not require much elaboration to say awarding of contract was valuable thing and payment of money was a pecuniary advantage.

251. The prosecution has been able to prove:

(i) Accused No. 1 awarded the contract without following the normal procedure for awarding the contract i.e. by calling tenders or consulting the other departments like logistics or getting a feedback from the zonal office if such a contract was at all required.

(ii) The contract was in the real sense not necessary.

(iii) Accused did not have the financial powers to award the contract of his own.

C.C. No. 71/11

(iv) Accused No. 1 D.S. Kanwar pressurized his sub­ordinates to release the payment of Rs.30, Lacs though termed as ad­hoc payment, knowing that Accused No. 2 Mohd. Dilawar Mir had done no work.

252. It is clear from above that Accused No.1 Sh. D.S. Kanwar abused his position first to award contract Ex P 1, a valuable thing, and then to release an amount of Rs. 30 Lacs to the Accused No. 2 Mohd. Dilawar Mir, causing a pecuniary advantage to him and thus committed an offence under section 13(1)(d) (ii) Punishable Under section 13(2) of the Act.

Offence of Conspiracy 120 B IPC

253. Direct evidence for conspiracy is seldom found. It can be inferred from the circumstances. I am of the view the way Accused No. 1 Sh. D.S. Kanwar has gone about awarding the contract to the Accused No. 2 Mohd. Dilawar Mir ignoring all the settled norms of awarding the contracts and even going beyond his own financial powers to award the contract and then getting the payment of Rs. 30 C.C. No. 71/11 Lacs without there being any basis for it, by putting pressure on his subordinates are good enough to show that there was conspiracy between the Accused No. 1 Sh. D.S. Kanwar and Accused No. 2 Mohd. Dilawar Mir whereby Accused No. 1 Sh. D.S. Kanwar would abuse his position as public servant and extend benefits to Accused No. 2 Mohd. Dilawar Mir and thereby commit the offence under section 13(1)(d)(ii) punishable under section 13(2) of the Act. Thus in my opinion they are committed offence under section 120 B IPC read with section 13(2) read with 13(1)(d) of the Act. ORDER

254. In view of forgoing discussion and the facts and circumstances of the case:

(1) I am acquitting both the accused persons under Section 420 IPC and under Section 120B IPC read read with Section 420 IPC;

C.C. No. 71/11

(2) convicting Accused No. 1 Sh. D.S. Kanwar and Accused No. 2 Mohd. Dilawar Mir under section 120 B IPC read with Section 13(1)

(d)(ii) read with Section 13(2) of the Prevention of Corruption Act;

and (3) convicting accused no.1 Sh. D.S Kanwar for having committed the substantive offence punishable under Section 13(1)(d)(ii) read with Section 13(2) of the Prevention of Corruption Act.

Ordered accordingly.

Announced in the Open Court                                                   ( L. K. GAUR )
on 27  September, 2014                                          Special Judge, P.C. Act  
       th


                                                                   (CBI­09), Central District, 
                                                                                          Delhi.




C.C. No. 71/11                                                                             
        IN THE COURT OF SHRI L.K. GAUR, SPECIAL JUDGE
                   P.C. ACT (CBI­09), CENTRAL DISTRICT, 
                                                 TIS HAZARI: DELHI 
CC No. 71/11
R.C. No. 3(A)/98
ID No. 02401R0118902000


Central Bureau of Investigation

                                               Versus
1.     Shri Dilbagh Singh Kanwar
       S/o Late Shri Surjit Singh
       R/o 9/9778, Vasant Kunj,
       New Delhi.


2.     Sh. Md. Dilawar Mir
       S/o Sh. Ghulam Rasool Mir,
       R/o A­9, Gandhi Nagar (Govt. Quarters)
       Jammu.


3      M/s Good Friends Agencies,
       95, Qutab View Apartments, 
       Shaheed Jit Singh Marg, 
       New Delhi.


Date of Institution                           :  01.03.2000
Date of reserving Order                       :  29.10.2014
Date of Pronouncement                         :  01.11.2014



C.C. No. 71/11                                                                            
 ORDER ON SENTENCE


Background

The prosecution has been successfully able to prove that the convict Sh. Dilbagh Singh Kanwar in conspiracy with the other convict Mohd. Dilawar Mir, had abused his position as a public servant while working as General Manager (Marketing), by awarding the contract to the convict no.2 Mohd. Dilawar Mir proprietor of M/s Good Friends Agencies, without having the powers to do so and following the existing practices, as detailed in the separate judgment without there being even necessity of awarding the said contract and thereafter releasing Rs.30 lacs as an advance payment despite it being clear that no services had been rendered under the said contract by convict Mohd. Dilawar Mir proprietor of M/s Good Friends Agencies.

2 Convicts namely Sh. Dilbagh Singh Kanwar and Mohd. Dilawar Mir have been convicted for having committed offence under Section 120B IPC read with Section 13(1)(d)(ii) read with Section 13(2) of the Prevention of Corruption Act. Convict Sh. Dilbagh Singh Kanwar has C.C. No. 71/11 been also convicted for committing the substantive offence punishable under Section 13(2) read with Section 13(1) (d) (ii) of the Prevention of Corruption Act.

Submissions 3 I have heard Ld. Counsel for the convicts and also the Ld. Prosecutor for CBI. I have also gone through the written submissions which have been submitted by the Ld. Defence Counsels for the convicts and also the record of this case. Sentencing Guidelines 4 Rule 1 of Chapter 19 of Volume 3 of Delhi High Court Rules and Orders provides in general the considerations which may be gone into while considering the question of sentence. The same reads as under :

"The award of suitable sentence depends on a variety of considerations -- The determination of appropriate punishment after the conviction of an C.C. No. 71/11 offender is often a question of great difficulty and always requires careful consideration. The law prescribes the nature and the limit of the punishment permissible for an offence, but the Court has to determine in each case a sentence suited to the offence and the offender. The maximum punishment prescribed by the law for any offence is intended for the gravest of its kind and it is rarely necessary in practice to go up to the maximum. The measure of punishment in any particular instance depends upon a variety of considerations such as the motive for the crime, its gravity, the character of the offender, his age, antecedents and other extenuating or aggravating circumstances, such as sudden temptation, previous convictions, and so forth, which have all to be carefully weighed by the Court in passing the sentence."

5 In the light of the above guidelines laid by the Hon'ble High Court, I would like to consider the various issues which have been raised by the Ld. Defence Counsels.

Extenuating Circumstance 6 Following are the extenuating circumstances which have been C.C. No. 71/11 submitted on behalf of the convict Sh. Dilbagh Singh Kanwar :

Age of the convict 6.1 It is submitted that the convict is a senior citizen and is of 77 years of age. Considering his ripe age in my opinion it is an extenuating factor which can be taken into account.

Need to take care of his aged wife 6.2 It is submitted that the wife of the convict is also aged and she requires regular medical attention because of her old age. I am of the view that this can also be taken as an extenuating factor in favour of the convict.

The period for which the trial had been faced by the convict 6.3 It is stated that the convict had retired from service in 1996. This case was registered against him in the year 1998. The allegations in this case are related to the year 1993­96. The convict C.C. No. 71/11 has been facing trial for the last 18 years. I have seen the record. It does not appear to me that the convict has been facing trial for the last 18 years. First time he had appeared in the Court was on 13.07.2000. He had not been arrested during the course of the investigation. At best he can be said to have faced the trial from 13.07.2000. That also comes to around 14 years. In my opinion still even this period of 14 years for which the convict is facing the trial, can be considered as an extenuating factor against the convict. Clean record/ Good antecedents 6.4 It is stated that the convict is an ex­army person and has never been convicted in any case. This is the first conviction he has ever faced at the age of 77 years. This also in my opinion can be considered as an extenuating circumstance.

7. Following are the extenuating circumstances which have been submitted on behalf of the convict Mohd. Dilawar Mir : C.C. No. 71/11

The case was registered on the basis of source information 7.1 It has been submitted that this Court should take a lenient view in the matter as this case was registered not on the basis of any complaint being filed by the National Fertilizers Ltd., but on some source information. I am of the view that it really does not matter how this case was ultimately registered. It does not appear to me that in case this case had been registered on a Complaint filed by the National Fertilizers Ltd., that could have been a reason for awarding higher punishment to the convict. Similarly, non­filing of Complaint by National Fertilizers Ltd. and it being registered on the basis of some other source information cannot be a reason to award lesser punishment. I do not consider this to be an extenuating circumstance against the convict.

The convict facing long trial in this case 7.2 It is stated that the convict has been facing trial for the last 18­20 years. Like it has been stated above, this convict has also been facing trial for 14 years. Also like for the other convict Sh. C.C. No. 71/11 Dilbagh Singh Kanwar for Convict Mohd. Dilawar Mir also it can be considered as an extenuating factor against him. Age of the convict 7.3 It is stated that the convict is of about 67 year of age. In the present age of medical care and other medical facilities I am of the view that the age of 67 years cannot be considered to be ripe enough to be considered as an extenuating circumstance at the time of awarding sentence.

Clean public life 7.4 It is submitted that the convict is a law graduate and he has been a member of J&K Assembly for six terms. He had been a Minister for the Government of J&K holding various portfolios and has an implacable public life. I am of the view that this is what is expected from the persons in public life and holding high positions. Clean antecedents can become a reason for an ordinary person to be granted a lesser punishment, but in my opinion, the same C.C. No. 71/11 standard, however, cannot be applied for the persons who have been Ministers or being in public life. Therefore, the fact that the convict has a clean record by itself will not become an extenuating factor in his case.

Lack of control over the internal management of National Fertilizers Ltd.

7.5 It has been submitted that the convict has been convicted in this case for alleged lapse of internal management by National Fertilizers Ltd. over which he had no control. I have already given detailed reasons as to why he has been convicted in this case. I would like to still add here that he was the person for whom the "internal management" was compromised. This cannot be considered as an extenuating circumstance in this case. Health of the convict 7.6 It is stated that the convict has serious medical problems. He was diagnosed for hyper­tension, diabetes and for tubercular C.C. No. 71/11 pericardial effusion he had to undergo pericardectomy in June 2013. It is, therefore, stated that considering his deteriorating health a lenient view may be taken and he may be sentenced only with fine. I would like to point out here that hypertension and diabetes are manageable medical problems if they are managed properly, a person can continue to lead a normal life for a long time. So far as the question of tubercular pericardial effusion is concerned, I am of the view that since it has already been treated after successful pericardectomy and he is leading a normal life there is no reason why it should be considered as a factor for awarding lesser punishment.

Aggravating factors

8. Ld. Prosecutor for the CBI on the other hand has pointed out that the offence for which they have been convicted are of grave nature and considering their standing they should be punished on the higher side so that it may have a deterrent effect in general of the society.

C.C. No. 71/11 Other factor impacting the sentence The amount involved 9.1 As one would notice that while sentencing, the court has to take into consideration also the maximum punishment which has been provided for the offence and thereafter make an assessment that as to whether considering the gravity of the matter how much punishment should be awarded. The maximum punishment which has been provided under Section 13(2) under Prevention of Corruption Act is 7 years and also fine. Maximum Punishment under Section 120B IPC in this case will also be 7 years and fine, same as provided under Section 13(2) read with Section 13(1)(d)(ii) of the Prevention of Corruption Act for the criminal conspiracy entered to commit this offence.

9.2 One may note here that the 7 years of imprisonment has been provided under section 13(2) of Prevention of Corruption Act, even C.C. No. 71/11 for the cases where the amounts involved may go up to crores and crores of rupees. It is true that in the year 1994 when the amount of Rs.30 lacs had been released to the convict, it was not a small amount, but still I will not consider it to be not so high so as to say that it deserve maximum punishment. In my opinion considering the amount of money involved and the manner in which the offence had been committed the punishment should lie somewhere in between without taking into account other extenuating factors. Fine component of the sentence 10.1 Fine is an important part of any sentence. While imposing fine on the one hand the Court is to take into account that the convict is not able to reap the monetary benefits of the crime he has committed and on the other hand it also has to take into consideration that the fine imposed must turn out to be ruinous for the convict or his family. There is also a clear guideline which has been given in Section 16 of the Prevention of Corruption Act as to how a fine is to be imposed while sentencing a convict under Sub Section ( 2) of Section 13 of the Prevention of Corruption Act. The same reads as under : C.C. No. 71/11

"16. Matters to be taken into consideration for fixing fine - Where a sentence of fine is imposed under sub­ section(2) of section 13 or section 14, the court is fixing the amount of the fine shall take into consideration the amount or the value of the property, if any, which the accused person has obtained by committing the offence or where the conviction is for an offence referred to in clause (e) of sub­section (1) of section 13, the pecuniary resources or property referred to in that clause for which the accused person is unable to account satisfactorily."

10.2 It is clear from Section 16 reproduced above that while imposing the fine the court shall take into consideration the amount or the value of the property, if any, which the accused person has obtained by committing the offence. Therefore, as far as the convict Mohd. Dilawr Mir is concerned, it shall have to be taken into account that in 1994 this convict had taken the benefit of Rs.30 lacs from National Fertilizers Ltd. without having discharged any obligation under the contract.

C.C. No. 71/11 Submission of defence to sentence the convict Mohd. Dilawar Mir under sub clause (2) of Section 120B IPC 11.1 It has been submitted by the Ld. Defence Counsel that convict Mohd. Dilawar Mir has not been independently substantively charged for offence under Section 120B IPC and that his conviction in the absence of an independent charge for substantive offence under Section 120B IPC, was not appropriate. According to him the convict had been alternatively charged with Section 120B IPC read with Section 420 IPC and also read with Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act. Out of these offences he stands acquitted for the offence under Section 420 IPC. The offence under Section 13(1)(d) of the Prevention of Corruption Act cannot stand against him because he is not a public servant. Based on the above logic he has submitted that since now after the conviction has been pronounced, the conviction for the convict under the said offence cannot be altered then in these circumstances it would be best that he may be convicted by invoking sub clause (2) of Section 120B IPC.

C.C. No. 71/11 11.2 I may put it here that there is some misconception that the convict has not been substantively charged and punished under Section 120B IPC. It may be noted here that criminal conspiracy 1 under Section 120A though is a substantive criminal offence in itself 2 but when it comes to punishment under Section 120B it is to be punished like an abetment of the offence for which the conspiracy 3 was entered into. When one looks at Section 109 of the Indian Penal Code it would show that a person who has abetted commission of an offence is to be punished with the punishment provided for the offence the commission of which had been abetted by the person. To sum up it would mean that under Section 120B 1 120A. Definition of Criminal conspiracy - When two or more persons agree to do, or cause to be done ­ (1) an illegal act, or (2) an act which is not illegal by illegal means, such an agreement is designated a criminal conspiracy ; Provided that no agreement except an agreement to commit an offence shall amount to a criminal conspiracy unless some act besides the agreement is done by one or more parties to such agreement in pursuance thereof.

2 120B. Punishment of criminal conspiracy - (1) Whoever is a party to a criminal conspiracy to commit an offence punishable with death [imprisonment for like] or rigorous imprisonment for a term of two years or upward, shall where no express provision is made in this ode for the punishment of such a conspiracy, be punished in the same manner as if he had abetted such offence. (2) Whoever is a party to criminal conspiracy other than a criminal conspiracy to commit an offence punishable as aforesaid shall be punished with imprisonment of either description for a term not exceeding six months, or with fine or with both.

3 109. Punishment of abetment if the act abetted is committed in consequence and where no express provision is made for its punishment - Whoever abets any offence shall, if the act abetted is committed in consequence of the abetment, and no express provision is made by this Code for the punishment of such abetment, be punished with the punishment provided for the offence. C.C. No. 71/11 the person who has entered into a conspiracy would suffer the same punishment for which he had entered into conspiracy. It is, therefore, necessary at the time of framing of charge that the offence for which the conspiracy may have been entered must also be mentioned as it is only thereafter the accused will be able to make out that as to what sentence he may suffer as a result of the conviction for entering into a criminal conspiracy. Since conspiracy is an independent offence in itself, therefore, even if Convict Mohd. Dilawar Mir was incapable of committing the offence under Section 13(1)(d)(ii) read with Section 13(2) of the Prevention of Corruption Act he can still be convicted under Section 120B IPC to suffer the period of sentence prescribed under Section 13(2) of the Prevention of Corruption Act. 11.3 Now coming to the possibility of sentencing the convict under sub clause (2) of Section 120 B IPC. Reading of Section 120B would show that if the offence to commit the conspiracy is punishable with death, imprisonment for life or Rigorous Imprisonment for a term of two years or upwards it is to be punished like an abetment of committing the said offence under clause (1) and where the criminal conspiracy to commit an offence is for an offence which punishable C.C. No. 71/11 for a period less than two years, clause (2) would come into picture. In the present case it is clearly not applicable. Submission of defence to give benefit to the convict Mohd. Dilawar Mir under Section 360 of the Code of Criminal Procedure

12. It may be noted that if under Section 120B the convict Mohd. Dilawar Mir is to be punished with the punishment prescribed under Section 13(2) of the Prevention of Corruption Act, then it would not be possible to punish him for a period of less than one year. If it is so, then it would not be possible to extend the benefit of Section 360 to the accused. [ Ref. State Vs. A. Parthiban (2006) 11 SCC 437 and State Vs. Ratan Lal Arora (2004) 4 SCC 590].

Judgments referred on behalf of convict Dilbagh Singh Kanwar 13.1 Ld. Defence Counsel in support of his submission that the age of the convict also for the period he has faced the trial be taken into account at the time of sentencing him, has made reference to the C.C. No. 71/11 following judgments :

(i) M.W. Mohiuddin Vs. State of Maharashtra (1995) 3 SCC 567;

(ii) Ram Lal Dogra Vs. State (CBI) (2002) 61 DRJ 763; and

(iii) V.K. Verma Vs. Central Bureau of Investigation (2014) 3 SCC 485.

13.2 It may be noted that the above discussion would show that those consideration have already been taken into account. Judgments referred on behalf of convict Mohd. Dilawar Mir 14.1 Ld. Defence Counsel in support of his submission that the convict could not have been convicted without a specific charge under Section 120B IPC has made reference to following judgments :

(i) Madan Raj Bhandari Vs. State of Rajasthan 1969(2) SCC 385;

(ii) Commissioner of Income Tax, Excess Profits Tax, Hyderabad Vs. V. Jagan Mohan Rao and Others 1969(2) SCC 389;

(iii) Subran alias Subramanian and Others Vs. State of Kerala C.C. No. 71/11 (1993) 3 SCC 32;

(iv) Industrial Finance Corporation and Others Vs. Official Liquidator, High Court, Calcutta and Another (1993) 3 SCC 40;

(v) R. Sai Bharathi Vs. J. Jayalalitha and Others (2004) 2 SCC 9; and

(vi) Prabha Shankar Dubey Vs. State of M.P. (2004) 2 SCC

56.

14.2 I may put it here first of all that the issue with regard to the conviction of the convict under Section 120B IPC read with Section 13(1)(d)(ii) read with Section 13(2) of the Prevention of Corruption Act cannot be revisited at this stage. But in any case it has already been discussed above that there was a independent charge under Section 120B IPC framed against the convict for which he was found guilty and convicted.

Punishment of sentence of Imprisonment In respect of convict Sh. Dilbagh Singh Kanwar 15.1 After having taken into account the maximum sentence which C.C. No. 71/11 can be awarded under Section 13(2) read with Section 13(1) (d) (ii) of the Prevention of Corruption Act and under section 120B read with Section 13(2) read with section 13(1)(d)(ii) of the Prevention of Corruption Act, gravity of the offence as well as of the extenuating circumstances narrated above in my opinion sentencing the convict to a Rigorous Imprisonment for a period of two and a half years would meet the ends of justice for the offences to be run concurrently.

In respect of convict Mohd. Dilawar Mir 15.2 After having taken into account the maximum sentence which can be afforded under Section 120 B IPC read with Section 13(2) read with Section 13(1)(d)(ii) of the Prevention of Corruption Act, gravity of the offence as well as the extenuating circumstances narrated above in my opinion sentencing the convict to a Rigorous Imprisonment for a period of three years would meet the ends of justice.

C.C. No. 71/11 Punishment of fine In respect of convict Sh. Dilbagh Singh Kanwar 16.1 Considering that the convict was holding a high position in National Fertilizers Ltd. and the nature of offence committed by him, I am of the view that imposing of fine of Rs. Two Lacs would meet the ends of justice. I am also of the opinion that imposition of such a fine would not have any adverse impact on his family.

In respect of convict Mohd. Dilawar Mir 16.2 Apart from other consideration taking into also into account that the convict herein had drawn a benefit of Rs.30 lacs from National Fertilizers Ltd. in the year 1994, imposing a fine of Rs. 3 Crores and 21 Lacs would meet the ends of justice.

No punishment in default of payment of fine

17. As I would like that the said amounts are actually recovered from C.C. No. 71/11 the convicts, I am not imposing any punishment on the convicts in default of payment of fine. In case of their failure to make the payment of fine to take steps for recovery of the fine under Section 421 of the Code of Criminal Procedure,1973. However, before taking such step, in my opinion it would be appropriate to grant some time for the payment of fine.

Payment of compensation to National Fertilizers Ltd.

18. In the light of the fact that the National Fertilizers Ltd. suffered a loss in the year 1994 of Rs.30 lacs at the hands of the convict Mohd. Dilawar Mir, in my opinion, it would be in the interest of justice that a suitable compensation be awarded to National Fertilizers Ltd. for the said loss under Section 357 of the Code of Criminal Procedure. In my view awarding the compensation to the National Fertilizers Ltd. of Rs. three Crores and nineteen lacs, which is roughly the same as principal plus 12% compoundable interest per annum with quarterly rests for twenty years. This amount would be recoverable from the fine imposed by this order . The payment, however, of the C.C. No. 71/11 compensation to National Fertilizers Ltd. would be released in terms of Section 357(2) of the Code of Criminal Procedure. To Conclude

19. To conclude :

(a) I am sentencing the convict Sh. Dilbagh Singh Kanwar under Section 13(2) read with Section 13(1)(d)(ii) of the Prevention of Corruption Act to Rigorous Imprisonment for a period of two and a half years and to also pay a fine of Rs. 1 lac.

(b) I am further sentencing convict Sh. Dilbagh Singh Kanwar to undergo Rigorous Imprisonment under Section 120B of the Indian Penal Code read with Section 13(2) read with Section 13(1)(d)(ii) of the Prevention of Corruption Act for two and a half years and to also pay a fine of Rs.1 lac.

(c) The sentences of imprisonment imposed above against convict Sh. Dilbagh Singh Kanwar shall run concurrently.

C.C. No. 71/11

(d) I am sentencing the convict Mohd. Dilawar Mir under Section 120B Indian Penal Code read with Section 13(2) read with Section 13(1)(d)(ii) of the Prevention of Corruption Act to Rigorous Imprisonment for a period of three years and to pay a fine of Rs.3 crores and 21 lacs.

(e) Out of the fine realized of Rs.3 crores and 21 lacs, Rs. 3 crores and 19 lacs is directed to be paid as compensation under Section 357(i) of the Code of Criminal Procedure to National Fertilizers Ltd.

and released in terms of Section 357(2) of the Code of Criminal Procedure.

It may be noted that the convicts herein i.e Sh. Dilbagh Singh Kanwar and Mohd. Dilawar Mir have spend no time in judicial custody either during the period of investigation or during trial.

Ordered accordingly.

Announced in the Open Court           ( L. K. GAUR )
on 1st day of November, 2014                             Special Judge, P.C. Act  
                                                          (CBI­09), Central District, 
                                                                          Delhi.



C.C. No. 71/11                                                                             
 C.C. No. 71/11