Delhi District Court
Cbi vs . 1) S.K. Relan (Retired Ex. on 9 June, 2016
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IN THE COURT OF SH. PITAMBER DUTT, SPECIAL
JUDGE (PC ACT) CBI-02 CENTRAL, TIS HAZARI COURTS,
DELHI
CC NO. 182/01
RC NO. 3(A)/1991
CBI/ACU-VII, New Delhi
UNIQUE ID NO. 02401R022122001
CBI VS. 1) S.K. Relan (Retired Ex.
Director) (Finance)
N.P.C.C., Raja House,
30-31 Nehru Place,
New Delhi.
(deceased).
2) D.K. Sharma, the then
Chief Project Manager,
Al - EDAWAIYAH Project,
Iraq,
(also General Manager,
NPCC, Baroda)
(deceased).
3) B.B. GUPTA, Ex. D.G.M.
(Finance), N.P.C.C.,
New Delhi R/o Sector - 7,
Huda Complex, Civil Road,
Haryana-124001
(deceased).
CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 1 of 115
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4) N.L. Manchanda
S/o Sh. G.R. Manchanda,
the then DGM, Corporate
Office, NPCC, New Delhi,
(also Additional GM, Salal
Sector, J.K. with Hqs at
Faridabad)
R/o D-4/4054, Vasant Kunj,
New Delhi.
5) Ashok Shetty
S/o Sh. Gurupadapppa
Mahalinga Shetty,
Managing Director of
M/s. Mahalinga Shetty &
Co. Ltd., 61-62,Vishweshar
Nagar, Hubli. R/o 67, 16th
Main Judicial Layout,
G.K.V.K. Post, Bangalore.
6) Mool Chand Jain
S/o Late Sh. Amar Chand
Jain, Director of M/s.
Royal Construction Co.,
R/o 51 Malviya
Nagar, Durg, Chhatisgarh.
Date of institution : 21.04.1994
Date of decision : 08.06.2016
Date of Sentence : 09.06.2016
CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 2 of 115
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ORDER ON SENTENCE
1. Vide my separate judgment announced on
08.06.2016, convicts N.L. Manchanda, Ashok Shetty and
Mool Chand Jain are held guilty and convicted for the
offences punishable u/s 120 B IPC r/w section 5 (2) r/w
section 5 (1) (d) of the Prevention of Corruption Act,
1947. Convict N.L. Manchanda has also been convicted
for the substantive offence punishable u/s 5 (2) r/w
section 5 (1) (d) of the Prevention of Corruption Act,
1947.
2. Sh. Rajeev Chauhan, Ld. Counsel for convict N.L.
Manchanda has contended that convict is of 76 years of
age and suffering from various ailments. He has
undergone Angioplasty thrice. His wife is also suffering
from old age ailments. He further contended that convict
has been facing trial since year 1994 and has been
CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 3 of 115
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attending the Court without any default. Ld. counsel for
the convict prayed that considering the medical condition
of the convict, a lenient view may be taken and minimum
sentence may be awarded to him.
3. Sh. Jugal Wadhwa, Ld. Counsel for convict Ashok
Shetty contended that convict Ashok Shetty is of 63
years of age and suffering from multifarious diseases.
He has been diagnosed with Right Vocal Cord Paralysis,
Cervical Spondylosis etc on 12.02.2016. He is also
suffering from Diabetes and High Blood Pressure.
Convict Ashok Shetty is also partly suffering with
paralysis and is dependent on medication for his day to
day work. Ld. Counsel further contended that convict has
been facing trial since year 1994 and is attending the
Court without any default.
4. Sh. Jugal Wadhwa also contended on behalf of
convict Mool Chand Jain that he is 76 years of age and
CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 4 of 115
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his both knees have been operated. Ld. counsel further
contended that he is suffering from various old age
ailments and can not move without help. Ld. counsel for
convicts Ashok Shetty and Mool Chand Jain contended
that convicts may be awarded minimum sentence
keeping in view their medical condition.
5. On the other hand, Sh. Mohd. Shakeel, Ld. Senior
PP for CBI has contended that convicts N.L. Manchanda,
Ashok Shetty and Mool Chand Jain have cheated the
State and caused loss to NPCC. He further contended
that old age of the convicts would not condone the act
committed by them. He prayed that maximum
punishment may be awarded and huge fine may be
imposed upon them.
6. I have heard, Sh. Rajeev Chauhan, Sh. Jugal
Wadhwa, Ld. Counsels for convicts N.L. Manchanda,
Ashok Shetty and Mool Chand Jain as well as Sh. Mohd.
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Shakeel, Ld. Senior PP for CBI. Vide judgment dated
08.06.2016. I have held convicts N.L. Manchanda, Ashok
Shetty and Mool Chand Jain guilty for the offences
punishable u/s 120B IPC r/w Section 5 (2) r/w Section 5
(1) (d) of the Prevention of Corruption Act, 1947 which
provides imprisonment for a term which shall not be
less than one year but which may extend to seven years
alongwith fine. The Court may, however for special
reasons to be recorded in writing may impose a
sentence of imprisonment of less than 1 year.
7. Ld. counsels for the convicts argued that special
reasons are existing in this case as convicts are of
advanced age and suffering from medical ailments. The
reasons assigned by Ld. counsels for the convicts
cannot be construed as special reasons. Therefore,
Proviso of Section 5 (2) of the Prevention of Corruption
Act, 1947 is not applicable in the facts and
circumstances of the case.
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8. Taking into consideration the submissions made on
behalf of convicts and prosecution, I am of the
considered view that interest of justice may be served if
following sentences are awarded to the convicts in this
case.
9. For the offence punishable u/s 120B IPC r/w section
5 (2) r/w section 5 (1) (d) of the Prevention of Corruption
Act, 1947, convicts N.L. Manchanda, Ashok Shetty and
Mool Chand Jain are sentence to undergo Rigorous
Imprisonment for a period of 2 years alongwith fine of
Rs. 20,000/- each and in default of payment of fine,
convicts shall undergo SI for a period of 2 months.
10. For the offence punishable u/s 5 (2) r/w section 5(1)
(d) of the Prevention of Corruption Act, 1947, convict
N.L. Manchanda is further sentenced to undergo
Rigorous Imprisonment for a period of 2 years alongwith
fine of Rs. 20,000/- and in default of payment of fine, he
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shall undergo SI for a period of 2 months.
11. It is directed that all the substantive sentences shall
run concurrently and benefit of section 428 Cr.P.C., if
any, shall be given to all the convicts .
12. Copy of the judgment and order on sentence be
given to all the convicts free of cost. File be consigned to
Record Room, after due compliance.
(ANNOUNCED IN THE OPEN
COURT TODAY I.E ON 09.06.2016)
(PITAMBER DUTT)
SPECIAL JUDGE (PC ACT)(CBI):02
TIS HAZARI COURTS, DELHI
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IN THE COURT OF SH. PITAMBER DUTT, SPECIAL
JUDGE (PC ACT) CBI-02 CENTRAL, TIS HAZARI COURTS,
DELHI
CC NO. 182/01
RC NO. 3(A)/1991
CBI/ACU-VII, New Delhi
UNIQUE ID NO. 02401R022122001
CBI VS. 1) S.K. Relan (Retired Ex.
Director) (Finance)
N.P.C.C., Raja House,
30-31 Nehru Place,
New Delhi.
(deceased).
2) D.K. Sharma, the then
Chief Project Manager,
Al - EDAWAIYAH Project,
Iraq,
(also General Manager,
NPCC, Baroda)
(deceased).
3) B.B. GUPTA, Ex. D.G.M.
(Finance), N.P.C.C.,
New Delhi R/o Sector - 7,
Huda Complex, Civil Road,
Haryana-124001
(deceased).
CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 9 of 115
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4) N.L. Manchanda
S/o Sh. G.R. Manchanda,
the then DGM, Corporate
Office, NPCC, New Delhi,
(also Additional GM, Salal
Sector, J.K. with Hqs at
Faridabad)
R/o D-4/4054, Vasant Kunj,
New Delhi.
5) Ashok Shetty
S/o Sh. Gurupadapppa
Mahalinga Shetty,
Managing Director of
M/s. Mahalinga Shetty &
Co. Ltd., 61-62,Vishweshar
Nagar, Hubli. R/o 67, 16th
Main Judicial Layout,
G.K.V.K. Post, Bangalore.
6) Mool Chand Jain
S/o Late Sh. Amar Chand
Jain, Director of M/s.
Royal Construction Co.,
R/o 51 Malviya
Nagar, Durg, Chhatisgarh.
Date of institution : 21.04.1994
Date of decision reserved on : 28.05.2016
Date of decision : 08.06.2016
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JUDGMENT
1. Vide this judgment, I shall decide the case bearing RC No.3(A)/91-ACU(VII), registered on 30.04.91 against above named accused persons u/s 120 B IPC r/w section 5 (2) r/w section 5 (1) (d) of the Prevention of Corruption Act, 1947. The brief facts giving rise of registration of the present case as per the prosecution are given as under:-
2. The prosecution has alleged that Accused S.K. Relan (deceased), accused D.K. Sharma (deceased), accused B.B. Gupta (deceased) and accused N.L. Manchanda, all public servants had entered into a criminal conspiracy by abusing their position as public servant for causing pecuniary advantage to their co- conspirators accused Ashok Shetty and accused Mool Chand Jain by granting unauthorized, illegal, monetary concessions in contravention of the agreement executed between the NPCC and the aforesaid two associates for CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 11 of 115 12 the execution of Drainage Canal Earth Work, etc., under Bill no. 6, Irrigation Canal Work, under bill no.7 and Road Construction Work, under Bill no.14 at Iraq.
3. The Prosecution has further alleged that NPCC had secured an order for construction of earth work of AL EDAWIYAH (Land Reclamation Project) in Iraq, in the year 1982. The labour component of the said work was equally sub divided by the NPCC and entrusted M/s. Mahalinga Shetty & Co. Pvt. Ltd and M/s Royal Constructions Co. (RCC) and two separate agreements were executed in this regard on 29.06.1982.
4. The Prosecution has further alleged that the contract entered into between NPCC and accused Ashok Shetty and Mool Chand Jain was subject to various terms and conditions incorporated in the contract. Clause 73 of the contract deals with supply of machineries and equipments. As per clause 73, NPCC was required to supply four dumpers to each sub contractors free of cost. These dumpers were supplied by NPCC during the CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 12 of 115 13 period between 10.08.1982 and 05.10.1982. It was envisaged in clause 73 of the contract that for any extra equipment to be provided by NPCC to the sub contractors, the hire charges for the same would be charged.
5. The prosecution has alleged that Sh. D.R. Sikka, the then CMD and accused S.K. Relan, Director (Finance), NPCC (deceased) visited Iraq in the month of October 1982, at that time it was proposed by accused S.K. Relan (deceased) that for any extra equipment, if provided to the sub contractors by NPCC, hire charges would be recovered and the said proposal was approved by D.R. Sikka, the then CMD.
6. The Prosecution has further alleged that in November 1983 accused Ashok Shetty and Mool Chand Jain represented to accused S.K. Relan, Director (Finance) (deceased) that machinery listed at the time of agreement was for the works with normal lead, since in actual practice extra lead was involved, therefore, CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 13 of 115 14 additional dumpers provided to them, to be treated as included in the list of machinery mentioned in the agreement. The said representation was considered and accused S.K. Relan (deceased) had decided that hire charges on additional dumpers would be recovered from the two associates if they were paid for extra lead. Pursuant to this decision accused B.B. Gupta (deceased) addressed a letter dated 02.12.1983 to Sh. P.Y. Koche, the then Chief Project Manager wherein he reiterated the earlier decision of accused S.K. Relan (deceased) dated 09.10.1982 with regard to recovery of hire charges. The said letter remained unattended till 30.11.1985 and no hire charges were recovered from accused Ashok Shetty and Mool Chand Jain.
7. The Prosecution has further alleged that accused D.K. Sharma (deceased) had taken over the charge as Chief Project Manager following the transfer of his predecessor in April 1984, he wrote a letter no. 109119/Conf./2072 dated 30.11.1985 which was CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 14 of 115 15 addressed to the Director (Finance) mentioning that even if the lead payment is made to the sub contractors, hire charges on additional dumpers should not be recovered from accused Ashok Shetty and Mool Chand Jain. The said letter was processed by accused B.B. Gupta (deceased) and accused N.L. Manchanda vide their joint note dated 30.01.1986. These accused persons agreed with the recommendation of accused D.K. Sharma (deceased). This recommendation was finally approved by accused S.K. Relan (deceased) and the same was communicated by accused B.B. Gupta to accused D.K. Sharma (deceased) vide letter no. 7109403/RCC dated 12.02.1986.
8. The Prosecution has further alleged that execution of drainage canal earth work, irrigation canal work and road construction work under bill numbers 6, 7 and 14 were to be executed as per the rates incorporated in the contract. However, accused public servants had revised the rates up to 15% on the balance work to be executed CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 15 of 115 16 w.e.f. 01.10.1984 on the proposal of accused D.K. Sharma (deceased) dated 21.10.1984 which was recommended by accused B.B. Gupta (deceased) and N.L. Manchanda on 22.02.1985 and approved by accused S.K. Relan (deceased) and the said approval was communicated to the associates i.e. accused Ashok Shetty and Mool Chand Jain by accused D.K. Sharma (deceased). The accused public servants made unilateral increase in rates disproportionately thereby caused pecuniary advantage of about Rs.17,62,007/- to M/s. Mahalinga Shetty & Co. and M/s. Royal Constructions Co. and corresponding loss to NPCC.
9. After completion of investigation CBI filed charge sheet u/s 120B r/w section 5 (2) r/w section 5 (1) (d) of the Prevention of Corruption Act, 1947 and substantive offences after taking appropriate sanction from the Competent Authority as required u/s 6 (1) of the Prevention of Corruption Act, 1947 as well as u/s 188 of Cr.P.C. for prosecution of accused D.K. Sharma CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 16 of 115 17 (deceased) and accused N.L. Manchanda. Accused B.B. Gupta died before filing the charge sheet whereas accused S.K. Relan and accused D.K. Sharma have died during the pendency of the case and proceedings against them have been abated.
10. Ld. Predecessor of this Court after completing all the preliminary proceedings, heard the arguments on charge and vide order dated 13.11.2007 formed an opinion that there is no prima facie material on record against accused persons qua the allegation of 15% increase in rates because the said proposal was approved by the then CMD. However, Ld. Predecessor formed an opinion that waiver of hire charges was unauthorized and thus pleased to frame charges against accused S.K. Relan (deceased), D.K. Sharma (deceased), B.B. Gupta (deceased), N.L. Manchanda, Ashok Shetty and Mool Chand Jain u/s 120B r/w section 5 (2) r/w section 5 (1) (d) of the Prevention of Corruption Act, 1947 and for substantive CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 17 of 115 18 offences section 5 (2) r/w section 5 (1) (d) of the Prevention of Corruption Act, 1947 against accused S.K. Relan (deceased), B.B. Gupta (deceased) and N.L. Manchanda only as accused D.K. Sharma had already expired at that time.
11. In order to substantiate charges against accused persons, prosecution has examined 18 witnesses. PW-1 is Sh. S.V. Patwardhan, the then Additional General Manager, NPCC at Iraq. He exhibited Letter dated 31.12.1984 alongwith its enclosures (D-16) as Ex. PW-1/1, Letter dated 21.10.1984 alongwith its enclosures (D-15) as Ex. PW-1/2, Note sheet file (D-18) in respect of M/s. Mahalinga Shetty & Co. as Ex. PW-1/3, Letter dated 13.03.1985 (D-17) as Ex. PW-1/4 and Corrigendum dated 24.03.1985 (D-19) as Ex. PW-1/5.
12. PW-2 is Sh. P.L. Behl, the then Senior Deputy Manager (Finance), NPCC. He has exhibited Special Audit Report of ARPS unit no. IV, Iraq as Ex. PW-2/1 CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 18 of 115 19 and Special Audit Report as Ex. PW-2/2.
13. PW-3 is Sh. Rajender Pal Chopra, the then Chief Engineer (Mechanical). He has exhibited Note of Sh. P.Y. Koche, the then Chief Project Manager which was approved by accused S.K. Relan (deceased) and the then CMD as Ex. PW-3/1 (D-7) and Joint Note of accused B.B. Gupta (deceased) and N.L. Manchanda as Ex. PW-3/2 (D-5).
14. PW-4 is Sh. Harbans Lal, the then Company Secretary, NPCC. He exhibited letters related to manual of orders dated 22.03.1980, 16.04.1982 and 18.08.1989 (D-53) as Ex. PW-4/1 (colly.).
15. PW-5 is M.G. Sampatkumaran, the then Executive Engineer, NPCC. He exhibited Internal Audit Report (D-26/24) as EX. PW-5/A and entries encircled in red at page 94 of the comparative statement of internal audit as Ex. PW-5/B and Ex. PW-5/B respectively.
16. PW-6 is Sh. I. Jalhotra, the then Executive Engineer (Designs) who assisted Sh. J.K. Wadera, the then CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 19 of 115 20 Manager (Vigilance), NPCC during investigation.
17. PW-7 is Sh. S. Basak, retired AGM, NPCC. He exhibited the Agreement as Ex. PW-7/A, Letter dated 25.09.1984 (D-13) as Ex. PW-7/B (colly.), Letter dated 10.02.1987 alongwith Report as Ex. PW-7/C and Ex. PW-7/D, respectively. and Letter dated 29.12.1984 as Ex. PW-7/E.
18. PW-8 is Sh. P.L. Gaur, the then Deputy General Manager, NPCC. He exhibited Agreements dated 29.06.1982 as Ex. PW-8/1 and Ex. PW-8/2 respectively, Minutes of meeting held on 03.06.1982 as Ex. PW-8/3, office copy of audit report alongwith forwarding letter as Ex. PW-8/3.A (colly.) (D-3), special audit report and its annexures as Ex. PW-8/4 (colly.), Letter dated 16.08.1984 as Ex. PW-8/5 (D-11), Letter dated 31.08.1984 as Ex. PW-8/6 (D-12), Letter dated 15.10.1984 as Ex. PW-8/7 (D-14), Letter dated 18.12.1984 as Ex. PW-8/8, File no. 300597/ Mahalinga as Ex. PW-8/9, Letter dated 13.03.1985 as Ex. PW-8/10, CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 20 of 115 21 Letter dated 30.11.1985 as Ex. PW-8/11, Letter dated 25.11.1983 as Ex. PW-8/12 and Letter dated 02.12.1983 as Ex. PW-8/13.
19. PW-9 is Sh. K.S. Reddy, the then Sectional Officer (Mechanical) at Vizag Steel Plant. He exhibited Indent Form of Book No. 15 dated 01.09.82 as Ex. PW-9/A, Indent Form of Book No. 15 dated 01.09.82 as Ex. PW-9/B, Indent Form of Book No. 15 dated 28.08.82 as Ex. PW-9/C, Indent Form of Book No. 15 dated 28.08.82 as Ex. PW-9/D, Indent Form of Book No. 15 dated 10.08.82 as Ex. PW-9/E, Indent Form of Book No. 15 dated 10.08.82 as Ex. PW-9/F, Indent Form of Book No. 15 dated 14.08.82 as Ex. PW-9/G, Indent Form of Book No. 6 dated 05.10.82 as Ex. PW-9/H, Indent Form of Book No. 15 dated 10.08.82 as Ex. PW-9/J, Indent Form of Book No. 12 dated 08.01.84 as Ex. PW-9/K, Indent Form of Book No. 15 dated 03.08.82 as Ex. PW-9/L, Indent Form of Book No. 6 dated 01.11.82 as Ex. PW-9/M, Indent Form of Book No. 6 dated 19.09.82 as CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 21 of 115 22 Ex. PW-9/N, Indent Form of Book No. 15 dated 05.08.1982 as Ex. PW-9/P, Indent Form of Book No. 15 dated 03.08.82 as Ex. PW-9/Q, Indent Form of Book No. 1 dated 23.03.1984 as Ex. PW-9/R, Indent Form of Book No. 12 dated 13.09.83 as Ex. PW-9/S, Indent Form of Book No. 80 dated 05.03.86 as Ex. PW-9/T, Indent Form of Book No. 13 dated 23.03.84 as Ex. PW-9/U, Indent Form of Book No. 69 dated 02.01.83 as Ex. PW-9/V, Indent Form of Book No. 69 dated 06.01.83 as Ex. PW-9/W, Indent Form of Book No. 69 dated 08.01.83 as Ex. PW-9/X, Indent Form of Book No. 69 dated 08.01.83 as Ex. PW-9/Y, Indent Form of Book No. 1 dated 23.03.84 as Ex. PW-9/Z, Indent Form of Book No. 81 dated 18.08.86 / 30.08.86 as Ex. PW-9/Z1, Indent Form of Book No. 14 dated 22.04.84 as Ex. PW-9/Z2, Letter dated 24.01.84 of M/s. Mahalinga Shetty & Co. as Ex. PW-9/Z3, Log Book of MAN Dumper no.3, as Ex. PW-9/Z4, Log Book of Pocklain Hydraulic Excavator No. 3 as Ex. PW-9/Z-5, Log Book of Pocklain Hydraulic CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 22 of 115 23 Excavator No. 2 as Ex. PW-9/Z-6, Log Book of Volvo Dumper No. 8 as Ex. PW-9/Z-7, Log Book of Volvo Dumper no. 7 as Ex. PW-9/Z-8, Log Book of Volvo Dumper no. 5 as Ex. PW-9/Z-9, Log Book of Volvo Dumper no. 3 as Ex. PW-9/Z-10, Statement of PW-9 recorded during internal enquiry in NPCC dated 31.12.1987 as Ex. PW-9/Z-12.
20. PW-10 is Ashok Kumar Bhalla who remained posted as Superintending Engineer in Iraq at Al Edawiyah Project from July 1982 to 03.06.1987. He exhibited pages 8 and 9 of the Measurement Book as Ex. PW-10/A, Letter dated 16.06.87 as Ex. PW-10/B, original bills of spare parts as Ex. PW-10/B-1 to Ex. PW-10/B-23, entries at page no. 11 of Measurement Book dated 01.06.87 as Ex. PW-10/C, page no. 6 and 7 of Measurement Book dated 31.05.1987 as Ex. PW-10/E, page no. 10 of Measurement Book dated 01.06.87 as Ex. PW-10/F, letter dated 30.12.82 as Ex. PW-10/G, letter dated 31.08.85 as Ex. PW-10/H, letter CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 23 of 115 24 dated 30.12.82 as Ex. PW-10/J, letter dated 16.11.82 as Ex. PW-10/K, letter dated 17.10.82 as Ex. PW-10/L, enclosed details of repairs in Annexure as Ex. PW-10/L-1 and enclosed vouchers Ex.PW-10/L-2 to Ex. PW-10/L-23.
21. PW-11 is Sh. Purushottam Das Sharma who was posted as Accountant in Grain Silos Project, Khana Quin, Iraq from January 1981 to July 1983.
22. PW-12 is Sh. Farooq Saulat who remained posted as Senior Project Manager in Al-Edawiyah, Land Reclamation Project at Iraq from 1982 to 1986. He exhibited letter dated 27.05.1982 as Ex. PW-12/1 and letter dated 12.02.1986 (D-5) as Ex. PW-12/2.
23. PW-13 is Sh. K.P.S. Dhaka, the then Inspector in ACU-VII Branch of CBI, New Delhi who was entrusted with the investigation of this case after transfer of IO / Dy. SP Sh. K.S. Nair to SIT, CBI and filed charge sheet alongwith all its documents, sanctions etc. which he received from the earlier IO and was forwarded by the CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 24 of 115 25 then SP Sh. V.D. Maheshwari. PW-13 has exhibited charge sheet as Ex. PW-13/1.
24. PW-14 is Inspector Rajesh Kumar of Delhi Police who was posted as Inspector in CBI, AC-II Zone on deputation during period 1987 to 1992 and conducted part investigation in this case.
25. PW-15 is Sh. S.R. Sahasrabudhe, the then Commissioner, Ministry of Water Resources, Government of India and was also holding additional charge of Chairman and Managing Director of National Project Construction Corporation (NPCC) who accorded sanction for prosecution of accused D.K. Sharma (deceased) and accused N.L. Manchanda vide sanction order dated 25.03.1994 Ex. PW-15/1.
26. PW-16 is Sh. V.K. Trikha, the then Under Secretary to the Government of India. He exhibited an order as Ex. PW-16/1. Vide said order it was conveyed that a sanction order was accorded by the President of India u/s. 188 Cr.P.C.
CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 25 of 115 26
27. PW-17 is Sh. V.D. Maheshwari, retired DIG, CBI, New Delhi who was posted as SP, CBI in ACU-VII Branch during the year 1990 to 1996. PW-17 has exhibited the FIR dated 30.04.1991 as Ex. PW-17/1 which was registered under his signature on the basis of source information.
28. PW-18 is Sh. Sanjay Kher who remained posted as Junior Executive/Assistant Executive Engineer at National Project Construction Corporation Ltd. at Iraq from February 1985 till June 1989 and was looking after field civil work. PW-18 has exhibited printed page No.1 to 4 of D-21 regarding acceptance of measurement of civil work carried out by the contractor as Ex. PW18/1. He also exhibited printed pages No.5 to 7 as Ex. PW-18/2 which is abstract of bill No.14. He also exhibited pages No.11 to 22 in file (D-21) pertaining to measurement of work executed by the contractor under items No.7.03, 7.04, 7.06 & 7.07. as Ex. PW18/3 (colly.). , pages No.23 to 26, abstract of quantities pertaining to CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 26 of 115 27 items No.7.03 & 7.04 of the contract as Ex. PW18/4 (colly.)., page No.27 in file (D-21), abstract of quantities of items No.7.07 & 7.09 of the contract as Ex. PW18/5, page No.28 in file (D-21), abstract of quantities of items No.7.06 of the contract as Ex. PW18/6, pages No.29 to 32 which is a measurement of the work done by the contractor under item No.7.01 of the contract as Ex. PW18/7, pages No.33 to 35, a measurement of the work done by the contractor under item No.14.01 & 14.02 of the contract as Ex. PW18/8, pages No.36 to 38, a measurement of the work done by the contractor under item No.14.01 & 14.02 of the contract as Ex. PW18/9, pages No.39 & 40, a measurement of the work done by the contractor under item No.14.01 & 14.02 of the contract as Ex. PW18/10, pages No.41 & 42, measurement of the work done by the contractor under item No.14.01 & 14.02 of the contract as Ex. PW18/11, pages No.43 & 44, abstract of quantities of knots of the work done by the contractor under item No.14.01 & CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 27 of 115 28 14.02 of the contract as Ex. PW18/12, pages No.45 to 47, abstract of quantities of knots of the work done by the contractor under item No.14.01 & 14.02 of the contract as Ex. PW18/13, page No.48, abstract of bill No.14, prepared on the basis of above measurements and abstracts regarding the work done by the contractor under item No.14.01 & 14.02 of the contract as Ex. PW18/14, pages No.50 & 54, abstract of bill No.6 of the work done by the contractor under item No.6.03 of the contract as Ex. PW18/15, page No.56, regarding quantities of work executed by the department and not payable to the contractor/associates as Ex. PW18/16. PW-18 has also exhibited pages No.1 to 4, measurements of running account bill No.47 as Ex. PW18/17 (colly.)., pages No.5 & 6, abstract of costs of running account bill No.47 as Ex. PW18/18 (colly.)., pages No.7 to 9, abstract of quantities of running account bill No.47 as Ex. PW18/19 (colly.)., page No.10 abstract of quantities of running account bill No.47 as CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 28 of 115 29 Ex. PW18/20, pages No.12 & 13, regarding road works executed departmentally and not payable to associates as Ex. PW18/21 (colly.), pages No.14 to 24 measurement of quantities of final bill of 6, 7 & 14 (except item No.14.05) as Ex. PW18/22 (colly.), pages No.25 to 28 measurement of item No.7.03, 7.06, 7.04 & 7.07 of the contract as Ex. PW18/23 (colly.), pages No. 29 to 32 measurement of item No.7.01 of the contract as Ex. PW18/24 (colly.), page No.33 abstract of quantities of item No.7.07 & 7.09 of the contract as Ex. PW18/25, page No.34, abstract of quantities of item No.7.06 of the contract as Ex. PW18/26, pages No.35 & 36, abstract of quantities of item No.14.01 & 14.02 of the contract for final bill of 6, 7 & 14 (excepting bill No.14.05) as Ex. PW18/27 (colly.), pages No.37 & 38, abstract of quantities of item No.14.01 & 14.02 of the contract as Ex. PW18/28 (colly.), pages No.39 & 40 abstract of quantities of item No.14.01 & 14.02 of the contract as Ex. PW18/29 (colly.), pages No.41 & 42, abstract of CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 29 of 115 30 quantities of item No.14.01 & 14.02 of the contract as Ex. PW18/30 (colly.), pages No.43 & 44, abstract of quantities of knots of item No.14.01 & 14.02 of the contract as Ex. PW18/31 (colly.), pages No.45 to 47 which is abstract of quantities of knots of item No.14.01 & 14.02 of the contract as Ex. PW18/32 (colly.), page No.48, abstract of bill No.14 of the contract as Ex. PW18/33., pages No.49 to 53, abstract of bill No.6 of the contract as Ex. PW18/34 (colly.), page No.55, recovery statement as Ex. PW18/35.
29. After conclusion of prosecution evidence, statement of accused persons under section 313 Cr. P. C have been recorded. All the accused persons have denied their involvement in the commission of offence and have stated that they have been falsely implicated in this case.
30. Accused Mool Chand Jain has examined himself u/s 315 Cr.P.C. as DW-1.
31. Sh. Mohd. Shakeel, Ld. Senior PP for CBI has contended that prosecution has proved on record that CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 30 of 115 31 accused N.L. Manchanda alongwith other public servants entered into criminal conspiracy with accused Ashok Shetty and Mool Chand Jain to cause pecuniary advantage to themselves by waiving the hire charges. He further contended that by their act, accused public servants had caused pecuniary advantage to themselves and corresponding pecuniary loss to NPCC. He further contended that as per the contract NPCC was required to provide four dumpers each to accused Ashok Shetty and Mool Chand Jain free of cost but accused public servants had further provided two dumpers each to both these accused which can be given on hire basis but accused public servants in furtherance of their criminal conspiracy waived the hire charges which were to be recovered from accused Ashok Shetty and Mool Chand Jain, thus caused wrongful loss to NPCC. He further contended that prosecution has placed on record sufficient material to prove the charges framed against accused persons.
CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 31 of 115 32
32. Per contra Sh. Rajeev Chauhan, Ld. counsel for accused N.L. Manchanda argued that the contract between the parties was a labour contract wherein the associates were paid for the labour work and NPCC was required to provide machinery to execute the work in accordance with quantity / proportion of work. He further contended that PW-10 A.K. Bhalla, PW-12 Farooq Saulat and PW-9 K.S. Reddy have deposed in their testimony that NPCC was liable to provide machinery to the associates free of cost as per increased quantity of work to be executed. He has further contended that as per clause 73 of the agreement four dumpers were provided by NPCC free of cost for execution of said work i.e. excavation of 3,30,000 M3 or 3,30,000 cubic meters of earth plus 30% and transportation of it to 500 meters, however, work of excavation was increased to the tune of 17.27 lac cubic meter, the lead or distance of transportation also increased to about 7 KM, therefore in view of enormous increase in labour component of CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 32 of 115 33 work, NPCC was required to provide free of cost machinery to associates in same proportion. He further contended that accused N.L. Manchanda was having no fraudulent intention while processing note dated 30.01.1986. He further contended that there was no agreement in writing between the parties which mentions that hire charges will be taken from associates if extra machinery is provided by NPCC for extra work done by them. He further contended that accused N.L. Manchanda never visited the site and visualized the situation from office notes, therefore no dishonesty can be attributed to him. He further contended that prosecution has not placed any material to show that accused S.K. Relan (deceased) was not authorized to take decision of waiver of hire charges and only CMD can take such decision. Ld. counsel for accused N.L. Manchanda prayed that accused may be acquitted. In support of his contentions, Ld. counsel has relied upon judgments titled as "Anil Maheshwari & Ors. Vs. CBI" CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 33 of 115 34
Reported as 2013 (136) DRJ 249.
33. Sh. Jugal Wadhwa, Ld. counsel for accused Ashok Shetty and Mool Chand Jain has contended that increase of 15% was recommended vide letter dated 21.10.1984 (D-15) Ex. PW-1/2 on account of increased cost of spare parts, diesel, labour element, negative cash flow in the accounts of associates only which was approved by the CMD and conveyed through letter Ex.
PW-1/4 and corrigendum dated 24.03.1985 entered into between NPCC and RCC dated 24.04.1985 between NPCC and MCO Ex. PW-1/5. He further contended that accused Ashok Shetty and Mool Chand Jain never agreed to pay hire charges and prosecution has not placed any document which may show that they ever agreed to pay hire charges. He further contended that even recovery of hire charges was not mentioned in the final bill which has been proved by PW-18. He further contended that the Auditor prepared the Audit Report belatedly and did not consider the aspects of multi fold CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 34 of 115 35 increase in quantity of earth work and lead. He further contended that prosecution has failed to place any material on record which may show that accused Ashok Shetty and Mool Chand Jain have entered into any conspiracy with public servants. He further contended that it is a settled law that if two views are emerging from the evidence, one pointing out towards the guilt and other towards the innocence of the accused then the view favorable to the accused should be adopted. Ld. counsel for accused persons prayed that accused persons may be acquitted. In support of his plea, Ld. counsel for accused has relied upon judgments titled as "K.R. Purushothaman Vs. State of Kerala" Reported as (2006) I SCC (Cri) 686, "Subhash @ Dhillu, Mukesh @ Billu Vs. State of Haryana" Reported as III (2015) SLT 193, "Central Bureau of Investigation, Hyderabad Vs. K. Narayana Rao" Reported as (2012) 9 SCC 512, "State of Uttar Pradesh Vs. Nandu Vishwakarma and Others" Reported as (2009) 14 CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 35 of 115 36 SCC 501 and "Harijana Thirupala Vs. Public Prosecutor, High Court of A.P." Reported as AIR 2002 Supreme Court 2821.
34. I have heard Ld. Senior PP for the CBI and Ld. Defence Counsel on behalf of accused persons. I have also perused the charge sheet, documents, evidence recorded before the Court and all other material placed on record. Perusal of the above shows that accused public servants have been charged for waiving the hire charges of two additional dumpers each provided to accused Ashok Shetty and Mool Chand Jain without any authority and without the concurrence of higher authorities of NPCC in furtherance of their criminal conspiracy with private accused persons
35. The first point for consideration is as to whether the proper sanction for prosecution was accorded before initiation of prosecution against accused N.L. Manchanda or not as required u/s 6 (1) of the Prevention of Corruption Act, 1947, which is mandatory and reads CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 36 of 115 37 as under:-
"6(1).Previous Sanction necessary for prosecution:-
(1) No Court shall take cognizance of an offence punishable under sections 161 [or sec.164] or section 165 of the Indian Penal Code or under Sub Section (2) of section 5 of this Act alleged to have been committed by a public servant, except with the previous sanction.
(a) in the case of a person who is employed in connection with the affairs of the (Union) and is not removable from his office save by or with the sanction of the Central Government, (of the) Central Government;
(b) in the case of a person who is employed in connection with the affairs of [a State] and is not removable from his office save by or with sanction of the State Government, (of the) State Government;
(c) in the case of any other person, of the authority competent to remove him from his office."
36. Accused N.L. Manchanda, though has not argued CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 37 of 115 38 that proper sanction as required u/s 6 of the Prevention of Corruption Act, 1947, has not been obtained by the prosecution, however, it is mandatory for the Court to decide as to whether sanction as required u/s 6 of Prevention of Corruption Act, 1947, has been obtained by the prosecution or not.
37. It is not in dispute that accused N.L. Manchanda was working as Deputy General Manager, NPCC at New Delhi. Accused has also not disputed that he was a public servant. The prosecution has placed on record sanction order dated 25.03.1994 Ex. PW-15/1, passed by Sh. S.R. Sahsrabudhe, Chairman and Managing Director, NPCC by which sanction u/s 6 (1) (c) of the Prevention of Corruption Act, 1947 was accorded.
38. Prosecution has also placed on record sanction order accorded by the President of India as required u/s 188 Cr.P.C. Ex. PW-16/1 and was conveyed by Sh. V.K. Trikha, the then Under Secretary to the Government of India.
CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 38 of 115 39
39. The prosecution has examined PW-15 Sh. S.R. Sahasrabudhe, Chairman and Managing Director of NPCC, who was the sanctioning authority of accused N.L. Manchanda. During his examination in chief, PW-15 has deposed that he was competent to remove accused D.K. Sharma (deceased) and N.L. Manchanda. He further deposed that he passed sanction order Ex. PW-15/1 and before passing sanction order he perused the FIR, relevant documents and statement of witnesses alongwith their list and after perusal of all the above documents, he found that it is a fit case for according sanction for prosecution of above named accused persons.
40. During cross-examination PW-15 denied that he was not competent to remove accused N.L. Manchanda from his duties. He admitted that the machinery was to be provided by the NPCC but those machinery were to be of specific numbers as mentioned in the contract. He admitted that as per clause 73 of the contract the NPCC CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 39 of 115 40 was to provide four dumpers to the contractors for performing specific quantity of work. He denied that if contractor was to perform additional work which was not there in the contract then the NPCC was to provide additional dumper to the contractor without any charge.
41. A perusal of sanction order Ex. PW-15/1 clearly shows that the sanctioning authority had examined each and every aspect of the case and the material placed before it. The sanctioning authority applied its mind and found that the act complained against accused persons constitute an offence u/s 120B IPC r/w section 5 (2) r/w section 5 (1) (d) of the Prevention of Corruption Act, 1947 and thus accorded the sanction to prosecute accused N.L. Manchanda and there appears no infirmity in the sanction order.
42. The prosecution has also placed on record sanction order passed by the Hon'ble President of India u/s 188 Cr.P.C., which was conveyed by Sh. V.K. Trikha, the then Under Secretary to the Government of India, who CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 40 of 115 41 has examined as PW-16 and has duly proved the sanction order Ex. PW-16/1 by which he conveyed the sanction accorded by the Hon'ble President of India as per section 188 Cr.P.C.
43. In the material produced by the prosecution, there is nothing even remotely to suggest that the sanction orders Ex. PW-15/1 and Ex. PW-16/1 have been passed without any application of mind. Moreover accused N.L. Manchanda has not disputed the sanction so granted by the competent authority to prosecute him in this case. The prosecution has thus proved on record that competent authority has accorded sanction as required u/s 6 (1) (c) of the Prevention of Corruption Act, 1947 as well as sanction u/s 188 Cr.P.C. to prosecute accused N.L. Manchanda.
44. Before adverting to the discussion of this case, it would be useful to look at the relevant charges framed against accused persons. Accused N.L. Manchanda, Ashok Shetty and Mool Chand Jain have been charged CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 41 of 115 42 for the offence punishable u/s 120B IPC r/w section 5(2) r/w section 5(1) (d) of the Prevention of Corruption Act, 1947 and substantive offence u/s 5(2) r/w section 5(1)
(d) of the Prevention of Corruption Act, 1947. The relevant provision of section 120A of IPC which defines criminal conspiracy is reproduced as under:-
"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 s done by one or more parties to such agreement in pursuance thereof."
45. The Hon'ble Supreme Court of India in "Kehar Singh & Others Vs State" AIR 1988 SC 1883 has held that "Generally, a conspiracy is CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 42 of 115 43 hatched in secrecy and it may be difficult to adduce direct evidence of the same. The prosecution will often rely on the evidence of acts of various parties to infer that they were done in reference to their common intention. The prosecution will also more often rely upon the circumstantial evidence. The conspiracy can be undoubtedly proved by such evidence direct or circumstantial.
But the court must require whether the two persons are independently pursuing the same end or they have come together to the pursuit of the unlawful object.
The former does not render them conspirators, but the later does. It is, however, essential that the offence of conspiracy required some kind of physical manifestation or agreement the express agreement however need not be proved. Nor mutual meetings of the two persons is necessary. Nor it is necessary to prove the actual words of communication. The evidence as to transmission of thoughts sharing the unlawful design may be sufficient".
46. The above legal proposition has been reiterated by the Hon'ble Supreme Court of India in "Central Bureau CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 43 of 115 44 of Investigation, Hyderabad Vs. K. Narayana Rao" (Supra), in "K.R. Purushothaman Vs. State of Kerala" (Supra) and in "Subhash @ Dhillu, Mukesh @ Billu Vs. State of Haryana (Supra).
47. Section 5 (1) & 5 (2) of the Prevention of Corruption Act, 1947 reads as under:-
"(1) A Public servant is said to commit the offence of criminal misconduct;
(a) to (c) .........
(d) If he by corrupt or illegal means or by otherwise abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage; or
(e) ------
(2) Any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall not be less then one year but which may extend to seven years and shall also be liable to fine."CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 44 of 115 45
48. The Hon'ble Delhi High Court in "Anil Maheshwari & Ors. Vs. CBI" (Supra) has held that:-
"The definition of offence of criminal misconduct under section 13 (1) (d) of the P.C. Act shows that the pecuniary advantage or advantage of any valuable thing to himself or to the other person should be coupled by either corrupt or illegal means or abusing the position as a public servant or without any public interest. It may be noted that it is the duty of a public servant to pass orders like award of tender, claim etc.. Thus merely causing pecuniary advantage to someone will not hold the public servant liable for criminal misconduct under section 13 (1) (d) of the P.C. Act, as by awarding a tender or claim the pecuniary advantage is bound to follow. The prosecution is bound to prove that the pecuniary advantage or the valuable thing to that person was obtained either by corrupt or illegal means or by abusing the position or without any public interest. It may be further noted that the presumption under section 20 PC Act is not available for an offence of criminal CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 45 of 115 46 misconduct under section 13 (1)
(d) PC Act. In absence of proof by the prosecution of corrupt or illegal means, abuse of position or without any public interest, the prosecution cannot be said to have proved the offence under section 13 (1) (d) PC Act punishable under section 13 (2) PC Act."
49. A careful reading of the above provisions makes it absolutely clear that in order to constitute criminal conspiracy as defined u/s 120A IPC, the prosecution is required to prove that two or more persons have agreed to do or cause to be done an illegal act or an act which is not illegal by illegal means. The essence of criminal conspiracy is an agreement to do an illegal act. Such an agreement can be proved either by direct evidence or by circumstantial evidence or by both.
50. To establish the guilt of the accused u/s 5 (2) r/w section 5 (1) (d) of the Prevention of Corruption Act, 1947, the prosecution is required to establish that the accused by corrupt or illegal means or by abusing his CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 46 of 115 47 official position obtained advantage or valuable thing for himself or for any other person.
51. The prosecution has filed charge sheet against accused persons mainly on the basis of two allegations, first allegation is qua waiving of hire charges on the dumpers to be recovered from accused Ashok Shetty and Mool Chand Jain. The said waiver was proposed by accused D.K. Sharma (deceased) and recommended by accused B.B. Gupta (deceased) & accused N.L. Manchanda and approved by accused S.K. Relan (deceased) and another allegation is qua increase of rates by 15% of the balance work to be executed w.e.f. 01.10.1984.
52. Ld. Predecessor of this Court while framing charge against accused persons had observed that there is no prima facie material against accused persons qua the allegation of allowing 15% of increase in cost to accused Ashok Shetty and Mool Chand Jain on the balance work as on 01.10.84 as same was approved by the then CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 47 of 115 48 Chairman cum Managing Director.
53. The only allegation qua which charges have been framed relates qua waiving of hire charges on the additional dumpers provided to accused Ashok Shetty and Mool Chand Jain.
54. A perusal of the record shows that National Project Construction Corporation Ltd. (NPCC), New Delhi, a Government of India Undertaking, secured an order of construction work of Al Edawiyah Land Excavation Project in Iraq in the year 1982. To perform the said work, NPCC had entered into an agreement with accused Ashok Shetty Director of M/s. Mahalinga Shetty & Co. and accused Mool Chand Jain, Director of M/s. Royal Construction Company qua the labour component of the said work and for that purpose separate contract were entered into between NPCC and accused Ashok Shetty and accused Mool Chand Jain Ex. PW-8/1 and Ex. PW-8/2 respectively. These agreements are dated 29.06.82. Relevant clause of the agreement are clause CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 48 of 115 49 no. 34, 36, 73 and 75 which are reproduced as under:-
AGREEMENT Ex. PW-7/A Clause 34. Variations:- The engineer / CPM shall make any variation of the form, quality or quantity of the work of any part thereof, that may in his opinion be necessary or desirable and for that purpose, shall have power to order the Associate to do and the Associate shall do any or all of the following:-
a) Increase or decrease the quantity of any work included in the agreement.
b) Omit any such work.
c) Change the character or quality or kind of any such work.
d) Change levels, lines, positions and dimensions of any part of the works and
e) Execute additional work of any kind necessary for the completion of the works and no such variation shall in any way vitiate or invalidate the Agreement. The value (if any) of all such variations shall be taken into account in ascertaining the amount of the agreement price and its completion time.
Clause 36. Variations.
The rates indicated in section IV for various items of work will hold good for variations in quantities upto plus / minus 30% after apportioning the work (between the two CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 49 of 115 50 associates). The apportioning of the work will however, be done within three months. Clause 73. Supply of Construction Plant / Equipment.
The following equipments are likely to be made available to the Associates for the execution of the said work free of cost:-
Sl.no. Description New From
Purchase Nahar
Saad to
be
available
after
July
1982.
1. Hydraulic Excavator 2 -
1.3 M3
2. Motorized Scraper - 2
3. Dump Trucks - 4
4. Vibratory 1 1
Compactors
5. Water Tankers 1 1
6. Dozers - 1
7. Motor Graxder 1 1
8. Frontend Loader 2.5 1 -
M3 Capacity.
NB One Hydraulic Excavator and one Scraper will be kept at site for giving to the associate when necessary.
Apart from the above equipments, the following equipments will also be given, free of cost, and these machines have to be used by (both) the CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 50 of 115 51 Associates :
1. Dragline 1.3 M3 Capacity 1 no.
2. Trenching Attachment for 1 set of 3 Hydraulic Excavators. nos.
3. Dozer D-155A 1 no.
4. Diesel Bouzer 1 no.
5. Mobile Workshop 1 no.
6. Lubricating Truck 1 no.
7. Generator 150/100 KVA 1 no.
8. Theodolite 2 nos.
9. Leveling Instruments 4 nos. with requisite accessories.
Any extra amount required over and above the machines included in the list above, if required and if available with NPCC at Iraq, will be given on hire as per the rules of the Corporation -
One 40 Ton Hydraulic Crane which is available at site with NPCC will be given on hire. The hire charges will be worked out on the basis of C.W.C. Guide.
For carrying out the repairs and maintenance of the machines, the associates may purchase spare parts of the machines. In case NPCC has to arrange and procure the spares then the Associate will be charged the actual cost of spares at site of work plus 3% stock storage. The Associate shall arrange for P.O.L. and other consumables for running and maintenance of the machines. All requisite assistance for procuring the P.O.L. will be given by the corporation. Any repairs and replacement of tyres, if required, at the time of handing over, CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 51 of 115 52 the same shall be arranged by NPCC. However, in the case of replacement of tyres, the replacement will be done by NPCC within a period of 3 months if such exigencies occur during that period from the date of handing over of the machines.
The Associate shall be responsible for efficient and proper utilisation of all machines and equipments made available to them. In case any equipment is damaged or is met with an accident during the operation of this contract, the Associate shall be responsible for the proper repair of these machines. The construction plant and equipment shall be handed over by the Associate to NPCC after the completion of the work in good working order with normal wear and tear.
Clause 75. Additional Work The Associate shall accept without any claim, fresh or repeat allocation of various items of work received from the Engineer and / or the Chief Project Manager from time to time, during the implementation of the project, as per the schedule of rates as agreed in this Agreement. The specific extra items / substituted items / additional items of work shall only be admissible, if it is accepted by the Employer and / or the contractor. The rates will be worked out as based on the analysis at present market rates in Iraq. Any items of work can be deleted from the bill of quantities and / or from the scope of work of the Associate provided such portions are withdrawn by the project authorities without extra payment or any other claims whatsoever.
55. A perusal of the clause 34 & 36 shows that NPCC CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 52 of 115 53 was having its right to guard the nature of work assigned to accused Ashok Shetty and Mool Chand Jain vide this contract. The Engineer / Chief Project Manager were entitled to vary, the form, quality and quantity of the work which is necessary in their opinion. The rates agreed between the parties as per contract would remain same for the variation in quantity upto plus / minus 30% after aproportioning work.
56. Clause 73 of the contract makes it clear that the NPCC was required to provide number of machinery mentioned in clause 73 to accused Ashok Shetty and Mool Chand Jain free of charge. It is also specifically mentioned in clause 73 that for any extra machinery over and above the machines included in the list, required by accused Ashok Shetty and Mool Chand Jain and if the same are available with the NPCC at Iraq, same would be given on hire charges as per rules of the Corporation.
57. Clause 75 talks about additional work and it mandates that associates shall accept fresh or repeat CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 53 of 115 54 allocation of work received during the implementation of the work. The extra work would be admissible only when same is acceptable to the contractor and for which rates would be worked out as per the market rate.
58. The Prosecution has placed on record a note Ex. PW-3/1 (D-7) regarding requirement of additional equipments for earth work prepared by Sh. P.Y. Koche, the then Chief Project Manager of said work. Vide that note Sh. P.Y. Koche had mentioned that there was an urgent requirement of four dumpers for earth work assigned to accused Ashok Shetty and Mool Chand Jain. Said note was put up for approval before the higher authorities.
59. The note Ex. PW-3/1 of Sh. P.Y. Koche, Chief Project Manager was put up before the then Chief Engineer (Mechanical), accused S.K. Relan, Director Finance (deceased) and before the then Chief Managing Director. The 3 handwritten notes over the note of Sh. P.Y. Koche Ex. PW-3/1 (D-7) of Chief Engineer CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 54 of 115 55 (Mechanical), accused S.K. Relan (deceased) and the then CMD are reproduced as under:-
"Since the quantity of earth work involving lead have increased dumpers are necessary for transportation of excavated earth. One water tanker is also necessary for optimum moisture content as the tanker from Nahar Saad cannot be released at this stage."
dated 09.10.82 CE (M) Camp Al-Edawiyah "We may go with the purchase as proposed but the associates may be asked to pay hire charges which may be mutually settled as per agreement. Really speaking, we may get a demand from them since they had worked out the requirement for doing earth work to the extent of 8000 M3 per day."
Dated 09.10.82 "Go ahead - We have to procure at the lowest price and at the earliest proper action plan for approval. "
Dated 10.10.82 CMD.
60. The notings made by accused S.K. Relan (deceased) and the CMD, NPCC on 10.10.1982 over note Ex. PW-3/1 (D-7) clearly shows that accused S.K. Relan (deceased) himself had proposed for purchase of CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 55 of 115 56 dumpers and for recovery of hire charges if additional dumpers are provided to accused Ashok Shetty and Mool Chand Jain. Said proposal given by accused S.K. Relan (deceased) was accepted by the then CMD for purchase of dumpers as well as for recovery of hire charges qua additional dumpers provided to accused Ashok Shetty and Mool Chand Jain.
61. The prosecution has also placed on record a letter dated 25.11.1983 Ex. PW-8/12 written by accused Mool Chand Jain, Managing Director of M/s. Royal Construction Company to the Manager (Finance), NPCC. The relevant portion of the said letter is reproduced as under:-
Dear Sir, Kindly recall our meeting with the Director (Finance) in connection with the above project, where your goodself were also present. The various issues were discussed and it was decided that you would be sending a telex to the Project immediately in these connections. On some of the issues, you may be sending a detailed letter to site, however, we outline a few issues which have immediate importance, for your immediate action please:-CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 56 of 115 57
1. The machineries handed over to us were required to be in working order and the cost of the repairs required in first four months working was also to be borne by NPCC. This has not been done as per this understanding of the contract.
2. As per contract the complete machinery has not been given to us. However, some extra machinery, over and above the list, has been provided to us.
Before charging the hire charges for extra machinery, a credit for machinery not issued to us was to be given. The Project may please be be advised to give full credit first, for machinery not issued . You may also remember that it was also agreed, at the time of signing the contract that one extra dozer will also be provided to us over and above the list, without any charge. The same is to be taken as incorporated in the agreed list.
3. The machinery listed at the time of agreement was for the works with normal lead only. Since. in actual practice, extra lead is involved and therefore, additional dumpers are needed. These additional dumpers therefore are to be treated as included in the agreement list and its effect is to be given in our payments.
62. The prosecution has also placed on record the letter dated 02.12.1983 written by accused B.B. Gupta (deceased) the then Manager (Finance) to Sh. P.Y. Koche, Chief Project Manager Ex. PW-8/13. The relevant clause of the said letter is Clause (e) which is CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 57 of 115 58 reproduced as under:-
(e) Hire Charges of Dumpers.
It was explained by the two associates that machinery listed at the time of agreement was for the works with normal lead only but in actual practice lead was involved and as such additional dumpers were needed. It was requested by the two associates that additional dumpers be treated as included in the agreement list. It was agreed by Director (F) that the hire charges on dumpers would be recovered from the two Associates if they were paid extra lead.
63. A perusal of letter dated 25.11.1983 Ex. PW-8/12 and letter dated 02.12.1983 Ex. PW-8/13 shows that vide letter dated 25.11.1983 accused Mool Chand Jain requested for waiver of hire charges with respect to additional dumpers provided to them by the NPCC on the ground of increased quantity of lead. The said plea of accused Ashok Shetty and Mool Chand Jain was considered by the then Director (Finance) who recommended that hire charges on dumpers would be recovered from two associates if they were paid extra lead. Meaning thereby that Director (Finance) was of the view that if accused Ashok Shetty and Mool Chand Jain CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 58 of 115 59 were paid for the extra lead then hire charges for the additional dumpers would be recovered from them. Despite the said decision, no hire charges were either calculated or recovered from accused Ashok Shetty and Mool Chand Jain with respect to additional dumpers provided to them.
64. The prosecution has also placed on record letter dated 31.10.1984 written by accused D.K. Sharma (deceased), the then Zonal Manager to Director (Finance), NPCC. Vide said letter, accused D.K. Sharma recommended revision of rates for the remaining work to be done by accused Ashok Shetty and Mool Chand Jain by 15%. Said proposal was approved by the NPCC which was conveyed to accused D.K. Sharma (deceased), the then Zonal Manager, NPCC by accused B.B. Gupta (deceased), the then Manager (Finance) vide letter dated 13.03.1984. After approval of increase of rates, a corrigendum of the contract dated 24.03.1985 Ex. PW-1/5 (D- 19) was issued qua revision of rates and CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 59 of 115 60 regarding various other items including quantity of the excavation of earth.
65. A perusal of the corrigendum dated 24.03.1985 Ex. PW-1/5 shows that rates with respect to item number 6.03 which was earlier agreed at the rate of 0.075 per Metric Ton was increased to 0.091 per Metric Ton. It also incorporates that other terms and conditions of the contract would remain unchanged as agreed. The ramification of issuance of corrigendum Ex. PW-1/5 dated 24.03.1985 is that terms of the original contract qua the clauses mentioned in the corrigendum stood reviewed and rest of the terms and conditions of the contract Ex. PW-8/1 and Ex. PW-8/2 remained unchanged. In the corrigendum Ex. PW-1/5 there is no mention regarding the fact that NPCC was to provide additional dumpers for the increased lead to accused Ashok Shetty and Mool Chand Jain.
66. The prosecution has also placed on record letter dated 30.11.1985 Ex. PW-8/11, written by accused D.K. CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 60 of 115 61 Sharma (deceased), the then Zonal Manager to the then Director (Finance), NPCC. Clause (e) of the said letter relates to the hire charges for the additional dumpers which reads as under:-
Clause (e) Hire Charges for Dumpers:- As per the original contract documents, he transportation of only 3,30,000 Cu.M. of earth was envisaged under item 6.03. It was therefore considered that only 8 Dumpers (4 to each associate) shall be sufficient. When we started the work, it was visualized that this quantity shall increase considerably and may cross 2 Millions Cu.M. The matter was put up to the Chairman & M.D. during his visit to the unit in October 1982 and approval to purchase additional dumpers was obtained in consultation with Chief Engineer (M) & Director (Finance). However, it was decided that hire charges of these dumpers shall be recovered from the associates in case extra quantity of transportation is paid by the department. (Photocopy of note sheet enclosed.) When these eight M.A.N. Dumpers were received, 4 nos. were given to associates as replacement for 4 VOLVO Dumpers which were taken back from them and 4 nos. were given as additional machines. Till now the two associates have transported approximately 1.5 Million Cu. M. but since the payment from the Project authorities has been restricted to 3,30,000 Cu.M., we have neither paid any amount to the associates for extra quantity nor recovered hire charges of Dumpers.
As per the revised estimates done by us it is hoped that the total transportation CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 61 of 115 62 quantity under item 6.03 shall be above two million Cu.M. This quantity could only be executed with the help of the additional dumpers. Since the responsibility for providing necessary equipments to associates free of charges is of NPCC, it is felt that these additional dumpers may also be considered as provided within the agreement due to the increase in the volume of work and no hire charges may be levied for these dumpers. The operation, repairs and maintenance of the additional dumpers provided to the associates is already being carried out by them at their cost. So if any hire charges are levied these will be only to the extent of depreciation which amounts to the recovery of basic cost of the machines. As such it is recommended that even if the lead payment is made the hire charges may not be recovered from the associates.
It is anticipated that the client may agree to pay 1.5 Million Cu.M. extra quantity against item 6.03. then the payment to NPCC shall be ID 225000/- out of which an amount of approx. ID 127000/- shall be payable to associates leaving a balance of ID 98000/-. The basic cost of these 4 additional dumpers was approx. ID 65000/- which gets covered by the extra amounts earned by the Corporation. This further justifies our proposal for no recovery from the associates. It will not be out of place to mention here, that while recommending enhancement of rates we had not taken into account this extra expenditure to be incurred by the associates.
67. A perusal of Clause (e) of letter Ex. PW-8/11 (D-4) clearly shows that accused D.K. Sharma (deceased) had CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 62 of 115 63 considered the letter dated 25.11.1983 Ex. PW-8/12 (D-31) written by accused Mool Chand Jain wherein accused Mool Chand Jain made a prayer for waiver of hire charges with regard to additional dumpers. At that time accused Ashok Shetty and Mool Chand Jain were clearly told that hire charges for additional dumpers would be recovered if they were paid for the extra lead. However, vide this letter accused D.K. Sharma (deceased) had ignored all those earlier decisions and recommended that even if accused Ashok Shetty and Mool Chand Jain are paid for extra lead, hire charges may not be recovered from the associates.
68. The said letter was addressed by accused D.K. Sharma (deceased) to accused S.K. Relan (deceased), the then Director (Finance) of NPCC at the relevant time. The proposal given by accused D.K. Sharma vide his letter dated 30.11.1985 was processed by accused B.B. Gupta (deceased) and N.L. Manchanda vide their joint note dated 30.01.1986. The relevant clause of said joint CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 63 of 115 64 note is clause (e) which is reproduced as under:-
Letter Ex. PW-3/2 (D-5).
Clause (e) Hire Charges for Dumpers:- It was explained by the two PRWs during their meeting with Director (F) that machinery listed at the time of agreement was for the works with normal lead only but in actual practice lead was involved and as such additional dumpers were needed. It was requested by the two PRWs that additional Dumpers be treated as included in the agreement list. It has been intimated by the Zonal Manager, Iraq vide his letter ibid that as per original contract agreement the transportation of 3,30,000 Cu. M. of earth was envisaged. It was, therefore, considered that only eight dumpers (4 to each PRW) shall be sufficient. It was, however, visualized with the start of the work that quantity of earthwork shall increase considerably and might cross 2 Millions Cu.M. The matter was accordingly put up to the Chairman & Managing Director during his visit to the Unit in October 1982 and the approval to purchase additional dumpers in consultation with the Chief Engineer (M) and Director (F) was obtained. It was, however, decided at that time that hire charges from the associates shall be recovered in case extra quantity of transportation was paid by the department. It has further been intimated that till now the two PRWs have transported approximately 1.6 Million Cu. M. but since the payment from the project authorities has been restricted to 3,30,000/- Cu.M., the two PRWs have CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 64 of 115 65 neither been paid any amount for extra quantity nor recovery effected for the hire charges of dumpers. It has also been intimated by him that as per revised estimates the total quantity earth transported is expected to be above two million Cu.M. and that this quantity could only be executed with the help of additional dumpers. He has accordingly recommended that since the responsibility for providing necessary equipments to the two PRWs free of charge is that of NPCC it is felt that these additional dumpers may also be considered as provided within the agreement only in accordance with the volume of work and no hire charges be levied for these dumpers as operation, repairs and maintenance of the additional dumpers is already carried out by them. It has further been recommended by him that even if the lead payment is made the hire charges may not be recovered from the two PRWs. In view of the position detailed by the Zonal Manager, ARPS-4 Unit in the letter ibid, we may agree with the above.
69. A perusal of clause (e) of the joint note prepared by accused B.B. Gupta (deceased) and N.L. Manchanda clearly shows that both the accused persons had given a go by to the earlier decision of charging hire charges for additional dumpers which was approved by the then Chief Managing Director, NPCC and which was in consonance of clause 73 of the Agreement Ex. PW-8/1 CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 65 of 115 66 and Ex. PW-8/2. Vide their joint note, both the above named accused persons despite having knowledge that earlier Chief Managing Director had approved recovery of hire charges qua additional dumpers, agreed with the proposal given by accused D.K. Sharma (deceased), Zonal Manager and submitted the said proposal for approval before accused S.K. Relan (deceased). Accused S.K. Relan (deceased) being the Director (Finance) approved the said note and accused B.B. Gupta (deceased) vide his letter dated 12.02.1986 conveyed to accused D.K. Sharma (deceased) that his recommendation has been approved.
70. The proposal given by accused D.K. Sharma (deceased) was processed by accused B.B. Gupta (deceased) and N.L. Manchanda . Both these accused persons were aware that as per clause 73 of the agreement, additional dumper can be provided on hire charges basis. They were also aware about the previous decision of the then CMD qua recovery of hire charges CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 66 of 115 67 in respect of additional dumpers provided to accused Ashok Shetty and Mool Chand Jain. Despite there being a clear stipulation in clause 73 of agreement and previous decision of Chief Managing Director regarding recovery of hire charges for additional dumpers, accused B.B. Gupta (deceased) and N.L. Manchanda processed the letter written by accused D.K. Sharma (deceased) and agreed with the said proposal which was in turn approved by accused S.K. Relan (deceased) who was not competent to do so.
71. The agreement Ex. PW8/1 and Ex. PW-8/2 were entered into by the Chief Managing Director on behalf of NPCC with accused Ashok Shetty & Mool Chand Jain. The terms and conditions of the contract could be modified, waived altered or changed either by the Chief Managing Director or by the Board of Directors of NPCC. Accused S.K. Relan (deceased) was working as Director (Finance), NPCC and therefore he was not competent to vary clause 73 of the agreement qua recovery of hire CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 67 of 115 68 charges.
72. Accused S.K. Relan (deceased) was knowing fully well that he had no authority for taking such decisions. He was also aware that waiver of hire charges could be granted either by the Chief Managing Director of NPCC or by higher officers i.e. Board of Directors of NPCC. Despite the same neither accused B.B. Gupta (deceased) and N.L. Manchanda nor accused S.K. Relan (deceased) presented the joint note for approval to the Chief Managing Director of NPCC or before the Board of Directors of NPCC.
73. The decision of approval of waiver of hire charges was taken by accused S.K. Relan (deceased) in furtherance of criminal conspiracy hatched by accused D.K. Sharma (deceased), B.B. Gupta (deceased) and N.L. Manchanda, public servants with accused Ashok Shetty and Mool Chand Jain, pursuant to which pecuniary loss has been caused to NPCC and corresponding pecuniary gain to accused Ashok Shetty CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 68 of 115 69 and Mool Chand Jain.
74. Ld. counsel for the accused persons have contended that the contract between the parties was a labour contract whereby NPCC was required to provide machinery to execute the work in accordance with the quantity / proportion of work. They further contended that NPCC was liable to provide extra machinery free of cost as per increased quantity of work. To support their contention they have relied upon statement of PW-3 Sh. Rajender Pal Chopra, PW-6 Sh. I Jalhotra, PW-8 Sh. P.L. Gaur, PW-10 Sh. Ashok Kumar Bhalla, PW-12 Sh. Farooq Saulat and PW-18 Sanjay Kher.
75. Before dealing with the contention of Ld. counsel for accused persons, it would be appropriate to examine the relevant portion of the testimony of above named prosecution witnesses.
i. PW-3 Sh. Rajender Pal Chopra in his examination in chief has briefly deposed that note Ex. PW-3/1 (D-7) was CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 69 of 115 70 put up by Chief Project Manager Sh.
Koche suggesting that quantity of earth work involving lead has increased.
Dumpers are necessary for transportation of excavated earth. He has further deposed that on the said note a noting was given by accused S.K. Relan (deceased) which was approved by CMD by his noting.
ii. During cross-examination, PW-3 briefly deposed that dumpers were used to transport the excavated earth. The requirement of machines was worked out in the mechanical department. As per the note of Chief Project Manager at Iraq Ex. PW-3/1, eight dumpers were to be provided free of cost by the NPCC to the associates for the transport of excavated earth. He admitted that he alongwith accused S.K. Relan (deceased) and the then CMD of NPCC had visited the site of work at Iraq. He further stated that he had endorsed the recommendation of Chief Project Manager in 1982 taking into CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 70 of 115 71 consideration the increase in quantity of work. This proposal was approved by the Chairman & Managing Director. He admitted that initial quantity of the earth which was to be excavated and transported was 3,30,000 Cubic Meters. He further stated that he remember that earth work had increased very much but he cannot say the quantity which was increased. NPCC was required to provide additional equipment to the associates if the volume of the work had increased as compared to initial volume of work. He further stated that he does not know whether no decision was taken by CMD in the year 1982 regarding hire charges of additional dumpers. He admitted that in the year 1986 accused S.K. Relan (deceased) was the Director (Finance) and was incharge of project at Iraq. He cannot say whether accused S.K. Relan (deceased) could take all the decisions regarding the project in Iraq himself. He admitted that the decision of providing eight dumpers to the associates had CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 71 of 115 72 been taken keeping in view the original quantity of earth of 3,30,000/- cubic meters to be excavated. He admitted that because of reason of increase in earth quantity, additional number of dumpers were required to be provided to the associates but he cannot comment their numbers which can only be told by the Project Manager at the site.
iii. During cross-examination a question was put to PW-3 that in view of the increase in the quantity the provision for additional dumpers was also to be made free of costs in the spirit of the terms of agreement. In response to said question he replied that he cannot answer this question as he was not aware of the agreement.
iv. Prosecution has also examined PW-6 Sh. I. Jalhotra who briefly deposed in his examination in chief that as per agreement four dumpers were to be provided free of cost to the associates. In CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 72 of 115 73 addition to above said four dumpers, four more dumpers were provided by NPCC for carrying out the earth work with extra lead (distance) and extra scope of work. For providing any additional machinery they were supposed to charge rental but in this case NPCC has not charged any amount from the sub contractor (associates).
v. During cross-examination PW-6 briefly deposed that in a labour contract the associate is only paid by the principal for the labour work done by him and the principal has to provide necessary machinery to execute the labour work. He further stated that he cannot say whether the NPCC decided to provide additional dumpers and machinery without realizing any hire charges to the associates because of tremendous increase in earth work and war conditions in Iraq.
vi. Prosecution has also examined PW-8 Sh. P.L. Gaur who briefly deposed CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 73 of 115 74 in his examination in chief that NPCC has entered into a contract dated 29.06.1982 with M/s. Mahalinga Shetty and Co. and M/s. Royal Constructions Co., for execution of work of drainage canal earth work under bill no. 6. As per clause 73 of the minutes of meeting which relates to certain equipments which were to be provided by the NPCC to the associates for the execution of said work free of cost. He has further deposed that the special audit of the ARPS Unit no. VI was ordered to be conducted by the order dated 14.08.88, the then Chairman cum Managing Director of NPCC Sh.
V.R.K. Murty, the then General Manager (Mechanical), himself as the then Deputy General Manager (Finance) and Sh. P.L. Behl the then Deputy General Manager (Finance) were entrusted to conduct the special audit. During the special audit of ARPS Unit IV, Iraq, he was also one of the members, they found that there was loss of about Rs. 77 lacs to the NPCC Ltd. due to decision taken by the Unit. He CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 74 of 115 75 further stated that the special audit which was conducted on second time mentioned the benefits which were extended to the associates M/s Mahalinga Shetty & Co. and M/s. Royal Constructions Co. by NPCC is non-
realization of hire charges for the
additional machines and equipments
such as V Bucket and dumpers etc.
provided to the associates in addition to the equipments as provided in agreement. He further stated that total benefit of Rs. 77 lacs (conversion value of the ID at that particular time) was extended to the aforesaid associates and corresponding loss has occurred to the NPCC. It was also observed that these benefits provided to the associates beyond the terms of the agreement were not brought to the notice of the Board of Directors of NPCC who were only competent to sanction such benefits. At the time of Audit, he had gone through the aforesaid agreement (D-1) Ex.
PW-7/A. Clause 34, 36 and 73 of the said CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 75 of 115 76 agreement (D-1) Ex. PW-7/A were violated by then Project Manager of NPCC accused D.K. Sharma (deceased) and the then Director (Finance) accused S.K. Relan (deceased) and the then Director (Engineering) for approving the above said benefits without obtaining the permission of Board of Directors. He further stated that as per agreement only one set of V Bucket was to be provided to the contractors but another set of V Bucket was additionally provided on the request of the contractors which was a deviation from the contract. He further stated that in case accused D.K. Sharma (deceased) and S.K. Relan (deceased) had not violated the terms and conditions of the agreement, NPCC would not have suffered the loss caused to it.
vii. During cross-examination, PW-8 briefly deposed that total quantity of earth work was later on increased to 20,00,000 Cubic Meters. No separate agreement was executed in respect of the increased CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 76 of 115 77 quantity of the earth work and that earth work was to be executed on the basis of the existing agreement. He admitted that time period for execution of entire earth work was fixed. He also admitted that in the said agreement their was no stipulation that if the quantity of the earth work increases, then what additional measure or provisions would be made by NPCC for providing additional machineries free of cost to the associates. He admitted that no separate agreement was executed by NPCC in favour of the associates after it was found that the quantity of the earth work had increased. He further stated that the work in question was completed by the contractors in the year 1985 or 1986. He denied that there was internal rivalry between the then CMD and the Erst while CMD and the Director (Finance) because of which a false case was got registered by the NPCC with ulterior motives. He admitted that Audit Report Ex. PW-2/1 was prepared on 03.08.1989 i.e. after CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 77 of 115 78 four and a half years of completion of work by the Associates. He denied the he signed the false audit report in order to please the then CMD and his senior officers. He admitted that the contractual period was for two years between the NPCC and Associates. He admitted that said work relates to the excavation of the earth from the drain and transporting the said earth to the canal and dumping it there. He admitted that the drain from which the earth was to be excavated was a narrow drain but the canal where the earth was to be dumped was wide. The transportation of the earth from the drain to canal is known as lead. The average lead was found to be more than 1 KM approximately and it may be about 7 KMs. He further stated that extra dumpers were provided for completing the extra work in time. He further stated that he does not remember if any final decision was taken on the note dated 09.10.1982 of accused S.K. Relan (deceased) on Ex.PW-3/1. It was CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 78 of 115 79 mentioned in the agreement that extra charges would by payable by the associates in connection with the extra machinery provided to complete the increased volume of work. However, it is pointed out by accused S.K. Relan (deceased) in his note dated 09.10.1982 at point X3 on Ex. PW-3/1 that they may purchase the dumpers but the amount may be asked to be paid as hire charges as might be mutually settled as per agreement but it was not a final decision to that effect. The said note of accused S.K. Relan (deceased) was marked to CMD for final orders. He admitted that associates should also have been paid for completion of increased quantity of work for which payment has been received from Iraq government. He further admitted that accused B.B. Gupta (deceased) and N.L. Manchanda never visited the site during execution of work and they used to visualize the situation from the departmental notes. Accused S.K. Relan (deceased) was Director CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 79 of 115 80 (Finance) but he was never given any additional charge of Project Manager which is a very small post qua his designation. He further stated that note dated 10.01.1986 of accused N.L. Manchanda and accused B.B. Gupta (deceased) Ex. PW-3/2 in connection with the hire charges for dumpers was prepared after receipt of letter Ex.
PW-8/11 and the said note was
forwarded to accused S.K. Relan
(deceased). He admitted that the senior officer can accept or reject the notes of the juniors. He further stated that he does not remember if he had gone into the aspect as to whether the proportionate increase of work and time has been granted by the Iraq Government or not while conducting the audit. As per Manual of Orders of NPCC, CMD was competent to pass orders for recovery of hire charges of machinery for completion of extra work. He denied that there is no such order in the Manual of Orders in NPCC suggesting that only CMD and CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 80 of 115 81 Board of Directors only are competent to pass orders for providing hire charges for machinery for timely completion of work. The CMD and Board of Directors were aware of the fact that the Iraq work was increased in quantity and extra machineries were provided to the associates. He further admitted that Sh.
J.K. Mehra was Executive Director, NPCC, Nagpur prior becoming CMD, at that time accused S.K. Relan (deceased) was Director (Finance) in Corporate Office, NPCC, Delhi. He admitted that at that time Sh. J.K. Mehra was subordinate to accused S.K. Relan (deceased) in the hierarchy of organization. He denied that the audit reports relied upon by him in his evidence are false and manipulated documents prepared at the behest of the then CMD who had a rivalry with accused S.K. Relan (deceased). He further denied that accused N.L. Manchanda has been roped into this false case to make out a false case against accused S.K. Relan (deceased) being his subordinate.
CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 81 of 115 82
viii. Prosecution has examined Sh.
Ashok Kumar Bhalla as PW-10 who deposed in his cross-examination that the four dumpers given to each associate were not sufficient to execute the increased quantity of work. The aforesaid work could not have been completed within the stipulated period for the extended quantity of work. Keeping in view this fact, the then Chief Project Manager had recommended to provide two more dumpers to each associate. He further deposed that as it was a labour contract, in his opinion the dumpers should have been provided free of cost. He further deposed that increase of the quantity of lead came to their notice immediately after start of work. He further deposed that he cannot admit or deny whether the rates were to be increased in accordance with increase of work to be executed by the increased number of labours and due to the time factor it was natural that the rates of the contract CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 82 of 115 83 labour or other material would have also increased. He admitted that at the initial stage of the work, less earth was available from drainage canal to be transported to irrigation canal. He further admitted that at the initial stage of work the earth was to be transported to the shorter distance. It is also correct that with progress of the work, more earth was to be excavated from the drainage canal and it was to be transported to a greater distance for formation of embankment of irrigation canal. He admitted that the initial machinery which was provided to the associates by the NPCC was in accordance with the initial haulage lead. He further admitted that there was a penalty clause in the Agreement. PW-10 further stated that the contract between NPCC and the associates was a labour contract wherein the machinery was to be proved to the associates by the NPCC free of hire charges. He admitted that the increased work was an extension of this labour CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 83 of 115 84 contract. Accused S.K. Relan (deceased) and the then CMD NPCC Sh. D.R. Sikka had visited the site in October, 1982 to inspect the work. Accused N.L. Manchanda had never gone to the site in Iraq. He admitted that being the Project Incharge accused S.K. Relan (deceased) was authorized to take the final decision regarding execution of work at Iraq.
Accused N.L. Manchanda was not authorized to take such decisions. He further stated that on account of rivalry between the officials of NPCC a false case was got registered against the associates M/s. RCC and M/s.
Mahalingam Shetty & Co. in collusion with the CBI.
ix. Ld. Senior PP carried out re-
examination of PW-10. During re-
examination PW-10 deposed that when FIR was registered he was posted in Delhi office of NPCC. He had not given any complaint for registration of FIR. He volunteered that the opinion is based on CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 84 of 115 85 the fact that the team who had gone to Iraq for auditing where he was also present at that time had informed him during the auditing process that this auditing is being done only because of rivalry between CMD and Director (Finance). He was so informed by Sh.
Behel and his team members. He is related to accused N.L. Manchanda as he is his brother in law (Saadu).
x. During cross-examination conducted by Ld. counsel for accused Ashok Shetty and Mool Chand Jain, PW-10 deposed that the fact that he is co-brother of accused N.L. Manchanda was duly known to the entire department including the senior officers of NPCC including Director Finance and respective CMDs of NPCC. He joined NPCC in the year 1975. Accused N.L.Manchanda was already posted in NPCC for almost a decade prior to his joining.
xi. Prosecution has also examined CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 85 of 115 86 PW-12 Sh. Farooq Saulat who deposed in his examination in chief that financial powers for meeting out the expenses were with the Board of Directors who in turn had delegated most of the powers to CMD who could further delegate the powers to Directors, Chief General Manager, General Managers and even to the extent of Project Managers.
xii. During cross-examination PW-12
deposed that NPCC had asked the Iraq
Government for making additional
payment for the additional lead but during his tenure the said amount was not sanctioned by Iraq Government. He admitted that later on to his information the payment for additional lead was made by the Iraq Government to NPCC.
He admitted that even the four additional dumpers which were supplied to associates were inadequate to meet the earth quantity within the scheduled time. As far as he remembered during his tenure accused N.L. Manchanda had not CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 86 of 115 87 visited the site.
xiii. Prosecution has also examined Sh. Sanjay Kher as PW-18 who briefly deposed in his examination in chief that he has not mentioned about the recovery of hire charges for the dumpers which would have been supplied by the mechanical department of NPCC to the contractor if any. He volunteered that he had mentioned in the head of recovery that as per measurement book submitted by mechanical section and all other if any. The amount of recovery towards hire charges would have been mentioned by the finance department at the time of passing the bills and release of payments.
76. An examination of material placed on record by the prosecution clearly shows that the contract entered into between NPCC and accused Ashok Shetty and Mool Chand Jain was a labour contract. As per the agreement CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 87 of 115 88 Ex. PW-8/1 and Ex. PW-8/2, NPCC had engaged accused Ashok Shetty and Mool Chand Jain for the work of drainage canal earth work under bills no. 6, 7 and 14. Said contract was subject to the terms and conditions as agreed between the parties. Clause 73 of the terms and conditions contains list of equipments which were to be provided by the NPCC to accused Ashok Shetty and Mool Chand Jain for performing their work. Clause 73 also incorporates that if any extra machinery which is not included in the list is required by the associates and was available with the NPCC at Iraq, same would be given to the associates on hire charges as per rule of the Corporation.
77. Ld. defence counsel have contended that the machinery mentioned in clause 73 of the agreement were meant for initial lead of 1,65,000/- Metric Tonnes of earth to each associates. However, during the continuity of the work, the quantity of lead enhanced tremendously and for which NPCC was required to provide additional CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 88 of 115 89 dumpers for transportation of excavated earth.
78. Most of the prosecution witnesses during their examination have deposed that accused Ashok Shetty and Mool Chand Jain were required additional dumpers for the increased quantity of work. PW-10 A.K. Bhalla even expressed his opinion that even additional machinery should have been provided free of cost to the associates.
79. The NPCC had entered into an agreement Ex. PW-8/1 and Ex. PW-8/2 with accused Ashok Shetty and Mool Chand Jain. The relation between the NPCC and accused Ashok Shetty and Mool Chand Jain qua the said work would be governed as per the terms of the contract and not by the opinion of any person.
80. No doubt that initially accused Ashok Shetty and Mool Chand Jain were allocated work for excavation and transportation of 1,65,000 MT quantity of excavated earth. As per clause 36 of the contract variation up to plus minus 30% was permissible but subsequently CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 89 of 115 90 quantity of earth was increased manifold and each associate lifted the earth approximately with 8,45,450 and 8,81,740 MT respectively as mentioned in the bills Ex. PW-11/PX2 and Ex. PW-11/PX3 respectively.
81. The question is whether in view of increase in the quantity of lead, accused Ashok Shetty and Mool Chand Jain were required to be provided additional dumpers free of cost?
82. During the continuation of the work, when it was realized by the NPCC that the quantity of lead had increased manifolds then a Corrigendum of contract was entered into between NPCC and accused Ashok Shetty and Mool Chand Jain Ex. PW-1/5 (D-19) whereby rates and quantity of the work under item no. 6.03 of bill no. 6 was enhanced. Few other conditions were also modified, however, rest of the terms and conditions of the contract remained unchanged. In the corrigendum Ex. PW-1/5, no stipulation has been made that additional dumpers would be provided free of charge to the parties in view of CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 90 of 115 91 increased quantity of lead.
83. A cumulative examination of agreement Ex. PW-8/1 and Ex. PW-8/2 and Corrigendum Ex. PW-1/5 shows that NPCC was required to provide only four number of dumpers to each associate free of cost and for additional dumpers provided to accused Ashok Shetty and Mool Chand Jain, hire charges were to be recovered as per clause 73 of the contract. The corrigendum Ex. PW-1/5 clearly stipulate that other terms of the initial agreement shall remain as it is. Meaning thereby that vide corrigendum Ex. PW-1/5 only rates and quantity of the work was revised, rest of the terms of agreement Ex. PW-8/1 and Ex. PW-8/2 remained unchanged.
84. The documentary evidence placed on record by the prosecution clearly shows that the NPCC and accused Ashok Shetty and Mool Chand Jain have entered into a labour contract whereby NPCC agreed to provide specific number of equipments to accused Ashok Shetty and Mool Chand Jain for performance of labour contract CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 91 of 115 92 free of charges. As per the said agreement, if any additional machinery was required by accused Ashok Shetty and Mool Chand Jain then same could be provided to them on hire charges basis. Accused Ashok Shetty and Mool Chand Jain were provided two additional dumpers each over and above four dumpers which were provided free of charge. These additional dumpers were provided as per clause 73 of the Contract, therefore, hire charges for two additional dumpers were required to be charged from accused Ashok Shetty and Mool Chand Jain. The contention of Ld. Counsel of accused persons is that as per increased quantity of work, NPCC was liable to provide extra machinery free of charge. Said contention of Ld. defence counsel is not based upon terms and conditions of the contract entered into between NPCC and accused Ashok Shetty and Mool Chand Jain. Consequently, contention of accused persons is not sustainable and same is accordingly rejected.
CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 92 of 115 93
85. Ld. Counsel for the accused persons have further contended that note dated 09.10.1982 of accused S.K. Relan (deceased) was only considered by CMD for purchasing additional dumper and no final decision was taken by the CMD that hire charges to be recovered from associates because S.K. Relan had only made proposal, which was to be finalized in consultation with accused Ashok Shetty and Mool Chand Jain.
86. The Said contention is not sustainable for the simple reason that Sh. P.Y. Koche, Chief Project Manager vide his note Ex. PW-3/1 (D-7) recommended for supplying of additional machinery to associates for the smooth functioning. Said note was considered by accused S.K. Relan (deceased) and vide his hand written note dated 09.10.1982 he mentioned that "They may go with the purchase as proposed but the associates may be asked to pay hire charges which may be mutually settled as per agreement." After making said noting, accused S.K. Relan (deceased) put up the said note and CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 93 of 115 94 his noting before CMD who approved the same on 10.10.1982 wherein he made a remark "Go ahead". Approval given by CMD was for both the proposals i.e. for purchasing of dumpers and for charging hire charges for additional dumpers from accused Ashok Shetty and Mool Chand Jain.
87. The said proposal of accused S.K. Relan (deceased) regarding recovery of hire charges for additional dumpers which was approved by CMD, was in consonance of Clause 73 of agreement whereby NPCC was required to provide only four dumpers to accused Ashok Shetty and Mool Chand Jain and the number of dumpers which were to be provided free of charge as per clause 73 of the agreement had not increased even vide corrigendum Ex. PW-1/5.
88. Ld. Counsel for the accused further contended that there is no agreement in writing between parties to show that hire charges will be recovered from accused Ashok Shetty and Mool Chand Jain if extra machinery is CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 94 of 115 95 provided by NPCC for extra work done by them.
89. The Said contention is not sustainable for the simple reason that clause 73 of the agreement Ex.PW-8/1 and Ex. PW-8/2 remained unchanged despite execution of corrigendum Ex. PW-1/5. Clause 73 of the contract makes it absolutely clear that NPCC was required to provide four dumpers each to accused Ashok Shetty and Mool Chand Jain free of cost and additional dumpers, if any, to be provided, on hire charge basis. There was a clear agreement between NPCC and accused Ashok Shetty and Mool Chand Jain that if any additional machinery, which is not mentioned in clause 73, was requested by the associates, same would be provided to them on hire charge basis.
90. Ld. counsel for accused N.L. Manchanda has also contended that no dishonesty can be attributed to accused N.L. Manchanda who never visited Iraq and only visualized the circumstances through notes.
91. The contention of Ld. defence counsel is not CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 95 of 115 96 sustainable for the simple reason that accused N.L. Manchanda was working as Deputy Manager, NPCC, New Delhi. He was aware that NPCC had entered into a labour contract with accused Ashok Shetty and Mool Chand Jain. He was also aware that as per clause 73 of the contract, NPCC was required to provide only 4 number of dumpers to accused Ashok Shetty and Mool Chand Jain each free of cost and additional dumpers can be provided on hire charge basis. Accused N.L. Manchanda received letter written by accused D.K. Sharma (deceased) dated 30.11.85 Ex. PW-8/11 (D-4) which was processed by him alongwith accused B.B. Gupta (deceased).
92. A perusal of clause (e) of the said joint note Ex. PW-8/11 clearly shows that accused N.L. Manchanda was aware that earlier CMD had given approval for purchasing additional dumpers in consultation with Chief Engineer (Mechanical) and Director (Finance). He was also aware that CMD had approved the proposal of CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 96 of 115 97 recovery of hire charges from accused Ashok Shetty and Mool Chand Jain qua additional dumpers provided to them. Accused N.L. Manchanda was also aware that when accused Ashok Shetty and Mool Chand Jain gave representation qua waiver of hire charges pursuant to the letter written by accused Mool Chand Jain dated 25.11.1983 Ex. PW-8/12, accused S.K. Relan (deceased), the then Director (Finance) decided that hire charges would be charged from associates if they were paid for extra lead, which fact was conveyed to Sh. P.Y. Koche by accused B.B. Gupta (deceased) vide letter dated 02.12.1983 Ex. PW-8/13 (D-32). Despite knowing fully well that additional dumpers were provided to accused Ashok Shetty and Mool Chand Jain on hire charges basis as per clause 73 of the agreement Ex. PW-8/1 and Ex. PW-8/2 as well as on the basis of previous decisions approved by CMD, accused N.L. Manchanda had processed the letter Ex. PW-8/11 sent by accused D.K. Sharma (deceased) and agreed with CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 97 of 115 98 the proposal of waiver of hire charges. The concurrence given by accused B.B. Gupta (deceased) and N.L. Manchanda to the proposal of accused D.K. Sharma (deceased) qua waiver of hire charges was in violation of clause 73 of the agreement as well as previous decision taken by the CMD of NPCC.
93. Accused N.L. Manchanda was well aware that the terms and conditions of the contract Ex. PW-8/1 and Ex. PW-8/2 could be varied either by the CMD or higher officers i.e. Board of Directors, despite the same, he alongwith accused B.B. Gupta (deceased) processed the joint note dated 30.01.1986 whereby they agreed to waive the hire charges as proposed by accused D.K. Sharma (deceased) and sent the joint note for approval before accused S.K. Relan (deceased) who approved the same.
94. Accused B.B. Gupta (deceased) and N.L. Manchanda, who prepared the joint note dated 30.01.1986 Ex. PW-3/2, had not bothered to send the CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 98 of 115 99 said note for approval to CMD or Board of Directors. This fact itself shows that accused N.L. Manchanda was a part of criminal conspiracy hatched by public servants accused S.K. Relan (deceased), accused D.K. Sharma (deceased), accused B.B. Gupta (deceased) alongwith private persons accused Ashok Shetty and Mool Chand Jain for causing pecuniary advantage to accused Ashok Shetty and Mool Chand Jain and corresponding pecuniary loss to NPCC. The Contention of Ld. counsel for accused N.L. Manchanda that he was not having any dishonest intention is clearly misplaced and same is thus rejected.
95. Ld. counsel for the accused persons have also contended that prosecution has not placed any material to show that accused S.K. Relan (deceased) was not competent to take a decision for waiver of hire charges and CMD alone can take such decision.
96. The said contention of Ld. defence counsel is not sustainable for a simple reason that the contract Ex. CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 99 of 115 100 PW-8/1 and Ex. PW-8/2 was entered into by NPCC through the then CMD with accused Ashok Shetty and Mool Chand Jain. Clause 73 of the said contract makes a provision regarding providing four dumpers free of cost to accused Ashok Shetty and Mool Chand Jain and regarding recovery of hire charges for additional dumpers. Clause 73 could be varied either by the CMD, who entered into agreement with accused Ashok Shetty and Mool Chand Jain on behalf of NPCC or by the Board of Directors of NPCC. Accused S.K. Relan (deceased) was the Director (Finance) and was subordinate to CMD, therefore he was not competent to change the specific stipulation of clause 73 of the agreement.
97. It is pertinent to mention that earlier also the proposal given by accused S.K. Relan (deceased) for purchasing dumpers and recovery of hire charges from accused Ashok Shetty and Mool Chand Jain was approved by the then CMD, therefore, it is only the CMD or Board of Directors of NPCC, who could have changed CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 100 of 115 101 the previous decision of the CMD or could have varied the terms and conditions of clause 73 of the agreement. Accused S.K. Relan (deceased) who was working as Director (Finance) was not competent to approve waiver of recovery of hire charges for additional dumpers provided to accused Ashok Shetty and Mool Chand Jain.
98. Ld. counsel for accused Ashok Shetty and Mool Chand Jain has contended that accused has not given any undertaking in the indemnity bond qua payment of hire charges and no objection was raised by the NPCC at that point of time.
99. No doubt that indemnity bond given by accused Ashok Shetty and Mool Chand Jain do not have any stipulation regarding payment of hire charges qua additional dumpers. But said indemnity bond was received by the Project Manager of NPCC. Accused D.K. Sharma (deceased) who was working as Project Manager during the relevant time was well aware that additional dumpers were provided to accused Ashok CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 101 of 115 102 Shetty and Mool Chand Jain on hire charges basis. Despite the same he failed to recover hire charges from accused Ashok Shetty and Mool Chand Jain and had not raised any objection qua not incorporating any clause regarding hire charges in the indemnity bond by accused Ashok Shetty and Mool Chand Jain. Accused D.K. Sharma (deceased) had not safe guarded the interest of NPCC and acted in violation of the terms of the contract and decision which was approved by the CMD in furtherance of the conspiracy entered by all the accused persons.
100. Ld. counsel for accused Ashok Shetty and Mool Chand Jain further contended that the recovery of hire charges was merely a proposal and no decision was taken in this regard.
101. The said contention of Ld. defence counsel is not sustainable for a simple reason that as per clause 73 of the Agreement Ex. PW-8/1 and Ex. PW-8/2, there was a clear stipulation that accused Ashok Shetty and Mool CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 102 of 115 103 Chand Jain were entitled for four dumpers each free of cost and if any additional dumper is required, same would be on hire charges basis. Even the proposal given by accused S.K. Relan (deceased) on the note of Sh. P.Y. Koche, Chief Project Manager Ex. PW-3/1 (D-7) which was approved by the then CMD was qua purchase of additional dumpers and recovery of hire charges from accused Ashok Shetty and Mool Chand Jain. The said proposal was also in consonance with clause 73 of the Agreement Ex. PW-8/1 and Ex. PW-8/2, as per which, accused Ashok Shetty and Mool Chand Jain were entitled to receive only four dumpers and for additional dumpers they were to pay hire charges.
102. Ld. counsel for accused further contended that prosecution witnesses have not supported prosecution case. None of the prosecution witnesses have deposed regarding any conspiracy which raises doubt about the prosecution case.
103. The said contention is not acceptable for the simple CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 103 of 115 104 reason that the case of the prosecution is primarily based upon documentary evidence against accused persons. No doubt that PW-10 A.K. Bhalla has expressed his opinion that in his view additional dumpers should be provided free of cost but opinion of PW-10 is immaterial before a clear stipulation in the contract arrived between NPCC and accused Ashok Shetty and Mool Chand Jain whereby NPCC had agreed to provide only four dumpers to accused Ashok Shetty and Mool Chand Jain each free of charge and for any additional dumper, hire charges were to be recovered. Clause 73 of the contract remained unchanged even after execution of corrigendum Ex. PW-1/5, whereby prices of work and quantity of work both were increased.
104. Ld. counsel for the accused has also contended that prosecution has failed to prove any pecuniary advantage to accused Ashok Shetty and Mool Chand Jain as they were not paid for the work performed by them despite various requests and despite passing of award in favour CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 104 of 115 105 of accused Ashok Shetty and Mool Chand Jain.
105. The contention of Ld. Defence counsel is not sustainable for a simple reason that PW-18 has proved on record the bills raised by M/s. Mahalinga Shetty & Co. which is Ex. PW-11/PX-4. A perusal of the said bill shows that the net amount payable to M/s. Mahalinga Shetty & Co. was ID 954107.492 and the amount which was withheld in roads was Rs.12,000/-. Thus, after deducting the withheld amount, total amount payable to associates was ID 942187.492 out of which NPCC paid ID 843912.39 and only ID 98275.101 was payable on the day of preparation of said bill. Similarly, PW-18 has placed on record details of work conducted by M/s. Royal Constructions Company Ex. PW-11/PX2 (D-21). A perusal of which shows that M/s. Royal Constructions Company was entitled for net amount of ID 959486.809 out of which amount withheld in roads is Rs.12,000/-. After deducting the said amount, total amount payable to associates was ID 947406.805, out of that NPCC paid ID CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 105 of 115 106 83643.658. Thus balance amount of ID 11155.147 was due and payable by NPCC to M/s. Royal Constructions Company for which M/s. Royal Constructions Company went in Arbitration and execution is stated to be payable before Hon'ble High Court of Delhi.
106. Accused Ashok Shetty and Mool Chand Jain thus received substantial amount from NPCC and only certain amount remained due at the time of preparation of bills. Even otherwise, non receipt of the amount by accused Ashok Shetty and Mool Chand Jain from NPCC would not change the nature of the accusation. Accused Ashok Shetty and Mool Chand Jain have been charged for entering into criminal conspiracy with accused public servants whereby accused public servants have waived the hire charges which were to be recovered from accused Ashok Shetty and Mool Chand Jain without any authority and thereby caused pecuniary advantage to accused Ashok Shetty and Mool Chand Jain and corresponding pecuniary loss to NPCC. Merely that CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 106 of 115 107 accused Ashok Shetty and Mool Chand Jain have not received certain portion of amount of their bills which was due against NPCC they can not be exonerated from the consequences of their criminal act which has been done by them in furtherance of their criminal conspiracy.
107. Ld. counsel for accused Ashok Shetty and Mool Chand Jain further contended that accused Mool Chand Jain has examined himself as DW-1 under section 315 Cr.P.C.. Ld. counsel has filed certified copy of arbitration order dated 10.08.2002, order dated 26.05.2005 passed by Hon'ble High Court of Delhi, order passed by the Hon'ble Division Bench dated 19.05.2014 and order dated 24.02.2015 passed by the Hon'ble Supreme Court of India. On the basis of the above arbitration proceedings, Ld. counsel for accused Ashok Shetty and Mool Chand Jain contended that Page no.24 to 26 of the award passed by Ld. Arbitrator shows that NPCC raised a counter claim for recovery of hire charges on dumpers which was rejected by the Ld. Arbitrator. Ld. counsel CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 107 of 115 108 thus contended that NPCC was not required to recover hire charges which has been upheld by Ld. Arbitrator. Thus accused persons can not be held liable for any offence.
108. I have considered the above contention of Ld. Counsel and perused the arbitration award passed by the Ld. Arbitrator dated 10.08.02, order passed by the Hon'ble High Court dated 26.05.2008, order passed by the Hon'ble Division Bench of the Hon'ble Delhi High Court dated 09.05.2014, and the order dated 19.05.2014 passed by the Hon'ble Supreme Court of India. The relevant findings of Ld. Arbitrator which is commencing from Page no. 23 to 26 of the award are reproduced herein below:-
COUNTER CLAIM NO.1 Hire charges of equipment supplied to the claimant by the respondent corporation beyond the items of machinery / equipment stipulated in clause 73 of the conditions of the Agreement forming part of the contract between the parties.CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 108 of 115 109
The respondent relied upon clause 73 of the agreement which says that the particulars of machinery to be supplied by the respondent to the claimant for the execution of work free of cost and also any other extra equipments/machinery which will be charged. The machines/equipments included in the list set out in aforesaid clause 73 were to be given on hire charges. Under this head respondents have claimed hire charges mainly of Dozers and Dumpers. These items are in the list but counter claim for the extra machines provided to the claimant. It is admitted position by both that the quantity of work was increased. The respondent submitted that they had provided four dumpers free of cost as per clause 73 and extra two dumpers for which they claimed hire charges. Similarly claim was raised for providing extra dozer. On the other hand, the claimant submitted that though as per the agreement they were to be provided four dumpers for the original quantity of work, however later on the quantity of work was revised by letter dated 20.08.1987. The quantity was revised from 337000 cu.m. to 999000 cu.m. Therefore the quantity of work for which dumpers were to be used got increased by 196%. Such a huge increase in quantity could obviously not be covered with only four dumpers and therefore the claimant was verbally told that no hire charges would be levied for additional dumpers. The claimant further submitted that respondent had to supply four dumpers free of cost for the original quantity of work and as per revised quantity of work the numbers would have been 12 dumpers in proportion to the increase in work but they somehow managed six dumpers and completed the work in time. Therefore the respondent could not claim any hire charges for the two additional dumpers provided by them. The claimant submitted that in the same context for completing the additional CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 109 of 115 110 work the extra dozer in addition to what was provided to in the list was to be given to the two associates by the respondent. This meant that half dozer was to be supplied free of cost to the claimant and therefore the hire charges for providing half dozer were liable to be refunded.
Upon query by me the claimant stated that except for verbal orders they did not have anything in writing to produce before me from their side but to the best of their knowledge the local office at Iraq had written to the Head Office vide their letter dated 30.11.85 in which they had clearly stated that two additional dumpers free of cost may be provided to the associate / claimant for handling the increase of work. The respondent produced the said letter before me but claimed confidentiality. The claimant on his part wanted that the copy of the letter be made available to them. Arguments were addressed on the confidentiality nature of the said letter. In my order dated 08.07.2002 I disallowed the prayer of the claimant in the above respect at the same time however, holding that the same would not be construed as my having expressed any bearing on the merits of the case.
19. Coming to the letter dated 30.11.1985.
The relevant para of the letter reads as under:
"As per the revised estimates done by us it is hoped that the total transportation quantity under item 6.03 shall be above two million Cu.M. This quantity could only be executed with the help of the additional dumpers. Since the responsibility for providing necessary equipments to associates free of charges is of NPCC, it is felt that these additional dumpers may also be considered as provided within the agreement due to the increase in the volume of work and no hire charges may be levied for these dumpers. The CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 110 of 115 111 operation, repairs and maintenance of the additional dumpers provided to the associates is already being carried out by them at their cost. So if any hire charges are levied these will be only to the extent of depreciation which amounts to the recovery of basic cost of the machines. As such it is recommended that even if the lead payment is made the hire charges may not be recovered from the associates. It is anticipated that the client may agree to pay 1.5 Million Cu.M. extra quantity against item 6.03. then the payment to NPCC shall be ID 225000/- out of which an amount of approx. ID 127000/- shall be payable to associates leaving a balance of ID 98000/-. The basic cost of these 4 additional dumpers was approx. ID 65000/- which gets covered by the extra amounts earned by the Corporation. This further justifies our proposal for no recovery from the associates. It will not be out of place to mention here, that while recommending enhancement of rates we had not taken into account this extra expenditure to be incurred by the associates."
I have gone through the contents of the letters relied upon by both the parties and also carefully perused the contents of the letter dated 30.11.1985 which cannot be considered as dies non. From the above I find justification in the contention of the claimant and therefore I am in agreement with contention that hire charges could not be levied.
For the foregoing reasons I disallow the counter claim.
109. A perusal of the findings of Ld. Arbitrator shows that while deciding the counter claim of NPCC, the Ld. CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 111 of 115 112 Arbitrator had relied on the letter dated 30.11.1985 written by accused D.K. Sharma (deceased), the then Zonal Manager and on that basis the counter claim of NPCC was rejected. Vide letter dated 30.11.1985 EX. PW-8/11, accused D.K. Sharma (deceased) had recommended for waiver of hire charges which was approved by accused B.B. Gupta (deceased) and N.L Manchanda vide their joint note Ex. PW-3/2 which was finally approved by accused S.K. Relan (deceased), the then Director (Finance) vide his signature dated 31.01.1986.
110. The findings of the Ld. Arbitrator shows that NPCC had not brought into notice of Ld. Arbitrator that letter dated 30.11.85 Ex. PW-8/11 was written by accused D.K. Sharma (deceased) without any authority and same was not in consonance with clause 73 of the Agreement Ex. PW-8/1 and Ex. PW-8/2 which was sine qua none between NPCC and accused Ashok Shetty and Mool Chand Jain. If the NPCC had brought the said fact that CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 112 of 115 113 letter dated 30.11.1985 was written without any authority and had produced requisite material before the Ld. Arbitrator then the observation of the Ld. Arbitrator would have been different.
111. It is pertinent to mention that claim no.2 of accused Mool Chand Jain pertaining to illegal recovery of hire charges of plant and machinery was rejected by the Ld. Arbitrator. The relevant finding qua this claim is at page no.10 of the award in Para 7 which is reproduced herein below:-
Para 7. The learned counsel for the claimant stated that it was the admitted position as per the terms of the contract that the machinery and equipment was to be supplied by the respondent free of cost with reference to the original work. Later on, some additional work/revised quantity or work was also awarded to the claimant. Therefore for additional work also machinery should have been provided free of cost in that proportion. He further submitted that as per clause 73 of the agreement two vibrating compactors were to be supplied for the original work. Therefore deduction or hire charges for the second self vibrating compactors supplied is not justified.
On the other hand, the Ld. counsel for CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 113 of 115 114 the respondent submitted that they had the right to recover the hire charges for the "Sakai Compactors" that was an additional machine and was not in the original list as per the agreement. They relied on the letter dated 05.08.1984 (R-15) in support of their contention.
I have gone through clause 73 and also perused the letter dated 05.08.1984 and also letter dated 30.11.1985 and I find that the Sakai Compactor was an additional machine and therefore respondent was justified in levying the hire charges.
For the foregoing reasons I disallow the claim.
112. A perusal of the findings of Ld. Arbitrator qua claim no.2 of accused Mool Chand Jain clearly shows that Ld. Arbitrator had rejected the claim of waiver of hire charges on plant and machinery by invoking clause 73 of the contract whereby only specific number of machinery were required to be provided free of cost to the associates and for any additional machinery hire charges to be recovered from them. Ld. Arbitrator thus understood while rejecting claim of accused Mool Chand Jain that accused Mool Chand Jain was entitled to get CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 114 of 115 115 only specific number of machinery from NPCC as mentioned in Clause 73.
113. Counter Claim of NPCC was rejected by Ld. Arbitrator merely on the basis of letter dated 30.11.1985 whereby accused D.K. Sharma (deceased) recommended for waiver of hire charges. The NPCC had not brought into the notice of Ld. Arbitrator that letter dated 30.11.1985 Ex. PW-8/11 was written without any authority. The NPCC had also not brought to the notice of Ld. Arbitrator that the hire charges could have been waived either by the CMD of NPCC or by the Board of Directors of NPCC. All these important facts had not been brought into the notice of Ld. Arbitrator due to which their counter claim seems to have been rejected by the Ld. Arbitrator.
114. Merely that the counter claim of NPCC was rejected by the Ld. Arbitrator regarding recovery of hire charges, same would not preclude this Court from deciding whether hire charges could be waived by accused CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 115 of 115 116 public servants on the request of accused Ashok Shetty and Mool Chand Jain or not.
115. Ld. Counsel for accused has further contended that it is a well settled law that if two views are emerging one pointing towards guilt of accused persons and other towards their innocence then the view favorable to accused should be adopted. In support of his plea, Ld. Defence Counsel has relied upon Judgment titled as "Harijana Thirupala Vs. Public Prosecutor, High Court of A.P." (Supra) and "State of Uttar Pradesh Vs. Nandu Vishwakarma and Others" (Supra).
116. It is not in dispute that if two views are emerging one pointing towards guilt of accused persons and other towards their innocence then the view favorable to accused should be adopted. However, before that a Court has to form an opinion that on the basis of material placed on record two views are emerging.
117. Instant case pertains to the conspiracy hatched by public servants with accused Ashok Shetty and Mool CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 116 of 115 117 Chand Jain. The motive of the said criminal conspiracy was to waive hire charges for additional dumpers thereby causing pecuniary loss to NPCC and corresponding pecuniary gain to accused Ashok Shetty and Mool Chand Jain. The prosecution has placed on record documentary evidence i.e. contract entered into between NPCC and accused Ashok Shetty and Mool Chand Jain Ex. PW-8/1 and Ex. PW-8/2, Clause 73 of the said contract clearly stipulates that accused Ashok Shetty and Mool Chand Jain were entitled to have specific number of machinery free of cost and for any additional machinery on request, same be given to them by NPCC on hire charges basis.
118. Prosecution has also placed on record note of Sh. P.Y. Koche, Chief Project Manager Ex. PW-3/1 (D-7) whereby the Chief Project Manager recommended for providing additional dumpers, his recommendation was seconded by accused S.K. Relan (deceased) vide noting dated 09.10.1982 whereby he proposed for recovery of CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 117 of 115 118 hire charges for additional dumpers. Said proposal of accused S.K. Relan (deceased) for recovery of hire charges was approved by the then CMD.
119. Prosecution has also placed on record letter dated 02.12.1983 written by accused B.B. Gupta to P.Y. Koche wherein it is clearly mentioned that accused Ashok Shetty and Mool Chand Jain requested that additional dumpers may be treated as included in agreement list, however, it was agreed by Director (F) that the hire charges on dumpers would be recovered from the two Associates if they were paid extra lead. Despite a clear stipulation in contract regarding recovery of hire charges and decision taken by the then CMD, accused D.K. Sharma (deceased) who was posted as Project Manager in Iraq had not recovered hire charges from accused Ashok Shetty and Mool Chand Jain.
120. The prosecution has also placed on record letter dated 25.11.1983 Ex. PW-8/12 written by accused Mool Chand Jain to the then Manager (Finance) wherein CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 118 of 115 119 accused Mool Chand Jain requested that additional dumpers to be treated as included in agreement list and its effect be given on their payment. Said letter remained unattended till 30.11.1985 when accused D.K. Sharma (deceased) made a proposal on the basis of said letter of accused Mool Chand Jain for waiver of hire charges to Director (Finance). The letter dated 30.11.1985 was processed by accused B.B. Gupta (deceased) and N.L. Manchanda posted in the office of NPCC, New Delhi. Both of them agreed for waiver of hire charges despite clear stipulation in contract and despite previous decision of the then CMD.
121. The joint note prepared by accused B.B. Gupta (deceased) and N.L. Manchanda was not sent for approval either to the CMD or to the Board of Directors of NPCC, who were the only competent authority to vary the terms and conditions of clause 73 of the agreement. The said joint note was approved by accused S.K. Relan (deceased), the then Director (Finance) who was not CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 119 of 115 120 competent to vary the terms of the contract.
122. Accused S.K. Relan (deceased), Director (Finance), accused D.K. Sharma, Chief Project Manager (deceased), accused B.B. Gupta DGM (Finance) (deceased) and accused N.L. Manchanda, DGM thus acted beyond the scope of their authority and had taken a decision for which they were not competent. The said decision resulted in pecuniary gain to accused Ashok Shetty and Mool Chand Jain and pecuniary loss to NPCC. The said decision was taken on the basis of letter dated 25.03.1984 written by accused Mool Chand Jain.
123. All these facts clearly shows that the prosecution has placed sufficient documentary evidence on record to prove that accused public servants and accused Ashok Shetty and Mool Chand Jain had entered into a criminal conspiracy. The motive of the said criminal conspiracy was to waive the hire charges which NPCC was entitled to recover from accused Ashok Shetty and Mool Chand Jain for additional dumpers which were provided to CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 120 of 115 121 them. Accused public servants had not recovered the said hire charges and ultimately waived the same without any authority and thus caused pecuniary gain to accused Ashok Shetty and Mool Chand Jain and corresponding pecuniary loss to NPCC. The documents placed on record clearly point out towards the guilt of accused persons and two views are not emerging from the material produced on record, benefit of which can be given to the accused.
124. From the above discussion it is amply clear that the prosecution has proved on record that NPCC has entered into an agreement Ex. PW-8/1 and Ex. PW-8/2 with M/s. Mahalinga Shetty & Co. and M/s. Royal Constructions Co. through accused Ashok Shetty and Mool Chand Jain. Prosecution has further proved that NPCC was required to provide only four dumpers to accused Ashok Shetty and Mool Chand Jain free of cost and for additional dumpers, hire charges were to be recovered as per clause 73 of the Agreement Ex. CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 121 of 115 122 PW-8/1 and Ex. PW-8/2 as well as as per previous decision taken by the then CMD of NPCC. Prosecution has further proved on record that despite clear stipulation in the agreement Ex. PW-8/1 and Ex. PW-8/2 regarding recovery of hire charges qua additional dumpers provided to accused Ashok Shetty and Mool Chand Jain, accused S.K. Relan (deceased), accused D.K. Sharma (deceased), accused B.B. Gupta (deceased) and accused N.L. Manchanda, all public servants approved the waiver of hire charges for the additional dumpers on the basis of letter dated 25.11.1983 written by accused Mool Chand Jain without any authority and in furtherance of their criminal conspiracy with accused Ashok Shetty and Mool Chand Jain. Accused public servants thereby caused huge pecuniary advantage to accused Ashok Shetty and Mool Chand Jain and corresponding pecuniary loss to NPCC.
125. In view of the above facts and circumstances, I am of the considered view that the prosecution has CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 122 of 115 123 succeeded in proving its case beyond reasonable doubt against accused N.L. Manchanda, accused Ashok Shetty and accused Mool Chand Jain for the offences punishable u/s 120 B IPC r/w section 5 (2) r/w section 5 (1) (d) of the Prevention of Corruption Act, 1947. Hence all the accused persons are held guilty and convicted accordingly.
126. The prosecution has also succeeded in proving its case beyond reasonable doubt against accused N.L. Manchanda for the substantive offence punishable u/s 5 (2) r/w section 5 (1) (d) of the Prevention of Corruption Act, 1947. Hence accused N.L. Manchanda is held guilty and convicted accordingly.
(ANNOUNCED IN THE OPEN COURT TODAY I.E ON 08.06.2016) (PITAMBER DUTT) SPECIAL JUDGE (PC ACT)(CBI):02 TIS HAZARI COURTS, DELHI CC No.182/01 CBI Vs S.K. RELAN & OTHERS Page 123 of 115