Jharkhand High Court
Niranjan Roy @ Niranjan Rai vs The State Of Jharkhand Through ... on 27 November, 2019
Equivalent citations: AIRONLINE 2019 JHA 1082, 2020 (1) AJR 413
Author: Anant Bijay Singh
Bench: Anant Bijay Singh
1
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P. (Cr.) No 12 of 2016
Niranjan Roy @ Niranjan Rai ...... Petitioner
Versus
The State of Jharkhand through Vigilance Bureau, Jharkhand, Ranchi
...... Respondent
CORAM: HON'BLE MR. JUSTICE ANANT BIJAY SINGH
---------
For the Petitioner : Mr. Anil Kr. Sinha, Sr. Advocate Mr. Pandey Neeraj Rai, Advocate For the Vigilance : Mr. T.N. Verma, Spl. P.P ...........
C.A. V On: 04/09/2019 Pronounced on:27 /11/2019
1. The instant writ petition has been filed on behalf of the petitioner invoking jurisdiction under Article 226 and 227 of the Constitution of India, relief made in para 1 of the writ petition which are as under:
"That in this writ petition the petitioner prays for issuing appropriate writ(s)/order (s)/direction(s) quashing/setting aside the entire criminal proceeding as against the petitioner in Vigilance P.S. No. 02/2011 (giving rise to Special Case No. 02/2011, pending in the Court of the Special Judge, Vigilance, Ranchi, including the order taking cognizance dated 26.08.2015 (Annexure-3) for the offences punishable under sections 109/409/420/467/468/471/477(A)/120-B, I.P.C and section 13(2) read with section 13(1) (c) (d), Prevention of Corruption Act, 1988 as passed by Mohammad Shakir, learned Special Judge, Vigilance, Ranchi".
2. Para 2 of the writ petition reveals that petitioner had earlier moved Cr.M.P. NO. 523 of 2013 for quashing of the FI.R of Vigilance P.S. Case No. 2 of 2011 (Special Case No. 2 of 2011) and the order dated 07.02.2013 whereby warrant of arrest was ordered to be issued against the petitioner which was 2 disposed of by an order dated 21.03.2013 quashing the orders issuing arrest warrant and process under section 82 Cr.P.C and reserving liberty unto the petitioner to challenge the F.I.R separately.
3. Petitioner also preferred A.B.A. No. 1302 of 2013 which stood rejected by order dated 18.10.2013 by co-ordinate Bench of this Court.
4. Thereafter, petitioner filed W.P. (Cr.) No. 295 of 2013, for which recalled was called for which reveals that W.P.(Cr) No. 295 of 2013 was dismissed as not pressed under order dated 29.07.2019.
5. The present criminal writ petition has been filed on 18.01.2016. Thereafter the matter was listed for 19.08.2016, 02.09.2016, 23.01.2019, 19.02.2019, 03.07.2019 and under order dated 03.07.2019 status report was called from the court concerned.
6. Thereafter the matter was adjourned for 29.07.2019 and under order dated 29.07.2019 the matter was reserved but during course of dictation the matter was directed to be listed on 16.08.2019 under the heading "For Orders"
with the records of A.B.A. No. 1302 of 2013 and W.P. (Cr.) No. 295 of 2013.
7. Order dated 16.08.2019 reveals as under :
"It appears that on 29.07.2019, the matter was reserved and when the order was being dictated, para 2 of the petition revealed that W.P.(Cr.) No. 295/2013 and A.B.A. 1302 of 2013 have also been moved by the petitioner, hence the matter was directed to be listed along with aforesaid records. From perusal of record of W.P.(Cr.) No. 295/2013 it appears that under order dated 29.07.2019, W.P(Cr) No. 295 of 201913 was dismissed as not pressed. Let the record of W.P.(Cr.) NO. 295/2013 be sent to its original place.
Further, from perusal of record of A.B.A. No. 1302 of 2013, it appears that under order dated 18.10.2013, the prayer for anticipatory bail of the petitioner was rejected."3
8. Thereafter the matter was directed to be listed on 04.09.2019 under the heading "For Admission". The matter was again heard on merit.
9. The fact giving rise to the instant writ petition is as under:
"(a). That a letter no. 410, dated 30.07.2010 was written by the Secretary of Jharkhand State Electricity Board (JSEB) to the Director General of Police, Vigilance Bureau, Government of Jharkhand mentioning the subject as:
"First Information Report of malpractices and financial irregularities committed by officers of the Board in connection with APDRP project under package 'D' for Jamshedpur vide work order no. 28/APDRP-64 and 290/APDRP-64 both dated 27.01.2005.
(b). It was contended in the letter that in course of review of the pending Project of APDRP course of review of the pending cell, JSEB have detected several malpractices and financial irregularities committed by some of the officers of the Board in connection with the subject work.
It was further contended based on the noting of Shri Amar Naik, Electrical Executive Engineer, (APDRP), endorsed by Shri B.K. Jha, Electrical Superintending Engineer, and Shri Alok Kumar Ghosh , Chief Engineer (APDRP) for action to be taken against the officers of the Board for fraud, criminal conspiracy, misuse of project fund and financial irregularities. Particulars of the alleged wrong -doings have been mentioned as follows:-
(i) That Shri P.K Sinha, Electrical Executive Engineer, APDRP, placed the file to Electrical Superintending Engineer, APDRP for appointment of Arbitrator, waiver of penalty and agenda for future time extension incorporating the proposal for approval of revised Bill of Quantity.
(ii) That the proposal was contrary to the earlier decision of the Baord 4 taken by Resolution 401 that " the reasons of delay were reviewed and it was observed that the progress has been unsatisfactory. Time extension was permitted up to July, 2007 without escalation of price but with imposition of L.D .
(iii) This time extension shall be subject to review of the progress made in the next two months.
(iv) If the work is completed prior to the extended time, the L.D. deducted shall be released as incentive".
(v) That the Chairman had observed that since M/s RPCL (Contractor) has not started the work even after extension period, an Agenda may be placed in the next Board's Meeting for termination of the contract, which was criminally ignored by Shri P.K. Sinha, Electrical Executive Engineer (E.E.E), APDRP in its proposal for further time extension amounting to fraud and criminal conspiracy.
(vi) The proposal of Sri Sinha was against the decision of the Board and against the Order of the Chairman. It has been endorsed by the then E.S.E. Incharge APDRP, Sri S.C. Shrivastava indicating his complicity in this criminal conspiracy of continuing with the work despite the fact that the contractor failed to complete the work even after expiry of 30 months.
(vii) That the sole Arbitrator was appointed at the behest of Sri P.K. Sinha, Sri S.C Shrivastava and Sri Niranjan Roy, the then Director of Finance (petitioner). The sole Arbitrator published the award and as per Award, payment to the tune of Rs. 10.87 crore has already been made for which fund was not available for the project and as such, Award should have been contested in the Court.
The Award also incorporated price variation, which was not even 5 asked for in the original letter of M/s RPCL for appointment of Arbitrator .
(viii). This point could have been agitated and Award could have been contested before the Court.
(ix).Although the opinion of the Advocate General was obtained, Mr. P.K, Sinha directly placed the file with Agenda Note for approval of time extension by Central Purchase Committee (CPC) on the basis of the Award without examining the merits of the Award and its further consequences on the Project.
(x). That again based on the recommendation of the Central Purchase Committee of the Board, Mr. P.K. Sinha placed a proposal with Agenda Note to the Chief Engineer, APDRP for approval of the arbitral Award.
(xi).The then Chief Engineer, W.N.K. Horo without examining the consequences of the Award, recommended for its approval by the Board. On this basis, it was alleged that it has been prima facie evident that Shri P.K. Sinha, with malafide intention for wrongful loss to the Board deliberately hiding the fact that the implementation of the Award would have financial impact of additional 11 crores against the revised approved cost of Rs. 33.13 crores, as also the fact that no fund is available for this additional financial burden and since it was a Central Government's sponsored Project, Additional fund could be arranged only after approval of the Ministry of Power, Government of India, induced the Board for implementation of the Award.
(xii). It has been further alleged that the complicity of Shri Sinha dates back since issuance of work order where he proposed for 6 issuance of separate work order for supply and erection with a view to enable the agency to get payment separately, although the additional documents did not provide for the same.
(xiii) That financial irregularities have been committed by Board to the Agency without approval by the competent authority. The bill so processed as per Board's delegation of Power Member (Finance ) and Chairman are only authorities to make payment to contractor's bill of Rs. 3 crore and above.
(xiv).However, Shri Umesh Kumar, the then Financial Controller usurp the authorities himself and ordered for release of payment and also that file be put up for post facto approval causing great financial difficulty.
Shri P.K. Sinha, veted the Bills without examining the basis of payment i.e practically examining the physical progress of work commensurate with payment of earlier bills.
(xv) That as per per Sri Amar Nayak's note, Sri V.P Dubey and Sri Devashish Mahapatra were also responsible for financial irregularities because they should not have allowed payment under improper order of the then Financial Controller-III, Sri Umesh Kumar.
(xvi). Payment against price variation are gross financial irregularties and misuse of fund since there was no provision for payment of this amount from the project cost and no payment should have been made till the fund was arranged for separately. (xvii). That the original cost of the Project was revised leading to the total project cost becoming Rs. 33.13 crores against which the cost of work done was Rs. 19,85,08,406/- whereas actual payment made 7 to the agency is Rs. 28,90,95,479/- (including the income tax) as against gross bill of Rs, 37,87,80,485/-.
(xviii). Thus, Rs, 9,05,87,073/- has been paid in excess from the fund meant for APDRP Project under package "D' for Jamshedpur and payment of Rs, 18,02,72,079/- has been accepted which is attributable to the fraudulent act and conspiracy of Sri P.K. Sinha and Sri Umesh Kumar, the then Financial Controller-III in connivance with other officials of the Board. Based on these allegations, a request was made to investigate the matter and take suitable action against appropriate officials of the Board.
(c).That alongwith the said letter no. 410 dated 30.07.2010 the alleged notings of Sri Amar Nayak, EEE (APDRP) was enclosed, the Ist page whereof refers to the petitioner. The noting relate to the files pertaining to arbitration and payment qua the contractor. It refers to the claims of the contractor for waiver of penalty and grant of time extension. As regards the petitioner only allegatins levelled is that he gave a proposal for constituting a committee for appointment of arbitrator. Pertinently, enough the allegations about the then Chairman of the Electricity Board had given consent for arbitration, and with his permission the sole arbitrator had been appointed namely, Sri Ramayan Pandey. Save and except the same there was no other allegations made against the petitioner.
(d). That based on these letters dated 30.07.2010 and 03.09.2010, the F.I.R showing Shri S.K. Sinha, Secretary, JSEB as the informant, was registered on 20.01.2011 as Vigilance P.S. Case N. 02/2011 under sections 409/420/467/468/471/471A/120B of the Indian Penal Code and Section 13(2) read with section 13 (1) (c) (d) of the Prevention of Corruption Act.
8.That the accused originally impleaded in the F.I.R are as follows:- 8
(i).Shri P.K. Sinha, Electrical Executive Engineer;
(ii). Shri Umesh Kumar, the then Financial Controller-III;
(iii) Shri S.C Srivastava;
(iv). Sri Niranjan Roy, the then Director Finance;
(v). Sri W.N.K. Horo, Chief Engineer;
((vi) Shri V.P. Dubey, D.F.
(vii). Sri Debashish Mahapatra, D.D.A, APDRP.
(viii). Sri Sanjeev Kumar, DDA (Head-quarter) and others. Aforesaid Sri Niranjan Roy, the then Director-Finance is the petitioner herein.
10. Learned counsel for the petitioner would submit :
11. That the Vigilance Bureau after conducting investigation submitted charge-sheet vide charge-sheet no. 26/2015 27.07.2015 against the accused persons, including the petitioner alleging offences punishable under sections 109/409/420/467/468/471/477(A)/120-B, I.P.C and Section 13(2) read with Section 13(1) (C) (d), Prevention of Corruption Act, 1988.
12. That the charge-sheet in the narration of facts made in para 16 thereof, firstly refers to the contents of the contract (including time, price escalation etc).
13. Then it refers to the dispute which arose because the defaults attributed upon the contractor on one hand (including the proposed termination contemplated at some point of time by some authority) and the claims made by the contractor on the other hand.
14. Then it attributes illegally upon almost all the subsequent events, starting from opinion of AG till payments made to the contractor.
15. These factual narrations in para 16 wrongly attribute upon the petitioner, contrary to the actual contents of his noting dated 18.06.2007, that he said that earlier opinion of the AG given in the dispute of transmission wing can 9 be accepted "or" new committee can be constituted f rom members of the technical, finance and law departments.
16. By and large the factual narrations are misconceived or misleading.
17. That the charge-sheet contains separate memos of evidence set out against each of the accused. In the Memo of Evidence qua the petitioner it has been stated and mainly alleged that:-
(a). The petitioner recorded this notings at pages 38-41 and 49 of the file no. 167/APDRP. At noting page 41 the opinion of AG Jharkhand in relation to transmission wing was there which Niranjan Roy did not peruse and equated both the disputes (Dumka and Jamshepdur) and recommended to take decision on the basis of that legal opinion.
(b). He advised for appointment of arbitrator through a committee on the basis of Clause 36(a) providing for arbitration.
(c). The work and NIT conditions of transmission wing were absolutely different from those of APDRP. It was wrong and misleading to see the legal opinion obtained in relation to transmission wing in the context of APDRP Scheme.
(d). The earlier notings at page 38-41 are about slow progress of work and termination of contract. So at page 47 advice was given for appointment of arbitrator with a view to extend benefits of M/s RPCL by deliberately ignoring the order for termination of contract. The purpose for appointing the arbitrator was to pay for the bills of RPCL, which Niranjan Roy was very well aware.
18. That purportedly upon consideration of the FIR, Charge-sheet, case diary, statement of witnesses and other materials an order taking cognizance was passed on 26.08.2015 by the learned Court of Mohammad Shakir, Special Judge, Vigilance, Ranchi for the offence punishable under sections 109/409/420/467/468/471/477A/120B I.P.C. and section 13(2) read with Section 13(1) (c)(d), Prevention of Corruption Act, 10 1988.
19. That the petitioner is innocent and his implication in the impugned criminal case is vexatious and false.
20. It is apparent that the registration of F.I.R was entirely a misconceived action. The allegations made in the F.I.R and eventually in the charge-sheet are absolutely ill-conceived and undue distortion of facts, coupled with expression of misconceived and misguided opinion and inferences.
21. Upon proper appreciation of the facts alleged or the documents referred to in the allegations made, no offence can be said to be made out even prima-facie.
22. That the allegations against the petitioner accusing him of having committed an offence is grossly irrational and illegal, which can be appreciated upon bare perusal of the note-sheets in the concerned file, especially those containing the notings of Sri P.K.Sinha, EEE (APDRP), the Member (Technical), the then and the petitioner as Director (Finance), the then.
23. These notings are part of the materials gathered during investigation by the Vigilance Bureau [the Vigilance Bureau has produced the same before the Hon'ble High Court with its Counter Affidavit filed in criminal quashing application preferred by another accused-Sanjeev Kumar, the then Dy. Director Accounts (Head Quarters) as Annexure-11, 15 & 16 thereto].
Bare perusal of the above mentioned file notings would show that the notings of Sri P.K.Sinha, EEE (APDRP) dated 08.06.2007 narrated about three requests made by the contractor which were part of the file:-
C/463 -pertained to the request for appointment of arbitrator, C/452 -pertained to the request for waiver of penalty, C/454 -pertained to the request for time extension for completion of work. 11 The author of the note-Sri P.K.Sinha, EEE (APDRP) made his observations with regard to each of the requests, and finally recommended for obtaining instructions on all the three issues. The language used by him was as follows:-
"Hence, instruction may be obtained on:
(i) Appointment of an arbitrator in light of the advice of the AG, Jharkhand,
(ii) Waiver of penalty in light of the advice of the AG, Jharkhand and
(iii) Putting the agenda for furhter time extension incorporating the condition of approval or revised BOQ which could not be given till date."
24. That thereupon this note was forwarded by Superintending Engineer (APDRP) to the Member (Technical) in the following language:-
"Member/Tech Notes above Instruction is solicited on the above point, (i), (ii) & (iii) Sd/-
ESE (APDRP)"
In turn the Member (Technical), who was a superior authority to the petitioner, forwarded a note directing the petitioner to give his opinion as Director (Finance) [denoted as "D(F)"] . The language used in the note was:-
" DF Please give your opinion Sd/ GNS Munda Member (Technical)"12
The petitioner in his capacity as Director (Finance), and therefore being bound by the directions of the Member of the Board, had to comply and give his opinion. He accordingly recorded his noting as follows:-
"Order of M(T) on prev. page RPCL is doing work in Transmission as well as under APDRP Scheme. Under Transmission Scheme the case has been referred to Advocate General and he has given opinion which has been put for approval of competent authority. Under APDRP Scheme also the dispute is of similar nature. As such, it is opined that Board may follow the same solution as in the case of Transmission Scheme. If M(T) agrees with my views he may constitute a committee consisting of officers from Technical, Finance and law Dept. to suggest 3 names for the post of Arbitrator, adfter taking approval of chairman.
Sd/-
M(T) Niranajan Roy
Notes above 28/6/07
Director of Finance
JSEB
Chairman............."
Thereupon the matter went upto the Member (Technical) and then the Chairman, JSEB, who also agreed with the proposal on appointing arbitrator through a committee.
25. That obviously the petitioner did not comment anything on grant or denial of the claims of the contractor (for time extension, penalty waiver etc.). He confined himself only to the appointment of arbitrator when there is an arbitration clause, which was a mandate of law and would have to be followed regardless of the 13 merits and admissibility of the rival contentions & claims of the employer and the contractor. The petitioner's action favouring arbitration is justified in view of the following crucial aspects:-
(a) that there was an arbitration clause in the contract. The NIT-clause 36 stipulated as follows:-
"36 a). ARBITRATION Any dispute arising between the contractor and purchaser dispute will be settled as per arbitration act (latest Indian Arbitration Act).
36 b). JURISDICTION OF COURT Only Jharkhand High court Ranchi will be jurisdiction of the court."
This NIT-condition was part of the work orders which stipulated as follows:-
"INCLUSION OF TENDER DOCUMENTS All matters which are not mentioned herein will be covered by the tender documents."
These conditions became part of the agreement executed also, as:
"The work order, the purchase order, terms & conditions of tender specification and modification, will form part of this agreement."
(b) that the Board of JSEB decides and approves the terms and conditions of the tender documents/contract containing, inter alia, the arbitration clause, which 14 is an exercise done much prior to the selection of contractor, grant of contract or emergence of dispute. Petitioner had no role to play in formulation of the terms of tender/contract.
(c) that the existence of arbitration clause binds the contracting parties, including the JSEB so much so that if one of the parties would commit default in acting towards appointment of arbitrator then the law is that the same would be made by the Hon'ble Chief Justice of the Hon'ble High Court or His designate (under section 11 of the Arbitration & Conciliation Act).
(d) that the existence of arbitration clause excludes the jurisdiction in civil suits and/or of the ordinary courts.
(e) that note-sheet received by the petitioner did refer to those claims of the contractor which were related to the contract; and as such a "dispute" was existing within the meaning and sweep of the arbitration clause.
(f) that the petitioner's opinion had been solicited by the Member (Technical) of the Board. As per the Rules of Executive Business of the Electricity Board the Member Technical/Engineering is the Principal Executive of the Engineering functions of the Board [Rule 6 of the Bihar State Electricity Board (Conduct of Business) Regulations, 1973.
(g) Petitioner was merely an employee of the Board. Every Member has the authority with respect to Board's affairs to ask a thing from any employee and the employee is bound to reply.
(h) The petitioner was asked to give his opinion while he was the senior-most Officer in the Finance Department and held the post of Director (Finance).
(i) That in such circumstances, it was the bounden legal duty of the petitioner, or any one faced with such a proposal, to recommend for arbitration; and on the contrary had the recourse to arbitration been impeded or hindrance been 15 caused to with, it would have been a wrong as being in defiance to the statutory regime.
(j) The Memo of Evidence in the charge-sheet arbitrarily comments at para 4 that the advice was given to appoint arbitrator ignoring the earlier note given about slow pace of work by the contractor.
(k) Here the Vigilance Bureau has grossly failed to appreciate that at that time when arbitration clause had been invoked by the contractor there was no occasion for making comments on contractor's performance, which in turn would tantamount to touching the merits of the claim otherwise fit for being settled in the arbitration.
(l) Termination or no termination was irrelevant, because even if it would be made, the dispute for arbitration nevertheless would remain. Therefore, it would make no difference to the arbitrator-appointment matter. The further comments made in the Memo of Evidence that the main aim of appointing arbitrator was to cause benefit to the contractor is a fanciful and ill-conceived claim of the I.O./Vigilance Bureau.
(m) It impliedly amounts to making allegations against the Arbitrator and attributing petitioner's meeting of mind with him, which is absolutely beyond any basis; that too when the arbitrator was shortlisted and nominated by other persons who are not accused in the case.
(n) There is also no basis and it is patently perverse to say that Niranjan Roy was aware of the fact that the main purpose of appointing arbitrator was to make payment to the contractor.
(o) that the petitioner has not recommended for any particular person to be appointed as Arbitrator; rather his action was most justified and fair because he recommended to constitute a committee for suggesting the names for the post of arbitrator, that too, to be made after taking the Chairman's approval. 16
(p) that constitution of committee, as suggested by him was also most reasonable, namely an officer each from the Technical, Finance and Law Departments of JSEB.
(q) Thus, the petitioner has not committed any wrong; rather has discharged his legal duty.
(r) that in any case, placing reliance , if any, or making a reference to the said opinion of the learned Advocate General should be considered to be most reasonable a conduct, because regardless of the similarity or dissimilarity between the other terms and conditions of the two contracts (Transmission and APDRP), fact remains that there were same arbitration clauses in both, because of which arbitration would have to be resorted to in either in either case, be it as per the opinion of the Advocate General or the own individual opinion of the petitioner as an officer of the Board, i.e. Director (Finance),- reasonably informed in law and having due respect for law.
(s) The difference, if any, in other terms and conditions of the two contracts are inconsequential as they are concerned with the merits.
(t) Therefore the comment in para 3 of the Memo of Evidence in the charge- sheet to the effect that the legal opinion given for the work of Transmission wing should not have been seen in the matter of APDRP , or that to do so was wrong or misleading, is by itself misconceived and misleading an exercise on part of the I.O.
(u) that once it is accepted that the petitioner's action was legally correct, the fact that he also relied upon the Advocate General's opinion in relation to another contract under Transmission Scheme, be it relating to the same or another contractor, becomes merely incidental and assumes a back-seat.
(v) that the petitioner had no role to play in the decision making on choosing the name of the arbitrator to be appointed or the correctness of the award 17 delivered by him, and they are separate questions to be decided as per separate legal provisions.
It is pertinent to mention here that by letter no.349 dated 14.08.2007 the Chief Engineer (APDRP) informed to the contractor the names of three former judicial officers selected by the committee for appointment of sole arbitrator. Incidentally, the contractor agreed on one of those names and thus the arbitrator was appointed, which is a matter unconcerned with the petitioner. (w) that the I.O. has, in recording his findings in para 5 and 6 of the Memo of Evidence relied upon the opinions of some officers of the Board with no basis to show as to how their opinions or report could bind the I.O. It shows non- application of independent mind on part of the I.O. and him acting on extraneous considerations.
26. That rest of the observations made in para 6 of the Memo of Evidence are pertaining to the merits of contractor's entitlement to the payment made and as to implementation of the arbitral award, which the petitioner is not concerned with. These observations are ill-conceived and misplaced, and ill- designed to mislead.
27. That an accusation of criminal nature made in lieu of merely recommending for forming a committee for nomination/appointment of arbitrator is in gross abuse of process of law and process of court.
28. The same is repugnant to the legislative intent as reflected in, amongst others, sections 8 & 11 of the Arbitration & Conciliation Act, 1996 or section 89, C.P.C. The importance of arbitration has been recognized by the Hon'ble Supreme Court in the following words [In AIR 2001 SC 626 : Executive Engineer, D.M.I. Divn. -v/s- N.C. Budhraj (Constitution Bench)]:-
"46. ........................... Many a time while suit is pending for adjudication before a court, the court with the consent of the 18 parties, refers the dispute to arbitration. On account of the growth in the international trade and commerce and also on account of long delays occurring in the disposal of suits and appeals in courts, there has been tremendous movement towards the resolution of disputes through alternative forum of arbitrators. The alternative method of settlement of dispute through arbitration is a speedy and convenient process, which is being followed throughout the world. In India since ancient days settlement of disputes by Panches has been a common process for resolution of disputes in an informal manner. But now arbitration is regulated by statutory provisions.
47. If that be the position, Courts which of late encourage litigants to opt for and avail disputes, would be penalizing or placing those who avail of the same in a serious disadvantage...................By agreeing to have settlement of disputes through arbitration, the party concerned must be understood to have only opted for a different forum of adjudication with less cumbersome procedure, delay and expense and not to abandon all or any of his substantive rights under the various laws in force, according to which only even the arbitrator is obliged to adjudicate the claims referred to him."
More emphasis on favouring arbitrations is reflected in the following observations made while construing arbitration clause in the case reported in: Renusagar Power Co. Ltd. -V/s- General Electric Company and another: (1984) 4 SCC 679, the Hon'ble Supreme Court has held:-
"In our opinion, it is the substance of the claim made before arbitrators which has to be seen. The court would not construe the 19 nature of claim by adopting too technical an approach or by indulging into hair-splitting. Else the whole purpose behind holding arbitration proceedings as an alternate to civil court's forum would stand defeated."
With the enforcement of Arbitration & Conciliation Act, 1996, various changes have been brought in the earlier arbitration law, specially aiming at reducing hurdles in commencement, conduct or challenge-procedure.
29. So much so that courts' interferences have been minimized paving way for the intention of the contracting parties to go for arbitration.
30. In the event of any vagueness or possibility of two views, presumption should lean in favour of construction favouring arbitration rather avoiding it. The petitioner's action, seen from this view-point, can never be said to be faulty.
31. That in such facts and circumstances attributing commission of any wrong or crime by the petitioner is completely wrong, misconceived and irrational.
32. The ingredients of the offences alleged are not at all made out as against the petitioner and his implication is clearly malafide, illegal and arbitrary..
33. That the manner in which the Vigilance Bureau has proceeded in the matter and the kind of stand taken by them in respect of the allegations leveled, clearly shows lack of due competence and fairness on the part of the investigating agency. This is why the Hon'ble Division Bench of Jharkhand High Court in C.W.J.C. No.1793/2001 and other analogous cases had passed an order on 28.03.2011 directing that the affairs relating to the Electricity Board, including APDRP scheme should be subjected to CBI and not to the Vigilance Bureau- a State's investigating agency. In para-26, the Hon'ble Court made observations as:-
"It seems that the State Police is not in a position to conduct fair and impartial investigation as very influential and senior 20 bureaucrats of the State may be involved, may have nexus with big industrialists. It is more than a prima-facie case and in view of the above facts and figures, this Court feels that it is appropriate to hand over investigation in this matter to the specialized agency C.B.I. in the public interest."
At para-31, the Hon'ble Division Bench observed:
"If need be and if it is found by the C.B.I. that criminality is involved, they will register proper F.I.R. against the concerned."
The fact that amongst others the implementation of APDRP Scheme was also under consideration before the Hon'ble Division Bench while noticing the offending or malafide actions of those connected with JSEB can be appreciated from the following narrations as contained in the order at para-21:
"From the perusal of the orders, direction and observations passed by this Court on various occasions, it is manifest that since the creation of State of Jharkhand and the Jharkhand State Electricity Board, they have totally failed to perform their duties towards the supply of electricity to the public.............Undisputedly, it is the statutory duty of the State of Jharkhand and the Board to generate and/or purchase electricity and ensure uninterrupted supply to the consumers.................. A further sum of Rs.600 crores has been given by the Central Government under Accelerated Power Development Reforms Programme (APDRP) to the JSEB from 2006 onwards to strengthen the transmission systerm. But the object of reducing the Transmission and Distribution losses has not been achieved despite receipt of huge amount."21
34. That pursuant to this order of the Hon'ble High Court, the C.B.I. proceeded in the matter and exchanged correspondences with other relevant authorities. In this connection, Mr. S.K. Sinha, Secretary, JSEB (the Informant of the Vigilance P.S. Case No. 02/2011) wrote letter No. 274, dated 11.04.2011 to Shri R.C. Choudhary, Superintendent of Police, C.B.I., AHD, Ranchi with the following caption:
"Preliminary enquiry no. 01/2011 dated 09.04.2011 - direction of the Hon'ble Jharkhand High Court regarding matters of JSEB".
In the said letter, enclosing copies of cases filed by the J.S.E.B. with the State Vigilance and all the reports sent to the State Government to inquire in the matter involving malfeasance, corruption and serious irregularities, it was stated that:
"In view of para-21 and 26 of the Hon'ble High Court's orders, C.B.I. may also like to inquire into all the cases relating to ... ... ... and Accelerate Power Development and Reforms Programme."
35. That so far as the representations made to the CBI are concerned, it appears from the letter dated 12.09.2011 written from the office of Sr. S.P., C.B.I. to the Chairman, JSEB that C.B.I. looked into the complaints received from the accused persons about a false case having been lodged against them and others in the State Vigilance Bureau vide F.I.R. No. 02/2011, for payment of price escalation to M/s. RPCL pertaining to APDRP Jamshedpur Project on the basis of Arbitration Award supported by the opinion of the learned Advocate General and approval of Central Purchase Committee (CPC) as well as approval of the Board of JSEB..
36. That it has been stated in the said letter that these accused requested the CBI to take up case from State Vigilance Bureau for impartial and fair justice.
Reference was also made to the letter no. 274, dated 11.04.2011 of the Secretary, J.S.E.B.-Shri S.K. Sinha (informant of Vigilance P.S. Case No. 02/2011) 22 requesting CBI to take over all the cases including the aforesaid case in view of para-21 and 26, dated 28.03.2011.
It has been further submitted in the letter that in view of the aforesaid, the CBI did narrate and scrutinize the records available in the Vigilance Court as well as with the Vigilance Department and with the JSEB. The result of aforesaid scrutiny has been reflected in the following language:-
"The Scrutiny revealed that the FIR alleged illegal payments to M/s. RPCL for price escalation. Subsequent reports of the Finance Controller forwarded by Sri S.K. Sinha, Secretary, JSEB vide his letter no. 240 date 24.03.2011 to Vigilance department however revealed that the payments in question, pursuant to the Arbitral Awards are proper and bonafide, leaving no scope for further investigation or enquiry. It also appears from the report aforesaid that Finance, Vigilance or Legal department of JSEB were not consulted at the time of lodging the FIR.
It is, therefore, requested to kindly provide us the copy of enquiry reports/ inputs of the Finance, Vigilance and Legal Departments of JSEB, if any, available on the records of the Board, on the basis of which the instant FIR was lodged with the State Vigilance Bureau."
Upon these categorical and vital observations, the CBI requested for being furnished with copies of the enquiry reports, inputs of the Finance, Vigilance and Legal Departments of JSEB, if any, available with the records of the case, on the basis of which the FIR had been lodged in the State Vigilance Bureau.
It is humbly stated that the aforesaid documents were demanded by the CBI with a view to further examine the causes and the elements responsible behind the lodgment of a false case in the form of Vigilance P.S. Case No. 23 02/2011.
37. That in reply the Joint Secretary of the Electricity Board forwarded the documents to CBI through alongwith a covering letter no.502 dated 20.10.2011.
38. That upon further enquiry, CBI, by its letter dated 16.11.2011 issued from the office of the Sr. Superintendent of Police, CBI to the Chairman, JSEB, by discussing the contents and purports of the record made available to it, made the following vital observations.
"It appears that neither the Finance Department of the board has been consulted nor any internal enquiry was made before lodging the complaint to State Vigilance Bureau. Enquiries made after lodging the complaint aforesaid, however, clarified that the release of alleged payments were proper and bonafide which is evident from the letter no. 240 dated 24.03.2011 addressed to the State Vigilance Bureau by the Secretary of the Board.
Further from the notes of Shri Amar Nayak, EEE (APDRP) dated 07.08.2010 and Shri S.K. Sinha, Secretary dated 31.07.2010 the board was not sure if the alleged payments were irregular or illegal and the complaint to State Vigilance Bureau was filed on 30.07.2010 in haste. Copies of the notes aforesaid are also enclosed for ready reference.
It is therefore requested to kindly seek clarification from the concerned officers of APDRP Cell who lodged the false complaint against the executives of the board to pin point the allegations if they have any and send them to us for taking follow up action at our end."
39. Learned counsel for the petitioner has submitted that the relief as sought 24 for in para 1 of the writ petition is fit to be allowed and the writ petition is also liable to be allowed.
40. A counter-affidavit has been filed on behalf of the respondent-Vigilance Department stating therein as under:
"(A). The JSEB issued notice inviting tender (hereinafter called NIT) No. 186/PR/JSEB/03 for work under the Accelerated Power Development and Reforms Programme (hereinafter called APDRP), package 'D' for Jamshedpur town. In the tender documents of aforesaid NIT, under Clause 15, it had been clearly stated that " This is a targeted work and time is the essence of contract".
Under para 1.3.2 © of Chapter III of the aforesaid tender documents it had further been clearly and explicitly stated as follows: Prince quoted by the bidder shall be firm during the completion of the project and shall not be subjected to variation on any account.
41. No escalation in prices shall be admissible on any account to the bidder.
42. The same was reiterated in terms of Claus 08 of work order no, 28/APDRP-64 (Supply contract) (Annexure-3) and Clause 07 of work order no. 29/APDRP -645 (Election Contract) (Annexure-4) both dated 27.01.2005 issued by JSEB in favour of M/s RPCL under aforesaid NIT NO. 186/PR/JSED/03 and in terms of Clause 1(b) and 1(c) of aforesaid work orders.
43. The same was reiterated again in terms of Agreement No. JBC/APDRP 43/04-5 and JBC/APDRP/44/04-05 both dated 10.02.2005 between JSEB and M/s RPC, a amended by two corresponding Corrigendum Agreements between JSEB and M/s RPCL.
44. Thus, under the provisions of the aforesaid Tender Documents, work orders and agreements, time was the essence of contract and there was a clear, explicit and express prohibition against any price or statutory variation on any 25 account whatsoever.
45. RPCL could not execute the work by the due date i.e 26.09.2005 and through its letters dated 02.08.2005 and 27.02.2006 requested JSEB for time extension.
Meanwhile, due to unsatisfactory work, the Electrical Superintending Engineer-cum-Chief Executive Officer, Jamshedpur, JSEB issued a Notice thrugh his letter no. 579/ESE/JSR dated 13.03.2006 to RPCL for termination of contract.
JSEB allowed time extension for completion of work from 26.09.2005 to 31.07.2007 vide resolution no. 401 the relevant portion of which reads as follows" The reasons of delay were reviewed and it was observed that progress had been unsatisfactory. Time extension was permitted up to July 2007 without escalation of price but with imposition of LD (Liquidated Damages).
A tripartite meeting was held on 06.02.2007 and 07.02.2007 between RPCL, and officials of JSEB and the consultant Rail India Technical & Economics Services LTD (RITES) in which it was agreed as follows:" M/s RPCL agreed that they will apply their full efforts to complete the project so that it may be completed within extended period i.e July 07 instead of going for arbitration /court of law."
46. Even after the time extension granted by JSEB up to 31.07.2007, RPCL did not start the work. In meeting held on 21.12.2006 in the office of the then Chairman, JSEB, it was reported that RPCL did not stat work even after extension of time period.
47. The then Chairman, JSEB directed Chief Engineer, APDRP to put up agenda for termination of contract of M/s RPCL for the next meeting of the Board of JSEB.
48. The then CE, APDRP complied with the instruction and put up draft agenda accordingly through his note dated 27.12.2006 to the then Member 26 (Technical), JSEBG.
49. In the aforesaid circumstances, the aforesaid contracts should have been terminated in accordance with the aforesaid instruction dated 21.12.2006 of the then Chairman, JSEB and such termination would have been fully justified and legally valid. Had the agenda submitted through the aforesaid note dated 27.12.2006 of the then CE, APDRP on aforesaid instruction of the then Chairman, JSEB been put up to the Board of JSEB, the aforesaid contracts awarded to RPCL would have been terminated in accordance with the instruction of the then Chairman, JSEB and the subsequent undue huge loss of several crores of rupees dishonestly caused to JSEB by some officials of JSEB in conspiracy and connivance with RPCL could have been avoided.
50. In spite of clear instruction of the then Chairman, JSEB, Sri Shivendu the then MT, JSEB did not comply.
51. On the aforesaid note stated dated 27.12.2006 of the then CE, APDRP the then MT, JSEB wrote "Please discuss" and marked it back to CE, APDRP. The next noting on the file is noting dated 08.06.2007 after a period of six months by the then Electrical Executive Engineer, APDRP Sri P.K. Sinha, which is discussed in detail in the following paragraph. How the file reached EEE, APDRP Sri Pushpendra Kumar Sinha without going through the then CE, APDRP is under question and is being investigated.
52. The aforesaid note dated 27.12.2006 of the then CE, APDRP was ostensibly marked back to CE, APDRP by the then MT, JSEB on 19.01.2007. The aforesaid note dated 27.12.2006 on the concerned file was not marked to the then EEE, APDRP.
53. Then how the file reached the then EEE, APDRP Sri P.K. Sinha is a matter of investigation which has not been answered satisfactory by the accused concerned.
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54. On request of M/s RPCL the then EEE, APDRP Sri P.K. Sinha put up a proposal dated 08.06.2007 on aforesaid file to the then Electrical Superintending Engineer, APDRP proposing as follows:-
M/s RPCL have requested for appointment of an Arbitration under Clause 36a of the NIT 186/PR/JSEB/03 package 'D' for this regard the opinion of Advocate General of Jharkhand may be perused at C/450 in context to the opinion sought by the Member (Technical) in the matter of Transmission wing of JSEB (C/450). Instructions of the Chairman may be obtained for the appointment of an arbitrator in NIT 186/PR/JSEB/03 in light of the advice of the AG, Jharkhand.
This is a request by M/s RPCL for waiver of penalty in context of legal opinion obtained from Advocate General of Jharkhand (C/450). Instructions of the Chairman may be obtained for waiver of penalty in NIT 3 186/PR/JSEB/03 in light of the advice of the AG, Jharkhand.
Hence, instruction may be obtained on:
(i). Appointment of an arbitrator in light of the advice of the AG,Jharkhand
(ii). Waiver of penalty in light of the advice of the Ag, Jharkhand unquote. (E). In his aforesaid proposal dated 08.06.2007, the then EEE, APDRP Sri P.K. Sinha dishonestly concealed several critical and vital facts with intention to cause huge wrongful gain to RPCL and to himself even though it caused huge wrongful loss to JSEB. Some of the facts that were thus dishonestly concealed were as follows:-
(i). That the then Chairman, JSEB, Sri Shivendu had directed the then CE< APDRP to put agenda for termination of contract of M/s RPCL for the next meeting of the Board of JSEB, and the then CE, APDRP had put up draft agenda accordingly through his note dated 27.12.2006.
(ii). That M/s RPCL had earlier submitted 14 fake and forged Bank 28 guarantee bonds amounts to Rs. 19.64,85,959 in favour of JSEB, regarding which Sri Umesh Kumar, the then Director, Finance of JSEB had registered which Sri Umesh Kumar, the then Director, Finance of JSEB had registered Dhurwa P.S. (Ranchi) FIR NO. 153 dated 11.08.2005 against Sri Ashok Kumar Singh Managing Director of M/s RPCL and other accused, and that after investigation the case had been found true and charge sheet no. 164 dated 30.06.2007 u/s 467/471/409/420/120(B) I.P.C had been submitted to Court against aforesaid Sri Ashok Kumar Singh, Managing Director of M/s RPCL.
(iii). That M/s RPCL was asking for arbitration due to price escalation, although, under the provisions of the concerned Tender Documents, Work orders and agreements, time was the essence of contract, and there was a clear, explicit and express prohibition against any price or statutory variation on any account whatsoever.
(iv). That according to JSEB resolution no. 401 the progress of work done by M/s RPCL was unsatisfactory, and time extension was permitted to M/s RPCL up to June, 2007 without escalation of price and with imposition of liquidated damages.
(v). That in meeting dated 06.02.2007 and 07.02.2007 M/s RPCL had clearly agreed that they would complete the work within extended time period i.e July, 2007 and would not go for arbitration/court of law.
(vi). That M/s RPCL did not do the work on time, asked for extension of time and did not start the work even within extended time. Thus, the same agency i.e M/s RPCL which at earlier points of time had itself asked for extension of time was subsequently asking for arbitration for price escalation due to extension of time.
55. In his aforesaid proposal dated 08.06.2007 on the request of RPCL the then EEE, APDRP Sri P.K. Sinha had recommended arbitration and waiver of 29 penalty in the light of so-called advice allegedly given by learned Advocate General. From Aforesaid proposal itself it is clear that learned A.G, Jharkhand had never advised either arbitration or waiver of penalty in the matter of aforesaid NIT NO. 186/PR/JSEB/03 and associated work orders and contracts. 58.
In fact the learned AG, Jharkhand had on 16.03.2007 advised appointment of arbitrator and suspension of penalty in an entirely different matter related to Transmission wing of JSEB, which was marked to Chief Engineer, Transmission, JSEB.
If appointment of arbitrator and waiver of penalty in the matter of NIT NO. 186/PR/JSEB/03 and aforesaid associated work orders and cntracts had to be done on the advice of AG, Jharkhand, then the opinion of learned AG, Jharkhand should have been again been obtained specifically on this matter, more so because the terms and conditions of contract in this matter were substantially different from those of the matter related to Transmission wing of JSEB. For example, there was provision for price variation in the matter related to Transmission wing of JSEB, but in the matter of NIT No. 186/PR/JSEB/03 and associated contracts there was a clear, explicit and express prohibition again any price or statutory variation on any account whatsoever.
56. The then ESE, APDRP the then CE, APDRP and the then MT, JSEB were fully aware of the dishonest concealment and distortion of critical and vital facts by the then EEE, APDRP and yet they dishonestly remained silent on these issues and forwarded the aforesaid proposal dated 08.06.2007.
The then MT, JSEB, asked the then Director, Finance , JSEB, Sri Niranjan Rai (petitioner) to give his opinion, Sri Niranjan Rai gave his opinion dated 28.06.2007 as follows:
" Under Transmission schemes, the case (for arbitration) has been referred to Advocate General and he has given opinion which has been put up for 30 approval of competent authority....Under APDRP scheme also the dispute is of similar nature. As such it is opined that Board may follow the same solution as in the case of Transmission scheme ".
It needs to be pointed out here with the terms and conditions of contract in the matter of NIT No. 186/PR/JSEB/ 03 were substantially different from these applicable to the matter related to Transmission wing of JSEB.
The aforesaid opinion dated 28.06.2007 of Sri Niranjan Rai was forwarded by the then MT, JSEB to the then Chairman, JSEB, Sri V.N. Pandey, who on 17.07.2007 ordered" same as file no. 620" said file no. 620 is file no. CE/Trans/620/06-07 of Transmission wing of JSEB.
It further needs to be pointed out here that the grant of contract to M/s RPCL under NIT no. 186/PR/JSEB/03 had been sanctioned by the Board of JSEB and therefore, decision regarding acceptance of demand of M/s RPCL for arbitration should also have been approved by the Board of JSEB, which was not done.
57. The Inspector General of the Vigilance wing of JSEB has conducted internal enquiry into the matter, and has submitted Enquiry Report through his letter no 87 dated 13.12.2011, the portion of which relevant for this issue reads as follows:
(i). One of the officials makes a noting in the file suggesting that arbitration can be done quoting another example which is totally irrelevant.
(ii). This Board official conveniently forget that there is an express bar to time extension and price escalation in the original tender and yet he recommends for arbitration even when the scope of escalation in price is ruled out in the original tender and contract. This Board official also conveniently forgets to mention in his note that the then Chairman had asked for blacklisting of the company. Rather he blatantly ignores the orders of the then Chairman and waits for the departure of the Chairman who ordered this company to be blacklisted."31
58. Thereafter, a committee consisting of the then MT, JSEB, the then Technical Secretary to Chairman, JSEB, and Law Officer, JSEB constituted to recommend a panel of three names for appointment of arbitrator . Officers like Senior Law Advisor and Deputy Law Adviser of JSEB who were senior to LO, JSEB, and officers of JSEB who were senior to TS, JSEB, could have been but were not included in the aforesaid committee. This committee recommended a panel of three names for appointment as arbitrator, but the criteria for selection of these three names were not disclosed.
One of the three names recommended for appointment of arbitrator was that of Sri Ramayan Pandey. It needs to be mentioned here that soon before the said recommendation was made, Sri Ramayan Pandey, had served as arbitrator in another arbitration case between M/s RPCL and JSEB and had passed arbitration award completely in favour of M/s RPCL. However Sri Ramayan Pandey, was again appointed as Sole arbitrator by the then Chairman, JSEB in the second arbitration case against M/s RPCL.
59. It also needs to be mentioned here that later on the JSEB filed arbitration Title Suit No. 569/2010 against Sri Ramayan Pandey and M/s RPL and Arbitration Title Suit No. 534/210 against M/s RPCL for alleged flagrant violation of law, misconduct and connivance with M/s RPCL on part of Sri Ramayan Pandey, and for alleged gross violation of the provisions of Arbitration and Conciliation Act, 1996 and illegal acts against Public Policy allegedly committed by Sri Ramayan Pandey.
60. In course of aforesaid arbitration proceedings M/s RPCL made certain claims before the Sole Arbitrator, JSEB, strongly rebutted these clams and placed before the sole arbitrator several documents in support of such rebuttals.
The sole Arbitrator passed an interim award dated 25.11.2007 in Arbitration Case No. 02/2007. The then EEE APDRP put up the file on 32 04.12.2007 quoting the last para of the interim award, which read as follows" " In view of the apparent delays on part of respondents as stated in preceding Para claimants are entitled for relief as prayed and respondents should grant time extension up to 31.03.2009 without penalty and with price variation on material and erection as per IEEMA/RBI/JSEB formulate for the extended period i.e after 26.09.2005 and communicate the claimants of such extension by 15.12.2007 in view of the claimants' request vide letter no. 199 dated 30.10.2007 for package D."
This award was allegedly in clear violation of the terms and conditions of the contract. In terms of the contract, time was the essence of contract and there was a clear explicit and express prohibition against any price or statutory variation on any account whatsoever.
61. Thus the grant of price variation was allegedly beyond the legal competency of the sole arbitrator and against the contract agreed to by M/s RPCL and JSEB. Moreover, on 25.11.2007 the sole arbitrator passed award to the extend the completion period till 31.03.2009 and thus allowed to M/s RPCL a time extension of sixteen months, whereas the actual period was merely eight months.
The sole arbitrator allowed price variation to M/s RPCL although price variation had not been asked for by M/s RPCL in its original request letter for appointment of arbitrator.
62. Thus, the sole arbitrator awarded to M/s RPCL even more then M/s RPCL had initially asked for. In paragraph number 04 of JSEB Agenda Item No. 658/10-11 it is stated that " He has put up file on 08.06.2007 for appointment of Sole Arbitrator on the representation of M/s RPCL dated 08.06.2007 for appointment of sole arbitrator enclosing his earlier letter dated 22.12.2006 in which M/s RPCL has claimed only under seven heads in which price variation 33 was not there.
The Arbitrator also granted an interest of 18% on the awarded amount and published his final award on 14.02.2008.
63. The then EEE, APDRP the then ESE, APDRP then the CE, APDRP and the then MT, JSEB did not examine the award on merits dishonestly concealed or distorted most of the critical and vital facts mentioned above, and recommended acceptance of the award.
The then Chairman, JSEB asked for opinion of the learned A.G, Jharkhand on the following points:-
(i.). Whether the award of the learned sole arbitrator for claim under price variation in absence of such provision in the agreement is maintainable ?
(ii). Whether the award of the learned sole arbitrator for claim of 18% interest over the delay made for payment is maintainable in absence of such provision in the Agreement ?
(iii). Whether the award of the learned sole arbitrator for waiver of LD is maintainable ?
(iv.) Whether there is any ground for appeal against the award of the learned sole arbitrator in an appropriate court ?
The A.G., Jharkhand had in his opinion stated among other things as follows:- Even in absence of any escalation/price variation clause, an Arbitrator can grant claims on account of enhanced rates, and/due to increase in the rate of labours or materials...award of learned sole Arbitrator in respect of price variation is justified and the same is maintainable even though there is no provision in the agreement for price variation and or escalation of price... In my opinion this is not a case in which JSEB should file an appeal against the award of sole arbitrator.... Prima facie I find that the agenda to be placed before the Board (JSEB) does not suffer from any illegality".
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64. The finding of the Inspector General of the Vigilance wing of JSEB regarding misrepresentation and distortion by officials of JSEB abut price variation stated in paragraph 19 of his aforesaid Enquiry report is as follows:
" The opinion of the AG, Jharkhand was sought giving a wrong impression that the tender terms are silent over price variation, whereras, under para 1.3.2© of chapter -III, of the tender document were is a clear restriction on the price variation. The AG, Jharkhand recorded his opinion in an impression as there is no clause in the agreement dealing with prices variation. Had he been informed about the above restriction in terms of NIT he would not have opined in support of the price variation. The above criminally connived officers did not try to place the actual facts. He suggested not to file an appeal against the said award. The maintainability of his opinion should be looked in the light of the fact that the learned competent court has admitted the appeal even after statutory period and the Hon'ble High Court has also maintained it. A question which immediately arise in the mind in the mind of any person looking in this whole affair would be that:- the Board entered into contracts with other agencies also for the similar work for other districts. Those agencies never requested for or allowed price variation. The Board's officials never examined this fact. The why was M/s RPCL given this royal treatment ?"
68. The aforesaid opinion given by AG, Jharkhand on arbitration award regarding NIT NO. 186/PR/JSEB/03 was an advice about a contemplated administrative decision and was not binding on JSEB.
65. In the light of the critical and vital facts mentioned in sub-paragraph numbers A,B, E, F, G, H, J and L above , the JSEB could have decided to go in appeal u/s (9) (e) of the Arbitration and Conciliation Act, 569/2010 against Ramayan Pandey and M/s RPCL and Arbitration Title Suit No. 534 of 2010 against M/s RPCL for alleged flagrant violation of law, misconduct and 35 connivance with M/s RPCL on part of Sri Ramayan Pandey and for alleged gross violation of the provisions of Arbitration and Conciliation Act, 1996 and illegal acts against Public Policy allegedly committed by Sri Ramayan Pandey. However, agenda for acceptance of the award in totality was put up before the Board of JSEB, Agenda Item No. 507 and was approved through JSEB Resolution NO. 508.
It needs to be mentioned here that the approval given to JSEB Agenda Item No. 507 through JSEBG Resolution No. 508 was subsequently, cancelled through aforesaid JSEB Agenda Item NO. 658/10-11 that was approved through aforesaid JSEB Resolution No. 655.
66. Subsequently, 12 numbers of bills of M/s RPCL amounting to gross amount Rs, 7,89,84,826 and net amount Rs.. 4,89,24,788/- were put up by the then Deputy Director of Accounts, JSEB, Sri D. Mahapatra, through the then Director Finance , JSEB Sri VP Dubey, to the then CE, APDRP Sri PUshpndra Kumar Sinha. The Then DF, JSEB, marked the file to DDA, APDRP on 09.03.2009. The then DDA, APDRP marked the file to the then DF, JSEB on 09.03.2009. The then DDA, APDRP marked the file to the then DF, JSEB on 09.03.2009 with noting "Release order may be obtained from Hon'ble Chairman". Then then DF, JSEB forwarded it on 09.03.2009 to the then Finance Controllr-III, JSEB Sri Umesh Kumar, who disregarded the aforesaid proposal regarding obtaining of release order from Chairman, JSEB, and on 09.03.2009 ordered "payment may be released and put up for post facto approval". Thereafter the file moved to the then DF, JSEB and to the then DDA, APDRP on 09.03.2009 itself and payment was made without approval of competent authority. Till date the approval has not been taken in the file for reasons best known to the accused persons.
Thus the concerned file move seven times between concerned officers on 36 09.03.2009 itself, and also through associated subordinate personnel on the same day, and huge payment of several crores of rupess was made without approval of competent authority, although in the JSEB rules and regulations there is no provision for post facto approval of such huge payments, and nor can the power of competent authority be delegated. There is no mention in the note-sheet of concerned file for any verabal order of competent authority for aforesaid payment. This indicates the unseemly and unholy haste among officials of JSEB to make the unauthorized payment to M/s RPCL.
It needs to be mentioned that this very Sri Umesh Kumar aforesaid had registered Dhurwa P.S. (Ranchi) FIR No. 153 dated 11.08.2005 against Sri Ashok Kumar Singh, Managing Director of M/s RPCL for submission of 14 fake and forged Bank Guarantee Bond amounting to Rs. 19,64,85,959/-
67. It has been claimed that the then FC-III, JSEB Sri Umesh Kumar had ordered release of aforesaid payment on verbal approval of the then Chairman, JSEB, Sri H. B. Lal and that Sri H.B. Lal had subsequently granted post facto approval for aforesaid payment through his un-issued so-called buff-sheet dated 23.03.2009.
68. There are many loop holes in this story, which appears to be extremely doubtful . In this regard, it is humbly prayed that this Hon'ble Court may kindly be pleased to peruse the facts stated in para no. 02 sub paragraph no.
"T" below in this counter-affidavit, from which it would be clear that the so- called buff-sheet dated 23.03.2009 was grossly backdated and was concocted on afterthought. The probability that the aforesaid backdated so-called buff-sheet was signed much later then 23.03.2009, perhaps after Sri H.B. Lal had been removed from the post of the Chairman, JSEB, is being investigated.
69. Thereafter 11 numbers of Price Variation bills of M/s RPCL amounting to gross amount Rs, 2,88,77,869 and net amount 2,75,43,156 were put 37 by the then DDA, APDRP through the then DF, APDRP to the then CE, APDRP Sri P.K. Sinha, who wrote on 21.03.2009 that "payment may be made from working fund for Rs, 2,75,143,156.00 on refundable bases from APDRP fund". The file moved through the then DF, APDRP on 23.03.2009 to the then DDA, APDRP who proposed on 23.03.2009 that "Release Order.....may be obtained from Hon'ble Chairman" .
70. After that the then DF, APDRP asked on 23.03.2009 for position regarding finds, upon which 23.03.2009 the then DDA (HQ), JSEB Sri Sanjeev Kumar Gave his noting and marked it to the then DF, APDRP who put it up to the FC-III, JSEB on 23.03.2009. The then FC-III, JSEB Sri Umesh Kumar proposed on 23.03.2009 that since adequate amount is not available in working fund of JSEB hence payment of the price variation bills of M/s RPCL may be made from PFC Power Finance Corporation) Loan fund of APDRP which was approved on file by the then Chairman, JSEB Sri H.B. Lal on 23.03.2009. Thus the concerned file moved seven times between concerned officers on 23.03.2009 itself, and through associated subordinate personnel on the same day, and payment was released the next day. This indicates the unseemly and unholy haste among officials of JSEB to make the huge payment of M/s RPCL. It needs to be mentioned here that power finance corporation loan funds of APDRP were not meant for payment of Price Variation Claims, and as per rules the approval of Govt. of Jharkhand and of Ministry of Power, Govt. of India was required before payment of PV claims from PFC Loan funds.
71. Later on the JSEB realized that some officials of JSEB had entered into a conspiracy and connived with M/s RPCL had abused their official position and had dishonestly caused huge wrongful loss of several crores of rupees to JSEB. Therefore, aforesaid JSEB Agenda Item no. 658/10-11 (Annexure-18) was put up before and approved by the Board of JSEB through aforesaid Resolution 38 NO. 655 (Annexure19). In terms of this Resolution the JSEB cancelled its previous approval accorded for implementation of award of the sole arbitrator vide Resolution No. 508 on Agenda item no. 507/08-09, and filed Miscellaneous Case No. 71/2010 (later admitted as Arbitration Title Suit No. 534/2010) in the Court of Sub-Judge-1, Ranchi.
The court of Sub-Judge-1, Ranchi through its order dated 20.12.2010 passed in aforesaid Miscellaneous Case NO. 71 of 2010 admitted the case.
This order was challenged by M/s RPCL in the Hon'ble High Court, Jharkhand, Ranchi through Civil Revision Petition No. 02/2011. The Hon'ble High Court in its order pronounced on 11.07.2011 was pleased to uphold the aforesaid order, and observed as follows:-
" I cannot lose sight of the fact that in the instant case the officers of JSEB have adopted delaying tactics in approval of the agenda and various proceedings, obviously for specific reasons not well intentioned . In the instant case, it is one of those exceptional cases where the department has also initiated criminal prosecution against the officers and in case the application is rejected on technical ground, it will have a far reaching effect on the public exchequer defeating principles of justice."
This order of the Hon'ble High Court was again challenged by M/s RPCL in Hon'ble High Court, Ranchi through Civil Review Petition No. 67/2011 which was dismissed by Hon'ble High Court in order dated 02/09.08.2011.
72. After publication of his final award dated 14.02.2008 the learned sole arbitrator had allegedly become 'functus officio' and since JSEB had not consented for his fresh appointment, Sri Ramayan Pandey, allegedly did not have jurisdiction to re-open or continue proceedings of the case already disposed through final award dated 14.02.2008.
73. Yet Sri Ramayan Pandey passed a supplementary award on 39 29.03.2009 and issued Notice dated 01.11.2010 to JSEB for another hearing of the same arbitration case on 14.11.2010. Consequently, JSEB had to file Arbitration Title Suit No. 569/2010 u/s (9)(e) of the Arbitration and Conciliation Act, 1996 against Sri Ramayan Pandey and M/s RPCL, in which JSEB has stated that Sri Ramayan Pandey is allegedly acting unilaterally in connivance with M/s RPCL, in flagrant violation of law, against natural justice and against public policy as envisaged u/s (34) of the Act.
74. The CAG has also raised Audit objections regarding this matter, and in part-II, Section A, Para 2 of his report dated 17.03.2011 has pointed out as follows:-
" In the work order there was no provision/clause of price variation (price was firm) and the award of sole arbitrator should have been challenged by the management in the appropriate court....Necessary action may be taken against responsible officials due to negligence of whom the Board has suffered extra payment of Rs, 10.89 crores".
Regarding aforesaid objection JSEB has given reply to AG that a case bearing no. 71/10 has been filed in competent court against the award. By giving this reply, regarding filing of case against the arbitration award, the JSEB has in fact accepted that the aforesaid AG audit objection is correct.
75. It has been claimed that the then FC-III, JSEB Sri Umesh Kumar had ordered release of aforesaid payment on verbal approval of the then Chairman, JSEB Sri H.B. Lal, and that Sri H.B. Lal had subsequently granted post facto approval for aforesaid payment through his un--issued so called buff- sheet dated 23.03.2009. There are many holes in this story which is extremely doubtful. The following issues are noteworthy in this regard:-
(i). There is no issue number on the so-called buff-sheet to authenticate that it is genuine.40
(ii). There is no mention of the so-called buff-sheet on the note-sheet or anywhere else on concerned file, to indicate that it is genuine or that post facto approval has been taken in concerned file.
(iii). There is no diary number on the so-called buff-sheet to authenticate its movement.
(iv). The very file, on which aforesaid unauthorized huge payment of gross amount Rs, 7,89,84,826 was ordered by FC-III, Sri Umesh Kumar on 09.03.2009 was put up to the then Chairman, JSEB on 23.03.2009 for approval of payment of Price Variation bills of M/s RPCL out of power finance corporation funds, and the then Chairman, JSEB Sri H.B. Lal had approved the payment of aforesaid PV bills on note-sheet of aforesaid file n 23.03.2009. In the very same aforesaid file, in two notings both dated 19.03.2009. In the very same aforesaid file, in two notings both dated 19.03.2009 on note-sheet of said file, it was proposed that post facto approval of Chairman, JSEB may be obtained for earlier payment of gross amount Rs, 7,89,84,826/-. It is not clear why the then Chairman, JSEB, Sri H.B. Lal had to accord post facto approval of aforesaid payment of gross amount Rs, 7,89,84,826 in a clandestine manner on an un-issued so-called buff-shet on 23.03.2009, and not on concerned file, when the concerned file had been put up to him on 23.03.2009 itself. This is extremely intriguing and is being investigated.
(v). There is no mention in note-sheet of concerned file of any verbal order of the then Chairman, JSEB for aforesaid huge payment of gross amount of Rs, 7,89,84,826.
(vi) The so-called post facto approval has never been put up for authentication, and this is clear violation of rules.
(vii). In the JSEB rules and regulations there is no provision of post facto approval of such huge payments.
41
76. Learned Spl. P.P appearing on behalf of the Vigilance Department has submitted that the aforesaid successor FC, JSEB had further opined that the payment of gross amount Rs, 2,81,81,756 towards price variation bills was approved by the then Chairman, JSEB and hence was regular and the aforesaid successor FC, JSEB is at best not aware of the facts stated in sub-paragraphs 'A to "T" of paragraph no. 2 above in this counter-affidavit.
77. Learned Spl. P.P appearing for the Vigilance Department has submitted that investigation in this case is complete, final form has been submitted, cognizance has been taken and petitioner is not appearing before the trial court and the anticipatory bail application of the petitioner has been rejected in A.B.A. No. 1302 of 2013 under order dated 18.10. 2013 and accordingly, this writ petition is fit to be dismissed.
78. Learned Spl. P.P appearing for the Vigilance Department produced case diary and referred para 90 of the case diary where statement of Devashish Mahapatra was recorded who has stated that he was posted as Accounts Officer, in JSEB. Question was formed that in File 72/2004-05 (Part File)/DDA (Headquarter) Financial Controller-III , Sri Umesh Kumar without obtaining permission from the Chairman of the Board, made payment of Rs. 4,89,24,788/- to M/s R.P.C.L.
79. In para 91 of the case diary, statement of Sanjeev Kumar has been recorded, who has stated that he was posted as Account Officer in JSEB (Headquarter).
80. Para 372 of the case diary reveals that I.O has mentioned Table no. 367 where note has been given for RPCL that the work is very slow and one resolution no. 401 was passed although the Chairman of the JSEB Board, Shri Shibendu directed to produce the file and cancel the contract with RPCL but it was delayed and when Shri Shibendu left the post, of Chairman, JSEB, no 42 action was taken and the file was in the office of CE (Executive Engineer) APDRP in which referring the opinion of AG, Jharkhand in page no. 450 of the file to appoint arbitrator, remove the penalty and for time extension for RPCL was given.
81. Para 375 of the case diary reveals that information have been received from the A.G. which relates to the transmission line of Dumka district which is as under:
a. 132/33 k.v. grid sub station, Dumka b. 132 k.v D/C Deoghar-Dumka c. 132 k.v S/C Dumka -Pakur Transmission line on D/c towers d. Construction of two nos. 132 kv bays at Deoghar grid sub-station for 132 kv Deoghar-Dumka line.
82. Para 376 of the case diary reveals that the aforesaid work was not for APDRP Scheme and the terms and conditions of the said work was different from the work of APDRP and this fact was concealed for wrongful gain to the M/s RPCL.
83. Para 359 of the case diary reveals that statement of the petitioner- Niranjon Roy (Director of Finance) has been recorded on 05.03.2014 in which in question, answer from the petitioner has given exculpatory statement and has stated that he has no role regarding obtaining the information of appointment of arbitrator giving award in favour of RPCL.
84. Having heard the learned counsel for the parties and after going through the record, considering the fact that final form has been submitted, cognizance has been taken, the petitioner is not either on anticipatory bail or regular bail, A.B.A. No. 1302 of 2013 filed by the petitioner was rejected under order dated 18.10.2013, non-appearance of the petitioner before the trial court held up the trial, as investigation is complete, petitioner has no other option then 43 to face trial, I find no merit in this writ petition. Accordingly, this writ petition is hereby dismissed. However, liberty is given to the petitioner to raise all the points which has been raised in this writ petition, before the appropriate form during course of trial.
85. Let a copy of this order be communicated to the concerned trial court through FAX. Let record of A.B.A. No. 1302 of 2013 be sent to its original place at once. Let case diary be handed over to the learned Spl. P.P. Satyarthi (Anant Bijay Singh, J.)