A. Ganesh Reddy vs C.B.I., SPEDehradun

Tarun Agarwala, J.—Heard Mr. S.K. Agarwal, the learned Senior Advocate assisted by Mr. Virendra Rawat and Mr. N.S. Pundir, Advocates for the applicant and Shri Arvind Vashistha, Advocate for the Respondent C.B.I.

The applicant is the Vice President of M/s Patel Engineering Limited which is a construction company for construction of civil engineering projects. The F.I.R. dated 13th October, 2010 was lodged against S.K. Sharma, Zonal Manager, NPCC, J.K. Sinha, General Manager, NPCC, S.K. Sinha, Chaitanya Projects Consultants Pvt. Ltd., M.V. Rao, Director CEC Projects, Naveen Chandra Bhatt, Vidyut Roy, Mrigendra Gosh and against unknown persons. The F.I.R. alleges that National Projects Construction Corporation Ltd. (NPCC for short) was entrusted the work of construction of road at Leh in the State of Jammu and Kashmir by the Ministry of Home Affairs. This NPCC is a Govt. of India undertaking. Subsequently, NPCC gave an award worth about rupees 200 crores to M/s Patel Engineering Ltd. The F.I.R. alleges that M/s Patel Engineering Ltd. instead of carrying out the work themselves sublet the same by executing another agreement to M/s CEC Projects Pvt. Ltd. whose director is Shri M.V. Rao and who is alleged to be close with J.K. Sinha, General Manager of NPCC. The brother of J.K. Sinha, namely, S.K. Sinha is running a company named as Chaitanya Projects Consultants Pvt. Ltd. It is alleged that J.K. Sinha abused his official position as the General Manager of NPCC and despite orders of the Chairman-cum-Managing Director not to release any amount to Patel Engineering released a mobilized advance of Rs. 16.71 crores in favor of M/s Patel Engineering which was subsequently transferred to M/s CEC Projects. The Director, Mr. M.V. Rao of this CEC Projects has withdrawn the amount and has used a portion of it to bribe Shri J.K. Sinha, General Manager of NPCC. The brother of J.K. Sinha, namely, S.K. Sinha and his employee Naveen Chandra Bhatt were directed to deliver the bribe amount to Shri S.K. Sharma, Zonal Manager at NPCC and were caught red handed. On this basis, the F.I.R. was lodged.

In paragraph 36 of the bail application, it has been stated that two of the accused named in the F.I.R., namely, Naveen Chandra Bhatt and Mrigendra Ghosh has been enlarged on bail who were the carriers to deliver the bribe amount to S.K. Sharma. In paragraph 3 of the counter affidavit it has been stated that all the accused named in the F.I.R. has been enlarged on bail which fact has not been denied by the C.B.I. in paragraph 14 of the counter affidavit.

During the course of investigation, basically a charge of criminal conspiracy has been alleged by the C.B.I. in paragraph 31 of their counter affidavit against the applicant. According to the CBI, during the course of the investigation, it was found that M/s Patel Engineering Ltd. had sublet the contract to M/S CEC Projects Ltd. and that B.S. Reddy, President of M/s Patel Engineering had entered into two agreements with CEC wherein it was agreed that M/s Patel Engineering would get the four percent of the contract value. According to the C.B.I., the criminal conspiracy is apparent since the principal agreement between the NPCC and M/s Patel Engineering was that there would be no subletting of the work granted to M/s Patel Engineering. The conspiracy was also writ large by the fact that the agreements executed with CEC indicated that the agreement will not be disclosed to NPCC.

In so far as the applicant is concerned, the C.B.I. in their counter affidavit suggested that the applicant, being the Vice President of M/s Patel Engineering Ltd., further created two lease hire agreements with CEC and M/s Anusha Projects to show that certain machineries had been hired, whereas, it was a case of subletting and was not a case of hiring. It was also alleged that pursuant to this agreement, no employee of M/s Patel Engineering were working at the site and that the employees of CEC Pvt. Ltd. and M/s Anusha Projects were working at the site in the Leh. The C.B.I. further submitted in their counter affidavit that advance mobilization granted by NPCC to M/s Patel Engineering was routed by Patel Engineering to the bank accounts of CEC Hyderabad and M/s Anusha Projects, through which, the money was withdrawn for payment of bribe.

In the light of these averments, the submission of Shri Arvind Vashistha, the learned Counsel for the C.B.I. is that a clear case of criminal conspiracy was made out against the applicant with unlawful design to cheat NPCC and submitted that even though the other co-accused were enlarged on bail by default because the charge sheet was not presented before the Court within the stipulated period as required u/s 167(2) of the Code of Criminal Procedure , the applicant''s case is on a different footing and the question of granting bail on parity does not arise.

During the pendency of the bail application, a supplementary affidavit was filed indicating that the mother of the applicant died on 9th April, 2011 and it was averred that the 13th day ceremony is scheduled to be held on 25th April, 2011.

Having heard the learned Counsel for the parties at some length and having perused the F.I.R. and other documents filed in support of the bail application and the counter affidavit filed by the Respondents, the Court finds that initially the F.I.R. was lodged against specific persons for their involvement in cheating NPCC and bribing their officials in the work entrusted to M/s Patel Engineering Ltd. The mobilization amount was used as bribe money to pay certain employees of NPCC. The F.I.R. does not, in any manner, name the applicant as being involved in the action of engineering the bribe or taking any portion of the mobilization advance given by NPCC for personal gain. The applicant admittedly was arrested thereafter during the course of the investigation and the allegation as per paragraph 31 is, that the role of the C.B.I. "on the contrary CBI is investigating the bribery & cheating aspect in the contract for construction of the 2 Indo China Border Roads in Leh." and then proceeds to allege that there is a criminal conspiracy to cheat NPCC, a Govt. of India undertaking by B.S. Reddy, President and by the applicant who is the Vice President of M/s Patel Engineering Ltd. The basic ground is that in gross violation of the terms and conditions of the contract, M/s Patel Engineering has sublet the project to CEC Pvt. Ltd. The Counter affidavit reveals that B.S. Reddy, President had entered into two agreements with CEC, Hyderabad in which four percent of the contract value was go be given to M/s Patel Engineering Ltd. In these two agreements, the role of the applicant is not indicated. The applicant''s role has only been confined to two lease hire agreements which he alleges to have executed with CEC, Hyderabad and M/s Anusha Projects. According to C.B.I., these two agreements are not hire agreements but agreements for subletting the works contract.

The learned Senior Counsel Shri S.K. Agarwal for the applicant has drawn the attention of the Court to the agreements executed between the NPCC and M/s Patel Engineering and submitted that under Clause 7.1 (d) and (e), the contractor could execute an agreement and appoint a sub contractor for hiring of plants and equipments for the purposes of the execution of the contract. The learned Senior Counsel submitted that by executing two lease hire agreements, the charge of criminal conspiracy cannot be made out nor could the applicant be remotely connected to the illegal gratification being paid by certain persons to certain employees of NPCC. The learned Senior Counsel further submitted that NPCC has issued notice for cancellation of the works agreement against which the company, namely, M/s Patel Engineering has filed a writ petition before the Delhi High Court where the matter is pending. The learned Counsel further submitted that assuming without admitting that the applicant had executed wrong agreements, it would only amount to a breach of the terms and conditions of the contract executed between the parties and in no way could the applicant be found guilty of a charge of criminal conspiracy. On the other hand, the learned Counsel for the C.B.I. submitted that the mobilization amount given to M/s Patel Engineering was routed to the sub-lessees and through their account the amount was withdrawn and the bribe was paid and, consequently, it was clear that there was an unlawful design by President and Vice President of M/s Patel Engineering for unlawful gain and it is quite apparent that a case of criminal conspiracy is made out justifying denial of bail.

Having heard the learned Counsel for the parties, the Court finds that there are several missing links in the sequence of events that has been placed before the Court at this stage. There must be a satisfaction that the applicant along with others committed a criminal act and the said act was done in furtherance of a common intention. At the moment, these ingredients are lacking and the sequence in the chain of events appears to be broken at various places. To bring home the charge of conspiracy within the ambit of Section 120B of I.P.C, it is necessary to establish that there was an agreement between the parties for doing an unlawful act. At the present moment, the only thing which is found against the applicant is that he secretly executed two lease hire agreements with two sub contractors. Whether it is a case of subletting in violation of the terms and conditions of the principal agreement or it was in consonance of Clause 7.1 (e) of the agreement is a case will be known only after evidence is led. But at this stage, it is not justified to hold that the applicant is guilty of the charge of criminal conspiracy.

In the light of the aforesaid and without commenting anything further on the merit of the case, the Court is of the opinion that the applicant is entitled to be enlarged on bail at this stage.

Let the applicant be enlarged on bail in FIR vide RC No. 0072010A0011 of 2011, u/s 7, 12 and 13(2) read with Section 13(1)(a) and (d) of the P.C. Act and 120B I.P.C., , on his executing a personal bond and furnishing two sureties each of the like amount to the satisfaction of Magistrate concerned.

Certified copy of the order shall be made available on payment of usual charges today itself.