K. Dileepkumar vs State Of Kerala And Ors

The petitioner is the fifth accused in the case C.C.No.34/2011 pending in the Court of the Enquiry Commissioner and Special Judge, Thrissur.

Accused 1 to 4 in the case were the Managing Director, General Manager, Deputy General Manager (Project) and Assistant Engineer respectively

in the company, Malabar Cements Limited. Accused No.5 was the Senior Manager (Technical Services) and Accused No.6 was the Managing

Director of the company M/s.AIA Engineering Limited.

The prosecution case, in short, is that, Accused 1 to 4, who were public servants, entered into a conspiracy and pursuant to such conspiracy,

without inviting public tenders, they purchased a complete set of cement mill internals, which were totally unnecessary for Malabar Cements Limited,

from the company AIA Engineering Limited and thereby caused loss of Rs.1,11,58,641/- to their company. The prosecution alleges that Accused 5

and 6 had participated in the above mentioned conspiracy and they had obtained pecuniary gain for the company M/s.AIA Engineering Limited.

This application under Section 482 Cr.P.C is filed by the fifth accused to quash Annexure-B final report in the case filed by the Dy.S.P, Vigilance

and Anti-Corruption Bureau (VACB), Northern Range, Kozhikode and all further proceedings based on that final report.

Heard learned counsel for the petitioner and the learned Public Prosecutor.

The offences alleged against the accused in the case are under Sections 13(1)(c) and 13(1)(d) read with 13(2) of the Prevention of Corruption Act,

1988 (for short 'the Act') and Sections 409 and 120B I.P.C. However, the allegation against Accused 5 and 6 is only that they committed an offence

punishable under Section 120B I.P.C read with Section 13(2) of the Act.

Before considering the merits of this petition, it is relevant here to note that Accused No.6 had filed a revision petition (Crl.R.P.No.529/2018)

before this Court challenging the order passed by the trial court dismissing the application for discharge which was filed by him. The aforesaid revision

petition was allowed by this Court as per the order dated 26.09.2018 and Accused No.6 was discharged. In the aforesaid order, this Court had stated

as follows:

“It is seen from the statement dated 11.05.2018 filed by the Deputy Superintendent of Police that the revision petitioner was made as the 6th

accused on the sole reason that the revision petitioner was the Managing Director of the Company, namely, M/s.AIA Engineering Ltd,

Ahammedabad, from which the above said spare liner plates were purchased. Under the P.C.Act, there was no provision for vicarious liability during

the period of the commission of the offences alleged in this case. Therefore, there must be independent material to connect the revision petitioner with

the commission of the offence.â€​

Learned counsel for the petitioner contended that the role of the petitioner in the transaction was the very same as alleged against the sixth accused

and since the sixth accused has been discharged, the petitioner is also entitled to be discharged. Learned counsel would submit that there is no

allegation against the petitioner that he had done any act in his individual or personal capacity or that he had obtained any pecuniary gain in the

transaction. Learned counsel would contend that whatever steps taken by the petitioner in the transaction were in his capacity as the Senior Manager

of the company M/s.AIA Engineering Limited and the petitioner cannot be prosecuted on the basis that he is vicariously liable for the acts of the

company in which he was employed.

Learned Public Prosecutor has submitted that there are materials produced by the prosecution to show that the petitioner had conducted inspection

of the cement mill of the Malabar Cements Limited and prepared an inspection note which contained technically incorrect facts. Learned Public

Prosecutor would also submit that it was the petitioner who signed the offer letter on behalf of the company M/s.AIA Engineering Limited. Learned

Public Prosecutor also submitted that, in the offer letter, the petitioner had made misleading and false statements which led to purchase of machinery

from the company in which he was employed.

Admittedly, Malabar Cements Limited had requested the company of the petitioner to submit offer for supply of one complete set of cement mill

internals. When such request was made from a prospective buyer, it was not the lookout of the seller company to ensure that the purchaser had

complied with the requisite procedure for purchase of machinery. It was an internal matter of the purchaser company.

Regarding the contents of the offer letter signed by the petitioner on behalf of his company, it was for the Malabar Cements Limited to decide

whether to purchase the machinery on the basis of that offer letter. They would not have blindly accepted whatever technical data given in the offer

letter given by the seller company. The prosecution has no case that Malabar Cements Limited had no technical expertise to evaluate its needs and to

decide what machinery it should purchase. Inspite of having such technical expertise, if Accused 1 to 4 had committed any misconduct or malpractice,

the petitioner, who is only a Senior Manager of the seller company, cannot be made liable for such acts on the presumption that he was a party to the

conspiracy hatched by Accused 1 to 4.

Regarding the inspection of the cement mill of the Malabar Cements Limited by the petitioner, when a prospective buyer approaches, the seller

company would take all steps to see that the transaction is materialised. As far as such steps are legal, the officers of the seller company cannot be

made criminally liable on the ground that the buyer has committed malpractices or misconduct.

When sale of machinery is made by a company to another and when the seller company obtains only the price of the machinery from the buyer, it

is not explained what is the pecuniary 'advantage' obtained by the seller company. As noticed earlier, for the illegalities, if any, committed by Accused

1 to 4 in the transaction, the officers of the seller company cannot be made liable. The prosecution has no allegation that anybody had received any

'kickbacks' in the transaction.

The essential ingredients of the offence of criminal conspiracy are: (i) an agreement between two or more persons; (ii) the agreement must relate

to doing or causing to be done either (a) an illegal act; or (b) an act which is not illegal in itself but is done by illegal means. It is, therefore, plain that

meeting of minds of two or more persons for doing or causing to be done an illegal act or an act by illegal means is sine qua non of criminal

conspiracy.

The allegations against the petitioner are not sufficient to infer even faintly that there was an agreement between him and the other accused to do

any illegal act or any legal act by illegal means and that pursuant to such an agreement, the petitioner had committed any such act.

The company M/s.AIA Engineering Limited is not arraigned as an accused in the case. The allegations against the petitioner, with regard to acts

done by him in his capacity as a Senior Manager of the seller company, are absolutely vague to infer that he was a party to the conspiracy alleged.

When prosecution intends to proceed against any officer of a company, it is essential to make requisite allegation to constitute vicarious liability. In the

absence of specific allegations against an officer of a company, imputing vicarious liability and in the absence of the company being arrayed as a

party, no proceedings can be initiated against such officer (See Sharad Kumar v. Sangita Rane : (2015) 12 SCC 781 and Sushil Sethi v. State of

Arunachal Pradesh : AIR 2020 SC 765).

In view of the reasons stated above, I find that this is a fit case to exercise the powers of this Court under Section 482 Cr.P.C and to quash the

criminal proceedings against the petitioner.

Consequently, the petition is allowed. Annexure-B final report, as far as it relates to the petitioner, and the criminal proceedings pending against

him on the basis of it, are quashed.

All pending interlocutory applications are closed.