Rakesh Kumar vs Central Bureau of Investigation and anr.

J.B. Garg, J.

A case has been registered vide FIR No. 16 on 1971992 at Chandigarh mainly against Rakesh Kumar partner of M/s Kay Kubeke of Chandigarh for obtaining steel of different diameter in excess of the requirement and not utilising it while building residential quarters for the staff of the Defence Audit Department in Sector 32, Chandigarh. The FIR and the proceedings which have arisen out of it have been challenged by means of the present petition under Section 482 of the Code of Criminal Procedure.

The relevant part of the FIR is reproduced as under :

"The information has been received that Type II 24 No. Type I and Type III 24 Nos. and Type IV 6 Nos. quarters are being constructed for the officials of the Defence Audit Department in Sector 32, Chandigarh by the PWD Chandigarh Circle. THe contract for the construction was awarded to M/s Klay Kubeke House No. 121, Sector 40A, Chandigarh which is represented by Shri Rakesh Kumar w.e.f. October, 1989. A point surprise check was carried out on 1331992 by officers of the CBI Chandigarh Branch and the CPWD Chandigarh and the (sic) of steel was found as under :

(1) steel issued to the contractor: 171.799 MT.

(2) steel required as per contract: 104.60 MT.

(3) consumed in the work: 110.533 Mt.

(4) balance supposed to be with the contractor (13): 53.26 MT.

(5) Hence the steel found short a site: 53.266 MT.

It was found that the actual requirement of steel was 104.66 MT. whereas 171.799 was issued to the contractor much in excess of the requirement. Shri Rakesh Kumar was the partner of M/s Kay Kube Ke and was the trustee of the Government Store under the direct supervision of Shri K.S. Matharoo, Sawant Ram, R.K. Wadhwa and Ashok Kumar, Engineers at site during the relevant period of their posting.

The contractor, Shri Rakesh in conspiracy with S/Shri K.S. Matharoo, Sawant Ram, R.K. Wadhwa and Ashok Wadhwa and Ashok Kumar cheated the CPWD Department and misappropriated the Government Store, steel weighing about 53.266 MT. worth about Rs. 6,00,000/. Thus, primafacie, the commission of offence under Section 120(B) r/w Section 420 IPC, Section 420 IPC and 13(1)(d) read with Section 13(2) of PC Act, 1988 against S/Shri K.S. Matharoo, Sewant Ram, R.K. Wadhwa, Ashok Kumar and Rakesh Kumar, contractor, is made out. A regular case is, therefore, registered and entrusted to Shri A.K. Anand, Inspector, SPP, CBI, Chandigarh, for investigation."

On behalf of the petitioner it has been alleged that there is a clause in the contract according to which the material received in excess supply is required to be returned to the Department after completion of the contract and before the finalisation of bills. In case of failure on the part of the contractor to return the unused material to the Department, it could charge double the rate of material supplied or the market price of the material supplied in excess whichever is higher; that the cement and steel were uncontrolled items and were available in the open market; that there was also an arbitration clause and the dispute between the parties as regards to the shortage of material etc. was to be referred to the arbitrator to be appointed by the Chief Engineer, Central Public Works Department etc.; that the indents are prepared at the request of the Junior Engineer and the Sub Divisional Engineer and thereafter, the material is supplied by the SDO (Stores) and at the end of every month the Junior Engineer certifies the consumption of the material; that the price of the material fixed as per contract is debited in the account of the contractor and it amounts to sale of the material to the contractor and the price of the material supplied is adjusted at the time of the finalisation of the bills or in other words the contractor for all intents and purposes becomes the owner of the material supplied to him by the Department; that the ingredients of cheating were not there especially when there is a provision to recover the price at double the rate.

In reply it has been averred that the petitioner contractor cheated the CPWD on 431922 by returning sub standard steel measuring 9.335 Mt by procuring the same from Industrial Area, Chandigarh, that surprise check was conducted on 1331992 by the CBI and it revealed that there was misappropriation of 1991.12 kgs of steel; that the contractor does not become the owner of the steel at any stage and it remains absolute property of the Government according to clause 10 of the agreement.

The learned counsel for the respondent has referred to the relevant part of clause 10 of the agreement and it is reproduced as under :

"Notwithstanding anything to the contrary contained in any other clause of contract and or the CPWA. Code all stores/materials so supplied to the contractor or procured with the assistance of the Government shall remain the absolute property of Government and the contractor shall be the stores/materials shall not be removed/disposed of from the site of the work on any account shall be at all times open to inspection by Engineerincharge.

On being required to return the stores/materials the contractor shall hand over the store/materials on being paid or credited such price as the Engineerincharge shall determine having due regard to the condition of the stones/materials. The price allowed to the contractor, however, shall not exceed the amount charged to him excluding the storage if any. The decision of the Engineerincharge shall be final and conclusive. In the event of breach of the aforesaid condition the contractor shall in addition to throwing selfopen to account for contravention of the terms of the licences or permit and/or for criminal breach of trust be liable to Govt. for all advantages or profits resulting or which in the usual course would having resulted in him by reason of such breach."

On behalf of the petitioners it has been argued that the contractor was required to hand over the stores/materials and the Engineerincharge was the authority to determine the condition of the stores and the materials and the price could not exceed the amount charged from him though storages charges if any could be excluded. The learned counsel for the petitioner has referred to Karam Singh v. The State of Punjab, 1983(1) Crimes 391 where a contractor who wa required to construct classrooms in a government High Secondary School, did not carry out the aforesaid work nor did he return the bags of cement when required to do so, the trial court convicted him under Section 406 of the Indian Penal Code and here in the High Court it was held that it was at the most a breach of a condition or breach of a transaction and it was not a case of breach of trust much less criminal. In the case in hand the learned counsel for the Central Bureau of Investigation has set up a clear distinction. Here the contractor undertook the work and also started and completed the construction. It was during the course of construction that it came to notice that the required quantity of steel was not utilised by the contractor while building the residential quarters of the staff of the Defence Audit Department. A surprise check was conducted by the CBI, CPWD and two independent witnesses of P and T Department were associated on 1331992 and it revealed the misappropriation in question. There is specific mention in the FIR that steel of different sizes was dishonestly taken away from the site. It is not a case that the petitioner has been unnecessarily and vexatiously ropedin besides the civil liability.

The learned counsel for the respondent has pointed out that the embezzlement came to notice in a check which was conducted on 621992 when the steel was scarcely found 2 MT instead of 63.602 MT. It has further been stressed that it was a case of misappropriation of steel by the petitioner. It has also been pointed out that the contractor returned substandard steel measuring 9.33 MT to CPWD which he had procured from the Industrial Area, Chandigarh.

In view of the reasons given above, the present petition under Section 482 of the Code of Criminal Procedure fails and is hereby dismissed.

This also disposes of Crl. Misc. No. 11904M of 92 Rakesh Kumar v. CBI and others.