Sri. Ashok Raj @ Ashok Kumar Badyal vs State

Anand Byrareddy, J.—These appeals are heard and disposed of by this common judgment as the appellants are the accused in the same case. The appellant in first of these appeals was arraigned as accused no. 1 (Hereinafter referred to as the ''A. 1'', for brevity) and the appellant in the second of these appeals was arraigned as accused no. 2 (Hereinafter referred to as the ''A. 2'', for brevity) before the trial court.

It was the case of the prosecution that India Tourism Development Corporation Limited (Hereinafter referred to as the ''ITDC'', for brevity), a Government of India undertaking, was running a Five Star Hotel namely, Hotel Ashoka, at Bangalore during the years-1995 to 1997. A. 1 was working as a Senior Manager in the said Hotel during the said period. It transpires that the renovation work had been taken up in respect of 32 guest rooms on the second and fourth floor, respectively, of the said hotel during the said period. It was alleged that there was a criminal conspiracy between A. 1 and A. 2, as a result of which, the renovation work, which A. 1 was empowered to award, with ulterior motives had been conferred on A. 2, with an understanding that payments would be made for the sub-standard work, not executed according to the specifications and the proceeds would be shared between the accused. This is said to have been discovered in hindsight and therefore, they were prosecuted.

It is the case of the prosecution that A. 1, as the head of the Civil Engineering Division of the hotel, was in a position to invite tenders, which had been done by issuing advertisements in the local news papers. Several entities had submitted their tenders. However, since A. 1 intended to award the work to A. 2 in furtherance of their criminal conspiracy, it was indeed awarded in the name of a firm, which was said to have been represented by A. 2 and which was later discovered to be nonexistent, namely, M/s. Interiors India Limited, Bangalore (Hereinafter referred to as the ''IIL'', for brevity). It is the case of the prosecution that A. 1 himself had processed the tender application and also supported the proposal for awarding the contract to IIL, without regard to the credentials of the said firm and suppressed the details. The unsuspecting management had approved the award of contract in favour of the said firm.

It is the case of the prosecution that when bills for payment in respect of the works executed by IIL were submitted, the same were processed by A. 1 and recommended for payment, again giving no room for suspicion as regards the identity of the agency being suspect, or the works being substandard, in order to ensure illegal profit. As a result of this conspiracy, the loss sustained by the management was quantified at Rs. 1.46 Lakh. IT is on these facts that the accused had been charge- sheeted and charges were framed against the accused for offences punishable under Sections 120-B, 420, 468, 471 of the Indian Penal Code, 1860 (hereinafter referred to as the ''IPC, for brevity) and an additional charge was framed against A. 1 for misconduct punishable under sections 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988 (Hereinafter referred to as the ''PC Act'', for brevity).

The accused pleaded not guilty and claimed to be tried. The prosecution examined 21 witnesses and marked documents in support of the charges. The statements of the accused u/s 313 of the Code of Criminal Procedure, 1973 (Hereinafter referred to as Cr.P.C., for brevity) were recorded.

The defence set up by the accused was as follows:-

A. 1 had stated that after obtaining technical sanction for the work at Rs. 8,94,372.80. the tender of IIL, which was said to be the lowest was accepted and the proposal recommending to award work was sent by A. 1 to the General Manager, who approved the same and the same was also scrutinized by the Engineers of the Scrutiny Cell, Vice President (Engineer) accepted the tender and a work order was issued. The net amount payable after the work was completed was Rs. 12,06,761.68, which was again approved by the Director (Finance). The balance payable after deducting the payments made in furtherance of the running bills was Rs. 2,06,761.68 and that the said accused had along with one Ayya Dorai and Engineering Assistant Mr. Jagadish, had visited the office of IIL at J.C. Road, Bangalore and the cheques and correspondences were all delivered at that particular address and there is no indication of any correspondence being returned to contend that it was not a non-existent firm. As there was delay in payment on one occasion and since there was urgency of work to be attended by the contractor, on request of the accounts branch, A. 1 had received the cheque and handed over to the Site Engineer of the Contract. Therefore, there was no irregularity that could be pointed out to claim that there was any kind of conspiracy.

Insofar as A. 2 was concerned, he had claimed a defence that he was a Civil Engineer. He along with one Nimesh, who is a partner, had worked in several interior decorating companies and thereafter he had started to work independently in the name and style of M/s. Ashok Kumar Badyal and thereafter had established a firm along with Nimesh in the name of IIL. Pursuant to the advertisement issued by ITDC, the firm had submitted quotations along with the tender forms and credentials in the name and style of IIL. However, it transpires that Nimesh, a partner of A. 2, had received better business offers from New Delhi and hence he had relocated himself to New Delhi and was not in a position to take up the work in question at Bangalore and had disassociated himself from A.2. Since the work allotted was during this transition period, the later discovery said to have been made by the prosecution, to the effect that the firm was non-existent and that there was discrepancy in the correspondence having been carried on-by Nimesh and the works having been completed by A.2 etc., cannot be construed as resulting in offences punishable under the several provisions of the IPC that have been invoked. It is not the case of the prosecution that the works have not been carried out. On the other hand, he was yet to receive a sum of Rs. 2.50 lakh from the management and hence, it was he who was the aggrieved person and could not be characterized as a criminal.

The trial court framed the following points for its consideration on the above charges and the defence set up :-

Whether the prosecution established that the prosecution sanction order obtained in this case is valid under law?

Whether the prosecution further proves that the accused persons in furtherance of their criminal conspiracy, has cheated Hotel Ashoka in the matter relating to awarding of contract work and caused wrongful loss to the extent of Rs. 1,46,000/- committed the offence of cheating punishable u/s 420 of the Indian Penal Code, 1860?

Whether the prosecution further proves that the accused No. 1, in furtherance of the criminal conspiracy by dishonestly and fraudulently preparing and submitting the tender application in the name of a non-existing firm by name M/s. Interior India got approval for awarding the said contract and thereby both accused have committed the offence punishable u/s 468 of the Indian Penal Code, 1860?

Whether the prosecution further proves that the accused No. 1 and 2 in furtherance of the criminal conspiracy, by using the forged documents as genuine relating to non-existing firm in the came and style of M/s. Interior India, Bangalore has committed an offence punishable u/s 471 of the Indian Penal Code, 1860?

Whether the prosecution further proves that accused No. 1 being a public servant has committed the criminal misconduct within the meaning of Section 13(2) read with 13(1)(d) of the Prevention of Corruption Act 1988?

Whether the prosecution proves that the accused have committed offence of criminal conspiracy to commit the offence of cheating and the offence punishable u/s 468 and 471 of Indian Penal Code, 1860 and thereby committed offence punishable u/s 120B of Indian Penal Code, 1860?

The court below held all the points in the affirmative in favour of the prosecution and convicted A. 1 to undergo rigorous imprisonment for six months and to pay a fine of Rs. 5,000/- for an offence punishable u/s 120-B of the IPC; to undergo rigorous imprisonment for six months and to pay a fine of Rs. 25,000/- for an offence punishable u/s 420 of the IPC; to undergo rigorous imprisonment for six months and to pay a fine of Rs. 10,000/- for an offence punishable u/s 468 of the IPC; to undergo rigorous imprisonment for six months and to pay a fine of Rs. 10,000/- for an offence punishable u/s 471 of the IPC, and to undergo imprisonment for one year and to pay a fine of Rs. 20,000/- for an offence punishable u/s 13(2) read with 13(1)(d) of the PC Act.

Accused no. 2 was convicted and sentenced to undergo rigorous imprisonment for six months and to pay a fine of Rs. 5,000/- for an offence punishable u/s 120-B of the IPC; to undergo rigorous imprisonment for six months and to pay a fine of Rs. 25,000/- for an offence punishable u/s 420 of the IPC; to undergo rigorous imprisonment for six months and to pay a fine of Rs. 10,000/- for an offence punishable u/s 468 of the IPC and to undergo rigorous imprisonment for six months and to pay a fine of Rs. 10,000/- for an offence punishable u/s 471 of the IPC. All the sentences were to run concurrently.

It is this which is in challenge in these appeals.

Heard Shri A.H. Bhagavan, appearing for A. 2 and Shri Jairaj, appearing for A. 1.

It is contended by the learned Counsel for A. 1 that the employer of A. 1 was the Government of India and the allegation that there was an unilateral decision, as a result of a criminal conspiracy between A. 1 and A. 2, to award the civil contract in favour of A. 2 by A. 1, by suppressing the fact that A. 2 was representing a non-existent firm, with no experience of civil interior works and that as a result of the same, the management having suffered a loss, conversely alleging that A. 1 and A. 2 had made illegal profit are allegations, which are made without reference to the actual material structure of which the A. 1 was only a part. The hierarchy through which the decision making process takes place would hardly enable A. 1 to have ensured the entrustment of the work to A. 2, if he did not qualify and if the offer made was not competitive. It is after scrutiny of all the particulars that the tender of the IIL was accepted. it is pointed out that the rebuttal evidence was tendered on behalf of the accused and the evidence of DW. 1 to DW. 3 would certainly indicate that there are atleast two views possible and this would not enable the prosecution to claim that the allegations had been proved beyond all reasonable doubt.

It is also contended that the charges framed against the A. 1, on the ground that there was no document to show that the partner of IIL-Nimesh, had authorised A. 2 to execute the works, whereas it had been proved by cogent evidence to establish that A. 2 was authorised by Nimesh to execute the works, by an authorization letter dated 25.8.1999 and that it was Nimesh who has signed all the running bills and not Ashok Kumar Badyal and the allegation that the signatures found on the running bills were that of A. 2 is false and the prosecution has failed to that extent to establish any criminal intention on the part of A. 1 in discharge of his duties.

Further, the allegation that the tenders submitted by IIL, the testimonials that were filed were that of Nimesh and therefore; A. 2 had no authority to represent IIL, was an allegation which required the prosecution to examine Nimesh to establish the same and Nimesh was cited as a prosecution witness, but was never examined. In any event, the work having been awarded after the testimonials were scrutinized to accept the authenticity of the tender and the credentials of the firm, it was not open for the prosecution, to make out a case by hindsight, in which, the prosecution had miserably failed in not establishing the material witnesses in support of the allegation. The significant circumstance that A. 1 was neither the sole authority to award work nor to pass the bills, has been lost sight of by the trial court, which would go to the root of the matter. Further; all payments had been made by account payee cheques in the name of IIL, represented by DW. 1 Ashok Raj and it could not be claimed that it was unlawfully made in favour of A. 2 at the behest of A. 1. It is also pointed out that during the course of investigation, the specimen handwriting signature of the appellants were collected by the Investigating Officer, apparently to prove the forgery and though a charge has been laid alleging forgery, but not supported by any report of an handwriting expert, would clearly demonstrate that the prosecution had no case at all insofar as the said charge was concerned. The court below has completely overlooked the documents Exhibits D. 1 to D. 13 as well as the admissions elicited during the course of cross-examination, in support of their defence, which has resulted in a miscarriage of justice. It is also to be noticed that the alleged loss said to have been incurred by the management on account of the conduct of the accused has not been established. On the other hand, it is on record that A. 2 was due to be paid and the management was in arrears of such payment. Therefore, the learned Counsel would plead that the judgment of the court below be set aside and the accused be acquitted.

In turn, the learned Counsel for A. 2 would contend as follows:-

That A. 2 had satisfactorily explained his conduct in the execution of the works awarded to IIL by tendering evidence as DW. 3 and further also having examined two other independent witnesses, namely, DW. 1 Ashok Raj and DW. 2 Omkar Upadhya and having placed reliance on Exhibits D. 1 to D. 13, there was material placed on record that A. 2 had invested a sum of Rs. 1,00,000/- to undertake the work along with Nimesh, who had packed off, on having secured better prospects at New Delhi. The contract having been awarded to IIL represented by Nimesh and the work having been taken over on an authorization from Nimesh, who had withdrawn from the partnership firm, had occurred coincidentally and therefore there was no fraud or irregularity and was only a circumstance which has beer explained. If it was contended that the appellant was an imposter and had executed the work fraudulently, though the contract had been awarded to IIL, it was for the prosecution to have established the same by tendering evidence in this regard and Nimesh would have been the best person to speak for the same. Though he was cited as a witness by the prosecution, he was never examined. The trial court has also ignored the circumstance that the appellant has incurred heavy losses on account of having undertaken the work and the criminal prosecution in the manner in which it has been launched against the appellant, only compounds his misery. In other words, there is no criminality to be attributed to the conduct of the appellant. It is also pointed out that DW. 1 was duly authorised by Nimesh to execute the work by an authorization letter dated 25.8.1999 and it is the said Ashok Raj, who has signed all the running bills and not A. 2 and the allegation that A. 2 had signed the bills, has been established to be a false allegation. It was also established that the firm IIL was very much existent, though it was in the process of transition, in Nimesh having chosen to withdraw, but having authorised Ashok Raj to carry on the work, which had been awarded. Hence, the learned Counsel would submit that on the mere allegation that the work was of sub-standard quality, a criminal case is sought to be foisted on A. 2.

In the light of the above contentions, the trial court, itself has noticed, as in the circumstance that the accused had also tendered evidence in support of their defence and has proceeded to hold that the phenomenon of discharging the burden of proof would lose its significance in such situations, where both the parties tender evidence and it would be a matter of appreciating the evidence led by both sides, and has proceeded to analyse the evidence of the accused in appreciating whether the allegation of the prosecution that IIL was a non-existent firm. Insofar as the claim that Nimesh had withdrawn from the partnership firm and that A. 2 became the sole proprietor thereafter, has been negated on finding that other incidental documents indicated that Nimesh was continued to be shown as representing the firm. Since it was claimed that the agreement in respect of the civil works was executed on 5.9.1994 and was signed by Nimesh, the claim by A. 2 that Nimesh had left the firm by the end of July 1994 and that he became the sole proprietor thereafter, was hence a contradiction and would falsify the case of A. 2 that he was a partner along with Nimesh and after his retirement, he continued as a proprietor. Significantly, the bank account that was held by A. 2 was as a sole proprietor, whereas the agreement was held by Nimesh representing IIL. This controversy as to whether the firm continued in existence or whether there was a change in the constitution and if A. 2 was the sole proprietor, whether he had the authority to continue the works, which had been awarded to IIL, represented by Nimesh, was not a controversy, which was relevant for the purpose of addressing the criminality that was alleged. The internal changes in the constitution of IIL was purely incidental. There was no controversy as between Nimesh and A. 2. Therefore, it was unnecessary for the court below to have embarked on a detailed examination, to point out the discrepancies and the seeming contradictions in the evidence as regards the affairs of the IIL is concerned. The court below has also disbelieved the evidence of Ashok Raj, who was said to be representing Nimesh and duly authorised to act on behalf of IIL, which was again not a controversy that was relevant for the case. The primary accused was A. 1 and whether A. 1 had, in conspiracy with A. 2 or the firm IIL, managed to award the contract to IIL inspite of better offers and had also passed bills for the inferior work that was rendered. This aspect is somehow overshadowed by the detailed analysis of the affairs of TIL vis-�-vis Nimesh and A. 2. Therefore, the serious view adopted by the trial court insofar as the bona fides of A. 2 being suspect was not relevant. In addressing the case of A. 1, the trial court''s view of the transaction has been extremely prejudiced in view of A. 2 not having established his credentials insofar as representing IIL as its erstwhile partner and it is that which has clouded its view in so far as the case that is alleged against A. 1. This is evident from a reading of Para-30 onwards of the judgment of the trial court, where the emphasis is on lack of bona fides of A.2 in having undertaken the work, allegedly at the discretion of A. 1 for their illegal benefit. There is no basis for the finding that the alleged defective work had been carried out by the A.2, except that there was an allegation by the management in that regard. As already stated, the case of A.2 has been totally disbelieved on account of the discrepancies, which the court has found. Insofar as the claim that A.2 and Nimesh were partners, but Nimesh having withdrawn after the contract was awarded, A. 2 had continued to execute the works, may not have been established to the satisfaction of the court below. That by itself did not establish the criminal conspiracy having regard to the hierarchy of the management under which A. 1 was employed and it is also not found as a fact that A.1 had the exclusive authority to award the contract in favour of IIL or any other party nor is it established as a fact that the bills could be passed exclusively by A.1, or the fact that he had received the cheque meant for A.2 or IIL and therefore, the same established his connivance with the contractor, has been sufficiently explained by the said witnesses. That however has been negated. Therefore, the manner in which the trial court has proceeded to address the bona fides of A.2 and thereafter has taken a coloured view of the role of A.1, has resulted in a miscarriage of justice. If it was the case of the management that there was defective work, it was a fit case to seek damages as against the contractor. It is noticed from the record that there was no such claim made, but on the other hand, the management has thought it fit to launch criminal proceedings, which do not have any merit given the allegations and the evidence tendered and the findings arrived at by the trial court.

Therefore, for the reasons aforesaid, the appeals are allowed and the judgment of the trial court is set aside and the appellants are acquitted. The fine amount, if any, paid by the appellants shall be refunded to them.