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Jharkhand High Court · body

2013 DIGILAW 148 (JHR)

Sanjeev Kumar v. State of Jharkhand

2013-01-29

R.R.PRASAD

body2013
ORDER By the Court. - This application has been filed for quashing of the first information report of Vigilance P.S. Case No.2 of 2011 (Special Case No. 2 of 2011) registered under Sections 409, 420, 467, 471, 477-A and 120-B of Indian Penal Code and also under Section 13(2) read with Section 13(1)(c)(d) of Prevention of Corruption Act, 1988. 2. Before adverting to the submissions made on behalf of the parties as also before noticing the case of the prosecution as has been made out in the FIR, the background of the case is necessarily to be taken notice of which is being noted hereinunder. 3. Jharkhand State Electricity Board issued Notice Inviting Tender (NIT) for undertaking work under the Accelerated Power Development and Reforms Programme (for short APDRP) under Package 'D' for Jamshedpur Town stipulating therein that the work would be targeted one which requires to be completed within time schedule and that the price quoted by the bidder shall not be subjected to variation on any account. Making it further clear that no escalation in prices shall be admissible on any account to the bidder, Same clauses were reiterated when the work orders were issued to M/s. Ramji Power Company Limited (for short M/s RPCL) and even in the agreement entered into in between the JSEB and M/s. RPCL they were part of the terms and conditions. M/s. RPCL could not execute the work by the due date i.e., 26.9.2005. However, time was extended from 26.9.2005 to 31.7.2007 without putting any clause for escalation of price but with imposition of liquidated damages (L.D.). M/s. RPCL agreed to that proposal and assured that the work will be completed within extended time and it will not be going for any arbitration. When it was found that M/s. RPCL contrary to its promise did not even start the work by 31.7.2007, the then Chairman, JSEB directed the Chief Engineer. APDRP to put up agenda for termination of contract of M/s. RPCL in the next meeting of the Board of JSEB. Accordingly, the Chief Engineer, APDRP put up the agenda to the then Member (Technical), JSEB, who in connivance with the other accused held back the concerned file till the transfer of the then Chairman, JSEB. 4. Thereupon Mr. APDRP to put up agenda for termination of contract of M/s. RPCL in the next meeting of the Board of JSEB. Accordingly, the Chief Engineer, APDRP put up the agenda to the then Member (Technical), JSEB, who in connivance with the other accused held back the concerned file till the transfer of the then Chairman, JSEB. 4. Thereupon Mr. P.K. Sinha, the then Electrical Executive Engineer., APDRP, put note in the file for appointment of Arbitrator and for waiver of penalty after having approval of the Chairman. Thereupon, the Arbitrator was appointed who gave award. Pursuant to that, payments were made to the contractor-M/s. RPCL. Thereupon, when it was detected that grave financial irregularities have been committed in making payments to M/s. RPCL by adopting malpractices by the officers of the Board, FIR was lodged with the Vigilance alleging therein that the time extended upto July, 2007 had been granted to M/s. RPCL but with stipulation that there should be no price escalation and that was subject to imposition of L.D. In spite of that, when it was found that M/s. RPCL has even not started the work, the then Chairman, JSEB asked the concerned officers to place the agenda in the next meeting of the Board for termination of contract but the officers of the Board having hatched conspiracy, never placed the agenda before the Board for termination of contract rather Mr. P.K. Sinha, Electrical Executive Engineer, APDRP, placed the me for appointment of an Arbitrator, waiver of penalty and extension of time. Thereupon, at the behest of said P.K. Sinha and other officers of the Board including the Director of Finance, an Arbitrator was appointed who gave award in favour of M/s. RPCL and pursuant to that, the Board had to pay a sum of Rs.10.87 Crores. That amount also included the amount on account of price variation but that was never the subject matter of dispute and, therefore, the Authority of the Board should have contested the award but the Authority of the Board without examining the merit of the award placed the file for approval of the award of the sole Arbitrator and then the then Chief Engineer, APDRP without examining the consequences of the award recommended for its approval by the Board. 5. It has further been alleged that Mr. 5. It has further been alleged that Mr. P.K. Sinha with malafide intention, deliberately suppressed the fact that implementation of award will have financial impact of additional Rs.11 Crores which amount is not available for making payment to the contractor and that additional fund could be arranged only after approval of the Ministry of Power. Government of India. By suppressing the aforesaid fact the file was moved for making payments of bill amounting to Rs. 7,89,84,826/- net value of Rs. 4,89,24,788/- which was paid after the order was passed by the Finance Controller-III though he had no authority to pass the order for making payment of a sum of Rs. Three Crores or above, rather the authority was either lying with the Member Finance or the Chairman, JSEB, Likewise payment of Rs.2,75,43,156/- towards price variation was made from the account of project cost which is gross financial irregularities as that amount could have been paid only after making the fund available. 6. In the last, it has been alleged that the total cost of the project was Rs.33.13 Crores. As against that, the work done including the cost of materials were worth Rs.19,85,08,406/- but the contractor was paid a sum of Rs.28,90,95,479/- and thereby a sum of Rs. 9,05,87,073/- has been paid in excess. The said FIR was lodged against number of officers of JSEB including this petitioner, who at the relevant point of time was the Deputy Director, Account (Headquarters). 7. Mr. Chittaranjan Sinha, learned senior counsel appearing for the petitioner, submits that whatever allegations. have been made in the FIR, all are wholly misconceived, as it would appear from the FIR that the payments were made pursuant to the award given by the Arbitrator and thereby there could not be any criminality on the part of the officers of the Board in making payment to the Contractor. 8. In this regard, it was submitted that this Court in a PIL (CWJC No. 1793 of 2001 and analogous matters) passed an order for taking up the matter relating to the affairs of JSEB by the CBI, if it finds any criminality involved in the matter. Accordingly, the CBI proceeded in the matter and exchanged correspondences with the Authorities including the informant of this case. Accordingly, the CBI proceeded in the matter and exchanged correspondences with the Authorities including the informant of this case. At the same time, representations were made by the accused persons before the officials of the CBI and the CBI having scrutinized the matter did find prima facie that pursuant to the arbitral award payments have been made which are quite proper and bonafide and it leaves no scope for further investigation or inquiry. However, at the same time, the CBI asked for copy of the inquiry inputs of the Finance Vigilance and Legal Department of JSEB if available. Upon further inquiry, it was recorded that perhaps the Board is itself responsible. if the alleged payments were irregular or illegal and the complaint seems to have been filed in haste. Thus, it was found by the CBI that there has not been any criminality. In such situation, continuation of any criminal proceeding against the petitioner is unwarranted. 9. It was further submitted that the role, which has been alleged to have been played by the petitioner, is so insignificant that it never connects the act of the petitioner with malpractices or financial irregularities. if any, In this respect it was pointed out that the petitioner at the relevant point of time was the Deputy Director, Account (Headquarters) and not the Deputy Director. Account, APDRP and as such he had nothing to do with the scheme of APDRP but it happened so that when the Chief Engineer, APDRP passed an order for making payment to the contractor-M/s. RPCL from the working fund. a query was made from the petitioner on the file about the position of working fund. Upon it a note was given that only a sum of Rs. 64 Lakhs is there in the working fund and simply for this reason the petitioner has been made accused which act of the petitioner never connects with any culpability and. therefore, the first information report is fit to be quashed so far the petitioner is concerned. 10. As against this Mr. Shailesh, learned counsel appearing for the Vigilance, submits that this case is not so simple as has been projected on behalf of the petitioner. therefore, the first information report is fit to be quashed so far the petitioner is concerned. 10. As against this Mr. Shailesh, learned counsel appearing for the Vigilance, submits that this case is not so simple as has been projected on behalf of the petitioner. This is a case in which several officials including the top officials of JSEB have entered into a conspiracy with the contractor-M/s. RPCL and they having abused their official position caused huge loss to the JSEB and Wrongful gain to M/s RPCL. 11. In this regard. it was submitted that when decision was taken by the then Chairman. JSEB to place the agenda before the Board for terminating the contract of M/s. RPCL, that order was never placed before the then Chairman or any other higher officials of JSEB, rather by suppressing that order, Mr. P.K. Sinha, the then Electrical Executive Engineer, APDRP, placed the file for appointment of an Arbitrator, waiver of penalty and also extension of time on the garb of an opinion of the Advocate General but the opinion of the Advocate General was altogether on the different point. Not only that, the then Electrical Executive Engineer. APDRP, purposely did not bring into notice of the higher officials regarding terms and conditions of the contract stipulating therein that the price quoted by the Arbitrator shall remain firm during completion of the project and shall not be subjected to variation on any account and that no escalation in prices shall be admissible on any account to the bidder. By suppressing all these facts, the then Electrical Executive Engineer. APDRP and other officials of JSEB succeeded in getting an Arbitrator appointed who passed an award extending the period for completing the work and also allowed the price variation which was against the agreement. 12. It was further pointed out that when award was passed officials of JSEB acted so hurriedly in the matter of payment of Rs. 4,89,24,788/- that it took only one day in getting clearance from number of officials and ultimately. it was paid in violation of the norms of JSEB without having approval of the competent authority though later on post facto sanction was taken but it was quite foreign to norms of JSEB. 4,89,24,788/- that it took only one day in getting clearance from number of officials and ultimately. it was paid in violation of the norms of JSEB without having approval of the competent authority though later on post facto sanction was taken but it was quite foreign to norms of JSEB. Same was the position in the matter of payment of Rs.2,75,43,156/- whereby when P.K. Sinha, who by the time had become Chief Engineer APDRP passed an order for payment of the said amount from the working fund, the file came to the Deputy Director, Account, APDRP who did propose that the release order may be obtained from the Chairman, JSEB but instead of that, Director (Finance), APDRP asked for position of the working fund, upon which, this petitioner-Deputy Director, Account (Headquarters) gave his nothing and marked it to the Director (Finance), APDRP. Thereupon, finance Controller, JSEB put a note that since adequate amount is not available in the working fund, payment may be made from the Power Finance Corporation Loan Fund of APDRP and, accordingly, money was diverted from the Power Finance Corporation Loan Fund to Power Finance Corporation Working Fund and then payment was made which was quite illegal for the reason that as per rule, approval of the Government of Jharkhand and also of the Ministry of Power, Government of India was required to have before payment of price variation claim from Power Finance Corporation Loan Fund and at that particular point of time, this petitioner was the Deputy Director (Account) of Power Finance Corporation Loan Fund and he should have raised objection in making payment but he never raised any objection and thereby he facilitated wrong doing of diverting the money from the Power Finance Corporation Loan Fund to Power Finance Corporation Working Fund and then payments were made to the contractor M/s. RPCL. Thus, all these facts prima facie, go to establish that many officials of JSEB having hatched conspiracy with the contractor M/s. RPCL and by abusing their official position dishonestly caused huge loss to the public exchequer and wrongul gain to M/s. RPCL and in such situation, where the police has been investigating the matter, the first information report never warrants to be quashed as the allegation made against the accused persons prima facie shows that huge loss has been caused to the JSEB and that since the investigation is going on, it is quite likely that the Investigating Agency may collect more materials showing the act of conspiracy of every accused persons including the petitioner and thereby the first information report never warrants to be quashed. 13. Having heard learned counsel appearing for the parties, it becomes quite apparent that when contractor M/s. RPCL did not accomplish the job within the time as stipulated under the agreement, decision was taken to place the matter before the Chairman, JSEB for terminating the contract of M/s. RPCL but that was suppressed purposely. By suppressing that fact, the file was processed for appointment of an Arbitrator, waiver of penalty and extension of time, though under the agreement job was to be accomplished within time stipulated thereunder without any variation of price. However, at one point of time, it was extended but with stipulation of deducting liquidated damages. After the award was passed, file was moved so hurriedly for making payment and even by diverting the fund that one may form opinion though prima facie that officials of JSEB including the petitioner in conspiracy with the contractor. M/s. RPCL acted in a way which according to the prosecution was not legal and that the investigation is still going on whereby the role played by each of the accused persons be exposed to determine in what manner they were in conspiracy with each other. The role played by the petitioner at this stage may not be sufficient to show the culpability but since the investigation is going on, it may be that further material is collected to establish the role of the petitioner as one of the conspirators. 14. Under the situation, first information report never warrants to be quashed. Accordingly, this application stands dismissed. 15. 14. Under the situation, first information report never warrants to be quashed. Accordingly, this application stands dismissed. 15. However, the petitioner would be at liberty to raise the points of insufficiency of materials to frame charge after submission of the charge-sheet when cognizance of the offence is taken. Application dismissed.