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2025 DIGILAW 324 (KER)

K. T. KURIAKOSE S/o THOMAS v. STATE OF KERALA

2025-02-19

P.G.AJITHKUMAR

body2025
JUDGMENT : 1. The 1 st accused in C.C.No.23 of 2001 on the files of the Court of Enquiry Commissioner and Special Judge, Thiruvananthapuram is the appellant. He along with the 2 nd accused was tried for offences punishable under Sections 13(1) (d) read with Section 13(2) of the Prevention of Corruption Act, 1988 (PC Act) and Section 120B of the Indian Penal Code, 1860 (IPC). The Special Court as per the judgment dated 02.12.2008 convicted and sentenced the appellant for both the offences, however, acquitted the 2 nd accused. Challenging his conviction and sentence, the appellant filed this appeal under Section 374(2) of the Code of Criminal Procedure, 1973 (Code). 2. Heard the learned counsel for the appellant and the learned Special Public Prosecutor (Vigilance). 3. The case of the prosecution is the following: The appellant was the contractor of the work “KIP RBC Formation of Vallikunnam Distributory Package-I from Ch.40-M to 2000-M including CD works”, an agreement in regard to the work was executed on 12.11.1987. Several additional works were to be undertaken. Regarding each such work, separate supplemental agreement was executed. One of such additional work was construction of toe wall and drain regarding which supplemental agreement No.5 dated 11.12.1990 was executed between the appellant and the then Superintending Engineer. In terms of that, additional work was undertaken. 4. The allegation is that the appellant, the 2 nd accused and the then Superintending Engineer hatched a conspiracy and the said additional work, which was estimated at Rs.13,57,688/- was allotted to the appellant after negotiation, for an amount of Rs.21,07,050/-. Although the Chief Engineer authorised the Superintending Engineer to get the work done after negotiation through the appellant, fixing the price of work at such an exorbitant amount was unauthorised. By allotting the work at such a rate, the Government sustained a loss of Rs.9,91,533.81. The then Superintending Engineer and the 2 nd accused misused their position as public servants in allotting the work at such a higher rate and in consequence thereof, the appellant obtained pecuniary advantage of the aforesaid amount. Thereby, they have committed the aforementioned offences. 5. Based on the aforesaid allegations, a charge was framed and read over to the appellant and the 2 nd accused. They pleaded not guilty. Therefore, the prosecution has examined PWs.1 to 9 and proved Exts.P1 to P28. Thereby, they have committed the aforementioned offences. 5. Based on the aforesaid allegations, a charge was framed and read over to the appellant and the 2 nd accused. They pleaded not guilty. Therefore, the prosecution has examined PWs.1 to 9 and proved Exts.P1 to P28. After closing the prosecution evidence, the appellant and the 2 nd accused were examined under Section 313(1)(b) of the Code. They denied the incriminating circumstances appeared against them in evidence. In the statement submitted by the appellant, he justified the supplemental agreement as lawful. He maintained that he quoted a reasonable rate for the work in the negotiation and the Superintending Engineer after deliberations fixed the price even at a lower rate. He contended that there was no element of mischief in the said contract. He added that more than Rs.12 lakhs remained due to him for the work in question and even if any amount is due from him, the Government can well realise the same from that sum. He, however, did not adduce any evidence. 6. The Special Judge considered the entire evidence in detail. After quantifying the amount paid in excess to the appellant as Rs.9,89,913.81/-, it was concluded that the appellant and the then Superintending Engineer hatched a conspiracy resulting in execution of supplemental agreement No.5, which is Ext.P3(e). It was also held that the said conspiracy fructified in undertaking the work and resultant loss of such an amount to the State amounting an offence under Section 13(1)(d) of the PC Act. The 2 nd accused was, however, found not guilty. 7. The learned counsel for the appellant would submit that the view taken by the Special Court regarding financial powers of the Superintending Engineer and application of Ext.P26 Government Order to the work in question, which was undertaken utilising the World Bank aid is incorrect. The Local Competitive Bidding (LCB) guidelines appended to the contract were alone applicable. As per Clauses 31 and 32 in it, the Superintending Engineer had every authority to fix the rate on negotiation. Therefore, the finding that the Superintending Engineer exceeded his authority and therefore the contract underlying Ext.P3(e) is illegal, does not stand scrutiny of law. 8. It is submitted that the original contract was awarded to the appellant at a rate 53.20% in excess of the estimated amount and as such no irregularity can be attributed to Ext.P3(e) agreement. Therefore, the finding that the Superintending Engineer exceeded his authority and therefore the contract underlying Ext.P3(e) is illegal, does not stand scrutiny of law. 8. It is submitted that the original contract was awarded to the appellant at a rate 53.20% in excess of the estimated amount and as such no irregularity can be attributed to Ext.P3(e) agreement. When the Chief Engineer, PW1 empowered the Superintending Engineer as per Ext.P4(d) to negotiate and award the work to the appellant, the supplemental agreement No.5 did not suffer from any vice. It is further submitted that the Special Court gave over- emphasise to the evidence of PW5, a II Grade Draftsman and PW6, a Financial Assistant in defining the powers of the Superintending Engineer, which is palpably wrong. Non- examination of Sri.Suredran Pillai, with whom the appellant executed the original agreement, Ext.P3(a), is fatal to the prosecution. PW1, the Chief Engineer and PW2, the Executive Engineer did not state that the Superintending Engineer did not have the authority to negotiate and fix the rate, which he deemed appropriate. In the light of the said evidence, the court below ought not have held that Ext.P3(e) agreement was unauthorised or illegal. It is further submitted that even if the Superintending Engineer exceeded his authority, the consequence is only an action for irregularity in the process and not a criminal prosecution. Thus, it is maintained that the conviction is incorrect and not based on any legal evidence. 9. The learned Public Prosecutor, on the other hand, submitted that when Ext.P26 G.O. restricted powers of the Superintending Engineer, the same applies to every decision he takes and all agreements he enters into. When Ext. P3(e) contract was awarded without obtaining sanction from the Government, the dishonest intention to award the work at an exorbitant rate and thereby to enable the appellant to obtain pecuniary advantage is quite clear. The learned counsel for the appellant urged that Ext.P26 was not duly proved and therefore the same could not be acted upon. In answer, the learned Special Public Prosecutor submitted that it being a Government Order issued under due authority, no formal proof is necessary to act it upon. Of course, it is a photocopy, but when its existence is not disputed, it could be received in evidence. In answer, the learned Special Public Prosecutor submitted that it being a Government Order issued under due authority, no formal proof is necessary to act it upon. Of course, it is a photocopy, but when its existence is not disputed, it could be received in evidence. In the above regard, the learned Special Public Prosecutor placed reliance on Union of India v. Nihar Kanta Sen and others [(1987) 3 SCC 465] and Venture Global Engineering LIC v. Tech Mahindra Ltd. and another [ (2018) 1 SCC 656 ] 10. Several facts forming the basis of the accusation are not in dispute. The Superintending Engineer with whom the appellant entered into Ext.P3(e) agreement, was a public servant, such an agreement was executed in connection with additional work of construction of toe wall and drain, the contract price was Rs.21,07,050/- the work was executed by the appellant, he received an amount of Rs.27,92,180/-, including for the additional quantity of work, and the contract price was fixed as Rs.21,07,050/- on the basis of negotiation are not disputed. Those facts are borne by records, which are duly proved by the prosecution also. 11. PW1 was the Chief Engineer. PW2 was the Superintending Engineer. PW5 was the II Grade Draftsman, who was dealing with the file relating to the contract. She also was a witness to the original agreement, Ext.P3(a) as well as the 12 supplemental agreements including Ext.P3(e). PW6 was the Financial Assistant in the office of the Superintending Engineer, and he deposed about Ext.P4 file which contains correspondences culminating in execution of Ext.P3(e). Evidence of these witnesses proved the aforementioned facts. 12. PW7 was the Assistant Engineer of Karunagappally KIP RB Circle No.38/25. It was he who submitted the proposal for the additional work in question. He estimated the cost of work at Rs.16,86,428/- and forwarded to the 2 nd accused, who was then the Executive Engineer. He in turn forwarded it to the Superintending Engineer, who modified the estimate and refixed the value at Rs.16,76,738/-. The estimate was computed based on the 1990 PWD schedule of rates. The estimate was submitted to the Chief Engineer, PW1. He reduced the estimate to Rs.13,57,688/- and the basis for the same was PWD schedule of rates, 1996. Accordingly, the work was sanctioned and the then Superintending Engineer was empowered to have negotiation and get executed the work through the same contractor-appellant. 13. The estimate was submitted to the Chief Engineer, PW1. He reduced the estimate to Rs.13,57,688/- and the basis for the same was PWD schedule of rates, 1996. Accordingly, the work was sanctioned and the then Superintending Engineer was empowered to have negotiation and get executed the work through the same contractor-appellant. 13. The Superintending Engineer was thus having sufficient authority to award the contract at the rate to be fixed after negotiation. The case of the prosecution is that the Government delineated the powers of Engineers at every level for granting escalation from the estimated rates. The power invested on the Superintending Engineer was upto Rs.2,500/- or 25% above the estimated amount. When that was the financial power of the Superintending Engineer, any escalation above that limit should have been with the permission of the Government only. Work awarded as per Ext.P3(e) supplemental agreement to the appellant was at a rate more than 50% of the estimate. But no sanction from the Government was obtained. 14. The definite contention of the appellant is that Ext.P26 was not duly proved and therefore the same could not be used in evidence. It was also contended that it was not Ext.P26, but the LCB specifications was applicable to the world bank works. Going by clause 31 of the LCB specifications, negotiation could be done and the revised rates could be fixed by the Superintending Engineer, having he been authorised by PW1. Clauses 31 and 32 in LCB specifications read:- "31. Schedule of Quantities:- Variation in the quantities of work in the Bill of quantities shall not vitiate the contract. The rates quoted for the individual items shall apply for the quantities of work increased or decreased by not more than thirty percent for each of the items. Should quantities of work actually involved under any item exceed quantities provided in the tender by more than thirty percent the rate of such excess over thirty percent of quantity provided in the tender may be revised in accordance with the procedure indicated under clause "Extra items". However, the said revised item rate shall not exceed the item rate quoted, subject to adjustment in accordance with price adjustment clauses. However, the said revised item rate shall not exceed the item rate quoted, subject to adjustment in accordance with price adjustment clauses. Should the quantity of work actually involved under any item be reduced by more than thirty percent of quantity provided in the tender, the bid unit price for the affected item may be revised in accordance with the procedure indicated under "Extra Items". However the total cost of such items should not exceed the cost of seventy percent of the item quoted, subject to adjustment in accordance with price adjustment clauses. The payment for the item will continue to be made at the original rate until the revised rate is decided. 32. Extra Items: Extra items of work shall not vitiate the contract. The Contractor shall be bound to execute extra items of work as directed by the …………………… The rates for extra items are to be mutually agreed." 15. Going by the aforesaid clauses, the cost of an item in the extra work should not exceed 70% of the item quoted, subject to adjustments in accordance with price adjustment clauses. The question was whether the Superintending Engineer could have given escalation in terms of the said clause or he was obliged to confine to the limits in Ext.P26. The question immediately arises is whether Ext.P26 could be relied on for want of its formal proof. 16. The Apex Court in Nihar Kanta Sen (supra) considered whether formal proof was required to rely on a notification issued by the Government. That was a notification published in the gazette. The Apex Court held that having published in the gazette, the court should have taken judicial notice of the notification. In Venture Global Engineering (supra) the question was regarding the requirement of formal proof of certain facts which acquired the character of notorious facts. It was held that no court should insist on formal proof, by evidence, of notorious facts of history, past or present. The date of poll, the passing away of a man of eminence, events that have rocked the nation, etc. need no proof and are judicially noticeable. Judicial notice, in such matters, takes the place of proof and is of equal force. 17. Ext.P26 is a Government Order issued, inter alia, fixing the financial powers of the Engineers in the PWD. The date of poll, the passing away of a man of eminence, events that have rocked the nation, etc. need no proof and are judicially noticeable. Judicial notice, in such matters, takes the place of proof and is of equal force. 17. Ext.P26 is a Government Order issued, inter alia, fixing the financial powers of the Engineers in the PWD. Although the Kallada Irrigation Project was financed by the World Bank and the LCB specifications were issued regarding implementation of the project, the Engineers who implemented the work continued to be in the service of the PWD. Their financial powers can certainly be restricted as per the orders of the Government. Although Ext.P26 is a photostat copy, PW5 and PW6, who are attached to PWD and also other witnesses deposed about such financial powers. It cannot be said that they have no direct knowledge about the order fixing the financial powers. Similar is in the case of the appellant who is a licensed PWD contractor. 18. PWs.5 and 6 spoke about contents of Ext.P26. Production of Ext.P26, dehors it is only a photostat copy, establishing its existence. Therefore, the contents of the said document can certainly be acted upon and used to corroborate what PW5 and PW6 deposed about the financial powers of the Superintending Engineer. Engineers and the contractors of the PWD cannot feign ignorance of the said Government Order, as though it may not have the character of a notorious fact. In the above circumstances the court can place reliance on Ext.P26. 19. When Ext.P26 contains the general powers of the Superintending Engineer, Clauses 31 and 32 in the LCB specifications deal with specific instances concerning extra items of work. The limitation imposed is that the cost should not exceed 70% of the item quoted. It was, however, insisted that unless the rate is revised, the payment of the item should be at the original rate. The decision taken by the Superintending Engineer after negotiation with the appellant to fix the rate of additional work as Rs.21,07,050/- has to be considered in the light of the aforesaid aspects. 20. As deposed by PW5 the contract excess for the original contract covered by Ext.P3(a), excluding the cost of articles supplied by the Government, was 53.20%. Whereas, the overall excess quoted by the appellant for the original work was 34.73%. 20. As deposed by PW5 the contract excess for the original contract covered by Ext.P3(a), excluding the cost of articles supplied by the Government, was 53.20%. Whereas, the overall excess quoted by the appellant for the original work was 34.73%. As stated, PW1 revised the estimate for the additional work and cost was reduced to Rs.13,57,688/-. The total excess cost while awarding the work to the appellant for Rs.21,07,050/- is therefore Rs.7,49,362/-. That is more than 50% of the estimated cost. It may be noted that PW1 fixed the estimated amount taking into account the 1986 PWD schedule of rates. Whereas, the Superintending Engineer adopted the 1990 PWD schedule of rates and estimated the price of work at Rs.16,76,368/-. 21. The additional work was awarded to the appellant as per Ext.P3(e) on 11.12.1990. So, following the 1990 PWD schedule of rates was apposite. Of course, going by the LCB specifications, the original rate should have been followed. Whether there was a criminal conspiracy to allow excess cost for the work in question has to be determined bearing in mind the above aspects. 22. In the above context, the following observations of the Special Court, while arriving at the conclusion that there was criminal conspiracy, are relevant: “A1 was fully aware of the amounts fixed in Ext.P3(a) the original agreement and also amount suggested by the then E.E., A2 herein, the S.E. and that approved by the C.E. So the execution of this supplemental agreement No.5 is sufficient evidence to prove the conspiracy entered between A1 and late Varghese Mathew. So the prosecution succeeded in proving that late Sri.Varghese Mathew and A1 conspired together and executed Ext.P3(e) supplemental agreement by which A1 by corrupt or illegal means obtained pecuniary advantage to the tune of Rs.9,89,913.81.” 23. The Special Court placed reliance on the law laid down by the Apex Court in Bhagwan Swarup Lal Bishan Lal v. State of Maharashtra [ AIR 1965 SC 682 ] and V.C. Shukla v. State (Delhi Administration) [(1982) 2 SCC 665] to conclude so. The view taken in Bhagwan Swarup (supra) is that in the light of the provisions of Section 10 of the Evidence Act, the things done or written by any party to the alleged conspiracy in reference to their common intention is relevant and can be used to prove the existence of the conspiracy. The view taken in Bhagwan Swarup (supra) is that in the light of the provisions of Section 10 of the Evidence Act, the things done or written by any party to the alleged conspiracy in reference to their common intention is relevant and can be used to prove the existence of the conspiracy. As explained in V.C. Shukla (supra), a meeting of mind resulting in ultimate decision taken by the conspirators regarding the commission of the offence has to be proved. The prosecution should show that the circumstances give rise to a conclusive or irresistible inference of the agreement between the persons to commit an offence. 24. As stated, the additional work in question was awarded to the appellant for an amount of Rs.21,07,050/- in violation of Ext.P26 and to a certain extent the LCB specifications. But when PW1 empowered the Superintending Engineer as per Ext.P4(e) to get the work executed through the appellant after negotiation, it was not a case of lack of empowerment. Even though there was no insistence in Ext.P4(e), the Superintending Engineer should have obtained sanction from the Government for awarding work at a cost above 25% of the estimate, which was above his power. All the same, when the original work contract covered by Ext.P3(a) allowed contract excess, after deducting cost of departmental material, of 53.20%, no dishonest intention in fixing the price for the additional work covered by Ext.P3(e) at Rs.21,07,050/- can readily be inferred. So, it cannot be said that from the circumstances which culminated in execution of Ext.P3(e) agreement and that appeared in evidence in this case, a criminal conspiracy is proved. 25. It can be seen from Ext.P4 file that the appellant was invited for a negotiation [Ext.P4(f)]. He offered his rate and that after due deliberation in the negotiation with reference to each item of work, the final amount was arrived at. It was not a secret affair. Various correspondences concerning execution of Ext.P3(e) contract are reflected from Ext.P4 file. All persons, who were dealing with the said file, including PW5 and PW6, were in the know of those correspondences and the incidents transpired. When that much transparency was there, it is incorrect to say that execution of Ext.P3(e) was the result of a criminal conspiracy. 26. A similar situation was considered by the Apex Court in C. Chenga Reddy v. State of A.P. [(1996) 10 SCC 193] . When that much transparency was there, it is incorrect to say that execution of Ext.P3(e) was the result of a criminal conspiracy. 26. A similar situation was considered by the Apex Court in C. Chenga Reddy v. State of A.P. [(1996) 10 SCC 193] . In that case the contract was awarded in violation of the regulations. It was considered whether in the absence of circumstances sufficient to prove the guilt of criminal misconduct could there be a conviction. The following observations are relevant: “22. On a careful consideration of the material on the record, we are of the opinion that though the prosecution has established that the appellants have committed not only codal violations but also irregularities by ignoring various circulars and departmental orders issued from time to time in the matter of allotment of work of jungle clearance on nomination basis and have committed departmental lapse yet. non of the circumstances relied upon by the prosecution are of any conclusive nature and all the circumstances put together do not lead to the irresistible conclusion that the said circumstances are compatible only with the hypothesis of the guilt of the appellant and wholly incompatible with their innocence. In Abdulla Mohammed Pagarkar v. State (Union Territory of Goa, Daman and Diu), [1980] 3 SCC 110 , under somewhat similar circumstances this Court opined that mere disregard of relevant provisions of the Financial Code as well as ordinary norms of procedural behaviour of government officials and con-tractors, without conclusively establishing, beyond a reasonable doubt, the guilt of the concerned officials and contractors, may give rise to a strong suspicion but that cannot be held to establish the guilt of the accused. The established circumstances in this case also do not establish criminality of the appellants beyond the realm of suspicion and, in our opinion, the approach of the trial court and the High Court to the requirements of proof in relation to a criminal charge was not proper. xx xx” (underline added) 27. From the discussions made above, it can certainly be said that the Superintending Engineer (who was arraigned as an accused, but expired before filing of the final report), violated Ext.P26 and to a limited extent of Clause 31 in the LCB specifications. Therefore, there is violation of the Government directions on his part. xx xx” (underline added) 27. From the discussions made above, it can certainly be said that the Superintending Engineer (who was arraigned as an accused, but expired before filing of the final report), violated Ext.P26 and to a limited extent of Clause 31 in the LCB specifications. Therefore, there is violation of the Government directions on his part. But the circumstances brought on record are insufficient to conclude that Ext.P3(e) was executed in consequence of a criminal conspiracy and an offence of criminal misconduct was committed concerning execution of Ext.P3(e) and undertaking of that work. Therefore, the conviction of the appellant for the offence under Section 13(1)(d) read with Section 13(2) of the PC Act and Section 120B of the IPC is liable to be set aside. 28. Although the appellant is entitled for an acquittal, the loss of the Government in respect of the additional work covered by Ext.P3(e) is required to be made good, since there was no Government sanction for the same. It is, therefore, made clear that the acquittal of the appellant does not fetter the Government from recovering the loss as it quantified in respect of the said work, in accordance with law. Accordingly, the appeal is allowed. The conviction of the appellant in C.C.No.23 of 2001 on the file of the Court of Enquiry Commissioner and Special Judge, Thiruvananthapuram and consequent sentence are set aside. The appellant is acquitted and set at liberty.