Supreme Court of India
A. SRINIVASULUversusTHE STATE REP. BY THE INSPECTOR OF POLICE
- Citation
- 2023 INSC 971
- Decided
- 15 June 2023
- Disposal
- Appeal(s) allowed
- Bench
- V RAMASUBRAMANIAN
Holding
A prosecution of public servants for offences alleged to have been committed in the discharge of official duty requires prior sanction under Section 197 CrPC, and the procedural safeguards for approvers under Section 306(4)(a) are not triggered when a Special Judge takes cognizance directly, rendering the convictions unsustainable.
Summary
The case involved senior officials of BHEL and private individuals accused of conspiring to award a contract for a desalination plant through a restricted tender, allegedly causing a loss of Rs.4.32 crore to the PSU. The prosecution relied heavily on the testimony of an approver who had been granted pardon under Section 306 of the CrPC, but the court found his evidence unreliable and uncorroborated. The Court held that the prosecution failed to obtain the mandatory prior sanction under Section 197 of the CrPC for prosecuting the public servants, and that the alleged acts were within the scope of official duty. It also concluded that the procedural requirements for examining an approver under Section 306(4)(a) were not applicable because the Special Judge had taken cognizance directly, and that the High Court’s use of Section 73 of the Evidence Act to compare signatures was improper. Consequently, the convictions under the IPC and the Prevention of Corruption Act were set aside and the appellants were acquitted.
Issues considered
- The necessity of obtaining prior sanction under Section 197 CrPC for prosecuting public servants for offences alleged to be committed in the discharge of official duty.
- Whether the procedure prescribed under Section 306(4)(a) CrPC for examining an approver twice applies when a Special Judge takes cognizance directly under the PC Act.
- The admissibility and reliability of the approver's testimony and the requirement of corroboration under Indian evidentiary law.
- The correctness of the High Court’s reliance on Section 73 of the Evidence Act to compare disputed signatures without admitted specimens.
- The applicability of Sections 13(2) and 13(1)(d) of the Prevention of Corruption Act to the accused who were retired at the time of the final report.
Legislation cited
- Code of Criminal Procedure, 1973s. 190, s. 193, s. 195(1)(b)(i), s. 197(1), s. 306, s. 306(4)(a), s. 306(5), s. 307, s. 308
- Indian Evidence Act, 1872s. 133, s. 73
- Indian Penal Code, 1860s. 120B, s. 193, s. 420, s. 468, s. 471
- Prevention of Corruption Act, 1988s. 13(1)(d), s. 13(2), s. 19(1), s. 5, s. 5(2)
Subjects
criminal conspiracycheatingpublic servantprevious sanctionSection 197 CrPCapproverpardonevidencehandwriting expertPrevention of Corruption ActIndian Penal Coderestricted tenderBHELcorruption
Judgment
[2023] 10 S.C.R. 11 11
A. SRINIVASULU A
v.
THE STATE REP. BY THE INSPECTOR OF POLICE
(Criminal Appeal No. 2417 of 2010)
JUNE 15, 2023 B
[V. RAMASUBRAMANIAN AND PANKAJ MITHAL, JJ.]
Penal Code, 1860: ss.120B, 193, 420, 468 and 471 – Criminal
conspiracy and cheating – Prosecution case that the appellant,
officials of PSU and other private persons entered into a criminal
C
conspiracy to cheat the PSU in the matter of award of contract –
Contract granted to one company after resorting to limited/restricted
tenders causing wrongful loss to the PSU – Illegalities alleged in
the procedure followed for inviting the tender – FIR lodged u/s.
120B r/w ss. 193, 420, 468, 471 r/w ss. 13 (2) and 13(1)(d) of PC
Act – Final report against accused persons including the public D
servants-officers of PSU – Two accused died during trial – Special
judge acquitted one but convicted four – Upheld by the High Court
– On appeal, held: Culpability of the appellants for offences under
the IPC and the PC Act not established and proved – Thus, the
judgment of the Special Court convicting the appellants for various
E
offences and judgment of the High Court confirming the same set
aside – Prevention of Corruption Act, 1988 – s.13.
Code of Criminal Procedure, 1973:
s. 197(1) – Prosecution of public servant – Previous sanction
– Requirement of – Executive director of PSU with a view to confer F
an unfair and under advantage, went for restricted tender by
dictating the names of four bogus companies along with the name
of the one chosen to whom the contract was awarded – Allegations
that he got into a criminal conspiracy with others to commit offences
– He retired five years before filing of the final report – Previous
sanction u/s. 197 not sought for prosecuting the executive director G
– Correctness of – Held: Prosecution ought to have taken previous
sanction in terms of s. 197(1) for prosecuting the executive director
for the offences under the IPC – Sanction is required not only for
acts done in the discharge of official duty but also required for any
act purported to be done in the discharge of official duty and/or H
11
12 SUPREME COURT REPORTS [2023] 10 S.C.R.
A act done under colour of or in excess of such duty or authority – If
the very same act of the co-conspirators fell in the realm of
commercial wisdom, it is impossible that the act of executive director,
as part of the criminal conspiracy, fell outside the discharge of his
public duty, so as to disentitle him for protection u/s.197(1) – His
act, even if alleged to be lacking in bona fides or in pursuance of a
B
conspiracy, would be an act in the discharge of his official duty,
making the case come within the parameters of s. 197(1).
ss. 306, 307 – Tender of pardon to approver – Procedure
prescribed by s. 306(4)(a) – Compliance of – On facts, the additional
Chief Judicial Magistrate granted pardon at the stage of
C investigation and the prosecution examined him before the Special
Court – Plea that the approver, in cases covered by s.306(1), should
be examined twice, once as court witness before committal and then
as prosecution witness at the time of trial – Held: When the Special
Court chooses to take cognizance, the question of the approver
D being examined as a witness in the court of the Magistrate as
required by s. 306 (4)(a) does not arise – Object of examining an
approver twice, is to ensure that the accused is made aware of the
evidence against him even at the preliminary stage, so as to enable
him to effectively cross examine the approver during trial, bring
out contradictions and show him to be untrustworthy – On facts,
E the object stood fulfilled – Magistrate who recorded the confession
examined him and the Additional Chief Judicial Magistrate who
granted pardon also examined – Thus, no violation of the procedure
prescribed by s. 306(4)(a) – Prevention of Corruption Act, 1988 –
s.5.
F Allowing the appeals, the Court
HELD: 1. The judgment of the Special Court convicting
the appellants for various offences under the Penal Code and the
Prevention of Corruption Act, 1988, and the judgment of the High
Court confirming the same are set aside. [Para 139][72-H; 73-A]
G
2.1 A-1 to A-4, being officers of a company were ‘public
servants’ within the definition of the said expression under Section
21 of the IPC and under Section 2(c)(iii) of the PC Act. Therefore,
there is a requirement of previous sanction both under Section
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A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 13
POLICE
197(1) of the Code and under Section 19(1) of the PC Act, for A
prosecuting A-1 to A-4 for the offences punishable under the IPC
and the PC Act. [Para 29][35-F, G]
2.2 Until the amendment to the PC Act under the Prevention
of Corruption (Amendment) Act, 2018 (Act 16 of 2018), with effect
from 26.07.2018, the requirement of a previous sanction under B
Section 19(1)(a) was confined only to a person “who is employed”.
On the contrary, Section 197(1) made the requirement of previous
sanction necessary, both in respect of “any person who is” and in
respect of “any person who was” employed. By the amendment
under Act 16 of 2018, Section 19(1)(a) of the PC Act was suitably
amended so that previous sanction became necessary even in C
respect of a person who “was employed at the time of commission
of the offence”. [Para 30][35-M; 36-A-B]
2.3 The case on hand arose before the coming into force of
the Prevention of Corruption (Amendment) Act, 2018 (Act 16 of
2018). Therefore, no previous sanction under Section 19(1) of D
the PC Act was necessary insofar as A-1 was concerned, as he
had retired by the time a final report was filed in the year 2002.
But previous sanction under Section 19(1) of the PC Act was
required in respect of A-3 and A-4, as they were in service at the
time of the Special Court taking cognizance. Therefore, the E
Agency sought sanction, but the Management of PSU refused to
grant sanction not once but twice, insofar as A-3 and A-4 are
concerned. It is by a quirk of fate or the unfortunate circumstances
of having been born at a time (and consequently retiring at a
particular time) that the benevolence derived by A-3 and A-4
from their employer, was not available to A-1. The refusal to grant F
sanction for prosecution in respect of A-3 and A-4 may not have
a direct bearing upon the prosecution of A-1. But it would certainly
provide the context in which the culpability of A-1 for the offences
both under the IPC and under the PC Act has to be determined.
[Paras 31, 32, 34][36-C-E, H; 37-A] G
2.4 The existing policy shows that A-1 at least had an
arguable case, in defence of the decision he took to go in for
Restricted Tender. Once this is clear, his act, even if alleged to
H
14 SUPREME COURT REPORTS [2023] 10 S.C.R.
A be lacking in bona fides or in pursuance of a conspiracy, would be
an act in the discharge of his official duty, making the case come
within the parameters of Section 197(1) of the Code. Therefore,
the prosecution ought to have obtained previous sanction. The
Special Court as well as the High Court did not apply their mind
to this aspect. [Para 47][41-G-H; 42-A]
B
2.5 The FIR actually implicated only four persons, namely
PW-16, A-3, A-4 and A-5. A-1 was not implicated in the FIR. It
was only after a confession statement was made by PW-16 in the
year 1998 that A-1 was roped in. The allegations against A-1 were
that he got into a criminal conspiracy with the others to commit
C these offences. But the Management of PSU refused to grant
sanction for prosecuting A-3 and A-4, twice, on the ground that
the decisions taken were in the realm of commercial wisdom of
the Company. If according to the Management of the Company,
the very same act of the co-conspirators fell in the realm of
D commercial wisdom, it is inconceivable that the act of A-1, as
part of the criminal conspiracy, fell outside the discharge of his
public duty, so as to disentitle him for protection under Section
197(1) of the Code. In view thereof, the prosecution ought to
have taken previous sanction in terms of Section 197(1) of the
Code, for prosecuting A-1, for the offences under the IPC. [Paras
E 52, 53][43-C-F]
3.1 A careful look at the anatomy of Section 306 of the Code
shows that it provides a plethora of steps either in the alternative
or in addition. Section 307 of the Code empowers the Court to
which the commitment is made, to tender pardon. The power can
F be exercised at any time after the commitment of the case but
before judgment is passed. [Paras 61, 62][48-G; 50-A]
3.1 Sub-section (1) of s. 5 of the PC Act empowers the
Special Judge to take cognizance of offences without the accused
being committed to him for trial. It also says that while trying the
G accused persons, the Special Judge is obliged to follow the
procedure prescribed by the Code for the trial of warrant cases
by the Magistrates. The Special Judge under the PC Act, while
trying offences, has a dual power of the Sessions Judge as well as
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A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 15
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that of the Magistrate and that such a Special Judge conducts A
the proceedings both prior to the filing of the charge sheet and
for holding trial. In contrast, Section 5(2) of the PC Act does not
speak about the stage at which pardon may be tendered by a
Special Judge. This is perhaps in view of the express provisions
of sub-section (1) of Section 5 which empowers the Special Judge
B
himself to take cognizance without the accused being committed
to him for trial. But the second part of sub-section (2) of Section
5 of the PC Act creates a deeming fiction that the pardon tendered
by the Special Judge shall be deemed to be a pardon tendered
under Section 307 of the Code. However, this deeming fiction is
limited for the purposes of Sub-sections (1) to (5) of Section 308 C
of the Code. [Para 65][51-A, B]
3.2 When the Special Court chooses to take cognizance,
the question of the approver being examined as a witness in the
Court of the Magistrate as required by Section 306 (4)(a) does
not arise. [Para 76][57-D] D
3.3 The object of examining an approver twice, is to ensure
that the accused is made aware of the evidence against him even
at the preliminary stage, so as to enable him to effectively cross
examine the approver during trial, bring out contradictions and
show him to be untrustworthy. The said object stands fulfilled in E
the instant case, since the confession statement of the approver
before the Metropolitan Magistrate was enclosed to the Charge
Sheet. The approver was examined as PW-16 during trial and he
was cross examined on the contents of the confession statement.
The Magistrate who recorded the confession was examined as
PW 17 and the Additional Chief Judicial Magistrate who granted F
pardon was examined as PW-18. The proceedings before the
Metropolitan Magistrate, the petition under section 306 of the
Code and the proceedings on tender of pardon were marked
respectively. All the accused were given opportunity to cross
examine these witnesses both on the procedure and on the G
contents. There was no violation of the procedure prescribed by
Section 306(4)(a) of the Code. [Paras 78, 79][57-G; 58-A-D]
4.1 The trial court and the High Court came to the
conclusion that the names of two big companies were included in
H
16 SUPREME COURT REPORTS [2023] 10 S.C.R.
A Exhibit P-26 chit only to lend credibility to the process adopted.
But it was on record through the statement of PW-4, Manager of
L&T Company that a tender enquiry was received by them from
the PSU. If the inclusion of the names of those two companies
were intended to be a make belief affair, A-1 would not have taken
the risk of sending the letter and that too to a company like L&T.
B
Therefore, the evidence of PW-16 was not worthy of credit; that
even assuming that it has some credibility, his statement that
“he recommended the contract to be given to A-5 not because of
A-1’s interest”, made the whole edifice upon which the case of
the prosecution was built, collapse; and that there was no other
C evidence to connect A-1 with the commission of these offences.
[Para 102][64-G-H; 65-A, B]
4.2 The only person found by both the courts to be guilty of
the offence under Section 120B was A-1. Therefore, an argument
was advanced that a single person cannot be held guilty of criminal
D conspiracy. But this contention was repelled by the courts on the
ground that PW-16 was the second person with whom A-1 had
entered into a conspiracy. In other words, the reasoning adopted
by the trial court and the High Court was that only A-1 and PW-
16 were part of the conspiracy. Such a reasoning was a huge
climbdown from the original charge that A-1 to A-7 entered into
E a criminal conspiracy, to cause wrongful loss to PSU and to confer
a wrongful gain to A-5 to A-7. Once an offence of Section 120B is
not made out against A-5 to A-7, the very foundation for the
prosecution becomes shaky. Therefore, the conviction of A-1 for
the offences under Section 120B read with Sections 420, 468,
F Section 471 read with Section 468 and Section 193 IPC and
Section 13(2) read with Section 13(1)(d) of the PC Act cannot be
sustained. [Para 103][65-C-E]
4.3 A-1 was found guilty of an offence under Section 193.
Section 193 applies only to false evidence given in any stage of a
G judicial proceeding or the fabrication of false evidence for the
purpose of being used in any stage of a judicial proceeding. The
allegation against A-1 was not even remotely linked to any of the
Explanations under Section 193 of the IPC. Therefore, the
judgment of the trial court and that of the High Court convicting
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A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 17
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A-1 for the said offences and sentencing him to imprisonment of A
varying terms and fines of different amounts are liable to be
reversed. [Para 104][65-F-G]
4.4 No Court shall take cognizance of any offence punishable
under Section 193 IPC, except on a complaint in writing of that
Court or of some other Court to which that Court is subordinate. B
This bar is found in Section 195(1)(b)(i) of the Code. No complaint
was ever made by any Court or by any officer authorized by any
Court that A-1 or A-3 or A-4 committed an offence punishable
under Section 193 IPC. But unfortunately, the trial court
convicted A-1, A-3 and A-4, of the offence under Section 193
without any application of mind and the same has been upheld by C
the High Court. [Para 108][66-E, F]
4.5 The reading of the trial court and the High Court as
though this Committee of which A-3, A-4 and the Approver were
a part, was actually a Tender Committee having a larger role to
play, is completely misconceived. In fact, the prosecution had to D
stand or fall on the strength of the testimony of the Approver
namely PW-16. Despite the assertion on the part of PW-16 giving
a clean chit to A-3 and A-4, the trial court found both of them
guilty on a convoluted logic that they were part of a Tender
Committee and that “every word and every description in the E
Tender Committee proceedings had been written by them with a
view to cheat PSU” and that “if A-3 and A-4 were innocent they
should have questioned and asked for details regarding the
contractors.” Such a reasoning given by the trial court and
approved by the trial court and approved by the High Court was
completely perverse. [Paras 110-112][64-D, E; 68-A, B] F
4.6 A-4 had no role in choosing the tenderers, but entered
the picture only after the offers were received from the tenderers.
Admittedly, A-4 was subordinate to both PW-16 and A-3.The
competent authority refused to grant sanction to prosecute A-3
and A-4 for the offences under the PC Act. The trial court and the G
High Court did not find A-4 as a co-conspirator, which is why he
was not held guilty of the offence under Section 120-B IPC. Section
193 IPC had been included completely out of context. The
H
18 SUPREME COURT REPORTS [2023] 10 S.C.R.
A conviction of A-4 by the trial court as confirmed by the High Court
is wholly unsustainable and is liable to be set aside. [Paras 113-
115][68-C-E]
4.7 Three out of four bank officials examined by the
prosecution to show that A-7 applied for demand drafts on behalf
B of four bogus firms, did not identify A-7 as the person who applied
for the demand drafts. They did not also identify the handwriting
in Exhibits P-66, P-90 and P- 92 as that of A-7. The only person
who stated something in favour of the prosecution was PW-32
and it was in relation to Exhibit P-76. [Para 122][69-H; 70-A]
C 4.8 There was a colossal failure on the part of the
prosecution to establish that Exhibits P-66, P-76, P-90 and P-92
were in the handwritings/signatures of A-7. This is despite the
prosecution examining the bank officials as PW-22, PW-32, PW-
40 and PW-41 and the handwriting expert as PW-30. [Para
128][71-A]
D
4.9 Unfortunately, the trial court adopted a very curious
reasoning that since he was a beneficiary of the money diverted
to the account of sister concern, he must have had participation
and knowledge that the demand drafts were purchased to cheat
PSU. Such a reasoning is wholly unacceptable in view of the fact
E that A-7 was accused of forgery and charged u/s. 468 IPC, in
relation to these very same applications for demand drafts.
Therefore, it was necessary for the prosecution to prove forgery
and also to show that the purpose of such forgery was cheating.
Both were absent. The High Court fortunately realised the pitfall
F in the reasoning of the trial court. But in an over-anxiety to
somehow convict A-7, the High Court adopted a very peculiar
route, namely that of undertaking the task of comparing the
admitted signatures/ handwritings with the disputed ones u/s. 73
of the Evidence Act. [Paras 129, 130][71-B-E]
G 4.10 There was no signature or writing available before the
High Court, which had been admitted or proved to the satisfaction
of the Court to have been written or made. The High Court did
not also direct A-7 to write any words or figures for the purpose
of enabling a comparison. Without following the procedure so
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A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 19
POLICE
prescribed in Section 73, the High Court invented a novel A
procedure, to uphold the conviction handed over by the trial court
through a wrong reasoning. Even in the questioning under Section
313 of the Code, no specific question was put to A-7 whether
Exhibits P-66, P-76, P-90, P-92 and P- 75 were in his handwritings
and whether they contained his signatures. Therefore, what was
B
contained in Exhibit P-75 was not even admitted signatures. In
the absence of either admission or proof of the admitted
signatures, the High Court could not have resorted to Section
73 of the Evidence Act. In view thereof, the finding recorded by
the trial court and the High Court as though A-7 committed forgery
and cheating by making applications for the issue of demand drafts C
in the names of bogus firms is wholly unsustainable. [Paras 132,
135-137][71-F, G; 72-C-E]
4.11 The only connecting link pointed out against A-7 was
the transfer of money to the total extent of Rs.1,52,50,000/- to
the account of a firm of which he was a partner. This by itself will D
not constitute any offence. Therefore, the charge that A-7 abetted
the commission of the crime by the other accused, should also
fail. This is especially so when A-5, whose proprietary concern
bagged the contract, not only lost the contract but also allowed
the bank guarantee to be invoked by the PSU and in addition, left
a huge amount of Rs.2.60 crores still with the PSU. Therefore, E
the conviction and sentence awarded to A-7 cannot be sustained.
[Para 138][72-F-G]
Suresh Chandra Bahri vs. State of Bihar 1995 Supp (1)
SCC 80:[1994] 1 Suppl. SCR 483 – distinguished.
F
Bangaru Laxman vs. State (through CBI) (2012) 1 SCC
500 : [2011] 13 SCR 268; State through CBI vs. V. Arul
Kumar (2016) 11 SCC 733 : [2016] 2 SCR 486; Sardar
Iqbal Singh vs. State (Delhi Administration) (1977) 4
SCC 536 : [1978] 2 SCR 174; Yakub Abdul Razak
Memon vs. State of Maharashtra (2013) 13 SCC 1 : G
[2013] 15 SCR 1; Sarwan Singh vs. State of Punjab
1957 SCR 953; Ravinder Singh vs. State of Haryana
(1975) 3 SCC 742 : [1975] 3 SCR 453 – relied on.
H
20 SUPREME COURT REPORTS [2023] 10 S.C.R.
A Matajog Dobey vs. H.C. Bhari [1955] 2 SCR 925; Dr.
Hori Ram Singh vs. The Crown 1939 SCC OnLine FC
2; State of Orissa through Kumar Raghvendra Singh
vs. Ganesh Chandra Jew (2004) 8 SCC 40 : [2004] 3
SCR 504; K. Kalimuthu vs. State by DSP (2005) 4 SCC
512 : [2005] 3 SCR 1; Rakesh Kumar Mishra vs. State
B
of Bihar (2006) 1 SCC 557 : [2006] 1 SCR 124;
Devinder Singh vs. State of Punjab through CBI (2016)
12 SCC 87 : [2016] 6 SCR 295; D. Devaraja vs. Owais
Sabeer Hussain (2020) 7 SCC 695 : [2020] 6 SCR 453;
Parkash Singh Badal vs. State of Punjab (2007) 1 SCC
C 1 : [2006] 10 Suppl. SCR 197; Harshad S. Mehta vs.
State of Maharashtra (2001) 8 SCC 257 : [2001] 2
Suppl. SCR 577; State through Central Bureau of
Investigation, Chennai vs. V. Arul Kumar (2016) 11 SCC
733 : [2016] 2 SCR 486; A. Devendran vs. State of
D T.N. (1997) 11 SCC 720 : [1997] 4 Suppl. SCR 591;
P.C. Mishra vs. State (CBI) (2014) 14 SCC 629 : [2014]
4 SCR 183; M.O. Shamsudhin vs. State of Kerala (1995)
3 SCC 351 : [1995] 2 SCR 900 – referred to.
Case Law Reference
E (1955) 2 SCR 925 referred Para 38
[2004] 3 SCR 504 referred to Para 39
[2005] 3 SCR 1 referred to Para 40
[2006] 1 SCR 124 referred to Para 40
F
[2016] 6 SCR 295 referred to Para 41
[2020] 6 SCR 453 relied on Para 42, 43
[2006] 10 Suppl. SCR 197 referred to Para 48
[2001] 2 Suppl. SCR 577 referred to Para 57
G
[2014] 4 SCR 183 referred to Para 57, 74
[2016] 2 SCR 486 relied on Para 74
[2011] 13 SCR 268 relied on Para 63
[1997] 4 Suppl. SCR 591 referred to Para 67
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A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 21
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[1994] 1 Suppl. SCR 483 distinguished Para 72 A
[1978] 2 SCR 174 relied on Para 76
[2013] 15 SCR 1 relied on Para 76
[1957] SCR 953 relied on Para 83
[1975] 3 SCR 453 relied on Para 83 B
[1995] 2 SCR 900 referred to Para 84
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
2417 of 2010.
From the Judgment and Order dated 17.09.2010 of the High Court
C
of Madras in CRLA No. 437 of 2006.
With
Criminal Appeal Nos. 16 of 2011 and 2444 of 2010.
Nagamuthu, Mrs. V. Mohana, Huzefa A. Ahmadi, Sr. Advs., Vijay
Kumar, B. Ragunath, N. Sridhar, Mrs. N. C. Kavitha, Karthick D
Subramani, Ms. Ranjeeta Rohatgi, Kaushik Mishra, Ms. Rashmi Singh,
Ms. Samten Doma Lachungpa, Nishant Sharm, Rakesh K. Sharma, Advs.
for the Appellant.
Sanjay Jain, ASG, A K Kaul, Ms. Srishti Mishra, Padmesh Mishra,
Ms. Shradha Deshmukh, Madhav Sinhal, Arvind Kumar Sharma, Advs. E
for the Respondent.
The Judgment of the Court was delivered by
V. RAMASUBRAMANIAN, J.
1. These three criminal appeals arise out of a common Judgment F
passed by the Madurai Bench of the Madras High Court confirming the
conviction of the appellants herein for various offences under the Indian
Penal Code, 18601 and the Prevention of Corruption Act, 1988 2.
2. We have heard Shri Huzefa A. Ahmadi, Shri S. Nagamuthu,
Mrs. V. Mohana, learned senior counsel and Shri S.R. Raghunathan, G
learned counsel appearing for the appellants and Shri Sanjay Jain, learned
ASG assisted by Shri Padmesh Misra, learned Counsel for the Central
Bureau of Investigation.
1
For short, “IPC”
2
For short, “PC Act” H
22 SUPREME COURT REPORTS [2023] 10 S.C.R.
A 3. The brief facts leading to the above appeals are as follows:
(i) Seven persons, four of whom were officers of BHEL,
Trichy (a Public Sector Undertaking), and the remaining
three engaged in private enterprise, were charged by the
Inspector of Police, SPE/CBI/ACB, Chennai, through a final
B report dated 16.07.2002, for alleged offences under Section
120B read with Sections 420, 468, Section 471 read with
Section 468 and Section 193 IPC and Section 13(2) read
with Section 13(1)(d) of the PC Act. Cognizance was taken
by the Principal Special Judge for CBI cases, Madurai in
C CC No.9 of 2002. During the pendency of trial, two of the
accused, namely, A-5 and A-6 died.
(ii) By a judgment dated 08.09.2006, the Special Court
acquitted A-2 and convicted A-1, A-3, A-4 and A-7 for
various offences. These four convicted persons filed three
D appeals in Criminal Appeal (MD) Nos.437, 445 and 469
of 2006, on the file of the Madurai Bench of the Madras
High Court.
(iii) By a common Judgment dated 17.09.2010, the High Court
dismissed the appeals, forcing A-1, A-3, A-4 and A-7 to
E come up with four criminal appeals, namely, Appeal
Nos.2417, 2443 and 2444 of 2010 and 16 of 2011.
(iv) However, during the pendency of the above appeals, A-3
(R. Thiagarajan) died and hence Criminal Appeal No.2443
of 2010 filed by him was dismissed as abated.
F
(v) Therefore, what is now before us, are three criminal appeals,
namely, Criminal Appeal Nos.2417 and 2444 of 2010 and
16 of 2011 filed respectively by A-1, A-7 and A-4.
4. Since the charges framed against all the appellants were not
G the same and also since all the appellants herein were not convicted
uniformly for all the offences charged against them, we present below
in a tabular form, the offences for which charges were framed against
each of them, the offences for which each of them was held guilty and
the offences for which they were not held guilty.
H
A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 23
POLICE [V. RAMASUBRAMANIAN, J.]
A
B
C
D
E
F
G
H
24 SUPREME COURT REPORTS [2023] 10 S.C.R.
A A7 N.Raghunath, Section 120B read Section 471 read Not found guilty
Brother of A-5 with 420, 468, 471 with 468 and 109 of the offences
and son of A-6 read with 468 and IPC read with under Section
193 IPC and Section 13(2) 120B read with
Section 13(2) read read with 13(1)(e) Section 420 and
with 13(1)(d) of of the PC Act. 193 IPC.
the PC Act.
B In addition, he
was charged also
under Section 109
IPC.
5. For easy appreciation, the punishments awarded offence-wise
to each of the accused, by the Special Court and confirmed by the High
C
Court, are again presented in a tabular column as follows:
D
E
F
G
H
A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 25
POLICE [V. RAMASUBRAMANIAN, J.]
6. The background facts leading to the prosecution of the appellants A
herein and their eventual conviction, may be summarised as follows:-
(i) During the period 1991-92, the Tamil Nadu Water Supply
and Drainage Board decided to set up “ROD Plants”
(Reverse Osmosis Desalination Plants) to provide potable
water to drought-prone areas in Ramnad District of Tamil B
Nadu. They entrusted the work to BHEL, Tiruchirapalli.
(ii) After resorting to limited/restricted tenders, BHEL awarded
the contract to one Entoma Hydro Systems.
(iii) A Letter of Intent was issued to the said Company on
C
06.07.1994 and on 02.08.1994, an interest free mobilisation
advance to the tune of Rs.4.32 crores was released to M/s
Entoma Hydro Systems.
(iv) But subsequently, the contract was also cancelled on
04.10.1996; the bank guarantee furnished by the Contractor
D
was invoked on 27.09.1996; and a payment of
Rs.4,84,13,581/- was realised by BHEL.
(v) Thereafter, on 31.01.1997, CBI registered a First
Information Report in Crime No. RC 8(A) of 97 against
four individuals, three of whom were officials of BHEL
E
and the fourth, the contractor. It was alleged in the First
Information Report that the three officials of BHEL and
the contractor entered into a criminal conspiracy to cheat
BHEL and caused loss to BHEL to the tune of Rs.4.32
crores by awarding the contract to the aforesaid concern.
The FIR was for offences under Section 120B read with F
420, Section 420 IPC and Section 13(2) read with Section
13(1)(d) of PC Act.
(vi) In November 1998, the person first named in the FIR namely
K.Bhaskar Rao, DGM, was arrested and released on bail
by CBI itself. Thereafter, he gave a confession before the G
XVIII Metropolitan Magistrate, Chennai under Section 164
of the Code of Criminal Procedure. After the confession
so made, CBI moved an application in Criminal
Miscellaneous Petition No.562 of 2000 under Section 306
of the Code, before the Chief Judicial Magistrate, Madurai
H
26 SUPREME COURT REPORTS [2023] 10 S.C.R.
A for the grant of pardon to K.Bhaskar Rao. The petition
was made over to the Additional Chief Judicial Magistrate,
Madurai, who passed an order dated 18.07.2000 granting
pardon to Bhaskar Rao.
(vii) Thereafter, CBI requested the Chairman, BHEL to grant
B sanction to prosecute the other two officials named in the
FIR, for the offences under the PC Act. But by letter dated
02.05.2001, the Chairman, BHEL refused to grant the
permission to prosecute those two officers named in the
FIR for the offences under the PC Act.
C (viii) After completion of investigation, CBI filed a final report
on 16.07.2002 against seven accused namely, (i) A
Srinivasulu, formerly Executive Director, BHEL; (ii) R.
Krishna Rao, Retired General Manager, BHEL; (iii) R.
Thyagarajan, Assistant General Manager (Finance), BHEL;
(iv) K. Chandrasekaran, Deputy General Manager, BHEL;
D (v) Mohan Ramnath Proprietor, Entoma Hydro Systems;
(vi) NRN Ayyar; and (vii) N. Raghunath. The final report
was filed directly before the Principal Special Court for
CBI Cases, Madurai.
(ix) In the final report, the prosecution charged:-
E
A-1 to A-7 for the offences under Section 120B read
with Sections 420, 468, Section 471 read with Section
468, Section 193 IPC and Section 13(2) read with
Section 13(1)(d) of the PC Act.
F A-1 and A-2 for offences under Section 13(2) read
with Section 13(1)(d) of the PC Act, 1988 and Section
109 IPC read with Sections 420, 468, Section 471
read with Section 468 and Section 193 IPC.
A-3 and A-4 for offences under Section 109 IPC
read with Sections 420, 468, Section 471 read with
G
Section 468 and Section 193 IPC.
A-5, A-6 and A-7 for offences under Sections 420,
468, Section 471 read with Section 468, Section 193
IPC and Section 109 IPC read with Section 13(1)(d)
of the PC Act.
H
A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 27
POLICE [V. RAMASUBRAMANIAN, J.]
(x) The Special Judge framed the charges on 04.07.2003. A
(xi) The prosecution examined 44 witnesses and marked 94
documents. A-5 and A-6 died pending trial and hence the
charges against them were abated.
(xii) By a judgment dated 08.09.2006, the Principal Special Judge
for CBI cases acquitted A-2 but convicted A-1, A-3, A-4 B
and A-7 for various offences indicated in Column No. 4 of
the Table under paragraph 4 above.
(xiii) Challenging the conviction and punishment, A-1 filed a
separate appeal in Criminal Appeal No.437 of 2006 on the
file of the Madurai Bench of the Madras High Court. A-3 C
and A-4 joined together and filed a common appeal in
Criminal Appeal No.469 of 2006. A-7 filed a separate appeal
in Criminal Appeal No.445 of 2006.
(xiv) By a judgment dated 17.09.2010, the Madurai Bench of the
Madras High Court dismissed all the three appeals. D
(xv) Therefore, A-1, A-3, A-4 and A-7 filed four independent
appeals before this Court respectively in Criminal Appeal
Nos.2417, 2443 and 2444 of 2010 and 16 of 2011. But A-3,
the appellant in Criminal Appeal No.2443 of 2010 died
pending appeal and hence his appeal was dismissed as E
abated. Therefore, we are now left with three appeals filed
by A-1, A-4 and A-7 arising out of concurrent judgments of
conviction.
7. In brief, the case of the prosecution was that A-1 to A-7 entered
into a criminal conspiracy to cheat BHEL in the matter of award of F
contract for the construction of desalination plants. In pursuance of the
said conspiracy, A-1, the then Executive Director of BHEL instructed
Bhaskar Rao, the DGM (who turned Approver) to go in for limited/
restricted tenders without following the tender procedure of pre-
qualification of prospective tenderers before inviting limited tenders.
G
According to the prosecution, A-1 dictated the names of four bogus
firms along with the name of M/s Entoma Hydro Systems represented
by its proprietor A-5, for inviting limited tenders. As per the dictates of
A-1, the Approver put up a proposal suggesting the names of the five
firms (including four bogus firms) together with the names of two
companies which were not in the similar line of work. Thereafter, A-2, H
28 SUPREME COURT REPORTS [2023] 10 S.C.R.
A knowing well that the firms were bogus and were neither pre-qualified
nor selected from the approved list of contractors, processed the note
submitted by the Approver and sent it to A-1. When tender enquires
were made, A-5 responded to the same not only in the name of M/s
Entoma Hydro Systems but also on behalf of the four bogus firms. A-7,
the brother of A-5 obtained demand drafts for Rs.20,000/- each in the
B
names of the bogus firms by remitting cash into Indian Bank, Royapettah
Branch, State Bank of India, Velachery Branch, State Bank of Mysore,
T. Nagar Branch and Bank of Madura, Mount Road Branch and also by
filling up demand draft applications and signing the same in the names of
the bogus firms. Thereafter, the Tender Committee consisting of the
C Approver, A-3 and A-4 processed the names of all these firms and
recommended the award of contract to M/s Entoma Hydro Systems,
giving false justifications for recommending them though the said firm
did not have necessary experts or technical expertise. The Committee
even recommended the sanction of interest free mobilisation advance,
in violation of existing practice, to cause pecuniary advantage to A-5.
D
Accordingly, an interest free mobilisation advance of Rs.4.32 crores
was paid to A-5’s firm. The amount was deposited in the account of the
firm with Indian Bank. From the said account, a sum of Rs.1.52 crores
was diverted to a sister concern of A-5, in which A-5, his father (A-6)
and his brother (A-7) were partners. By such an action, A-5 to A-7
E obtained wrongful gain from BHEL. The Prosecution alleged that by
these actions, A-1 to A-7 committed the offences charged against them.
8. As stated in para 6 above, the Prosecution examined 44
witnesses, which included the Approver, who was examined as PW-16.
94 documents were marked as exhibits on the side of the prosecution.
F One witness was examined on the side of the defence as DW-1 and 6
documents were marked as exhibits Ex. D-1 to D-6.
9. In its judgment dated 08.09.2006, the Special Court brought on
record the charges, the evidence and the rival contentions from paragraphs
1 to 60. The actual discussion and analysis by the Court began from
G paragraph 61.
10. To begin with, the Special Court took up for consideration the
contention of the accused that BHEL did not suffer any wrongful loss
and that, therefore, the charge under Section 420 IPC does not lie. But
this contention of the accused was rejected by the Trial Court on the
H ground that the entire interest free mobilisation advance of Rs.4.32 crores
A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 29
POLICE [V. RAMASUBRAMANIAN, J.]
was deposited in the account of M/s Entoma Hydro Systems with Indian A
Bank and that out of the same, a sum of Rs.1,52,50,000/- was transferred
to a firm by name M/s Insecticides & Allied Chemicals, of which A-5 to
A-7 were partners. Therefore, the Special Court came to the conclusion
that on the date on which the transfer of money took place, a direct
wrongful monetary loss was caused to BHEL and a direct wrongful
B
monetary gain caused to A-5 to A-7. The Special Court also held that
after the termination of the contract with M/s Entoma Hydro Systems,
BHEL divided the contract into several parts and awarded the contracts
to various persons and that, therefore, the money paid to each of such
contractors was a wrongful loss to BHEL. Though the Special Court
also found that BHEL actually recovered Rs.4.32 crores (by invoking C
the bank guarantee), the Court concluded that there was no proof to
show that money was paid out of the firm M/s Insecticides & Allied
Chemicals. Therefore, the Special Court first concluded that BHEL
suffered wrongful loss and that therefore, the offence under Section
420 IPC was made out.
D
11. The Trial Court then took up for consideration, the argument
that the confession statement of PW-16 (Approver) marked as Exhibit
P-44 had to be rejected, in view of the fact that PW-16 had not stated
anything self-incriminating in his confession statement. But this contention
advanced on behalf of A-1 was rejected by the Court on the ground that
Exhibit P-26 is the chit in which PW-16 admittedly wrote down the names E
of four bogus firms and the name of M/s Entoma Hydro Systems, as
dictated by A-1 and that this was sufficient to show that PW-16 was
incriminating himself in the charge of criminal conspiracy with A-1.
12. When it was pointed out that as per the evidence on record,
PW-1 was on leave26.11.1992, due to the death of his mother-in-law F
and that therefore, he could not have had any discussion on that date,
the Trial Court turned this very argument against A-1 and held that A-1
should not have approved the Approval Note dated 25.11.1992 marked
as Exhibit P-27, if he was on leave and had not carried out a background
check. G
13. The Trial Court thereafter held that the prosecution had
successfully proved that the four other firms whose names were found
in the chit Exhibit P-26 were all bogus. This was on the basis of the
evidence of PW-2, PW-3, PW-5, PW-6, PW-7, PW-9, PW-10 and PW-
13. H
30 SUPREME COURT REPORTS [2023] 10 S.C.R.
A 14. Believing the statement of PW-16 to be true, the Special Court
came to the conclusion that A-1 predetermined the award of contract to
A-5 and created circumstances and records to show as though proper
procedure was followed and that therefore A-1 was guilty of the charges.
15. Coming to the charges against A-2, the Special Court held
B that the only role played by him was to prepare the Approval Note dated
25.11.1992 and that in view of the overwhelming evidence against A-1,
the contract would have, in any case, been awarded to the firm in
question. Therefore, the Special Court came to the conclusion (in
paragraph 79 of the judgment) that A-2 was merely asked to sign in
Exhibit P-27, only to give credibility to the list prepared by A-1 and the
C Approver acting in conspiracy. After reaching such a finding, the Special
Court acquitted A-2 of the charges framed against him.
16. Insofar as A-3 and A-4 are concerned, it was argued that
they came into the picture only after 23.12.1992, when the Negotiation
Committee comprising of A-3, A-4 and the Approver was formed. But
D this argument was rejected by the Trial Court by holding that what was
constituted was a Tender Committee, as seen from Exhibit P-36
(proceedings of the Committee) and that therefore if they were innocent,
they should have questioned and sought details regarding the contractors.
Interestingly, the Trial Court after holding in paragraph 79 that the charges
E against A-2 were not proved, again went back to the question of guilt of
A-2, after holding A-3 and A-4 guilty, through a reversal of the logic.
17. Coming to the role played by A-7, the Trial Court held that it
was he who purchased the demand drafts in the names of the bogus
firms, with a view to cheat BHEL and that he obtained wrongful gain for
F himself as a partner of the firm Insecticides & Allied Chemicals. On the
basis of these findings, the Trial Court convicted the accused for the
offences mentioned by us in the table under paragraph 4 and sentenced
them to imprisonment and fine indicated in the table under paragraph 5.
18. While dealing with the appeals filed by A-1, A-3, A-4 and A-
G 7, the High Court divided the same into two categories, the first dealing
with the complicity of A-1, A-3 and A-4 and the second dealing with the
complicity of A-7. This was perhaps for the reason that A-1, A-3 and A-
4 were Officers of BHEL, while A-7 was a private individual.
19. On the complicity of A-1, A-3 and A-4, the High Court primarily
relied upon the evidence of PW-8, the Technical Examiner of the Central
H
A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 31
POLICE [V. RAMASUBRAMANIAN, J.]
Vigilance Commission as well as the evidence of PW-16, the Approver. A
On the basis of their evidence, supported by documents, the High Court
held that the complicity of A-1, A-3 and A-4 was proved. On the question
as to whether the action of the accused resulted in monetary loss to
BHEL, the High Court held that the subsequent remedial measure taken
by BHEL by invoking the bank guarantee and realizing the money, cannot
B
lead to the conclusion that there was no wrongful loss.
20. Insofar as the complicity of A-7 is concerned, the High Court
held that the signatures contained in the applications presented to various
banks for obtaining demand drafts for procuring the tender document,
were obviously that of A-7. In fact, the applications for securing demand
drafts were marked as Exhibits P-66, P-76, P-90 and P-92 and these C
exhibits had been sent to a handwriting expert for his opinion. The
handwriting expert was examined as PW-30. His report was marked as
Exhibit P-68. The specimen writings and signatures of A-7 were marked
as Exhibit P-75 through PW-30.
21. But the High Court found in paragraph 44 of the impugned D
judgment that the handwriting expert had not furnished any opinion in his
report as to the comparison of the writings found in Exhibit P-75 with
the demand draft application forms Exhibits P-66, P-76, P-90 and P-92.
The High Court also found (in paragraph 49 of the impugned judgment)
that the admitted handwritings and the signatures were not compared by E
the handwriting expert. After recording such a finding, the High Court
took upon itself the task of making a comparison by itself, by invoking
Section 73 of the Evidence Act. By so invoking Section 73, the High
Court came to the conclusion that the signatures found in the demand
draft applications were that of A-7 and that the diversion of funds to M/
s. Insecticides & Allied Chemicals is a circumstance which corroborated F
the same.
22. It was argued before the High Court on behalf of A-3 and A-
4 that BHEL Administration had refused to accord sanction to prosecute
them for the offences under the PC Act and that therefore they cannot
be held guilty of other offences. But this contention was rejected by the G
High Court, on the ground that the decision taken by the Management of
the Company cannot have a bearing upon the prosecution case.
23. On the basis of the above findings, the High Court dismissed
the appeals and confirmed the conviction and sentence awarded by the
Trial Court. H
32 SUPREME COURT REPORTS [2023] 10 S.C.R.
A 24. Appearing on behalf of A-1, Shri Huzefa Ahmadi, learned
senior counsel contended:-
(i) That there was no evidence to connect A-1 with the
commission of any of the offences and that none of the
charges stood established beyond reasonable doubt;
B (ii) That the substratum of the allegations was based entirely
upon the statement of the approver (PW-16), but the same
suffers from serious irregularities;
(iii) That though no sanction was required to prosecute A-1 for
the offences under the PC Act in view of his retirement
C before the filing of the final report, a previous sanction was
necessary under Section 197(1) of the Code, but the same
was not obtained; and
(iv) That the prosecution failed to establish the necessary
ingredient of “obtaining any valuable thing or pecuniary
D advantage either for himself or for any other person”
for holding him guilty of the offences under Section 13(1)(d)
of the PC Act.
25. Appearing on behalf of A-4, it was contended by Shri S.R.
Raghunathan, learned counsel:-
E (i) that A-4 played no role either in the preparation of tender
or in choosing the tenderers;
(ii) that what was constituted on 23.12.1992, after the tenderers
were shortlisted, allegedly by PW-16 at the instance of A-
1, was only a Negotiation Committee;
F (iii) that in the said Committee comprising of three members,
namely A-3, A-4 and PW-16, he (A-4) was the one who
was subordinate to the other two members and hence the
logic applied to A-2 should have been extended to him also;
(iv) that both the Special Court and the High Court overlooked
G the evidence of PW-14 to the effect that no tender committee
was constituted;
(v) that no wrongful loss was caused to BHEL;
(vi) that on the contrary, due to the role played by A-4, a bank
guarantee to the tune of Rs.4.84 crores was obtained from
H Entoma Hydro Systems;
A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 33
POLICE [V. RAMASUBRAMANIAN, J.]
(vii) that the bank guarantee was invoked and the entire amount A
paid by BHEL towards mobilization advance was recovered;
(viii) that as a matter of fact a sum of Rs. 2.60 crores is due and
payable by BHEL to Entoma Hydro Systems, after the bank
guarantee was invoked and the accounts reconciled;
(ix) that despite repeated requests of the CBI, the Management B
of BHEL refused to give sanction to prosecute A-3 and A-
4, on the ground that they acted in the best commercial
interest of the Company; and
(x) that once A-4 is not held guilty of the offence under Section
120B, it was not possible to convict him for the other C
offences, especially in the facts and circumstances of the
case.
26. Appearing on behalf of A-7, it was contended by Shri S.
Nagamuthu, learned senior counsel:-
D
(i) that the confession statement of PW-16 was recorded by
the XVIII Metropolitan Magistrate, Chennai, but pardon
was granted by the Additional Chief Judicial Magistrate,
Madurai and the final report was filed directly before the
Special Court for CBI cases;
E
(ii) that since the Additional Chief Judicial Magistrate granted
pardon in this case, this case is covered by Sub-section (1)
of Section 306 and hence the prosecution ought to have
followed the procedure prescribed under Section 306(4)(a)
of the Code;
F
(iii) that there is no particular reason as to why the petition for
pardon was made before the Additional Chief Judicial
Magistrate, when the confession statement was recorded
by the Metropolitan Magistrate and there is no reason why
the prosecution chose to file the final report directly before
the Special Court under section 5(1) of the PC Act 1988; G
(iv) that neither the evidence of PW-44 (I.O.) nor the evidence
of PW-16 (approver) had anything incriminating A-7;
(v) that A-7 has been roped in, merely because of his
relationship with A-5 and also on account of a sum of
H
34 SUPREME COURT REPORTS [2023] 10 S.C.R.
A Rs.1,52,50,000/- being transferred to the firm of which he
is a partner, from out of the account of Entoma Hydro
Systems;
(vi) that while the Special Court, without going into the report
of the handwriting expert marked as Exhibit P-68 and
B without putting any question to A-7 under Section 313 of
the Code in relation to his specimen signatures marked as
Exhibit P-75 came to the conclusion that the applications
for demand drafts bore his handwriting and signatures, the
High Court rejected the said reasoning but took to the route
available under Section 73 of the Indian Evidence Act, 1872.
C
(vii) That the procedure under Section 73 of the Evidence Act
is available to a Court only when there are admitted or
proved handwritings, which were absent in this case;
(viii) That in any case there was no loss caused to BHEL, which
D is a sine qua non for the offence under the PC Act; and
(ix) That by a strange logic A-7 was convicted for the offence
under Section 13(1)(e) of the PC Act.
27. Countering the submissions made on behalf of the appellants,
it was argued by Shri Padmesh Mishra, learned counsel for the State:
E
(i) that there was cogent evidence, both oral and documentary, to
connect all the accused with the offences for which they
were found guilty;
(ii) that the evidence of the Approver (PW-16) stood
corroborated by the testimonies of other witnesses, on all
F
aspects such as the deliberate act of going in for limited
tender, predetermining the person in whose favour the
contract was to be awarded, sanction of an interest free
mobilisation advance far in excess of the normal business
norm, diversion of such advance by the contractor to another
G firm in which he was a partner along with is father and
brother and the eventual termination of the contract on
account of these malpractices;
(iii) that there is no requirement in law that actual loss should
have been suffered for an offence under Section 13(1)(d)
H of the PC Act to be made out;
A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 35
POLICE [V. RAMASUBRAMANIAN, J.]
(iv) that in any case what was recovered by the invocation of A
the bank guarantee was the loss suffered in the first instance;
(v) that it is well settled that previous sanction to prosecute
under Section 197(1) of the Code is necessary only when
the act complained of is in the discharge of official duties;
(vi) that an offence of cheating cannot by any stretch of B
imagination be seen as part of official duties;
(vii) that the power to grant pardon is available concurrently to
the Chief Judicial Magistrate/ Metropolitan Magistrate as
well as the Court of Session;
C
(viii) that therefore there was nothing wrong in the Additional
Chief Judicial Magistrate, Madurai granting pardon; and
(ix) that therefore the concurrent judgments of conviction of
the appellants do not warrant any interference.
28. We have carefully considered the rival contentions. For the D
purpose of easy appreciation, we shall divide the discussion and analysis
into three parts, the first dealing with the contention revolving around
Section 197 of the Code, the second dealing with the correctness of the
procedure adopted while granting pardon under Section 306 of the Code
and the third revolving around the merits of the case qua culpability of
E
each of the appellants before us.
Discussion and Analysis
Part-I (Revolving around Section 197 of the Code)
29. There is no dispute about the fact that A-1 to A-4, being officers
of a company coming within the description contained in the Twelfth F
item of Section 21 of the IPC, were ‘public servants’ within the definition
of the said expression under Section 21 of the IPC. A-1 to A-4 were
also public servants within the meaning of the expression under Section
2(c)(iii) of the PC Act. Therefore, there is a requirement of previous
sanction both under Section 197(1) of the Code and under Section 19(1) G
of the PC Act, for prosecuting A-1 to A-4 for the offences punishable
under the IPC and the PC Act.
30. Until the amendment to the PC Act under the Prevention of
Corruption (Amendment) Act, 2018 (Act 16 of 2018), with effect from
26.07.2018, the requirement of a previous sanction under Section 19(1)(a) H
36 SUPREME COURT REPORTS [2023] 10 S.C.R.
A was confined only to a person “who is employed”. On the contrary,
Section 197(1) made the requirement of previous sanction necessary,
both in respect of “any person who is” and in respect of “any person
who was” employed. By the amendment under Act 16 of 2018, Section
19(1)(a) of the PC Act was suitably amended so that previous sanction
became necessary even in respect of a person who “was employed at
B
the time of commission of the offence”.
31. The case on hand arose before the coming into force of the
Prevention of Corruption (Amendment) Act, 2018 (Act 16 of 2018).
Therefore, no previous sanction under Section 19(1) of the PC Act was
necessary insofar as A-1 was concerned, as he had retired by the time
C
a final report was filed. He actually retired on 31.08.1997, after 7 months
of registration of the FIR (31.01.1997) and 5 years before the filing of
the final report (16.07.2002) and 6 years before the Special Court took
cognizance (04.07.2003). But previous sanction under Section 19(1) of
the PC Act was required in respect of A-3 and A-4, as they were in
D service at the time of the Special Court taking cognizance. Therefore,
the Agency sought sanction, but the Management of BHEL refused to
grant sanction not once but twice, insofar as A-3 and A-4 are concerned.
32. It is by a quirk of fate or the unfortunate circumstances of
having been born at a time (and consequently retiring at a particular
E time) that the benevolence derived by A-3 and A-4 from their employer,
was not available to A-1. Had he continued in service, he could not have
been prosecuted for the offences punishable under the PC Act, in view
of the stand taken by BHEL.
33. It appears that BHEL refused to accord sanction by a letter
F dated 24.11.2000, providing reasons, but the CVC insisted, vide a letter
dated 08.02.2001. In response to the same, a fresh look was taken by the
CMD of BHEL. Thereafter, by a decision dated 02.05.2001, he refused
to accord sanction on the ground that it will not be in the commercial
interest of the Company nor in the public interest of an efficient, quick and
disciplined working in PSU.
G
34. The argument revolving around the necessity for previous
sanction under Section 197(1) of the Code, has to be considered keeping
in view the above facts. It is true that the refusal to grant sanction for
prosecution under the PC Act in respect of A-3 and A-4 may not have a
direct bearing upon the prosecution of A-1. But it would certainly provide
H
A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 37
POLICE [V. RAMASUBRAMANIAN, J.]
the context in which the culpability of A-1 for the offences both under A
the IPC and under the PC Act has to be determined.
35. It is admitted by the respondent-State that no previous sanction
under section 197(1) of the Code was sought for prosecuting A-1. The
stand of the prosecution is that the previous sanction under Section 197(1)
may be necessary only when the offence is allegedly committed “while B
acting or purporting to act in the discharge of his official duty”.
Almost all judicial precedents on Section 197(1) have turned on these
words. Therefore, we may now take a quick but brief look at some of
the decisions.
36. Dr. Hori Ram Singh vs. The Crown3 is a decision of the C
Federal Court, cited with approval by this court in several decisions. It
arose out of the decision of the Lahore High Court against the decision
of the Sessions Court which acquitted the appellant of the charges under
Sections 409 and 477A IPC for want of consent of the Governor. Sir S.
Varadachariar, with whose opinion Gwyer C.J., concurred, examined
the words, “any act done or purporting to be done in the execution D
of his duty” appearing in Section 270(1) of the Government of India
Act, 1935, which required the consent of the Governor. The Federal
Court observed at the outset that this question is substantially one of
fact, to be determined with reference to the act complained of and
the attendant circumstances. The Federal Court then referred by way E
of analogy to a number of rulings under Section 197 of the Code and
held as follows:-
“The reported decisions on the application of sec. 197 of the
Criminal Procedure Code are not by any means uniform. In most
of them, the actual conclusion will probably be found to be F
unexceptionable, in view of the facts of each ease; but, in some,
the test has been laid down in terms which it is difficult to accept
as exhaustive or correct. Much the same may be said even of
decisions pronounced in England, on the language, of similar
statutory provisions (see observations in Booth v. Clive . It does
not seem to me necessary to review in detail the decisions G
given under sec. 197 of the Criminal Procedure Code which
may roughly be classified as falling into three groups, so
far as they attempted to state something in the nature of a
3
1939 SCC OnLine FC 2 H
38 SUPREME COURT REPORTS [2023] 10 S.C.R.
A test. In one group of cases, it is insisted that there must be
something in the nature of the act complained of that
attaches it to the official character of the person doing it: cf.
In re Sheik Abdul Khadir Saheb ; Kamisetty Raja
Rao v. Ramaswamy, AmanatAli v. King-emperor, King-
Emperor v. Maung Bo Maung and Gurushidayya
B
Shantivirayya Kulkarni v. King-Emperor. In another group,
more stress has been laid on the circumstance that the
official character or status of the accused gave him the
opportunity to commit the offence. It seems to me that the
first is the correct view. In the third group of cases, stress
C is laid almost exclusively on the fact that it was at a time
when the accused was engaged in his official duty that the
alleged offence was said to have been committed
[see Gangaraju v. Venki , quoting from Mitra’s Commentary
on the (criminal Procedure Code). The use of the
expression “while acting” etc., in sec. 197 of the Criminal
D
Procedure Code (particularly its introduction by way of
amendment in 1923) has been held to lend some support
to this view. While I do not wish to ignore the significance
of the time factor, it does not seem to me right to make it
the test. To take an illustration suggested in the course of
E the argument, if a medical officer, while on duty in the
hospital, is alleged to have committed rape on one of the
patients or to have stolen a jewel from the patient’s person,
it is difficult to believe that it was the intention of the
Legislature that he could not be prosecuted for such
offences except with the previous sanction of the Local
F
Government”
37. It is seen from the portion of the decision extracted above
that the Federal Court categorised in Dr. Hori Ram Singh (supra),
the decisions given under Section 197 of the Code into three groups
namely (i)cases where it was held that there must be something
G in the nature of the act complained of that attaches it to the
official character of the person doing it;(ii) cases where more
stress has been laid on the circumstance that the official
character or status of the accused gave him the opportunity to
commit the offence; and (iii) cases where stress is laid almost
H exclusively on the fact that it was at a time when the accused
A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 39
POLICE [V. RAMASUBRAMANIAN, J.]
was engaged in his official duty that the alleged offence was A
said to have been committed. While preferring the test laid down in
the first category of cases, the Federal Court rejected the test given in
the third category of cases by providing the illustration of a medical
officer committing rape on one of his patients or committing theft of a
jewel from the patient’s person.
B
38. In Matajog Dobey vs. H.C. Bhari4 a ConstitutionBench of
this Court was concerned with the interpretation to be given to the words,
“any offence alleged to have been committed by him while acting or
purporting to act in the discharge of his official duty” in Section 197
of the Code. After referring to the decision in Dr. Hori Ram Singh, the
Constitution Bench summed up the result of the discussion, in paragraph C
19 by holding: “There must be a reasonable connection between the
act and the discharge of official duty; the act must bear such relation
to the duty that the accused could lay a reasonable, but not a
pretended or fanciful claim, that he did it in the course of the
performance of his duty.” D
39. In State of Orissa through Kumar Raghvendra Singh vs.
Ganesh Chandra Jew5, a two Member Bench of this Court explained
that the protection under Section 197 has certain limits and that it is
available only when the alleged act is reasonably connected with the
discharge of his official duty and is not merely a cloak for doing the E
objectionable act. The Court also explained that if in doing his official
duty, he acted in excess of his duty, but there is a reasonable connection
between the act and the performance of the official duty, the excess
will not be a sufficient ground to deprive the public servant of the
protection.
F
40. The above decision in State of Orissa (supra) was followed
(incidentally by the very same author) in K. Kalimuthu vs. State by
DSP6 and Rakesh Kumar Mishra vs. State of Bihar7.
41. In Devinder Singh vs. State of Punjab through CBI8, this
Court took note of almost all the decisions on the point and summarized G
the principles emerging therefrom, in paragraph 39 as follows:
4
(1955) 2 SCR 925
5
(2004) 8 SCC 40:
6
(2005) 4 SCC 512
7
(2006) 1 SCC 557
8
(2016) 12 SCC 87 H
40 SUPREME COURT REPORTS [2023] 10 S.C.R.
A “39. The principles emerging from the aforesaid decisions are
summarised hereunder:
39.1. Protection of sanction is an assurance to an honest
and sincere officer to perform his duty honestly and to the
best of his ability to further public duty. However, authority
B cannot be camouflaged to commit crime.
39.2. Once act or omission has been found to have been
committed by public servant in discharging his duty it must
be given liberal and wide construction so far its official
nature is concerned. Public servant is not entitled to indulge
C in criminal activities. To that extent Section 197 CrPC has
to be construed narrowly and in a restricted manner.
39.3. Even in facts of a case when public servant has
exceeded in his duty, if there is reasonable connection it
will not deprive him of protection under Section 197 CrPC.
D There cannot be a universal rule to determine whether
there is reasonable nexus between the act done and official
duty nor is it possible to lay down such rule.
39.4. In case the assault made is intrinsically connected
with or related to performance of official duties, sanction
E would be necessary under Section 197 CrPC, but such
relation to duty should not be pretended or fanciful claim.
The offence must be directly and reasonably connected
with official duty to require sanction. It is no part of official
duty to commit offence. In case offence was incomplete
without proving, the official act, ordinarily the provisions
F of Section 197 CrPC would apply.
….”
42. In D. Devaraja vs. Owais Sabeer Hussain9, this Court
explained that sanction is required not only for acts done in the discharge
of official duty but also required for any act purported to be done in the
G
discharge of official duty and/or act done under colour of or in excess of
such duty or authority. This Court also held that to decide whether sanction
is necessary, the test is whether the act is totally unconnected with official
duty or whether there is a reasonable connection with the official duty.
9
H (2020) 7 SCC 695
A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 41
POLICE [V. RAMASUBRAMANIAN, J.]
43. Keeping in mind the above principles, if we get back to the A
facts of the case, it may be seen that the primary charge against A-1 is
that with a view to confer an unfair and undue advantage upon A-5, he
directed PW-16 to go for limited tenders by dictating the names of four
bogus companies, along with the name of the chosen one and eventually
awarded the contract to the chosen one. It was admitted by the
B
prosecution that at the relevant point of time, the Works Policy of BHEL
marked as Exhibit P-11, provided for three types of tenders, namely (i)
Open Tender; (ii) Limited/Restricted Tender; and (iii) Single Tender.
44. Paragraph 4.2.1 of the Works Policy filed as Exhibit P-11 and
relied upon by the prosecution laid down that as a rule, only works up to
Rs.1,00,000/- should be awarded by Restricted Tender. However, C
paragraph 4.2.1 also contained a rider which reads as follows:
“4.2.1 … However even in cases involving more than
Rs.1,00,000/- if it is felt necessary to resort to Restricted Tender
due to urgency or any other reasons it would be open to the General
Managers or other officers authorised for this purpose to do so D
after recording reasons therefor.”
45. Two things are clear from the portion of the Works Policy
extracted above. One is that a deviation from the rule was permissible.
The second is that even General Managers were authorised to take a
call, to deviate from the normal rule and resort to Restricted Tender. E
46. Admittedly, A-1 was occupying the position of Executive
Director, which was above the rank of a General Manager. According
to him he had taken a call to go for Restricted Tender, after discussing
with the Chairman and Managing Director. The Chairman and Managing
Director, in his evidence as PW-28, denied having had any discussion in F
this regard.
47. For the purpose of finding out whether A-1 acted or purported
to act in the discharge of his official duty, it is enough for us to see
whether he could take cover, rightly or wrongly, under any existing policy.
Paragraph 4.2.1 of the existing policy extracted above shows that A-1 G
at least had an arguable case, in defence of the decision he took to go in
for Restricted Tender. Once this is clear, his act, even if alleged to be
lacking in bona fides or in pursuance of a conspiracy, would be an act in
the discharge of his official duty, making the case come within the
parameters of Section 197(1) of the Code. Therefore, the prosecution
H
42 SUPREME COURT REPORTS [2023] 10 S.C.R.
A ought to have obtained previous sanction. The Special Court as well as
the High Court did not apply their mind to this aspect.
48. Shri Padmesh Mishra, learned counsel for the respondent
placed strong reliance upon the observation contained in paragraph 50
of the decision of this Court in Parkash Singh Badal vs. State of
B Punjab10. It reads as follows:-
“50.The offence of cheating under Section 420 or for that
matter offences relatable to Sections 467, 468, 471 and 120-
B can by no stretch of imagination by their very nature be
regarded as having been committed by any public servant
C while acting or purporting to act in discharge of official duty.
In such cases, official status only provides an opportunity for
commission of the offence.”
49. On the basis of the above observation, it was contended by
the learned counsel for the respondent that any act done by a public
D servant, which constitutes an offence of cheating, cannot be taken to
have been committed while acting or purporting to act in the discharge
of official duty.
50. But the above contention in our opinion is far-fetched. The
observations contained in paragraph 50 of the decision in Parkash Singh
E Badal (supra) are too general in nature and cannot be regarded as the
ratio flowing out of the said case. If by their very nature, the offences
under sections 420, 468, 471 and 120B cannot be regarded as having
been committed by a public servant while acting or purporting to act in
the discharge of official duty, the same logic would apply with much
more vigour in the case of offences under the PC Act. Section 197 of
F the Code does not carve out any group of offences that will fall outside
its purview. Therefore, the observations contained in para 50 of the
decision in Parkash Singh Badal cannot be taken as carving out an
exception judicially, to a statutory prescription. In fact, Parkash Singh
Badal cites with approval the other decisions (authored by the very
G same learned Judge) where this Court made a distinction between an
act, though in excess of the duty, was reasonably connected with the
discharge of official duty and an act which was merely a cloak for doing
the objectionable act. Interestingly, the proposition laid down in Rakesh
Kumar Mishra (supra) was distinguished in paragraph 49 of the decision
H 10
(2007) 1 SCC 1
A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 43
POLICE [V. RAMASUBRAMANIAN, J.]
in Parkash Singh Badal, before the Court made the observations in A
paragraph 50 extracted above.
51. No public servant is appointed with a mandate or authority to
commit an offence. Therefore, if the observations contained in paragraph
50 of the decision in Parkash Singh Badal are applied, any act which
constitutes an offence under any statute will go out of the purview of an B
act in the discharge of official duty. The requirement of a previous sanction
will thus be rendered redundant by such an interpretation.
52. It must be remembered that in this particular case, the FIR
actually implicated only four persons, namely PW-16, A-3, A-4 an A-5.
A-1 was not implicated in the FIR. It was only after a confession C
statement was made by PW-16 in the year 1998 that A-1 was roped in.
The allegations against A-1 were that he got into a criminal conspiracy
with the others to commit these offences. But the Management of BHEL
refused to grant sanction for prosecuting A-3 and A-4, twice, on the
ground that the decisions taken were in the realm of commercial wisdom
of the Company. If according to the Management of the Company, D
the very same act of the co-conspirators fell in the realm of
commercial wisdom, it is inconceivable that the act of A-1, as part
of the criminal conspiracy, fell outside the discharge of his public
duty, so as to disentitle him for protection under Section 197(1) of
the Code. E
53. In view of the above, we uphold the contention advanced on
behalf of A-1 that the prosecution ought to have taken previous sanction
in terms of Section 197(1) of the Code, for prosecuting A-1, for the
offences under the IPC.
Part-II (Revolving around grant of pardon) F
54. As we have indicated elsewhere, the FIR was filed on
31.01.1997 against 4 persons namely K. Bhaskar Rao (the person who
turned Approver later) and A-3 to A-5. K. Bhaskar Rao, who later turned
approver, was arrested in August, 1998 and released on bail by the
respondents themselves. After his release, the said K. Bhaskar Rao G
gave a confession statement under Section 164 of the Code before the
XVIII Metropolitan Magistrate, Chennai on 16.11.1998. On the basis of
the statement so given by K. Bhaskar Rao, prosecution filed a petition in
Criminal M.P No.562 of 2000 before theChief Judicial Magistrate,
Maduraiunder Section 306 of the Code for the grant of pardon. On the
H
44 SUPREME COURT REPORTS [2023] 10 S.C.R.
A said petition so filed on 22.06.2000, the Additional Chief Judicial
Magistrate, Madurai (to whom it was made over) summoned K. Bhaskar
Rao to appear before him on 17.07.2000. After broadly informing K.
Bhaskar Rao of the consequences of his action, the Additional Chief
Judicial Magistrate adjourned the matter to 18.07.2000. On 18.07.2000,
the Additional Chief Judicial Magistrate read out the contents of his
B
confession statement and asked Bhaskar Rao whether it was voluntarily
given by him after knowing the consequences. Once K. Bhaskar Rao
answered the questions in the affirmative, the Additional Chief Judicial
Magistrate passed an order on 18.07.2000 granting pardon to K. Bhaskar
Rao under Section 306 of the Code. Thereafter, the respondents filed a
C final report on 16.07.2002 directly before the Special Judge for CBI
cases, Chennai, without the case being committed by the Magistrate.
Since the aforesaid K. Bhaskar Rao had already been granted pardon
by the Additional Chief Judicial Magistrate, the prosecution examined
him as PW-16 before the Special Court for CBI cases and marked (i)
the statement of K. Bhaskar Rao under Section 164 of the Code as
D
Exhibit P-44; (ii) the copy of the petition filed under Section 306 of the
Code dated 22.06.2000 as Exhibit P-51; and (iii) the proceedings dated
17.07.2000 and 18.07.2000 of the Additional Chief Judicial Magistrate,
Madurai, relating to the tender of pardon, as Exhibit P-52.
55. Appearing on behalf of A-7, Shri S. Nagamuthu, learned senior
E counsel assailed the procedure so followed. According to the learned
senior counsel, the Chief Judicial Magistrate/Metropolitan Magistrate is
empowered to grant pardon during investigation, inquiry or trial and a
Magistrate of first class is empowered to grant pardon while inquiring
into or trying an offence. This is by virtue of sub-section (1) of Section
F 306 of the Code. In the case on hand, the Additional Chief Judicial
Magistrate granted pardon at the stage of investigation. Therefore, it is
contended by the learned senior counsel that the approver, in cases
covered by Section 306(1), should be examined twice, once before
committal and then at the time of trial. The difference between the
examination of an approver at these two stages is that the approver is
G examined as a court witness before committal, but as a prosecution
witness during trial. Therefore, the learned senior counsel contended
that such examination of an approver twice, is a mandatory requirement
of clause (a) of sub-section (4) of Section 306 and that it has been held
by a catena of decisions that the non-compliance with Section 306(4)(a)
H would vitiate the proceedings. It is the contention of the learned senior
A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 45
POLICE [V. RAMASUBRAMANIAN, J.]
counsel that if the Magistrate, who grants pardon, has failed to examine A
him as a witness as soon as pardon is accepted by the approver, the
evidence of the approver is liable to be eschewed from consideration. It
is submitted by the learned senior counsel that in this case, the Additional
Chief Judicial Magistrate examined as PW-18 had not complied with the
requirement of Section 306(4)(a) of the Code and that therefore the
evidence of the approver is liable to be eschewed. B
56. Shri S. Nagamuthu, learned senior counsel also submitted that
the requirement of examining an approver once as a court witness before
committal and then as a prosecution witness during trial, prescribed by
Section 306(4)(a), will not be applicable to a case covered by Section
307 of the Code, which empowers the Court to which the case is C
committed for trial, itself to grant pardon. But in the case on hand, the
case was not committed by any Magistrate/Additional Chief Judicial
Magistrate to the Special Court and hence, the prosecution cannot even
rely upon Section 307 of the Code.
57. Adverting to the provisions of sub-sections (1) and (2) of D
Section 5 of the PC Act, it was contended by Shri S. Nagamuthu, learned
senior counsel that the power to tender a pardon was available even to
the Special Court. The pardon so tendered by the Special Court is deemed
under sub-section (2) of Section 5 to be a pardon tendered under Section
307 of the Code. But this deeming fiction is limited in its applicability
E
only for the purposes of sub-sections (1) to (5) of Section 308 of the
Code. In other words, the power of the Court to grant pardon under
Section 307 of the Code is materially different from the power of the
Special Court under Section 5(2) of the PC Act. In fact, Section 5(1)
of the PC Act empowers the Special Court to take cognizance without
the case being committed to it by any Magistrate. The provisions of F
Section 193 of the Code thus stand excluded in their application. The
Special Court is thus conferred by Section 5(1) of the PC Act, original
jurisdiction to take cognizance. This principle has been recognized by
this Court in Bangaru Laxman vs. State (through CBI)11, wherein it
was held that the Special Judge has a dual power, namely that of a
Court of Session and that of a Magistrate. Relying upon the decision in G
Harshad S. Mehta vs. State of Maharashtra12 and the decisions in
P.C. Mishra vs. State (Central Bureau of Investigation)13 and State
11
(2012) 1 SCC 500
12
(2001) 8 SCC 257
13
(2014) 14 SCC 629 H
46 SUPREME COURT REPORTS [2023] 10 S.C.R.
A through Central Bureau of Investigation, Chennai vs. V. Arul
Kumar14, the learned senior counsel contended that the request for pardon
should have been made in this case at the stage of investigation only
before the Special Court. Even assuming that it was a curable defect,
there must be an evidence of good faith on the part of PW-18 (the
Additional Chief Judicial Magistrate). In the absence of such an evidence,
B
it is contended that the testimony of the approver was liable to be
eschewed in this case.
58. We have carefully considered the above submissions.
59. Before we proceed with our analysis, it is necessary to bring
C on record Sections 306 and 307 of the Code and Section 5 of the PC
Act. Section 306 and 307 of the Code reads as follows:
“306.Tender of pardon to accomplice.-(1) With a view to
obtaining the evidence of any person supposed to have been directly
or indirectly concerned in or privy to an offence to which this
section applies, the Chief Judicial Magistrate or a Metropolitan
D
Magistrate at any stage of the investigation or inquiry into, or the
trial of, the offence, and the Magistrate of the first class inquiring
into or trying the offence, at any stage of the inquiry or trial, may
tender a pardon to such person on condition of his making a full
and true disclosure of the whole of the circumstances within his
E knowledge relative to the offence and to every other person
concerned, whether as principal or abettor, in the commission
thereof.
(2) This section applies to—
(a) any offence triable exclusively by the Court of Session
F or by the Court of a Special Judge appointed under
the Criminal Law Amendment Act, 1952 (46 of 1952)
(b) any offence punishable with imprisonment which may
extend to seven years or with a more severe sentence.
(3) Every Magistrate who tenders a pardon under sub-section
G (1) shall record-
(a) his reasons for so doing;
(b) whether the tender was or was not accepted by the
person to whom it was made,
H 14
(2016) 11 SCC 733
A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 47
POLICE [V. RAMASUBRAMANIAN, J.]
and shall, on application made by the accused, furnish him with a A
copy of such record free of cost.
(4) Every person accepting a tender of pardon made under
sub-section (1)—
(a) shall be examined as a witness in the Court of the
Magistrate taking cognizance of the offence and in B
the subsequent trial, if any,
(b) shall, unless he is already on bail, be detained in
custody until the termination of the trial.
(5) Where a person has accepted a tender of pardon made
under sub-section (1) and has been examined under sub-section C
(4), the Magistrate taking cognizance of the offence shall, without
making any further inquiry in the case,
(a) commit it for trial-
(i) to the Court of Session if the offence is triable
exclusively by that Court or if the Magistrate D
taking cognizance is the Chief Judicial
Magistrate;
(ii) to a Court of Special Judge appointed under
the Criminal Law Amendment Act, 1952 (46
of 1952), if the offence is triable exclusively E
by that Court;
(b) in any other case, make over the case to the Chief
Judicial Magistrate who shall try the case himself.
307. Power to direct tender of pardon.—At any time after
commitment of a case but before judgment is passed, the Court to F
which the commitment is made may, with a view to obtaining at
the trial the evidence of any person supposed to have been directly
or indirectly concerned in, or privy to, any such offence, tender a
pardon on the same condition to such person.”
60. Section 5 of the PC Act reads as follows: G
“5. Procedure and powers of special Judge.—(1) A special
Judge may take cognizance of offences without the accused being
committed to him for trial and, in trying the accused persons, shall
follow the procedure prescribed by the Code of Criminal Procedure,
1973 (2 of 1974), for the trial of warrant cases by the Magistrates. H
48 SUPREME COURT REPORTS [2023] 10 S.C.R.
A (2) A special Judge may, with a view to obtaining the evidence of
any person supposed to have been directly or indirectly concerned
in, or privy to, an offence, tender a pardon to such person on
condition of his making a full and true disclosure of the whole
circumstances within his knowledge relating to the offence and to
B every other person concerned, whether as principal or abettor, in
the commission thereof and any pardon so tendered shall, for the
purposes of sub-sections (1) to (5) of section 308 of the Code of
Criminal Procedure, 1973 (2 of 1974), be deemed to have been
tendered under section 307 of that Code.
C (3) Save as provided in sub-section (1) or sub-section (2), the
provisions of the Code of Criminal Procedure, 1973 (2 of 1974),
shall, so far as they are not inconsistent with this Act, apply to the
proceedings before a special Judge; and for purposes of the said
provisions, the Court of the special Judge shall be deemed to be a
Court of Session and the person conducting a prosecution before
D a special Judge shall be deemed to be a public prosecutor.
(4) In particular and without prejudice to the generality of the
provisions contained in sub-section (3), the provisions of sections
326 and 475 of the Code of Criminal Procedure, 1973 (2 of 1974),
shall, so far as may be, apply to the proceedings before a special
E Judge and for the purposes of the said provisions, a special Judge
shall be deemed to be a Magistrate.
(5) A special Judge may pass upon any person convicted by him
any sentence authorised by law for the punishment of the offence
of which such person is convicted.
F
(6) A special Judge, while trying an offence punishable under this
Act, shall exercise all the powers and functions exercisable by a
District Judge under the Criminal Law Amendment Ordinance,
1944 (Ord. 38 of 1944).”
61. A careful look at the anatomy of Section 306 of the Code
G
shows that it provides a plethora of steps either in the alternative or in
addition. They are as follows:-
(i) Section 306(1) divides a criminal case into three stages,
namely, (i) investigation; (ii) inquiry; and (iii) trial of the
offence.
H
A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 49
POLICE [V. RAMASUBRAMANIAN, J.]
(ii) A Chief Judicial Magistrate or a Metropolitan Magistrate A
is empowered to grant pardon to any person, at any of the
three stages, namely the stage of investigation, the stage
of inquiry or the stage of trial. In contrast, the Magistrate
of the first class can grant pardon only in two stages,
namely the stage of inquiring into or the stage of trying
B
the offence.
(iii) Sub-section (2) of Section 306 makes the provisions of
Section 306 applicable to any offence triable exclusively by
a Court of Session or a Court of Special Judge appointed
under the Criminal Law Amendment Act, 1952 and to any
offence punishable with imprisonment which may extend C
to seven years or more.
(iv) Sub-section (3) of Section 306 obliges the Magistrate
tendering pardon, not only to record reasons for doing so
but also to state whether the tender was accepted by the
person to whom it was made; D
(v) Sub-section (4) of Section 306 makes it mandatory that every
person accepting a tender of pardon made under sub-section
(1) shall be examined as a witness both in the Court of the
Magistrate taking cognizance and in the subsequent trial.
Sub-section (4) also imposes an additional condition that E
the person accepting a tender of pardon shall be detained
in custody till the termination of the trial, except when he is
already on bail.
(vi) A careful look at clauses (a) and (b) of sub-section (4)
shows that the procedure prescribed therein is applicable F
only to cases covered by sub-section (1).
(vii) Sub-section (5) prescribes that once a person has accepted
a tender of pardon under sub-section (1) and has been
examined under sub-section (4) then the Magistrate taking
cognizance should commit the case for trial either to the G
Court of Session or to the Court of Special Judge. In cases
not covered by clause (a) of sub-section (5), the Magistrate
taking cognizance should make over the case to the Chief
Judicial Magistrate in terms of clause (b).
H
50 SUPREME COURT REPORTS [2023] 10 S.C.R.
A 62. Section 307 of the Code empowers the Court to which the
commitment is made, to tender pardon. The power can be exercised at
any time after the commitment of the case but before judgment is passed.
63. Coming to Section 5 of the PC Act, it is seen that sub-section
(1) empowers the Special Judge to take cognizance of offences without
B the accused being committed to him for trial. It also says that while
trying the accused persons, the Special Judge is obliged to follow the
procedure prescribed by the Code for the trial of warrant cases by the
Magistrates. This is why this court held in Bangaru Laxman (in para
40 of the report) that the Special Judge under the PC Act, while
trying offences, has a dual power of the Sessions Judge as well as
C that of the Magistrate and that such a Special Judge conducts the
proceedings both prior to the filing of the charge sheet and for
holding trial. In fact what was in question in Bangaru Laxman was
whether the pardon tendered by the Special Judge, one day before the
filing of the charge sheet, was correct or not. This court found the same
D to be in order.
64. Interestingly, sub-section (2) of Section 5 which empowers
the Special Judge to tender a pardon, does not speak about the stage at
which a Special Judge may tender pardon. This point can be appreciated
if we go back once again to Sections 306 and 307 of the Code which
E lays down the following rules:-
(i) A Chief Judicial Magistrate or a Metropolitan Magistrate is
empowered to tender pardon at any of the three stages;
(ii) The Magistrate of first class is empowered to tender pardon
at two stage; and
F
(iii) The Court to which commitment is made (meaning thereby
either a Court of Session or a Court of Special Judge named
in sub-clauses (i) and (ii) of clause (a) of sub-section (5) of
Section 306) is empowered to tender pardon at only one
stage namely the trial of the offence. Though the word trial,
G used in Section 306(1) is not used in Section 307, the words
appearing in Section 307, namely “at any time after
commitment of a case but before judgment is passed”
can only indicate the stage of trial, in view of the fact that
under sub-section (5) of Section 306, committal takes place
after cognizance is taken.
H
A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 51
POLICE [V. RAMASUBRAMANIAN, J.]
65. In contrast, Section 5(2) of the PC Act does not speak about A
the stage at which pardon may be tendered by a Special Judge. This is
perhaps in view of the express provisions of sub-section (1) of Section 5
which empowers the Special Judge himself to take cognizance without
the accused being committed to him for trial. But the second part of sub-
section (2) of Section 5 of the PC Act creates a deeming fiction that the
B
pardon tendered by the Special Judge shall be deemed to be a pardon
tendered under Section 307 of the Code. However, as rightly contended
by the learned Senior Counsel for A-7, this deeming fiction is limited for
the purposes of Sub-sections (1) to (5) of Section 308 of the Code.
66. It appears that before the advent of the Code of Criminal
Procedure, 1973, the Courts were taking a view that the Magistrates C
had the power to tender pardon even after the commitment of the case
for trial to the Court of Session/Special Judge. This was because of the
way in which Section 338 of the Code of Criminal Procedure, 1898 was
worded. A comparison of Section 307 of the Code of Criminal Procedure,
1973 with Section 338 of the Code of Criminal Procedure, 1898 will D
make the position more clear.
Section 307 of the Code of Section 338 of the Code of Criminal
Criminal Procedure, 1973 Procedure, 1898
307. Power to direct tender of 338. Power to direct tender of
pardon.—At any time after pardon. - At any time after
commitment of a case but before commitment, but before judgment is E
judgment is passed, the Court to passed, the Court to which the
which the commitment is made commitment is made may, with the
may, with a view to obtaining at view of obtaining on the trial the
the trial the evidence of any person evidence of any person supposed to
supposed to have been directly or have been directly or indirectly
indirectly concerned in, or privy concerned in, or privy to, any such F
to, any such offence, tender a offence, tender, or order the
pardon on the same condition to committing Magistrate or the
such person. District Magistrate to tender, a
pardon on the same condition to such
person.
67. The change brought about by the legislature to the procedure G
prescribed in Sections 306 and 307 of the Code of 1973 was noted by
this Court in A. Devendran vs. State of T.N.15. Incidentally, a question
arose in A. Devendran (supra) as to whether the non-examination of
15
(1997) 11 SCC 720 H
52 SUPREME COURT REPORTS [2023] 10 S.C.R.
A the Approver as a witness after grant of pardon was a non-compliance
of sub-section (4)(a) of Section 306 and whether it would vitiate the
proceedings. Paragraph 10 of the decision in A.Devendran is of
importance and hence it is extracted as follows:-
“10. The next question that arises for consideration is as to
B whether non-examination of the approver as a witness after
grant of pardon and thereby non-compliance of sub-section
4(a) of Section 306 vitiates the entire proceeding. In the case
in hand there is no dispute that after the Chief Judicial Magistrate
granted pardon to the accused he was not examined immediately
after the grant of pardon and was only examined once by the
C learned Sessions Judge in course of trial. The question that arises
for consideration is: When an accused is granted pardon after the
case is committed to the Court of Session would it be necessary
to comply with sub-section (4)(a) of Section 306 of the Code.
The contention of Mr Mohan, the learned counsel appearing for
D the State, in this connection is that Section 307 merely mandates
that pardon should be tendered on the same condition and such
condition obviously refers to the condition indicated in sub-section
(1) of Section 306, namely, on the accused making a full and true
disclosure of the whole of the circumstances within his knowledge
relating to the offence and to every other person concerned,
E whether as principal or abettor, in the commission thereof.
According to the learned counsel, sub-section (4) of Section 306
is not a condition for tendering pardon but is merely a procedure
which has to be followed when a person is tendered pardon by a
Magistrate in exercise of power under Section 306. Since after a
F case committed to the Court of Session pardon is tendered by the
court to whom the commitment is made, it would not be necessary
for such court to comply with sub-section (4)(a) of Section 306.
Mr Murlidhar, the learned counsel appearing for the
appellants, on the other hand contended, that the object
and purpose engrafted in clause (a) of sub-section (4) of
G Section 306 is to provide a safeguard to the accused who
can cross-examine even at the preliminary stage on knowing
the evidence of the approver against him and can impeach the
said testimony when the approver is examined in court during
trial, if any contradictions or improvements are made by him. This
H right of the accused cannot be denied to him merely because
A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 53
POLICE [V. RAMASUBRAMANIAN, J.]
pardon is tendered after the proceeding is committed to the Court A
of Session.
68. As seen from what is extracted above, the Chief Judicial
Magistrate granted pardon to the accused in that case but he was not
examined immediately after the grant of pardon and was only examined
once before the Sessions Judge in the course of trial. Therefore, the B
question that arose was whether it was necessary to comply with sub-
section (4)(a) of Section 306, when an accused is granted pardon after
the case is committed to the Court of Session. As seen from the argument
advanced before this Court in A. Devendran was that the object of
clause (a) of sub-section (4) of Section 306 is to provide a safeguard to
C
the accused so that he can cross examine even at the preliminary stage
on knowing the evidence of the approver and can impeach the said
testimony when the approver is examined in Court during trial.
69. For finding an answer to the said question, the Court in A.
Devendran, first made a distinction between a case where tender of
D
pardon was made before the commitment of the same to the Court of
Session and a case where pardon is tendered after commitment. After
making such a distinction, on the basis of whether pardon was tendered
before or after the committal, this Court held in Devendran (para 11) as
follows:-
E
“11. … A combined reading of sub-section (4) of Section 306
and Section 307 would make it clear that in a case exclusively
triable by the Sessions Court if an accused is tendered pardon
and is taken as an approver before commitment then
compliance of sub-section (4) of Section 306 becomes
mandatory and non-compliance of such mandatory F
requirements would vitiate the proceedings but if an accused
is tendered pardon after the commitment by the Court to which
the proceeding is committed in exercise of powers under Section
307 then in such a case the provisions of sub-section (4) of Section
306 are not attracted. …” G
70. To come to the above conclusion, this Court relied upon its
previous decision in Suresh Chandra Bahri vs. State of Bihar16,
whereinit was held as follows:-
16
1995 Supp (1) SCC 80 H
54 SUPREME COURT REPORTS [2023] 10 S.C.R.
A “30. A bare reading of clause (a) of sub-section (4) of Section
306 of the Code will go to show that every person accepting the
tender of pardon made under sub-section (1) has to be examined
as a witness in the Court of the Magistrate taking cognizance of
the offence and in the subsequent trial, if any. Sub-section (5)
further provides that the Magistrate taking cognizance of the
B
offence shall, without making any further enquiry in the case
commit it for trial to any one of the courts mentioned in clauses (i)
or (ii) of clause (a) of sub-section (5), as the case may be. Section
209 of the Code deals with the commitment of cases to the Court
of Session when offence is tried exclusively by that court. The
C examination of accomplice or an approver after accepting
the tender of pardon as a witness in the Court of the Magistrate
taking cognizance of the offence is thus a mandatory
provision and cannot be dispensed with and if this mandatory
provision is not complied with it vitiates the trial. As envisaged
in sub-section (1) of Section 306, the tender of pardon is made on
D
the condition that an approver shall make a full and true disclosure
of the whole of the circumstances within his knowledge relating
to the offence. Consequently, the failure to examine the
approver as a witness before the committing Magistrate would
not only amount to breach of the mandatory provisions
E contained in clause (a) of sub-section (4) of Section 306 but it
would also be inconsistent with and in violation of the duty to
make a full and frank disclosure of the case at all stages.
The breach of the provisions contained in clause (a) of sub-
section (4) of Section 306 is of a mandatory nature and not
merely directory and, therefore, non-compliance of the same
F
would render committal order illegal. The object and purpose
in enacting this mandatory provision is obviously intended to provide
a safeguard to the accused inasmuch as the approver has to make
a statement disclosing his evidence at the preliminary stage before
the committal order is made and the accused not only becomes
G aware of the evidence against him but he is also afforded an
opportunity to meet with the evidence of an approver before the
committing court itself at the very threshold so that he may take
steps to show that the approver’s evidence at the trial was
untrustworthy in case there are any contradictions or improvements
made by him during his evidence at the trial. It is for this reason
H
A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 55
POLICE [V. RAMASUBRAMANIAN, J.]
that the examination of the approver at two stages has been A
provided for and if the said mandatory provision is not complied
with, the accused would be deprived of the said benefit. This may
cause serious prejudice to him resulting in failure of justice as he
will lose the opportunity of showing the approver’s evidence as
unreliable. Further clause (b) of sub-section (4) of Section 306 of
B
the Code will also go to show that it mandates that a person who
has accepted a tender of pardon shall, unless he is already on bail
be detained in custody until the termination of the trial. We have,
therefore, also to see whether in the instant case these two
mandatory provisions were complied with or not and if the
same were not complied with, what is the effect of such a C
non-compliance on the trial?”
71. It is interest to see that in Suresh Chandra Bahri, this court
first held that the procedure prescribed in Section 306(4)(a) of the Code
is mandatory and not directory and that its non-compliance will render
the committal order illegal. After so holding, this court raised a question D
in the last line of para 30 extracted above, as to what is the effect of
such non-compliance on the trial. While answering this question, this
court found in Suresh Chandra Bahri, that the Court to which the case
was committed, noticed this irregularity even at the threshold and hence
remanded the matter back to the Magistrate for recording the evidence
of the approver. Thus the defect got cured before trial and hence this E
court held in paragraph 31 of the decision that eventually no prejudice
or disadvantage was shown to have been caused to the accused.
72. Thus, there were two distinguishing features in Suresh
Chandra Bahri. The first was that the Chief Judicial Magistrate who
tendered pardon in that case committed the case to the Court of Session F
for trial (unlike the case on hand) without examining the approver as a
witness in the Court. The second distinguishing feature was that the
Court to whom the case was committed for trial noticed the defect and
hence remanded the case back to the Court of Chief Judicial Magistrate.
Therefore, this court applied the prejudice test in that case. G
73. But more importantly, what was held in Suresh Chandra
Bahri to be vitiated, was the committal order. Therefore, it was
concluded eventually in Suresh Chandra Bahri that the moment the
defect in the committal order is cured before trial, the trial does not get
vitiated. H
56 SUPREME COURT REPORTS [2023] 10 S.C.R.
A 74. But in cases where a Special Court itself is competent to take
cognizance and also empowered to grant pardon, the procedure under
Section 306 of the Code gets by-passed, as held by this Court in State
through CBI vs. V. Arul Kumar17. An argument was advanced in Arul
Kumar (supra) (as seen from paragraph 20 of the Report) that Section
306 of the Code has no application to cases relating to offences under
B
the PC Act. In support of the said argument, the decision in P.C. Mishra
vs. State (CBI)18 was also relied upon. While dealing with the said
contention, this Court held in Arul Kumar as follows:-
“21. Sub-section (1) of Section 5, while empowering a Special
Judge to take cognizance of offence without the accused being
C committed to him for trial, only has the effect of waiving the
otherwise mandatory requirement of Section 193 of the Code.
Section 193 of the Code stipulates that the Court of Session cannot
take cognizance of any offence as a court of original jurisdiction
unless the case has been committed to it by a Magistrate under
D the Code. Thus, embargo of Section 193 of the Code has been
lifted. It, however, nowhere provides that the cognizance cannot
be taken by the Magistrate at all. There is, thus, an option given to
the Special Judge to straightaway take cognizance of the offences
and not to have the committal route through a Magistrate.
However, normal procedure prescribed under Section 190 of the
E Code empowering the Magistrate to take cognizance of such
offences, though triable by the Court of Session, is not given a go-
by. Both the alternatives are available. In those cases where
charge-sheet is filed before the Magistrate, he will have to commit
it to the Special Judge. In this situation, the provisions of Section
F 306 of the Code would be applicable and the Magistrate would be
empowered to exercise the power under the said provision. In
contrast, in those cases where Special Judge takes cognizance of
offence directly, as he is authorised to do so in view of Section
5(2) of the PC Act, 1988, Section 306 of the Code would get
bypassed and as the Special Judge has taken cognizance, it is
G Section 307 of the Code which would become applicable. Sub-
section (2) of Section 5 of the PC Act, 1988 makes this position
clear by prescribing that it is the Special Judge who would exercise
17
(2016) 11 SCC 733
18
H (2014) 14 SCC 629
A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 57
POLICE [V. RAMASUBRAMANIAN, J.]
his powers to tender of pardon as can clearly be spelled out by A
the language employed in that provision. Section 5(2) is to be read
in conjunction with Section 5(1) of the PC Act, 1988. The
aforesaid legal position would also answer the argument of the
learned counsel for the respondent based on the judgment of this
Court in A. Devendran [A. Devendran v. State of T.N., (1997)
B
11 SCC 720 : 1998 SCC (Cri) 220] . In that case, this Court held
that once the proceedings are committed to the Court of Session,
it is that court only to which commitment is made which can grant
pardon to the approver. The view taken by us is, rather, in tune
with the said judgment.”
75. In other words, this Court recognised in Arul Kumar two C
types of cases, namely (i) those which come through the committal route;
and (ii) those where cognizance is taken directly by the Special Judge
under Section 5(1) of the PC Act. In the second category of cases, the
Court held that Section 306 of the Code would get by-passed.
76. Therefore, it is clear that when the Special Court chooses to D
take cognizance, the question of the approver being examined as a witness
in the Court of the Magistrate as required by Section 306 (4)(a) does not
arise. Shri Padmesh Mishra, learned counsel for the respondent is
therefore right in relying upon the decisions of this Court in Sardar
Iqbal Singh vs. State (Delhi Administration)19 and Yakub Abdul Razak E
Memon vs. State of Maharashtra20
77. In Sardar Iqbal Singh (supra) the offence was triable by the
Special Judge who also took cognizance. Therefore, there were no
committal proceedings. Though Sardar Iqbal Singh arose under the
1898 Code, sub-section (2) of Section 337 of the 1898 Code was in pari F
materia with Section 306(4)(a) of the 1973 Code. Therefore, the ratio
laid down in Sardar Iqbal Singh was rightly applied in Yakub Abdul
Razak Memon (supra) for coming to the conclusion that where a Special
Judge takes cognizance of the case, the occasion for examining the
approver as a witness arises only once.
G
78. In any case, all decisions cited so far, uniformly say that the
object of examining an approver twice, is to ensure that the accused is
made aware of the evidence against him even at the preliminary stage,
19
(1977) 4 SCC 536
20
(2013) 13 SCC 1 H
58 SUPREME COURT REPORTS [2023] 10 S.C.R.
A so as to enable him to effectively cross examine the approver during
trial, bring out contradictions and show him to be untrustworthy. The
said object stands fulfilled in this case, since the confession statement of
the approver before the XVIII Metropolitan Magistrate was enclosed to
the Charge Sheet. The approver was examined as PW-16 during trial
B and he was cross examined on the contents of the confession statement.
The Magistrate who recorded the confession was examined as PW 17
and the Additional Chief Judicial Magistrate who granted pardon was
examined as PW-18. The proceedings before the XVIII Metropolitan
Magistrate, the petition under section 306 of the Code and the proceedings
on tender of pardon were marked respectively as EXX. P-50, 51 and
C 52. All the accused were given opportunity to cross examine these
witnesses both on the procedure and on the contents.
79. In view of the above, we are of the considered view that
there was no violation of the procedure prescribed by Section 306(4)(a)
of the Code. Thus, we answer the second issue against the appellants.
D
Part-III (Revolving around the merits of the case qua
culpability of each of the appellants before us)
As regards A-1
80. Though we have found in Part-I of this judgment that the
E failure of the prosecution to take previous sanction under Section 197(1)
of the Code has vitiated the proceedings against A-1, we would
nevertheless deal with his case on merits to see if the offences under
the IPC or under the PC Act stood proved beyond reasonable doubt.
81. To recapitulate, the allegations against A-1 are (i) that by
F entering into a criminal conspiracy to cheat BHEL and award the tender
to A-5’s firm and by instructing PW-16 to go in for limited tenders without
following the procedure of pre-qualification of prospective tenderers and
without selecting any one from the approved list of contractors, he
committed various offences punishable under the IPC; and (ii) that by
G abusing his official position and awarding the contract to A-5, he caused
a wrongful loss to the tune of Rs.4.32 crores to BHEL.
82. For proving the allegations with regard to the criminal
conspiracy and for establishing that A-1 decided to go in for Restricted
Tender for the purpose of awarding the contract to a chosen firm and
H also for showing that A-1 directed the inclusion of four bogus firms, the
A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 59
POLICE [V. RAMASUBRAMANIAN, J.]
prosecution relied upon its star witness, namely PW-16. But PW-16 was A
the first-named accused in the FIR, who later turned approver by giving
a confession statement.
83. As rightly contended by Shri Huzefa Ahmadi, learned senior
counsel, this Court has laid down two tests in Sarwan Singh vs. State
of Punjab21, to be satisfied before accepting the evidence of an approver. B
The first is that the approver is a reliable witness and the second is that
his statement should be corroborated with sufficient evidence. Again, in
Ravinder Singh vs. State of Haryana22 this Court pointed out that, “an
approver is a most unworthy friend” and that he having bargained for
his immunity, must prove his worthiness for credibility in court. The test
to be fulfilled was pithily put in paragraph 12 of the Report by this Court C
as follows:-
“12. … This test is fulfilled, firstly, if the story he relates involves
him in the crime and appears intrinsically to be a natural and
probable catalogue of events that had taken place. The story if
given of minute details according with reality is likely to save it D
from being rejected brevi manu. Secondly, once that hurdle is
crossed, the story given by an approver so far as the accused on
trial is concerned, must implicate him in such a manner as to give
rise to a conclusion of guilt beyond reasonable doubt. In a rare
case taking into consideration all the factors, circumstances and E
situations governing a particular case, conviction based on the
uncorroborated evidence of an approver confidently held to be
true and reliable by the Court may be permissible. Ordinarily,
however, an approver’s statement has to be corroborated in
material particulars bridging closely the distance between the crime
and the criminal. Certain clinching features of involvement F
disclosed by an approver appertaining directly to an accused, if
reliable, by the touchstone of other independent credible evidence,
would give the needed assurance for acceptance of his testimony
on which a conviction may be based.”
84. Section 133 of the Indian Evidence Act, 1872 declares an G
accomplice to be a competent witness and that a conviction is not illegal
merely because it proceeds upon the uncorroborated testimony of an
21
1957 SCR 953
22
(1975) 3 SCC 742 H
60 SUPREME COURT REPORTS [2023] 10 S.C.R.
A accomplice. However, while considering the import of Section 133. this
Court held in M.O. Shamsudhin vs. State of Kerala23 that the court is
bound to take note of a precautionary provision contained in Illustration
(b) to Section 114 of the Evidence Act, which provides that an
accomplice is unworthy of credit unless he is corroborated in
material particulars.
B
85. Keeping the above principles in mind, if we turn our attention
to the evidence of PW-16, it will be seen that he was trying to shift the
burden on A-1, to save his own skin. The following admissions made by
him during the cross-examination showed that he was unworthy of credit:-
C (i) There was no approved list of contractors maintained at
BHEL, Trichy, till 1994;
(ii) It is not correct to say that open tender system was not at
all resorted to by Civil Engineering Department in BHEL,
Trichy till 1994. I cannot recollect single instance of open
tender as I have forgotten;
D
(iii) During my tenure I did not initiate anything to cancel the
award of contract to Entoma Hydro Systems. It is true that
I did not take steps to annul the contract as the circumstances
did not warrant that;
E (iv) I am the competent person to call the tenderers for
negotiation and in that capacity I wrote several letters to
the contractors;
(v) Exhibit P-55 is the letter dated 02.01.1993 by me to Entoma
Hydro Systems asking them to send fresh offer before
07.01.1993;
F
(vi) Exhibit P-53 is one such letter dated 31.12.1992 written by
me to Mercantile Construction Corporation;
(vii) In Exhibits P-53 and P-54 it is mentioned as “in
continuation of the telephonic conversation we had”;
G (viii) As per Exhibit P-39, one Mr. R. Ilango represented
Mercantile Construction Corporation in the meeting held
on 11.01.1993. As per Exhibit P-40 one Mr. J.N.J. Chandran
attended the meeting held on 11.01.1993 representing
Raghav Engineers and Builders; and
H 23
(1995) 3 SCC 351
A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 61
POLICE [V. RAMASUBRAMANIAN, J.]
(ix) As per the limited tender policy, tender enquiry ought to be A
addressed only to eligible and qualified parties. Keeping it
in my mind I have prepared Exhibit P-27 note, dated
25.11.1992.
86. In his examination-in-chief, PW-16 claimed thatsomewhere
in 1992 he came to know for the first time from A-1 regarding the B
proposal for construction of Desalination Plants and that one day
A-1 called him to his office and said that he had located a person in
Chennai who was a dynamic person, resourceful person, go-getter
and an achiever.It was his positive assertion in chief examination that
on the same day A-1 told him to prepare tender documents and hence
he returned to his office and instructed the Tender Department to prepare C
the tender document. What has happened subsequently is narrated by
PW-16 in chief examination as follows:
“… After some time A1 again called me to his office and told me
that he had collected the names and addresses of some contractors
from TWAD Board who were in a position to take up the work if D
awarded. Then I told him that the tender documents were ready
and that I could send the same if it was furnished with the names
and address of the contractors. Then, A1 dictated the following 5
names
1) Entomo Hydro Systems, Madras. E
2) East Coast Builders, Madras.
3) Turn Key Construction Company, Madras.
4) Raghava Engineers and Builders, Madras.
F
5) Mercantile Construction Company, Madras.
I noted down these names. Then I told him that I had no knowledge
of any of these 5 companies, might be they were exclusively the
TWAD Board contractors and I might not be aware of them.
Some of these names like East Coast Builders, Turn Key
Construction Company, Raghava Engineers and Builders appeared G
to be similar to the names of big companies i.e. may be subsidiaries
of some big companies. I further told him that big companies like
L&T and Geo Miller could also be included in that list because it
would give some respectability to the list. A1 thought for some
time and told me that these two companies may also be included.” H
62 SUPREME COURT REPORTS [2023] 10 S.C.R.
A 87. But in cross-examination, he admitted that Exhibit P-33 was a
letter dated 22.10.1992 written by one Sri Kantarao, Manager (Civil/
Design) to Ganesan (PW-14) and that there was a note in that letter to
the effect that Ganesan has discussed this matter with DGM, Civil. PW-
16 further admitted that it was possible that Ganesan might have discussed
with him.
B
88. The above statement in cross-examination shows that the
discussion between PW-16 and PW-14 took place on 22.10.1992. But
the discussion with A-1 and the dictation of five names took place even
according to PW-16, only in November, 1992. In fact, Exhibit P-33 letter
which was dated 22.10.1992, according to PW-16 dealt with inviting
C limited tender.
89. If discussions had taken place between PW-16 and someone
else in October, 1992 and a decision taken in that meeting to go for
limited tender, it is inconceivable as to how the original sin can be attributed
to A-1, especially when the discussion between PW-16 and A-1 took
D place only in November, 1992 wherein the dictation of four bogus names
and that of the prospective contractor allegedly took place.
90. PW-16 admitted during cross-examination that he discussed
with A-1 on the day when tender documents were dispatched through
‘speed post’ and that was on 26.11.1992. But it was brought on record
E through the evidence of DW-2 and DW-3 that A-1 was absent on
26.11.1992 due to the death of his mother-in-law. In any case, PW-16
admitted in cross-examination that he had signed Exhibit P-27 note even
on 25.11.1992, which was one day before the date on which he had
discussion with A-1.
F 91. The story advanced by PW-16 that the other four firms were
actually bogus firms, is belied by his own statement to the effect that as
per Exhibits P-39 and P-40, two individuals represented two out of those
four firms in the meeting held on 11.01.1993. If those firms were bogus
firms, there is no explanation as to how they were represented in the
meeting.
G
92. It was admitted by PW-16 that in Exhibits P-53 and P-54,
(letters written to two of those firms) there was an indication as though
the letters were in continuation of the telephonic conversation they had.
93. In other words, two of the four firms, which were branded as
bogus firms by PW-16, have had discussions with PW-16 and they have
H also attended the meetings.
A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 63
POLICE [V. RAMASUBRAMANIAN, J.]
94. To cap all this, PW-16 admitted: A
“I recommended the contract to be given to Entoma who was
the lowest tenderer. I recommended the contract to be given
to A5 not because of A1’s interest.”
95. Therefore, nothing more was required to show that PW-16
B
was unworthy of credit and the conviction based upon such a person as
a star witness, cannot be sustained.
96. On the question whether BHEL suffered a wrongful loss or
whether A-5 or any other firm with which he was associated had a
wrongful gain, the evidence of PW-24 who was the Deputy Manager
C
(Finance) BHEL is crucial. In his cross-examination, PW-24 stated as
follows:-
“…In the course of the enquiry by the CBI official they asked me
to send a detailed account copies. As per their request I sent
them. Ex. D1 is the true copy of the accounts I sent to CBI. As
D
far as this contract is concerned as the bank guarantee was revoked
M/s BHEL Trichy has not lost any money in this contract. As a
matter of fact A.5 the contractors’ money to the tune of
Rs.1,61,86,234/- in with M/s BHEL Trichy. Apart from this amount
an amount of Rs.98,52,286/- is payable to accused No.5 by BHEL
towards the work done by him…” E
97. Two things are borne out of the above admission made by
PW-24. The first is that even at the time of investigation, PW-24 had
provided to the I.O., a detailed accounts copy showing that BHEL had
not suffered any loss and that on the contrary, a sum of Rs.2.60 crores
was payable to Entoma. But for some inexplicable reason, the copy of F
the said accounts statement was not produced by the CBI before the
Court. The same had to be marked as Defense Exhibit D-1 while cross-
examining PW-24. Therefore, it is clear that this statement of account
was burked, so that a picture is painted as though BHEL suffered wrongful
loss.
G
98. The second thing that flows out of PW-24’s cross-examination
extracted above, is that even after invoking the bank guarantee and
appropriating the same towards the monies already paid, BHEL was still
left with the contractor’s money of Rs.1,61,86,234/- apart from an amount
of Rs.98,52,286/- payable to A-5 by BHEL towards the work done.
H
64 SUPREME COURT REPORTS [2023] 10 S.C.R.
A 99. Therefore, it is clear that it was A-5 who actually got into a
mess, both financially and legally, by bagging the contract. Rather than
making any gain much less unlawful gain, the contractor has lost the
above two amounts, in addition to having the bank guarantee invoked.
100. Unfortunately, the Trial Court fell into a trap because of the
B statement that an amount of Rs.1,52,50,000/- was transferred by Entoma
Hydro Systems from the amount of mobilization advance, to the account
of another firm of which A-5 to A-7 were partners. The Trial Court
concluded that the partnership firm M/s Insecticides & Allied Chemicals
had a wrongful gain to the extent of this amount, forgetting for a moment
that if it was BHEL’s money that was received by the said firm, what
C was paid back, by the same logic should have been the firm’s money.
There cannot be two different yardsticks, one relating to the money
received by the partnership firm and another relating to the money realized
by BHEL. As a matter of fact, mobilization advance is intended to be
used for the purchase of materials. The DGM (EMS), BHEL, examined
D as PW-34 stated even in chief examination that in the initial stages, the
contract had gone very well and that up to the stage of water quality
testing, the contractor was doing well. Therefore, the mobilization advance
was necessarily to be spent. A suspicion cannot be thrown, solely on the
basis of the person to whom the payments were made. If what was paid
by BHEL to A-5 had been shared by A-6 and A-7, what was realized
E from A-5 through the invocation of the bank guarantee, cannot be taken
advantage of to contend that A-6 and A-7 did not repay the money. The
logic adopted by Trial Court in this regard was completely flawed.
101. Both the Trial Court and the High Court considered the oral
evidence of PW-2 (a Chartered Accountant), PW-3 (an officer of the
F Chennai Telephones) and a few others to come to the conclusion that
the names of four other firms included in Exhibit P-26 chit were bogus.
But both the Trial Court and the High Court overlooked the admissions
made by PW-16 that he held negotiations at least with two out of those
four firms and that the representatives of those two firms even attended
G the meetings.
102. The Trial Court and the High Court came to the conclusion
that the names of two big companies were included in Exhibit P-26 chit
only to lend credibility to the process adopted. But it was on record
through the statement of PW-4, Manager of L&T Company that a tender
H enquiry was received by them from BHEL. If the inclusion of the names
A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 65
POLICE [V. RAMASUBRAMANIAN, J.]
of those two companies were intended to be a make belief affair, A-1 A
would not have taken the risk of sending the letter and that too to a
company like L&T. Therefore, we are of the view, (i) that the evidence
of PW-16 was not worthy of credit; (ii) that even assuming that it
has some credibility, his statement that “he recommended the
contract to be given to A-5 not because of A-1’s interest”, made the
B
whole edifice upon which the case of the prosecution was built,
collapse; and (iii)that there was no other evidence to connect A-1
with the commission of these offences.
103. In fact, the only person found by both the Courts to be guilty
of the offence under Section 120B was A-1. Therefore, an argument
was advanced that a single person cannot be held guilty of criminal C
conspiracy. But this contention was repelled by the Courts on the ground
that PW-16 was the second person with whom A-1 had entered into a
conspiracy. In other words, the reasoning adopted by the Trial Court and
the High Court was that only A-1 and PW-16 were part of the conspiracy.
Such a reasoning was a huge climbdown from the original charge that D
A-1 to A-7 entered into a criminal conspiracy, to cause wrongful loss to
BHEL and to confer a wrongful gain to A-5 to A-7. Once an offence of
Section 120B is not made out against A-5 to A-7, the very foundation for
the prosecution becomes shaky. Therefore, we are of the view that the
conviction of A-1 for the offences under Section 120B read with Sections
420, 468, Section 471 read with Section 468 and Section 193 IPC and E
Section 13(2) read with Section 13(1)(d) of the PC Act cannot be
sustained.
104. We are surprised that A-1 was found guilty of an offence
under Section 193. Section 193 applies only to false evidence given in
any stage of a judicial proceeding or the fabrication of false evidence for F
the purpose of being used in any stage of a judicial proceeding. The
allegation against A-1 was not even remotely linked to any of the
Explanations under Section 193 of the IPC. Therefore, the judgment of
the Trial Court and that of the High Court convicting A-1 for the aforesaid
offences and sentencing him to imprisonment of varying terms and fines
G
of different amounts are liable to be reversed.
As regards A-4
105. As can be seen from the judgment of the Trial Court, A-4
was convicted for the offences under Section 109 read with Section
420, 468 IPC, Section 471 read with 468 IPC and Section 193 IPC. H
66 SUPREME COURT REPORTS [2023] 10 S.C.R.
A 106. As we have pointed out in the last paragraph dealing with the
case of A-1, Section 193 IPC deals with punishment for false evidence,
given intentionally in any stage of a judicial proceeding. It also includes
fabrication of false evidence for the purpose of being used in any stage
of a judicial proceeding. There are three Explanations under Section
193. Explanation 2 under Section 193 makes an investigation directed by
B
law preliminary to a proceeding before a Court of Justice, to be a stage
of judicial proceeding, though that investigation may not take place before
a Court of Justice. Similarly, Explanation 3 makes an investigation directed
by a Court of Justice according to law, and conducted under the authority
of a Court of Justice, to be a stage of judicial proceeding, though that
C investigation may not take place before a Court of Justice.
107. Interestingly, there was no allegation that either A-1 or A-3
or A-4 either gave false evidence or fabricated false evidence in any
stage of a judicial proceeding, falling within any of the three Explanations
under Section 193. But unfortunately, the Trial Court found A-4 guilty of
D the offence under Section 193, without there being any specific allegation
in the charge-sheet and without there being any specific finding on merits.
108. As rightly contended by Shri S.R. Raghunathan, learned
counsel for A-4, no Court shall take cognizance of any offence punishable
under Section 193 IPC, except on a complaint in writing of that Court or
E of some other Court to which that Court is subordinate. This bar is found
in Section 195(1)(b)(i) of the Code. No complaint was ever made by
any Court or by any officer authorized by any Court that A-1 or A-3 or
A-4 committed an offence punishable under Section 193 IPC. But
unfortunately, the Trial Court convicted A-1, A-3 and A-4, of the offence
under Section 193 without any application of mind and the same has
F been upheld by the High Court.
109. Even according to the prosecution, the only role played by
A-4 was that of being a member of a Committee constituted on
23.12.1992. Much ado was sought to be made, about the nature of the
Committee and as to whether it was a Tender Committee or Negotiation
G Committee. Due to the heat and dust created about the role and the
name of the Committee, it was completely overlooked that this Committee
came into the picture only after much water had flown under the bridge,
by (i) deciding to go for a Restricted Tender; (ii) by issuing tender notices
to seven identified contractors; (iii) by receiving the offers from five
H contractors; and (iv) by opening the tender documents on 18.12.1992
A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 67
POLICE [V. RAMASUBRAMANIAN, J.]
for the purpose of further processing. For the purpose of establishing an A
offence of cheating, what is important is the mindset at the beginning,
when the criminal conspiracy was hatched. At the time when the criminal
conspiracy was allegedly hatched in October/November, 1992, A-3 and
A-4 were not at all in the picture. They came into the picture only on
23.12.1992. The Note dated 23.12.1992 by which the Negotiation
B
Committee was constituted brings on record the fact that five named
contractors had submitted their offers. The names and addresses of all
the five contractors, the amounts quoted by them and the date and mode
of receipt of the offers are all presented in the form of a table in the
Note dated 23.12.1992. After noting all these particulars, the Note date
dated 23.12.1992 proceeds to state the object behind the constitution of C
the Committee as follows:-
“As the quoted value by the tenderers are very high, it is proposed
to conduct negotiation with the lowest three tenderers under Serial
Nos.1 to 3.”
110. Therefore, the reading of the trial Court and the High Court D
as though this Committee of which A-3, A-4 and the Approver were a
part, was actually a Tender Committee having a larger role to play, is
completely misconceived.
111. In fact, the prosecution had to stand or fall on the strength of
the testimony of the Approver namely PW-16. But this is what PW-16 E
said about the role played by A-3 and A-4.
“A3 Thiagarajan and A4 Chandrasekaran had absolutely nothing
to do in choosing the contractors in this case. Their only job was
to negotiate with the three lowest tenderers. With that their job
will be over. As the members of the committee A3 and A4 did F
their job well. In this case the contractor awarded 50% as
mobilization advance and that was reduced to 30% because of
the negotiation by the committee. The negotiation committee had
insisted the bank guarantee for the amount and obtained the bank
guarantee also. Though the negotiations were completed as early G
as in January, 1993 letter of intent came to be issued only in July
1994 i.e. after 18 months. It is true that because of the efforts of
the negotiation committee the contractor was persuaded not to
hike the rate because of the delay of 18 months in issuing the
work order.”
H
68 SUPREME COURT REPORTS [2023] 10 S.C.R.
A 112. Despite the above assertion on the part of PW-16 giving a
clean chit to A-3 and A-4, the Trial Court found both of them guilty on a
convoluted logic that they were part of a Tender Committee and that
“every word and every description in Exhibit P-36 (Tender Committee
proceedings) had been written by them with a view to cheat BHEL”
and that “if A-3 and A-4 were innocent they should have questioned
B
and asked for details regarding the contractors.” Such a reasoning
given by the trial Court and approved by the Trial Court and approved by
the High Court was completely perverse.
113. As rightly contended by the learned counsel, A-4 had no role
in choosing the tenderers, but entered the picture only after the offers
C were received from the tenderers. Admittedly, A-4 was subordinate to
both PW-16 and A-3.
114. At the cost of repetition, it should be pointed out that the
competent authority refused to grant sanction to prosecute A-3 and A-4
for the offences under the PC Act. The Trial Court and the High Court
D did not find A-4 as a co-conspirator, which is why he was not held guilty
of the offence under Section 120-B IPC. Section 193 IPC had been
included completely out of context.
115. For all the above reasons, we are of the view that the
conviction of A-4 by the Trial Court as confirmed by the High Court is
E wholly unsustainable and is liable to be set aside.
As regards A-7
116. The role attributed to A-7 was that he applied for and obtained
demand drafts, in the names of four different bogus firms, drawn in
F favour of BHEL for a sum of Rs.20,000/- each to make it appear as
though they were real firms, though they were not in existence. A-7 was
also accused of causing wrongful loss to BHEL along with A-5 and A-6
to the tune of Rs.4.32 crores. A-7 was also accused of abetting A-1 and
A-2 to commit criminal misconduct by misusing their official position
and obtaining pecuniary advantage to themselves.
G
117. To establish that A-7 filed applications with different banks
for the issue of demand drafts in the names of four bogus firms, the
prosecution examined PW-22, a Senior Manager of Indian Bank, PW-
32, the Branch Manager of State Bank of India, PW-40, the Senior
Manager of Bank of Madura, PW-41, the Chief Manager of State Bank
H of Mysore and PW-30, the handwriting expert. The prosecution marked
A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 69
POLICE [V. RAMASUBRAMANIAN, J.]
Exhibits P-66, P-76, P-90 and P-92, which were the applications submitted A
in the names of the four bogus firms, to these banks for the issue of
demand drafts.
118. PW-22 through whom Exhibit P-66 was marked did not say
even in the chief-examination that the application form was signed by
A-7. PW-32 through whom Exhibit P-76 was marked, stated in the chief- B
examination that on the date of the application for the issue of demand
draft he was not working in that branch and that he joined the branch six
years later. He also admitted that he could not know anything about the
demand draft application personally. But he claimed in the chief-
examination that A-6, the father of A-5 and A-7, was the owner of the
premises in which the branch was located and that he could identify the C
signature of A-7 in Exhibit P-76. However, in cross-examination he
admitted:
“the applicant’s signature was available in the branch. I did not
compare the specimen signature with the signature in the DD
Application. When I was examined by CBI, I did not ask for the D
specimen signature of the applicant.”
119. PW-40 through whom Exhibit P-90 was marked, did not say
anything in the chief-examination that A-7 signed the application form
for demand draft. He merely identified the demand draft application E
form and the party on whose behalf the demand draft was taken. In
other words, PW-40, like PW-22 did not implicate A-7 as the person
who signed the application for the issue of demand draft on behalf of
some bogus firms.
120. PW-41 through whom Exhibit P-92 was marked, merely stated F
as to who obtained the demand draft. He did not also specifically name
A-7 as the person who signed the application form or who received the
demand draft.
121. In fact, PW-40 stated that no statement under Section 161 of
the Code was recorded by the I.O. though he was examined. Similarly, G
PW-41 stated that he was examined by the Inspector, CBI but he did not
know whether a statement under Section 161 was recorded.
122. Thus, three out of four bank officials examined by the
prosecution to show that A-7 applied for demand drafts on behalf of
four bogus firms, did not identify A-7 as the person who applied for the H
70 SUPREME COURT REPORTS [2023] 10 S.C.R.
A demand drafts. They did not also identify the handwriting in Exhibits P-
66, P-90 and P-92 as that of A-7. The only person who stated something
in favour of the prosecution was PW-32 and it was in relation to Exhibit
P-76.
123. It is on account of the slippery nature of their evidence that
B the prosecution chose to send Exhibits P-66, P-76, P-90 and P-92 for
examination by the handwriting expert. The handwriting expert was
examined as PW-30 and his Report dated 16.09.1998 was marked as
Exhibit P-68.
124. The specimen writings and signatures of A-5 were identified
C by PW-30 as S1 to S31 and marked as Exhibit P-70. The specimen
writings/signatures of A-7 were identified as S63 to S73A and marked
as Exhibit P-75 series.
125. In the chief-examination, PW-30, the handwriting expert
stated that in his opinion, the writer of the specimen writings/ signatures
D marked as S1 to S31 in Exhibit P-70, was the person responsible for
writing the red-encircled questioned writings in certain documents. The
writer of the specimen writings and signatures identified in Exhibit P-70
was A-5 and not A-7.
126. Similarly, PW-30 identified the writer of the specimen writings
E in S40 and S41 marked as Exhibit P-73 as the person responsible for
writing Exhibit P-26. This related to K. Bhaskar Rao (PW-16) and the
reference was to the chit in which the names of five firms were originally
dictated and the names of two later included. Similarly, PW-30 identified
in chief examination, the specimen writings marked in S42 to S62 and
S93 to S96 in Exhibit P-74 as that of the person whose writings are
F found in Exhibit P-26. S42 to S62 and S93 to S96 were that of A-6.
127. After thus relating the specimen writings and signatures of
A-5, PW-16 and A-6 to some of the questioned writings, the handwriting
expert made it clear even in his chief examination that it was not possible
for him to express any opinion on the rest of the questioned items on the
G basis of the material on hand. In other words, the handwriting expert
examined as PW-30, did not go to the rescue of the prosecution even in
his chief examination in so far as A-7 is concerned. His report marked
as Exhibit P-68 did not implicate A-7 as the person in whose handwriting
and signature, Exhibits P-66, P-76, P-90 and P-92 were written and
signed.
H
A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 71
POLICE [V. RAMASUBRAMANIAN, J.]
128. Thus, there was a colossal failure on the part of the A
prosecution to establish that Exhibits P-66, P-76, P-90 and P-92 were in
the handwritings/signatures of A-7. This is despite the prosecution
examining the bank officials as PW-22, PW-32, PW-40 and PW-41 and
the handwriting expert as PW-30.
129. Unfortunately, the Trial Court adopted a very curious reasoning B
in paragraph 91 (the only paragraph in which the reasons were given in
this regard) that since he was a beneficiary of the money diverted to the
account of Insecticides & Allied Chemicals, he must have had
participation and knowledge that the demand drafts were purchased to
cheat BHEL. Such a reasoning is wholly unacceptable in view of the
fact that A-7 was accused of forgery and charged under Section 468 C
IPC, in relation to these very same applications for demand drafts.
Therefore, it was necessary for the prosecution to prove forgery and
also to show that the purpose of such forgery was cheating. Both were
absent.
130. The High Court fortunately realised the pitfall in the reasoning D
of the Trial Court. But in an over-anxiety to somehow convict A-7, the
High Court adopted a very peculiar route, namely that of undertaking
the task of comparing the admitted signatures/ handwritings with the
disputed ones under Section 73 of the Evidence Act.
131. For invoking Section 73, there must first have been some E
signature or writing admitted or proved to the satisfaction of the Court,
to have been written or made by that person. The Section empowers the
Court also to direct any person present in Court to write any words or
figures for the purpose of enabling the Court to compare the words or
figures.
F
132. There was no signature or writing available before the High
Court, which had been admitted or proved to the satisfaction of the
Court to have been written or made. The High Court did not also direct
A-7 to write any words or figures for the purpose of enabling a
comparison. Without following the procedure so prescribed in Section
73, the High Court invented a novel procedure, to uphold the conviction G
handed over by the Trial Court through a wrong reasoning.
133. In fact, the High Court considered Exhibit P-75 to be the
document containing the admitted handwritings and signatures of A-7
and compared what was found therein with the handwritings/signatures
found in Exhibits P-66, P-76, P-90 and P-92. H
72 SUPREME COURT REPORTS [2023] 10 S.C.R.
A 134. But what was contained in Exhibit P-75 was never admitted
by A-7 to be in his handwriting. Exhibit P-75 was marked through PW-
30, the handwriting expert, and not even by the I.O. At least if the I.O.
had identified and marked the specimen writings and signatures of A-7
as Exhibit P-75, it was possible for the prosecution to contend that the
specimen signatures stood proved. But the I.O. did not identify Exhibit
B
P-75. PW-30 through whom Exhibit P-75 was marked did not directly
obtain the specimen writings of A-7. The statement of PW-30 that the
specimen writings of A-7 are in Exhibit P-75 was only hearsay evidence,
as he did not directly obtain those specimen signatures. Thus, Exhibit P-
75 never stood proved.
C
135. Even in the questioning under Section 313 of the Code, no
specific question was put to A-7 whether Exhibits P-66, P-76, P-90, P-
92 and P-75 were in his handwritings and whether they contained his
signatures. Therefore, what was contained in Exhibit P-75 was not even
admitted signatures.
D
136. In the absence of either admission or proof of the admitted
signatures, the High Court could not have resorted to Section 73 of the
Evidence Act.
137. In view of the above, the finding recorded by the Trial Court
and the High Court as though A-7 committed forgery and cheating by
E
making applications for the issue of demand drafts in the names of bogus
firms is wholly unsustainable.
138. The only connecting link pointed out against A-7 was the
transfer of money to the total extent of Rs.1,52,50,000/- to the account
F of a firm of which he was a partner. This by itself will not constitute any
offence. Therefore, the charge that A-7 abetted the commission of the
crime by the other accused, should also fail. This is especially so when
A-5, whose proprietary concern bagged the contract, not only lost the
contract but also allowed the bank guarantee to be invoked by BHEL
and in addition, left a huge amount of Rs.2.60 crores still with BHEL.
G Therefore, the conviction and sentence awarded to A-7 cannot be
sustained.
Conclusion
139. In the light of the above discussion, all the appeals are allowed
H and the judgment of the Special Court for CBI cases convicting the
A. SRINIVASULU v. THE STATE REP. BY THE INSPECTOR OF 73
POLICE [V. RAMASUBRAMANIAN, J.]
appellants for various offences and the judgment of the High Court A
confirming the same are set aside. The appellants are acquitted of all
the charges. The bail bonds, if any, furnished by them shall stand
discharged.
Nidhi Jain Appeals allowed. B
(Assisted by : Tamana, LCRA)
C
D
E
F
G
H
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