B A I L S L I P The Appellant in Crl.A.253/2000 viz., Selvaraju (A4) was directed to be released on bail as per the order of this Court dated 24.3.2000 and made in Crl.MP.No.1606/2000 in Crl.A.253/00. The Appellant in Crl.A.254/2000 viz., Arvind Kumar R. Shah (A5) was directed to be released on bail as per the order of this Court dated 23.3.2000 and made in Crl.MP.No.1607/2000 in Crl.A.254/00. The Appellant in Crl.A.287/2000 viz., P. Muthusamy, was directed to be released on bail as per the order of this Court dated 31.3.2000 and made in Crl.MP.No.1906/2000 in Crl.A.287/00. The Appellant in Crl.A.298/2000 viz., E. Madhusudhanan (A1) was directed to be released on bail as per the order of this Court dated 4.4.2000 and made in Crl.MP.No.1989/2000 in Crl.A.298/00. The Appellant in Crl.A.313/2000 viz., R. Narasimmalu, (A3) was directed to be released on bail as per the order of this Court dated 7.4.2000 and made in Crl.MP.No.2069/2000 in Crl.A.313/00. The Appellant in Crl.A.381/2000 viz., R.N.Jayaprakash, (Accused in Spl CC.2/2000) was directed to be released on bail as per the order of this Court dated 26.4.2000 and made in Crl.MP.No.2464/2000 in Crl.A.381/00. IN THE HIGH COURT OF JUDICATURE AT MADRAS Date: 24.8.2009 Coram The Hon’ble Mr.Justice M.JEYAPAUL Criminal Appeal Nos.253, 254, 287, 298 and 313 of 2000 in Spl.C.C.No.1 of 1997 and Criminal Appeal No.381 of 2000 in Spl.C.C.No.2 of 2000 https://hcservices.ecourts.gov.in/hcservices/ Selvaraju Appellant in C.A.No.253/2000(A4) Arvind Kumar R.Shah Appellant in C.A.No.254/2000(A5) P.Muthusamy Appellant in C.A.No.287/2000(A6) E.Madhusudhanan Appellant in C.A.No.298/2000(A1) R.Narasimmalu Appellant in C.A.No.313/2000(A3) R.N.Jayaprakash Appellant in C.A.No.381/2000 vs. State rep by Additional Deputy Superintendent of Police, CBCID Chennai. Respondent in all the appeals/Complainant Criminal Appeal Nos.253, 254, 287, 298 and 313 of 2000 are filed under Section 374 of the Code of Criminal Procedure against the conviction and sentence made in Spl.C.C.No.1 of 1997 dated 16.3.2000 on the file of the XI Additional Sessions Judge, Chennai; and Criminal Appeal No.381 of 2000 is filed under Section 374 of the Code of Criminal Procedure against the conviction and sentence made in Spl.C.C.No.2 of 2000 dated 20.4.2000 on the file of the XI Additional Sessions Judge, Chennai For appellant in C.A.No.298/2000 : Mr.V.Gopinath, Senior Counsel for Mr.R.M.Kannappa Rajendran For appellant in C.A.No.381 and 313 of 2000 : Mr.Nirmal Kumar For appellant in C.A.No.253/2000 : Mr.V.Raja Mohan For appellant in C.A.No.254/2000 : Mr.Sakthivel Murguan For appellant in C.A.No.287/2000 : Mr.Senthil Kumar For respondent : Mr.P.Kumaresan Public Prosecutor i/c https://hcservices.ecourts.gov.in/hcservices/ COMMON JUDGMENT There were totally seven accused, who originally faced the trial in Special C.C.No.1 of 1997. The 7th accused A.A.Joseph was acquitted of all the charges framed against him. Though evidence was recorded in common and arguments were also heard in common, the case against the second accused R.N.Jayaprakash was split up at the time when the judgment of conviction was recorded as against A1 E.Madhusudanan, A3 R.Narasimmalu, A4 Selvaraju, A5 Aravind Kumar R. Shah and A6 P.Muthusamy and Special C.C.No.2 of 2000 was assigned but, later on the learned XI Additional Judge, having relied upon the very same evidence recorded earlier as against all the accused, recorded conviction as against A2 in Special C.C.No.2 of 2000. 2. The first accused E.Madhusudanan was convicted for offence under section 120B read with 409 and 420 of the Indian Penal Code and section 13(2) read with section 13(1)(d) of the Prevention of Corruption Act and was sentenced to undergo one year rigorous imprisonment and pay a fine of Rs.5000/= in default to undergo three months rigorous imprisonment, convicted under section 409 read with section 109 of the Indian Penal Code and was sentenced to one year rigorous imprisonment and pay a fine of Rs.5000/= in default to undergo three months rigorous imprisonment, convicted for offence under section 420 read with section 109 of the Indian Penal Code and was sentenced to undergo one year rigorous imprisonment and pay a fine of Rs.5000/= in default to undergo three months rigorous imprisonment and convicted under section 13(2) read with section 13 (1)(d) of the Prevention of Corruption Act and was sentenced to undergo two years rigorous imprisonment and pay a fine of Rs.5000/= in default to undergo six months rigorous imprisonment. 3. The third accused R.Narasimmalu was convicted for offence under section 120(b) read with section 409, 420 of the Indian Penal Code and section 13(2) read with section 13(1)(d) of the Prevention of Corruption Act and sentenced to undergo one year rigorous imprisonment and pay a fine of Rs.5000/= in default to undergo three months rigorous imprisonment, convicted under section 409 of the Indian Penal Code and was sentenced to undergo one year rigorous imprisonment and pay a fine of Rs.5000/= in default to undergo three months rigorous imprisonment, convicted under section 420 read with section 109 of the Indian Penal Code and sentenced to undergo one year rigorous imprisonment and pay a fine of Rs.5000/= in default to undergo three months rigorous imprisonment and convicted under section 13(2) read with section 13(1)(d) of the Prevention of Corruption Act and sentenced to undergo two years rigorous https://hcservices.ecourts.gov.in/hcservices/ imprisonment and pay a fine of Rs.5000/= in default to undergo six months rigorous imprisonment. 4. The fourth and fifth accused were convicted under section 120 read with section 409, 420 of the Indian Penal Code and section 13 (2) read with section 13(1)(d) of the Prevention of Corruption Act and were sentenced to undergo two years rigorous imprisonment each and pay a fine of Rs.10,000/= each in default to undergo six months rigorous imprisonment each, convicted under section 409 read with section 109 of the Indian Penal Code and were sentenced to undergo rigorous imprisonment each and pay a fine of Rs.10,000/= each in default to undergo six months rigorous imprisonment each and convicted under section 420 of the Indian Penal Code and were sentenced to undergo four years rigorous imprisonment each and pay a fine of Rs.1,00,000/= each in default to undergo one year rigorous imprisonment each. In the event of payment of fine amount by the fourth and fifth accused, a compensation of Rs.50,000/= each was ordered to be paid to PW61, PW68 and PW72. 5. The sixth accused was convicted under section 120(b) read with section 409, 420 of the Indian Penal Code and section 13(2) read with section 13(1)(d) of the Prevention of Corruption Act and was sentenced to undergo one year rigorous imprisonment and pay a fine of Rs.2500/= in default to undergo three months rigorous imprisonment, convicted under section 409 read with section 109 of the Indian Penal Code and was sentenced to undergo one year rigorous imprisonment and pay a fine of Rs.2500/= in default to undergo three months rigorous imprisonment and convicted under section 420 of the Indian Penal Code and was sentenced to undergo one year rigorous imprisonment and pay a fine of Rs.2500/= in default to undergo three months rigorous imprisonment. 6. On the side of the prosecution P.Ws.1 to 80 were examined and Exs.P1 to 135 were marked. On the side of the defence, no witness was examined, but, Exs.D1 to D25 were marked. 7. The brief case of the prosecution reads as follows:- A1 was the then Handloom Minister. During the year 1991, the Government proposed to distribute free dhoties and sarees to the downtrodden people in the State of Tamilnadu on the eve of Pongal Festival 1992. In order to fulfil the order, the Government transferred rupees 12.58 crores to the Tamilnadu Textile Croporation Limited for the purpose of procuring and distributing sarees and dhoties. The Government also specified certain conditions for the purpose of procurement by tender process and also payment of money to the selected tenderers by getting Bank Guarantee. Based on these https://hcservices.ecourts.gov.in/hcservices/ procedures, the Textile Corporation processed the tenders submitted by twenty one firms. Out of the twenty one firms, six firms were selected and were called for enquiry. By that time, A4 representing on behalf of two firms gave a letter stating his inadequate position to supply the goods and also requested to distribute the orders for supply of clothes proposed to be placed with them to the other three firms viz., Balaji Agencies, Cotton Yarn Textiles and Rajaram Apparels. The above mentioned three firms entered into an agreement with the Textile Corporation on 18.12.1991. The Balaji Agencies was represented by A4's mother. Cotton Yarn Textiles was represented by A4's wife and Rajaram Apparels was represented by A4. All the three firms opened bank accounts in the Lakshmi Vilas Bank, Coimbatore. All the three firms were introduced for opening bank account by A4 at the behest of A5 who was the long standing customer of the Lakshmi Vilas Bank, Coimbatore. Thereafter, A4 and A5 looked after the tender process and A6 who was the then Manager of A5 company also looked after the bank affairs. 8. After entering into the agreement on 18.12.1991, in which it was specifically stated that Bank Guarantee had to be given, the three firms were individually informed of the necessity to give Bank Guarantee for drawing first instalment advance amount of 25% from the Textile Corporation by letter dated 23.12.1991. Whereas, all the three firms gave a letter on 24.12.1991 expressing their inability to give Bank Guarantee and insisted for release of the first 25% advance amount without any security. 9. At this point, A1 and A2 intervened and directed the officials to release the first 25% advance amount without any security. But, the officials of the Government and the Textile Corporation raised their objections pointing out the orders of the Government insisting for getting security for the release of advance amount. A1 and A2 pressurized, forced and threatened the Government Officials to release the first 25% advance amount without any security. 10. On the intervention of A1 and A2, the Balaji Agencies received the cheque for the first 25% advance amount from the department concerned without giving the stipulated security. Thereafter, the other firms were also provided with the first 25% advance amount without furnishing security. 11. The three firms supplied dhoties and sarees on their own to various destinations as directed. But, the sarees and dhoties supplied did not have the length and breadth as per the specification. Number of Tahsildars and other officials complained to https://hcservices.ecourts.gov.in/hcservices/ the Government regarding the supply of inferior quality sarees and dhoties. Inspite of the objections raised by the officials of the department, A1 and A2 insisted them to release the second 25% advance amount to the three firms. Though it was specifically brought to the knowledge of A1 regarding the inferior quality and poor supply for the amount already released, A1 personally visited Coimbatore on 9.1.1992 and threatened the officials to release the remaining amounts. 12. The first accused, having been not satisfied with the progress in disbursement of amount to the firms, put a note to the then Chief Secretary for transferring the Official who was in-charge for the disbursement of the advance amount. Only on the instigation of A1 and A2, A3 was appointed as Managing Director of Tamilnadu Textile Corporation in the place of Mr.Kanagaraj, PW2. After assumption of office by A3, the amounts were disbursed on instruction by A1 and A2 without any hitch. But, inferior quality goods were supplied. After A3 assumed office, A4 and A5 procured sarees meant to be distributed for the poor people in at the State of West Bengal with the seal of West Bengal Government thereon. A4 and A5 clandestinely distributed them in the State of Tamilnadu. 13. During the short supply of materials, the respective Collectorate staff were made to enquire the existence of the firms. But, to the shock and surprise, there were no such firms in the said address given in the tender forms. On verification with the commercial Department, it came to light that the firms were not registered and no tax was also paid by them. 14. Thus, A1 and A3 by using their official position, procured sarees at a lesser rate viz., 50% of the rate fixed by the Government from various places including West Bengal through A4 and A5 and distributed the same to the people of Tamilnadu on the eve of the Pongal Festival 1992. A2 who is the nephew of A1 coordinated with A3, A4 and A5. A6 played a vital role in maintaining the Bank Accounts and preparing bogus bills from the shops of Textile Dealers who were actually selling textiles. 15. In view of the above, A1 to A6 entered into a criminal conspiracy and A1 and A2 selected the firms of A4, A5 recommended for opening bank accounts with the help of A6 and thus A1 to A6 conspired to cheat the Government of Tamilnadu by floating three fictitious firms, opened the Bank accounts with false address and procured very poor and inferior quality sarees and dhoties and misappropriated the Government fund. https://hcservices.ecourts.gov.in/hcservices/ 16. Learned Senior Counsel appearing for the first accused and the learned counsel appearing for the other accused would vehemently submit that it was only the Government which selected the tenderers. The accused have nothing to do with the selection of the tenderers. Exs.P14 to P16 agreements were executed between the tenderers who supplied dhoties and sarees for free distribution and the Tamil Nadu Textile Corporation (TNTC). Though the first accused recommended for the transfer of PW2, it was only the Chief Minister, who ultimately took the decision as per the evidence of the Chief Secretary, who was examined before the court and ultimately, A3 who had got sufficient experience in Handlooms and Textiles, was appointed in his place. The transfer of PW2 was recommended only to promote the efficiency and also to complete the work at a lightning speed. PW2 himself had admitted that he had gone on medical leave on account of his ill- health. Mr.Muneer Hoda examined as PW75 was wantonly deleted from the criminal prosecution though he was implicated originally in the FIR. The prosecution failed to establish that the levy of penalty shall be approved by the Finance Department. If at all, A1 was inclined to favour the suppliers, he would not have imposed penalty and blacklisted the suppliers. It is further submitted that the sanction in fact preceded the note prepared by PW40 to the effect that it was a fit case for sanction. Mr.Devaraj, who signed on behalf of the Governor of Tamil Nadu in the order of sanction was not examined before this court to speak about the mind of the sanctioning authority. On account of the external pressure, sanction was hurriedly obtained and therefore, the sanction is vitiated. No reason has been assigned by the learned Sessions Judge to split up the case as against A2 at the time of pronouncing the judgment as against the other accused. The new incumbent pronounced the judgment only based on the very same materials which were available at the time when the case of A2 was split up by his predecessor. The suppliers were not associated for checking up the quality and the alleged shortfall of supplies made by three firms. The defective dhoties and sarees with lesser quality were not produced before the court as material objects. The test check up was not done as per the instructions flowed from the Government. No mahazar was prepared for the seizure of the defective dhoties and sarees. One Mr.R.S.Manian, who allegedly gave a complaint alleging lack of quality of dhoties and sarees supplied free of cost by the Government was not examined. The evidence of Pws.1 and 2 that A1 warned PW2 with serious consequences if advance was not made to the suppliers and also conveyed his displeasure through A2 is found to be contradictory with each other. No witness spoke to the aforesaid unbecoming act of A1 and A2. A5 had no connection with the supply transaction. A6 after all worked under A5. The Government imposed a condition to https://hcservices.ecourts.gov.in/hcservices/ furnish security for 25% of advance being disbursed by the Government to the suppliers only after the agreements, Exs.P14 to P16 were entered into between the suppliers and the TNTC. Therefore, there is no valid reason for insisting bank guarantee for 25% advance as a condition precedent for releasing the advance the suppliers were entitled to as per the agreement. Therefore, the learned Senior Counsel and other counsel for accused/appellants would submit that they are entitled to acquittal. 17. Learned Special Public Prosecutor appearing for the State would submit that the over enthusiasm exhibited by A1 and A2 in releasing the advance to A4 despite the direction of the Government to insist for bank guarantee for the advance and their role in shifting PW2 and bringing in A3 in his place would go to show that there was a criminal conspiracy to cause loss to the Government. A1 and A2 knowing full well that there was no firm floated by A4 was in existence, selected three firms which were fictitious in nature. A5 and A6 knowing full well that the firms were fictitious in nature, recommended and opened bank account in Laxmi Vilas Bank, Coimbatore in the name of those three firms. A1 to A6 had common agreement to cheat the Government and thus they had effectively conspired and committed the offence of cheating and misappropriation. A1 used his official position as a public servant and Ministership of the Department for transmitting the object of criminal conspiracy. A2 is none other than the nephew of A1. A3 was specifically posted in the place of PW2 for the purpose of releasing the amount of advance as instructed by A1 and A2. A4 to A6 prepared and supplied materials and received the cheques from the Government. The Government instruction to insist for bank guarantee for releasing the advance payment was totally ignored by the accused. The anger of A1 was reflected in the transfer of PW2 and substitution in his place by A3. A6 Muthusamy presented seven forged cheques as genuine to Laxmi Vilas Bank Uppilipalayam Branch and got the amounts released. There are voluminous evidence on record to show that the fourth accused, through fictitious firms, having hatched conspiracy with other accused, supplied only third rate dhoties and sarees to the Government for free distribution and thereby all the accused caused heavy loss to the Government. Therefore, he would submit that there is no warrant for disturbing the well considered and well merited judgment of the Trial Court. 18. Conspiracy consist in the agreement of two or more persons to do an unlawful act or to do a lawful act by unlawful means. The essence of the offence of conspiracy is the fact of combination of agreement. It is not enough that two or more persons pursued the same unlawful object at the same time or in the same place. It is https://hcservices.ecourts.gov.in/hcservices/ very much necessary to show a meeting of minds that is to say a consensus to achieve an unlawful purpose, but, it is not necessary that each conspirator should have in communication with each other. 19. Conspiracy is hatched in secrecy. Therefore, it may not be possible to establish a conspiracy by direct evidence. The facts and circumstances surrounding the role of each and every accused should provide an inference to conclude the existence of conspiracy and its avowed object. 20. Let us now take up the charges framed as against A1 E.Madhusudhanan. It is found that there is no direct evidence let in by the prosecution to establish that A1 to A6 conspired together and committed the offence under section 120B of the Indian Penal Code . The prosecution mainly banks on the circumstantial evidence to prove the charge of conspiracy. The court will have to find whether the circumstances projected by the prosecution inspire confidence to convict the accused under section 120B of the Indian Penal Code . 21. As far as the first accused is concerned, there is virtually no evidence to show that he was in any way involved in selecting the suppliers which process was embarked upon by the Committee constituted for the said purpose. PW2 Kanagaraj, Managing Director of TNTC, Coimbatore and PW3 D.Chandrasekar, Joint Director, Handlooms, Chennai have categorically spoken to the fact that the suppliers were selected by the committee consisting of PW2, PW3 and one Subbiah. It appears that the tenders received from the intending suppliers were tabulated as found from Ex.P11 and despatched to PW75 Mr.Muneer Hoda, Director of Handloom and Textiles, Chennai. Orders were placed to the suppliers who quoted the lowest prices. Therefore, as far as the selection of suppliers are concerned, there is dearth of evidence that the first accused had played any pivotal role. 22. On a perusal of the proceedings under Ex.P120 dated 11.12.1991, it is seen that the proposal to clinch the deal with the successful tenderers were sent to the Chief Minister by the Secretary specifically listing the names of successful tenderers. Ex.P120 also would establish that the successful tenderers were selected by the orders of the Chief Minister of Tamil Nadu. The Chief Minister also was pleased to approve the draft agreement proposed to be entered into with the successful tenderers and release of 50% of the total cost of the procurement amounting to rupees 12.50 crores in advance. The above facts and circumstances would go to show that the very selection of the tenderers, the terms of the agreement and the advance proposed to be released were approved by the Chief Minister and A1 had played no role in the matter. Nothing has been produced https://hcservices.ecourts.gov.in/hcservices/ before this court to show even distantly that A1 was part of the selection process and fixation of terms of the agreement. 23. Ex.P58 is the proceedings emanated from the Secretary to Government to the Director of Handloom and Textiles, Kuralagam. The aforesaid proceedings would reveal that the original deadline viz., 31.1.1992 fixed for the supply of dhoties and sarees was extended upto 31.3.1992 by the Secretary to Government. 24. The Handloom Ministry submitted a proposal as found from Ex.P74 dated 23.3.1992 suggesting cancellation of the tenders in view of the unsatisfactory performance of the private suppliers within the extended time limit fixed for implementation of the scheme for distribution of free dhoties and sarees and placement of orders to Co-optex for supplying the remaining unsupplied quantity of dhoties and sarees. It is also found that the Chief Minister, based on the proceedings, Ex.P74, approved the said proposal on 7.8.1992. If at all the first accused hatched a conspiracy to loot the Government Exchequer in order to benefit the suppliers, his Ministry would not have come out with the proposal to cancel the tenders and place orders to Co-optex for supplying the remaining unsupplied quantity. 25. The Tamil Nadu Textile Corporation, Coimbatore had entered into an agreement for supply of dhoties and sarees with the suppliers. It is only the TNTC which was expected to take action as per the terms of the agreement if it came to its notice any violation of any of the terms and conditions of the agreement. 26. The evidence of PW1, PW2 and PW56 is relied upon by the prosecution in order to prove the charge as against the first accused. PW1, PW2 and PW56 have come out with a version that the first accused forced them to pay advance cost of procurement of dhoties and sarees to the suppliers. Exs.P14 to P16 are the agreements entered into between the Tamil Nadu Textile Corporation, Coimbatore represented by its Managing Director and the suppliers viz., M/s.Raja Ram Apparel, M/s.Balaji Agencies and M/s.Cotton Yarn Textiles. Clauses 4, 5 and 7 of the said agreement are found to be relevant. Clause 4 would read that the supplier shall complete the supply before 31.12.1991. Delay in supply of goods if any will attract penalty of Rs.5/= per dhoti and Rs.8/= per saree per day. The supplier also shall deposit one percent of the value of the contract with Tamil Nadu Textile Corporation. The Tamil Nadu Textile Corporation, Coimbatore is bound to pay advance amount equivalent to 25%