IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN FRIDAY, THE 4TH MARCH 2011 / 13TH PHALGUNA 1932 CRL.A.No. 1112 of 2002() ------------------------ CC.29/1997 of ENQUIRY COMMR. & SPL. JUDGE, TRIVANDRUM .................... APPELLANT/ACCUSED NO.1 -------------------------- N.E.ABRAHAM S/O. ITHAPPIRI, GOVERNMENT CONTRACTOR, NJATUKALAYIL HOUSE, KUNNATHUNADU, KADAYIRUPPU P.O., KOLENCHERRY BY ADV. SRI.P.VIJAYA BHANU, SENIOR ADVOCATE SRI.P.M.RAFIQ RESPONDENT/COMPLAINANT -------------------------- STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. PUBLIC PROSECUTOR SRI.I.V.PRAMOD THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 04/03/2011, THE COURT ON 04/03/2011 DELIVERED THE FOLLOWING: P.S.GOPINATHAN, J. -------------------------------- Crl.A. No.1112 OF 2002 ---------------------------------- Dated this the 4th day of March, 2011 J U D G M E N T ~~~~~~~~~~~ Appellant is the 1st accused in C.C.29/97 on the file of the Enquiry Commissioner Special Judge, Thiruvananthapuram. He was prosecuted along with late K.G.Ramachandran Nair (2nd accused), formerly Executive Engineer, Kallada Irrigation Project, RB Division No.5., Kollam alleging offences under Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 and Section 120B IPC. 2. The learned Judge, after trial, arrived at a finding of guilt. Consequently, the appellant was convicted and sentenced to undergo rigorous imprisonment for four years and a fine of Rs.4,00,000/- under Section 120B IPC with a default clause for non payment of fine. The 2nd accused was found guilty for offence under Sections 13(2) read with Section 13(1)(d) and 120B IPC. The 2nd accused was sentenced to rigorous imprisonment for four years and a fine of Rs.2,00,000/- under Section 120B IPC. For offence under Section 13(2) read with 13 (1)(d) of the Prevention of Corruption Act, the 2nd accused was Crl.Appeal No.1112/02 2 sentenced to rigorous imprisonment for four years and a fine of Rs. 2,00,000/- with default clause. Assailing the above conviction and sentence, the 1st accused has filed this appeal. The 2nd accused filed Crl.A.No.1110/2002. Pending appeal, the 2nd accused expired. The learned counsel for the appellant submitted that none of the legal heirs had come forward to implead in the appeal and to prosecute the appeal. On the basis of that submission, the other appeal was dismissed as abated. 3. PW18, the Deputy Superintendent of Police, Vigilance and Anti Corruption Bureau, Kollam on the basis of a report of preliminary enquiry registered a case as Crime No.9/96/VACB, Kollam by Ext.P20 First Information Report against late Mr.Varghese Mathew, who was the Superintending Engineer, KIP Circle, Kollam and against the appellant herein. He took over the investigation. Pending investigation, the Superintending Engineer, Varghese Mathew, died. After completing the investigation, the charge sheet was filed against the appellant as 1st accused and late Ramachandran Nair, the Executive Engineer, KIP, RB Division 5, Kollam as 2nd accused. It was alleged that the appellant herein was a successful bidder in Crl.Appeal No.1112/02 3 respect of the construction of Kallada Irrigation Project, Part-II at Ch.54540m to 54814m. Being a successful bidder, the appellant was informed about the acceptance of the bid. Responding to the communication, the appellant turned up and executed Ext.P2(a) agreement with PW2, then Superintending Engineer. Ext.P2(a-2) is the local competitive bidding specification executed in between PW2 and the appellant. As per Appendix-L1 attached to Ext.P2(a) item No.3 is the earthwork excavation. The estimated quantity of the work was 17,718 m3. The work was undertaken at the rate of Rs.31 per m3. In pursuance to Ext.P2(a), possession of the land was handed over to the appellant. The work started on 27.10.1988. As per the terms of the agreement, the work ought to have been finished in July 1989. But it was finished only on 31.12.1989. Since the work could not be completed in time, the appellant sought for extension of time. It was granted for which supplementary agreement was also executed on condition that the appellant would not lodge any extra claim. As per the allegation of the prosecution, on 24.4.1991, the appellant lodged the claim for extra work before late Varghese Mathew, the then Crl.Appeal No.1112/02 4 Superintending Engineer. As per the allegations in the final report filed by PW20, in respect of the earthwork excavation there is no extra work. But the appellant conspired together with then Superintending Engineer and in pursuance to such criminal conspiracy Ext.P2(b) supplementary agreement was executed, whereby for the earthwork excavation of an approximate quantity of 22886.550 m3 the appellant is to be paid at the rate of Rs.75 per m3 as extra item as against original agreed rate of Rs.31 per m3. Ext.P2(b) was executed on 30.4.1991 on the day on which the then Superintending Engineer retired from service. In pursuance to Ext.P2(b), the appellant submitted a claim for earthwork excavation amounting to Rs.22886.559 m3 at the rate of Rs.75 per m3. Ext.P9 bill would show that for a quantity of 20,736.807 m3 as extra item bill was passed at the rate of Rs.45 per m3. Thereafter the appellant again made claim for the said work. Ext.P11 bill would show that the bill was passed sanctioning at the rate of Rs.70 per m3 for the above said quantity and after deducting the earlier payments and other items the payment was duly made. Thereafter, Ext.P13 final bill was also submitted and payments were effected Crl.Appeal No.1112/02 5 adjusting the earlier payments. 4. According to the prosecution, there is no extra item of work whereas it is only an added quantity of work and as per the terms of the agreement, if the added quantity of work is plus or minus 30%, it is to be executed at the rate for which the agreement was executed. The additional quantity of work executed is within 30% of the estimated quantity. In such a circumstance, the claim put forward by the appellant more than one year after the execution of the work and the execution of supplemental agreement is the result of a criminal conspiracy between the then Superintending Engineer and the appellant. So also, overruling the objections made by the office including the Divisional Accountant, the 2nd accused passed Ext.P11 bill on the date on which he retired from service and it was also because of the criminal conspiracy between the appellant, the Superintending Engineer and the Executive Engineer. In executing Ext.P2(b) and passing the bill in excess of the quoted rate of Rs.31/M3 the Superintending Engineer and the Executive Engineer abused their office with a motive to have undue pecuniary advantage to the appellant and as a result, the Crl.Appeal No.1112/02 6 appellant got undue pecuniary advantage. For the earth excavation work which was agreed to be executed at the rate of Rs.31/- per M3 the appellant got at the rate of Rs.75/- per M3. Thereby he had undue pecuniary advantage amounting to Rs.8,34,232/-. 5. The Special judge, taking cognizance, issued process, responding to which the appellant and the 2nd accused, who is now no more, entered appearance. After hearing either side and finding that there are materials to frame charge, the learned Judge framed charge. The appellant and the other accused pleaded not guilty when the particulars of the offence was read over. Hence both accused were sent for trial. On the side of the prosecution, PWs 1 to 18 were examined and Exts.P1 to P33 were marked. On the side of the defence, Exts.D1 to D6 were marked. No oral evidence was adduced. The appellant admitted that he was the contractor for the execution of the work in dispute. The payments covered by the bills produced were also not disputed. In a separate lengthy written statement, it was stated by the appellant that he had finished the work on 31/12/1989. If the bill and comparative statements were Crl.Appeal No.1112/02 7 prepared by the Assistant Engineer and other hierarchy of the officers in time as per the PWD manual and MCB conditions, the then Superintending Engineer would have determined the extra item of work and the rate would have been negotiated and payment would have been effected before 05/10/1990. But the Assistant Engineer and the Executive Engineer furnished the comparative statement on 10/7/1990 and 24/1/1991 respectively and only thereafter the negotiations could be effected and that he had not entered into any criminal conspiracy with Varghese Mathew, the then Superintending Engineer. It was further alleged that since it was stated that unless the appellant gives an undertaking that no extra claim would be made, the payment of the work executed would not be made, the appellant was constrained to give a conditional letter stating that he would not make any claim for extra item of earth work. Though he had given a conditional letter, the payment was not made before 31/3/1990 and that the department had raised various objections regarding the quantity of work and it was approved only on 29/4/1991 and that though an additional work amounting to 5160 M3 was sanctioned the payment was made only for 20736 Crl.Appeal No.1112/02 8 M3 and that he had not committed any crime. The trial court, on an appraisal of the evidence, arrived at the following conclusion in paragraph 172 of the impugned judgment as follows: 172. Now, here is the summary of the findings: (a) Ext.P2(a) agreement was executed by A1 and the then Superintending Engineer on 12/09/1988. Notice of work was sent to A1 on 11/10/1988. The site was handed over to A1 on 27/10/1988. The work was started on 29/11/1988. (b) The work in question - involved in this case - is relating to item No.3 of Appendix L1 of the schedule of work attached to Ext.P2(a). (c) That item of work (L1-3) includes the dumping of spoil in the Contractor's own compound, rehandling the spoil, and also all leads and lifts, and depositing the spoil simultaneously over the cut and cover etc. (d) As per clause 13 of Ext.P2(a-3) the Contractor was not eligible to extra rate for any increase of quantity as a result of change in slope or widening of width. (e) As per Clause 31 of Ext.P2(a-2) the Contractor is not eligible to extra rate for Crl.Appeal No.1112/02 9 quantity variation not exceeding 30% of the agreed quantity. (f) The work was to be completed within nine months from the date of notice to work. If so it should have been completed on 10/7/1989. (g) As per Ext.P2(c) the period of completion of the work was extended up to 31/12/1989. (h) It was on 28/1/1989, as per Ext.P7 (b) the then Asst.Executive Engineer reported that cracks had developed and that the cracked earth should be removed and that the additional quantity estimated was about 6000 M3. (i) Pages 35 and 36 of Ext.P5 contained the notes of Technical Assistant (of the office of Supdtg. Engineer). That proposal (as per which it was not treated as extra item) was accepted by the Personal Assistant to the Supdtg.Engineer on 21/7/1989. That was further approved by the then Supdtg.Engineer (vide para 27 of judgment). (j) On 31/7/1989 the then Supdtg.Engineer, as per Ext.P7(d) required the Executive Engineer to obtain an Crl.Appeal No.1112/02 10 undertaking from A1 as per Clause 13 of Ext.P2(a-3) stating that it was only quantity variation and that no extra payment could be allowed. (k) Again on 16/08/1989 the Technical Asst. noted that the Executive Engineer should obtain the undertaking from A1 that he will not claim extra rate. (This is the continuation of the notes just mentioned above (vide para 28 of judgment). (l) Page 71 of Ext.P5 shows that the additional quantity occurred due to the change of bottom width from 3.6 M to 4.6 M and change of slope was measured and payment was effected. That note was seen and initialled by all the officers including the then Supdtg.Engineer in March 1990. (vide para 29 of judgment). (m) Due to the development of cracks and the consequent widening of slopes and widening of the bottom width an additional quantity of 5,106.559 M3 was executed by A1. That work was falling under L1-3 of Ext.P2 (a). In view of clause 13 of Ext.P2(a-3) and Clause 31 of Ext.P2(a-2) it was not an extra item. The quantity variation was only up to 28.72%. The original rate agreed and Crl.Appeal No.1112/02 11 accepted by A1 was only Rs.31/M3 . (n) As per Clause 31 of Ext.P2(a-2) even for the quantity exceeding 30% of the agreed quantity, Contractor was entitled to get extra rate only for the quantity exceeding 30% of the agreed quantity. Even in such cases, for the quantity up to 30% contractor was entitled to get only the agreed rate. Therefore, A1 was not entitled to get extra rate for the additional quantity of 5,106.559 M3. (o) A quantity of 14,147.695 M3 of earth work excavation falling under L1-3 was executed and was measured and check measured on 13/2/1989. That measurement shown in Ext.P3 was accepted by A1. Payments for the same at the rate of Rs.31/M3 effected as per part bills were accepted by A1 without any objection. (p) As on 28/8/1989 a total quantity of 19,755.10 M3 had been executed. Deducting the payment already made, payment was effected for the balance quantity also at the rate of Rs.31/M3. That was also accepted by A1 without any objection. (q) Even as per Ext.P2(c) dated 20/3/1990, A1 had agreed that he will not Crl.Appeal No.1112/02 12 claim any enhanced rate for such items of work either due to the increased rate of materials or labour or on any ground whatsoever; he had agreed (as per Ext.P2(c) dated 20/3/1990 also) to execute the work on the conditions prescribed in Ext.P2(a) itself. (r) For the cutting of Kottiyam- Kundara Road extra payment had already been effected on 30/3/1990. (vide para 29 of judgment). (s) Again regarding the additional quantity excavated as per Ext.P5(a), the Personal Asst. to Supdtg. Engineer noted that it was only quantity variation. That was approved by the then Supdtg. Engineer and negotiation was ordered to be done only as stipulated under Clause 31 of LCB for the quantity variation. That was also approved by the then Supdtg. Engineer on 27.4.1991. (vide para 37 of judgment). (t) Regarding this additional quantity PW3 has stated that it was only as insisted by Mr.Varghese Mathew, it was shown as extra item. That indicates the prior meeting of minds between A1 and Mr.Varghese Mathew to obtain pecuniary advantage illegally. (vide para 37 of judgment). Crl.Appeal No.1112/02 13 (u) The subsequent act of later Mr.Varghese Mathew on or after 24/4/1991 also would indicate the meeting of minds between himself and A1 and that Ext.P2(b) was executed in pursuance of the criminal conspiracy between himself and A1. (v) Even though the work had been completed on 30/12/1989 and even though the predecessors in office of deceased Varghese Mathew were not inclined to award extra rate, he (deceased Varghese Mathew) executed Ext.P2(b), on the date of retirement (30/4/1991), treating the entire quantity of earth work excavation amounting to 22,886.559 M3 as extra item and fixed a rate of Rs.75/M3, (as against the original agreed rate of Rs.31/M3) totally ignoring the binding contract and the provisions contained in Ext.P2(a-2), P2(a-3) and in Ext.P2(a-1) and Ext.P2(c). Ext.P2(b) was thus found to be a fraudulent one. It involves or implies injury to the State or its property. Hence on all grounds Ext.P2(b) has been proved to be an illegal agreement. (v-1) Even in Ext.P2(b), P3, P9, P11 and P13 and other documents the said Crl.Appeal No.1112/02 14 item of work was continued to be shown; as noted in L1-3 of Ext.P2(a-1) and there was no change of specification or change of nature or scope of work but only quantity variation which was below 30%. (vide para 152 and 153 of judgment). (w) The supplemental agreements executed by deceased Varghese Mathew, were found to be illegal by the inspection party of the Accountant General. (see Ext.P8 (b). (x) The Chief Engineer (PW5) directed as per Ext.P8(a) that payments should not be effected on the basis of the rates shown in Ext.P2(b). (y) PW6, PW8, PW10, PW13 etc. have stated about the Audit objections and also regarding the illegality of Ext.P2(b) in treating the quantity variation as extra item and they suggested payment only at the rate of Rs.31/M3. Ext.P8(a), P8(b), Ext.P10(c), P10(c-1), P10(d) and P10(d-1) have been relied upon. (vide para 50 of judgment). (z) The copy of Ext.P2(b) with audit objection was forwarded by PW17 the then Supdtg.Engineer to A2 and it was seen by A2 on 16/3/1992. (vide para 59 of judgment). Crl.Appeal No.1112/02 15 (a-a) The impugned bills were not get scrutinized and initialled by the then Divisional Accountant (PW8). The bill was passed by A2 at the rate of Rs.70/M3 without getting the signature of PW8. A2 made the controversial and objected payment knowing fully well that it was illegal. That illegal payment was effected on 30/3/1992 and again on 31/10/1992 on the very same day of his retirement. The cheque - Ext.P12(a) was signed and issued by him to the contractor on the very same day: 31/10/1992. (vide para 58 of judgment). (a-b) Page 3 last of Ext.P8(b) also refers to the letter of the Chief Engineer of March 1991 regarding the exorbitant rate. That was also ignored by A2. Since that order was issued by the Chief Engineer all subordinates, including A2, should have gone through the same and obeyed the direction (vide para 59 of judgment). (a-c) Had there been no cracks or widening of slope there would have been no occasion at all for any claim for enhancement since for the quantity already executed payment was effected at the agreed rate long back and it was accepted by A1 without Crl.Appeal No.1112/02 16 objection. That will negative the plea for enhancement for the entire quantity. (vide para 124 and under Section 125 Cr.P.C of judgment). (a-d) Even on 20/5/1991 the Executive Engineer (PW10) had sent Ext.P7(k) to the Supdtg. Engineer pointing out the illegalities of Ext.P2(b). That was also ignored by A2. (vide para 77). (a-e) The plea raised by A1 that he had incurred huge expense towards conveyance for dumping the spoil cannot be sustained since that is covered by the stipulations contained in Ext.P2(a-3) and P2(a-2) and Ext.L1-3 of Ext.P2(a-1). (vide para 115 and 154 of judgment). (a-f) Inspite of the Audit objections and the dissenting notes of the officers, A2 issued a specific direction to PW15 on 5/2/1992 as per Ext.P8(g) to treat the entire quantity as extra item and to prepare the bill and to send it to him. It was on that basis PW15 later prepared the bill. (vide para 110 of judgment). (a-g) The second payment covered by Ext.P11 was effected after Ext.P8(d) the letter of A1 dated 22/10/1992. Since A1 was Crl.Appeal No.1112/02 17 aware of the illegality of the agreement and also the fact that he was not entitled to claim extra rate for quantity variation which was less than 30% and also when there was audit objection and the dissenting notes of all the officers and also when there was direction from the Chief Engineer not to pass the bill at the rates shown in the supplemental agreements and since the bill was passed without getting the endorsement and signature of the Divisional Accountant, it would clearly show that A1 and A2 had conspired together to pass the bill at the rate of Rs.70/M3 on the date of retirement of A2 and that was why the cheque was also issued by A2 on the very same day. (a-h) Had it not been prompted by illegal consideration and had there been no conspiracy between A1 and A2, in view of the patent illegality of Ext.P2(b) and the objection raised by all officers including the Chief Engineer, A2 would not have passed the two bills on 30/3/1992 and 31/10/1992. That also shows there was criminal conspiracy between A1 and A2 for illegally passing the two bills; Ext.P9 and P11. Crl.Appeal No.1112/02 18 Again at paragraph 173 of the impugned judgment regarding the payments, the trial court entered the following findings: 173. Here is the calculation regarding the excess payment, the loss caused to the State etc. (a) CC Bill 6 and part was prepared for the entire quantity of 22,886.559 M3 at the rate of Rs.31/M3. A2 adopted a clever device and in order to make it a part-bill, he showed the quantity as 20,736.807 M3 and allowed the bill at the rate of Rs.45/M3 . (b) For the entire quantity of 22,886.559 M3 the amount payable to A1 at the rate of Rs.31/M3 was only Rs.7,09,483.32. For the quantity agreed as per Ext.P2(a); namely for 17780 M3, the amount payable at the rate of Rs.31/M3 was only Rs.5,51,180/-. (c) A1 was entitled to get only the agreed rate of Rs.31/M3 . Even if A1 had felt that as per the letter of the Chief Engineer, the Contractor could be paid reasonable reduced rate, adding 50% to the original rate of Rs.31/M3 the reasonable enhanced rate if at all payable could be only Rs.45/M3 . Crl.Appeal No.1112/02 19 (d) Even if it is assumed that A1 was to be given a reduced reasonable enhancement for the additional quantity executed by him due to the change in slope that was payable only for the quantity of 5,106.559 M3. (e) If payment is allowed at that rate (Rs.45/M3) for the additional quantity of 5,106.559 M3 then the amount payable to A1 would be Rs.2,29,795.15. So adding this amount along with Rs.5,51,180/- (which was the amount payable to A1 for the agreed quantity of 17,780 M3 at the rate of Rs.31/M3) the total amount payable to A1 would be only Rs.7,80,975/-. (f) As against this, A1 had effected payment at the rate of Rs.70/M3 for the entire quantity of 20,736.807 M3. That payment would come to Rs.14,51,576/-. Even then the illegal excess payment given to A1 would come to Rs.6,70,601/-. (g) The total payment which A2 had intended to effect at the rate of Rs.70/M3 for the entire quantity of 22,886.559 M3 would be Rs.16,02,059/-. (h) By allowing Rs.70/M3 for the agreed quantity of 17,780 M3, alone which Crl.Appeal No.1112/02 20 had been executed prior to August 1989 as against Rs.31/M3 and by effecting payment at the rate, the loss caused to the State was Rs.6,93,420/-. (i) Since the payment effected was only in respect of a quantity of 20,736.807 M3 and since the actual quantity executed was 22,886.559 M3, for the balance quantity of 2,149.752 M3, at the rate of Rs.31/M3 the amount payable was Rs.66,642.31/- (j) If this amount is deducted from the total illegal payment of Rs.8,08,735.47 (effected for 20,736.807 M3), the balance illegal payment effected by A2 would come to Rs.7,42,093/-. (k) These illegal excess payments were effected by A2 as per Ext.P14(a) dated 30/3/1992 and Ext.P12(a) dated 31/10/1992. Even at the modest rate, interest on the said illegal payment mentioned above for the period of about 10 years would itself come to more than Rs.Five lakhs. 6. Ultimately the learned Judge arrived at a conclusion of guilt consequent to which the appellant and the 2nd accused were convicted and sentenced as above. Crl.Appeal No.1112/02 21 7. The fact that the appellant was a successful bidder in respect of the work in dispute relating to chainage 54540 M to 54814 M is not only disputed but also admitted. It was proved by the testimony of PW2, the then Superintending Engineer, PW4, the Executive Engineer, PW5, another Superintending Engineer, PW6, the Upper Division Clerk, PW9, the Junior Superintendent, PW12, yet another Executive Engineer, PW13, the Assistant Executive Engineer, PW14, the Superintending Engineer, Field Study Circle. 8. PW2, would depose that at the time when the agreement was executed by the appellant, he was the Superintending Engineer and on behalf of the State, he signed the agreement which was marked as Ext.P2(a) on behalf of the State and that the appellant also signed the agreement and it is in pursuance of Ext.P2(a), the work in dispute was entrusted to the appellant. Ext.P2(a) agreement was executed on 12/09/1988 with nine months time for completion of the work.