IN THE HIGH COURT OF JUDICATURE AT PATNA Cr.Misc. No.55272 of 2007 Brig. Satish Kapur(Retd.) S/o Late Shri D.R. Kapur, R/o 3644, D-3, Vasant Kunj, New Delhi-110070 ---- Petitioner Versus The Union of India through Central Bureau of Investigation --- Opp. party. . With Cr.Misc. No.6565 of 2008 Shashi Kumar Soni @ S.K.Soni, S/O Shri Harmesh Kumar Soni, R/O A-546,Sector-19, Noida, Uttar Pradesh. ----Petitioner Versus The Union of India through Central Bureau of Investigation. -- Opp. party With Cr.Misc. No.6399 of 2008 J.Ganguly Son of Basanta Kumar Ganguly, Vice President, Larsen & Toubro Ltd. E.C.C. Division, Head Quarter, Working from the office of the said company situated at Manapakkam, Mount Poonamali Road, PB No. 979, Chennai-600089.. ---- Petitioner Versus The Union of India through the Central Bureau of Investigation. --- Opp.Party For the Petitioners ( in Cr. Misc. nos. 55272 of 2007 & 6399 of 2008) : Mr. S.A.Narain, Advocate. For the Petitioner ( in Cr. Misc. no. 6565 of 2008) : Mr. Kamal Nayan Chaubey, Sr. Advocate. For the CBI : Mr. Bipin Kumar Sinha, Advocate. ----------- 13. 10.11.2010 These three applications arise out of order dated 31.07.2007 passed by learned Special judge, CBI, South Bihar Patna in special case no. 28 of 2004 arising out of R.C. case no. 7(s)/2004/CBI/SCR- III whereby on a consideration of the charge sheet and the documents filed therewith it has been found that a prima facie case under Section 120B read with Section 420 of the Penal Code and 2 under Section 13(2) read with 13(1) (d) of the Prevention of Corruption Act has been made out against the three accused persons( the three petitioners herein) and accordingly cognizance has been taken and summons have been directed to be issued. These matters have therefore been made analogous and heard together. Present order shall govern them. 2. For the sake of brevity relevant facts shall be drawn from Cr. Misc. no. 55272 of 2007. National Highway Authority of India ( for short „NHAI‟) entered into a contract with M/S Larsen and Toubro Limited (for short „L &T‟) for construction of road work in package III V-B of golden Quadrilateral project in Delhi, Kolkata leg in the State of Bihar and Jharkhand . L & T formed a joint venture with HALCROW in order to obtain the contract on 03.02.2001. Upon biding/negotiation the contract was awarded to the said Joint Venture (JV). It is relevant to state here that to supervise the work L & T and HALCROW entered into an agreement with RITES and HALCROW Group for supervision and execution of work. Petitioner Brigadier Satish Kapur (Cr. Misc. no. 55272 of 2007) was functioning as the Resident Engineer of RITES HALCROW (JV). Petitioner Shashi Kumar Soni @ S.K. Soni of Cr. Misc. 6565 of 2008 was functioning as the Deputy General Manager cum Project Director of NHAI. Petitioner J. Ganguly of Cr. Misc. no. 6399 of 2008 was employed and working as the Consultant cum Vice President of M/S L&T, the company in whose favour the contract work was awarded by the NHAI. It appears total value of the 3 contract was close to 434 crores. Under the agreement the contractor(s) (L&T) was allowed to sub contract work up to 10% of the total contract amount subject to certain conditions. The allegation is that these petitioners who were at the helms of the affairs entered into criminal conspiracy with dishonest intention and caused undue pecuniary advantage to the main contractor M/S L&T and HALCROW in the matter of execution of road work in package V-B of NHAI a golden quadrilateral project in Delhi, Kolkatta leg covering area from Km 240 to Km 320 ( 80 kilometers). They got major part of the contract work sub let to other contractors/companies and got executed from these unauthorized and unapproved contractors/companies who were incompetent, lacking the skill, the technology and the machinery required for execution of work. Such contract work was got executed at far less rates against the provision of the contract and thereby obtained undue pecuniary advantage for themselves and for the contractors in the matter of execution of work and corresponding loss to the NHAI. Criminal case ignited on the strength of FIR (Anneuxre-1) lodged on 26.09.2004 in which all the petitioners are named accuseds. Investigation was carried out whereafter charge sheet (Annexure-1/A) was submitted on 30.07.2007 leading to the order impugned. Para 15 of the charge sheet at page 31 embodies the facts/allegations wherefrom it would appear that petitioner S.K.Soni, former project Director NHAI, and Brigadier Satish Kapur, retired Resident Engineer, RITES HALCROW Joint Venture Kodarma entered into criminal conspiracy with petitioner J. Ganguly, Vice 4 President of the main Contractor (M/S L&T). In pursuance thereof, they acting with dishonest intention obtained undue pecuniary advantage for themselves and for M/S L&T HCC (JV) in the matter of execution of road work in package V-B of the golden quadrilateral project. The contract/agreement with the NHAI and the company was signed on 26th March 2002. Total value of work awarded as per contract was close to 434 crores through a Joint Venture agreement dated 30th September 2001. Petitioner J. Ganguli on behalf of M/S L & T and Sri M.D.Khattar on behalf of M/S HCC entered into an agreement whereby work awarded by NHAI to the (JV) was divided amongst JV partners in the ratio of 60:40 and it was agreed that M/S L &T would execute the work in 48 KM and M/S HCC in 32 KM. NHAI also entered into an agreement between RITES LIMITED and HALCROW on March 19,2002 to supervise the execution of work by the contractor M/S L&T/ HCC(JV) in the said package. As per the conditions of the contract the consultant RITES HALCROW (JV) was the “Engineer‟‟ of the construction. They were required to appoint a Team Leader to act as an “Engineer” who was assigned certain specified job. Petitioner S.K. soni was posted as Project Director NHAI kodarma and worked from December 2000 to September 2003. Brigadier Satish Kapoor worked as Resident Engineer of RITES HALCROW (JV) from June 2002 to November 2003. At the time of bidding they had not intended to engage any sub contractors. Clause 5(1) of the agreement ( bidding data), however, permits sub contracting part of the work but after obtaining approval of the Engineer and NHAI and 5 within the limits specified in the contract ( 10% of the contract amount) M/S L &T immediately after award of contract on March 26 2002 started negotiation with different contractors for off loading the work and for that purpose started communicating with M/S ECI in respect of work which was not allowed to be sub contracted and for the value exceeding 10% of the contract amount. M/S L&T also initiated correspondences with M/S Bharadwaj Construction company ( for short „BCC‟) for sub contracting construction of road work. On conclusion of negotiations M/S L& T signed a sub contract agreement on October 1, 2002 with M/S ECI which was signed by Sri J.Gangul on behalf of L& T and Managing Director of ECI. Similarly another sub contract agreement was signed with M/S BCC on September 9, 2002 which was executed by Sri. J.Ganguli on behalf of L&T. Sub contracts amount was far in excess of 10% of the value of the contract. The materials on record indicate that L&T sub let contract to M/S ECI worth Rs 67 crores and to M/S BCC worth Rs. 33 crores. After executing those agreements the L&T started taking steps for obtaining approval from NHAI which was a condition precedent. It is to be kept in mind that as per agreement prior sanction was required for sub letting the contract with certain conditions and limitations. L&T approached HALCROW Team Leader to accord approval in September 2002. Team leader recommended proposal for such sub letting to the Project Director Shri S.K.Soni. In all these recommendations/communications it was noted that sub contract amount for which approval was/were sought was less than 10% of 6 the contract amount. Petitioner S.K. Soni, the Project Director forwarded the same to the NHAI who finally approved the proposal on such mis -representation in respect of less amount of sub contract in favour of M/S BCC and M/S ECI. In fact, the agreement for sub contracting the work was made for an amount close to 100 crores. On the strength of these agreements the contract work continued in course whereof Shri Satendra Dubey one of the Engineers of the NHAI working on the site found these under hand dealings and reported to the authorities but no action was taken on the said report of the engineer working on the site on behalf of the NHAI. It appears that efforts were made on behalf of the persons involved in getting the substandard work executed by the Sub Contractors to shield the irregularities in the matter of contract/work which was found to be wholly sub standard. A thorough investigation was carried out by the CBI and considering the technicalities involved a team of experts was also got constituted and the samples drawn of GSB, DLC and PQC that were tested and evaluated at CRRI, Delhi. The team of experts submitted the report in May 2005 expressing its opinion on different matters/issues. Four samples drawn for testing failed in gradation test. It would be relevant to note here that from the investigation report it appears that the petitioners herein were put on notice seeking their explanations which was/were submitted by each of them and was/were also considered by the experts. The experts opined that there was direct financial gains of Rs. 22 crores to M/S L&T ( main contractor) by getting the works executed through different sub contractors. Clauses 2.8, 2.9, 3.0, 3.1, 3.2, 3.3 7 and 3.4 of the memo of charge (Annexure 1/A) would indicate the gravamen of allegation and charge against the petitioners based on appraisal of the material collected in course of investigation as also the report of the experts consisting of high officials of the Central Government such as the Chief Engineer, Ministry of Shipping, Road Transport and Highways, Government of India , New Delhi and the scientist(s) of Central Road Research Instituted New Delhi (CRRI). Let it be recorded that in course of hearing of the case learned counsel appearing on behalf of C.B.I. produced before this Court the statement of the members of the team of expert namely, Professor G.V.Rao, Sri Kamlesh Kumar and Shri Sunil Bose for perusal of the Court. On a consideration of these materials available on the records of the case, learned Court below having been satisfied that the implication of the petitioners in the offence is/are prima facie made out, took cognizance. As noticed above, petitioners want criminal proceeding quashed at its initial stage. 3. Learned senior counsel Shri S.A.Narain, who appears on behalf of the petitioners in Cr. Misc. nos. 55272 of 2007 ( Brig. Satish Kapur) and 6399 of 2008 (J. Ganguly) made the leading arguments. Mr. Kamal Nayan Chaubey, learned Senior counsel appears in support of Cr. Misc. no. 6565 of 2008 ( S.K.Soni) and supported the submissions advanced on behalf of Sri Narain. While adopting the submissions advanced by Sri S.A. Narain he made certain additional submissions. Sri Bipin Kumar Sinha appearing on behalf of the CBI, on the other hand, opposed the prayer made in the three applications 8 and supported the impugned order. 4. It has been contended on behalf of the petitioners that no legal evidence is on record to substantiate the charge(s). A submission has been made that petitioner Brigadier Satish .Kapur was Resident Engineer RITES HALCROW (JV) and was not found associated with forwarding of the proposal for according permission to the main contractor (L &T) to enter into sub contract with another company. It is the stand of the petitioners that such proposal was initiated by one Mr. Dasgupta and was sent to the Team Leader who has not been examined by the C.B.I. The Team Leader, in turn, forwarded the same to NHAI which ultimately approved the proposal. It is the contention of the petitioner(s) that there is no material in the prosecution report which may indicate that he was ever associated with the processing of the aforesaid recommendation which has been alleged to be deceitful suppressing the real state of affairs. It is next contended that letter dated 12.06.2003 written by Mr. Dubey of NHAI working on the site was addressed to the team leader whereafter actions were taken and certain reports were called for. Petitioner(s) were not required to take any action on the said letter/complaint. It is contended that petitioner Satish Kapur was posted at Kodarma for a brief period whereafter he was shifted therefrom. He was therefore not associated with the alleged sub standard work executed by the sub contractors. It is next contended that the petitioner had only approved design of PQC which failed at the testing. This by itself would not show his involvement in the alleged occurrence. Learned 9 counsel has also submitted that the allegations at best would constitute non compliance with the terms of agreement which would give rise to a civil liability and not a criminal liability. 5. While advancing submissions in support of Cr. Misc. no. 6399 of 2008 it is contended by Mr. Narain that the petitioner was posted as the Vice President of L &T. The approval, having been granted by the officers superior to him, he signed the contract/sub contract which was found to be beyond the limit of 10% permissible under the contract entered into between NHAI and the main contractor. It is further submitted that the petitioner had in fact no role to play as the proposal was initiated by one Shri Das Gupta and forwarded to the Team Leader who, in turn, forwarded the same to the Chairman of the National Highway Authority of India to approve the same whereafter he signed the sub contract(s). It is the contention of the petitioner that neither Shri Das Gupta nor the Team Leader nor the Chairman of the NHAI have been made accuseds in the case. The petitioner has been made a scape goat in the case by the CBI. Learned counsel has further submitted that going by the materials collected in course of investigation no case has been made out against the petitioner. In the same vein it has been argued that there is absolute lack of materials which could demonstrate conspiracy. It is also contended that petitioner is not a public servant and as such provisions of Prevention of Corruption Act shall not apply to him. Shri Narain placed reliance on the following judgments:- (i) 1998(7) SCC 698(Ashok Chaturvedi & Ors. Vs. Shitul H. 10 Chanchani & Anr. Para 5) (ii) 2008(1) PLJR 51 SC (All Cargo Movers (I).Pvt. Ltd. & Ors. vs. Dhanesh Badarmal Jain & Anr. para 17). (iii) 2005(1) PLJR 89 ( Patliputra Builders Pvt. Ltd. & Anr. Vs. The State of Bihar & Anr. para 5) 6. Mr. Kamal Nayan Chaubey, learned counsel appearing in support of the Cr. Misc. no. 6565 of 2008 submits that petitioner is not a signatory to those agreements which have been found to be deceitfully executed to cause undue loss to the NHAI and corresponding gain(s) to the contractor. It is submitted that the petitioner only forwarded the proposal in respect of those agreements for sub contracting. It is thus the submission that there is no legal material on record depicting his implication in the commission of the crime/offence. It is next contended that the gravamen of the allegation is relatable to the omission rather than commission. The omission is not penal unless enjoined upon by the statute. The charge at best against the petitioner would be that he had not acted reasonably and thereby preventing commission of the offence. 7. Learned counsel appearing on behalf of the CBI submits that an offence may constitute both civil liability as well as criminal liability. The Court would not be justified in quashing the proceeding at its initial stage only on the said ground. He relies on judgment of the Supreme Court rendered in the case of Mahesh Chaudhary vs. State of Rajasthan & Anr.,reported in 2009(4) SCC 11 439 ( paragraph nos. 11,14,17, and 18). Referring to different paragraphs of the Case diary, it is stated that the statements of M.K. Dasgupta, Project Manager was recorded by the C.B.I. where from, prima facie, involvement of the petitioner S.Kapur in the offence can be gathered. It is highlighted that the petitioners were given adequate opportunity to submit their explanations on the points/issues found by the experts and the explanations so submitted were forwarded for consideration by the experts. The experts did not agree with their explanations about wrong and/or false implication in the case. Be it noted here that separate counter affidavits have been filed in each case by the CBI. Learned counsel referred to the statements made in paragraph nos. 5,11,13,15,17,18, 20 and 21 of the counter affidavit in an effort to show that there is adequate materials on record to indicate that the petitioners had acted in close concert and allowed the main contractors (L&T) to sub let the contract work to the tune of over 100 crores and thereafter recommended and got approved the proposals which indicate that the same was less than 10% of the contract amount and as such permissible under the terms of the agreement. As a result of the aforesaid conspiracy and connivance a wholly sub standard work on the project was executed by the sub contractors who lacked skills, technology and expertise in the matter of execution of work. These works were got executed at a low price /cost whereas the main contractor (L&T) claimed amount on higher rates for a quality work to be executed by the main contractor which caused heavy loss to the NHAI which has been quantified by the experts close to 22 12 crores. It is the contention of the counsel that there are materials on record to indicate that tests were carried out of the works executed by the sub contractors which have found to be sub standard. In a case of conspiracy to cheat a party one may silently omit to discharge his duty as per law/agreement. It is contended that the petitioners are facing charge of criminal conspiracy read with Section 420 of the Penal Code and different Sections of Prevention of Corruption Act. So far as sanction is concerned the authorities have already granted sanction in so far as petitioner S.K. Soni is concerned. The charge is that the other two petitioners have acted in conspiracy with the aforesaid co-accused. A bare perusal of the report of the expert committee would show the latches and illegalities committed on the part of the accused petitioners which have been also scrutinized with an angle of financial implication. It is thus the contention that the case in hand is not a case where it can be said that the charge(s) based on materials collected in course of investigation do not make out a case against the petitioners. 8. I have heard the parties at length and perused the materials on record. The following facts reflect from the record. Petitioner Brigadier S. Kapur was associated with the execution of contract as the Resident Engineer RITES HALCROW (JV) during the relevant time. Petitioner S.K. Soni was functioning as the Deputy General Manager as also Project Director of NHAI. Petitioner J. Ganguly was the Consultant Engineer- cum- Vice President of the main contractor (M/S L & T) and signatories to the contracts. The 13 contract was awarded on 26.03.2002. Total value thereof was close to 434 crores. In July 2002, letter of intent was placed to ECI for sub letting contract worth over Rs. 67 crores. Subsequently in October 2002, agreement between L& T and ECI was signed. Let it be recorded that the agreement was signed on behalf of the L& T by petitioner J. Ganguly. It further appears that letter of intent was also placed by L& T to M/S Bharadwaj construction company worth over Rs. 33 crores which was followed by an agreement signed by them in September 2002. These facts were not brought to the notice of the NHAI. On 20.09.2002, L& T began communicating with HALCROW through Team Leader to accord approval to such sub contracting. Such proposal was made indicating therein that the total amount of sub letting the contract would be less than 10% of the total value of work contract awarded to M/s L &T and would thus be permissible under the terms of the agreement/contract entered into between the NHAI and the L &T( main contractor). Acting on the said representation the Team Leader recommended aforesaid proposals for sub letting to the project Director, who, in turn, forwarded it to the authorities of the NHAI. NHAI acting on the representation accorded approval to those proposal which was depicted to be less than 10% of the total value of the work contract(less than 43 crores). It further appears that Shri Satyendra Dubey, an Engineer of NHAI, posted on the site (Kodarma), in his letter, dated 12th June 2003, apprised the Supervising Consultant about the unauthorized sub contracting by M/S L &T in package V-B copy whereof was also endorsed to petitioner S.K. Soni, Project 14 Director, PIU, Kodarma. He apprised them of the execution of sub standard works at the hands of the Companies to whom the work was sub let by the L & T. An attempt appears to have been made on behalf of the petitioners to shield the irregularities being committed in execution of works by the main contractor L & T by executing substandard works causing huge loss to the NHAI. It further appears from the materials on record that petitioner Brigadier Satish Kapur being second man in command of the Company to whom supervision of work was assigned under the agreement was also associated with submission of the proposals. It further appears from the case record that for examination of various technical issues involved in the testing of works executed by M/s L&T, the C.B.I. sought help of Ministry of Road Transport & Highways, New Delhi, Central Road Research Institute, New Delhi and Indian Institute of Technology New Delhi. Experts in the field of road work were deputed from those institutions consisting of three officials. The said committee of experts drew samples of GSB, DLC and PQC which were tested and evaluated at CRRI, Delhi and those samples failed in gradation test. 9. Submission made on behalf of the petitioners that although agreements were made sub letting the contract to other Companies during posting at the Kodarma but execution of substandard work made by them took place when they were shifted therefrom and that there is absolute lack of evidence/materials indicating meeting of mind of all the three petitioners in order to commit the crime, in my view, shall be considered at the relevant stage of the 15 proceeding. Charge punishable under Section 120B is to be proved with reference to evidence and documents. Principles of law are fairly settled that in a case where the Court is called upon to quash the criminal proceeding in its cradle, the Court has to see as to whether from perusal of the materials on record no offence is made out and/or there is absolute lack of legal materials on record. Reference in this regard may be made to the following judgments:- (i) AIR1992 SC 604 (State of Haryana & Ors. Vs. Ch. Bhajan Lal & Ors.) (ii) 1998(7) SCC 698(Ashok Chaturvedi & Ors. Vs. Shitul H. Chanchani & Anr. Para 5) 10. This Court further deems it apposite to consider the submission advanced on behalf of the petitioners that the allegation at best would constitute violation of the terms of the agreement and thus would give rise to a civil liability. This Court, in view of the facts