Case: State Of M.P Vs. Sheetla Sahai

4. Before proceeding further, we may notice the positions held by the respondents herein. Respondent No. 1 Sheetla Sahai was Minister for Water Resources of the State of Madhya Pradesh. Respondent No. 2 D.V.S.R. Sarma and the respondent No. 7 S.W. Mohgoankar were the Secretary to the Government of Madhya Pradesh. Respondent No. 3 P.V. Srinivasaiyah was the Engineer-in-Chief and the respondent No. 4 A.S. Laxminarsimhaiya was the Deputy Secretary in the Government of Madhya Pradesh. Respondent No. 5 V.R.B. Gopal and the respondent No. 6 M.N. Nadkarni were the Chief Engineers, Hasdeo Bango Project. Respondent No. 11 R.P. Khare was the Secretary, Control Board for Major Projects.5. Appellant under the aegies of the World Bank undertook construction of the Hasdeo Bango Masonry dam project. For the aforementioned purpose, the respondent Nos. 8, 9 and 10 herein, viz.,M/s Progressive Constructions Pvt. Ltd., M/s Prasad & Company, M/s SEW Construction Co. (hereinafter referred to as "the contractors") were awarded contracts in terms whereof they were required to excavate stones etc. from Therma Pahar Quarry, which was situate at only 12 kms. away from the site, for use of the stone to be extracted therefrom for construction of masonry spillway.6. One of the terms of the said contract is astenderer should satisfy himself regarding availability of the required quality and quantity of the materials, if any quarry is changed for any reason whatsoever, no claim shall be entertained on thisaddition to the guidelines, a plan was also supplied to the contractors containing the followingcontractor shall extract materials from the approved sources and quarry areas to be designated by the engineer-in-charge for their particular contract group. They shall have no claim for any material collected elsewhere without having obtained the prior approval in writing of the engineer in charge. Such material shall become the property of the department unless approval to use the same is subsequently accorded by the engineer-in-charge, in which case, however, the contractor shall not be entitled for any extra rate or lead.However, on the premise that whereas eight lakh cubic meters of stones of the requisite specification were required for masonry work, only one lakh cubic meter stone was available from the Therma Pahar Quarry, permission was sought for by the contractors to excavate stones, rubbles and other materials from a quarry known as Katghora Quarry which was situated at a distance of 22 kms. from the dam.8. The question was considered by the concerned engineers. The District Mining Officer and the Additional Collector Korba, having regard to the fact that the mining leases in respect of the said quarries were to be granted, asked them not to do so as the stones in the hillocks of villages Katghora, Hunkra and Maheshpur were found to be suitable for the masonry work of the dam, as would appear from a letter dated 14.07.1983 issued by the Executive Engineer to the Additional Collector, Korba.9. The Superintending Engineer, respondent No. 7 herein also by his letter dated 28.07.1983 addressed to Shri R.C. Gupta, the then Executive Engineeram informed that Rampura quarry near Katghora on Kathora Ambikapur road, may also yield good masonary stones. You may also explore this possibility and let me know if the stones were got tested. If not, the samples from this quarry may also be tested. Case could also be moved to obtain lease for this quarry.A request was also made to the Mining Officer of Bilaspur to the same effect by Shri R.C. Gupta, the then Executive Engineer by a letter dated 16.10.1983,quantity of rubble is not available from Therma quarries of Forest Department acquired for this purpose and Geologist, Geological Survey of India had intimated that about one lakh cum. of rubble can only be extracted from Therma quarries. For completion of this major dam about ten lakh cum. rubble & metal are needed. Out of which 1 lakh cum. can be extracted from Therma quarry, about three lakh cum. can be used out of the stone received from excavation of foundation of dam, remaining 6 (six) lakh cum. is required from adjacent stone quarries like Katghora, Hukra & Maheshpur. Hence, I have requested in my letter cited above (copy enclosed) to additional Collector, Korba, to reserve rubble quarries in the surroundings of the above villages so that rubble from these quarries can be extracted for completion of the Bango Dam in time.Now I understand that you have proposed the above quarries for auction on 20th & 21st Oct.83. I request to delete the rubble quarries situated in the surrounding of Katghora, Hukra & Maheshpur from the purview of auction and transfer to Irrigation Department. Depending upon the quantity of rubble required by each agency executed masonry works at Bango Dam, allotment of individual quarries will be made by us after the agencies deposit the royalty charges which will be refundable to them after awarding the certificate of utilizing the material in bonafide Government works.Till the formalities are over for transfer of the above quarries to Irrigation Department, I request to delete the following quarries from the purview of auction.S. No.Name of VillagePC No.Name of materialKhasra No.Area1.Hukra47Stone347/117.396 Hec.2.Maheshpur31-AStone1/1-K30.425 Hec.The Additional Collector (Mining Section), Korba in response thereto by a letter dated 22.11.1983 addressed to the Executive Engineer reserved the aforementioned quarries for extraction of stones departmentally, subject to the conditions mentioned therein.12. Yet again, the Executive Engineer by a letter dated 05.12.1984 addressed to the Superintending Engineer brought to his notice that alternative sites for quarrying operations for extraction of stones were necessary, inter alia,The quarrying operations for extraction of stones was started in the real sense during 82-83 working season, i.e., prior to the area was ready for starting the masonry. The contractors after the start of quarry operations, repeatedly wrote, regarding the non availability of sufficient stones of requisite quality. They had also brought out that the yield of even this small quantity of stone was very much less. In consultations with the department and the resident geologist, they have opened more number of quarry faces, but this did not result yields. This office has also carried out case studies which has established the yield of useful stone to be very much less. The details enclosed at Annexure A. Even the quantum of stone available is less, when compared to the requirement.3. It was reported that the quantum of useful rubble available in the entire Therma Pahad Hills is to the tune of one lakh cum. against the total requirement of 8 lakh cum. for the entire dam. This was based on the detailed investigations and report of the Resident Geologist. Even this quantity can be extracted with much difficulty. Therma Pahad Quarry on the visual appearance and the random bore holes, initially appeared to be good. As such this was declared as quarry for masonry stone and accordingly estimates prepared and designated as the specified quarry in the quarry map enclosed along with the agreements. The contractors naturally could not have investigated the quarry by actual opening/ operation, and have inspected the quarry with the data available to them. Therefore neither department nor the contractor could have foreseen the non availability of useful stone in the required quantity from the designatedIt is therefore requested that the sanction may be obtained for payment of additional leads and communicated. However, the payment towards additional wasteful expenditure incurred in therma quarries as claimed by contractors is recommended for rejection.The Superintending Engineer brought the same to the notice of the Chief Engineer by a letter dated 18.12.1984 stating that there had always been a controversy regarding the use of those stones as rubble in masonry dam. A question was also raised as to whether the department would permit additional payment due to change in the quarry. If such a step is not taken, the contractor may put an end to the contract and, thus, inter alia requested that payment of additional leads from Katghora quarry may be allowed.14. It appears that even the Central Water Commission of the Government of India by a letter dated 04.05.1984 informed the Chief Engineer of the project to the followingrefer to your letter on the above mentioned subject. You have proposed to use stone from Therma Pahar quarry for the construction of the dam. Though the stone from this quarry has been approved as Granite, the Compressive strength of the stone from this quarry varies from 289 kg/cm to 373 kg/cm, which is very low. It is necessary that the reasons for such low strength for the Granite are investigated before deciding to use the same for the construction of the dam.By a letter dated 7.06.1983, the Executive Engineer of the Quality Control Division brought the following to the notice of the Superintending Engineer of the Quality Controlit is noticed the mica existing in the rocks under question varies from 7% to 11%. No mention of the permissible percentage of mica is given in IS codes or other books. Only Hand book on civil engineering by PN Khanna, reveals that 2% of mica is permissible. In view of the above it is submitted that the pigmetite band stones are not fit for use in masonry dam from quality control unit Machadolis point of view. This is, however, continuously used in masonry on dam blocks 16, 17, 18, 19, 25, 26, 27, 28, 29, 35, 37 in which work continuously in progress. If the higher authority deems it fit, that use of pigmetite is to be continued by overruling the opinion of the undersigned clear written instructions may kindly be issued to this office for guiding the A.R.Os. Quality Control deployed on Quality control work of masonry dam. Early reply is solicited.In view of the aforementioned development, the Chief Engineer of the Project brought the same to the notice of the Secretary of the Major, Medium and Minor Irrigation Department, Bhopal by a letter dated 11.01.1985 inter alia making the followingPermitting the Chief Engineer for declaring Katghora quarry as an additional quarry for balance quantity of rubble quarry for rubble for masonry dam other than one lakh cubic meter of rubble, as assessed by the geologist to be extracted by the contractors from Therma Pahad quarry as far as possible in the contracts mentioned in this letter.(ii) To allow payment of additional leads from Katghora quarry for cum of masonry at the rates detailed in table at para 5.3with the said letter, various other documents were enclosed as specified therein including a letter dated 4.05.1990, wherein it was inter aliaIn view of the above, the Chief Engineer submitted proposals on 4.07.85 for Government Orders. According to the above proposals sanction to pay extra lead amounting to Rs. 1,23,23,767/- has been sought. This amount is about 3% of the total amount of contract of Rs. 41.77 crores. The Chief Engineer had also sought the opinion of the World Bank, and the World Bank gave a suggestion to deal the issue with in the contractual provisions. Similar problem has been raised by the contractors in Bansagar Project also, and the Executive Committee had recommended approval of lead payment.11. According to the Chief Engineers report, the Executive Engineers had reported that only 30% to 35% useful stones can be extracted which was not economical. This project is under construction with the World Bank assistance, will have to be completed on time, to supply water to the National Thermal Power Corporation, and also to the M.P.E.B. Power Station. In view of this stones have been brought from Katghora quarry situated at 22 Km. where sufficient quality of stones are available.In case, due to above reasons had the Agreements drawn been cancelled and new tenders recalled the cost would have been more. Further, precious time would have been lost in this process which would have affected the works and it would not be possible to supply water to N.T.P.C. and M.P.E.B.In a letter dated 14.02.1985 addressed to the Chief Engineer, the World Banknote you have referred the matter to the Secretary, Irrigation Department, Bhopal for decision. We suggest that the matter be resolved within contractual limits.Pursuant thereto and in furtherance thereof, even the Progress Review Committee observed in its note dated 14.05.1985 asChief Engineer (HBP) explained his proposal submitted through his memo No. 1916/HB/84 dated 29/3/85. He gave the background of the change of quarry, in view of unexpectedly low yield of useful stone from the Therma Pahad quarry, approved in the technically sanctioned, sanctioned estimate and also on which basis tenders had been invited and contractors rates accepted. He informed the Committee that the total extra commitment for the various contracts worked out to Rs. 1.23 crores - approximately 3% of the total contract value.28. Financial Adviser observed that he had no offered any comments on the merit of the case, as then appeared to him essentially a claim case. PRC does not deal such claim cases.29. The Committee observed that the World Bank too vide their letter of 14/2/85 had suggested that the matter be resolved within contractual limits.30. In view of the above, the Committee did not examine the proposal of Chief Engineer and refrained from giving any comments in the matter at this stage.However, the contractors invoked the arbitration agreement contained in the said contract in the year 1987 and an ad hoc settlement was proposed.20. The matter was placed before the Financial Adviser. The Financial Adviser in his note dated 4.01.1991 to the Secretary, while stating that the Financial Adviser functions as a consultant offering comments on cases referred to him in the light of his background, experience and expertise and going by the facts placed before him which may not be treated as a substitute for vetting by the Finance Department wherever such vetting is required under the rules of governmental business, inter alia made the followingsince the whole contract action was based on the presumption that the required quantity of material of required specification would be available from a quarry with in 12 KM of the work site, it can be reasonable assumed that the contractors have quoted their rates on this assumption. The departmental estimates were also based on this assumption. Since, later on, this assumption was found to be invalid and majority of the material had to be obtained from a quarry with an average lead of 22 KM from the work site as against 12 KM in respect of the contemplated quarry, the contractors have a reasonable case for additional payment on account of extra lead of the material brought by them from this second quarry. Thus, their claim is based on consideration of equity rather than there ofregard thereto, the Financial AdviserSince the proposed settlement will amount to extra-contractual payment, it has to be ensured that the proposed settlement is acceptable to the contractors concerned. In other words, the settlement has to be a negotiated settlement and should not leave room for further disputes with the various contractors. Since the purpose of the whole exercise is to avoid arbitration it could even be ascertained if there are any other disputed issues in these contracts. If an overall settlement of all the disputes could be attempted and a sort of package deal is evolved in respect of each contract so that the contracts are finalized once for all leaving no scope for arbitration on the other hand if the contractors intend to take resort to arbitration for other issues, this issue could also go in for arbitration. A package approach would allow negotiation in a spirit or give and take for an over- all settlement of all disputes.The then Secretary (Irrigation) Shri M.S. Billore constituted a committee comprising of the Engineer-in-Chief P.V. Srinivasaiyah, the Chief Engineer, the Financial Adviser, Secretary (Control Board) and the Deputy Secretary, some of whom are Accused Nos. 3, 4,5 and 11.22. The said Committee submitted a report in respect whereof the Secretary made a note that the same be critically examined.The Officer on Special Duty noticed the recommendations of the Committee, which are asAs the quarry has been changed by the Department due to Technical reasons the contractors cannot be held responsible.(ii) When the Department itself did not know about the quarrys unsuitability it will be unfair to expect the contractors to bring stones from the changed quarry at the same rates.(iii) Payment to the extent of actual quantity brought from the quarries beproposals of the Chief Engineer, the quantities under each agreement, the rate and the amount were also noticed. It wasit is proposed to approve payment for actual quantity and the Chief Engineer may be informed to take undertakings from the contractors before making theFinancial Adviser was asked to examine the said proposal in details. Some discussions apparently were held and it was found necessary to obtain the following information before taking decision at the governmentAfter the inspection of the Geologists how much quantity has been brought from Therma Pahad by each contractor.2. How much quantity has been brought from Katghora quarry.3. How the records are kept by the Department about the quantity of stones brought from differentdraft letter was also prepared.23. On or about 6.04.1991, one Shri Uday Shinde in his note stated that the Chief Engineer had not sent any detail in regard to Block 31-38 as in the agreement only Therma Pahar quarry had been shown for the balance work and as the original file was sent to the Honble Minister, it was not possible to deal with the case. The file was re-submitted and the amount payable to the contractor for additional lead was again put up for administrative approval. Yet again, the Engineering in-Chief Committee was asked to examine the matter.24. In a note to the Secretary dated 27.04.1991, the salient features in respect of the aforementioned matter were placed again to which Shri M.S. Billore by his note dated 1.05.1991 opinedgovernment decision has already been informed to the Chief Engineer, Hasdeo Bango Project through government letter No: 9/CP/B/31/89/319, Bhopal dated 28.2.89. Hence, any action at government level is not pending in this case and Chief Engineer to take action in this case as per government order.Allegedly, the respondent No. 1 who was Minister at the relevant point of time sat over the file for a period of about six months. He on 4.11.1991have studied the case. Whenever any opinion has been sought by the Secretary, from whichever authority, they gave their opinion as per their wisdom. Every time the Secretary has been seeking the opinion from one after another officer. In this process he spent a period of one year between 3.5.90 to 1.5.91. In accepting the opinion or recommending any action, it was expected from the Secretary to take into consideration the fact that the opinions had been given as per their wisdom. Therefore, question does not arise to take any action against the subordinate officers.No basis appears for the Secretary to take a totally different view than the unanimous opinions. Therefore, it is necessary to investigate the basis on which the Secretary Shri Billore had rendered his opinion.The new Secretary to study the case and give opinion.Pursuant thereto or in furtherance thereof, the respondent No. 2 Shri D.V.S.R. Sarma submitted a report upon constitution of a Committee,Due to technical reasons, the department has changed the quarry. Therefore, its liability should not be upon the contractors.(ii) When the Department had not any knowledge about the quarry, and to expect this that even under the changed quarry the contractor should fetch/ transport the stones at the same rate, is also not proper.(iii) Where & Where (sic) and for that much of the quantities, the materials have been brought from a quarry at more distance, it is proper to make payment for that much excess distance.The respondent No.1 approved the said note of the respondent No. 2 on or about 20.01.1992 whereupon the amount in question was sanctioned.28. Thereafter, the accounts were audited and one Shri G.K. Shukla, Deputy Accountant GeneralThe clause of the agreement noted above and the quarry chart clearly bring out that in the event of change of quarry on whatever reasons no claim will be entertained and contractor should before quoting rates, visit the quarry site and satisfy himself regarding quantity and quality of the material available. Thus, the sanction appears a negotiated settlement beyond the contractual provisions, for which concurrence of Finance Department ought to have been obtained.b) The PRC considered this as a claim case which was to be decided by Arbitrator under M.P. Adhikaran Adhiniyan, 1983.c) The Member, World Bank suggested to resolve the matter within the contractual limits.d) The Secretary Irrigation had earlier rejected the case as it was not admissible.e) The rates quoted by the contractors were inclusive of all lead and lift, being item rateAuditor General of India also took note of the said report,in spite of the report of the Geologist that the good quality of stone was available in sufficient quantities in the upper portion of the quarry situated in the hill mentioned in the agreement and in spite of there being specific provision in the agreements that no additional payment would be acceptable in the event of change in leads or change in quarry, the payments made to the contractors were irregular and resultantly made additional gains of Rs. 102.46 lacs to them.Pursuant thereto or in furtherance thereof, a complaint was lodged. The matter was investigated by the Special Police Establishment. They collected all the materials and filed a chargesheet in the Court of learned Special Judge on 27.03.1997. The case was registered as Special Case No. 6 of 1997.30. By an order dated 13.05.1997, the learned Special Judge took cognizance of the case,As none of the accused is a public servant, no sanction was required to be obtained in terms of Section 19 of the Act.(ii) Criminal misconduct relating to corrupt practice under Section 13(1)(d)(ii-iii) of the Act has nothing to do with normal activity and work under government duty of any public servant at any time.In the year 1997, the respondent Nos. 1 and 2 had filed a revision application before the High Court.32. The Special Judge framed charges against the respondents on or about 29.07.1999; a sample copy whereof reads aswere working as Minister In-charge, Ministry of Water Resources, Government of Madhya Pradesh from June 1990 to September 1992. On the recommendatory note of Shri D.V.S.R. Sharma ignoring the letter dated 14.02.85 of the Finance Branch of World Bank and earlier decision dated 18.02.85 according to which the case of extra lead was to be decided within the ambit of the contract in respect of payment of extra lead to the concerned Tender Contractors for transportation of stones used in construction work of masonry non-flow dam upstream in Hasdeo Bango Project. You in conspiracy with the employees and Tender Contractors accorded administrative sanction and payment of one crore two lac forty six thousand two hundred rupees was made to the Contractors towards extra lead. Hence, you while holding the post of public servant misusing the position of the post provided financial benefit to the Tender Contractors without public interest.Your above act being offence under Section 13(1)(D)(ii-iii), the Prevention of Corruption Act, 1988 is punishable under Section 13(2) the Prevention of Corruption Act, 1988. In the alternative, you in criminal conspiracy with Shri D.V.S.R. Sharma, Secretary, working in the Ministry of Water Resources, Government of Madhya Pradesh and other employees and contractors acted as mentioned above, which is punishable under Section 13(1)(D)(ii and iii) read with Section 120B IPC, which is within the jurisdiction of this Court.Hence, I hereby direct that you will be tried for the offence mentioned above by this Court.Aggrieved by and dissatisfied therewith, the respondents filed revision applications before the High Court, which by reason of the impugned order have been allowed. The State is, thus, before us.Before proceeding further, we may notice the positions held by the respondents herein. Respondent No. 1 Sheetla Sahai was Minister for Water Resources of the State of Madhya Pradesh. Respondent No. 2 D.V.S.R. Sarma and the respondent No. 7 S.W. Mohgoankar were the Secretary to the Government of Madhya Pradesh. Respondent No. 3 P.V. Srinivasaiyah was the Engineer-in-Chief and the respondent No. 4 A.S. Laxminarsimhaiya was the Deputy Secretary in the Government of Madhya Pradesh. Respondent No. 5 V.R.B. Gopal and the respondent No. 6 M.N. Nadkarni were the Chief Engineers, Hasdeo Bango Project. Respondent No. 11 R.P. Khare was the Secretary, Control Board for Major Projects.5. Appellant under the aegies of the World Bank undertook construction of the Hasdeo Bango Masonry dam project. For the aforementioned purpose, the respondent Nos. 8, 9 and 10 herein, viz.,M/s Progressive Constructions Pvt. Ltd., M/s Prasad & Company, M/s SEW Construction Co. (hereinafter referred to as "the contractors") were awarded contracts in terms whereof they were required to excavate stones etc. from Therma Pahar Quarry, which was situate at only 12 kms. away from the site, for use of the stone to be extracted therefrom for construction of masonry spillway.6. One of the terms of the said contract is asr should satisfy himself regarding availability of the required quality and quantity of the materials, if any quarry is changed for any reason whatsoever, no claim shall be entertained on thisn to the guidelines, a plan was also supplied to the contractors containing the followingcontractor shall extract materials from the approved sources and quarry areas to be designated by the engineer-in-charge for their particular contract group. They shall have no claim for any material collected elsewhere without having obtained the prior approval in writing of the engineer in charge. Such material shall become the property of the department unless approval to use the same is subsequently accorded by the engineer-in-charge, in which case, however, the contractor shall not be entitled for any extra rate or lead., on the premise that whereas eight lakh cubic meters of stones of the requisite specification were required for masonry work, only one lakh cubic meter stone was available from the Therma Pahar Quarry, permission was sought for by the contractors to excavate stones, rubbles and other materials from a quarry known as Katghora Quarry which was situated at a distance of 22 kms. from the dam.8. The question was considered by the concerned engineers. The District Mining Officer and the Additional Collector Korba, having regard to the fact that the mining leases in respect of the said quarries were to be granted, asked them not to do so as the stones in the hillocks of villages Katghora, Hunkra and Maheshpur were found to be suitable for the masonry work of the dam, as would appear from a letter dated 14.07.1983 issued by the Executive Engineer to the Additional Collector, Korba.9. The Superintending Engineer, respondent No. 7 herein also by his letter dated 28.07.1983 addressed to Shri R.C. Gupta, the then Executive Engineerm informed that Rampura quarry near Katghora on Kathora Ambikapur road, may also yield good masonary stones. You may also explore this possibility and let me know if the stones were got tested. If not, the samples from this quarry may also be tested. Case could also be moved to obtain lease for this quarry.A request was also made to the Mining Officer of Bilaspur to the same effect by Shri R.C. Gupta, the then Executive Engineer by a letter dated 16.10.1983,quantity of rubble is not available from Therma quarries of Forest Department acquired for this purpose and Geologist, Geological Survey of India had intimated that about one lakh cum. of rubble can only be extracted from Therma quarries. For completion of this major dam about ten lakh cum. rubble & metal are needed. Out of which 1 lakh cum. can be extracted from Therma quarry, about three lakh cum. can be used out of the stone received from excavation of foundation of dam, remaining 6 (six) lakh cum. is required from adjacent stone quarries like Katghora, Hukra & Maheshpur. Hence, I have requested in my letter cited above (copy enclosed) to additional Collector, Korba, to reserve rubble quarries in the surroundings of the above villages so that rubble from these quarries can be extracted for completion of the Bango Dam in time.Now I understand that you have proposed the above quarries for auction on 20th & 21st Oct.83. I request to delete the rubble quarries situated in the surrounding of Katghora, Hukra & Maheshpur from the purview of auction and transfer to Irrigation Department. Depending upon the quantity of rubble required by each agency executed masonry works at Bango Dam, allotment of individual quarries will be made by us after the agencies deposit the royalty charges which will be refundable to them after awarding the certificate of utilizing the material in bonafide Government works.Till the formalities are over for transfer of the above quarries to Irrigation Department, I request to delete the following quarries from the purview of auction.S. No.Name of VillagePC No.Name of materialKhasra No.Area1.Hukra47Stone347/117.396 Hec.2.Maheshpur31-AStone1/1-K30.425 Hec.e Additional Collector (Mining Section), Korba in response thereto by a letter dated 22.11.1983 addressed to the Executive Engineer reserved the aforementioned quarries for extraction of stones departmentally, subject to the conditions mentioned therein.12. Yet again, the Executive Engineer by a letter dated 05.12.1984 addressed to the Superintending Engineer brought to his notice that alternative sites for quarrying operations for extraction of stones were necessary, inter alia,e quarrying operations for extraction of stones was started in the real sense during 82-83 working season, i.e., prior to the area was ready for starting the masonry. The contractors after the start of quarry operations, repeatedly wrote, regarding the non availability of sufficient stones of requisite quality. They had also brought out that the yield of even this small quantity of stone was very much less. In consultations with the department and the resident geologist, they have opened more number of quarry faces, but this did not result yields. This office has also carried out case studies which has established the yield of useful stone to be very much less. The details enclosed at Annexure A. Even the quantum of stone available is less, when compared to the requirement.3. It was reported that the quantum of useful rubble available in the entire Therma Pahad Hills is to the tune of one lakh cum. against the total requirement of 8 lakh cum. for the entire dam. This was based on the detailed investigations and report of the Resident Geologist. Even this quantity can be extracted with much difficulty. Therma Pahad Quarry on the visual appearance and the random bore holes, initially appeared to be good. As such this was declared as quarry for masonry stone and accordingly estimates prepared and designated as the specified quarry in the quarry map enclosed along with the agreements. The contractors naturally could not have investigated the quarry by actual opening/ operation, and have inspected the quarry with the data available to them. Therefore neither department nor the contractor could have foreseen the non availability of useful stone in the required quantity from the designatedIt is therefore requested that the sanction may be obtained for payment of additional leads and communicated. However, the payment towards additional wasteful expenditure incurred in therma quarries as claimed by contractors is recommended for rejection.The Superintending Engineer brought the same to the notice of the Chief Engineer by a letter dated 18.12.1984 stating that there had always been a controversy regarding the use of those stones as rubble in masonry dam. A question was also raised as to whether the department would permit additional payment due to change in the quarry. If such a step is not taken, the contractor may put an end to the contract and, thus, inter alia requested that payment of additional leads from Katghora quarry may be allowed.14. It appears that even the Central Water Commission of the Government of India by a letter dated 04.05.1984 informed the Chief Engineer of the project to the followingr to your letter on the above mentioned subject. You have proposed to use stone from Therma Pahar quarry for the construction of the dam. Though the stone from this quarry has been approved as Granite, the Compressive strength of the stone from this quarry varies from 289 kg/cm to 373 kg/cm, which is very low. It is necessary that the reasons for such low strength for the Granite are investigated before deciding to use the same for the construction of the dam.By a letter dated 7.06.1983, the Executive Engineer of the Quality Control Division brought the following to the notice of the Superintending Engineer of the Quality Controlit is noticed the mica existing in the rocks under question varies from 7% to 11%. No mention of the permissible percentage of mica is given in IS codes or other books. Only Hand book on civil engineering by PN Khanna, reveals that 2% of mica is permissible. In view of the above it is submitted that the pigmetite band stones are not fit for use in masonry dam from quality control unit Machadolis point of view. This is, however, continuously used in masonry on dam blocks 16, 17, 18, 19, 25, 26, 27, 28, 29, 35, 37 in which work continuously in progress. If the higher authority deems it fit, that use of pigmetite is to be continued by overruling the opinion of the undersigned clear written instructions may kindly be issued to this office for guiding the A.R.Os. Quality Control deployed on Quality control work of masonry dam. Early reply is solicited.In view of the aforementioned development, the Chief Engineer of the Project brought the same to the notice of the Secretary of the Major, Medium and Minor Irrigation Department, Bhopal by a letter dated 11.01.1985 inter alia making the followingg the Chief Engineer for declaring Katghora quarry as an additional quarry for balance quantity of rubble quarry for rubble for masonry dam other than one lakh cubic meter of rubble, as assessed by the geologist to be extracted by the contractors from Therma Pahad quarry as far as possible in the contracts mentioned in this letter.(ii) To allow payment of additional leads from Katghora quarry for cum of masonry at the rates detailed in table at para 5.3with the said letter, various other documents were enclosed as specified therein including a letter dated 4.05.1990, wherein it was inter aliaIn view of the above, the Chief Engineer submitted proposals on 4.07.85 for Government Orders. According to the above proposals sanction to pay extra lead amounting to Rs. 1,23,23,767/- has been sought. This amount is about 3% of the total amount of contract of Rs. 41.77 crores. The Chief Engineer had also sought the opinion of the World Bank, and the World Bank gave a suggestion to deal the issue with in the contractual provisions. Similar problem has been raised by the contractors in Bansagar Project also, and the Executive Committee had recommended approval of lead payment.11. According to the Chief Engineers report, the Executive Engineers had reported that only 30% to 35% useful stones can be extracted which was not economical. This project is under construction with the World Bank assistance, will have to be completed on time, to supply water to the National Thermal Power Corporation, and also to the M.P.E.B. Power Station. In view of this stones have been brought from Katghora quarry situated at 22 Km. where sufficient quality of stones are available.In case, due to above reasons had the Agreements drawn been cancelled and new tenders recalled the cost would have been more. Further, precious time would have been lost in this process which would have affected the works and it would not be possible to supply water to N.T.P.C. and M.P.E.B.In a letter dated 14.02.1985 addressed to the Chief Engineer, the World Banke you have referred the matter to the Secretary, Irrigation Department, Bhopal for decision. We suggest that the matter be resolved within contractual limits.t thereto and in furtherance thereof, even the Progress Review Committee observed in its note dated 14.05.1985 asChief Engineer (HBP) explained his proposal submitted through his memo No. 1916/HB/84 dated 29/3/85. He gave the background of the change of quarry, in view of unexpectedly low yield of useful stone from the Therma Pahad quarry, approved in the technically sanctioned, sanctioned estimate and also on which basis tenders had been invited and contractors rates accepted. He informed the Committee that the total extra commitment for the various contracts worked out to Rs. 1.23 crores - approximately 3% of the total contract value.28. Financial Adviser observed that he had no offered any comments on the merit of the case, as then appeared to him essentially a claim case. PRC does not deal such claim cases.29. The Committee observed that the World Bank too vide their letter of 14/2/85 had suggested that the matter be resolved within contractual limits.30. In view of the above, the Committee did not examine the proposal of Chief Engineer and refrained from giving any comments in the matter at this stage.However, the contractors invoked the arbitration agreement contained in the said contract in the year 1987 and an ad hoc settlement was proposed.20. The matter was placed before the Financial Adviser. The Financial Adviser in his note dated 4.01.1991 to the Secretary, while stating that the Financial Adviser functions as a consultant offering comments on cases referred to him in the light of his background, experience and expertise and going by the facts placed before him which may not be treated as a substitute for vetting by the Finance Department wherever such vetting is required under the rules of governmental business, inter alia made the followinge the whole contract action was based on the presumption that the required quantity of material of required specification would be available from a quarry with in 12 KM of the work site, it can be reasonable assumed that the contractors have quoted their rates on this assumption. The departmental estimates were also based on this assumption. Since, later on, this assumption was found to be invalid and majority of the material had to be obtained from a quarry with an average lead of 22 KM from the work site as against 12 KM in respect of the contemplated quarry, the contractors have a reasonable case for additional payment on account of extra lead of the material brought by them from this second quarry. Thus, their claim is based on consideration of equity rather than there ofd thereto, the Financial AdviserSince the proposed settlement will amount to extra-contractual payment, it has to be ensured that the proposed settlement is acceptable to the contractors concerned. In other words, the settlement has to be a negotiated settlement and should not leave room for further disputes with the various contractors. Since the purpose of the whole exercise is to avoid arbitration it could even be ascertained if there are any other disputed issues in these contracts. If an overall settlement of all the disputes could be attempted and a sort of package deal is evolved in respect of each contract so that the contracts are finalized once for all leaving no scope for arbitration on the other hand if the contractors intend to take resort to arbitration for other issues, this issue could also go in for arbitration. A package approach would allow negotiation in a spirit or give and take for an over- all settlement of all disputes.e then Secretary (Irrigation) Shri M.S. Billore constituted a committee comprising of the Engineer-in-Chief P.V. Srinivasaiyah, the Chief Engineer, the Financial Adviser, Secretary (Control Board) and the Deputy Secretary, some of whom are Accused Nos. 3, 4,5 and 11.22. The said Committee submitted a report in respect whereof the Secretary made a note that the same be critically examined.The Officer on Special Duty noticed the recommendations of the Committee, which are ass the quarry has been changed by the Department due to Technical reasons the contractors cannot be held responsible.(ii) When the Department itself did not know about the quarrys unsuitability it will be unfair to expect the contractors to bring stones from the changed quarry at the same rates.(iii) Payment to the extent of actual quantity brought from the quarries bes of the Chief Engineer, the quantities under each agreement, the rate and the amount were also noticed. It wasit is proposed to approve payment for actual quantity and the Chief Engineer may be informed to take undertakings from the contractors before making theFinancial Adviser was asked to examine the said proposal in details. Some discussions apparently were held and it was found necessary to obtain the following information before taking decision at the governmentr the inspection of the Geologists how much quantity has been brought from Therma Pahad by each contractor.2. How much quantity has been brought from Katghora quarry.3. How the records are kept by the Department about the quantity of stones brought from differentt letter was also prepared.23. On or about 6.04.1991, one Shri Uday Shinde in his note stated that the Chief Engineer had not sent any detail in regard to Block 31-38 as in the agreement only Therma Pahar quarry had been shown for the balance work and as the original file was sent to the Honble Minister, it was not possible to deal with the case. The file was re-submitted and the amount payable to the contractor for additional lead was again put up for administrative approval. Yet again, the Engineering in-Chief Committee was asked to examine the matter.24. In a note to the Secretary dated 27.04.1991, the salient features in respect of the aforementioned matter were placed again to which Shri M.S. Billore by his note dated 1.05.1991 opinedt decision has already been informed to the Chief Engineer, Hasdeo Bango Project through government letter No: 9/CP/B/31/89/319, Bhopal dated 28.2.89. Hence, any action at government level is not pending in this case and Chief Engineer to take action in this case as per government order., the respondent No. 1 who was Minister at the relevant point of time sat over the file for a period of about six months. He on 4.11.1991e studied the case. Whenever any opinion has been sought by the Secretary, from whichever authority, they gave their opinion as per their wisdom. Every time the Secretary has been seeking the opinion from one after another officer. In this process he spent a period of one year between 3.5.90 to 1.5.91. In accepting the opinion or recommending any action, it was expected from the Secretary to take into consideration the fact that the opinions had been given as per their wisdom. Therefore, question does not arise to take any action against the subordinate officers.No basis appears for the Secretary to take a totally different view than the unanimous opinions. Therefore, it is necessary to investigate the basis on which the Secretary Shri Billore had rendered his opinion.The new Secretary to study the case and give opinion.t thereto or in furtherance thereof, the respondent No. 2 Shri D.V.S.R. Sarma submitted a report upon constitution of a Committee,e to technical reasons, the department has changed the quarry. Therefore, its liability should not be upon the contractors.(ii) When the Department had not any knowledge about the quarry, and to expect this that even under the changed quarry the contractor should fetch/ transport the stones at the same rate, is also not proper.(iii) Where & Where (sic) and for that much of the quantities, the materials have been brought from a quarry at more distance, it is proper to make payment for that much excess distance.The respondent No.1 approved the said note of the respondent No. 2 on or about 20.01.1992 whereupon the amount in question was sanctioned.28. Thereafter, the accounts were audited and one Shri G.K. Shukla, Deputy Accountant Generale clause of the agreement noted above and the quarry chart clearly bring out that in the event of change of quarry on whatever reasons no claim will be entertained and contractor should before quoting rates, visit the quarry site and satisfy himself regarding quantity and quality of the material available. Thus, the sanction appears a negotiated settlement beyond the contractual provisions, for which concurrence of Finance Department ought to have been obtained.b) The PRC considered this as a claim case which was to be decided by Arbitrator under M.P. Adhikaran Adhiniyan, 1983.c) The Member, World Bank suggested to resolve the matter within the contractual limits.d) The Secretary Irrigation had earlier rejected the case as it was not admissible.e) The rates quoted by the contractors were inclusive of all lead and lift, being item rater General of India also took note of the said report,in spite of the report of the Geologist that the good quality of stone was available in sufficient quantities in the upper portion of the quarry situated in the hill mentioned in the agreement and in spite of there being specific provision in the agreements that no additional payment would be acceptable in the event of change in leads or change in quarry, the payments made to the contractors were irregular and resultantly made additional gains of Rs. 102.46 lacs to them.t thereto or in furtherance thereof, a complaint was lodged. The matter was investigated by the Special Police Establishment. They collected all the materials and filed a chargesheet in the Court of learned Special Judge on 27.03.1997. The case was registered as Special Case No. 6 of 1997.30. By an order dated 13.05.1997, the learned Special Judge took cognizance of the case,As none of the accused is a public servant, no sanction was required to be obtained in terms of Section 19 of the Act.(ii) Criminal misconduct relating to corrupt practice under Section 13(1)(d)(ii-iii) of the Act has nothing to do with normal activity and work under government duty of any public servant at any time.In the year 1997, the respondent Nos. 1 and 2 had filed a revision application before the High Court.32. The Special Judge framed charges against the respondents on or about 29.07.1999; a sample copy whereof reads ase working as Minister In-charge, Ministry of Water Resources, Government of Madhya Pradesh from June 1990 to September 1992. On the recommendatory note of Shri D.V.S.R. Sharma ignoring the letter dated 14.02.85 of the Finance Branch of World Bank and earlier decision dated 18.02.85 according to which the case of extra lead was to be decided within the ambit of the contract in respect of payment of extra lead to the concerned Tender Contractors for transportation of stones used in construction work of masonry non-flow dam upstream in Hasdeo Bango Project. You in conspiracy with the employees and Tender Contractors accorded administrative sanction and payment of one crore two lac forty six thousand two hundred rupees was made to the Contractors towards extra lead. Hence, you while holding the post of public servant misusing the position of the post provided financial benefit to the Tender Contractors without public interest.Your above act being offence under Section 13(1)(D)(ii-iii), the Prevention of Corruption Act, 1988 is punishable under Section 13(2) the Prevention of Corruption Act, 1988. In the alternative, you in criminal conspiracy with Shri D.V.S.R. Sharma, Secretary, working in the Ministry of Water Resources, Government of Madhya Pradesh and other employees and contractors acted as mentioned above, which is punishable under Section 13(1)(D)(ii and iii) read with Section 120B IPC, which is within the jurisdiction of this Court.Hence, I hereby direct that you will be tried for the offence mentioned above by this Court.d by and dissatisfied therewith, the respondents filed revision applications before the High Court, which by reason of the impugned order have been allowed. The State is, thus, before

Reasoning: 47. From the materials available on record, it is crystal clear that the decision taken was a collective one. The decision was required to be taken in the exigency of the situation. It may be an error of judgment but then no material has been brought on record to show that they did so for causing any wrongful gain to themselves or to a third party or for causing wrongful loss to the State.While saying so, we are not oblivious of the fact that often conspiracy is hatched in secrecy and for proving the said offence substantial direct evidence may not be possible to be obtained. An offence of criminal conspiracy can also be proved by circumstantialgist of the offence of conspiracy then lies, not in doing the act, or effecting the purpose for which the conspiracy is formed, nor in attempting to do them, nor in inciting others to do them, but in the f+orming of the scheme or agreement between the parties. Agreement is essential. Mere knowledge, or even discussion, of the plan is not, per seThus, it is manifest that the meeting of minds of two or more persons for doing an illegal act or an act by illegal means is sine qua non of the criminal conspiracy but it may not be possible to prove the agreement between them by direct proof. Nevertheless, existence of the conspiracy and its objective can be inferred from the surrounding circumstances and the conduct of the accused. But the incriminating circumstances must form a chain of events from which a conclusion about the guilt of the accused could be drawn. It is well settled that an offence of conspiracy is a substantive offence and renders the mere agreement to commit an offence punishable even if an offence does not take place pursuant to the illegalfacie, there is no material to show that a conspiracy had been hatched by thehave noticed hereinbefore that the Minister in his note dated 4.11.1991 did not make any recommendation. He merely lamented the manner in which the former Secretary Mr. M.S. Billore acted as prior thereto, the said authority himself for all intent and purport had accepted the recommendations of the authorities incharge of construction of the dam including the Chief Engineer. He constituted a committee. He obtained the opinion of the Financial Adviser. If upon consideration of the entire materials on record, independent opinion had been rendered and recommendations were made, it is difficult to comprehend as to how that by itself would constitute a criminal misconduct or leads to the conclusion of hatching any criminal conspiracy. Recommendations made by the Committee or the opinion rendered by an independent officer like Financial Adviser need not be acted upon. It was for the State to take a decision. Such a decision was required to be taken on the basis of the materials available.In this case, the probative value of the materials on record has not been gone into. The materials brought on record have been accepted as true at this stage. It is true that at this stage even a defence of an accused cannot be considered. But, we are unable to persuade ourselves to agree with the submission of Mr. Tulsi that where the entire materials collected during investigation have been placed before the court as part of the chargesheet, the court at the time of framing of the charge could only look to those materials whereupon the prosecution intended to rely upon and ignore the others which are in favour of the accused. The question as to whether the court should proceed on the basis as to whether the materials brought on record even if given face value and taken to be correct in their entirety disclose commission of an offence or not must be determined having regard to the entirety of materials brought on record by the prosecution and not on a part of it. If such a construction is made, Sub-section (5) of Section 173 of the Code of Criminal Procedure shall become meaningless.The prosecution, having regard to the right of an accused to have a fair investigation, fair inquiry and fair trial as adumbrated under Article 21 of the Constitution of India, cannot at any stage be deprived of taking advantage of the materials which the prosecution itself has placed on record. If upon perusal of the entire materials on record, the court arrives at an opinion that two views are possible, charges can be framed, but if only one and one view is possible to be taken, the court shall not put the accused to harassment by asking him to face a trial.For the purpose of attracting the provisions of Section 197 of the Code of Criminal Procedure, it is not necessary that they must act in their official capacity but even where a public servant purports to act in their official capacity, the same would attract the provisions of Section 197 of the Code of Criminal Procedure.Thus, in this case, sanction for prosecution in terms of Section 197 of the Code of Criminal Procedure was required to be obtained.From the materials available on record, it is crystal clear that the decision taken was a collective one. The decision was required to be taken in the exigency of the situation. It may be an error of judgment but then no material has been brought on record to show that they did so for causing any wrongful gain to themselves or to a third party or for causing wrongful loss to the State.e saying so, we are not oblivious of the fact that often conspiracy is hatched in secrecy and for proving the said offence substantial direct evidence may not be possible to be obtained. An offence of criminal conspiracy can also be proved by circumstantialt of the offence of conspiracy then lies, not in doing the act, or effecting the purpose for which the conspiracy is formed, nor in attempting to do them, nor in inciting others to do them, but in the f+orming of the scheme or agreement between the parties. Agreement is essential. Mere knowledge, or even discussion, of the plan is not, per se, it is manifest that the meeting of minds of two or more persons for doing an illegal act or an act by illegal means is sine qua non of the criminal conspiracy but it may not be possible to prove the agreement between them by direct proof. Nevertheless, existence of the conspiracy and its objective can be inferred from the surrounding circumstances and the conduct of the accused. But the incriminating circumstances must form a chain of events from which a conclusion about the guilt of the accused could be drawn. It is well settled that an offence of conspiracy is a substantive offence and renders the mere agreement to commit an offence punishable even if an offence does not take place pursuant to the illegal, there is no material to show that a conspiracy had been hatched by thee noticed hereinbefore that the Minister in his note dated 4.11.1991 did not make any recommendation. He merely lamented the manner in which the former Secretary Mr. M.S. Billore acted as prior thereto, the said authority himself for all intent and purport had accepted the recommendations of the authorities incharge of construction of the dam including the Chief Engineer. He constituted a committee. He obtained the opinion of the Financial Adviser. If upon consideration of the entire materials on record, independent opinion had been rendered and recommendations were made, it is difficult to comprehend as to how that by itself would constitute a criminal misconduct or leads to the conclusion of hatching any criminal conspiracy. Recommendations made by the Committee or the opinion rendered by an independent officer like Financial Adviser need not be acted upon. It was for the State to take a decision. Such a decision was required to be taken on the basis of the materials available.In this case, the probative value of the materials on record has not been gone into. The materials brought on record have been accepted as true at this stage. It is true that at this stage even a defence of an accused cannot be considered. But, we are unable to persuade ourselves to agree with the submission of Mr. Tulsi that where the entire materials collected during investigation have been placed before the court as part of the chargesheet, the court at the time of framing of the charge could only look to those materials whereupon the prosecution intended to rely upon and ignore the others which are in favour of the accused. The question as to whether the court should proceed on the basis as to whether the materials brought on record even if given face value and taken to be correct in their entirety disclose commission of an offence or not must be determined having regard to the entirety of materials brought on record by the prosecution and not on a part of it. If such a construction is made, Sub-section (5) of Section 173 of the Code of Criminal Procedure shall become meaningless.The prosecution, having regard to the right of an accused to have a fair investigation, fair inquiry and fair trial as adumbrated under Article 21 of the Constitution of India, cannot at any stage be deprived of taking advantage of the materials which the prosecution itself has placed on record. If upon perusal of the entire materials on record, the court arrives at an opinion that two views are possible, charges can be framed, but if only one and one view is possible to be taken, the court shall not put the accused to harassment by asking him to face a trial.For the purpose of attracting the provisions of Section 197 of the Code of Criminal Procedure, it is not necessary that they must act in their official capacity but even where a public servant purports to act in their official capacity, the same would attract the provisions of Section 197 of the Code of Criminal Procedure., in this case, sanction for prosecution in terms of Section 197 of the Code of Criminal Procedure was required to be obtained.