stipulates that a public servant is said to commit the offence of
criminal misconduct if he, by abusing his position as a public
servant, obtains for himself or for any other person any valuable
thing or pecuniary advantage. Thus, the ingredients which will be
required to be proved are:
(1) The public servant has abused his position.
(2) By abusing that position, he has obtained for himself or for
any other person any valuable thing or pecuniary advantage. In C. Chenga Reddy & Ors. v. State of A.P., (1996) 10 SCC 193,
this Court held that even when codal violations were established
and it was also proved that there were irregularities committed by
allotting/ awarding the work in violation of circulars, that by itself
was not sufficient to prove that a criminal case was made out. The
Court went on to hold:
“22. On a careful consideration of the material on
the record, we are of the opinion that though the
prosecution has established that the appellants
have committed not only codal violations but also
irregularities by ignoring various circulars and
departmental orders issued from time to time in the
matter of allotment of work of jungle clearance on
nomination basis and have committed
departmental lapse yet, none of the circumstances
relied upon by the prosecution are of any
conclusive nature and all the circumstances put
together do not lead to the irresistible conclusion
that the said circumstances are compatible only
with the hypothesis of the guilt of the appellants
and wholly incompatible with their innocence. In
Abdulla Mohd. Pagarkar v. State (Union Territory of
Goa, Daman and Diu), (1980) 3 SCC 110, under
somewhat similar circumstances this Court opined
that mere disregard of relevant provisions of the
Financial Code as well as ordinary norms of
procedural behaviour of government officials and
contractors, without conclusively establishing,
beyond a reasonable doubt, the guilt of the officials
and contractors concerned, may give rise to a
strong suspicion but that cannot be held to
establish the guilt of the accused. The established
circumstances in this case also do not establish
criminality of the appellants beyond the realm of
suspicion and, in our opinion, the approach of the
trial court and the High Court to the requirements of
proof in relation to a criminal charge was not
proper....”
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 131 OF 2007
A. SIVAPRAKASH
VERSUS
STATE OF KERALA .
Dated:MAY 10, 2016
Four persons were implicated as accused persons in FIR
registered on 09.09.1993 under Sections 13(2) read with 13(1)(d)
of the Prevention of Corruption Act, 1988 (hereinafter referred to
as the 'PC Act') and Section 409 read with Section 34 of Indian
Penal Code ('IPC'). After investigation, when the chargesheet
was filed on 19.01.1998, one more person (who is the appellant
before us) was also added as an accused. Chargesheet was filed
under Section 13(2) read with 13(1)(d) of the PC Act and under
Sections 468 and 471 read with Section 34 of IPC. Charges were
framed by the trial Court against the accused persons. Matter
Criminal Appeal No. 131 of 2007 Page 1 of 14Page 2
went on trial and resulted in acquittal of A-2 and A-3 from all the
charges and conviction of A-1, A-4 and A-5 (i.e. the appellant)
under Sections 13(2) read with 13(1)(d) of the PC Act. These
accused persons i.e. A-1, A-4 and A-5 were, however, acquitted of
the charges under Sections 468 and 471 read with Section 34 of
IPC.
2) No appeal was filed by the State against the acquittal of A-2 and
A-3. A-1, A-4 and A-5 filed appeals in the High Court challenging
their conviction. A-1 and A-4 passed away during the pendency
of their appeals and, therefore, those appeals have abated. Thus,
it is only the appellant who remains in the fray. His appeal was
taken up by the High Court for hearing and was ultimately
dismissed by the High Court vide the impugned judgment dated
25.05.2006. Thus, in this appeal, we are only concerned with A-5
(the appellant). With these introductory remarks, we advert to the
meat of the matter.
3) The appellant was working as Assistant Engineer in the Public
Works Department (PWD) attached to Arudai, NES Block within
the jurisdiction of which Vandiperiyar Panchayat situates. The
said Panchayat decided to construct the first floor of the existing
high school building situated in the Panchayat area, by including
Criminal Appeal No. 131 of 2007
the work under Jawahar Rozgar Yojana (JRY). As per the
procedure followed under the D.R.D. Scheme the work was
included in the JRY to be carried out by a nominee selected from
the beneficiary of the work. Accordingly, one Rajarathinam (A-3)
was selected as nominee, awarding the said work of construction.
Appropriate agreement was executed by him. The total estimate
was for Rs. 4 lakhs which was to be met out of the fund of JRY
and of Panchayat. Payment for the work was to be effected as
per the guidelines issued by the Government including Ex. P/17
which provided that the Panchayat could make advance payment
upto 50% of the estimate amount. It was also mentioned therein
non-adherence to the aforesaid procedure would be termed as
irregular.
4) The case of the prosecution was that all the accused persons
colluded together and A-1, A-2 and A-4 disbursed the amount to
A-3, the nominee, on the basis of the 'stage certificate' which was
issued by A-5, the Assistant Engineer in respect of the part
completion of the work. Ex. P/16(a) was treated as the stage
certificate, which in fact is the letter dated 9.6.1992 wherein the
appellant had certified that 25% of the work in question had been
completed. Payments were effected to the nominee on
Criminal Appeal No. 131 of 2007
25.03.1992, 21.04.1992, 16.05.1992 and 21.10.1992 at the rate of
Rs.25,000/-, Rs. 50,000/-, Rs.7,000/- and Rs. 1 lakh. Payments
were effected by Ex.P/7, P/10, P/12 and P/14 respectively. The
prosecution alleged that the last and largest of these payments,
i.e. Rs. 1 lakh, was made on the basis of purported 'stage
certificate' [Ex.P/16(a)] issued by the appellant. It was alleged
that the false stage certificate was issued as 25% of the work had
not been completed. In this way, the appellant abused his official
position to obtain pecuniary advantage.
5) In nutshell, the gravamen of the charge against the appellant is
that while working as the Assistant Engineer, he issued stage
certificate in respect of the contract that was awarded to A-3 and
on the basis of these certificates, payment to the extent of 50% of
the contract value was received by A-3. As per the prosecution,
that was the false certificate which did not depict the correct
progress or the position of the work. This was surfaced on the
inspection of the work which was carried out by PW-2 on the
direction of Deputy Superintendent of Police (Vigilance) wherein it
was found that the work completed was only to the extent of
Rs.42,649.89, that too as on the date of inspection which was
much after the date on which stage certificates were issued by the
Criminal Appeal No. 131 of 2007
appellant. Since the contract value was Rs.4 lakhs, even on the
date of inspection only 10% work was completed.
6) Entire case of the prosecution rested on Ex.P16(a) coupled with
the Inspection Report (Ex.PW2). On the basis of the aforesaid
documentary evidence produced on record, the trial court came to
the conclusion that in issuing the certificate (Ex.P/16(a)), the
appellant had abused his official position only to enable either for
himself or for others to obtain peculiar advantage and, therefore,
guilty of offence punishable under Section 13(1)(d) of the PC Act.
Trial Court, accordingly, sentenced the appellant to undergo
rigorous imprisonment for the period of two years and to pay fine
of Rs.75,000/- and in default to undergo rigorous imprisonment for
a further term of 1½ years under Section 13(2) read with Section
13(1)(d) of the PC Act.
7) Challenging the conviction and sentence imposed by the trial
court, the appellant in his appeal to the High Court contended that
there was no evidence on record to reveal that payments were
made on the basis of the said letter dated 9.6.1992 [Ex.P/16(a)],
wrongly termed as 'stage certificate'. It was also argued that this
letter was not the basis for making payments as payments were
effected either before or after the date of Ex.P/16(a). It was also
Criminal Appeal No. 131 of 2007
argued that payments were not dependent upon the stage at
which the work was and the advance payment upto 50% could be
released at the start of the work. Itself, as per the procedure laid
down.
8) The High Court did not find any merit in the aforesaid arguments
of the appellant. It concurred with the findings of the trial court
and held that there was hardly any work done at the spot by A-3
when he was released the payments. Ex.P/2 which was the
report prepared by PW-2 on 19.07.1994 showed that only Pillar
work had been completed and the cost of the said work was to
the tune of Rs.42649.89. The High Court accepted the contention
of the appellant that payments of Rs.25,000/-, Rs.50,000/- and
Rs.7,000/- were made to A-3 before the issuance of Ex.P/16(a).
However, it held that after the issuance of the said certificate, an
amount of Rs.1 lakh (largest among the payments made) was
released in favour of A-3 on 21.10.1992. The High Court also
conceded the position that Ex.P/16(a) could not be termed as
'stage certificate' as it was accepted even by PW-4 that it was not
a stage certificate. Notwithstanding that, the High Court opined
that the appellant being a responsible officer knew how the stage
certificate is to be issued. In spite thereof he issued Ex.P/16(a)
Criminal Appeal No. 131 of 2007
which was the letter to the Panchayat informing the Panchayat
that the percentage valuation cost of completion of one work was
75% (with which we are not concerned) and that of other work, it
was 25% and this information was obviously furnished for the
purposes of releasing payment to A-3. From this, the High Court
concluded that the appellant intended that payment be released
on the basis of said certificate and writing of this letter (allegedly
termed as certificate) amounted to abusing his official position.
These are the reasons given by the High Court in dismissing the
appeal of the appellant.
9) Mr. R. Basant, learned senior counsel appearing for the appellant,
made a vehement plea that the trial court as well as the High
Court has totally misread the circular pertaining to JRY under
which such payments are to be released and a proper reading of
the provisions of the said circular would manifest that the
appellant had no role in making the payment, by the Panchayat,
to A-3. He referred to the chargesheet and argued that what was
stated in the chargesheet was totally different from what was
ultimately held against him.
10) Learned counsel for the respondent, on the other hand, justified
the reasoning given by the trial court as well as by the High Court
Criminal Appeal No. 131 of 2007
in support of their conclusion.
11) We have considered the respective submissions with reference to
the record.
12) It is not in dispute that two works were awarded to A-3: one was
known as “JRY – consignment semi permanent building in
Vandiperiyar” and other was known as “JRY – construction of
permanent building in Vandiperiyar”. In the present case, we are
concerned with release of payments to A-3 in respect of second
work contract. As is clear from the nomenclature of these two
contracts, they were under JRY. The Commissioner, Village
Development, Thiruvananthapuram had issued Circular No.
14514/J.R.Y. 1/91/C.R.D. dated 23.04.1991 which prescribes the
procedure for implementation of JRY and contains certain
suggestions. Para 2 thereof is relevant for our purposes which
mentions about the manner in which 50% of the advance can be
released by the Panchayat. It reads as under:
“2. It was directed that for all works under J.R.Y.
contractors shall be avoided and the works shall be
directly taken up by the panchayats or by the
convenors elected by the consumers. It was
directed that the amount for such works will be paid
in advance. As per the circular of village
Development Commissioner No. 29786/J.R.Y
1/90/CRD dated 23.7.1999, instructions have been
issued to panchayats to give necessary funds in
advance. By this way preparing bills every now
Criminal Appeal No. 131 of 2007
and then can be avoided and the 50% of
estimated cost can be given in advance. But
such funds have to be sanctioned considering
the work in hand in part installments.
Otherwise without starting a project work 50%
advance expenditure cannot be given in
advance. To do so will not be in order. Money
required to start a work can be given in advance
and as the work progresses according to the work,
more funds can be sanctioned. Funds entrusted
with the panchayats for the works of JRY are
included in the public funds and the panchayats are
reminded that unnecessary withdrawals from such
funds would tantamount temporary misutilisation of
public funds. When 50% of budget work is given
as advance and when works are completed, a part
bill can be prepared and advance amount can be
written off against completed works. Panchayats
are further informed that without preparing part bill
more than 50% advance payment cannot be
allowed and doing so would amount to
misutilisation of Government funds.”
13) Based on the aforesaid paragraph, submission of Mr. Basant was
that it was permissible for the Panchayat to release 50% of the
estimated cost of the Project as advance payment, though it was
to be sanctioned only after the project/work has started. This
Circular, however, mentioned that money required to start the
work can be given in advance and as the work progresses, more
funds can be sanctioned. He, thus, submitted that release of 50%
payment was not contingent upon the stage of the execution of
the work, but on the mere start of the work.
14) There appears to be merit in the aforesaid submission of the
Criminal Appeal No. 131 of 2007
learned senior counsel. PW-4 who was the Assistant Executive
Engineer in his deposition has categorically admitted that in JRY
Scheme Work, there is a provision to give advance amount of
50% of work. The total cost of the work in question, for which the
payments were made, was Rs. 4 lakhs and 50% thereof comes to
Rs. 2 lakhs.
15) Ex.P/16(a) which is dated 09.06.1992 shows that this letter was
written on the request of Panchayat President as it start with the
words “as requested by you.......”. In respect of work in question,
it is averred that “...Also the percentage valuation cost of the JRY
construction of permanent building in Vandiperiyar is 25 (twenty
five only).” Prior to the writing of this letter, A-3 had already
released three payments of Rs.25,000/-, Rs.50,000/- and
Rs.7,000/-. Thus, it is nobody's case that those payments were
made to A-3 on the basis of any 'stage certificate' or any such
letter issued by the appellant. Thus, much before the issuance of
Ex.P/16(a), A-3 was given the payment of Rs.82,000/-. As noted
above, as per circular dated 23.04.1991, payment could not be
made without starting a project/work. It means that as per
Panchayat itself, A-3 had started work which resulted in the
aforesaid payment. Once the work is started, Panchayat was
Criminal Appeal No. 131 of 2007
empowered to release advance to the extent of 50% of the
estimated cost, i.e. up to Rs. 2 lakhs. Thus, Panchayat could
have made further payment of Rs.1,18,000/- even without
Ex.P/16(a). Payment of Rs.1 lakh was made on 09.06.1992,
which was well within defined limits.
16) In this hue, let us consider the nature of Ex.P/16(a). It is issued
on the request of Panchayat President. It mentions that
“valuation cost” of the said project is 25%. This letter never stated
that A-3 had 'completed' 25% work. It only mentioned “valuation
cost”. A specific plea was raised by the appellant that it was the
cost which was mentioned by him and that included the cost of
material as well which was brought on site by A-3. High Court
rejected this argument which is clearly erroneous. It was equally
wrong in terming it as the stage certificate. The High Court
wrongly proceeded on the basis that advance payment could be
given only on installment basis depending upon the percentage of
the work completed. We, thus, are of the opinion that there is no
causal connection between release of payment to A-3 and letter
Ex.P/16(a).
17) Section 13(1)(d) of the PC Act reads as under:
“13. Criminal misconduct by a public servant
Criminal Appeal No. 131 of 2007
(1) A public servant is said to commit the offence of
criminal misconduct,-
xxxx
(d) If he,-
(i) by corrupt or illegal means, obtains for himself
or for any other person any valuable thing or
pecuniary advantage; or
(ii) by abusing his position as a public servant,
obtains for himself or for any other person any
valuable thing or pecuniary advantage; or
(iii) while holding office as a public servant, obtains
for any person any valuable thing or pecuniary
advantage without any public interest; or”
The prosecution has sought to cover the case of the
appellant under sub-clause (ii) and not under sub-clause (i) and
sub-clause (iii). Insofar as sub-clause (ii) is concerned, it
stipulates that a public servant is said to commit the offence of
criminal misconduct if he, by abusing his position as a public
servant, obtains for himself or for any other person any valuable
thing or pecuniary advantage. Thus, the ingredients which will be
required to be proved are:
(1) The public servant has abused his position.
(2) By abusing that position, he has obtained for himself or for
any other person any valuable thing or pecuniary advantage.
18) It was not even the case set up by the prosecution that appellant
had taken that money from some person and had obtained any
Criminal Appeal No. 131 of 2007
pecuniary advantage thereby. It was the obligation of the
prosecution to satisfy the aforesaid mandatory ingredients which
could implicate the appellant under the provisions of Section 13(1)
(d)(ii). The attempt of the prosecution was to bring the case
within the fold of clause (ii) alleging that he misused his official
position in issuing the certificate utterly fails as it is not even
alleged in the chargesheet and not even iota of evidence is led as
to what kind of pecuniary advantage was obtained by the
appellant in issuing the said letter.
19) In C. Chenga Reddy & Ors. v. State of A.P., (1996) 10 SCC 193,
this Court held that even when codal violations were established
and it was also proved that there were irregularities committed by
allotting/ awarding the work in violation of circulars, that by itself
was not sufficient to prove that a criminal case was made out. The
Court went on to hold:
“22. On a careful consideration of the material on
the record, we are of the opinion that though the
prosecution has established that the appellants
have committed not only codal violations but also
irregularities by ignoring various circulars and
departmental orders issued from time to time in the
matter of allotment of work of jungle clearance on
nomination basis and have committed
departmental lapse yet, none of the circumstances
relied upon by the prosecution are of any
conclusive nature and all the circumstances put
together do not lead to the irresistible conclusion
that the said circumstances are compatible only
with the hypothesis of the guilt of the appellants
and wholly incompatible with their innocence. In
Abdulla Mohd. Pagarkar v. State (Union Territory of
Goa, Daman and Diu), (1980) 3 SCC 110, under
somewhat similar circumstances this Court opined
that mere disregard of relevant provisions of the
Financial Code as well as ordinary norms of
procedural behaviour of government officials and
contractors, without conclusively establishing,
beyond a reasonable doubt, the guilt of the officials
and contractors concerned, may give rise to a
strong suspicion but that cannot be held to
establish the guilt of the accused. The established
circumstances in this case also do not establish
criminality of the appellants beyond the realm of
suspicion and, in our opinion, the approach of the
trial court and the High Court to the requirements of
proof in relation to a criminal charge was not
proper....”
20) We, therefore, are of the opinion that the prosecution has
miserably failed to prove the charge beyond reasonable doubt
and the courts below have not looked into the matter in a proper
perspective. We, thus, allow this appeal and set aside the
conviction of the appellant. The appellant is already on bail. His
bail bonds shall stand discharged.
.............................................J.
(A.K. SIKRI)
.............................................J.
(PRAFULLA C. PANT)
NEW DELHI;
MAY 10, 2016
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