# C. CHENGA REDDY AND ORS v. STATE OF ANDHRA PRADESH

- **Citation:** [1996] Supp. 3 S.C.R. 479
- **Court:** Supreme Court of India
- **Decided:** 1996-07-12
- **Case number:** Criminal Appeal H Nos. 52-105, 107-175 of 1993
- **Bench:** G.N. Ray, Dr. A.S. Anand
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/c-chenga-reddy-and-ors-v-state-of-andhra-pradesh-14684
- **Pages:** 52

## Headnote

B
Indian Penal Code, 1860 : Sections 120-B, 420/34 and 477-A.
Prevention of Co1111ption Act, 1947: Sections 5(2) and (J)(d).
c
State of Andhra Pradesh--Governnzent Engineers and Contracton-Prosecution for e1iminal conspirac;-Clieating and falsification of accounts-Allegation of committing large scale illegalities, i1regularities and
fraud in jungle clearance work-{;ase against all the accused rested on
circun1stantial evidenc~But circunistantial evidence not ]Jroving guilt of
accused beyond doubt--Conviction of accused and sentence iniposed set D
aside.
Evidence Act, 1872 :
Circunistantial evidence--Conviction based UJJon--Validity of-Extent
of proof required in circunzstantial evidence.
E
Section 45-E.xpert-Who is.
C!iminal Procedure Code, 1973:
F
Sections 161 and 162-Applicability of-Statements made dwing investigation-Pennissibility of us~Alleged offences against Govemmenl officials-Investigation of-Depart111ental official assisting the lnve.\u·gurion
Office1--Report by Depmtmelllal official prepared dwing investigation and
submitted after lodging of FIR-Said Officer examined by Investigation Officer-Submission of report-His repo11 fanned part of his statement recorded
u11der section 161-Held his report was hit by the bar co11tained in section G
162 and hence inadmissible in evidence-Held he was not expe11 within the
memzing of section 45 of Evidence Act.
C!iminal Trial-Establislunent of guilt of acrnsed-&tent of proof
required-Proof must establish guilt beyond a reasonable doubt-Suspicion
however strong ca1111ot take the place of proof.
H
479
480
SUPREME COURT REPORTS [1996] SUPP. 3 S.C.R.
A
Constitution of India, 1950:
B
A1ticle 136--Appeal by special leavi~Reappreciation of evidence by
Supreme Cowt-Numwl/y it would not da-But it would reappreciate
evidence lvhere conclusion of Colats below is based on conjectures and or
sunnises.
Anicle 142-Power of Supreme Court to do complete justice between
the parties--Govemment employees-Clwrge of forge1y and corruption-Violation of P. WD Code and circulm~ established-But no dishonest
intention-(;onviction by Courts below-Acquittal by Supreme Co1111-Instead
C of re111itting the n1aller Cozat itself bnposing punislunent for doing conzplete
justice between the pmties-Direction that officials would be entitled to
reinstalen1ent lvith pensiona1y benefits but not to back wages.
D
Service Laiv-Misconduct-Punislunent-Propo1tionate to the gravity of
offence.
Govemment officials-Violation of code and circulars-Dishonest intention not proved-Held 111ere violation cannot be const1ued as incriniinating
circzanstance to fasten c1i1ninal liability.
'rhe appellants working as Executive Engineers, De11uty Executive
E Engineers and Section Otlicers in the Irrigation Circle, Nellore, State of
Andhra Pradesh, along\\'ith some contractors, were prosecuted under sec~
tions 120-B, 420/34 and 477N34 of the Indian Penal Code, 1860 read with
section 5(2) and S(l)(d) of the Prevention of Corruption Act. They were
alleged to have committed large scale fraud, irregularities and illegalities
F
in the execution of jungle clearance work in respect of Gandipalem Project
Division, Nellore South Division and Nellore North Division during 19781981.
The Deputy Engineer-in-Chief, PW-7, who conducted the preliminary
inquiry and the Chief Engineer, PW-1, who conducted the departmental
G enquiry highlighted the irregularities and illegalities noticed by them in
their respective reports. Simultaneously investigation was also entrusted
to the Anti- Corruption Bureau which conducted an inquiry. Some serving
Otlicers of the Engineering Department were deputed to assist the otlicers
of the Anti-Corruption Bureau for purposes of collecting technical data
H during investigation.
C.CHENGAREDDY v. STATE
481 .
After completion of investigation, charge-sheets were filed against A
the appellants. There \\'as no direct evidence available on record connect~
ing any of the appellants with the Commission of the crime alleged against
the

## Text

_Characters 0–39,608 of 131,139. This is a partial read: ask again with offset=39608 for what follows._

C. CHENGA REDDY AND ORS.
A
v.
STATE OF ANDHRA PRADESH
JULY 12, 1996
[G.N. RAY AND DR. A.S. ANAND, JJ.]
B
Indian Penal Code, 1860 : Sections 120-B, 420/34 and 477-A.
Prevention of Co1111ption Act, 1947: Sections 5(2) and (J)(d).
c
State of Andhra Pradesh--Governnzent Engineers and Contracton-Prosecution for e1iminal conspirac;-Clieating and falsification of accounts-Allegation of committing large scale illegalities, i1regularities and
fraud in jungle clearance work-{;ase against all the accused rested on
circun1stantial evidenc~But circunistantial evidence not ]Jroving guilt of
accused beyond doubt--Conviction of accused and sentence iniposed set D
aside.
Evidence Act, 1872 :
Circunistantial evidence--Conviction based UJJon--Validity of-Extent
of proof required in circunzstantial evidence.
E
Section 45-E.xpert-Who is.
C!iminal Procedure Code, 1973:
F
Sections 161 and 162-Applicability of-Statements made dwing investigation-Pennissibility of us~Alleged offences against Govemmenl officials-Investigation of-Depart111ental official assisting the lnve.\u·gurion
Office1--Report by Depmtmelllal official prepared dwing investigation and
submitted after lodging of FIR-Said Officer examined by Investigation Officer-Submission of report-His repo11 fanned part of his statement recorded
u11der section 161-Held his report was hit by the bar co11tained in section G
162 and hence inadmissible in evidence-Held he was not expe11 within the
memzing of section 45 of Evidence Act.
C!iminal Trial-Establislunent of guilt of acrnsed-&tent of proof
required-Proof must establish guilt beyond a reasonable doubt-Suspicion
however strong ca1111ot take the place of proof.
H
479
480
SUPREME COURT REPORTS [1996] SUPP. 3 S.C.R.
A
Constitution of India, 1950:
B
A1ticle 136--Appeal by special leavi~Reappreciation of evidence by
Supreme Cowt-Numwl/y it would not da-But it would reappreciate
evidence lvhere conclusion of Colats below is based on conjectures and or
sunnises.
Anicle 142-Power of Supreme Court to do complete justice between
the parties--Govemment employees-Clwrge of forge1y and corruption-Violation of P. WD Code and circulm~ established-But no dishonest
intention-(;onviction by Courts below-Acquittal by Supreme Co1111-Instead
C of re111itting the n1aller Cozat itself bnposing punislunent for doing conzplete
justice between the pmties-Direction that officials would be entitled to
reinstalen1ent lvith pensiona1y benefits but not to back wages.
D
Service Laiv-Misconduct-Punislunent-Propo1tionate to the gravity of
offence.
Govemment officials-Violation of code and circulars-Dishonest intention not proved-Held 111ere violation cannot be const1ued as incriniinating
circzanstance to fasten c1i1ninal liability.
'rhe appellants working as Executive Engineers, De11uty Executive
E Engineers and Section Otlicers in the Irrigation Circle, Nellore, State of
Andhra Pradesh, along\\'ith some contractors, were prosecuted under sec~
tions 120-B, 420/34 and 477N34 of the Indian Penal Code, 1860 read with
section 5(2) and S(l)(d) of the Prevention of Corruption Act. They were
alleged to have committed large scale fraud, irregularities and illegalities
F
in the execution of jungle clearance work in respect of Gandipalem Project
Division, Nellore South Division and Nellore North Division during 19781981.
The Deputy Engineer-in-Chief, PW-7, who conducted the preliminary
inquiry and the Chief Engineer, PW-1, who conducted the departmental
G enquiry highlighted the irregularities and illegalities noticed by them in
their respective reports. Simultaneously investigation was also entrusted
to the Anti- Corruption Bureau which conducted an inquiry. Some serving
Otlicers of the Engineering Department were deputed to assist the otlicers
of the Anti-Corruption Bureau for purposes of collecting technical data
H during investigation.
C.CHENGAREDDY v. STATE
481 .
After completion of investigation, charge-sheets were filed against A
the appellants. There \\'as no direct evidence available on record connect~
ing any of the appellants with the Commission of the crime alleged against
them. The entire case of the prosecution rested on circumstantial evidence.
Gandipalem Project Division
The prosecution case in these appeals against five ollicials viz. Two
•
Executive Engineers, Two Deputy Executive Engineers and a Section 01'-
ficer, along uith a Contractor, resting entirely on circumstantial eviden1'.e
was that (i) the accused conspired to float work for clearance of prickly
B
pier Jungle during 1979-80 in violation of established rules under P.W.D.
C
Code; (ii) committed irregularities by ignoring various circulars and
departmental orders; (iii) allotted work on nomination basis "ithout
inviting tenders; (iv) ''ithout actual execution of work made payment of
Rs. 2869 to the contractor and thereby misappropriated the said amount;
and (v} false and fictitious record relating to preparation of estimates,
D
allotment of work on nomination basis, dra\Ving up of the agreements and
making payments was created.
The Trial Court convicted the appellants for various ollices charged
and imposed varying terms of imprisonment, including fine on ditl'erent
counts. The High Court dismissed the appeals except for reduction of E
sentence. Both the Trial Court and the High Court relied on the technical
report (Ex. P-11) prepared by P.W. 12, an ollicer serving in the Irrigation
Department, who assisted the Investigating Ollicer of the Anti- Corruption
Bureau to hold the appellants guilty. In his report P.W. 12 pointed out
various irregularities cpmmitted by the appellants while preparing the
estimate, nonlination of the Contractor for the execution of \\'Ork and F
drawing up of the agreement with the contractor. He also opined that the
corrections had been made in the estimate, Ex. P~4, \\-ith a view to conceal
facts and project false fact-situation.
Ne/lore South Division
This appeal has been preferred by three accused viz. Executive
Engineer, Deputy Executive Engineer and a Section Ollicer. The charge
against them related to clearance of work in Julifora Jungle. The prosecuG
tion alleged that no work was done and the entire amount of Rs. 13,164
towards payment was misappropriated by appellants and the contractor. H
482
SUPREME COURT REPORTS (1996] SUPP. 3 S.C.R.
A The circumstances relied upon by the prosecution were : (i) without
assigning any reason work \\'as allo~ted on nomination basis instead of
inviting tenders; (ii) work was started by the contractor before issuance of
\l'ork order; (iii) incorrect measurements were recorded in the measurement book to conceal the extent of actual work; (iv) endorsement on the
B
c
estimate documents were made without actual verification of the spot; (v)
no proper estimate for earth work, or for filling of pits was prepared; (vi)
anticipated credit for stumps as shown was WT<mg; anll (vii) basic documents viz. estimate, contract, Rill and payment order were fabricated. Jn
support of the circumstance that no jungle clearance work was dune
reliance was placed on the testimony of PWs 11, 12 and 13.
Relying: upon the aboven1entione4 circumstances and testimony of
PWs 11, 12 and 13 as well as the Technical Report submitted by PW 8, the
Trial Court recorded a finding that no work with respect to the clearance
and uprooting of the stumps of Julitlora jungle was undertaken at NorthD Mopur large tank and that the entire contract had been given surrep·
titiously and pa)'ntents 1nisappropriated .. l\ccordingly it convicted them for
various offences and imposed various terms of imprison1nents including
fine. Upholding the conviction the High Court reduced the sentence if
imprisonment of Engineers to the period "till the rising of the Court". The
appellants paid the fine and have since undergone the sentence till the
E rising of the Court.
Nel/ore No1th Division
In this appeal the case against the appellants-accused was that they
f
floated work for clearance of Julillora jungle and uprooting of the stumps
but without execution of that work misappropriated an amount of Rs. 5169.
The prosecution alleged that there had been flagrant violations of the codal
provisions in regard to preparation and sanctioning of estimates, nomination of the agency and allotment of \\''Ork on nomination basis, preparation
G
of the bills and passing of the same pursuant to an agreement wrongly
dramt up behveen the parties. The circumstances relied on by the prosecution were that: (i) the contractor commenced the work before drawing up
the agreement between the parties; (ii) the area from which jungle had been
cleared in 1979 was less than what \Vas actually entered in the measurement hook on the basis of the site inspection carried out in 1984; (iii)
H though no growth of jungle is· possible on the revetment yet the area of
C.CHENGAREDDY v. STATE
483
revetment was included as part of the area from where jungle was shown
to have been cleared; and (iv) although two pa~ments were not permissible
for clearing jungle and stumps separately yet the same were made.
The Trial Court held that no work with respect to clearance of
Julillora jungle and uprooting of the stumps was undertaken at the site
and the amount was misappropriated by the accused. Accordingly it
convicted and sentenced the appellants to various terms of imprisonment
and fine. The appellant's appeal, exce11t in the matter of sentence, failed
in the High Court.
Ne/lore South Divisio11-<:011tractor's Appeal
This appeal has been preferred by the Contractor. It relates to
clearance of Juliflorajungle including removal of stumps. The prosecution
case \l'as that Executive Engineer, Deputy Executive Engineer and AssisA
B
c
tant Executive Engineer of Alluru Section entered into criminal conspiracy
with appellant and \\ithout actually doing any work, an amount of Rs. D
15,643 "''as misap11ropriated by the accused persons. The circun1stances
relied upon by the prosecution against the appellant were that (i) the work
was falsely allotted and mthout any work the cheque for Rs.15,643 was
given to the appellant-Contractor, which was encashed by him; (ii)
preparation of estimate, award of sahction, drawing up of agreement were E
in violation of P.W.D. codes; (iii) in the measurement book the area \\'here
the work had been done was recorded by officials in excess to help the
appellants, without having actually visited the site; (iv) the work was split
up into parts so as to allot it on nomination basis to hrh.1g it \\''ithin the
. pecuniary jurisdiction of the Executive Engineers; (v) the terms of the
agreement were ambiguous; and (vi) preparation of bill and making F
separate payment for removal of stumps and clearance of jungle was in
breach of codal provisions. Relying upon these circumstances the courts
below convicted and sentenced the appellant.
Nel/ore North Division--'Contractor's Appeal
G
This appeal has been filed by the Contractor who was allotted work
on non1ination basis by Executive Engineer for clearance of jungle in
Nell ore North Division. The prosecution alleged that (i) the Contractor
\\'as a non-existent person and all the documents purportedly have been
signed by the appellant as a contractor had been fabricated by the EnH
484
SUPREME COURT REPORTS [1996] SUPP. 3 S.C.R.
A gineers because the alleged Contractor was an unknown and fictitious
person; (ii) the name of the contractor as appearing ln the order of
nomination, allotment letter. and the agreement was fictitious am! not
correct. Accepting the prosecution case both the Courts below convicted
and sentenced the appellant.
B
c
The Departmental officials as well as the Contractors preferred ·
appeals before this Court against the judgment of the High Court.
Allowing their appeals, this Court
HELD : l. The prosecution has not been able to establish beyond a
reasonable doubt, its case against any of' the departmental officials, that
is, the Engineers and Section Oflicers and conse<1uently their conviction
and sentence are set a!'lide. The prosecution has also not established its
case against any of the contractors beyond a reasonable doubt. Their
conviction and sentence are also set aside. The fine paid by each of the
D appellant is directed to be refunded to him. [528-G-H; 529-A)
2. As a normal rule, this Court does not in exercise of its jurisdiction
under Article 136 of the Constitution of India, while hearing a[lpeals by
special leave, reappreciate the evidence, where two courts have concurrentE ly appreciated the evidence and arrived at findings of guilt of' the accused
persons. [ 495-E]
3. Though all these cases hinge. on circumstantial evidence, yet
neither the Trial Court nor the High Court have catalogued the circumstances relied upon by the prosecution against the appellants, except
F for broad generalisations on the basis of' the charges framed against them.
G
Therefore, with a view to satisl)'ing its judicial conscience, the Court
examined some of the evidence led in the cases and in particular that
evidence which appears to have principally influenced both the Trial Court
and the High Court to convict the appellants. [ 495-G; F]
4. In a case based on circumstantial evidence, the settled law is that
the circumstances from which the conclusion of guilt is drawn should be
fully proved and such circumstances must be conclusive in nature.
Moreover, all the circumstances should be complete and there should be
no gap left in the chain of evidence. Further, the proved circumstances
H must be consistent only with the hypothesis of the guilt of the accused and
C. CHENGA REDDY v. STATE
485
totdly inconsistent with his innocence. [527-D-E]
Gandipalem Project Division
5. The established circumstances in this case do not establish
criminality of the appellants beyond the realm of suspicion and the approach of the trial court and the High Court to the requirements of proof
in relation to a criminal charge \\'as not proper. The c-c-mrts behnv have
overlooked the settled principles and allowed suspicion to take the place
of proof besides relying upon some inadmissible evidence. [508-F; BJ
6. There is not an iota of evidence led by the prosecution to prove
that no work at all was done for clearance of prickly pier jungle. As a
matter of fact, the prosecution has led evidence to sho\V that so1ne \\'ork
had been done hut it is alleged that payments had been made for excessive
work. During the investigation, the inspecting team had noticed existence
A
B
c
of signs of removal of prickly 11ier jungle on the banks of the canal. There
being no evidence to show that after 1979 some work had be,en undertaken D
for removal of prickly pier jungle on any of the banks of the canal, a
reasonable inference to he drawn \Vould be that some n·ork had in fact been
done and therefore, the charge against the appellant that no work had been
done is belied by the prosecution evidence itself. [502-F-G)
7. The technical report prepared by P.W. 12 could not have been
relied upon by the courts below as it was clearly inadmissible in evidence.
PW 12 while serving in the Irrigation Department assisted the investigating officer of Anti Corruption Bureau (ACB) during the investigation in
this case. He prepared his report during the course of the investigation
E
and submitted it to the Investigating Ollicer after the FIR in this case was
F
registered. He \Vas examined by the Investigating Oflicer after he had
submitted his report and the said report formed part of his statenient
recorded under Section 161 Cr.P.C. Under these circun1stances the observations contained in this report technically and factually form a part of
his statement recorded during the investigation of the case is hit by Section G
162 Cr.P.C. Admittedly, the report has not been used for any of the
purposes envisaged by Section 145 of the Evidence Act but as a substantive
piece of evidence. PW 12 does not qualify as an expert within the meaning
of Section 45 of the Evidence Act. Even in his own deposition, he has no
where stated about his technical 'qualifications', 'expertise' or 'experience'
in this particular fi1dd to render 'expert opinion'. There is no 1naterial on H
486
SUPREME COURT REPORTS [1996] SUPP. 3 S.C.R.
A the record to show that he possessed any particular skill which entitled
him to 'dra\v conclusions' relevant to the matter entrusted to him by the
Investigating Officer. Therefore, he is not an "expert
11 ll-ithin the meaning
of Section 45 of the Evidence Act and his report was hit by the bar of
section 162 Cr.P.C and was inadmissible in evidence. Once the report, Ex.
B P-11 is ruled out of consideration as inadn1issible, then it is not safe to
rely on the mere, impressions of the \11tnesses to hold the appellants guilty
of the offences alleged against them. [507-A-G]
8. Though the appellants are established to have violated coda!
provisions besides departmental circulars and instructions regarding
C no1nination of contractors and allohnent of \\'ork to then1, yet, those
circun1stances cannot be said to be consistent only \Vith the hypothesis of
the guilt of the appellants or connect them with the crime alleged against
thenl. That because of the actions of the appellants in breach of codal
provisions, instructions and procedural safeguards, the State n1ay have
D
suffered financially, particularly by allotment of "'ork on nomination basis
\Vithout inviting tenders, but those acts of on1ission and comn1ission by
the1nselves do not establish the co1nmission of criminal offence alleged
against them. [508-C-D; F-G]
Abdulla Mohammed Paga1kar v. State (Union Tenit01y of Goa,
E Daman and Diu }, [1980] 3 SCC 110, referred to.
9. Entrustment of work on nomination basis \\'as permissible under
Para 154, Note I A.P. P.W.D. Code also. As per G.O.Ms. No. 1007, TR &
B dated 5.11.76, the limit of monetary value fixed for entrustment of work
on nomination basis to an Executive Engineer is Rs. 20,000. The Superin·
F tending Engineer, Nellore in his Memo No. 599 dated 14.4.80 had advised
the Executive Engineers not to allot \Vorks costing more than Rs. 2500 as
it was required to be ratified by the Superintending Engineer. A circular
to this efl'ect \\'as issued to Assistant Engineers but an unacceptable plea
"'as raised that this circular had not been circulated and communicated
G and therefore it was not followed. [505-E-H]
10. The non-furnishing of reasons for entrusting the work on
nomination basis upto the value of Rs. 20,000 cannot be used as a circumstance of an incriminating nature against the appellants to establish
any 'dishonest' intention on their part in view of the directions issued by
H the superior oflicers to take up the work urgently because of the ensuing
C.CHENGAREDDYv. STATE
487
monsoon season. Even the splitting up of the work into parts, so as to allot A
it on nomination basis to bring it within the authorised powers of the
ExecutiYe Engineers, which \\'as against the codal provisions and the
circulars issued on the subject from time to time cannot be said to have
been done \lith the necessary "dishonest intention". [506-A-C]
11. There are ample admissions available in the prosecution evidence
itself by various witnesses to the effect that all estimates and agreements
including the data sheets for the estimates had been checked earlier and
that no mistakes or irregularities had been found therein. This is evident
from the evidence of PWs 8, 11 and 12. None of the witnesses deposed that
B
the appellants did not inspect the site before preparation or sanctioning C
of the estimates for the clearance \Vork. These is no acceptable material on
the record from \l'hich a conclusive inference may be dra\vn to the eft'ect
that the n1easurements found recorded in the measurement book had not
been actually taken at the site of the work but were manipulated by the
concerned otlicials sitting in the office, though there may he a strong D
suspicion that it "'as so done. Such a strong suspicion, however, cannot
take the place of proof to fasten criminal liability on the appellants.
[501-C-H; 502-A; 503-G]
12. The circumstance that jungle clearance work is only maintenance
work, but, it had been allegedly allotted on nomination basis to the selected
contractor, without recording any reason for considering the \\'Ork to be of E
an urgent nature cannot by itself be construed to be an incriminating
circumstance consistent only with the hypothesis of the guilt of the appellants. The evidence on the record sho,vs that jungle clearance \rork was
taken up on urgent basis as maintenance of the canal to avoid breaches
during the rainy season on account of the directions issued by the SuperF
intending Engineer and the Chief Engineer in that behalf besides for
clearing the jeep track. [505-B-C]
13. Thus the prosecution has failed to establish that in 1979-80, no
work of jungle clearance in the Gandipalem Project Division was undertaken and that false and fabricated documents were prepared with a view G
to misappropriate government funds. The prosecution has not even been
able to establish that less w0t* of jungle clearance was undertaken but
paynient was shown to have been 1nade for excessive work and some
amount out of the payment n1ade for the \\'Ork were thus misappropriated
by the appellants in connivance with the contractors. [508-G; 509-A-B]
H
488
SUPREME COURT REPORTS [1996] SUPP. 3 S.C.R.
A Nellore South Division
14. The prosecution has failed to establish the case against the
appellants beyond a reasonable doubt. [517-D-E]
15. Influenced by the inadmissible report (Ex. P-10) the courts below
B concluded that the appellants had committed the offence alleged against
them. None of the "itnesses have stated that no work of jungle clearance
was done at the site and the allegation with regard to less work having been
done is based upon calculations made five years later by PW 8, which does
not afford conclusive evidence against the appellants. It was impossible to
C know in 1984 whether jungle clearance work had been carried out and if so
to what extent in the year 1979 on the basis of an ins1iection carried out live
years later in the year 1984. The maximum that can be said against the
appellants is that they committed some indiscretion in the matter of allotment of jungle clearance work on nomination basis and also violated coda)
provisions in the matter of preparation of esti1uatcs, dra\\'ing up of the
D agreement and making payn1ents. These acts of 01nission and commission
du give rise to a strong suspicion that the appellants so acted with a view
to misappropriate Government funds but suspicion, howsoever, strong
cannot take the place of proof. [517-A-D]
16. The technical report submitted by PW 8 which is the sheet anchor
E of the prosecution case is not admissible. Even otherwise this report
prepared after visiting the site in 1984 to demonstrate the position as was
supposed to be existing at the site in 1979-80 is hardly of any value. [515-C]
F
G
17. May be, as alleged by the prosecution, clearing of the jungle and
up-rooting of stumps may be one operation and n1aking l\vo separate
payments, that is one for clearance of jungle above the ground level and the
other for up-rooting and removing the stumps may be objectionable and
against the codal provisions but in the absence of any evidence to show that
two separate payments were in fact not n1ade to the contractor it is not
possible to say that the charge of conspiracy has been established.
[516-f-G]
18. While accepting the plea of the prosecution that the accused had
no power to allot work on work nomination basis and they adopted this
mode only as an eye \Vash to cheat the Government and misappropriate the
funds, the High Court and the trial court failed to properly appreciate the
H evidence on the record. Vide GOMs lio. 1007 dated 5.U.76 the Executive
C. CHENGAREDDY v. STATE
489
Engineer had been empol\'ered to entrust \Vork on nomination basis upto A
the value of Rs. 20,000 and that GO Ms No. 1007 was in force at the relevant
time. [516-A-B]
Ne/lore No1th Division
•
19. In this case also no evidence has been led by the prosecution to B
show no ivoi* of jungle clearance \\'as at all undertaken. Since the prosecution nitnesses admitted in their evidence that some \\'Ork had been done, the
charge of conspiracy 1nust necessarily fail. Recourse has been n1ade to
surmises and conjectures by the courts below to hold that no wm* was
found to have been undertaken at the site when it was inspected in 1984. The C
courts belo\\' like in the case arising out of Gandipalen1 Project Division and
Nellore South Division allowed suspicion to take the place of proof to
convict the appellants. For a period of almost five years nothing was done
to verify the correctness or othernise of the allegations relating to jungle
clearance lVork. There does not appear to be any justification for the
prosecution to allege subsequently that the area from which jungle had been D
cleared in 1979 \\'as less than what was actually entered in the measurement
book on the basis of the site inspection carried out in 1984. The ornission on
the part of the department and the ACB to immediately inspect the site is a
serious lacuna in the prosecution case. The exercise undertaken in 1984
after a lapse of five years \\'as a futile exercise because once a jungle has be(n E
cleared and stumps up-rooted, nothing would remain as evidence on the soil
to show the extent to which the jungle was cleared 5-6 years earlier. It would
not even be possible to say whether there was any necessity for jungle
clearance at that earlier point of time. [520-B-C; E; 521-B-C; 522-B-C]
20. From the evidence on record it emerges that when work is F
entrusted on nomination basis to a contractor he may commence the work,
on oral instructions, even before the formal agreement is drawn up. The
agreement itself shows the entrustment of the work to have been done to the
contractor before the conclusion of the agreement and therefore no adverse
inference can be drawn against the contractor or the appellants for comG
mencing the work before dra\\ing up of the formal agreement. [521-D-F]
21. It is clear from the evidence of PW 13 that if the branches of.
Julillora spread over the revetment area then that has also to be cleared
and the area over the revetnient will also have to be calculated for determining the total area of jungle clearance. In a disturbed revetn1ent there H
490
SUPREME COURT REPORTS [1996] SUPP. 3 S.C.R.
A
is even otherwise the possibility of the grm•1h of Julillora. P.W. 7 who
conducted preliminary inCJuiry stated in his report that it was not possible
to lind out during the inCJuiry held in 1981 whether there in fact existed
any necessity for jungle clearance at the site or not; one fails to see how in
1984 the departmental otficials assisting the ACB could categorically
B report about tht' non·existence of the necessity for jungle clearance in 1979.
Therefore, the extent of jungle \Vhich \Vas required to be cleared in 1979 on
the basis of "paper calculation" or inspection carried out in 1984 was not
possible to be determined. [522-D-G]
22. Whether the measurements were recorded in the measurement
C book after actually visiting the site or not \Vould only be violation of the
statutory circulars/instructions. It may even be violative of the codal
provisions but in the absence of any evidence, direct or circumstantial, to
establish that ilithout any work having been undertaken at the site, payments were allegedly n1ade1 no offence can be said to have been established.
D
[523-B-C]
23. The circumstance that rn·o payments were made for clearing
jungle and stumps separately only shows the violation of coda! provisions
and comntission of irregularities but that does not by itself e~tablish any
criminality in so far as the appellants are concerned. [523-D-E]
E
24. None of the circumstances relied upon by the prosecution cannect
F
the appellants with the crime alleged against them. The circumstances have
not been proved beyond a reasonable .doubt and the circumstances taken
collectively cannot he said to be compatible only with the hypothesis of the
guilt of the appellants and totally incompatible with their innocence. Therefore, the prosecution has not established the case against the appellants
beyond a reasonable doubt. [523-E-F]
Ne/lore South Division • Contractor's Appeal
25. None of the circumstances relied upon by the prosecution against
G the appellant can be said to have been proved satisfactorily and all those
circumstances, "\\
1hich are not of any clinching nature, even if held to be
proved do not complete the chain of evidence so complete as to lead to an
irresistible conclusion con~istent only with the hypothesis of the guilt of
the appellant and wholly inconsistent with his innocence. The prosecution
has not established the case against the appellant beyond a reasonable
H doubt. [527-D-EJ
C.CHENGAREDDY v. STATE
491
26. Strictly speaking: the abovesaid circun1stances cannot be called
A
"circun1stances" against the appellant as the same are more in the nature
of "allegations" of the prosecution against the accused. Even othenvjse, so
far as circumstances (ii) to (vi) are concerned, they concern the oflicials
of the department, and may be relevant in the case of the appellant, if the
charge of conspiracy can be said to have been established. But the charge
of conspiracy has not been e~tablished. The evidence on record slHJ\VS that
jungle clearance work was being done at the site in 1979-80. It is nobody's
case that it \Vas being done departn1entally. The conclusion is irresistible
that the same had been done through tl~e agency of the appellant and the
charge of conspiracy must fail. [525-F-G; 527-B-C]
27. There have been some irregularities cnmmitted in the matter of
allotment work to the appellant or breach of coda! provisions, circulars
and departmental instructions, for preparation of estimates etc. and those
irregularities give rise to a strong suspicion in regard to the bona/ides of
B
c
the oflicial of the department and their link with the appellant, but that D
suspicion cannot be a substitute of proof. The courts below appear to have
drawn inference by placing the burden of proving innocence on the appellant which is an impermissible course. [527-C-D]
Nellore No1th Division - Contractor's appeal
28. Prosecution has failed to prove the case against the appellant
beyond a reasonable doubt either through direct or circumstantial
evidence. The courts below have apparently taken a superficial view of the
matter and without considering the material on the record, recorded the
conviction of the appellant. [528-F]
29. There is no justification for conviction of the appellant. If the
appellant had nothing tu do with the contract, how could he be convicted
E
F
for allegedly not undertaking the work with which he, according to the
prosecution case itself had no concern. In the charge-sheet and the charge
framed against the appellant, the name of the appellant has been given as G
the contractor who was alleged to be a co-conspirator with the Engineers
and section oflicers to misappropriate Government funds by receiving
payments for doing no jungle clearance work. That there was clearance of
jungle at the site in question has been amply established from the prosecution evidence. Since, jungle clearance work has been found to have been
done in 1979-80 and it is not the prosecution case that it was done H
492
SUPREME COUIUREPORTS [1996] SUPP. 3 S.C.R.
A departmentally, the inference that it was done through the agency of the
appelJa~t appears to be fair and reasonable. The argument that contractor
is a fictitious person it self defeating. (528-B-F]
B
Punishnzent f(_lr udniinistrative breaches and conlJJlete justice for depa1t1nental officials.
30. In view of the established violation of the codal provisions and
administrative lapses by the departmental officials, a departmental enquiry n1ay be justified but in this fact situation, it would be an unnecessary
exercise. A co~rt of equity must so act, within the permissible limits so as
C to prevent injustice. "Equity is not past the age of child bearing" and an
effort to do justice bet\\-·een the parties is a compulsion of judicial conscience. Courts can and should strive to evolve an appropriate remedy, in
the facts and circun1stances of a given case, so as to further the cause of
justice, \\'ithin the availalJle range and forging ne\V tools for the said
D purpose, if necessary to chisel hard edges of the law. In the established
facts and circumstances of these cases, it \vould be appropriate with a view
to do complete justice between the parties, in exercise of the jurisdiction
under Article 142 of the Constitution of India, to direct that no departmental inquiry shall now be initiated against the departmental otlicials for
their established administrative breaches and violation of the codal
E provisions in 1979-80. [530-A-E]
31. Consequent upon their acquittal, the otlicials concerned shall be
reinstated in service with continuity of service for all purposes but for their
established administrative lapses and breach of coda! provisions etc. they
F shall not be entitled to any back wages or any other type of monetary
benefit for the period they remained out of service. The suspension allowance, if any, received by all or anyone of them shall however not be
recovered from them. This punishment appears to be commensurate with
the gravity of their lapses and shall serve the ends of justice. Those of the
officials who may have reached the age of superannuation in the
G meanwhile, will get their pensionary benefits calculated on the basis of
their continuous service but they shall be entitled to draw pension with
effect from the date of this order only. [530-E-G]
CRIMINAL APPELLATE JURISDICTION
Criminal Appeal
H Nos. 52-105, 107-175 of 1993.
C. CHEN GA REDDY v. STATE [DR. ANAND, J.]
493
From the Judgment and Order dated 27.11.91 of the Andhra Pradesh A
High Court in Crl.A. Nos. 22, 142 and 240 of 1989.
K. Madhava Reddy, U.R. Lalit, A.S. Nambiar, D. Prakash Reddy,
Vimal Dave, Ms. Rani Chhabra and S.C. Patel for the Appellants.
Ms. K. Amareshwari, N.M. Reddy, K. Sethu Madhavan and Guntur
Prabhakar for for the Respondent.
The Judgment of the Court was delivered by
B
DR. ANAND, J. This batch of appeals by special leave arise out of C
the Judgment and Order of High Court of Andhra Pradesh dated
27.11.1991. The appellants in these appeals are Executive Engineers,
Deputy Executive Engineers, Section Officers and contractors of Nellore
North Division, Nellore South Division and Gandipalem Project Division.
They alongwith a Superintending Engineer (since dead) and various contractors were tried for offences under Sections 120-B, 420/34, 377A/34 !PC D
and Section 5(2) read with Section 5(1)(d) of the Prevention of Corruption
Act and on being found guilty were sentenced to different terms of imprisonment for the said offences. The circumstances under which the cases
arose are:
A Call Attention Motion was moved in the Andhra Pradesh Legislative Assembly in 1981 alleging large scale fraud, irregularities and illegalities committed in the execution of jungle clearance work by the
engineers and contractors in various divisions of Nellore District during
1978-1981. Consequent upon the Call Attention Motion, the Government
directed the then Deputy Engineer-in-Chief. Shri L.R. Kapoor PW. to
examine and inquire into the allegations. He visited Nellore and after
conducting a preliminary inquiry submitted his report on 17.4.1981 pointing
out various illegalities and irregularities committed by the Engineers. The
Secretary, Irrigation Department of the Government of Andhra Pradesh
also directed the then Chief Technical Examiner. Mohd. Rahamathullakban PW, to rnake an inquiry in to the allgations made on the floor of the
assembly during the Call Attention Motion. It further transpires that the
Government of Andhra Pradesh issued G.O. Ms. No. 313 Irrigation and
Power Department dated 20.7.1981. Ex. Pl. appointing Shri N.V.M. KrishE
F
G
na, the then Chief Engineer, for carrying out departmental enquiry into the
works allegedly carried out in three Divisions, namely, Nellore North H
494
SUPREME COURT REPORTS [1996] SUPP. 3 S.C.R.
A Division, Ncllore South Division and Gandipalem Project Division and the
role of the concerned engineers. Chief Engineer Shri Krishna rW 1 submitted his report highlighting the irregularities and illegalities as noticed
by him. The case which had acquired importance on account of the call
attention motion in the legislative Assembly was then entrusted by the
B Government to the Anti Corruption Bureau (for short ACB) for inquiry.
The ACB officials conducted an inquiry and on 1.5.1982 submitted a
report. Ex. P.30 to the Director Anti Corruption Bureau with a request to
register a case against the appellants. Consequently, crime case No.
2/ ACB/NLR/82 for various offences, as already noticed, came to be
registered against the appellants. The investigation was taken in hand by
C an Inspector of Police ACB in May 1984. On the request of the ACB, some
members of the engineering Staff of the department were deputed to assist
. it for purposes of collecting technical data etc. during the investigation. Site
inspections were also carried out to find out whether any work of jungle
clearance had in fact been done in 1979 in the three divisions and the area
D in which jungle clearance work could have been done in the year 1979 and
the question of making payments in respect of the work allegedly done.
After completion of investigation, chargesheets were filed by the ACB
against the appellants. The Learned Special Judge, after trial of the case,
found the appellants guilty of various offences and imposed varying terms
of imprisonments, including fine on different counts. The substantive senE tences were, however, directed to run concurrently. Against their conviction and sentence the appellants filed appeals in the High Court of Andhra
Pradesh. The High Court by its judgment dated 27.11.1991, confirmed the
conviction of the appellants on different counts but reduced the sentence
of imprisonment of the engineers to the period "till the rising of the Court".
F The sentence of fine and imprisonment in lieu, thereof, as imposed by the
trial court, was, however, maintained. The appellants have since paid the
fine and have undergone the sentence till the rising of the Court. By special
leave they have filed these appeals.
For facility of reference, we may mention that against the judgment
G of the Special Court in CC No. 1-8/87, 35 appeals were filed in the High
Court by 43 appellants therein. In this Court, the criminal appeals arising
out of that case are Criminal Appeal Nos. 72 - 74/93 etc. All these cases
relate to Gandipalem Project Division. Conviction and sentence imposed
in CC. 1/86 and the connected cases before the Special Court, led to the
H filing of 44 appeals in the High Court by 71 appellants therein. The
C.CHENGAREDDY v. STATE[DR.ANAND,J.J
495
Criminal appeals filed by them in this Court are Criminal Appeal Nos. 128A
130/93 etc. All these relate to Nellore North Division. In respect of Nellcire
South Division, 68 appellants preferred criminal appeals in the High Court
against their conviction and sentence as recorded by the Special judge and
those cases from the batch of Criminal Appeal Nos. 99-101/93 etc. in this
Court. The Contractors had filed separate appeals in the High Court and B
Criminal Appeal No. 153193 and 170-71/93 etc.