# R. BALAKRISHNA PILLAI v. STATE OF KERALA

- **Citation:** [2003] 2 S.C.R. 436
- **Court:** Supreme Court of India
- **Decided:** 2003-02-28
- **Case number:** Criminal Appeal No. 372 of2001
- **Bench:** R.C. Lahoti, BRl.JCSH KUMAR
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/r-balakrishna-pillai-v-state-of-kerala-18953
- **Pages:** 37

## Headnote

Prevention of Corruption Act, 1947-Section 5(2) read with 5(J)(d)-
E/ectricity (Supply) Act, 19481 Kera/a State Electricity Board Rules, 1957C Section 43/Rule 68-Al/egation that- officials illegally selling electricity to a
company-Conviction-High Court upholding the same-Justification of-Held,
conviction not justified since sale negotiated between two State Governments
thus, Section 43 and Rule 68 not violated-Inference of criminal liability
could not be drawn for not executing an agreement in writing-Act not
amounting to 'causing to obtain' valuable thing to company resulting in
D pecuniary advantage as well to the company-Mens rea and intention totally
lacking, thus facts leading to charges not proved-Also sale during the period
of crisis not objected to and prosecution failing to prove sale of electricity by
·the State to the company or the State or officials having caused profit to the
company.
E
According to the prosecution, appellant No.I-Minister for Electricity,
Government of Kerala and appellant No.2-Technical Member/Chairman
of the Kerala State Electricity Board (KSEB) illegally sold 1;22,41,440 units
of electricity to company G outside the State without sanction of the State
Government which amounted to causing to obtain valuable thing to
company G and also resulting in pecuniary advantage. Appellants were
F convicted and sentenced under Section 5(2) read with Section S(l)(d) of
the Prevention of Corruption Act, 1947. High Court upheld the order.
Hence the present appeals.
Appellants contended that the ingredient of the offence under section
G S(l)(d) of the Prevention of Corruption Act obtaining anycvaluable thing
or pecuniary advantage for himself or ·for any other person is not there;
and that if some profit has been caused to company G by lowering of the
price by State of Karnataka/KEB it is not proximate or .direct cause of
anything done by Al and A2.
H
Respondents contended that there is no document or formail order
436
'•
R. BALAKRISHNA PILLAI v. STATE
437
of consent of State Government for arrangement of supply of electricity; A
that the supply of electricity was made without any agreement in writing
or any other record of supplies; and that by supply of electrical energy to
company G by KSEB in definite and earmarked quantity, Al and A2
caused company G to obtain valuable thing namely, electricity which also
resulted in an advantage to company G.
Allowing the appeals, the Court
HELD: I.I. The agreement of sale and supply of electricity from
Kerala to Karnataka has been negotiated at the higher level, at the level
B
of the two State Governments through thei~ respective Ministers. The
Minister for Power, State of Karnataka had approached the Power C
Minister of the State of Kerala for exploring possibility of supply of
electricity to the State of Karnataka which was then facing acute deficit
of electric energy. The Chairman of the Electricity Boards of the two States
have also been present during the negotiations along with Secretary,
Power, Kerala Government. It was a transaction between State of D
Karnataka/KEB and State of Kerala/KSEB. Thus there was no occasion
of any document being there showing consent of Government of Kerala
for supply of energy to company G. The statement of the Chairman of
KSEB that there was no sanction of the Government of Kerala to supply
power to company G has no material bearing or relevance. Therefore,
there is no violation of Section 43 of the Electricity (Supply) Act, 1948 E
and Rule 68 of Kerala State Electricity Board Rules, 1957. The supply of
electricity made under the arrangement arrived at on negotiations entered
into between two States does not need any prior constent and thus section
43 or under Rule 68 are not attracted. (457-H; 458-A-DI
1.2. The fact that arrangement entered into was not reduced into an
agreement in writing, lost relevance for the purposes of the instant case
since the same having been acted upon and the electricity having been
supplied to the Sta

## Text

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A
B
R. BALAKRISHNA PILLAI
v.
STATE OF KERALA
FEBRUARY 28, 2003
[R.C. LAHOTI AND BRl.JCSH KUMAR, JJ. ]
Prevention of Corruption Act, 1947-Section 5(2) read with 5(J)(d)-
E/ectricity (Supply) Act, 19481 Kera/a State Electricity Board Rules, 1957C Section 43/Rule 68-Al/egation that- officials illegally selling electricity to a
company-Conviction-High Court upholding the same-Justification of-Held,
conviction not justified since sale negotiated between two State Governments
thus, Section 43 and Rule 68 not violated-Inference of criminal liability
could not be drawn for not executing an agreement in writing-Act not
amounting to 'causing to obtain' valuable thing to company resulting in
D pecuniary advantage as well to the company-Mens rea and intention totally
lacking, thus facts leading to charges not proved-Also sale during the period
of crisis not objected to and prosecution failing to prove sale of electricity by
·the State to the company or the State or officials having caused profit to the
company.
E
According to the prosecution, appellant No.I-Minister for Electricity,
Government of Kerala and appellant No.2-Technical Member/Chairman
of the Kerala State Electricity Board (KSEB) illegally sold 1;22,41,440 units
of electricity to company G outside the State without sanction of the State
Government which amounted to causing to obtain valuable thing to
company G and also resulting in pecuniary advantage. Appellants were
F convicted and sentenced under Section 5(2) read with Section S(l)(d) of
the Prevention of Corruption Act, 1947. High Court upheld the order.
Hence the present appeals.
Appellants contended that the ingredient of the offence under section
G S(l)(d) of the Prevention of Corruption Act obtaining anycvaluable thing
or pecuniary advantage for himself or ·for any other person is not there;
and that if some profit has been caused to company G by lowering of the
price by State of Karnataka/KEB it is not proximate or .direct cause of
anything done by Al and A2.
H
Respondents contended that there is no document or formail order
436
'•
R. BALAKRISHNA PILLAI v. STATE
437
of consent of State Government for arrangement of supply of electricity; A
that the supply of electricity was made without any agreement in writing
or any other record of supplies; and that by supply of electrical energy to
company G by KSEB in definite and earmarked quantity, Al and A2
caused company G to obtain valuable thing namely, electricity which also
resulted in an advantage to company G.
Allowing the appeals, the Court
HELD: I.I. The agreement of sale and supply of electricity from
Kerala to Karnataka has been negotiated at the higher level, at the level
B
of the two State Governments through thei~ respective Ministers. The
Minister for Power, State of Karnataka had approached the Power C
Minister of the State of Kerala for exploring possibility of supply of
electricity to the State of Karnataka which was then facing acute deficit
of electric energy. The Chairman of the Electricity Boards of the two States
have also been present during the negotiations along with Secretary,
Power, Kerala Government. It was a transaction between State of D
Karnataka/KEB and State of Kerala/KSEB. Thus there was no occasion
of any document being there showing consent of Government of Kerala
for supply of energy to company G. The statement of the Chairman of
KSEB that there was no sanction of the Government of Kerala to supply
power to company G has no material bearing or relevance. Therefore,
there is no violation of Section 43 of the Electricity (Supply) Act, 1948 E
and Rule 68 of Kerala State Electricity Board Rules, 1957. The supply of
electricity made under the arrangement arrived at on negotiations entered
into between two States does not need any prior constent and thus section
43 or under Rule 68 are not attracted. (457-H; 458-A-DI
1.2. The fact that arrangement entered into was not reduced into an
agreement in writing, lost relevance for the purposes of the instant case
since the same having been acted upon and the electricity having been
supplied to the State of Karnataka/KEB for which there is no complaint
that State of Kerala/KSEB has not received the agreed price. However,
F
the requirement or necessity to execute an agreement in writing for any G
contract entered into for and on behalf of State or such bodies like KSEB
is not undermined but such omission, in the facts and circumstances of
the instant case, would not lead to any inference of commission of any
offence. [464-C, D; 461-D)
1.3. In the instant case, the documentary as well as oral evidence H
438
SUPREME COURT REPORTS
[2003] 2 S.C.R.
A establishes that the State of Karnataka/KEB contacted appellant No.I for
assistance in the matter of supply of electricity due to grim situation of
shortage of energy in their State. Time and again in different meetings
and otherwise the State of Karnataka/KEB had been emphasizing the
requirement of electricity and supply of more energy stressing upon the
B need for their industry some of which were named including company G
and other Plant, so much so that they had even advised company G also
to make effort and use their good offices with Kerala Authorities for
supply of more electricity. The appellants had only told that they would
look into their demands and would like to assist them maximum possible
which would also depend upon the ensuing monsoon situation. It is not to
C be found that the State of Kerala/KSEB, Al or A2 ever made efforts to
sell Kerala energy to KEB nothing to say of company G. Had that been
so there was no occasion for the State of Karnataka/KEB to advise
company G to use their good offices with Kerala Authorities for supply
of ener11y. It is !llso evident that despite assurance on the request of
Karnataka/KEB to assist it was not always possible for KSEB to make
D supply. Whatever energy was exported from Kera!a was taken in the
general pool' of electricity in the State of Karnataka/KEB and the
distribution thereof used to be made by the State of Karnataka/KEB and
the Chief Minister. Some stray utterances made in some letters or internal
documents of the KEB that KSEB had agreed for certain quantity of
E energy for company G would in no way lead to the inference that the State
of Kerala/KSEB, Al or A2 has earmarked any supply for company G.
Even according to them, KSEB had only "agreed" to spare electrical
energy for company G which definitely shows that initiative was on the
part of the State of Karnataka/KEB. There is no case of initiative or effort
on the part of KSEB for supply of energy, thus the reliance on such letters
F or non-reply of certain letters is misplaced. The primary requisite of
offence u/s 5(l)(d) of 'obtaining' any valuable thing or pecuniary
advantage for any other person, in absence of any effort, initiative or
request on the part of the appellants shatters the charge. With regard to
causing pecuniary advantage or profit to company G, it was purely a
G matter between the State of Karnataka/KEB and company G to decide
what price was to be charged by KEB from company G for supply of
imported energy. There is neither allegation nor evidence to show that the
State of Kerala/KSEB or Al and A2 had any say or hand in lowering of
the price for company G by the State of Karnataka/KEB. Earlier also there
have been instances of supply of imported energy at a lower. rate to
H company G and other Plant by KEB. In any case it was a matter between
R. BALAKRISHNA PILLAI v. STATE
439
the State of Karnataka/KEB and company G or other industries. A
Therefore, the appellants did not cause any profit to occur to company
G. 1467-B-H; 468-A-DI
Su bash Parbat Sonvane v. State of Gujarat, 1200215 SCC 86, referred
· to.
Ram Kishan v. State of Delhi, AIR (1956] SC 476; MW Mohiuddin v.
State of Maharashtra, [1995] 3 SCC 567 and C.K. Damodaran Nair v.
Government of India, (1997] 9 SCC 477, referred to.
B
to.·
Blackstone's Criminal Practice by Peter Murphy, 1992 p.64, referred C
1.4. Once the supplies were made to the State of Karnataka to help
out during the period of scarcity of energy, as requested, it is not
understandable how only a part of supply which the State of Karnataka/
KEB, amongst others allocated to company G that alone could be said to D
be illegal or that the appellants caused to be obtained valuable thing to
company G illegally by abuse of their official position. KSEB did not sell
energy to company G, all supplies were made to KEB. Therefore, the
charge that the appellants had illegally sold energy to company G or
caused it to be obtained by company G or they abused their position in
supplying energy of Karnataka/KEB is rejected. (468-E, Fl
E
1.5. The act of the State of Karnataka/KEB intervenes between the
supplies made by the State of Kerala/KSEB to KEB who. in turn supplied
the same to its consumers including company G at a lower price. It is not
the direct effect or proximate cause to any benefit, if at all, accrued to F
company G. (469-B)
Kurban Hussein Mohammeda/i Rangwal/a v. State of Maharashtra,
[1965) 2 SCR 622, distinguished.
1.6. The accused must have the mental state or degree of fault at G
the relevant time. It may differ from crime to crime according to the
definition thereof. The mental state and the criminal act must coincide.
The criminal act may be one which may be intended by the wrong doer.
It is as well known mere intention is not punishable except when it is
accompanied by an act or conduct of commission or omission on the part
of the accused. Situation varies in respect of different kinds of crimes as H
440
SUPREME COURT REPORTS
[2003] 2 S.C.R.
A in some of them even negligence or careless act may constitute an offence
or there may be cases of presumptions and putting the accused to proof
to the contrary. 1469-H; 470-A-CJ
Blackstone's Criminal Practice by Peter Murphy, 1992 p.18; Criminal
Law, J.C. Smith, Brian Hogan, 6th Edition, p.31; Criminal Law by K.D. Gaur,
B 3rd Edition, p.23 and Criminal Law by Glanville Williams -The General
Part- Second Edition, p.1, referred to.
1.7. Under Section S(l)(d) of the Act it is necessary that the act must
have been done illegally abusing his position as public servant for obtaining
C benefit pecuniary or otherwise for himself or for someone else. This is an
offence which would require an intention to accompany the act. The
element of mental state would be necessary to do a conscious act to get
the required result of pecuniary advantage or to obtain any valuable thing,
even if it is for someone else, then too element of mental state must be
there at the relevant time. Facts leading to charges are not proved and
D the element of mens rea and intention is totally lacking. The electrical
energy was exported to Karnataka/KEB at the request of State of
Karnataka during the period of crisis of shortage of energy which is not
objected to, so as to be illegal but for a part of it which is allocated by the
State of Karnataka/KEB to company G constitutes no offence. The
prosecution failed to prove the case of sale of electricity by KSEB to
E company G or the KSEB or Al and A 2 having caused profit to company
G. Admittedly, appellants did not stand to gain in any manner nor they
had any say in price fixation for company G by KEB. Thus the order of
conviction and sentence passed against the appellants by the trial court
and upheld by the High Court under Sect:on 5(2) read with Section S(l)(d)
p of the Prevention of Corruption Act are set aside. [471-E-H; 472-A, BJ
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No.
372 of2001.
From the Judgment and Order dated 2.3.2001 of the Kerala High Court
G in Cr!. A. No. 304 of 1996/S.
WITH
Crl. A. Nos. 373/01 and 725-727 of 2002.
H
U.R. Lalit, P.P. Rao, Fazlin Anam, E.M.S. Anam, Ashok Kr. Pandey,
f·
....
R. BALAKRISHNA PILLAI v. STATE [BRIJESH KUMAR, J.]
441
G. Balaji, V.K. Beeran, Additional Advocate General for State, K.R. A
Sasiprabhu, K.I. Abdul Rashid, Sushil Tekriwal for the appearing parties.
The Judgment of the Court was delivered by
BRIJESH KUMAR, J. This is a case in which the appellants before
us in Criminal Appeal No.372 of2001 and Criminal Appeal No.373 of2001 B
have been convicted under Section 5(2) read with Section 5(1)(d) of the
Prevention of Corruption Act, 1947 (for short 'the Act') for having caused,
Mis. Graphite India Ltd. (for short 'Mis. GIL), Bangalore, to obtain valuable
thing namely, electricity by selling it to the said company illegally and by
abusing their official position as public servants which also resulted in C
pecuniary advantage to Mis. GIL to the tune of Rs.19 lakhs and odd. So far
"
the said two appellants themselves are concerned, it is neither the case of the
prosecution nor the finding of any court that they gained or acquired any
kind of benefit, pecuniary or otherwise, out of the transaction in question.
The High Court, on the other hand, finds that there is nothing to show that
for obtaining Kerala electricity any illegal gratification was given to the D
appellants or any illegal means was employed by Mis. GIL.
The two appellants for the aforesaid conviction have been sen!t11ced to
simple imprisonment for a period of one year and a fine of Rs. I 0,000 each,
in default, to undergo simple imprisonment for a further period of two months.
The conviction and sentence. as recorded by the Trial Court has been E
maintained by. the High Court in appeal. The appellant in Criminal Appeal
No.372 of2001. Balakrishna Pillai is to be referred hereinafter as 'A-I' and
the appellant in Criminal Appeal No. 373 of2001 P. Kesava Pillai as 'A-2'.
So far the appellant in Criminal Appeals Nos. 725-727 of2002 Gopalakrishna
Pillai is concerned, he has been examined as PW 45 in the case and is F
aggrieved by adverse comments made against him in the judgment of the
High Court.
The main question which falls for our consideration in these app~als is
as to whether the appellants A I and A2 have illegally sold electricity to
Mis. GIL by abusing their official position which amounted to "causing to G
obtain" valuable thing to Mis. GIL resulting in pecuniary advantage as well .
to Mis. GIL.
During the relevant period namely, October 1984 to May, 1985, A-1
was Minister for Electricity, Government of Kerala and A-2 was Technical
Member/Chairman of the Kerala State Electricity Board (for short 'KSEB'). H
442
SUPREME COURT REPORTS
[2003) 2 S.C.R.
A The two have been found to have illegally sold 1,22,41,440 units of Kerala
electricity to Mis. GIL without sanction of the State Government as per the
requirement under the law. It is also the prosecution case that no written
agreement was entered into between the KSEB and the Karanataka Electricity
Board (for short 'KEB') for supply of the electricity.
B
Undisputedly KSEB supplied electricity to KEB at the rate of 42 paise
per unit. KEB charged for the said high cost energy used by the industries
in Karnataka at the rate of 80 paise per unit whereas for the electricity ·
supplied to Mis. GIL the KEB charged at the rate of 64 paise per unit i.e. to
say 16 paise less as compared to the rate charged by it from its other
C consumers. It resulted in pecuniary benefit to Mis. GIL. According to the
prosecution the KSEB earmarked a definite quantity of electricity and suppiied
the same to Mis. GIL without sanction of the State Government as required
under the law before selling electricity to any industry outside the state. It
could be possible only at the instance of the two appellants who are said to
have abused their official position for the benefit of Mis. GIL.
D
The appellants refuted the prosecution case and chose to contest.
According to the defence case, the electricity was supplied by the KSEB to
KEB on the basis of a decision taken at the State level by A- I who was the
Minister concerned and authorised t<J'.take such decisions according to the
rules of business. The electricity was· being supplied by the State of Kerala
E much prior to the relevant period to different neighbouring States including
Karnataka and Tamil Nadu. Such supplies have been made since prior to
I 978 as and when it was possible to do so. During the relevant period the
electricity was supplied to KEB at the rate of 42 paise per unit. Thereafter
it was for the KEB to fix its tariff for its consumers. No amount of electrical
p energy out of the supplies made by K.S.E.B. to State of Kamataka/KEB was
earmarked or specifically provided for Mis. GIL. The request for supply of
electricity was made by the State Government of Kamataka. The State of
Kerala had assured it to help in the matter as much as possible. So far the
question of rate of electricity is concerned KEB fixed the rate of high cost
energy (Kerala electricity) @ 80 paise per unit and for Mis. GIL at 64 paise
G per unit. The State of Kerala or KSEB had no concern whatsoever with
fixation of rate of electricity supplied by KEB to its consumers including
Mis. GIL. KSEB supplied the electricity to KEB/State of Karnataka at the
rate of 42 paise per unit which was the highest rate ever charged before.
There is no charge, allegation much less any evidence or finding of any kind
H of pecuniary or other benefit accruing to the appellants. Rather it is not the
-
l
\
R. BALAKRISHNA PILLAI v. STATE [BRIJESH KUMAR, J.]
443
case of the prosecution that the appellants were benefitted by the transaction A
in any manner. It has also been the case of the appellants that no provision
of law has been violated in making the supplies of energy to the State of
Kamataka. As a matter of fact the supplies were being made since before and
they have only been continue::! at a revised price. The supplies were made to
the State of Kamataka/KEB and not to any particular industry or Mis. GIL.
It was for the KEB to distribute the energy to its consumers according to its B
own policy and priorities. Lastly the defence case is that in any case, if at-all,
there was any irregularity or technical violation of any law it would not mean
that the appellants are guilty of any criminal offence.
Coming to the charge as framed against the appellants for which they C
have been tried and convicted is as follows :
"Secondly, that you the accused 1 and 2 being Minister for Electricity
and Technical Member/Chairman of the K.S.E.B. during the period
from October 1984 and May 1985 abused your official position as
public servants and in pursuance of the above said conspiracy illegally D
sold 12241440 units of Kerala Electricity to Mis. Graphite India Ltd.,
Bangalore, Kamataka State and caused the said company r 'ltain
'valuable' thing viz. Electricity and pecuniary advantage to the tune
of Rs. 19,58,.630.40 and also resultant profit and thereby committed
an offence punishable under S.5(2) r/w 5(1)(d) of P.C. Act 1947 and
within my cognizance."
E
As a matter of fact, initially two charges were framed. First of it read
· as follows :
"Firstly, that you Sri R. Balakrishnan Pillai (A 1) while functioning as
Minister for Electricity, Govt. of Kerala from May 1982 to 5.6.1985 F
and P. Kesava Pillai (A2) while functioning as Technical Member/
Chairman of the K.S.E.B., Thiruvananthapuram from 1.2.1984 to
31.11.1985 and as such being public servants during the period from
July 1984 to November 1985 entered into a criminal conspiracy to
sell electricity to the State ofKarnataka, to be supplied to Mis Graphite G
India Ltd., Bangalore, Kamataka State without the consent of the
Govt. of Kerala, which is an illegal act under the provisions of the
Electricity (Supply) Act, 1948 and Kerala Electricity Board Rules
and in pursuance of the conspiracy abused your official position and
illegally sold 1,22,41,440 units of Kerala Electricity to Mis. Graphite
India Ltd., Bangalore, Kamataka State during the months of October H
A
B
444
SUPREME COURT REPORTS
[2003] 2 S.C.R.
1984 and May 1985 and caused the said private industry obtain undue
pecuniary advantage to the tune of Rs.19,58,630.40 and more by way
of resultant profit to the industry, since Electricity being a valuable
thing for the functioning of the State industries during the period of
acute shortage of energy in K arnataka State and you the accused I
and 2 thereby committed an offence punishable under S.120-B of
1.P.C. and within my cognizance."
But the first charge has been ultimately quashed by this Court due to
lack of sanction (Cr!. A. No.1742195 dt.5.12.1995, [1996] 1 SCC 478).
C
Thus, it is only the second charge which remained against the appellants
and according to the same A-I and A-2 (i) abused their official position as
public servants (ii) they conspired and illegally sold 1,22,41,440 units of
Kerala Electricity to Mis. GIL (iii) caused the said company (Mis. GIL) to .
obtain valuable thing namely electricity and pecuniary advantage (iv) hence
committed offence punishable under Section 5(2) read with Section 5(1 )( d)
D of the Act. Thus, according to the charge also there is no accusation against
the appellants for having obtained any advantage pecuniary or otherwise for
themselves by causing the company (Mis. GIL) to obtain valuable thing
namely, electricity.
It may be relevant to mention here that amongst others Mis. GIL, ahd
E Wheel & Axle Plant (for short 'WAP'), an undertaking of the Indian Railways,
seem to be quite important industries from the point of view of Karnataka
State. It is said that Mis. GIL manufactures electrodes and such other items
which are used by other industries in Karnataka and other neighbouring
States including the State of Kerala. So far WAP is concerned there is evidence
F on the record to show that in connection with supply of electricity to it, the
Minister for Railways and Minister for Electricity, State of Kera la had been
holding negotiations on the earlier occasions and electricity was supplied to
W AP, before the pe~iod in question, at the rate of 35 paise per unit. The
goods manufactured by W AP are for the use of the Indian Railways. It is
only to indicate and emphasise the importance of the said industries running
G in the State of Karnataka.
The findings as recorded by the High Court are that there was scarcity
of electricity in Kerala itself during the relevant period of supplies namely,
October 1984 to May 1985. The documentary evidence including letter written
by the Chief Minister of Karnataka to A- I and the DO Letter sent by PW 22
H to A-2 proved that they agreed to supply Kerala Electricity to Mis. GIL, more
I
R. BALAKRISHNA PILLAI v. STATE [BRJJESH KUMAR. J.]
445
particularly in view of the fact that the said letters were not replied by AI and A
A2 to refute its contents. It was also found that by charging at a lower rate
for supply of Kerala Electricity to Mis. GIL there was a total saving of more
than Rs. 28 lacs to Mis. GIL. No sanction was given by Government of
Kerala to supply electricity to Mis. GIL. It is also held specifically ............ "from
the materials available on record it could be clearly seen that A 1 and A2 B
agreed to give specific quantity of electricity to Graphite India Ltd. If A I or
A2 had not agreed to give specific quantity of electricity by K.S.E.B. to
Graphite India Ltd. and electrical energy was not supplied to Graphite India
Ltd. by K.S.E.B. through KEB, KEB would have charged for the imported
energy supplied (Kerala energy) to Graphite India Ltd. at the rate payable for
high cost energy (80 paise per unit) and Graphite India Ltd. would not have C
saved Rs.19,58,630.40 during the relevant period. The sale of electrical energy
to Graphite India Ltd. without the sanction of the Government of Kerala was
illegal". (emphasis supplied by us)
The High Court has further found in paragraph 216 as follows :
D
"From the evidence available, it is also possible to conclude that
Graphite India Ltd. had also played an important role in getting the
electricity supplied to it. It is evident from the statement of A I under
Section 313 Cr.P.C. no request was made by the Power Minister of
Karnataka or any official KEB who had a meeting with him on E
28.9.1984 for supplying electricity to Graphite India Ltd. Then why
he had agreed to supply energy to Graphite India Ltd.? Inference is
irresistible that he had agreed to supply electricity to Graphite India
Ltd. at the instance of PW.47 who met him on the same day."
(emphasis supplied by us) F
The High Court has also found as follows :
" ........ From Section 43 it is crystal clear that the Board can enter into
an arrangement with any government or persons for the purchase or
sale of electricity to be generated or used outside the state only if the G
sanctioned scheme provides for such sale or purchase. The proviso to
Section 43 says that for entering into ·an arrangement for sale of
electricity to a person or Government outside the State, consent of the
State Government is necessary. It further provides that for entering
into an arrangement with any person other than any Government, the
sanction of the Government of the State within which the electricity H
446
SUPREME COURT REPORTS
(2003] 2 S.C.R.
A
is to be used is to be obtained."
It has also been held that A2 had no authority to agree or direct to supply
energy to Mis. GIL without sanction of Government of Kerala. In paragraph
224 in the end it is observed as follows :
B
"As no records were maintained by the Power Department of Kerala
and K. S.E.B. regarding supply of electrical energy to Graphite India
Ltd., it is only legitimate to infer that the factum of supplying electrical
energy to Graphite India Ltd. was deliberately and intentionally
suppressed by A I and A2. A I and A2 agreed to supply specific
c
quantity of electrical energy to Graphite India Ltd. So, we have no
hesitation in holding that there was dishonest intention for A I and A2
in agreeing to supply electrical energy to Graphite India Ltd."
We have heard Shri U.R. Lalit, learned senior counsel appearing for A I
and Shri P.P. Rao, learned senior counsel appearing for A2 at length. Shri
K.R. Sasiprabhu has also made his submissions in regard to the adverse
D observations made in the judgment against the appellant Shri G. Gopalakrishna
Pillai in that appeal. Shri V .K. Beeran, Addi. Advocate General, State of
Kerala made submissions on behalf of the respondents and has also furnished
a brief note of his arguments.
E
So as to be clear about the nature of grievance against the appellants,
it is to be indicated that the learned counsel for the respondents has very
fairly stated that it is not the case of the prosecution that the appellants were
benefited in any manner financially or otherwise by supply of electricity to
Mis. GIL. He has also indicated that so far the rate at which supply of
electricity has been made to the State of Karnataka i.e. at the rate of 42 paise
F per unit is also not a cause of any grievance. But the grievance is that by
supply of electrical energy to Mis. GIL by K.S.E.B. in definite and earmarked
quantity, A I and A2 caused Mis. GIL to obtain valuable thing namely,
electricity which also resulted in an advantage to Mis. GIL to the tune of Rs.
19 lacs and odd. The supply of electricity was made without any agreement
G in writing or any other record of supplies, in violation of the relevant rules
which leads to the conclusion that the supply of electricity was made illegally
further leading t.J the inference of dishonest intention on the part of A I and
A 2. At this stage it would also be appropriate to indicate one of the findings
recorded in connection thereof by the High Court in its judgment:
H
"We find nothing unJsual in PW 47 approaching A I or A2 for getting
R. BALAKR!SHNA PILLAI v. STATE [BRJJESH KUMAR, J.]
447
electricity and if he succeeded in getting energy for his employer, it A
only indicated that he had faithfully and diligently performed his
duty. There is no evidence to show that for obtaining Kerala energy
during the relevant period, any illegal gratification was given to A I
or A2 by Graphite India Ltd. through PW 47 or any illegal means
was employed by PW 47 or Graphite India Ltd. to obtain energy B
during the relevant period. It was for A I and A2 to protect the interest
of Kerala State and when there was scarcity of energy, they should
not have agreed to supply energy to Graphite India Ltd .. "
To a straight question put to the learned counsel for the respondent as to the
evidence indicating scarcity of electricity in the State of Kerala during the C
relevant period he categorically replied that virtually there was no such
evidence available on the record.
In the backgrounc;I of the prosecution case it may have to be seen as to
whether it was supply/sale of electricity by K.S.E.B. to 1,1/s. GIL or it was
supply of electricity by State of Kerala to State of Karnataka through their D
respective electricity boards, namely, K.S.E.!3. and K.E.B. It may also have
to be seen in what circumstances arrangement of supply of electricity came
about between KEB and K.S.E.B. It is not in dispute that the State of Kerala
has quite often been supplying electricity to the neighbouring States namely,
Karnataka, Tamil Nadu and Andhra Pradesh etc. A chart of supply of electricity
by Kerala has been shown by Shri P.P. Rao which shows that such supplies E
were being made since at least 1978 with some intermittent gaps here and
there. So it was not unusual indeed that such supplies were undertaken by
K.S.E.B. in 1984-85. It has been stated by PWs 4, 6 and 8 that supply of
electricity was being made by the State of Kerala to the State of Kamataka
as Karnataka has generally been a deficit State so far as the electricity is
concerned. Similarly, there is evidence on record which is not in dispute that F
supplies have been made to other States also; for example State of Tamil
Nadu. There have been periods of surplus of electricity in the State of Kerala.
Ext. P. 25(h) is a statement relating to supplies of electricity by the State of
Kerala to other States during the period from April, 1982 to March, 1987. It
also shows that at times the State of Kerala has also imported electricity from G
other States though significantly low in quantity during certain periods. It is
thus clear that this practice of supply of electricity by the State of Kerala to
the other States has been in vogue. There have been negotiations from time
to time in that connection, between ihe Minister, Power & Energy, State of
Kerala and Minister~ of other States including Railway Minister for supply
of electricity to Wheel and Axle plant.
H
448
SUPREME COURT REPORTS
[2003] 2 S.C.R.
A
As it concerns the supply of electricity in question, we find that a
meeting took place between the Minister for Power, State of Karnataka and
the Minister for Power and Energy, State of Kerala on 28.9.1984 at the
instance of the former. It is evident from Exh.P-56(a) a letter dated 28.9.84
written by the Chairman, K.E.B. (Karnataka Electricity Board) to the Secretary
to the Government, Public Works and Electricity Department, Bangalore,
B State of Karnataka informing that he alongwith Minister for Power, State of
Kamataka had been to Kerala to explore the possibility of getting some
assistance for supply of electricity and in that connection they had met the
Minister A 1 on 28.9.1984. We feel it would be appropriate to reproduce the
text of the letter since it has been heavily relied upon by the prosecution also
C to show that the appellant had agreed to supply electricity to Mis. GIL. The
text of the letter is quoted as below :
D
"As you are kindly aware of the fact that the Hon '~le Minister for
Power and myself had been to Kerala to explore the possibility of
getting some assistance. We met the Minister on the evening of 28th
instant and the discussions were cordial. The Minister for Power in
Kerala said that Kerala is still interested to assist Kamataka to the
maximum extent possible. He also mentioned that due to poor rain-
. fall in the recent weeks, the assistance to Tamil Nadu has been scaled
down considerably. He said that ifthe North East monsoon improves,
E
it may be possible to give some assistance and this will be known
only by the end of October 1984. When we raised the issue of Kerala
share of 58 MWs from Ramagundam Thermal Project being passed
on to Karnataka, he said, he has an open mind on this subject. He
wanted the discussions to be continued at Bangalore with our Hon'ble
F
G
Chief Minister to discuss this issue as well as ofMananthvady project.
He pointed out that if this project came through, the beneficiary would
be, Karnataka itself, as most of.this energy will have to be utilised in
Kamataka as Malabar area though an industrial area, has not been
fully developed. I do not know the merits and de-merits of this case
but I am convinced that the Hon'ble Minister is particular about this.
Though he has agreed to spare some energy to Mis. Graphite
India, he expressed inability to give any power during the peak hours.
But, Mis. Graphite India needs power during peak hours also. This
problem will have to be sorted out after further examination ..... "
H It is clear from the above letter that the State of Karnataka was in need of
)
....
f
,_
..
R. BALAKRISHNA PILLAI v. STATE [BRIJESH KUMAR, J.]
449
importing electricity and in that connection the Minister and the Chairman of A
the Electricity Board, Karnataka met A I. According to the said letter A I had
indicated that the State of Kerala would assist in the matter to the maximum
possible and also indicated the fact that assistance to State of Tamil Nadu has
been scaled down. It is also clear that it was given out that some assistance
was possible depending upon improvement in North East monsoon, which B
will be known only by the end of October, 1984. Agreeing to this kind of
assistance A I had also made a reference to the issue of Kerala share of 58
MWs from Ramagundam Thermal Project as well as issue relating to
Mananthvady project. It is significant to note that the Chairman, Electricity
Board, Kamataka writes though A I had agreed to spare some energy to
Mis. GIL but he had expressed inability to giv~ any power during the peak C
hours. The Chairman, KEB then informed the Secretary to the Government,
Department of Power, Government ofKarnataka that Mis. GIL needed power
durihg peak hours also and this problem was to be sorted out. The above
letter clearly shows that the State of Kamataka had approached the State of
Kerala through A I for assistance in supply of electricity. It also emerges
from the above letter that emphasis was at the instance of the State of Kamataka D
for supply of energy to Mis. GIL in response whereof A I is said to have
agreed to spare some energy but expressed his inability to provide it durlng
peak hours. The Kamataka authorities do not seem to have given up and
decided to pursue with the State of Kerala to sort out the problem about the
supply of energy to Mis. GIL during the peak hours. It was a talk at the E
Ministerial level between the two States. The Ext. P.56(a) however, does not
indicate any assurance of supply of electricity to the State of Kamataka much
less for Mis. GIL particularly. This letter hardly shows any interest on the
part of A I or A2 to take into account the requirement of Mis. GIL. The
emphasis seems to be on the part of the State of Kamataka to stress upon the
requirement of Mis. GIL. There seem to be representatives of the two States F
and their Electricity Boards. No other party seems to be there in the meeting.
The other relevant document upon which great emphasis has been made is
Ext.P-22(a). It is a letter dated January 24, 1985 written by the Chief Minister
of State of Kamataka to A I. It will again be beneficial to quote the letter G
written by the Chief Minister. It is as follows:
"The power position in Karnataka is very acute due to several reasons
including the poor monsoons in Sharavathi basin. I am thankful to
you for having agreed to supply power for two specific industries
situated in Kamataka.
H
450
A
B
SUPREME COURT REPORTS
[2003] 2 S. C.R.
Three or four industries which are critical in importance and from
the State point of view are suffering from the crippling shortage of
power. These are Mls.Dandeli Ferro Alloys, Calcium Carbide at
Bellary (Mls.Panyam) and one or two others. 1 understand the Speaker
of Karnataka Legislature had a talk with you in this regard and the
Secretary, Public Works & Electricity Department had sent a telex
message. May I request you to kindly supply from your grid energy
to an extent of only five million units per month for the next three
months. I am sure since the quantum we need is insignificant you will
. be able to help us out."
C
The above letter also depicts the scenario of shortage of electricity
power in the State of Karnataka and it was requested to extend some more
help. It is also evident that there was nothing which was kept secret in the
matter of supply of electricity to the State of Karnataka by the State of
Kerala. The negotiations were at the level of the Ministers concerned of the
respective States and the Chief Minister· of the State of Karnataka. There
D seems to be nothing which could be said to be a guarded secret. Rather it
appears that it was quite usual for such kind of import and export of electricity
during the times of crisis. The prosecution however, draws an inference that
A I had agreed to supply electricity to two specific industries situated in
Karnataka though none of the two are specifically named in the letter. Even
E if they are taken to be Mis. GIL and Wheel and Axle Plant, it was the Chief
Minister of Karnataka who expressed thanks for the same. The background
as to what transpired in the meeting of 28.9.84 cannot be overlooked. It
shows State of Karnatka was keen and interested in providing energy to its
heavy industries. But it does not mean that KEB was not giving supplies to
other industries out of imported Kerala energy viz. industries other than
F Mis. GIL and Wheel and Axle Plant. According to the .letter, A I is only said
to have agreed for supply which implies initiative and request from the other
end viz. Karnataka authorities. Non-reply to the letter of the Chief Minister
dated January 24, 1985 by A I is one of the main circumstance., the prosecution
banks upon to infer that supply was made by the Kerala Electricity Board to
Mis. GIL which inference we feel, cannot be drawn. Non-reply of letter is
G inconsequential, more particularly in view of the letter referred to earlier,
namely Ext.P-56(a). Agreement to supply electricity was to the State of
Karnataka/KEB on the request made and need emphasised by the Karnataka
Government and none else.
H
On behalf of the prosecution Ext.P.44(m) is also referred to, which is
_,
·-
I
I
~
R. BALAKRISHNA PILLAI v. STATE OF KERALA [BRIJESH KUMAR, J.] 451
a letter dated 6.3 .. l 995 containing the statement of supply of electricity to A
Wheel and Axle plant and Mis. GIL, Bangalore during the period from
October, 1984 to January, 1985. From the said document it was sought to be
shown that major part ofihe electricity supplied by .Kerala State was consumed
by Wheel and Axle and Mis. GIL but it is to be noted that it is not the total
supply which has gone to Mis. GIL. A note contained on the foot of one of
the pages of the said exhibit indicates that only 34% of the energy supplied B
to Kamataka by Kerala was utilised by Mis. GIL and 66% was utilised by
other consumers. There is no dispute about the fact that electric energy was
imported by the State of Karnataka from the State of Kerala out of which the
State of Kamataka had made energy available ro Mis. GIL and Wheel and
Axle plant amongst its other consumers. Mis. GIL and Wheel and Axle plant C
seem to be heavy industries catering to the needs of the Indian Railways and
to other industries in general including industries in the ·neighbouring States.
·Their consumption of electricity and requirement may be heavy.