# ' S. P. BHATNAGAR ETC v. STATE OF MAHARASHTRA

- **Citation:** [1979] 2 S.C.R. 875
- **Court:** Supreme Court of India
- **Decided:** 1979-01-04
- **Case number:** Criminal Appeal No. 1005 and 1006 of 1973
- **Bench:** Jaswant Singh, 0. Chinnappa Reddy
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/s-p-bhatnagar-etc-v-state-of-maharashtra-7675
- **Pages:** 30

## Headnote

875
Pre1·e111ion of Corrup•tion Act, 1947 s. S(l)(d) & s. 5(2)-Scope of-Proof
of guilt based on circumstantial evidence-Tests for deciding.
Both the appellants were officers of Indian Oil Corporation.
The Corpora·
tion invited tenders from experienced contractors for rock cutting, filling and
levelling of cert2.i1.1 land acuired by it.
On the notified date it opened the
tenders received from eleven contractors.
But in the meantime since it made
a change in the specification of work to be done it asked the tenderers to sub·
mit revised tender.
The direction to submit fresh tt:nders was restricted only
to the original 11 tenderers.
Even so it \\'as alleged that a te\1der form was
issued by the appellants to A-4, who was not one of the 11 tenderers.
There
\:Vas age.in a change in the specifr:ation of the work to be done at the suggestion of foreign collaborators.
The appellants were alleged to have asked the
concerned officers of the Corporation to make a fresh survey along with A-4,
keepi•.1g in view the suggestion of the foreign collaborators. EventuaJly ~1-'!.e contract \Vas giYe11 to A-4.
The prosecution alleged that ( 1) the conduct of the
appellants showed their keenness to have the contract entrusted to A-4. (2)
the issue of work order was inflated with :figures relating to rock cutting and
filling; and ( 3) the appellants removed certain original documents fron1 the
departmental files at.1d substituted in their pla;ce fabricated material.
The appellants who were charged with offences under s. 120B and s. 109
IPC ands. 5(2) read withs. 5(l)(d) of the Prevention of Corruption Act, 1947
were convicted and sentenced to undergo imprisonment.
On the question whether the appellants had been rightly convicted
under
s. 5(1)(d) of the Prevention of Corruption Act.
A11o\ving the appeals,
HELD : 1. An analysis of the circumstantial evidence adduced by t!le prosecution did not lead to the unerring certainty that the appellants acted with
any dishonest or corrupt motive or abused their position. [904 FJ.
A
B
c
D
E
F
2. (a) It is well settled that abuse of position, in order to come v1ithin
G
the mischief of s. 5(1) (d) of the Act, must necessarily be dishonest so that it
may be proved that the ar.:cused caused deliberate loss to the department. Further it is for the prosecution to prove affirmatively that the accused, by corrupt
or i1legal means or by abusing his position, obtained any pecuniary advantage
for some other person. [892 G; 893 A].
(b) Again, the fundamental rule relating to the proof of guilt based on
circumstantial evidence is that there is always danger that conjecture or su~pi~
~ion n1ight take the place of legal proof.
In such cases the mind is apt to take
a pleasure in adC:hpting circumstances to one another and even in straining then! a
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876
SUPREME COURT REPORTS
[!979] 2 S.C.R.
A
little, if need be to force them to forn1 parts of one connected whole and the
more ingenious the mind of the individual the more likely it is, in considering
such matters, to over-reach and mislead itself to supply some little link that
is wanting, to take for gratited some fact consistent with its previo;Js thcoric:s
and necessary to render them complete. [893 B-D].
(c) In cases where the evidence· is of a circumstantial n1ature. the circumB
stances from which the conclusion of guilt is to be drawn should in the first
instance be fu1Jy established, and all the facts so estah!ished should be consistent only \Yith the hypothesis of the guilt of the accused.
Again, t'1e circumstances should be of a conclusive nature and should be such as to t:Al'lndc every
hypothesis but the one proposed, to be proved. In other words there must
be
a chain of evidence so far complete as not to give any reasonable ground for
a conclusion consistent with the innocence of the accused and it must be such
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as to show that within all human probability the act must have been done by
the accused. [893 D-F].
D
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M. Narayanana Nambiar v. State of Kera/a, [1963] Supp

## Text

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'
S. P. BHATNAGAR ETC.
v.
STATE OF MAHARASHTRA
January 4, 1979
[JASWANT SINGH AND 0. CHINNAPPA REDDY, JJ.]
875
Pre1·e111ion of Corrup•tion Act, 1947 s. S(l)(d) & s. 5(2)-Scope of-Proof
of guilt based on circumstantial evidence-Tests for deciding.
Both the appellants were officers of Indian Oil Corporation.
The Corpora·
tion invited tenders from experienced contractors for rock cutting, filling and
levelling of cert2.i1.1 land acuired by it.
On the notified date it opened the
tenders received from eleven contractors.
But in the meantime since it made
a change in the specification of work to be done it asked the tenderers to sub·
mit revised tender.
The direction to submit fresh tt:nders was restricted only
to the original 11 tenderers.
Even so it \\'as alleged that a te\1der form was
issued by the appellants to A-4, who was not one of the 11 tenderers.
There
\:Vas age.in a change in the specifr:ation of the work to be done at the suggestion of foreign collaborators.
The appellants were alleged to have asked the
concerned officers of the Corporation to make a fresh survey along with A-4,
keepi•.1g in view the suggestion of the foreign collaborators. EventuaJly ~1-'!.e contract \Vas giYe11 to A-4.
The prosecution alleged that ( 1) the conduct of the
appellants showed their keenness to have the contract entrusted to A-4. (2)
the issue of work order was inflated with :figures relating to rock cutting and
filling; and ( 3) the appellants removed certain original documents fron1 the
departmental files at.1d substituted in their pla;ce fabricated material.
The appellants who were charged with offences under s. 120B and s. 109
IPC ands. 5(2) read withs. 5(l)(d) of the Prevention of Corruption Act, 1947
were convicted and sentenced to undergo imprisonment.
On the question whether the appellants had been rightly convicted
under
s. 5(1)(d) of the Prevention of Corruption Act.
A11o\ving the appeals,
HELD : 1. An analysis of the circumstantial evidence adduced by t!le prosecution did not lead to the unerring certainty that the appellants acted with
any dishonest or corrupt motive or abused their position. [904 FJ.
A
B
c
D
E
F
2. (a) It is well settled that abuse of position, in order to come v1ithin
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the mischief of s. 5(1) (d) of the Act, must necessarily be dishonest so that it
may be proved that the ar.:cused caused deliberate loss to the department. Further it is for the prosecution to prove affirmatively that the accused, by corrupt
or i1legal means or by abusing his position, obtained any pecuniary advantage
for some other person. [892 G; 893 A].
(b) Again, the fundamental rule relating to the proof of guilt based on
circumstantial evidence is that there is always danger that conjecture or su~pi~
~ion n1ight take the place of legal proof.
In such cases the mind is apt to take
a pleasure in adC:hpting circumstances to one another and even in straining then! a
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876
SUPREME COURT REPORTS
[!979] 2 S.C.R.
A
little, if need be to force them to forn1 parts of one connected whole and the
more ingenious the mind of the individual the more likely it is, in considering
such matters, to over-reach and mislead itself to supply some little link that
is wanting, to take for gratited some fact consistent with its previo;Js thcoric:s
and necessary to render them complete. [893 B-D].
(c) In cases where the evidence· is of a circumstantial n1ature. the circumB
stances from which the conclusion of guilt is to be drawn should in the first
instance be fu1Jy established, and all the facts so estah!ished should be consistent only \Yith the hypothesis of the guilt of the accused.
Again, t'1e circumstances should be of a conclusive nature and should be such as to t:Al'lndc every
hypothesis but the one proposed, to be proved. In other words there must
be
a chain of evidence so far complete as not to give any reasonable ground for
a conclusion consistent with the innocence of the accused and it must be such
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as to show that within all human probability the act must have been done by
the accused. [893 D-F].
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M. Narayanana Nambiar v. State of Kera/a, [1963] Supp. 2 SCR
724; Maior S. K. Kale v. State of Maharashtra, AIR 1977
SC
822;
Hanumant Govind Nergundkar v. State of M.P.,
[1952] SCR 1091,
AIR 1952 SC 343; Palvinder Kaur v. State of Pun;ab, [1953] SCR
94: AIR 1952 SC 354; Charan Singh v. State of U.P., AIR 196' SC
529; referred to.
(d) The principle that inculpatory fact must be inconsistent with the innocence of the accused and i!lcapable of explanation on any other hypothesis
than that of guilt does not mean that any extravagant hypothesis would be
sufficient to sustain the principle, but that the hypothesis suggested must be
reasonable. [893 G].
Govinda Reddy v. State of Mysore, AIR 1960 SC 29; referred to.
In the instant case the conduct of the appel1ants in preferring A~4 to any
ne\V contractor did not savour of dishonest irltcntions on their part.
Although
the notice was sent by registered post to the 11 original tenderers there is nothing in that notice or elsewhere on the record to indicate that other contract0rs
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were precluded from submitting their tenders or that the corrigendum extending the date for submission of the tenders was neither intended to be published
TI(1f \Vas it actually published. The High Court had missed this fact.
Th:! High
Court was also wrong in thinking that out of the nine contractors who submitted their revised tenders eight were from the original nine tenderers and
the ninth \Vas A-4. In fact five of the contractors that
submitted the fresh
tenders were fresh tenderers.
Moreover none of the officers of the Finance
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and Engineering Department of the Corporation who handled the file
:elating
to the griant of contract ever raised any objection regarding the improper reception or ente1tainment of A-4's tender.
This showed that there was nothing
wrong about the issue of tender Form to A-4 or its entertainment by the appellants.
The contr21.::t in question was not a specialised job requiring any extraordinary skill.
A-4 was the Corporation's old and tried contractcr who had
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previously executed a number of works including rock cutting.
(2) Though it cannot be gainsaid that the second appellant had been extremely negligent in not scrutinising the papers, he affixed his signature in a
routine manner to the work order prepared by his subordinates without realising
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s. P. BHATNAGAR v. MAHARASHTRA (Jaswant Singh, !.)
877
the importance of his act, placing fmplicit faith in the integrity of the latter.
[900 E-Fl
(3) There is no clear, cogent and convincing evidence to show that the
appellants had a1 hand in the removlll of the level plans from the dcpartn1cntal
file relating to the contract and substitution of the faked plans. [900 G).
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal !'fas. 346
and 387 of 1975.
Appeals by Special Leave from the Judgment and Order dated
~
6-8-75 of the Bombay High Court in Criminal Appeal No. 1005 and
1006 of 1973.
l
La/it Chari, P. R. Guna, A. K. Srivastava and Vineet Kumar for
A
B
the Appellant in Cr!. A. No. 387 /75.
C
R. L. Kohli, P. P. Rao, R. C. Kohli and R. Nagarathnam for the
Appellant in Crl. A. No. 346/75.
V. S. Desai, H. R. Kh,inna and M. N. Shroff for the Respondent
in both the appeals.
The Judgment of the Court was delivered by
JASWANT SINGH, J.-The above noted two criminal appeals which
are directed against the common judgment and order dated August 6,
1975 o( the High Court of Judicature at Bombay a!fuming on appeal
the judgment and order dated August 6, 1973 of the Special Judge,
Greater Bombay, convicting S. P. Bhatnagar, appellant in the aforesaid first appeal, (hereinafter described as A-1) under s. l 20B read
'°'~ with sections 409 and 109 of the Indian Penal Code and s. 5 ( 1) read
with s. 5 (2) of the Prevention of Corruption Act, 1947, and sentencing him to six months simple imprisonment on each of the said two
•
coui!ts as well as convicting A. S. Krishnaswamy, appellant in the
,)c,
aforesaid second appeal (hereinafter described as A-2) under the afore-
.,-
said two counts but reducing his sentence from nine months' imprisonment to ,six months simple imprisonment on each one
of those
counts, shall be disposed of by this judgment.
•
Briefly put the case as set up by the prosecution was :
In 1964, the Indian Oil Corporation (hereinafter referred to as
'the Corporation') which is a Government owned company, decided
to purchase 13 acres and odd of a hilly tract of land situate in village
Mahul in Trombay (Bombay) from the Tatas for the purpose of erecting black furnace oil storage tanks and construction of administrative
buildings.
After the area was
taken
over by the
Corporation
Varandani (P. W. 20), Junior Engineer of the Corporation surveyed
the land in October, 1964, under the directions of A-1 and A-2 the
Engineering Manager and Senior Engineer respectively of the EngiD
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SUPREME COURT REPORTS
[1979] 2 S.C.R.
neering Department of the Marketing Division of the Corporation
with a view to find out the extent of rock cutting and filling which
might be required to be done for levelling the area of 7 acres out of
the said tract of land.
The kacha level plan (Exh. 125) and worksheets prepared by Varandani on October 13, 1964 and November 3,
1964 respectively during the course of his aforesaid survey (which
were signed by A-l and A-2, showed that 16,80,000 cft.
of rock
cutting work and 8,00,000 cft. of filling work would have to be done
to suit the purpose for which the land was acquired.
Estimate (Exh.
27) prepared by Varandani indicated that expenditure at the rate of
Rs. 30/- per 100 cft. for rock cutting and Rs. 10/- per 100 cft. for
filling would have to be incurred.
Pucca tracing (Exh. 34) of level
plan (Exh. 125) and copies thereof signed by A-1 and A-2,
and
contour plan prepared by Varandani and approved by Engineering
Manager were kept on the record.
On the basis of the survey and
the estimate of expenditure made by Varandani, notice (Exh. 28)
inviting tenders fron1 experienced civil contractors for rock cutting,
filling and levelling of the land in question was prepared by A-2 on
February 2, 1965, and was forwarded (under his signatures) by A-1
to the Finance Department for approval on February 5, 1965. After
the approval of the Finance Department, the Public Relations Oftlcer
of the Corporation by his letter (Exh. 29) dated February 11. l 965
requested Times of India, Indian Express and Free Press to publish
the tender notice (Exh. 28) wherein it was stated that the tenders
which should reach the Corporation by 2.30 P.M. on March 2, 1965
would be opened at 3.00 P.M. on that date.
In response to this
notice eleven firms of contractors including Ram & Co. submitted
their tenders.
N. N. Desai (hereinafter described as A-4) however
abstained from submitting his tender.
In the
meanwhile,
it was
decided that instead of having stack measurement as
provided
in
Exhibit 28, it would be desirable to have the measurements on the
basis of differences between the existing and finished levels. Accordingly, on March 5, 1965, the aforesaid eleven tenderers were asked
to submit revised tenders on the basis of the amended tender notice
by March 15, 1965.
Although fresh tenders were restricted
to the original eleven
tenderers, a tender form was issued to A-4 in response to the application made by him on March 8, 1965.
On opening the tenders on
March 15, 1965, it was found that five out of the eleven
original
H
tenderers and four new ones including A-4 had submitted their tenders, that the tender of Ram & Co. whereby it had quoted Rs. 28/-
per I 00 cft.
for cutting work and 'nil amount for filling was the
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s. P. BHATNAGAR v. MAHARASHTRA (Jaswant Singh, !.)
879
lowest and that the second lowest tender was of A-4 who had quoted
Rs. 26/- per 100 cit. for cutting and Rs. 6/- per 100 cft. for filling
work. Thus, the actual amount as per quotation of Ram & Co. was
Rs. 4,70,400/- and that of A-4 was Rs. 4,84,800/- for 16,80,000
cit. of cutting work and 8,00,000 cft. of filling work. On discovering
that the tender of his firm was the lowest, Roshan Lal, a partner of
Ram & Co. addressed communication dated March 20, 1965 to the
Managing Director of the Corporation requesting him that the aforesaid job of rock cutting and filling be entrusted to his firm in view
of its working experience detailed therein but handed over the same
to A-1. At or about this time, Messrs Labitos Oil Fields Limited,
a British firm whom the Corporation was trying to collaborate in its
project advised the Corporation that instead of three levels (steppings) which had been planned as per cantour map (Exh. 34) there
should be a single level and instead of the survey being on the basis
of 100 ft. spacing as done earlier by Varadani, it should be on the
basis of 10 ft. spacing. Accordingly A-1 and A-2 told Varadani
(P.W. 20) and S. D. Vaidya, another Assistant Engineer (hereinafter
described as A-3) to make a fresh survey alongwith A-4 according
to the advice of Messers Labitos Oil Fields Limited as it had been
almost decided to entrust the aforesaid work to A-4.
Pursuant to
the instructions of A-1 and A-2, B. N. Desai, a representative of
A-4 was associated with the revised survey which was carried from
March 21 to March 26, 1965.
As a result of the joint survey, kacha
level plan (Exh. 22) and work-sheet (Exh. 23) were prepared by
A-3 under the directions of Varandani.
As a result of this survey,
it was found that rock cutting and filling would have to be done to
the extent of 23,30,454 cft. and 31,500 cft. respectively as against
16,80,000 cft. and 8,00,000 cft. respectively as found as a result of
the earlier survey.
Notwithstanding the large variations in the cutting
and filling work which required to be done as a result of the revised
joint survey, the Engineering Department did not invite fresh tendett
but instead prepared another comparative statement on the basis of
the rates quoted by Ram & Co. and A-4 in their tenders opened on
March 15, 1965 and showed therein that the tender of A-4 had
turned out to be the lowest and that of Ram & Co. to be the second
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lowest. On April 7, 1965, A-2 drew up tender committee proceedings (Exh. 16) as reproduced below and got them signed by A-1 in
the hope that the recommendations made therein would be accepted
by Srivastava, (P.W. 5) the Financial Controller and Patel. the
Operation Manager of the Corporation, who were the other members
H
of the Tender Committee, in addition to A-l and finally by Gopiil
Krishan, the then Chairman of the Company :-
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SUPREME COURT REPORTS
[1979] 2 S.C.R.
"Ref. No. ENG/ASK/Q 250 April 7, 1965.
Subject : Tender Committee proceedings for the
finalisation of rock cutting, levelling of plot, taken over
from M/s. Tata at Bombay.
(1) We had taken over 13.5 acres of land from M/s.
Tata Power House at Trombay. It was intended to level
this plot of land and recover about 7 acres of land by cutting and levelling in order to put up our Black Storage tanks
and other allied facilities.
Due to the uneven
terrain, it
was decided to have two steppings so that the storage tanks
may be installed at a higher level and the remaining administrative blocks, were house stores etc., at a lower level.
Accordingly, Public Tenders were invited for rock cutting
and filling this area on 100 cft. basis.
(2) Subsequently, M/s. Lobitos Oil Fields Ltd. Ellesmere Port, Wirral, Cheshire, had negotiations with us for
putting up a Transformer Oil Blending Plant at this site.
The representatives of the above firm during their discussions with C. & S. M. and M. E. (accused No. 1) stated,
that they would like to have only plain piece of land instead
of steppings as was decided by us previously.
This will
entail additional cutting and minimise the quantity of filling.
(3) Our estimated quantity previously was 16,80,000
cft. of cutting and 8,00,000 cft. of filling.
As per the revision in the levels to be maintained at this site that the total
quantity of cutting comes to 23,30,456 cft.
The quantity
of filling comes to 31,500 cft. The total estimated cost for
the original work was Rs. 6,13,200/-.
A comparative statement has been drawn as
per
the
tendered rates quoted by the various parties and the position of the first three is as follows
S. Name of Contractor
Qty.
Rate
Amount
Total
No.
%Cft.
1. N. N. Desai
Cutting
23,30,450 Cft.
26/- Sd.
6,05,917'L
6,07,807
Filling
31,500 Cft. 6/-
1,890 f
2. Ram & Co.
Cutting
23,30,450
28/-
6,52,526
6,52,52'6
Cft.
Filling
31,500 cft. free
6,52,526'\
3. Libery Constructions
Cutting
23,30,450 28/-
Cft.
3,150 J~
6,55,676
Filling
31,500 cft.
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s. P. BHATNAGAR v. MAHARASHTRA (Jaswant Singh, J.)
881
M/s. N. N. Desai, Contractor arc the lowest.
The Tender
Committee therefore recommends that this work may be
allotted to M/s. N. N. Desai, Contractor at their quoted rate
of Rs. 6,07,8071- being the lowest tenderer.
Sd/-
(S. P. Bhatnagar)
M.E.
Approved
(P. A. Gopalakrishnan)
(A. K. Srivastava)
F.O.
!H. B. Patel)
O.M.
Chairman.··
Contrary to the expectations of A-1 and A-2, Srivastava (P.W.
5) refused to be a party to the Tender Committee recommendations.
Ignoring not only the
opposition of Srivastava
and the suggestion
of the Accounts Officer of the
Finance
Department
and
the Assistant Finance Controller of the Corporation made vide Exhibit 68 and Exhibit 31 respectively while processing the tender committee proceedings that in view of the fact that both
the
quantity
and value of the work had increased substantially as a result of the
revised survey, it would be fair and proper to ask all the contractors
"'l who had responded to the tender notice to re-submit their quotations
-- but also the offer made by Ram & Co. (which possessed the requisite
skill and equipment) to execute the contract at the lower rates of
Rs. 20/- per 100 cft. for rock cutting and Rs. 15/- per 100 cit. for
filling as well as the flat refusal to reduce his rates given
by A-4
during the negotiations conducted at the suggestion of the Accounts
Departmcr•t of :the Corporation on April 17, 1965 with the three
contractors mentioned in Exhibit 16, A-2 carried on, in pursuance
of the conspiracy entered into between himself and A-1 and A-4 fresh
negotiations with A-4 on or about April 20, 1965 without associating
any member of the Finance Department and persuaded him to accept
the lowest revised rates offered by Ram & Co. although he did not
possess the requisite experience in and equipment for rock cutting
and filling and by passing the Financial Controller forwarded
the
papers'to the Operation Manager who not being conversant with the
proceedings supported A-2 for entrusting the contract to A-4 at the
lowest rates offered by
Ram & Co.
On the Tender Committee recommendations reaching him in circulation.
Srivastava put on record
his bold and emphatic protest but eventually reluctantly gave his conA
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SUPREME COURT REPORTS
[1979] 2 S.C.R.
A
currence to the recommendations made by A-1 and the Operation
Manager as is evident from the concluding sentence of the Note :
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"The case is recommended for acceptance of the Chairman only because the Engineering Manager has
certified
that he would not be able to accept any responsibility about
the deadline if work is not given to Desai."
Although according to A-2's note (Exh. 33) dated
April 19,
1965, the Coordinator and Sales Manager was keen to have the site
developed as early as possible, the latter held up the matter for nearly
three months in the vain expectation that the work would be done
free of cost either by the Government of Maharashtra or the Bharat
Sevak Samaj and it was not before July 15, 1967 that he gave his
approval to A-l's proposal to award the contract to A-4 whereafter
accepting the said proposal the Managing Director of the Marketing
Division and Chairman of the Board of Directors of the Corporation
accorded sanction to the entrustment of the work to A-4.
On receipt
of the sanction, A-1 forwarded the papers with his endorsement to
the Financial C:ontro!ler on July 29, 1965.
On July 30, 1965, work
order (Exh. 19) manifesting quantity of rock cutting work as
29,30,450 cft., filling work as 90,000 cft. and value of the work as
Rs. 5,99,590/- as against the corresponding figures of 23,30,450 cft.,
31,500 cft. and Rs. 4,70,000/- respectively as specified in the final
sanction which was based on the aforesaid level statement (Exh. 22)
and work sheet (Exh. 23) was prepared and handed over by A-2 to
A-4. Copies of the work order were also endorsed by A-2 to the f
Bills Section of the Engineering Department and the Accounts Section of the Finance Department of the Corporation with the endorsement "the above has Chairman's approval on our note of even
reference dated 7th April 1965.
Please have
the
agreement executed.
Earnest money of unsuccessful tenderers may also please be
refunded early." On July 30, 1965, formal contract (Exh. 74) mentioning only the number and date of the work order
in the blank
columns of the printed forrn was prepared and signed by A-4 and a
representative of the Company.
The joint level statement Exhibit
22 and the work sheet Exhibit 23 in respect of the joint survey made
between March 21 and 26,
1965 for ascertaining the extent of rock
cutting and filling which formed the basis for invitation of tenders
and the final
sanction in favour of A-4 were not only left unsigned
by the concerned but were actually removed from the file and were
substituted by spurious level plan (Exh. 24) and its copy (Exh. 38)
which were fabricated by A-3 to justify the inflated figures of rock
cutting and filling work mentioned in the work order (Exh. 19) dated
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s. P. BHATNAGAR v. MAHARASHTRA (Jaswant Singh, I.)
883
July 29/30, 1965. On August 19, 1965, fabricated
level
plans
A
(Exhibits 24 and 38) prepared by A-3 were sent to A-4 as annexures
to Exhibit 106 which ran as under :-
"We are enclosing herewith two prints of spot level of land
area to be dressed and levelled at our Trombay plot.
The whole plot should be brought to a level of 102.00
as directed.
Please return to us a copy of the Blue Print showing
spot levels duly signed as a token of acceptance of the same
for payment."
While A-4 retained one of the spurious plans viz. Exhibit 38
with himself, he returned the other viz. Exhibit 24 after putting his
initials thereon.
Thereafter A-3 endorsed on the Jetter Exhibit 106
that 'the print signed by A-4 should be filed by Sukhtankar (P.W.
13 J who is in charge of the filing section.' Accordingly, Sukhtankar
filed Exhibit 106 alongwith Exhibit 24 in the
Bill Section.
The
actual rock cutting operations commenced with effect from August 1,
1965 and on August 27, 1965, A-4 prepared and submitted the first
running bill (Exhibit 51) indicating that 8,00,000 cft.
of
cutting
work and 80,000 cft. of filling work had been completed. This bill
was accompanied by the certificate of A-3 reading as under :-
"The measurements on which column No. 3 of this bill
are based were taken by me on 24-8-65 and recorded at
pages of MMC No. 7201.
Certified that the quantities of
work actually executed as shown in column No. 4 has
actually been done and in no case less than the on account
payments claimed.''
The above certificate was countersigned by A-2 on August 26,
1965. A-2, A-3 and A-4
also
signed
measurement
certificate
(Exhibit 52) which read as follows :-
"We certify that the measurements given
above
are
the actual works carried out in accordance with the drawings and specifications as indicated in the work order referred to above."
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On the basis of these certificates, the first on account running bill
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was passed and paid for.
Thereafter the second and third running
bills and measurement certificates Exhibits 53 and 54 dated Septem-
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bcr 16, 1965 and November 17, 1965 respectively claiming that the
additional cutting work of 5,00,000 cft. and 8,00,000 cft. had been
done were likewise prepared by A-4 and signed by A-3 and countcrsigned by A-2.
The fourth running bill and measurement certificate
(Exh. 55) dated February 22, 1966 claiming that additional work
to the extent of 7,00,000 cft. had been done was prepared by A-4
and signed by A-3. This bill which was countersigned by K. S. Joshi,
another Senior Engineer who was put incharge of the Project in :he
absence of A-2 who had been transferred to Delhi was also paid.
On November 8, 1966, one Gurunath Naik (P.W. 17) who was
working as a Junior or Assistant Engineer for some time in Bombay
and for the remaining period at Allahabad, Kanpur and Mugalsarai
was called by A-1 and asked to see Ramrao, the then Junior Engineering Manager.
Accordingly Naik met Ramrao who directed him
to go to the spot and have the level drawings.
Pursuant
to this
direction, Naik went to the site for spot verification and reported to
Ramrao vide Exhibit 18 that excepting at one place where he got a
level of 102-9 nowhere else did he get a level of 102. Naik also
reported that as against an area of 7 .4 acres which had to be levelled
hardiy an area of 4.8 acres was attempted to
be levelled.
On
December 30, 1966, A-4 submitted his final bill (Exb. 56) claiming
to have completed the work by August 11, 1966. This bill bore the
certificate dated December 29, 1966 of A-3 to the effect that the
measurements on which column No. 3 of the bill was based was taken
by him on that date, and bad been recorded in the measurements of
the .M.B.M.C. book. A-3 also recorded a further certificate to tho effect
that the work had been completed 100% according to the specifications and drawings.
This certificate of A-3 was followed by another
certificate of A-4 that he accepted the above certificate and certifiee
that the amount of payment which he received on that bill would be
in full and final settlement of all his claims in respect of the work
excepting the refund of his security deposit.
By this bill, A-4 claimed
to have done 3,84,720 cft. of cutting work and 18,200 cft. of hlling
work in addition to the work covered by the four earlier running bills.
Thus A-4 claimed to have done 31,84,720 cft.
of rock cutting
work and 98,200 cft. of filling work.
On this
bill,
which
bore
the certificates of A-3 and A-4 was countersigned by Ramrao
on
December 30, 1961 and wherein it was falsely claimed by A-4 that
the work was completed on August 11,
1966-although that date
was also much beyond the stipulated clate-A-3 recorded the foilowing note:-
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s. P. BHATNAGAR v. MAHARASHTRA (Jaswant Singh, !.)
885
"The final bill amounts to Rs. 6,51,674/- and is in excess of
work order amount by Rs. 52,084.
Since this excess is within
10% of the ordered amount, M.E. may kindly approve."
Accordingly the papers were laid before A-1 who accorded the
desired approval the moment the bill was laid before him and sent
it for payment to the Accounts Officer ignoring the practice
which
required all such bills involving an excess of 10% over the sanctioned
amount to be submitted to the Chairman for sanction.
On the
bill
coming before the Accounts Department for scrutiny, it pointed out
that since the actual
work
exceeded the
sanctioned amount by
Rs. 52,084/- for which originally the approval of the Chairman was
taken, the excess needed to be regularised by obtaining his sanction. It
was also pointed out that as the contractor had not completed the
work within the stipulated time, the question of imposition of penalty
also required to be considered.
On the pay order being returned to
the Engineering Department, Ramrao, the ·then Deputy Engiueering Manager, submitted the following reply vide
Exhibit 59 dated
January 12, 1967 :-
"The work is now completed
as required.
However
to acquire the required level and gradient, the quantity of
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work has increased.
The party has now
submitted their
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final bill for this work amounting to Rs. 6,51,674/- which
is in excess by Rs. 52,084/- than the original amount of
work order .
The excess is within
10% of the original
estimate,
M.D. is therefore requested to kindly approve the excess
wdrk done and to pass the final bill for Rs. 6,51,674/-.
As per the work order, the work was to be completed
within 4 months (120 working days). However, the Contractors could not complete this work including the disposal
·of the excavated stuff within this time limit due to the fact
that there was no approach available to this plot.
The
party has completed the work expeditiously, after the
approach was given to them by M/s. Talas.
M. D. is therefore, requested to consider this
aspect
and approve the time limit extension upto 11-8-1966, the
date on which the party has completed the work."
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On the matter coming back to the Finance Department, Shende
(P.W. 16) pointed out that not only the quantities of rock cutting and
filling work which were found as a result of the survey made between
March 21 and 26, 1965 had been enormously inflated in the work
order but the work claimed to have been done also exceeded the inflated figures mentioned in the work order. He, therefore,
suggested
that the Department might agree to the payment of extra amount to
A-4 subject to A-l's obtaining the Board's
ratification. Sometime
before March 28, 1967, Krishnaswamy Rajam (P.W. 1), the Chief
Internal Auditor, was summoned by the Managing Director and the
General Manager and was asked to have a personal talk with A-3 in
connection with the matter.
On P.W. l's questioning A-3 on March
28, 1967, the latter made confessional statement (Exh. 21) which is.
reproduced below for facility of reference :-
''Regarding rock cutting and filling at T rombay site I
wish to bring to your kind attention the following :
I was assigned to this job after the work was
started at site by M/s N. N. Desai.
The original
estimates for cutting and filling were 16,80,000 cft.
and 8,00,000 cft. respectively. It was later revised
to 23,30,450 cft. and 31,500 cft. for cutting and
filling.
I have got the workings for
this revision
with me at Ahmedabad.
(He refers to the genuine
level statements and plans and worksheets Bxs.
22
and 23 which were prepared by him under the directions of Varandani between 21st and 26th March,
1965).
Later on I was advised by my superiors to give
a still further upward revision giving the quantities
as 29,30,450 cft. for cutting and 90,000 cft. for filling.
The work sheets prepared by me and signed
by contractor only (N. N. Desai) has no bearing to
actual quantities involved.
I had merely acted as
asked by my superiors
in preparing
worksheets
accordingly which has resulted in this upward revision. I have also given measurement certificates irr
this regard in line with the revised wrong quantities.
I realise now this has resulted in making excess payments to the contractor. I beg to be excused for
having done such a thing which was done solely at
the instance of my superiors in Engineering Depart-
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s. P. BHATNAGAR v. MAHARASHTRA (Jaswant Singh, !.)
887
ment.
E.M. (accused No. 1) and Dy. E.M. are
A
aware of this."
Thereupon P.W. 1 put up the papers before the Managing Director and the General Manager who advised him to start investigation
on particular lines. During the course of the inquiry, A-2 told P.W.
1 that the work order which as far as he remembered was prepared
by A-3 was cursorily signed by him due to heavy rush of work and
that while checking the running bills submitted for
payment, he normally checked the percentage of progress of work certified by the
Assistant Engineer.
On further investigation made on April I, 1967,
A-3 produced the genuine level statement (Exh. 22) and the work
sheet (Exh. 23) before P.W. 1 and told him that the substitution of
the fabricated level statement and work sheet relating to rock cutting
and filling at Trombay was done at the instance of Joshi, A-2 and
A-1 and that they were aware of the same.
To the further question
as to what was the basis for the work order for the figure of 29,00,000
cft. of rock cutting and 90,000 cft. of filling, A-3 told P.W. 1 that
there was no basis for the work order and the quantities were fixed
to suit sanctioned amount.
On a query being made by P .W. 1 from
Ramrao regarding the final bill, he admitted that he had not personally
checked the calculations and had counter;signed the bill relying
on
the accuracy of the measurements shown in the bill which was prepared by A-3. He further stated that he had not personally checked
the calculations based on the final bill and initialled joint levels which
according to him were normally done by the Assistant
Engineer.
During the course of this inquiry, Murthy (P.W. 18) was deputed
by A-1 and Krishnaswamy (P.W. 1) to go to the spot and find out
the work which had actually been done.
Thereupon, Murthy (P. W.
18) submitted his interim report on April 6, 1967 pointing out that
at only one place the level was 103.94 and elsewhere
it remained
much more.
By his final report (Exh. 44) dated April 20, 1967,
Murthy (P.W. 18) pointed out tha~ actually on the spot only 9,73,000
cft. of rock cutting and 50,000 cft. of filling had been done.
After
recording the statements of A-2, A-3 and A-4, Krislmaswamy (P.W.
1) submitted a detailed report (Exh. 25) on April 8, 1967 to the
Managing Director through the Financial Controller. In his report,
P.W. 1 also pointed out that contour plan/levels statement which in
case of this nature are jointly signed by the contractor and the representative of the Engineering Department were not available in the
instant case for inspection and that A-3 had produced a level statement alleged to have been processed by him and Varandani which
was not signed by any hody including A-3's superiors.
P.W. 1 also
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[1979] 2 S.C.R.
pointed out in the course of the report that the quantities of rock
cutting and filling shown in the work order were 29,30,450 cft. and
90,000 cft. respectively and that there was an increase of 6,00,000
cft. of rock cutting straightaway.
Krishnaswamy (P.W. 1) also mentioned in his report that according to A-3, the level statement giving
the figure of 29,30,450 cft. for cutting and 90.000 cft. for filling had
been signed by A-4.
~
On the report being put up before the then Financial Controller,
he directed that before proceeding with the matter, it was necessary
to call for the comments of A-1.
Thereupon after calling for a report
from Ramrao, A-1 gave his comments vide Exhibit 178 dated April
17, 1967 wherein after doubting the competence and qualification of
P.W. 1 to hold the investigation, he offered to send one of the senior
engineers from Western Branch to carry out an independent survey
to find out the quantity of work done by A-4 and suggested that
measurements might be made by reference to the kacha level statement (Exh. 125), the work sheet (Exh. 126) and the contour plan
(Exh. 34) which were checked by A-2 and approved by him and
which must be with the department. On April 18, 1967, A-1 sent
for A-3 and questioned him in regard to the matter. In the statement penned by A-3 himself, he stated that he changed the levels of
drawing of Trombay plot regarding rock cutting and filling job at the
instance of A-2 and KSJ (i.e. Joshi) but did not inform A-1.
On May 3, 1967, A-1 issued show cause notices to A-2 and A-3
with a view to hold departmental enquiry against them. By his reply
dated May 20, 1967 to the show cause notice, A-3 stated that he had
changed the original contour plan at the instance of A-2.
On getting information on July 15, 1967 that A-4 was
having
some rock cutting done on the site althougli he had in his final bill
claimed that he had fully completed the work on August 11, 1966,
A-1 and A-2 visited the site along with Lakshmanan, the Operations
Manager and finding that the work of rock cutting was still going on
and that the claim of A-4 as certified by A-3 and countersigned by
Ramrao about the work having been completed on August 11, 1966
was apparently false had the measurements of rock cutting and filling
work taken by Ganapathy.
As the measurements taken by Ganpathy
were on the basis of level plans prepared by Talas in which the bench
mark was 94.5 as against the bench mark of 100 for the survey in
question, the Managing Director had the measurements
taken
by
M/s R. L. Dalal & Co. The report of Dalal & Co. showed that the
rock cutting work done was 9,60,000 cft. and filling
work
was
1,96,000 cft. only.
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s. P. BHATNAGAR v. MAHARASHTRA (Jaswant Singh, J.)
889
On July 28, 1967, the Managing Director issued a charge sheet to
A-1, A-2, A-3 and Ramrao. In his reply (Exh.64) dated August 4,
1967 to the charge sheet, A-3 submitted that whatever he did was
W1der the orders of A-1 and the Deputy Engineering Manager.
This
time he did not mention A-2 to be responsible for anything done by
him.
On the same day i.e. August 4, 1967, A-1 sent for A-3 in his
cabin and questioned him in the presence of three other officers viz.
Roy Chowdhary (P.W.2), who was the Deputy Financial Controller,
Shriyan (P .W.23), the Assistant Engineer, and Vora, the Senior Engineer.
On this Occasion, A-3 allegedly made statement
(Exh.43)
absolving A-1 and throwing the entire responsibility on A-2.
While
the three other officers and A-1 signed the statement (Exh.48) made
by A-3, A-3 declined to sign it and fled away from the chamber on
some excuse and rushed to the chamber of Krishnaswamy, Chief Internal Auditor whereupon Roy Chowdhary (P.W.2) also followed A-3 to
the chamber of Kri,shnaswamy.
In the chamber of Krishnaswamy,
A-3 resiled from the statement.
Having regard to the position adopted
by A-3 in resiling from his earlier statement of that very day before
A-1, Roy Chowdhary reminded him that in the morning ill his presence, he had stated that it was A-2 who was responsible for asking
him to change the drawing and increase the quantities.
To this question of Roy Chowdhary in the chall!ber of Krishnaswamy, A-3 replied
in tho negative and stated that A-1 called him and Joshi into his room
and instructed him personally to increase the quantity.
When questioned by Roy Chowdhary as to why he did not come out with that
"""
truth in the room of A-1 in the presence of Roy Chowdhary, A-3
replied that he did not do so out of fear or A-1.
In his reply to the charge sheet, Ramrao inter alia stated that he
signed the bill (Exh.56) relying on the certificate of A-3 who had been
assigned to the job and added that according to the practice prevailing
in the Corporation, Senior Engineers were not expected to verify the
measurements.
Elaborating his explanation; he stated that
just as
Senior Engineer, Doraiswamy could not proceed to a BPI nor Senior
Engineer Vora nor Senior Engineer Chari could proceed to an installation just to verify the billed quantities in view of the fact that there
were a number of bills on each work order and so many work orders
for each location.
Similarly in the Branches, Senior Engineers who
were controlling the work for so many depots and installations were
not expected to verify the quantities in each bill; that however, if there
was a dispute with the contractor or there was some other reason to
doubt the correctness of the Assistant Engineer's certificate, the Senior
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Engineer might either take measurements himself or get them taken by
another Assistant Engineer; that subsequent to the counter signature by
the Senior Engineer, the bill was passed on to the Engineering Bills
Section where the bills were checked by the Accountant against sanctions, work order, rates and amounts, deductions for cement A.