# STATE OF MADHYA PRADESH v. SHEETLA SAHAI & ORS - **Citation:** [2009] 12 S.C.R. 1048 - **Court:** Supreme Court of India - **Decided:** 2009-08-04 - **Case number:** Criminal Appeal No. 1417 of 2009 - **Bench:** S.B. Sinha, Cyriac Joseph - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-of-madhya-pradesh-v-sheetla-sahai-ors-24983 - **Pages:** 45 ## Headnote CODE OF CRIMINAL PROCEDURE, 1973: Section 197 - Sanction for prosecution - Whether public servants act in their official capacity or purport to act in their official capacity such action would attract the provisions of Section 197 - Thus sanction for prosecution was required to be obtained - Prevention of Corruption Act, 1988 - Sections 13, 19. In this appeal on the basis of the facts of the case and contentions raised on both sides, the main question that arose for consideration was whether sanction for prosecution in terms of Section 197 Cr.P.C. was required to be obtained. Dismissing the appeal, the Court HELD: 1.1. Criminal conspiracy is an independent offence. It is punishable separately. Prosecution, therefore, for the purpose of bringing the charge of criminal conspiracy read with the relevant provisions of the Prevention of Corruption Act was required to establish the offence by applying the same legal principles which are otherwise applicable for the purpose of bringing a criminal misconduct on the part of an accused. A criminal conspiracy must be put to action inasmuch as so long a crime is generated in the mind of an accused, it does not become punishable. What is 1048 \' - - • -< STATE OF MADHYA PRADESH v. SHEETLA SAHAI 1049 & ORS. necessary is not thoughts, which may even be criminal A --'-· in cli.aracter, often involuntary, but offence would be said to have been committed thereunder only when that take concrete shape of an agreement to do or cause to be done an illegal act or an act which although not illegal by illegal means and then if nothing further is done the B agreement would give rise to a criminal conspiracy. [Paras 50 and 51] [1078-C-F] 1.2. What is necessary is to show meeting of minds .. ,, of two or more persons for doing or causing to be done an illegal act or an act by illegal means. While saying so, c this Court is not oblivious of the fact that often conspiracy is hatched in secrec~r and for proving the said offence substantial direct evidence may not be possible to be obtained. An offence of criminal conspiracy can also D be proved by circumstantial evidence. [Paras 51 and 52] ,.1,- [1078-H; 1079-A-B] 1.3. Ex facie, there is no material to show that a conspiracy had been hatched by the respondents. [Para 52] E Soma Chakravarty v. State Through CBI (2007) 5 SCC --"'-! 403; K.N. Sathyapalan (Dead) by LRs. v. State of Kera/a & Anr. (2006) 12 SCALE 654; Kehar Singh and Ors. v. State (Delhi Administration), 1988 (3) SCC 609; State (NCT) of F Delhi v. Navjot Sandhu @ Afsan Guru (2005) 11 SCC 600; Ram Narayan Popli v. CBI (2003) 3 SCC 641 and Yogesh @ Sachin Jagdish Joshi v. State of Maharashtra (2008) 6 SCALE 469, referred to. 2. The Minister in his note dated 4.11.1991 did not G '-1 make any recommendation. He merely lamented the manner in which the former Secretary acted as prior thereto, the said authority himself for all intent and purport had accepted the recommendations of the authorities incharge of construction of the dam including H 1050 SUPREME COURT REPORTS [2009) 12 S.C.R. A the Chief Engineer. He constituted a committee. He obtained the opinion of the Financial Adviser. If upon consideration of the entire materials on record, independent opinion had been rendered and recommendations were made, it is difficult to B comprehend as to how that by itself would constitute a criminal misconduct or leads to the conclusion of hatching any criminal conspiracy. Recommendations made by the Committee or the opinion rendered by an independent officer like Financial Adviser need not be c acted upon. It was for the State to take a decision. Such a decision was required to be taken on the basis of the materials available. [Para 53) [1080-H; 1081-A-C] D Inspector Prem Chand v. Govt. of N. C. T. of Delhi & Ors. 2007 AIR SCW 2532, referred to. 3. Even under the Prevention of Corruption Act, an offence cannot be said to have been committed only because the public servant has obtained either for himself or f ## Text _Characters 0–39,987 of 81,966. This is a partial read: ask again with offset=39987 for what follows._ A B c D E F G H [2009] 12 S.C.R. 1048 STATE OF MADHYA PRADESH v. SHEETLA SAHAI & ORS. (Criminal Appeal No. 1417 of 2009) AUGUST 4, 2009 [S.B. SINHA AND CYRIAC JOSEPH, JJ.] CODE OF CRIMINAL PROCEDURE, 1973: Section 197 - Sanction for prosecution - Whether public servants act in their official capacity or purport to act in their official capacity such action would attract the provisions of Section 197 - Thus sanction for prosecution was required to be obtained - Prevention of Corruption Act, 1988 - Sections 13, 19. In this appeal on the basis of the facts of the case and contentions raised on both sides, the main question that arose for consideration was whether sanction for prosecution in terms of Section 197 Cr.P.C. was required to be obtained. Dismissing the appeal, the Court HELD: 1.1. Criminal conspiracy is an independent offence. It is punishable separately. Prosecution, therefore, for the purpose of bringing the charge of criminal conspiracy read with the relevant provisions of the Prevention of Corruption Act was required to establish the offence by applying the same legal principles which are otherwise applicable for the purpose of bringing a criminal misconduct on the part of an accused. A criminal conspiracy must be put to action inasmuch as so long a crime is generated in the mind of an accused, it does not become punishable. What is 1048 \' - - • -< STATE OF MADHYA PRADESH v. SHEETLA SAHAI 1049 & ORS. necessary is not thoughts, which may even be criminal A --'-· in cli.aracter, often involuntary, but offence would be said to have been committed thereunder only when that take concrete shape of an agreement to do or cause to be done an illegal act or an act which although not illegal by illegal means and then if nothing further is done the B agreement would give rise to a criminal conspiracy. [Paras 50 and 51] [1078-C-F] 1.2. What is necessary is to show meeting of minds .. ,, of two or more persons for doing or causing to be done an illegal act or an act by illegal means. While saying so, c this Court is not oblivious of the fact that often conspiracy is hatched in secrec~r and for proving the said offence substantial direct evidence may not be possible to be obtained. An offence of criminal conspiracy can also D be proved by circumstantial evidence. [Paras 51 and 52] ,.1,- [1078-H; 1079-A-B] 1.3. Ex facie, there is no material to show that a conspiracy had been hatched by the respondents. [Para 52] E Soma Chakravarty v. State Through CBI (2007) 5 SCC --"'-! 403; K.N. Sathyapalan (Dead) by LRs. v. State of Kera/a & Anr. (2006) 12 SCALE 654; Kehar Singh and Ors. v. State (Delhi Administration), 1988 (3) SCC 609; State (NCT) of F Delhi v. Navjot Sandhu @ Afsan Guru (2005) 11 SCC 600; Ram Narayan Popli v. CBI (2003) 3 SCC 641 and Yogesh @ Sachin Jagdish Joshi v. State of Maharashtra (2008) 6 SCALE 469, referred to. 2. The Minister in his note dated 4.11.1991 did not G '-1 make any recommendation. He merely lamented the manner in which the former Secretary acted as prior thereto, the said authority himself for all intent and purport had accepted the recommendations of the authorities incharge of construction of the dam including H 1050 SUPREME COURT REPORTS [2009) 12 S.C.R. A the Chief Engineer. He constituted a committee. He obtained the opinion of the Financial Adviser. If upon consideration of the entire materials on record, independent opinion had been rendered and recommendations were made, it is difficult to B comprehend as to how that by itself would constitute a criminal misconduct or leads to the conclusion of hatching any criminal conspiracy. Recommendations made by the Committee or the opinion rendered by an independent officer like Financial Adviser need not be c acted upon. It was for the State to take a decision. Such a decision was required to be taken on the basis of the materials available. [Para 53) [1080-H; 1081-A-C] D Inspector Prem Chand v. Govt. of N. C. T. of Delhi & Ors. 2007 AIR SCW 2532, referred to. 3. Even under the Prevention of Corruption Act, an offence cannot be said to have been committed only because the public servant has obtained either for himself or for any other person any pecuniary advantage. E He must do so by abusing his position as public servant or holding office as a public servant. In the latter category of cases, absence of any public interest is a sine qua non. The materials brought on record do not suggest in any manner whatsoever that the respondent Nos. 1 to 7 F either had abused their position or had obtained pecuniary advantage for the respondent Nos. 8, 9 and 10, which was without any public interest. [Para 54) (1082E-F] 4.1. There cannot be any doubt whatsoever that the G tests for the purpose of framing of charge and the one for recording a judgment of conviction are different. A distinction must be borne in mind that whereas at the time of framing of the charge, the court may take into consideration the fact as to whether the accused might H have committed the offence or not; at the time of STATE OF MADHYA PRADESH v. SHEETLA SAHAI 1051 & ORS. _ _..;... recording a judgment of conviction, the prosecution is A required to prove beyond reasonable doubt that the accused has committed the offence. [Para 58) [1084-B-C] · 4.2. In this case, the probative value of the materials on record has not been gone into. The materials brought B on record have been accepted as true at this stage. It is true that at this stage even a defence of an accused cannot be considered. But, this Court is unable to agree ~"i· with the submission that where the entire materials collected during investigation have been placed before c the court as part of the ch'argesheet, the court at the time of framing. of the charge could only look to those materials whereupon the prosecution intended to rely upon and ignore the others which are in favour of the accused. The question as to whether the court should D A· proceed on the basis as to whether the materials brought on record even if given face value and taken to be correct in their entirety disclose commission of an offence or not must be determined having regard to the entirety of materials brought on record by the prosecution and not 4 on a part of it. If such a construction is made, Sub-section E (5) of Section 173 of the Code of Criminal Procedure shall -- "'! become meaningless. [Para 59) [1084-D-G] 5. The prosecution, having regard to the right of an accused to have a fair investigation, fair inquiry and fair F trial as adumbrated under Article 21 of the Constitution of India, cannot at any stage be deprived of taking advantage of the materials which the prosecution itself has placed on record. If upon perusal of the entire materials on record, the court arrives at an opinion that G .. ..,, two views are possible, charges can be framed, but if only one and one view is possible to be taken, the court shall not put the accused to harassment by asking him to face a trial. [Para 59] [1084-G-H; 1085-A-B] H 1052 SUPREME COURT REPORTS (2009] 12 S.C.R. A State of Maharashtra and Others v. Som Nath Thapa and B Others (1996) 4 SCC 659, relied on. Centre for Public Interest Litigation and Another v. Union of India and Another (2005) 8 SCC 202, referred to. 6.1. Be he an Executive Engineer, Superintending Engineer, Chief Engineer, Engineer-in-Chief, Secretary or Deputy Secretary, matters were placed before them by their subordinate officers. They were required to take action thereupon. They were required to apply their own C mind. A decision on their part was required to be taken so as to enable them to oversee supervision and completion of a government project. The Minister having regard to the provisions of the Rules of Executive Business was required to take a decision for and on D behalf of the State. Some of the respondents were required to render their individual opinion required by their superiors. They were members of the Committee constituted by the authorities, viz., the Minister or the Secretary. At that stage, it was not possible for them to E refuse to be a Member of the Committee and/ or not to render any opinion at all when they were asked to perform their duties. They were required to do the same and, thus, there cannot be any doubt whatsoever that each one of the respondent Nos. 1 to 7 was performing F his official duties. [Para 62] [1087-D-H] 6.2. For the purpose of attracting the provisions of Section 197 of the Code of Criminal Procedure, it is not necessary that they must act in their official capacity but even where a public servant purports to act in their G official capacity, the same would attract the provisions of Section 197 of the Code of Criminal Procedure. Thus, in the instant case, sanction for prosecution in terms of Section 197 of the Code of Criminal Procedure was H •-... . STATE OF MADHYA PRADESH v. SHEETLA SAHAl1053 & ORS. required to be obtained. (Paras 63 and 66) (1088-A-B; A _,.. 1092-F] Sankaran Moitra v. Sadhna Das and Another (2006) 4 SCC 584; Matajog Dobey v. H. C. Bhari AIR 1956 SC 44 : 1955 (2) SCR 925; 8. Saha v. M.S. Kochar (1979) 4 SCC B 177; R. Balakrishna Pillai v. State of Kera/a and Another (1996) 1 SCC 478; Rakesh Kumar Mishra v. State of Bihar and Others (2006) 1 SCC 557; Parkash Singh Badal v. State of Punjab and Others (2007) 1 SCC 1 and State of Karantaka -~ v. Ameerjan (2007) 11 SCC 273, relied on. c Case Law Reference: (2007) 5 sec 403 referred to Para 34 (2006) 12 SCALE 654 referred to Para 35 D 1988 (3) sec 609 referred to Para 52 ~- (2005) 11 sec 600 referred to Para 52 (2003) 3 sec 641 referred to Para 52 (2008) 6 SCALE 469 referred to Para 52 E 2001 AIR sew 2532 referred to Para 53 ~ (1996) 4 sec 659 relied on Para 59 (2005) 8 sec 202 referred to Para 60 F (2006) 4 sec 584 relied on Para 63 AIR 1956 SC 44 : 1955 (2) SCR 925 relied on Para 63 G (1979) 4 sec 111 relied on Para 63 ; 1 (1996) 1 sec 478 relied on Para 63 (2006) 1 sec 557 relied on Para 63 H A B 1054 SUPREME COURT REPORTS [2009] 12 S.C.R. (2001) 1 sec 1 (2007) 11 sec 213 relied on relied on Para 64 Para 65 CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 1417 of 2009. From the Judgment & Order dated 12.01.2006 of the High Court of Madhya Pradesh, Jabalpur in Criminal Revision Nos. 75, 126, 127, 147, 161, 242 of 1999 and 734 of 1997. K.T.S. Tulsi, Ravinder Singh, Puneet Jain, Sushi! Kumar C Jain, Ashwin V. Kotemath for the Appellant. Vivek K. Tankha, Ajay Mishra, Uday Umesh Lalit, B.K. Satija, Siddharth Gupta, Mohit Nayak, Akshat Shrivastava, P.P. Singh, lnderjeet Yadav for the Respondents. D The Judgment of the Court was delivered by S.B. SINHA, J. 1. Leave granted. 2. Appellant is before us being aggrieved by and E dissatisfied with a judgment and order dated 12.01.2006 passed by a learned Single Judge of the Madhya Pradesh High Court allowing the criminal revision applications filed by the respondents herein arising out of the orders dated 21.12.1998 and 13.05.1997 passed by the Special Judge, Bhopal in F Special Case No. 6 of 1997. • 3. The respondents herein were proceeded against for commission of offences under Section 13(1)(d)(2)(ii-iii) read with Section 13(2) of the Prevention of Corruption Act, 1988 (for short "the Act") and Section 1208 of the Indian Penal Code, G 1860. H 4. Before proceeding further, we may notice the positions held by the respondents herein. Respondent No. 1 Sheetla Sahai was Minister for Water Resources of the State of Madhya f • STATE OF MADHYA PRADESH v. SHEETLA SAHA! 1055 & ORS. [S.B. SINHA, J.] Pradesh. Respondent No. 2 D.V.S.R. Sarma and the A __ .. respondent No. 7 S.W. Mohgoankar were the Secretary to the Government of Madhya Pradesh. Respondent No. 3 P.V. Srinivasaiyah was the Engineer-in-Chief and the respondent No. 4 A.S. Laxminarsimhaiya was\the Deputy Secretary in the Government of Madhya Pradesh. Respondent No. 5 V.R.B. B Gopal and the respondent No. 6 M.N. Nadkarni were the Chief Engineers, Hasdeo Bango Project. Respondent No. 11 R.P. Khare was the Secretary, Control Board for Major Projects. -:l\ 5. Appellant under the aegies of the World Bank undertook construction of the Hasdeo Bango Masonry dam c project. For the aforementioned purpose, the respondent Nos. 8, 9 and 10 herein, viz.,M/s Progressive Constructions Pvt. Ltd., M/s Prasad & Company, M/s SEW Construction Co. (hereinafter referred to as "the contractors") were awarded D contracts in terms whereof they were required to excavate £,;Jr stones etc. from Therma Pahar Quarry, which was situate at only 12 kms. away from the site, for use of the stone to be extracted therefrom for construction of masonry spillway. 6. One of the terms of the said contract is as under: E " .. :The tenderer should satisfy himself regarding ,•v availability of the required quality and quantity of the materials, if any quarry is changed for any reason whatsoever, no claim shall be entertained on this account." F In addition to the guidelines, a plan was also supplied to the contractors containing the following note: "the contractor shall extract materials from the approved sources and quarry areas to be designated by G the engineer-in-charge for their particular contract group. ~·~' They shall have no claim for any material collected elsewhere without having obtained the prior approval in writing of the engineer in charge. Such material shall become the property of the department unless approval to H A 1056 SUPREME COURT REPORTS [2009] 12 S.C.R. use the same is subsequently accorded by the engineerin-charge, in which case, however, the contractor shall not be entitled for any extra rate or lead." 7. However, on the premise that whereas eight lakh cubic 8 meters of stones of the requisite specification were required for masonry work, only one lakh cubic meter stone was available from the Therma Pahar Quarry, permission was sought for by the contractors to excavate stones, rubbles and other materials from a quarry known as Katghora Quarry which C was situated at a distance of 22 kms. from the dam. !-- 8. The question was considered by the concerned engineers. The District Mining Officer and the Additional Collector Korba, having regard to the fact that the mining leases in respect of the said quarries were to be granted, asked them D not to do so as the stones in the hillocks of villages Katghora, Hunkra and Maheshpur were found to be suitable for the masonry work of the dam, as would appear from a letter dated 14.07.1983 issued by the Executive Engineer to the Additional Collector, Korba. E 9. The Superinteoding Engineer, respondent No. 7 herein also by his letter dated 28.07.1983 addressed to Shri R.C. Gupta, the then Executive Engineer stated: "I am informed that Rampura quarry near Katghora on F Kathora Ambikapur road, may also yield good masonary stones. You may also explore this possibility and let me know if the stones were got tested. If not, the samples from this quarry may also be tested. Case could also be moved to obtain lease for this quarry." G H 10. A request was also made to the Mining Officer of Bilaspur to the same effect by Shri R.C. Gupta, the then Executive Engineer by a letter dated 16.10.1983, stating: " ... Adequate quantity of rubble is not available from Therma quarries of Forest Department acquired for this ' . -. ..\- STATE OF MADHYA PRADESH v. SHEETLA SAHAI 1057 & ORS. [S.B. SINHA, J.] purpose and Geologist, Geological Survey of India had A intimated that about one lakh cum. of rubble can only be extracted from Therma quarries. For completion of this major dam about ten lakh cum. rubble & metal are needed. Out of which 1 lakh cum. can be extracted from Therma quarry, about three lakh cum. can be used out of the stone B received from excavation of foundation of dam, remaining 6 (six) lakh cum. is required from adjacent stone quarries like Katghora, Hukra & Maheshpur. Hence, I have requested in my letter cited above (copy enclosed) to additional Collector, Korba, to reserve rubble quarries in c the surroundings of the above villages so that rubble from these quarries can be extracted for completion of the Bango Dam in time. Now I understand that you have proposed the above quarries for auction on 20th & 21st Oct.'83. I request to D delete the rubble quarries situated in the surrounding of Katghora, Hukra & Maheshpur from the purview of auction and transfer to Irrigation Department. Depending upon the quantity of rubble required by each agency executed masonry works at Bango Dam, allotment of individual E quarries will be made by us after the agenCies deposit the royalty charges which will be refundable to them after awarding the certificate of utilizing the material in bonafide Government works. Till the formalities are over for transfer of the above quarries to Irrigation Department, I request to delete the following quarries from the purview of auction. F S.No. Name of PC No. Name of Khasra No. Area 1. 2. Village material Hukra 47 Stone 347/1 17.396 Hee. Maheshpur 31-A Stone 1/1-K 30.425Hec." '• G H A B c D E F G H 1058 SUPREME COURT REPORTS [2009) 12 S.C.R. 11. The Additional Collector (Mining Section), Korba in response thereto by a letter dated 22.11.1983 addressed to the Executive Engineer reserved the aforementioned quarries for extraction of stones departmentally, subject to the conditions mentioned therein. 12. Yet again, the Executive Engineer by a letter dated 05.12.1984 addressed to the Superintending Engineer brought to his notice that alternative sites for quarrying operations for extraction of stones were necessary, inter alia, stating: "2. The quarrying operations for extraction of stones was started in the real sense during 82-83 working season, i.e., prior to the area was ready for starting the masonry. The contractors after the start of quarry operations, repeatedly wrote, regarding the non availability of sufficient stones of requisite quality. They had also brought out that the yield of even this small quantity of stone was very much less. In consultations with the department and the resident geologist, they have opened more number of quarry faces, but this did not result yields. This office has also carried out case studies which has established the yield of useful stone to be very much less. The details enclosed at Annexure A. Even the quantum of stone available is less, when compared to the requirement. 3. It was reported that the quantum of useful rubble available in the entire Therma Pahad Hills is to the tune of one lakh cum. against the total requirement of 8 lakh cum. for the entire dam. This was based on the detailed investigations and report of the Resident Geologist. Even this quantity can be extracted with much difficulty. Therma Pahad Quarry on the visual appearance and the random 'f • bore holes, initially appeared to be good. As such this was ' ' declared as quarry for masonry stone and accordingly estimates prepared and designated as the specified quarry in the quarry map enclosed along with the agreements. The contractors naturally could not have STATE OF MADHYA PRADESH v. SHEETLA SAHA! 1059 & ORS. [S.B. SINHA, J.] ,-k investigated the quarry by actual opening/ operation, and A have inspected the quarry with the data available to them. Therefore neither department nor the contractor could have foreseen the non availability of useful stone in the required quantity from the designated quarry." It was requested: B "It is therefore requested that the sanction may be obtained ·~ for payment of additional leads and communicated. However, the payment towards additional wasteful expenditure incurred in therma quarries as claimed by c contractors is recommended for rejection." 13. The Superintending Engineer brought the same to the ... notice of the Chief Engineer by a letter dated 18.12.1984 stating that there had always been a controversy regarding the use of D ~* those stones as rubble in masonry dam. A question was also raised as to whether the department would permit additional payment due to change in the quarry. If such a step is not taken, the contractor may put an end to the contract and, thus, inter alia requested that payment of additional leads from Katghora E quarry may be allowed. Department: "Thus, it is noticed the mica existing in the rocks under B question varies from 7% to 11%. No mention of the permissible percentage of mica is given in IS codes or other books. Only Hand book on civil engineering by PN Khanna, reveals that 2% of mica is permissible. In view of the above it is submitted that the pigmetite band stones j • c are not fit for use in masonry dam from quality control unit Machadoli's point of view. This is, however, continuously used in masonry on dam blocks 16, 17, 18, 19, 25, 26, 27, 28, 29, 35, 37 in which work continuously in progress. If the higher authority deems it fit, that use of pigmetite is .... to be continued by overruling the opinion of the D undersigned clear written instructions may kindly be issued "I: to this office for guiding the A.R.Os. Quality Control deployed on Quality control work of masonry dam. Early reply is solicited." E 16. In view of the aforementioned development, the Chief Engineer of the Project brought the same to the notice of the Secretary of the Major, Medium and Minor Irrigation "( - Department, Bhopal by a letter dated 11.01.1985 inter alia making the following recommendations: F "(i) Permitting the Chief Engineer for declaring Katghora quarry as an additional quarry for balance quantity of rubble quarry for rubble for masonry dam other than one lakh cubic meter of rubble, as assessed by the geologist to be extracted by the contractors from Therma Pahad G quarry as far as possible in the contracts mentioned in this letter. ; . (ii) To allow payment of additional leads from Katghora quarry for cum of masonry at the rates detailed in table at H para 5.3 above." STATE OF MADHYA PRADESH v. SHEETLA SAHAl1061 & ORS. [S.B. SINHA, J.] · .. ---+ Along with the said letter, various other documents were A enclosed as specified therein including a letter dated 4.05.1990, wherein it was inter alia stated: - "10. In view of the above, the Chief Engineer submitted proposals on 4.07.85 for Government Orders. According to the above proposals sanction to pay extra lead B amounting to Rs. 1,23,23,767/- has been sought. This amount is about 3% of the total amount of contract of Rs. -* 41. 77 crores. The Chief Engineer had also sought the opinion of the World Bank, and the World Bank gave a c suggestion to deal the issue with in the contractual provisions. Similar problem has been raised by th.e contractors in Bansagar Project also, and the Executive ~. Committee had recommended approval of lead payment. -r 11. According to the Chief Engineer's report, the Executive D Engineers had reported that only 30% to 35% useful stones can be extracted which was not economical. This project is under construction with the World Bank assistance, will have to be completed on time, to supply water to the National Thermal Power Corporation, and also E to the M.P.E.B. Power Stgtion. In view of this stones have ~ v been brought from Katghora quarry situated at 22 Km. where sufficient quality of stones are available. In case, due to above reasons had the Agreements drawn F been cancelled and new tenders recalled the cost would have been more. Further, precious time would have been lost in this process which would have affected the works and it would not be possible to supply water to N.T.P.C. and M.P.E.B." G ;. ' 17. In a letter dated 14.02.1985 addressed to the Chief Engineer, the World Bank stated: "We note you have referred the matter to the Secretary, Irrigation Department, Bhopal for decision. We suggest H A B c D E 1062 SUPREME COURT REPORTS [2009] 12 S.C.R. that the matter be resolved within contractual limits." 18. Pursuant thereto and in furtherance thereof, even the Progress Review Committee observed in its note dated 14.05.1985 as follows: "27. Chief Engineer (HBP) explained his proposal submitted through his memo No. 1916/HB/84 dated 29/3/ 85. He gave the background of the change of quarry, in view of unexpectedly low yield of useful stone from the Therma Pahad quarry, approved in the technically sanctioned, sanctioned estimate and also on which basis tenders had been invited and contractors' rates accepted. He informed the Committee that the total extra commitment for the various contracts worked out to Rs. 1.23 crores - approximately 3% of the total contract value. 28. Financial Adviser observed that he had no offered any comments on the merit of the case, as then appeared to him essentially a claim case. PRC does not deal such claim cases. 29. The Committee observed that the World Bank too vide their letter of 14/2/85 had suggested that'the matter be resolved within contractual limits. 30. In view of the above, the Committee did not examine F the proposal of Chief Engineer and refrained from giving any comments in the matter at this stage." G 19. However, the contractors invoked the arbitration agreement contained in the said contract in the year 1987 and an ad hoc settlement was proposed. 20. The matter was placed before the Financial Adviser.· The Financial Adviser in his note dated 4.01.1991 to the Secretary, while stating that the Financial Adviser functions as a consultant offering comments on cases referred to him in the H light of his background, experience and expertise and going , . 1 STATE OF MADHYA PRADESH v. SHEETLA SAHAI 1063 ---.. & ORS. [S.B. SINHA, J.] -" by the facts placed before him which may not be treated as a A substitute for vetting by the Finance Department wherever such vetting is required under the rules of governmental business, inter alia made the following comments: " ... However, since the whole contract action was based B on the presumption that the required quantity of material of required specification would be available from a quarry with in 12 KM of the work site, it can be reasonable -> assumed that the contractors have quoted their rates on this assumption. The departmental estimates were also c based on this assumption. Since, later on, this assumption was found to be invalid and majority of the material had to be obtained from a quarry with an average lead of 22 KM from the work site as against 12 KM in respect of the contemplated quarry, the contractors have a reasonable D _.,.._ case for additional payment on account of extra lead of the material brought by them from this second quarry. Thus, their claim is based on consideration of equity rather than there of law." In regard thereto, the Financial Adviser opined: E ..Ao ·y "4. Since the proposed settlement will amount to extracontractual payment, it has to be ensured that the proposed settlement is acceptable to the contractors concerned. In other words, the settlement has to be a negotiated F settlement and should not leave room for further disputes with the various contractors. Since the purpose of the whole exercise is to avoid arbitration it could even be ascertained if there are any other disputed issues in these contracts. If an overall settlement of all the disputes could G be attempted and a sort of package deal is evolved in . ~ respect of each contract so that the contracts are finalized once for all leaving no scope for arbitration on the other hand if the contractors intend to take resort to arbitration for other issues, this issue could also go in for arbitration. A package approach would allow negotiation in a spirit or H 1064 SUPREME COURT REPORTS [2009] 12 S.C.R. give and take for an over-all settlement of all disputes." 21. The then Secretary (Irrigation) Shri M.S. Billore constituted a committee comprising of the Engineer-in-Chief P.V. Srinivasaiyah, the Chief Engineer, the Financial Adviser, 8 Secretary (Control Board) and the Deputy Secretary, some of whom are Accused Nos. 3, 4,5 and 11. A 22. The said Committee submitted a report in respect whereof the Secretary made a note that the same be critically ~ _ c D examined. The Officer on Special Duty noticed the recommendations of the Committee, which are as under: "(i) As the quarry has been changed by the Department due to Technical reasons the contractors cannot be held responsible. (ii) When the Department itself did not know about the quarry's unsuitability it will be unfair to expect the contractors to bring stones from the changed quarry at the E same rates. (iii) Payment to the extent of actual quantity brought from .,.. ~ the quarries be made." The proposals of the Chief Engineer, the quantities under F each agreement, the rate and the amount were also noticed. It G was proposed: "Therefore, it is proposed to approve payment for actual quantity and the Chief Engineer may be informed to take undertakings from the contractors before making the payment." The Financial Adviser was asked to examine the said proposal in details. Some discussions apparently were held and it was found necessary to obtain the following information H ( . I 0 STATE OF MADHYA PRADESH v. SHEETLA SAHAI 1065 & ORS. [S.B. SINHA, J.] _,..... before taking decision at the government level: A "1. After the inspection of the Geologists how much quantity has been brought from Therma Pahad by each contractor. 2. How much quantity has been brought from Katghora B quarry. 3. How the records are kept by the Department about the - }. quantity of stones brought from different quarries." A draft letter was also prepared. c 23. On or about 6.04.1991, one Shri Uday Shinde in his note· stated that the Chief Engineer had not sent any detail in regard to Block 31-38 as in the agreement only Therma Pahar quarry had been shown for the balance work and as the original file was sent to the Hon'ble Minister, it was not possible to deal D -+- with the case. The file was re-submitted and the amount payable to the contractor for additional lead was again put up for administrative approval. Yet again, the Engineering in-Chief Committee was asked to examine the matter. E 24. In a note to the Secretary dated 27.04.1991, the salient ... --r features in respect of the aforementioned matter were placed again to which Shri M.S. Billore by his note dated 1.05.1991 opined : "Since government decision has already been informed to F the Chief Engineer, Hasdeo Bango Project through government letter No: 9/CP/B/31/89/319, Bhopal dated 28.2.89. Hence, any action at government level is not pending in this case and Chief Engineer to take action in this case as per government order." G • )j 25. Allegedly, the respondent No. 1 who was Minister at the relevant point of time sat over the file for a period of about six months. He on 4.11.1991 noted: H A B c D 1066 SUPREME COURT REPORTS [2009] 12 S.C.R. "I have studied the case. Whenever any opinion has been sought by the Secretary, from whichever authority, they gave their opinion as per their wisdom. Every time the Secretary has been seeking the opinion from one after another officer. In this process he spent a period of one year between 3.5.90 to 1.5.91. In accepting the opinion or recommending any action, it was expected from the Secretary to take into consideration the fact that the opinions had been given as per their wisdom. Therefore, question does not arise to take any action against the subordinate officers. No basis appears for the Secretary to take a totally different view than the unanimous opinions. Therefore, it is necessary to investigate the basis on which the Secretary Shri Billore had rendered his opinion. The new Secretary to study the case and give opinion." 26. Pursuant thereto or in furtherance thereof, the respondent No. 2 Shri D.V.S.R. Sarma submitted a report upon E constitution of a Committee, stating: "(i) Due to technical reasons, the department has changed the quarry. Therefore, its liability should not be upon the contractors. F (ii) When the Department had not any knowledge about the quarry, and to expect this that even under the changed quarry the contractor should fetch/ transport the stones at the same rate, is also not proper. G (iii) Where & Where (sic) and for that much of the quantities, the materials have been brought from a quarry at more distance, it is proper to make payment for that much excess distance." 27. The respondent No.1 approved the said note of the H respondent No. 2 on or about 20.01.1992 whereupon the STATE OF MADHYA PRADESH v. SHEETLA SAHAI 1067 & ORS. [S.B. SINHA, J.] amount in question was sanctioned. A /~ 28. Thereafter, the accounts were audited and one Shri G.K. Shukla, Deputy Accountant General reported: "(a) The clause of the agreement noted above and the B quarry chart clearly bring out that in the event of change of quarry on whatever reasons no claim will be entertained and contractor should before quoting rates, visit the quarry -> site and satisfy himself regarding quantity and quality of the material available. Thus, the sanction appears a negotiated settlement beyond the contractual provisions, c for which concurrence of Finance Department ought to have been obtained. (b) The PRC considered this as a claim case which was to be decided by Arbitrator under M. P. Adhikaran D ~~· Adhiniyan, 1983. (c) The Member, World Bank suggested to resolve the matter within the contractual limits. (d) The Secretary Irrigation had earlier rejected the case E as it was not admissible. > '-1 (e) The rates quoted by the contractors were inclusive of all lead and lift, being item rate tender." - The Auditor General of India also took note of the said F report, stating: "Therefore, in spite of the report of the Geologist that the good quality of stone was available in sufficient quantities in the upper portion of the quarry situated in the hill G >. )' mentioned in the agreement and in spite of there being specific provision in the agreements that no additional payment would be acceptable in the event of change in leads or change in quarry, the payments made to the contractors were irregular and resultantly made additional H 1068 SUPREME COURT REPORTS [2009] 12 S.C.R. A gains of Rs. 102.46 lacs to them." ~. 29. Pursuant thereto or in furtherance thereof, a complaint was lodged. The matter was investigated by the Special Police Establishment. They collected all the materials and filed a B chargesheet in the Court of learned Special Judge on 27.03.1997. The case was registered as Special Case No. 6 of 1997. 30. By an order dated 13.05.1997, the learned Special Judge took cognizance of the case, opining: ~ - c (i) As none of the accused is a public servant, no sanction was required to be obtained in terms of Section 19 of the Act. D (ii) Criminal misconduct relating to corrupt practice under Section 13(1)(d)(ii-iii) of the Act has nothing to do with normal activity and work under +- government duty of any public servant at any time. 31. In the year 1997, the respondent Nos. 1and2 had filed E a revision application before the High Court. 32. The Special Judge framed charges against the respondents on or about 29.07.1999; a sample copy whereof y• reads as under: F "You were working as Minister In-charge, Ministry of Water Resources, Government of Madhya Pradesh from June 1990 to September 1992 .. On the recommendatory note of Shri D.V.S.R. Sharma ignoring the letter dated 14.02.85 of the Finance Branch of World Bank and earlier decision G dated 18.02.85 according to which the case of extra lead was to be decided within the ambit of the contract in 1 4 respect of payment of extra lead to the concerned Tender Contractors for transportation of stones used in construction work of masonry non-flow dam upstream in H Hasdeo Bango Project. You in conspiracy with the STATE OF MADHYA PRADESH v. SHEETLA SAHAI 1069 & ORS. [S.B. SINHA, J.] employees and Tender Contractors accorded A administrative sanction and payment of one crore two lac forty six thousand two hundred rupees was made to the Contractors towards extra lead. Hence, you while holding the post of public servant misusing the position of the post provided financial benefit to the Tender Contractors without B public interest. Your above act being offence under Section 13(1)(D)(ii-iii), the Prevention of Corruption Act, 1988 is punishable under Section 13(2) the Prevention of C Corruption Act, 1988. In the alternative, you in criminal conspiracy with Shri D.V.S.R. Sharma, Secretary! working in the Ministry of Water Resources, Government of Madhya Pradesh and other employees and contractors acted as mentioned above, which is punishable under Section 13(1)(D)(ii and iii) read with Section 1208 iPC, which is D within the jurisdiction of this Court. Hence, I hereby direct that you will be tried for the offence mentioned above by this Court." 33. Aggrieved by and dissatisfied therewith, the respondents filed revision applications before the High Court, which by reason of the impugned order have been allowed. The State is, thus, before us. E 34. Mr. K.T.S. Tulsi, learned senior counsel appearing on F behalf of the appellant, in support of the appeal, inter alia would submit: (i) The High Court committed a serious error in opining that an order of sanction in terms of Section 197 G of the Code of Criminal Procedure was required to ~ "' be obtained despite the fact that the respondent Nos. 1 to 7 were no longer holders of public office(s). (ii) While exercising its revisional jurisdiction, the High H A B c D E F G H 1070 SUPREME COURT REPORTS [2009] 12 S.C.R. Court could not enter into the question of appreciation of evidence as also the probative value of the materials brought on record, contrary to the tests laid down by this Court in Soma Chakravarty v. State Through CBI [(2007) 5 SCC 403] as the tests for framing of charge are different from the tests for recording a judgment of acquittal against an accused insofar as whereas in the former, strong suspicion would be sufficient, in the latter proof beyond any reasonable doubt is necessary. (iii) The prosecution agency being a special agency constituted under the Madhya Pradesh Special Police Establishment Act, which functions under the jurisdiction of the Lokayukata, only because all materials have been made part of the chargesheet, the same could not have been relied upon by the High Court as the only materials upon which the prosecution would rely upon for proving its case would be the terms of the contract, the note sheets, the letters dated 4.08.1983, 11.08.1983, 16.08.1983, 17.08.1983, 10.07.1984, 14.11.1984 and 2.03.1988, in terms whereof the contractors were categorically informed that they would not be entitled to any extra amount towards additional lead or otherwise. (iv) The World Bank having opined that stones from alternative sources may be obtained within the budgeted amount, the extra amount could not have been sanctioned by the respondents. (v) By reason of the acts of the respondents, the State ., • has suffered a loss to the extent of Rs. 1.02 crores and in that view of the matter, the High Court should not have passed the impugned order. STATE OF MADHYA PRADESH v.