Supreme Court Allows Criminal Appeal And Set Aside Order Of High Court In An Alleged Criminal Misconduct Case Of BHEL Officers

Hon’ble Division Bench comprising Hon’ble Mr. Justice V. Ramasubramanian and Hon’ble Mr. Justice Pankaj Mithal of Hon’ble Supreme Court recently allowed the Criminal Appeal and set aside the judgment & order passed by Hon’ble High Court and Learned Trial court in an alleged loss accrued to BHEL by the conduct of the appellants in a Tendering process.

BRIEF FACTS OF THE CASE

During the period 1991-92, the Tamil Nadu Water Supply and Drainage Board decided to set up “ROD Plants” (Reverse Osmosis Desalination Plants) to provide potable water to drought-prone areas in Ramnad District of Tamil Nadu. They entrusted the work to BHEL, Tiruchirapalli.  After resorting to limited/restricted tenders, BHEL awarded the contract to one Entoma Hydro Systems.  Letter of intent was issued but subsequently contract was cancelled. Thereafter, on 31.01.1997, CBI registered a First Information Report in Crime No. RC 8(A) of 97 against four individuals, three of whom were officials of BHEL and the fourth, the contractor. It was alleged in the First Information Report that the three officials of BHEL and the contractor entered into a criminal conspiracy to cheat BHEL and caused loss to BHEL to the tune of Rs.4.32 crores by awarding the contract to the aforesaid concern. After completion of investigation, CBI filed a final report on 16.07.2002 against seven accused

CONTENTION OF THE PARTIES

Hon’ble Court has recorded the contention of the parties in Para 24,25,26 & 27.

HON’BLE COURT’S OBSERVATIONS

Hon’ble Court has divided the issue primarily on 3 issues viz. the first dealing with the contention revolving around Section 197 of the Code, the second dealing with the correctness of the procedure adopted while granting pardon under Section 306 of the Code and the third revolving around the merits of the case qua culpability of each of the appellants before us.

1. Contention Revolving around Section 197 of the Cr.P.C.

Hon’ble Court has observed that “The argument revolving around the necessity for previous sanction under Section 197(1) of the Code, has to be considered keeping in view the above facts. It is true that the refusal to grant sanction for prosecution under the PC Act in respect of A-3 and A-4 may not have a direct bearing upon the prosecution of A-1. But it would certainly provide the context in which the culpability of A-1 for the offences both under the IPC and under the PC Act has to be determined”

“It is admitted by the respondent-State that no previous sanction under section 197(1) of the Code was sought for prosecuting A-1. The stand of the prosecution is that the previous sanction under Section 197(1) may be necessary only when the offence is allegedly committed “while acting or purporting to act in the discharge of his official duty”

“In Matajog Dobey vs. H.C. Bhari  a Constitution Bench of this Court was concerned with the interpretation to be given to the words, “any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty” in Section 197 of the Code. After referring to the decision in Dr. Hori Ram Singh, the Constitution Bench summed up the result of the discussion, in paragraph 19 by holding: “There must be a reasonable connection between the act and the discharge of official duty; the act must bear such relation to the duty that the accused could lay a reasonable, but not a pretended or fanciful claim, that he did it in the course of the performance of his duty.”

Hon’ble court further relied on Devinder Singh vs. State of Punjab through CBI where Hon’ble court took note of almost all the decisions on the point and summarized the principles emerging therefrom, in paragraph 39 as follows:

“39. The principles emerging from the aforesaid decisions are summarised hereunder:

39.1. Protection of sanction is an assurance to an honest and sincere officer to perform his duty honestly and to the best of his ability to further public duty. However, authority cannot be camouflaged to commit crime.

39.2. Once act or omission has been found to have been committed by public servant in discharging his duty it must be given liberal and wide construction so far its official nature is concerned. Public servant is not entitled to indulge in criminal activities. To that extent Section 197 CrPC has to be construed narrowly and in a restricted manner.

39.3. Even in facts of a case when public servant has exceeded in his duty, if there is reasonable connection it will not deprive him of protection under Section 197 CrPC. There cannot be a universal rule to determine whether there is reasonable nexus between the act done and official duty nor is it possible to lay down such rule.

39.4. In case the assault made is intrinsically connected with or related to performance of official duties, sanction would be necessary under Section 197 CrPC, but such relation to duty should not be pretended or fanciful claim. The offence must be directly and reasonably connected with official duty to require sanction. It is no part of official duty to commit offence. In case offence was incomplete without proving, the official act, ordinarily the provisions of Section 197 CrPC would apply.”

In view of the above, the Hon’ble court upheld the contention advanced on behalf of A-1 that the prosecution ought to have taken previous sanction in terms of Section 197(1) of the Code, for prosecuting A-1, for the offences under the IPC.

2. Correct Procedure while granting pardon.

Hon’ble Court after relying on several past precedents found that there was no violation of Procedure as established U/s 306 (4)(a) and this issue was decided against the appellants.

3. Culpability of each of the appellants

Hon’ble court stated that “As rightly contended by Shri Huzefa Ahmadi, learned senior counsel, this Court has laid down two tests in Sarwan Singh vs. State of Punjab , to be satisfied before accepting the evidence of an approver. The first is that the approver is a reliable witness and the second is that his statement should be corroborated with sufficient evidence. Again, in Ravinder Singh vs. State of Haryana this Court pointed out that, “an approver is a most unworthy friend” and that he having bargained for his immunity, must prove his worthiness for credibility in Court.

After perusing and examining the record, Hon’ble Court found that conviction of appellants cannot be sustained and in pursuance thereof, the Criminal Appeal was allowed by setting aside the orders passed by the Hon’ble High Court and learned Trial Court.

Case Title:-  A Srinivasulu Vs. State

Case no. :- CRIMINAL APPEAL NO.2417 OF 2010

Order date :- 15.06.2023