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Section 420 IPC, 120B IPC and Section 5(2) of Prevention of Corruption Act, 1947 (for short ‘the P.C. Act’) – Purchase of Damp Proof cement at higher rate in collusion with company by department servants causing huge loss to NEHU – complaint – CBI registered the case and filed charge sheet – trial court convicted A 1 and acquitted rest of accused – on appeal – High court reversed the acquittal and convicted the Accused No.4 also – who filed appeal – pending appeal – he has under gone imprisonment for considerable period – A 1 died but his Lrs prosecuting his appeal – Apex court held that first accused, Chief Engineer being Technical Member of the Purchase Committee, it was his duty to advise the Purchase Committee about the then prevailing market rate of DPC to enable NEHU to purchase DPC at the market rate. The first accused was primarily responsible for the commission of the offence and the first accused by abusing his position as Chief Engineer and Technical Member got the inflated rate of DPC at Rs.42.75 per kg approved when the same was available in the local market at price ranging from Rs.5/- to Rs.10/- per kg. and A-1 obtained pecuniary advantage to himself and also to accused 4 and 5 and caused wrongful loss to NEHU to the tune of Rs.49 lacs. The first accused was rightly convicted under Sections 120B IPC and 420 IPC and also under Section 5(2)(d) of the PC Act. Having regard to the gravity of the offence and the extent of loss caused to the NEHU, the High Court rightly enhanced the sentence of imprisonment imposed for various offences for which the first accused was convicted and we find no reason to interfere with the same. So far as the fourth accused is concerned, he was also convicted for the offence under Section 420 IPC. The offence of cheating is made of two ingredients: “deception of any person and fraudulently or dishonestly inducing that person to deliver any property to any person or to consent that any person shall retain any property”. In collusion with first accused, the fourth accused quoted and supplied DPC at an inflated rate of Rs.42.75 per kg, fourth accused dishonestly induced NEHU to purchase DPC. Fourth accused has taken stand that he did not know the then prevalent market rate of DPC at Shillong. As a supplier and also dealing with DPC, it is incomprehensible that the fourth accused did not know the prevalent market rate. The High Court rightly negatived the defence version and convicted the fourth accused under Section 420 IPC read with Section 120B IPC. taking into consideration of his age and taking into consideration of payment of amount of Rs. Rs.3,50,000/- and further directed to pay Rs. 2,50,000/- treating his imprisonment as set off as the case is pending for 3 decades = CRIMINAL APPEAL NO. 2056 OF 2014 (Arising out of SLP (Crl.) No. 553/2011) EDMUND S LYNGDOH …Appellant Versus STATE OF MEGHALAYA …Respondent = 2014 – Sept. Month – http://judis.nic.in/supremecourt/filename=41915

Section 420 IPC, 120B IPC and Section 5(2)  of  Prevention  of Corruption Act, 1947 (for short ‘the  P.C.  Act’) – Purchase of Damp proof cement at higher rate in collusion with company by department servants causing huge loss to NEHU – complaint – CBI registered the case and filed charge sheet – trial court convicted A 1 and acquitted rest of accused – on appeal – High court reversed the acquittal and convicted the Accused No.4 also – who filed appeal – pending appeal – he has under gone imprisonment for considerable period – A 1 died but his Lrs prosecuting his appeal – Apex court held that first accused,  Chief Engineer  being Technical Member of the Purchase  Committee, it  was  his  duty  to  advise  the  Purchase  Committee   about   the  then prevailing market rate of DPC  to  enable  NEHU  to  purchase   DPC  at  the market  rate.   The  first  accused  was  primarily  responsible   for   the commission of the offence and the first accused by abusing his  position  as Chief Engineer and  Technical  Member  got  the  inflated  rate  of  DPC  at Rs.42.75  per kg  approved when  the same was available in the local  market  at price  ranging from   Rs.5/-  to  Rs.10/-  per  kg.  and  A-1   obtained pecuniary advantage to himself and also to   accused  4  and  5  and  caused wrongful loss to NEHU to the tune of Rs.49  lacs.   The  first  accused  was rightly convicted under Sections  120B  IPC  and  420  IPC  and  also  under

Section 5(2)(d) of the PC Act.  Having regard to the gravity of the  offence and the extent of loss caused to the NEHU, the High Court  rightly  enhanced the sentence of imprisonment  imposed for various offences   for  which  the first  accused was convicted and we find no reason  to  interfere  with  the same.  So far  as  the  fourth  accused  is  concerned,  he  was   also convicted for the offence under Section 420 IPC.  The  offence  of  cheating is made of two ingredients: “deception of any  person  and  fraudulently  or dishonestly inducing that person to deliver any property to  any  person  or to consent that any person shall retain any property”.   In  collusion  with

first accused, the fourth accused quoted and supplied  DPC  at  an  inflated rate of  Rs.42.75  per  kg,  fourth  accused  dishonestly  induced  NEHU  to purchase DPC.  Fourth accused has taken stand that he did not know the  then prevalent market rate of DPC at Shillong.  As a supplier  and  also  dealing with DPC, it is incomprehensible that the fourth accused did  not  know  the

prevalent market  rate.   The  High  Court  rightly  negatived  the  defence version and convicted the fourth accused under Section  420  IPC  read  with Section 120B IPC. taking into consideration of his age and taking into consideration of payment of amount of Rs. Rs.3,50,000/- and further directed to pay Rs. 2,50,000/- treating his imprisonment as set off as the case is pending for 3 decades =

The gist of the  offence  under  Section  5(1)(d)  is  that  a  public

officer abusing his position as a Public Servant obtains for himself or  for

any other person any  valuable  thing  or  pecuniary  advantage.   The  word

“abuse” means, misuse i.e. using his position for something for which it  is

not intended. Based on oral and documentary evidence, the  trial  court  and

the High  Court   recorded  the  concurrent  findings  of  fact  that  first

accused,  Chief Engineer  being Technical Member of the Purchase  Committee,

it  was  his  duty  to  advise  the  Purchase  Committee   about   the  then

prevailing market rate of DPC  to  enable  NEHU  to  purchase   DPC  at  the

market  rate.   The  first  accused  was  primarily  responsible   for   the

commission of the offence and the first accused by abusing his  position  as

Chief Engineer and  Technical  Member  got  the  inflated  rate  of  DPC  at

Rs.42.75  per kg  approved when  the same was available in the local  market

at price  ranging from   Rs.5/-  to  Rs.10/-  per  kg.  and  A-1   obtained

pecuniary advantage to himself and also to   accused  4  and  5  and  caused

wrongful loss to NEHU to the tune of Rs.49  lacs.   The  first  accused  was

rightly convicted under Sections  120B  IPC  and  420  IPC  and  also  under

Section 5(2)(d) of the PC Act.  Having regard to the gravity of the  offence

and the extent of loss caused to the NEHU, the High Court  rightly  enhanced

the sentence of imprisonment  imposed for various offences   for  which  the

first  accused was convicted and we find no reason  to  interfere  with  the

same.  The appeal preferred by the first accused  and  now  pursued  by  his

legal representative fails and the same is dismissed.

32.         Re: Criminal  Appeal  qua  the  fourth                accused  –

Edmund S. Lyngdoh:  The fourth  accused  Edmund                 S.  Lyngdoh,

the proprietor of M/s Edmund S. Lyngdoh, had also supplied DPC  to  NEHU  at

the rate of Rs.42.75 per kg.  Being the dealer,  dealing  with  DPC,  Edmund

must have known the market rate of DPC; the then market rate  of  DPC  which

was ranging from Rs.5/- to Rs. 10/- in those days.  Even if A-1  was  silent

on the said market price, fourth accused, Edmund  must  have  disclosed  the

market rate of DPC and must have quoted the then prevalent market  price  of

DPC which was ranging from Rs.5/- to Rs.10/; but the fourth  accused  quoted

inflated price of Rs. 42.75 per  kg  in  order  to  make  wrongful  gain  to

himself and to cause wrongful loss to NEHU.

33.         To bring home the guilt of the criminal conspiracy,  prosecution

should prove ; (i) that the accused agreed to do or caused  to  be  done  an

act that was illegal or was to be done by illegal  means;   (ii)  that  some

overt act  was done  by one of the accused in pursuance  of  the  agreement.

The essence of conspiracy is that  there  should  be  an  agreement  between

persons to do one or other of the acts constituting the  act  under  Section

120B IPC.  First accused is alleged to have conspired  with  fourth  accused

and others to supply DPC at an inflated price to NEHU of Rs.  42.75  per  kg

as against the then prevalent market rate of Rs.5/- to Rs.10/- per  kg.   In

furtherance of the conspiracy, fourth accused supplied Six MTs  of  DPC  and

thereby said to have caused wrongful loss of about Rs. 6 lacs to NEHU.

34.         Agreement among the conspirators can be  inferred  by  necessary

implications, and the inference can be  drawn  on  the  proved  facts.   The

facts and incriminating circumstances so proved must  form  the  full  chain

whereby the agreement between the accused and  their  guilt  can  be  safely

inferred.  Fourth accused supplied DPC to NEHU at an inflated  rate  of  Rs.

42.75 per kg and had obtained pecuniary advantage for himself  and  also  to

first accused and thereby caused  wrongful loss to NEHU.  In  the  light  of

evidence and proved facts, the High Court  rightly  reversed  the  acquittal

and convicted the fourth accused under Section 120B IPC.

35.         So far  as  the  fourth  accused  is  concerned,  he  was   also

convicted for the offence under Section 420 IPC.  The  offence  of  cheating

is made of two ingredients: “deception of any  person  and  fraudulently  or

dishonestly inducing that person to deliver any property to  any  person  or

to consent that any person shall retain any property”.   In  collusion  with

first accused, the fourth accused quoted and supplied  DPC  at  an  inflated

rate of  Rs.42.75  per  kg,  fourth  accused  dishonestly  induced  NEHU  to

purchase DPC.  Fourth accused has taken stand that he did not know the  then

prevalent market rate of DPC at Shillong.  As a supplier  and  also  dealing

with DPC, it is incomprehensible that the fourth accused did  not  know  the

prevalent market  rate.   The  High  Court  rightly  negatived  the  defence

version and convicted the fourth accused under Section  420  IPC  read  with

Section 120B IPC.

36.         The High Court remitted the matter to the trial  court  to  hear

the accused on the question of sentence and  pass  appropriate  orders.   In

the meanwhile, the fourth accused preferred appeal in this  Court  and  also

filed an application   seeking for a direction to the  trial  court  not  to

pass sentence.   By order dated 31.01.2011 this  court  ordered  that  trial

court will proceed on the sentence and pass appropriate orders.

37.         By order dated 14.06.2011, the trial court sentenced the  fourth

accused to undergo five years rigorous imprisonment with  fine  of  Rs.  one

lakh with default clause for the offence punishable under Section  420  IPC;

for the offence under Section 120B  IPC  fourth  accused  was  sentenced  to

undergo three  years  rigorous  imprisonment  with  a  fine  of  Rs.50,000/-

alongwith default  clause  and  both  the  sentences  were  ordered  to  run

concurrently. The fourth accused  had  undergone  sentence  of  imprisonment

from 14.06.2011 till 16.02.2012 totally 248 days.   By  the  order  of  this

Court dated 16.02.2012, the sentence imposed on fourth accused  was  ordered

to be suspended subject to the petitioner/fourth accused  depositing  a  sum

of Rs.3,50,000/- roughly representing 50% of  the  excess  amount  allegedly

gained by him towards the price of the DPC supplied.  The fourth accused  is

stated to be seventy years old and is said to be  undergoing  treatment  for

Type II Diabetes.  The matter is lingering on for about three decades.

38.         Having regard to the duration of the pendency of the matter  and

age of the fourth accused and that he has already paid fine amount and  also

deposited the amount as per the order  of  this  Court,  in  our  view,  the

period of sentence of imprisonment imposed on the  appellant-fourth  accused

for the conviction under Section 420 IPC  and  Section  120B  IPC  shall  be

modified to the period  already  undergone  and  by  imposing  further  fine

amount of Rs. 2,50,000/- in addition to the fine imposed by the trial  court

and the amount deposited pursuant to the orders of this Court.   In  default

of payment of the said fine amount  of  Rs.2,50,000/-,  the  fourth  accused

shall undergo imprisonment of one year.

39.         The appeal preferred by first accused now pursued by  his  legal

representative is  dismissed.    The  appeal  preferred  by  fourth  accused

(Edmund S. Lyngdoh) is partly allowed to the extent indicated above.

2014 – Sept. Month – http://judis.nic.in/supremecourt/filename=41915 

REPORTABLE

IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 2056 OF 2014
(Arising out of SLP (Crl.) No. 553/2011)

EDMUND S LYNGDOH …Appellant

Versus

STATE OF MEGHALAYA …Respondent

With

CRIMINAL APPEAL NOs. 2057-58 OF 2014
(Arising out of SLP (Crl.) Nos. 2203-2204/2011)

DEVA PRASAD SHARMA …Appellant

Versus

CENTRAL BUREAU OF INVESTIGATION …Respondent
J U D G M E N T
R. BANUMATHI, J.
Leave granted.

2. These appeals arising out of SLP (Crl.) Nos.
2203-2204/2011 are filed challenging the judgment of the Gauhati High Court
confirming the conviction of the appellant-first accused (Deva Prasad
Sharma) under Section 420 IPC, 120B IPC and Section 5(2) of Prevention of
Corruption Act, 1947 (for short ‘the P.C. Act’) and enhancement of the
sentence imposed on him. Fourth accused (Edmund S. Lyngdoh) has preferred
SLP (Crl.) No.553/2011 challenging the reversal of his acquittal and
assailing the conviction under Section 420 IPC read with Section 120B IPC.
3. Deva Prasad Sharma (A-1) died on 9.10.2011 during the pendency
of the petition before this Court and his legal representative was brought
on record by this Court’s Order dated 14.11.2011 in Crl. Appeal arising out
of SLP (Crl.) Nos.2203-2204/11 and his son Debashish Sharma is
pursuing the appeal.
4. Briefly stated, case of the prosecution is that Deva Prasad
Sharma (First accused) was the then Chief Engineer of North Eastern Hill
University, Shillong (for short ‘NEHU’), Stetnel Roy (A-2) was the
Accounts Officer, W.M.R. Wahlang (third accused) was the then Assistant
Finance Officer, Edmund S. Lyngdoh, proprietor of M/s E.S. Enterprise (A-4)
and T.S. Bareh, proprietor of M/s Premiere Enterprise (A-5), N.P. Garg,
Executive Engineer, Shri G.L. Sharma, Jr. Engineer,
Sanjay, Sr. Technical Assistant and Shri H. Nongkynrih, Section Officer,
Construction Division of NEHU have colluded together for procurement of
Damp Seal Cement from some fictitious and non-existent firms at an
exorbitant rate during the year 1982 to mid 1985. In furtherance of
this collusion, it is alleged that A-1 invited quotation on 12.12.1982 from
12 firms for supply of Damp Proof Cement (DPC) at the rate of Rs.42.75 per
kg. though the then actual market rate was Rs.5/- to Rs.7/- per kg. Even
though the Purchase Committee had approved only two firms for supplying
the materials, A-1 is alleged to have placed orders from many firms and
persons without ascertaining the available stock and actual requirement
which resulted in leaving huge quantities of the materials so purchased
unused. On the basis of the complaint lodged by Dr. B.D. Sharma, the then
Vice-Chancellor of NEHU, case was registered and investigation was taken up
by the CBI. In the course of investigation, CBI found a prima facie case
against A-1 to A-3, Shri Edmund S. Lyngdoh, the owner of the firm
M/s E.S. Enterprises (A-4), Shri T.S. Bareh of M/s. Premiere Enterprises
(A-5) and other suppliers and charge sheeted them under Section 120B IPC
read with Section 420 IPC and Sections 5(2) read with 5 (1)(d) of the
Prevention of Corruption Act, 1947. At the investigation stage, others
were dropped from the case and chargesheet was filed only against A-1 to
A-5. The trial court framed the charges against A-1 to A-3 under Sections
120B IPC read with 420 IPC and Section 5(2) read with Section 5(1)(d) of
the PC Act, 1947, to which they pleaded not guilty. As far as A-4 and A-5
are concerned, charges were framed against them under Sections 120B IPC and
420 IPC. The trial court convicted A-1 under Section 120B IPC read with
Section 420 IPC and under Section 5(2) of the PC Act and sentenced him to
undergo imprisonment. A-2 to A-5 were acquitted of the charges.
5. Being aggrieved by the acquittal of A-2 to A-5 and also
seeking for enhancement of punishment for the first accused, CBI preferred
appeal before the High Court challenging his conviction and sentence of
imprisonment imposed by the trial court. Both the appeals were heard
together and the learned single Judge of the Gauhati High Court enhanced
the punishment imposed on the first accused, and dismissed the appeal
preferred by the first accused. The details of conviction of A-1 and the
sentences imposed on him by the trial court and enhancement of sentence by
the High Court is as under:
|Trial Court |High Court |
|Conviction |Sentence |Conviction |Sentence |
|Section 120B |4 months SI & |Section 120B|3 years RI and|
|of IPC |fine of |IPC |fine of |
| |Rs.15,000/- in | |Rs.50,000/- in |
| |default to | |default to |
| |undergo SI for | |undergo RI for |
| |two months. | |one year. |
|Section 420 |6 months of SI |Section 420 |5 years RI and|
|IPC |and fine of |IPC |fine of |
| |Rs.15,000/- in | |Rs.1,00,000/- |
| |default to | |in default to |
| |undergo SI for 2| |undergo RI for |
| |months. | |one year. |
|Section 5(2) |1 year of SI & |Section |5 years RI |
|PC Act |fine of |5(2)(d) of |and fine of |
| |Rs.25,000/- in |P.C. Act. | |
| |default to | |Rs.1,00,000/- |
| |undergo SI for | |in default to |
| |two months. | |undergo RI for |
| | | |one year. |

6. A-2 died during the pendency of appeal before the High Court.
The acquittal of accused 3 to 5 was reversed and they were convicted under
Sections 120B IPC and 420 IPC. So far as imposing the quantum of sentence,
the High Court remanded the matter to the trial court with a direction to
pass appropriate orders after giving opportunity to the Accused 3 to 5 in
regard to the quantum of sentence under Section 235 (2) Cr.P.C. Being
aggrieved with the order of reversal of acquittal, the appellants are
before us. Pursuant to the order of this Court dated 31.01.2011, trial
court passed order imposing sentence upon fourth accused. For the
conviction under Section 420 IPC and Section 120B IPC, fourth accused was
imposed sentence of imprisonment of five years and three years respectively
and fine was also imposed.
7. We have heard the submission of the learned counsel for the
appellants and the respondents and we have given our due consideration to
the same.
8. Re: Criminal Appeal qua first accused Deva Prasad Sharma (since
dead) : First accused was the Chief Engineer of the NEHU at the relevant
time and the first accused and A-2 and A3 were Technical Members in the
Purchase Committee. On 12.12.1982, first accused invited sealed quotations
from 12 firms for the supply of Damp Proof Cement (DPC) without mentioning
the quantity and quality required. In response, quotations were received
from six firms and the same were scrutinized on 6.4.1983 which is said to
be in contravention of norms and procedure and the rate of Rs.42.75 per kg
quoted by M/s. Premiere Enterprises (A-5) and M/s. Edmund S. Lyngdoh (A-4)
were found to be the lowest and after making comparative statement, A-1
appended his initial with date.
9. On 7.04.1983, A-1 placed order upon four different firms of A-4
– M/s Edmund S. Lyngdoh and M/s Premiere Enterprise belonging to T.S. Bareh
(A-5) for supply of 2 metric tones (MT) each at the quoted price of Rs.
42.75 per kg. On 04.06.1983 in terms of the order placed and the prices
quoted, fourth accused through his firm M/s Edmund S. Lyngdoh and M/s E.S.
Enterprise and also M/s T.S. Bareh supplied DPC at the rate of Rs.42.75 per
kg. On 06.07.1983, the Purchase Committee of NEHU, in which first accused
was the Technical Member approved the rate of Rs. 42.75 per kg quoted by
the fourth accused and M/s Premiere Enterprises for purchase of DPC.
10. The learned counsel for the first accused contended that there
is no evidence to show that A-1 had induced the Purchase Committee to
approve the rates of two firms M/s Premiere Enterprises and M/s Edmunds
S. Lyngdoh- fourth accused at the rate of Rs.42.75 per kg. and as the
contract was awarded to the lowest tenderer, there was no question of A-1
inducing the Purchase Committee by deception to purchase DPC at an
exorbitant price and it was the Purchase Committee which on its own
approved the rate on the basis of comparative statement of the prices
quoted by the tenderers as prepared by the officials.
11. The learned counsel for the respondent submitted that
quotations were floated by the first accused even prior to the matter being
taken up by the Purchase Committee and as the Chief Engineer of NEHU- first
accused must have known the then prevailing market rate and as Technical
Member of the Purchase Committee the first accused should have assisted the
non-technical members in the purchase of DPC at the then prevalent market
rate. The learned counsel submitted that adequate evidence has been
adduced by the prosecution to bring home the guilt of first accused that he
induced the Purchase Committee to purchase DPC at an inflated rate of
Rs.42.75 per kg.
12. PW-6, Sri O.D. Shira, the then Assistant Registrar of
Administration, NEHU during 1983 was the convener of the Purchase Committee
and he called for a meeting of the Purchase Committee on 6.7.1983. Ext. P1
is the file relating to Purchase Committee Meeting held on 6.7.1983. As
per Ext.P1 (1), there was no agenda for the purchase of DPC. However, the
first accused managed to introduce the item before the Purchase Committee,
agenda found place in resolution no.14 [Ext. P1 (5)] relates to the
purchase of Damp Seal Water Proofing Compound for use in the department
campus at Umshing. Purchase Committee accepted the lowest rate of Rs.42.75
per kg quoted by the appellant/fourth accused and M/s. Premiere
Enterprises, Jowai. Based on the evidence of PW-6 and Resolution vide
P1(5), trial court and the High Court recorded concurrent findings of fact
that before ever the Purchase Committee approved the rate, quotations were
already invited by accused No.1 and A-1 being one of the technical members
in the Purchase Committee managed to introduce the item in the meeting of
the Purchase Committee for approving the rate quoted by fourth accused and
M/s Premiere Enterprises at the rate of Rs.42.75 per kg as A-1 was
taken into confidence by the Purchase Committee.
13. In her evidence PW-9, Smt. M.R. Mawlong who was the then Registrar
of NEHU from February 1980 to March 1984 stated that first accused being
the Chief Engineer was the Technical Member of the Purchase Committee and
“Purchase Committee depended on the suggestion of the Technical Member who
was in the rank of a Chief Engineer as regards the rate of DPC”. The
object of having technical members in the Purchase Committee was with a
view to assist the non-technical members concerning any matter of
technical nature and to guide them, as regards the utility, prevailing
rate and the quantity required of the said item for the Institution. Role
of the Technical Members in the Purchase Committee becomes vital and
important and it was expected that the Technical Members namely the first
accused (Deva Prasad Sharma) and the second and third accused are to
contribute their technical knowledge and give their best possible opinion,
suggestion and advice to the Purchase Committee in making purchases of
quality materials at the prevalent market rate. We find no substance in
the contention that there is nothing to show that the technical members
first accused and A-2 and A-3 have misled the Purchase Committee and that
Purchase Committee had taken the decision on its own to make purchase of
DPC.
14. There is ample evidence and circumstances justifying the conclusion
of the trial court and High Court that the Purchase Committee was misled by
the first accused to approve the quotation of fourth accused – M/s Edmund
S. Lyngdoh and M/s Premiere Enterprises at the inflated rate of Rs.42.75
per kg. To fortify the same, we may briefly refer to few facts and
circumstances as recorded by the trial court and the High Court:
(i) Before the approval of the rate by the Purchase Committee, five
quotations for supply of the DPC invited by A-1 on his own were already in
existence;

As per Ext. P1 (1), there was no agenda for the purchase of DPC in the
meeting of Purchase Committee held on 6.7.1983 and the said agenda was
introduced in Resolution No. 14 vide Ext.P1 (5) with regard to purchase
of DPC and A-1 being a Technical Member in the Purchase Committee managed
to introduce the item for purchase of DPC as one of the agendas;

(iii) First accused being the Chief Engineer did not take steps for survey
through quotation or by any other method to ascertain the then prevailing
market rate of DPC;

(iv) Purchase Committee depended on the suggestion of the Technical
Members – first accused and others as regards the rate of DPC;

First accused did not ascertain the available stock of DPC or the actual
requirement of DPC for NEHU;

(vi) First accused invited quotations from 12 firms out of which only two
firms were approved firms by Purchase Committee.

15. Learned counsel for A-1 submitted that from the evidence adduced by
the prosecution, it cannot be conclusively held that the then prevalent
market rate of DPC was Rs. 5/- to Rs. 6/- per kg. at the relevant time
inasmuch as no documentary evidence to that effect or any price list of
DPC in the open market at that time was produced by the prosecution and
while so the courts have grossly erred in convicting A-1 on the basis of
oral testimony. It was further contended that the High Court erred in
placing reliance upon the answers of A-1 recorded under Section 313
Cr.P.C. as one piece of evidence to complete the link in the chain of
circumstances against the first accused.
16. To prove that the then market rate of DPC at Shillong was ranging
from Rs.5/- to Rs.10/- per kg, prosecution has adduced adequate evidence.
PW-5, Sri Satinder Bawa who is the Director of firm Bawa Paints Pvt. Ltd.
which manufacture paints and water proof compound since the year 1965
and the products of his firms are sold to various distributors including
M/s Premiere Enterprises and others and all over the North Eastern States
including Meghalaya and Jowai area and the products were sold during 1982-
1983 also. In his evidence PW-5 stated that during 1982-1984, 50 Kg. of
Damp Proof Cement were sold at the rate between Rs. 80/- to Rs.85/- at
Delhi plus taxes and one kilogram packet, used to be sold at Rs. 2.80/- to
Rs. 3.80/- at Delhi. PW 5 further stated that in Shillong, the rate of one
kilogram of DPC would then be in the range of Rs. 6/- to Rs. 7/- per
kg. which is inclusive of taxes, transportation and profit.
17. PW-16, Sri Santosh Kumar Chachan is the proprietor of M/s Gajanand
Chachan of Barabazar, Shillong which deals with hardware, paints and
building materials including water proofing cement. As per the evidence
of PW-5, PW-16 M/s Gajanand Chachan is also one of the firms to whom DPC
and paints was supplied by PW-5. Corroborating the evidence of PW-5, PW-
16 stated that his firm was dealing with water proofing cement during
1982-1984 and he used to purchase paints and water proofing cement
from Delhi, Calcutta and sometimes from Gauhati during 1983-1984, and
prices of water proofing cement during that period was Rs. 5/- per kg.
which was sold at Shillong. From the evidence of PWs 5 and 16, it is
amply established that the market rate of DPC at the relevant time was
Rs. 2.80 to Rs. 3.80 per kg in Delhi and in Shillong, the rate was Rs.6/-
to Rs.7/- per kg and the rate at Rs.42.75 per kg. is an inflated one and
the quotations submitted by fourth accused and accepted by first accused
was with ulterior motive.
18. Apart from establishing the then prevailing market rate by
examining PWs 5 and 16, prosecution has also examined PW-13, Sri N.P. Garg
who has worked in NEHU since 1984 as Executive Engineer who is also aware
of the use of Damp Seal Cement in the construction work. Through PW-13,
Ext.P5, the Work File for the construction work of Intake Water Tank at
Wahjarain for the period of 6.9.1983 and by item 7 (17) Rs.10/- per kg.
was paid for Water Proofing Compound (DPC) along with other item and the
work was done by contractor Hansraj Jain and the amount was paid to him.
Referring to the evidence of PW-13 and Ext.P5, the trial court and the
High Court recorded findings of fact that the defence neither impeached his
credibility nor challenged Ext.P5 Bill as per which Rs.10/- per kg. was
paid for DPC for water proofing compound and that Ext.P5 would be
corroborative evidence so far as the rate of water proofing compound (DPC)
was Rs. 10/- per kg. during the period of 1983. From the evidence of PW-5
and PW-16, the dealers in DPC, and from the earlier Work File (Ext.P5) as
spoken by PW-13, the prosecution has clearly established that the then
prevalent market rate of DPC was Rs.5/- to Rs.10/- per kg.
19. Before placing the subject for purchase of DPC in Purchase Committee
Meeting held on 6.07.1983, as pointed out by the trial court, no survey was
conducted nor any other method was adopted by first accused for
ascertaining the then prevalent market rate of DPC. During questioning
under Section 313 Cr.P.C., when the first accused was questioned about the
then prevalent market rate of DPC, first accused stated that he was not
aware of the same. Referring to the same, the High Court observed that it
is an evasive reply and the same was taken as a piece of evidence against
the accused to complete the chain of circumstances.
20. Insofar as contention taking the statement of first accused recorded
under Section 313 Cr. P.C., as an evidence it was submitted that the
statement under Section 313 Cr. P.C. cannot be taken as an incriminating
evidence against the accused. Of course, the High Court in extenso
referred to the statements of the first accused put to him in his
cross-examination under Section 313 Cr.P.C. and observed as under:-
“A-1 did not utter a single word to assail that the market rate of
DPC at Shillong at the relevant time was ranging from Rs.5/- to Rs.10/-.
All that he said was that he was not aware of the market rate of a DPC at
that time or that Rs.42.75 was accepted and approved rate of DPC. These
evasive replies, taken together with evidence of PW-6 and PW-13 and item
no. 7(17) of Ext. P-5, complete the link in the chain of circumstances
against A-1”.

After so observing, the High Court held that those evasive replies under
Section 313 Cr. P.C. taken together with the evidence complete the link in
the chain of circumstances against A-1.
21. Where the accused gives evasive answers in his cross-examination
under Section 313 Cr.P.C., an adverse inference can be drawn against him.
But such inference cannot be a substitute for the evidence which the
prosecution must adduce to bring home the offence of the accused. The
statement under Section 313 Cr.P.C. is not an evidence. In Balwant vs.
State of U.P. (2008) 9 SCC 974, this Court held that conviction of the
accused cannot be based merely on his statement recorded under Section 313
Cr.P.C. which cannot be regarded as evidence. It is only the stand or
version of the accused by way of explanation explaining the incriminating
evidence/circumstances appearing against him. The statement made in defence
by the accused under Section 313 Cr.P.C. can certainly be taken aid of to
lend credence to other evidence led by the prosecution. Statements made
under Section 313 Cr.P.C. must be considered not in isolation but in
conjunction with the other prosecution evidence.
22. In the present case, it is not as if the High Court arrived at the
conclusion and based conviction only on the statement made by the first
accused under Section 313 Cr.P.C. As seen from the reasonings of the High
Court extracted above, the statement of first accused under Section 313
Cr.P.C. was taken with the evidences of PW-6 and PW-13 and items 7(17) of
Ext. P5 as a link to complete the chain of circumstances against A-1. As
elaborated earlier, the answers given by the first accused were considered
not in isolation but in conjunction with other oral and documentary
evidence. We find no substance in the contention that the High Court erred
in taking the statement of first accused under Section 313 Cr.P.C. as a
link to complete the chain of circumstances.
23. Based on the oral and documentary evidence, the trial court and the
High Court recorded concurrent findings of fact that the Purchase Committee
consisting of the non-technical members, the first accused being a
Technical Member played a dominant and crucial role in inducing the
Purchase Committee to purchase DPC at an inflated rate of Rs. 42.75 per
kg. when the then prevalent market rate at the relevant period was Rs.
5/- to Rs. 10/- per kg. and we see no perversity in the concurrent
findings recorded by the courts.
24. Contention regarding validity of sanction: Ext.P19 is the sanction
order for prosecution against A-1 and the same was under the signature of
the then Chief Secretary, Government of Meghalaya. PW-18, Sri Kharkongor,
Secretary in the Political Department, Government of Meghalaya was
examined through whom Ext. P9 sanction order was exhibited.
25. Learned counsel for A-1 contended that under Section 6 of PC Act “no
court shall take cognizance of offence unless previous sanction is
obtained……..” and so far as A-1 is concerned, Chief Secretary is not the
competent authority to remove A-1 and A-1 was appointed by the Governor
and the Governor of Meghalaya is the appointing authority, and therefore
the sanction should be to the satisfaction of the Governor and Chief
Secretary is only the authority communicating the sanction and the
prosecution has not adduced any material to show that appointing
authority – Governor of Meghalaya was satisfied that the relevant
material to approve the sanction for prosecuting A-1 was placed before
him.
26. The learned counsel for the respondents had taken us through the
evidence of PW-18 and submitted that the Chief Secretary accorded the
sanction on the basis of report of CBI placed before him and other
materials as reflected in the note sheet of the file and then accorded the
sanction for prosecuting A-1 and there is valid sanction for prosecution
of A-1. Referring to the evidence of PW-18, the courts observed that the
then Chief Secretary accorded the sanction on the basis of the report of
CBI as reflected in the note sheet of the file and the sanction order does
not suffer from any infirmity.
27. As per Article 166 (2) of the Constitution of India, all orders and
other instruments made and executed in the name of Governor shall be
authenticated in such manner as may be specified in rules to be made by
the Governor and the validity of an order or instrument which is so
authenticated shall not be called in question on the ground that it is not
an order or instrument made or executed by the Governor. It was not
suggested to PW-18 that Chief Secretary has no power whatsoever to
authenticate the orders and instruments made and executed in the name of
Governor. During trial, the first accused also did not insist for
production of the file nor suggested that the sanction order was not
approved by the Governor. Referring to Article 166 of the Constitution of
India, the trial court observed that the State must be having certain
rules where orders and other instruments made and executed in the name of
the Governor to be authenticated by certain officers of the State
Government, the trial court negatived the contention of the first accused
challenging the validity of sanction. We find no merit in the contention
challenging the validity of sanction to prosecute first accused.
28. Contention regarding delay in lodging FIR: The accused A-1 in
collusion with other accused persons invited quotations on 12.12.1982 from
the 12 firms for the supply of Damp Proof Cement (DPC) and DPC was
procured during 1982 to mid 1985. Ext.P11 complaint was lodged by Dr.
B.D. Sharma, Vice Chancellor, NEHU, Shillong, Meghalaya on 3.7.1985 based
on which FIR was registered. On behalf of the appellant/first accused it
was contended that FIR was registered nearly after two years which creates
serious doubts about its genuineness, more so, when the Vice Chancellor on
whose complaint FIR was registered was not examined as a witness.
29. Per contra, the learned counsel for the prosecution submitted that
DPC was procured during 1982 to mid 1985 and the offence being a
continuing offence and it cannot be said that there was a delay in
lodging the FIR and non-examination of the complainant-Vice Chancellor was
not fatal to the prosecution case.
30. Mere delay in lodging the FIR is not necessarily fatal to the
prosecution case. As rightly contended by the learned counsel for the
respondent-CBI, supply of DPC was continuously made from 1982 to mid 1985
and it was a continuing offence. In matters of continuing offence no
duration of time can be fixed for lodging the complaint. First accused
in collusion with other accused persons induced the Purchase Committee
for purchase of DPC at an exorbitant rate of Rs.42.75 per kg and only
when the conspiracy came to the fore, the Vice-Chancellor lodged the
complaint. In cases of abuse of powers and obtaining pecuniary advantage
and causing wrongful loss, time of lodging complaint and registration of
FIR cannot be considered on the touchstone of prompt lodging of
complaint like other cases of murder, dacoity and assault etc., where there
are possibilities of exaggeration and embellishments being crept in. In
cases of abuse of position by the persons holding official position, and
causing wrongful loss, prosecution case is based on documentary evidence
and oral evidence of other official witnesses and hardly any possibility
of concoction and introduction of coloured version. We find no merit
in the contention that the delay in lodging FIR raises doubts about the
genuineness of the prosecution case.
31. The gist of the offence under Section 5(1)(d) is that a public
officer abusing his position as a Public Servant obtains for himself or for
any other person any valuable thing or pecuniary advantage. The word
“abuse” means, misuse i.e. using his position for something for which it is
not intended. Based on oral and documentary evidence, the trial court and
the High Court recorded the concurrent findings of fact that first
accused, Chief Engineer being Technical Member of the Purchase Committee,
it was his duty to advise the Purchase Committee about the then
prevailing market rate of DPC to enable NEHU to purchase DPC at the
market rate. The first accused was primarily responsible for the
commission of the offence and the first accused by abusing his position as
Chief Engineer and Technical Member got the inflated rate of DPC at
Rs.42.75 per kg approved when the same was available in the local market
at price ranging from Rs.5/- to Rs.10/- per kg. and A-1 obtained
pecuniary advantage to himself and also to accused 4 and 5 and caused
wrongful loss to NEHU to the tune of Rs.49 lacs. The first accused was
rightly convicted under Sections 120B IPC and 420 IPC and also under
Section 5(2)(d) of the PC Act. Having regard to the gravity of the offence
and the extent of loss caused to the NEHU, the High Court rightly enhanced
the sentence of imprisonment imposed for various offences for which the
first accused was convicted and we find no reason to interfere with the
same. The appeal preferred by the first accused and now pursued by his
legal representative fails and the same is dismissed.
32. Re: Criminal Appeal qua the fourth accused –
Edmund S. Lyngdoh: The fourth accused Edmund S. Lyngdoh,
the proprietor of M/s Edmund S. Lyngdoh, had also supplied DPC to NEHU at
the rate of Rs.42.75 per kg. Being the dealer, dealing with DPC, Edmund
must have known the market rate of DPC; the then market rate of DPC which
was ranging from Rs.5/- to Rs. 10/- in those days. Even if A-1 was silent
on the said market price, fourth accused, Edmund must have disclosed the
market rate of DPC and must have quoted the then prevalent market price of
DPC which was ranging from Rs.5/- to Rs.10/; but the fourth accused quoted
inflated price of Rs. 42.75 per kg in order to make wrongful gain to
himself and to cause wrongful loss to NEHU.
33. To bring home the guilt of the criminal conspiracy, prosecution
should prove ; (i) that the accused agreed to do or caused to be done an
act that was illegal or was to be done by illegal means; (ii) that some
overt act was done by one of the accused in pursuance of the agreement.
The essence of conspiracy is that there should be an agreement between
persons to do one or other of the acts constituting the act under Section
120B IPC. First accused is alleged to have conspired with fourth accused
and others to supply DPC at an inflated price to NEHU of Rs. 42.75 per kg
as against the then prevalent market rate of Rs.5/- to Rs.10/- per kg. In
furtherance of the conspiracy, fourth accused supplied Six MTs of DPC and
thereby said to have caused wrongful loss of about Rs. 6 lacs to NEHU.
34. Agreement among the conspirators can be inferred by necessary
implications, and the inference can be drawn on the proved facts. The
facts and incriminating circumstances so proved must form the full chain
whereby the agreement between the accused and their guilt can be safely
inferred. Fourth accused supplied DPC to NEHU at an inflated rate of Rs.
42.75 per kg and had obtained pecuniary advantage for himself and also to
first accused and thereby caused wrongful loss to NEHU. In the light of
evidence and proved facts, the High Court rightly reversed the acquittal
and convicted the fourth accused under Section 120B IPC.
35. So far as the fourth accused is concerned, he was also
convicted for the offence under Section 420 IPC. The offence of cheating
is made of two ingredients: “deception of any person and fraudulently or
dishonestly inducing that person to deliver any property to any person or
to consent that any person shall retain any property”. In collusion with
first accused, the fourth accused quoted and supplied DPC at an inflated
rate of Rs.42.75 per kg, fourth accused dishonestly induced NEHU to
purchase DPC. Fourth accused has taken stand that he did not know the then
prevalent market rate of DPC at Shillong. As a supplier and also dealing
with DPC, it is incomprehensible that the fourth accused did not know the
prevalent market rate. The High Court rightly negatived the defence
version and convicted the fourth accused under Section 420 IPC read with
Section 120B IPC.
36. The High Court remitted the matter to the trial court to hear
the accused on the question of sentence and pass appropriate orders. In
the meanwhile, the fourth accused preferred appeal in this Court and also
filed an application seeking for a direction to the trial court not to
pass sentence. By order dated 31.01.2011 this court ordered that trial
court will proceed on the sentence and pass appropriate orders.
37. By order dated 14.06.2011, the trial court sentenced the fourth
accused to undergo five years rigorous imprisonment with fine of Rs. one
lakh with default clause for the offence punishable under Section 420 IPC;
for the offence under Section 120B IPC fourth accused was sentenced to
undergo three years rigorous imprisonment with a fine of Rs.50,000/-
alongwith default clause and both the sentences were ordered to run
concurrently. The fourth accused had undergone sentence of imprisonment
from 14.06.2011 till 16.02.2012 totally 248 days. By the order of this
Court dated 16.02.2012, the sentence imposed on fourth accused was ordered
to be suspended subject to the petitioner/fourth accused depositing a sum
of Rs.3,50,000/- roughly representing 50% of the excess amount allegedly
gained by him towards the price of the DPC supplied. The fourth accused is
stated to be seventy years old and is said to be undergoing treatment for
Type II Diabetes. The matter is lingering on for about three decades.
38. Having regard to the duration of the pendency of the matter and
age of the fourth accused and that he has already paid fine amount and also
deposited the amount as per the order of this Court, in our view, the
period of sentence of imprisonment imposed on the appellant-fourth accused
for the conviction under Section 420 IPC and Section 120B IPC shall be
modified to the period already undergone and by imposing further fine
amount of Rs. 2,50,000/- in addition to the fine imposed by the trial court
and the amount deposited pursuant to the orders of this Court. In default
of payment of the said fine amount of Rs.2,50,000/-, the fourth accused
shall undergo imprisonment of one year.
39. The appeal preferred by first accused now pursued by his legal
representative is dismissed. The appeal preferred by fourth accused
(Edmund S. Lyngdoh) is partly allowed to the extent indicated above.

…………………………………J
(T.S. Thakur)

…………………………………..J
(R. Banumathi)

New Delhi;
September 16, 2014

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