N. Rama Rao vs Special Police Establishment Hyderabad

Punnayya

This appeal is directed against the conviction and sentence passed by the Special Judge for S.P.E. & A C B. cases, Hyderabad in C.C. 9/1969. The appellant accused was convicted under sections 165 IPC and 5(1) (d) read with 5(2) of Prevention of Corruption Act and sentenced to pay a fine of Rs. 2,000/- and default R I for one year under the first count and for imprisonment till the raising of court and to pay a fine of Rs 1,000/- and in default R.I. for six months under the second count.

The appellant worked in Bharat Heavy Electricals Ltd Hyderabad (hereinafter referred to as ''BHEL'') as Project Engineer on deputation from the Central Public Works Department, Government of India, from March 1962 to May, 1965 He purchased a 2 H.P. pump set and accessories from M/s. Industrial & Agricultural Engineering Co. (Hyderabad) (P) Ltd hereinafter referred to as I AFC'') for his personal use for Rs. 1,500/- including sales tax of Rs. 101. 40.p He took delivery or the pump set as well as accessories on 21-12-1963 and 30-12-63 respectively. He did not pay the price immediately when he took deli very of them. But he paid Rs. 1000/- on 5-7-65 and the balance of Rs.500- on 12-4-66.

The prosecution contends that the appellant as Project Engineer of BHEL, either placed orders or processed them for purchasing the pump sets and several other goods on behalf of BHEL, with IA EC. during 1962-65 and it is for that reason that IAEC, had chosen to sell the pump set to the appellant accused for Rs. 1,500/- as against its actual price of Rs. 2,209-32P including the freight charges of Rs. 30.27 P. at which rate IAEC. purchased it from the manufacturer at Madras.

The prosecution, therefore, contends that the appellant abusing his official position, obtained the pump set for a consideration which he knew to be inadequate from IAEC, with which he was having official dealings and there by he committed offences under sections 165 IPC and 5 (1) (d) read with 5 (2) of Prevention of Corruption Act.

The defence case, on the other hand is that the pump set sold to the appellant was in a damaged condition and hence it was sold to him for a lesser price than its actual price and it was not sold to him for any concessional price in consideration of the several transations which IAEC. was having with BHEL.

The learned Special Judge, relying upon Ex. P-1 to Ex. P-20 held that the accused as Project Engineer of BHEL was considering tenders called by BHEL, and the accused placed orders sometime directly and sometimes processing orders through Purchase Department of the Unit to purchase material that was required for the project from IAEC and these facts clearly establish that the accused is an officer of public company and he as officer, was having business transactions with IAEC. The learned Special Judge also held that the company sold the pump set for Rs. 1,500/- as against its original price of Rs. 2,209-32p. and, thus, the accused abated his official position and obtained the pump set and accessories, for a consideration which be knew to be inadequate, from the said company with which he was having official dealings.

These findings are now assailed in this appeal by the learned counsel for the appellant.

The learned counsel for the appellant contends that the findings of the learned Special Judge that the accused as Project Engineer of BHEL was considering tenders called by BHEL and placed orders sometimes directly and sometimes processing orders through purchase department of the Unit to purchase the material required to the project, with IAEC, and thus he was having business transactions with IAEC is not correct.

He further contends that the findings of the Special Judge that the accused purchased pump set for Rs. 1,500/- as against its original price of Rs. 2,209-32p. and thus he obtained the pump set for a consideration which he knew to be inadequate is also not correct. He contends that the appellant purchased the pump set for Rs. 1,500/- because it was in a damaged condition and the price of Rs. 1,500/- is reasonable and proper.

I have, therefore, to examine whether the contentions raised by the learned counsel for the appellant are entitled to acceptance.

It is not in dispute that the appellant was working as Project Engineer during the period 1962-65. It is also not in dispute that during that period, BHEL. was having transactions with JAEC. and placing orders for purchase of pump sets end several other goods to the tune of Rs. 15,744-98p. during 1962-63. Ps 62,000/- during 1963-64 and Rs. 82,000 during 1964-65. But the case of the accused is that be did not choose IAEC. for the purpose of the above mentioned transactions and it was the Deputy Chief Engineer that was placing orders with IAEC. for the supply of pump sets and several other goods required by BHEL. and he (accused) has nothing to do with these transactions.

The prosecution relied upon Ex. p-1 to Ex.p 20 to prove that the accused was having dealings with I.A.E.C. and to falsify the contention of the appellant accused in this regard.

Ex.P. 1 is the letter of enquiry issued by B.H.E.L. inviting tenders of the supply of the pump sets and other goods mentioned therein and also the terms and conditions for the supply. Ex P-3 shows the details as to why the Deputy Chief Engineer has preferred I. A. E. C. for the supply of the pump sets and goods, for which B.H.E.L. invited tenders. Ex. p 4 is a noteon Ex. p 3, which was signed by the accused Ex. p 13, Ex. p 14, and Ex. p-16 are the letters addressed by the accused to the Deputy Chief Engineer stating the requirements and requesting him to take immediate action to purchase the items mentioned therein, in view of the urgency. Ex. p-19 and p 20 are the purchase orders placed by the Deputy Chief Engineer with I.A.E.C.

From the above documents it is clear that the accused did not take any interest for choosing I.A.E.C. for the supply of pump sets and other goods to B.H.E.L. Ex-P3 makes it abundantly clear that it is the Deputy Chief Engineer that had taken into consideration the merits of I. A. E. C. as against the other company and took a decision in favour of I. A. E. C. for supplying the pump sets and other goods, for which the tenders were invited and the accused had nothing to do with said decision of the Deputy Chief Engineer.

The learned standing counsel for the respondent gave much importance to Ex. P 4 and contends that 1. A. E. C. was chosen at the instance of the accused I do not think that Ex. P-4 lends support to the contention of the learned counsel for the respondent.

Ex-P4 reads as follows :--

Supply water for hostel workshop, tennis ground and quarters under construction. It is essential to purchase another pump from I. A. E. C. which would cost about Rs. 7,700/-

Ex. p4 was signed by the accused and D. F. A. It is, therefore, clear that it cannot be said that under Ex. p4 any decision was taken by the accused in favour of I. A. E. C. for supply of pump sets etc. Ex.p4 further shows only the requirements for which the installation of pump set was necessary and these requirements were proposed after Deputy Chief Engineer had chosen I. A. E. C. for the supply of pump sets etc. On the other hand, p. 11 shows the disinterestedness of the accused towards I. A. E. C.

But on that account, it cannot be said that the accused was not having any dealings with 1. A. E. C. Ex. p. 5, Ex. p.9 and Ex. p.15 show that the accused placed order with I. A. E. C. for the items mentioned therein. Ex. p. 10 and Ex. p. 12 disclose that I. A. E. C. offered to supply the goods mentioned in them in pursuance of the personal talks that the accused had with them with regard to the supply of the goods.

Thus, these documents clearly prove that the accused was having dealings with I. A. E. C. on behalf of B. H. E. L. with regard to supply of several goods and it cannot be said that he was not having any dealings with I. A. E. C. Hence I am not able to agree with the contention of the learned counsel for the appellant on this aspect and the finding given by the lower court on this aspect is entitled to acceptance.

The next point that requires consideration is whether the appellant purchased the pump set for inadequate consideration.

It is not in dispute that the accused purchased the pump set for Rs. 1,400/- According to the prosecution, the original price of the pump set put chased by the accused was Rs. 2, 209-32 p.

The accountant of I. A. E. C. as P. W. 3 gave the details of the price of the several parts of the pump set. According to him the cost of the engine was Rs. 1,944/-, the cost of the cable was Rs. 192/--, the cost of 12 cable clips was Rs. 20/-- and the sales tax was Rs. 43-32p. and thus the total price was Rs. 2.209-32p. He produced Ex. p. 27 the bill under which I. A. E. C. purchased the pump set from the manufacturer. P. W. 3 is evidence with regard to I. A. E. C. purchasing the pump set under Ex P. 27 for Rs 2.239-32p. is entitled to acceptance since there was no cross-examination on that aspect and in fact it is not in dispute also. It is further not in dispute that I. A. E. C. sold the pump set to the accused under Ex. p. 22 for Rs. 1,500/-. Thus the prosecution proved that I. A. E. C. sold the pump set to the accused for Rs. 1,500/- as against its original price of 2,209-32p.

The next question that requires consideration is whether the accused purchased, the pump set for inadequate consideration by using his official position, as public servant.

In order to convict the accused under sections 165 I. P. C. and 5 (1) (d) read with 5 (2) of the Prevention of Corruption Act, it has to be proved that the accused, as a public servant, obtained the pump set for a consideration, which he knows to be inadequate, from I. A. E. C. with which he was having transactions. If once the prosecution succeeds in proving that the accused has purchased the pump set for a price less than its actual price from I. A. E. C. which he was having dealings as Project Engineer on behalf of B. H. E. L, then the presumption u/s 4 of the Prevention of Corruption Act comes in to play. According to section 4, it shall be presumed that the accused accepted or obtained a valuable thing as the motive or reward such as is mentioned in section 161 IPC without consideration or for a consideration which he knows to be be inadequate, unless the contrary is proved.

In this case the prosecution has succeeded in proving that the accused has purchased from I. A. E. C. the pump set for a price of Rs 1,500/- as against its actual price of 2,209--32p. Thus the presumption u/s 3 of P. C. Act came into play against the accused. Hence, it is for the accused to prove that the price of Rs. 1,500/- is proper and reasonable but not inadequate consideration.

The accused comes forwards with a definite case that he purchased the pump set for Rs, 1500/- because it was in a damaged condition and hence it cannot be said that his purchase was for inadequate consideration. The question for consideration is whether he has proved his case viz., that the pump set which he purchased was in a damaged condition.

In order to prove his case, he examined one witness as D.W.1. But the learned Special Judge rejected the evidence of D.W.1. The learned counsel for the appellant contends that the learned Special Judge is not justified in rejecting the evidence of D.W.1. According to him, D.W.1 was residing in the same locality and he and the accused were going together for morning walks and hence they were acquainted with each other. He also contends that D.W.1 wanted to purchase a pump set of 2 HP capacity and in December, 1963 he contacted the sale man in charge of the above firm (I.A.E.C.) and on enquiry be said that the company was having one 2. H.P. pump set but it was in a damaged condition, that it would pump 800 to 1000 gallons water per hour and that it would be sold for Rs. 1500.- and D.W.1, did not purchase it because his requirements are more than 1500 gallons per hour and on the next morning he told the accused about the same and the accused asked him to find out and inform him and hence, D.W.1 actually contacted I.A.E.C. and told the accused that they are aggeable to sell it for Rs. 1500/- with two years guarantee to supply 800 gallons water per hour and then D.W.1 told the same to the accused and then the accused purchased the same.

The learned counsel for the appellant therefore contends that the evidence of D.W.1 cannot be said to be either unnatural or impropable and the finding of the lower court is incorrect in not accepting his evidence.

It is true that D.W.1 was residing in locality in which the accused was residing and hence it is not improbable for the accused and D.W.1 to go for morning walks together. But the question is whether D.W.1 actually required any pump set for his domestic purpose. If he required a pump set for his domestic purpose he ought to have purchased the same even if he did not purchase the one available with I.A.E.C. But D.W.1, admitted that he did not purchase any pump set even subsequently. This admission therefore gives rise to the conclusion that D.W.1, has no necessity to purchase any pump set. In such a case, the story given by him, with regard to his making enquiries and his informing the accused about the availability of the pump set for a price of Rs. 1500/- with I.A.E.C. is unworthy of acceptance. Though D.W.1 admitted in the chief examination that he actually contacted the saleman in charge of I.A.E.C. and asked him about the price and guarantee and through he also stated that after the accused asked him to find out about the terms, he contacted I.A.E.C and fixed up the terms for the purchase of the same, he admitted in the cross-examination that he contacted I.A.E.C. only on telephone and he did not accept the offer through phone. He is making prevaricating statements.

From all these facts it is clear that the evidence of D.W.1 does not inspite confidence and is not entitled to acceptance and the learned Special Judge is therefore justified in rejecting his evidence.

The learned counsel for the appellant contends that merely because D.W.1''s evidence is rejected it cannot be said that the appellant failed to prove his case as there are admissions in the evidence of P. Ws 2 and 3 and those admissions, undoubtedly lend support to the case of the accused. He further contends that the evidence of C.W.1 also supports the case of the accused. He therefore, contends that the lower court is not justified in not taking into consideration the valuable material available in the prosecution evidence itself, and if hat is considered, the accused should be deemed to have discharged the onus of proving his case.

As stated above, the accused came forward with a specific case that the pump set was in a damaged condition and hence it was sold to him for Rs. 1500/- as against its original price. P. W. 2 was examined by the prosecution to prove that he took delivery of the pump set sold to the accused from the firm on 21-12-1963 and the delivery receipt is Ex. P. 21. In the cross-examination he stated that the pump set was slightly in a damaged condition when he took delivery of it, that is appeared to be a used one and that there was some muddy appearance indicating that it was tested at some places, The prosecution did not treat this witness as hostle after the cross-examination in which he made the above mentioned admissions. Law is settled that the admissions brought on record in the cross examination of the prosecution witnesses do constitute valuable material and the accused is entitled to take benefit of such valuable material in support of his case.

P.W.3 is another witness examined by the prosecution to prove the several transactions that B.H.E.L. was having with I.A.E.C. and to prove that the accused, as Project Engineer, was having dealings with I.A.E.C. and also to prove that the pump set sold to the accused was purchased by I.A.E.C. under Ex. P. 27 from the manufacturers at Madras. He is therefore, another material witness for the prosecution, since he is the Accountant of I.A.E.C. In the cross-examination, he stated that the pump set was tested on 19-12-63 before it was sold to the accused and it was tested in 2 or 3 wells outside and he was informed by Mr. Shamu, the Managing Director of I.A.E.C. that during testing the pump set was damaged. The prosecution did not choose to treat this witness also as hostile at the time of re-examination and cross-examine him after he made the above mentioned admissions. u/s 154 of the Evidence Act, Court can permit a party calling a witness to put questions in the nature of cross-examination even at the stage of re-examination, in view of the answers given in the cross-examination. But the prosecution did not seek permission from the Court to treat P. W.3 as hostile witness and to cross-examine him. In such a case, the accused is entitled to take advantage of all the admissions made by P.W. 3 in support of his case.

Even the Managing Director, Mr. Shamu, who was examined by the Court as C.W. 1 gave evidence supporting the appellant''s case. He also stated that his sales Assistant, Nagarajan, told him that the pump set was in a damaged condition and that the bearings were worn out and the shaft and cable were damaged as the pump set fell in a well while being tested. He also stated that after 2 or 3 days after the receipt of the pump set, it was tested in 2 or 3 wells and during the testing, it was damaged. All these facts were elicited in the cross-examination by the prosecutor. The evidence of C.W. 1 is quite cogent and satisfactory. His evidence on this aspect therefore, deserves to be given credence.

The admissions made by P.Ws. 2 and 3 in their cross-examination and the evidence of C.W. 1 clearly establish that the pump set purchased by the accused was tested on 19-12-63 in 2 or 3 wells and it was damaged during the testing and therefore it was sold to the accused for Rs. 1,500/- as against its original price of Rs. 2,209-32p.

In the examination u/s 342 Cr. P.C, the accused stated that the submersible pump set purchased by him was already used for demonstration purpose at different places, that it was so damaged that its maximum capacity to pump water was permanently impaired and that being so, the company bad to dispose of the same for lesser price.

As stated above, the admissions made by P. Ws. 2 and 3 and also that of C.W. 1 lend support to the case of the accused.

The words, unless, the contrary is proved'' which occur in section 4 of the Prevention of Corruption Act, require the accused to prove that he did not obtain the valuable thing for a consideration which he knows to be inadequate It is not sufficient if the accused offers bare explanation, which may be plausible But at the same time it may be mentioned that the burden resting on the accused will be discharged if he establishes his case by a preponderance of probability and it is not necessary for him to establish his case by the test of proof beyond reasonable doubt. In other words, the nature of the burden placed on him is not the same placed on prosecution, which must not only prove its case, but prove its case beyond reasonable doubt.

Regarding the burden of proof to be discharged by the accused u/s 4 of the Prevention of Corruption Act. Their Lordships of the Supreme Court held in Dhanvantrai Balwantrai Desai Vs. State of Maharashtra, that it cannot be suggested that the relevant clause in section 4 (1) which deals with acceptance of any valuable thing should be interpreted to impose upon the prosecution an obligation to prove not only that the valuable thing has been received by the accused, but that it has been received by him without consideration or for a consideration which he knows to be inadequate. The plain meaning of this clause, undoubtedly requires the presumption to be raised whenever it is shown that the valuable thing has been received by the accused without anything more.

Before their Lordships, the contention that the accused person is entitled to rebut the presumption arising against him by virtue of a statutory provision by offering the explanation which is reasonable and probable, was raised. On this aspect their Lordships held that, it is well to bear in mind that whereas u/s 114 of the Evidence Act, it is open to the court to draw or not to draw a presumption as to the existence of one fact from the proof of another fact, and it is not obligatory upon the court to draw such presumption under Sec. 4 (1). However, if a certain fact is proved, that is where any gratification, (other than legal gratification) or any valuable thing is proved to have been received by an accused person, the court is required to draw & presumption that the person received that thing as a motive of reward such as is mentioned in section 161 IPC. Therefore the Court has no choice in the matter, once it is established that the accused person has received a sum of money, which was not due to him as legal remuneration. Of course, it is open to that person to show that though that money was not due to him as legal remuneration, it was legally due to him, in some other manner or that he had received it under a transaction or an arrangement which was lawful. The burden resting on the accused person in such a cases would not be as light as it is where a presumption is raised u/s 114 of the Evidence Act and cannot be held to be discharged merely by reason of the fact that the explanation offered by the accused is reasonable and probable. The words ''unless the contrary is proved, which occur in this provision make it clear that the presumption has to be rebutted by ''proof'' and not by explanation which is merely plausible. A fact is said to be proved when its existence is directly established or when upon the material before if the court finds its existence to be so probable that a reasonable man would act on the supposition that it exists Unless, therefore, the explanation is supported by proof, the presumption created by the provision cannot be said to be rebutted''.

In V.D Thingan v. State of U.P, AIR 1969 S.C. 1762 Their Lordships followed the decision in Dhanvantrai Balwantrai Desai Vs. State of Maharashtra, to consider what is the burden of proof placed upon the accused person against whom the presumption is drawn u/s 4 (1) of the Prevention of Corruption Act, and held as follows :

It is well established that where the burden of an issue lies upon the accused, he is not required to discharge that burden by leading evidence to prove his case beyond reasonable doubt. That is, of course, the test prescribed in deciding whether the prosecution has discharged its onus to prove the guilt of the accused ; but the same chat cannot be applied to an accused person, who seeks to discharge the burden placed upon him under sec. 4 (1) of the Prevention of Corruption Act. It is sufficient if the accused person succeeds in proving a preponderence of probability in favour of his case. It is not necessary for the accused person to prove his case beyond reasonable doubt or in default to incur a verdict of guilty. The onus of prooflying upon the accused person is to prove his case by a preponderence of probability. As soon as he succeeds in doing so the burden is shifted to prosecution, which still has to discharge its original onus that never shifts i.e. that of establishing on the whole case the guilt of the accused beyond reasonable doubt.

In The State of Assam Vs. Krishna Rao, the Supreme Court again considered the question of onus on the accused of proving the contrary and held that according to the well-settled view (of the Supreme Court) the words ''unless the contrary is proved'' mean that the presumption raised by section 4 has to be rebutted by proof and not by mere explanation, which may be merely plausible. The required proof need not be such as is expected for sustaining a criminal conviction ; it need only establish a high degree of probability.

From the above rulings of the Supreme Court on the question of onus on the accused of proving the contrary, it is clear that a presumption of law cannot be successfully rebutted by merely raising a probability, however, reasonable it may be. But something more than raising reasonable probability is required for rebutting a presumption of law. The bare word of the appellant is not enough and it was necessary for him to show that upon the established practice his explanation was so probable that a prudent man ought, in the circumstances, to have accepted it.

In this case, the appellant not only came forward with a specific case but also was able to prove his case with the very admissions, referred to above, made by P. Ws. 2 and 3 and C. W. 1. It is true that D. W. 1, is evidence is found unacceptable, But on that account it cannot be said that the appellant''s explanation is not supported by any evidence. On the other hand, the admissions of F. Ws. 2 and 3 and also that of C. W. 1 which are unequivocal and specific, would lend support to the case of the appellant that the pump set was purchased for Rs. 1,500/- as against its original price of Rs. 2,209-32 p because it was in a damaged condition.

Is the accused entitled to take the benefit of the admissions made by the prosecution witnesses and other circumstances appearing in the prosecution evidence in support of his case, for discharging the burden of proof ? The preponderance of judicial authorities has been consistently in favour of upholding the wholesome principle of criminal jurisprudence that the accused is entitled to take the benefit of admissions made by the prosecution witnesses in cross-examination in order to discharge the burden of proof cast on him under law, even if he is not able to adduce any evidence or if the evidence adduced by him is found unacceptable to support his case.

The supreme Court, while examining the doctrine of burden of proof in the context of the plea of insanity u/s 84 I. P. C. which is as heavy on the accused as that of one u/s 4 (1) of the Prevention of Corruption Act, held in Dahyabhai Chhaganbhai Thakker Vs. State of Gujarat, that the accused has to satisfy the standard of prudent person. If the material placed before the court such as oral and documentary evidence, presumptions, admissions or even the prosecution evidence satisfies the test of ''prudent man'', the accused will be deemed to have discharged the burden. Even in Dhanvantrai Balwantrai Desai Vs. State of Maharashtra, the Supreme Court enunciated the same dictum while considering the question as to what evidence should satisfy the words ''unless the contrary is proved'' occurring in Section 4 (1) of the Prevention of Corruption Act. Their Lordships held that "the least that can be said is that the court must be satisfied from the material placed before it on behalf of the accused either from the evidence for the prosecution or for the accused that it creates a reasonable doubt about the prosecution case itself".

The above ruling of the Supreme Court makes it abundantly clear that the accused is entitled to take benefit of the admission; made by the prosecution witness to discharge the burden of proof required under law.

Thus, the accused in this case has succeeded in proving his case with the admissions brought on record in the cross-examination of P. Ws. 2 and 3 and C. W. 1 to the satisfaction of the court that the pump set that was purchased by him was in damaged condition and hence it was sold to him for Rs. 1,500/- and as such he did not purchase the pump set for a consideration which was inadequate and, thus, he discharged the burden cast on him u/s 4 (1) of the Prevention of Corruption Act.

The learned Special Judge unfortunately fell into error in refusing to take into consideration these admissions of P. Ws. 2 and 3 and C. W. 1 on flimsy grounds bused on conjectures and thus he misdirected himself in rejecting them.

It is true that the accused took much time to make payments and the company appeared to be lenient in giving so much time. But on that account it cannot be said that the prosecution has succeed in proving the guilt of the accused, as what is required to be proved is that the accused purchased the pump set for a consideration which he knows to be inadequate. Here, the accused has proved to the satisfaction of the court that the consideration for which he purchased the pump set is not at all inadequate and, on the other hand it is reasonable and proper consideration because of the damaged condition of the pump set. When once the accused was able to prove that he did not obtain the valuable thing for a consideration, which was not inadequate, the prosecution case fails even if the prosecution succeeds in proving that there were transactions between I. A. E. C. and B. H. E. L. in which the accused was serving and was connected with those transactions. Hence the deferred payments made by the accused cannot form the basis of conviction as it does not come as an ingradient of the provision of section 165 I. P. C. or 5 (1) (d) of the Prevention of Corruption Act. For the aforesaid reasons, I am not able to agree with the learned Special Judge on the second aspect. I hold that the accused is not at all guilty of the offences, to which he stood charged. I, therefore, allow the appeal set aside the conviction and sentence passed by the learned Special Judge and acquit the accused. The fine, if any, paid by him shall be refunded to him.