Paturu Rama Rao vs State (Central Bureau Of ...
1996 Latest Caselaw 726 Del

JUDGMENT

S.K. Mahajan, J.

(1) The petitioner after having been arrested in case Rc No.3(A)/96/CBI/ACU Iv under sections 120-B and section 13(2) read with section 13(l)(d) of the Prevention of Corruption Act, 1988, has applied to this Court for being admitted to bail after his bail application was dismissed by the trial Court. A few facts which are relevant for purposes of deciding this petition in short are :

(2) That Department of Telecommunication (in short referred to as "DoT"), Ministry of Communication, Government of India, had issued a notice inviting tenders for procurement of 3,000 numbers of 2/15 Marr shared radio systems (in short referred to as the "system"). Out of these, 1,000 numbers were required for the year 1992-93 while 2,000 were required for the year 1993-94. On scrutiny of the tenders, the Tender Enquiry. Committee (TEC) recommended a price of Rs.3,54,000.00 per system with single antena working including antena coupler and isolator quoted by M/s. Indotronics, being the lowest. The Tec also recommended together a counter offer on the same rate to M/s.Advance Radio Masts Limited (ARM) who had also submitted their tender. Rates accepted were inclusive of packing and forwarding charges exclusive of sales-tax, excise duty, freight and insurance, etc. Another firm M/s.Shyam Electronics (in short referred to as "Shyam") also having type approval approached Tec for supply of the above systems and it was decided to split the order in two parts i.e. 300 systems to be supplied by Arm and 200 by Shyam against the said approval for entire supply of 500 systems by M/s.ARM. These orders were placed on 4th December, 1992 and till the placement of these orders, the price variation in respect of crystal and synthesized versions were not discussed anywhere and orders for both the versions were placed at the same price.

(3) For the remaining 2,000 systems it was proposed by DoT to procure the same from all those venders having type approval at the rate of Rs.3,45,000.00 per system. There were three firms, namely, M/s.ARM, Shyam and Punwire who were having type approval for 2/15 Marr system. The petitioner is the Managing Director of ARM. Smt. Runu Ghosh, the then Director (FA-V) in her note dated 25th May, 1993 pleaded for placement of orders of crystal controlled sets saying that it should not cause problem and she recommended 1,500 systems to be procured from Arm, 500 systems from Shyam and 200 from Punwire at the lowest rate of Rs.3,45,000.00 per system before February, 1994. It is also alleged in the Fir that as all the three firms were having type approval, a Price Negotiation Committee (PNC) was constituted and one of its member was Mrs.Runu Ghosh. During negotiations, the lowest price of Rs.3,40,750.00 per system together with one spare unit of Lna was offered by Shyam and also agreed to by Arm on 10th June, 1993. In the meeting, it was highlighted by the other two members of Pnc that the system based on crystal frequency design was of inferior quality as compared to synthesized versions but Mrs.Runu Ghosh did not agree with the minutes of the meeting as according to her it was not within the province of the Pnc to assess the quality of the system. Moreover, according to her, the faults and advantages of the system were not discussed in the Pnc meeting. Sh.N.G.Gupta, who was a member of the committee, was also at the relevant time DDG(RN), justified the price difference between crystal and synthesized version by quoting the DGS&D rate contract in which crystal version was cheaper by 34,170.00 vis-a-vis synthesized version. It is alleged that when Mrs.Runu Ghosh came to know about the approval of difference of rates between the crystal and synthesized version systems by the competent authority i.e. Member(P), she sent the file toSr.DDG(TEC) for seeking certain clarifications without even consulting her seniors. It is also alleged that a letter dated 21st July, 1993 was received by Mrs.Runu Ghosh by speed post from M/s.ARM indicating the reduction of sales-tax from 4% to 2% by A.P.State. Government, however, no action whatsoever was taken by her in that regard. She is alleged to have submitted the file directly to the then Minister of State for Communications, Sh.Sukh Ram on 5th August, 1993 instead of receiving clarifications from the Telecommunication Engineering Centre. On seeing the file, Mr.Sukh Ram advised to procure the system within a period of week's time without making any comment on price reduction as approved by the Member(P). On a proposal having been put up by the Director of Mm Cell duly approved by the Minister of State, supply order dated 28th September, 1993 for 600 systems of synthesized versions and 300 systems of crystal versions was placed upon M/s.ARM at the rate of Rs.3,35,639.00 and Rs.2,98,469.00 respectively. Meanwhile, it appears that Arm requested to place more orders of crystal version at the same rate as that of synthesized version vide their letter dated 11th September, 1993. The request of the firm was received directly by Mr.Sukh Ram 560 on 27th September, 1993 and he observed "how are we offering two rates against the same tenders since we have taken both crystal and synthesized at the same price earlier?" On these observations of Mr.Sukh Ram, the matter was again examined by the DoT and it was reiterated that as the synthesized version was definitely of a superior quality than crystal version, the price difference was justified. Mr.Sukh Ram, however, turned down the said plea of reduction in the price of crystal version, recommended by the PNC. DDG(PF) vide his note dated 9th December, 1993 suggested to get the rates redetermined after quick study of the relative merits of the two types of systems, however, Mr.Sukh Ram ignored all these recommendations and ultimately ordered for immediate compliance vide his note dated 9th December, 1993 for placing orders of crystal version also at the same rate as of synthesized version upon M/s.ARM. It is also alleged that by the aforesaid acts of Mr.Sukh Ram in his capacity as the Minister of State for Communications and Smt.Runu Ghosh in her capacity of Director(FA) being such public servants in conspiracy with amongst themselves and with owner of M/s.Advance Radio Masts Limited by corrupt or illegal means or by abusing their position as such public servants caused pecuniary advantage either to M/s.ARM or/and to themselves. It is alleged that by their acts, the Government had suffered a total loss of Rs.l,68,00,000.00 .

(4) The contention of Mr.Jaitley, Sr.Advocate, appearing on behalf of the petitioner, who is the President and Managing Director of M/s.ARM, is that on a plain reading of the Fir no case whatsoever has been made out against the petitioner. According to him, after the DoT had placed an order for supply of crystal version of the system at a reduced price, M/s.ARM were within its right to make representation with the DoT for increasing the price, as in earlier years there was no difference between the prices of crystal as well as synthesized version and the reduction was wholly artificial as the two systems were not only technically identical but they were also identically priced. It is his submission that it was to remove the anomaly of the reduced price for the supply of crystal version of the system that he had made representation with .the Minister and the Minister being satisfied with the price reduction was not justified, directed purchase of the crystal version of system at the same rate as the synthesized version.

(5) It is next contended by Mr.Jaitley that even assuming the allegations to be correct, the State has allegedly suffered a loss of Rs.l,68,00,000.00 which the petitioner without prejudice to his rights and contentions is willing to deposit with the Government. Moreover, according to him, during the search of his office premises as well as residence, nothing incriminating has been recovered from the petitioner and the only alleged incriminating circumstance sought to connect the petitioner with the conspiracy was the alleged recovery of two blank Signed letter heads of Arm from the office of Mrs.Runu Ghosh. It is stated that the petitioner is a respectable person heading a company employ- ing about 1,500 employees with a turn over in hundreds of crores and there was no likelihood of the petitioner tampering with evidence as the complete case of the Cbi was based upon the documents which have already been taken into possession by them. It is further his contention that the petitioner has already joined investigation and undertakes to join the investigation as and when required by the Investigating Officer and there was no likelihood of his fleeing from justice, as he was not only a permanent resident of Hyderabad but was heading a big industrial unit employing about 1,500 employees.

(6) The contention of Mr.Lal, appearing for Cbi, opposing bail is that as the petitioner was allegedly involved in the commission of an economic offence, the Court should not admit him to bail as the Supreme Court in State of Gujamt Vs. Mohanlal Jitamalji Porwal and Another, has held that "the entire community is aggrieved if the economic offenders who run the economy of the State are not brought to book. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequences to the community." lt.is, therefore, his contention that the investigation being at the crucial stage, the co-accused Sukh Ram having not yet been arrested, it will not be proper to admit the petitioner to bail.

(7) At this stage of considering the application of the petitioner for the grant of bail, the Court is not required to go into the detailed examination of evidence and pre-judge the case and for that exhaustive exploitation of the merits of the case are not required in the order. The Court before granting bail in cases involving non-bailable offences, is to take into consideration matters such as the nature and seriousness of the offence, the character of evidence, circumstances which are peculiar to the accused, a reasonable possibility of the presence of the accused not being secured at trial, reasonable apprehension of witnesses being tampered with, the larger interest of the public or the State and similar other considerations. Bail should normally not be withheld as a punishment if, after taking into consideration other factors, the accused is entitled to the grant of bail. Bail and not jail is the normal rule. The two paramount considerations, namely, likelihood of the accused fleeing from justice and his tampering with prosecution evidence relate to ensuring fair trial of a case in the course of justice. Due and proper weight should be bestowed on these two factors apart from others. There cannot be a set formula in the matter of granting bail. The facts and circumstances of each case will govern the exercise of judicial discretion in granting or cancelling the bail.

(8) In the present case, the allegations against the petitioner linking him to the commission of offence are that after he had submitted his tender for supply of crystal and synthesized version of 2/15 Marr system, he made a representation directly to the Minister for increasing the price of the crystal 562 version as the price negotiation committee had approved a lesser price for crystal version than the price which had been approved for synthesized version. This representation was allegedly made by the petitioner on the ground that in earlier years, the price of both the crystal and synthesized version was the same and in the year in question also, therefore, M/s.ARM should be paid the same price as had been paid in the earlier years. This representation of the petitioner found favour of the Minister and it is- alleged in the Fir that as a result of the acceptance of the representation of the petitioner, the State has suffered a loss of Rs.1.68 crores. The other allegation which had been made against the petitioner is that two signed blank letter heads of his company were found in the office of Mrs. Runu Ghosh. As already been pointed out by me above and as held by the Supreme Court, at the time of consideration of application of the petitioner for the grant of bail, it will not be proper on my part to go into the merits as to whether merely by writing a letter to the Minister representing him to increase the price of the crystal version and finding of two signed blank letter heads in the office of Mrs.Runu Ghosh, any offence under the Prevention of Corruption Act has been made out against the petitioner. However, the fact remains that the respondent has not pointed out to me nor it is alleged that at the time of search of the premises of the petitioner, anything incriminating was recovered. Prima facie, however, it appears to me that any businessman has a right to represent to the purchaser to pay him the proper price in case he feels that the price which is being paid to him is not proper. What was the consideration for accepting the representation of M/s.ARM is not the question I am required to decide at this stage.

(9) What has been alleged in the Fir is that Mr.Sukh Ram in his capacity as a Minister and Mrs.Runu Ghosh in her capacity as Director in conspiracy with among themselves and with owner of M/s.ARM by corrupt or illegal means or by abusing their position as such public .servants caused pecuniary advantage either to M/s.ARM or/and to themselves which facts, according to the Fir, disclosed the commission of offence punishable under Section 120-B and section 13(2) read with section 13(l)(d) of the Prevention of Corruption Act, 1988. I am at this stage also not expressing any opinion on the question whether the petitioner, who is not a public servant, can be charged for an offence punishable under Sections 13(l)(d) and 13(2) of the Act.

(10) In State of Gujarat Vs. Mohanlal Jitamalji Porwal and Another (Supra), the judgment relied upon by Mr.Lal opposing the bail application, the facts were that the accused was acquitted by the trial Court and his acquittal was confirmed by the High Court. During the arguments in the High Court, a request was made on behalf of the State for adducing additional evidence under section 391 of the Code of Criminal Procedure in order to remove the alleged formal defect in the proof of the mint master and this request of the State was rejected by the High Court. Against the judgment of the High Court, an ap- peal was preferred to the Supreme Court and dealing with this part of the order of the High Court the Supreme Court has held as under :- "APART from the fact that the alleged lacuna was a technical lacuna in the sense that while the opinion of the Mint Master had admittedly been placed on record it had not been formally proved the report completely supported the case of the prosecution that the gold was of the specified purity. To deny the opportunity to remove the formal defect was to abort a case against an alleged economic offender. Ends of justice are not satisfied 'only when the accused in a criminal case is acquitted. The Community acting through the State and the Public Prosecutor is also entitled to justice. The cause of the Community deserves equal treatment at the hands of the Court in the discharge of its judicial functions. The Community or the State is not a person non-gratia whose cause may be treated with disdain. The entire Community is aggrieved if the economic offenders who ruin the economy of the State are not brought to book. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the community. A disregard for the interest of the Community can be manifested only at the cost of forfeiting the trust and faith of the Community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the National Economy and National interest. The High Court was therefore altogether unjustified in rejecting the application made by the learned Assistant Public Prosecutor invoking the powers of the Court under Section 391 of the Code of Criminal Procedure."

(11) The Supreme Court was, therefore, not concerned with the grant of bail nor was it concerned with the ultimate conviction of the accused but it was concerned only with that part of the judgment of the High Court where the request of the State for leading additional evidence was rejected. In my view, these observations though are relevant for deciding the matter finally, however, at the time of grant of bail, the considerations which weigh with the Court are the seriousness of the offence and whether the accused would be readily available for trial and whether he is likely to use the discretion granted in his favour by tampering with evidence.

(12) The petitioner is the President and Managing Director of a company employing about 1,500 employees and has a turn over of about Rs.200 crores. He has roots in society and I do not see any reason as to why he should flee from justice. Petitioner is in custody for the last about one month and he has already been interrogated. Moreover, the entire case of the & prosecution is based almost upon the documents. Nothing incriminating has been shown to. 564 have been recovered from the residence or office of the petitioner after a search had been made and if conditions are imposed, I am of the opinion that the petitioner can be admitted to bail. Though, an offer has been made by the petitioner during the course of arguments to deposit a sum of Rs.l.68 crores in this Court which is the difference between the price which has been paid to his company and the price which was initially agreed to be paid, however, while deciding this application, I am not taking the same into consideration. In case, bail is allowed only on the ground of the petitioner agreeing to deposit the said amount in Court, every accused who is booked for an offence under the Prevention of Corruption Act, will offer to deposit the amount taken by him in bribe or for which he has been benefited. However, it will be open to the petitioner to approach the authorities concerned directly for depositing the said amount with them.

(13) For the foregoing reasons and without, therefore, in any manner commenting upon the merits of the case and in the facts and circumstances of this case, I direct the petitioner to be admitted to bail on his furnishing a personal bond in the sum of Rs.l,00,000.00 (Rupees One lakh only) with one surety in the like amount to the satisfaction of the trial Court. The petitioner will surrender his passport, if not already surrendered, with the investigating agency and will not leave the country without prior permission of the Court. Petitioner will also not tamper with the evidence during the time he will be on bail and will cooperate with the investigating agency, as and when required by it.

(14) Any observation made in this order will not have any bearing on the merits of the case.