K.S. Bakshi vs C.B.I.
2010 Latest Caselaw 3184 Del

                                                     UNREPORTABLE

*     IN THE HIGH COURT OF DELHI AT NEW DELHI


+     BAIL APPLN. NOS. 1037/2010 & 1038/2010

                                           Reserved on: 7th July, 2010
%                                         Date of decision: 9th July, 2010


      SK DIXIT                   ..... Petitioner in Bail Appln. 1037/2010.
      KS BAKSHI                  ..... Petitioner in Bail Appln. 1038/2010.
                           Through Mr. Siddharth Luthra & Mr. Sushil
                           Kumar, Sr. Advocates with Mr. Anil Airi, Mr.
                           Aditya Kumar, Mr. R.K Chandna, Mr. Lavkesh
                           Sawhney & Ms. Meenakshi Grover, Advocates.

                    versus

      CBI                                         ..... Respondent

Through Mr. Pawan Sharma, Standing Counsel with Ms. Laxmi Chauhan, Advocate along with Mr. Om Prakash Parida, Addl. S.P.

(CBI).

CORAM:

HON'BLE MR. JUSTICE SANJIV KHANNA

1. Whether Reporters of local papers may be allowed to see the judgment?

2. To be referred to the Reporter or not ?

3. Whether the judgment should be reported in the Digest ?

SANJIV KHANNA, J.:

1. These bail applications under Section 439, Code of Criminal

Procedure (hereinafter referred to as Cr.P.C., for short) have been

filed by Mr. K.S. Bakshi and Mr. S.K. Dixit, Managing Director and

Chief Executive Officer, respectively, of Oriental Structures Engineers

Pvt. Ltd. (OSEL, for short). The two applicants were arrested by C.B.I.

Bail Applns.1037-38/2010 Page 1 in R.C. No. 9A/2010 registered against S.K. Nirmal and others. It is

stated that the two applicants have been in jail for about the last 45

days.

2. Learned counsel for the applicants has drawn my attention to

the FIR and the allegations made therein. It has been pointed out that

there are factual inaccuracies in the FIR and the following facts are

highlighted. The National Highways Authority of India (NHAI, for

short) had published an advertisement on 7th December, 2009

inviting applications from experienced and capable contractors to

submit Request for Qualification (RFQ, for short) for the next stage of

bidding i.e. Request for Proposals. RFQs were invited for "Four laning

of Nagpur-Betul Section of NH-69 from k.m. 137.000 to k.m. 257.000

in the State of Madhya Pradesh and from k.m. 59.300 to k.m. 3.000

in the State of Maharashtra under NHDP Phase IV on design, build,

finance, operate and transfer (annuity) basis."

3. It is stated that 17 applications were filed and not 13 as

mentioned in the FIR. These applications were scrutinized on 6th

April, 2010 and the applications of 8 companies were rejected and not

4 companies as mentioned in the FIR. It is pointed out that the bids

were given by 5 companies and the bid given by OSEL was the lowest

and therefore accepted. It is submitted that the bids were given by the

5 companies on 10th May, 2010 and were opened immediately for the

purpose of ascertaining the lowest proposal. It is thus submitted that

Bail Applns.1037-38/2010 Page 2 the allegations of undue favour to OSEL and reduction of time limit

from 45 days to 35 days made in para 6 of the FIR are incorrect and

false. There was no extension of time for giving of bids to extend any

favour to OSEL. Learned counsel for the applicants has submitted

that the OSEL was not successful in several cases/tenders as their

bids were not the lowest and contracts were not awarded to them. My

attention was drawn to the writ petition filed by Larsen & Turbo Ltd

in the Delhi High Court making similar allegations. The said Writ

Petition was withdrawn on 21st May, 2010. It is pointed out that the

FIR in question was registered on the very next date i.e. 22nd May,

2010. Counsel for the applicants have relied upon the following

decisions: S.K. Alagh versus State of Uttar Pradesh and

Others, (2008) 5 SCC 662, Ravi Singhal versus Union of

India, 51 (1993) DLT 133, Smt. Runu Ghosh versus State

(CBI), 64 (1996) DLT 474, Paturu Rama Rao versus State

(CBI), 64 (1996) DLT 455, Sukh Ram versus CBI, 64 (1996) DLT

633, Shameet Mukherjee versus CBI, MANU/DE/0863/2003,

Anurag Vardhan versus CBI, 105 (2003) DLT 594, Dharambir

khattar versus State (CBI), 110 (2004) DLT 366, Suresh

Nanda versus CBI, Ravinder Chadha versus State [Delhi],

2008 [4] JCC 2836, Prof K. Narayana Rao (In J.C.) versus

CBI [Delhi], 2009 [4] JCC 2551 and R. Vasudevan versus CBI,

166 (2010) DLT 583.

4. Filing of the writ petition and withdrawal of the same is one

Bail Applns.1037-38/2010 Page 3 aspect. The writ petition could have been withdrawn for a number of

reasons including making a complaint, which was pending before the

CBI. One is not required to go into the said aspect or reasons. In the

present bail applications, we are concerned with the allegations

against the two applicants and whether or not the allegations show

commission of an offence and the whether or not the applicants are

entitled to bail. In cases involving non bailable offences, the

considerations which weigh while examining an application for bail

are the nature and seriousness of the offence, the character of

evidence, a reasonable possibility of presence of the accused being

secured in trial, whether there is reasonable apprehension of

tampering with witnesses, circumstances peculiar to the accused and

larger interest of the State/ public.

5. As per the prosecution, searches in the houses of the two

officers of NHAI, Mr. N.K. Jain and Mr. S.K. Nirmal, have led to

recoveries of cash of Rs.2.48 crores and Rs.42 lacs, respectively.

Learned counsel for the CBI has also produced before me some

original files and has pointed out that 17 RFQ offers/bids were

received out of which 4 persons had withdrawn their RFQ offers.

Thus, in all, 13 companies had submitted RFQs at the first stage.

6. Clauses 2.13.1 and 2.13.2 of the terms and conditions for RFQ

read as under:

"2.13.1. The Applicant shall submit the Application in the format specified at Appendix-1, together with the documents specified in Clause 2.13.2,

Bail Applns.1037-38/2010 Page 4 and seal it in an envelope and mark the envelope as "APPLICATION". The Applicant shall seal the original and the copy of the Application, together with their respective enclosures, in separate envelopes duly marking the envelopes as "ORIGINAL" and "COPY". The envelopes shall then be sealed in an outer envelope which shall also be marked in accordance with Clauses 2.13.2 and 2.13.3.

2.13.2. Each envelope shall contain :

(i) Application in the prescribed format (Appendix-1) along with Annexes and supporting documents;

(ii) Power of Attorney for signing the Application as per the format at Appendix-II;

(iii) if applicable, the Power of Attorney for Lead Member of Consortium as per the format at Appendix-III;

(iv) copy of the Jt. Bidding Agreement, in case of a Consortium, substantially in the format at Appendix-IV;

(v) copy of Memorandum and Articles of Association, if the Applicant is a body corporate, and if a partnership then a copy of its partnership deed; and

(vi) copies of Applicant‟s duly audited balance sheet and profit and loss account for the preceding five years.

...................."

7. It is pointed out that the clauses do not specifically require

furnishing of original documents to be attached with the application.

In sub clauses of clause 2.13. 2 the word "copy/copies" is used. The

application for RFQ and a copy of the application for RFQ were

required to be enclosed and sealed in two separate envelopes.

8. As per the prosecution, in accordance with the tender

Bail Applns.1037-38/2010 Page 5 conditions the RFQs submitted by these 13 companies were to be

scrutinized on 6th April, 2010. On 31st March, 2010, a note was

initiated by Mr. Nitin Jain proposing that "cognizance should not be

taken of any scanned document/certificates submitted alongwith the

RFQ applications henceforth, where the requirement of original

document is stipulated". Mr. S.K. Nirmal and other senior officers of

NHAI agreed and processed the said proposal with great haste and

hurry. Even opinion of General Manager (Legal) was not obtained as

is normally done. The General Manager (Legal), it was recorded, was

busy in meetings. A draft circular was prepared on 1st April, 2010

and was directed to be issued on 2nd April, 2010. 2nd April, 2010 was

a gazetted holiday being Good Friday. However, as per the

prosecution their investigations have revealed that Mr. Gautam Das,

GM (Coordination) was compelled to issue Circular No. 54/2010

dated 2nd April,2010. Relevant portion of this circular reads:-

"It has been frequently noticed while evaluating the RFQ applications that many of the applicants submit photocopies, scanned copies, fax copies etc. of experience certificates, Power of Attorney, Joint Bidding Agreements etc. with their applications which are not in conformity with the requirement of submission of documents with the application as per RFQ conditions.

2. xxxx

3. It has been henceforth decided that the documents not submitted by the applicant in conformity with the above clause shall not be taken into cognizance and subsequent submission of original documents would not be entertained. It is also clarified that the vital documents like Power of Attorney, Experience Certificates, Joint Bidding Agreements submitted with the application in

Bail Applns.1037-38/2010 Page 6 original would only be considered while evaluating the applications.

4. The Policy Circular No. 17/2008 on the subject stands superseded."

9. As per the original file shown to me, in the meeting dated 6th

April, 2010, 8 RFQ applications were rejected in view of the aforesaid

circular and, therefore, recording that the said applicant does not

meet the technical or financial threshold.

10. As noticed above, RFQ applications were received on 21st

January, 2010 and this circular dated 2nd April, 2010 was issued in

great haste just before 6th April, 2010, when the applications were to

be considered. Only the successful RFQ applicants were entitled to

give financial bids. At RFQ stage financial bids/proposals are not

furnished nor examined. Elimination of an RFQ applicant, is

obviously beneficial and ensured less competition at the subsequent

stage when financial bids by approved parties are given and

examined. This alteration and issue of circular dated 2nd April,2010

as per the prosecution was done at the behest and on the asking of the

applicants to favour OSEL and oust the competitors.

11. The prosecution has pointed out that the minutes dated 6th

April, 2010 rejecting 8 RFQ applications, do not mention the specific

document of which a copy and not the original was furnished,

resulting in the application being rejected. Examination of the note

sheet in the original file reveals a note dated 2.4.2010, which reads:

"......Clause 2.13.1 was checked up and says submission in two envelopes; „original‟ and „copy‟. In original envelop therefore we must

Bail Applns.1037-38/2010 Page 7 insist on original documents unless explicitly marked otherwise."

12. It is submitted by the prosecution that this is a perverse and

perverted interpretation with mala fide intention to help the

applicants. It is also submitted that no opportunity was granted to

the rejected applicants to comply and meet the requirements of the

circular dated 2nd April, 2010 and not reject the RFQ

applications/offers.

13. My attention was drawn to the earlier noting of Mr. Nitin Jain

dated 11.3.2010 that out of 13 RFQ applicants, only 2 applicants did

not meet the technical threshold capability and their further

evaluation was not required. In 9 cases including OSEL, clarifications

were required and the said applicants were given 7 days to respond.

No time to respond or furnish originals was given to the 8 RFQ

applicants after 2nd April, 2010 though they were affected and were

being rejected on basis of circular dated 2nd April,2010, which was

issued after RFQ offers made by the applicants on or before 21st

Jan.,2010.

14. Counsel for the applicants has submitted that the circular dated

2nd April, 2010 was modified by a subsequent circular dated 26th

April, 2010 and all RFQ offers were reconsidered on the basis of a

report given by a consultant on 30th April, 2010. The relevant portion

of the corrigendum dated 26th April, 2010 reads:

"2. In this regard, it is further clarified that the copy of the JBA if submitted with the application

Bail Applns.1037-38/2010 Page 8 be considered while evaluating the applications, as the same is permitted in the RFQ vide clause 2.13.2 (iv).

3. Further, in line with the accepted practice & norms followed with respect to submission of documents in the country, it is also clarified that certified (bearing the certified true copy stamp alongwith proper signature & stamp of the signatory)/attested copies (attested by a Notary Public) of the experience certificates may also be considered while evaluating the applications."

15. In this connection, it is submitted on behalf of the prosecution

that this exercise was a sham and the report of the consultant states

that 6 RFQ applicants had enclosed photocopies/scanned copies of

their technical and financial experience certificates/documents which

were not attested or certified in terms of the corrigendum dated 26th

April, 2010, partly modifying the circular dated 2nd April, 2010.

Application of one of the applicants was rejected on the ground that

though the concerned document was stamped as a true copy with

initial of an authorized signatory and round stamp of the applicant,

but the requirement of the corrigendum that the certification should

be under proper signature and the stamp of signatory, was not

satisfied.

16. During investigation the prosecution has been able to get hold

of data from an e-mail account of Mr. S.K. Dixit. Data down loaded

from the said account and inbox and outbox folders reveals that Mr.

S.K. Dixit was in constant touch with officials of NHAI including Mr.

Nitin Jain and Mr. S.K. Nirmal during the period in question. On 25th

Bail Applns.1037-38/2010 Page 9 February, 2010, Mr. Nitin Jain had sent to Mr. S.K Dixit draft bid

documents "Schedule „C‟, Schedule „D‟, Schedule „A‟ Bridge condition

survey, Inventory, and Road inventory structure of culvert and

bridge, Road condition survey, and Road inventory documents, etc.

for Nagpur-Betul Project. It is pertinent to mention here that the

draft bid documents were made available to other bidders after the

result of RFQ stage on 6th April, 2010. E-mails for purchase of air

tickets for wife of one of the officials of NHAI have also been down

loaded. The prosecution has stated that Mr. Divakar Negi, an

employee of OSEL has confirmed that payments of these air tickets

were debited to the corporate account of the said company.

17. Counsel for the applicants have submitted that in several

corruption cases, courts have granted bail after the accused has been

detained for a period of about one month. It is not possible to accept

the contention that these decisions lay down as a ratio that in

Prevention of Corruption Act cases bail should be granted after an

accused has suffered incarceration for a period of 30/40 days.

Further the statement that the accused is well of, has status and roots

in society, cannot by itself alone without other reasons, justify grant

of bail. Offence of corruption, specially by high officials and those

dealing with infrastructure projects of high value, is a serious and a

grave offence. They affect the entire economy, government finances

and public at large. These offences have to be viewed seriously. In

Bail Applns.1037-38/2010 Page 10 Surain Singh versus State of Punjab, 2009 II AD (SC) 589, it

has been observed as under:

"7. Day in and day out the gigantic problem of corruption in the public servants is on the increase. Large scale corruption retards the nation-building activities and everyone has to suffer on that count. Corruption is corroding like cancerous lymph nodes, the vital veins of the body politics, social fabric of efficiency in the public service and demoralizing the honest officers. The efficiency in public service would improve only when the public servant devotes his sincere attention and does the duty diligently, truthfully, honestly and devotes himself assiduously to the performance of the duties of his post. (See: Swatantar Singh versus State of Haryana (1997 (4) SCC

14) and State of M.P. versus Shambhu Dayal Nagar (2002 (1) SCC 1)."

18. It is submitted that the offence, if any, has been committed by

the company, the Director/CEO cannot be made vicariously liable.

Reference is made to S.K. Alag‟s case (supra). In the said case there

was dispute between two private parties and allegations of criminal

breach of trust was made but no role or allegation was made against

the "individuals" as such, except that they were director/managing

director. The present case is not of vicarious liability as such. Role

and acts of the two applicants are in question.

19. It was submitted that Mr. S.K. Bakshi has undergone knee

operations and Mr. S.K. Dixit‟s father is suffering from prostate

cancer. However, prosecution has pointed out that Mr. S.K. Dixit has

a married son who is well placed and looking after his grandfather.

At this initial stage itself, I do not think there is any special reason or

Bail Applns.1037-38/2010 Page 11 medical reason to justify grant of bail. It is not the case of the

applicants that they are suffering because of lack of medical attention

or care.

20. It was submitted that at best the applicants can be prosecuted

under Part II of Section 120 B of the Indian Penal Code. Reliance is

placed on the order dated 29th April, 2008 passed in the Bail

Application No. 748/2008 in Suresh Nanda versus CBI and

other cases. The said decision has been considered and

distinguished in the order dated 8th September, 2008 passed in

Criminal M.C. No. 1945/2007 and CRL.M.A. No.11358/2007 Pankaj

Kumar versus State. Learned counsel for the prosecution has also

relied upon paragraph 387 of judgment in Ram Narain Poply

versus CBI, (2003) 3 SCC 641. In this decision it has been held that

cases of this type are not conventional offences and have to be

scrutinized and examined carefully. These cases require detailed

investigation. Further, offences of conspiracy of the present nature

are a matter of inference which is normally detected from acts of

parties. Privacy and secrecy are normally characteristics of

conspiracy. The investigation in such matters requires time and

detailed scrutiny and examination of documents. In the present case,

after the registration of the case till 10th June, 2010, 12 witnesses

including employees of NHAI and OSEL have been examined. 32

voluminous files and 184 incriminating documents have been seized

during the searches. These documents require detailed scrutiny,

Bail Applns.1037-38/2010 Page 12 examination and investigation. It may not be proper at this stage to

release and grant bail to the applicants when investigation is at the

initial stage itself and not complete. The investigating agency is in the

process of collecting requisite materials. Charge sheet has not been

filed.

The bail applications are dismissed. It is clarified that the

observations made in this order are for the purpose of deciding the

present bail applications and will not be binding on the learned Trial

Court who shall independently apply its mind.

(SANJIV KHANNA) JUDGE JULY 9, 2010.

         P/VKR




Bail Applns.1037-38/2010                                          Page 13