Delhi High Court
Central Bureau Of Investigation vs M/S Tdi International Pvt. Ltd. on 6 April, 2015
Author: Manmohan Singh
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment pronounced on: 6th April, 2015
+ CRL.M.C. 4807/2014
CENTRAL BUREAU OF INVESTIGATION ..... Petitioner
Through Ms.Sonia Mathur, Adv. with
Mr.Sushil Kr. Dubey, Adv.
versus
M/S TDI INTERNATIONAL PVT. LTD. ..... Respondent
Through Mr.Ashish Mohan, Adv.
CORAM:
HON'BLE MR.JUSTICE MANMOHAN SINGH
MANMOHAN SINGH, J.
1. The present petition has been filed by the petitioner under Section
482 Cr.P.C. seeking quashing of order dated 7th December, 2013
passed by Special Judge, CBI whereby the Special Judge rejected the
fourth final closure report filed by petitioner/CBI in the matter and
directed CBI to make further investigation into the matter.
2. The case was registered on source information against certain
unknown officials of Airport Authority of India (AAI) and other unknown
persons on the allegation that during 1995-1996, these officials
entered into a criminal conspiracy with one Sh. Prem Bajaj, MD, M/s
TDI International Pvt. Ltd. New Delhi with the object of causing
wrongful pecuniary advantage to his firm in the matter of award and
execution of contract of advertising rights on trolleys at five
international airports and by abusing their official position as public
servants as they awarded contract for advertising rights on luggage
trolleys supplied for five international airports to M/s TDI, thereby
causing wrongful gain of Rs. 21.5 Crores to M/s TDI and
corresponding loss to Airport Authority of India (AAI).
3. The matter was investigated thoroughly however allegations made
in the FIR could not be substantiated and Closure Report under
Section 173 Cr.PC. was filed on 25th November, 2005. The relevant
extracts of closure report prepared after the investigation are
reproduced as under :
"Investigation disclosed that this proposal was dealt by Sh.
Inderjit Singh, the then GM (Commercial) on 03.10.95. On
15.11.1995 and 17.11.1995, M/s TDI submitted revised
proposals and subsequent to discussions with officers of AAI,
a letter dated 15.12.1995 signed by Sh. Inderjit Singh GM
(Commercial) was issued to M/s TDI stating that their offer for
the free supply of trolleys at five International Airports in lieu
of advertising rights for seven years has been accepted but
the haring of maintenance costs between TDI and AAI would
be worked out.
M/s Aaren Advertising Pvt. Ltd. Mumbai approached
AAI with the proposal dated 27.12.1995 to supply trolleys
free of cost and also undertook to do free retrieval and
maintenance in lieu of advertisement rights on the trolleys.
M/s Deltrol also submitted their proposal on 03.01.1996 to the
Chairman, AAI. No action was taken on these proposals.
On 12.01.1996, after discussion between M/s TDI and
AAI regarding the sharing of maintenance costs, a proposal
was put up to Chairman AAI on 12.01.1996 for approval. At
this stage, Sh. Sudhir Kumar ED (Finance) discussed the
matter with the Chairman, AAI and recorded a note on
12.01.1996 that the Chairman had desired that M/s Aaren be
also called and their proposal discussed in more specific
terms.
M/s Aaren submitted their proposal on 18.01.1996
indicating a detailed plan of induction of 19500 trolleys free of
cost and apart from the free maintenance and free retrieval
they also offered to pay an amount of Rs.3.5 crores as
licence fee to AAI. While discussions were being held
between officers of AAI and M/s Aaren, M/s Sandeep
Publicity also submitted their proposal on 06.02.1996 but the
same was not considered. Investigation has also disclosed
that on 02.02.1996, Shri Sudhir Kumar ED (Finance) after
discussions with Chairman, AAI proposed that the proposals
of M/s Aaren and M/s TDI be bench marked on a common
standard and both parties be called to give a presentation of
their proposal alongwith the prototype of trolleys.
A Committee of officers was then constituted to
evaluate the two proposals. On 07.02.1996, the presentation
of proposals as well as sample trolleys of M/s TDI and M/s
Aaren, were seen by the Committee consisting of Sh. K.
Tekchandani, Sr. ED (Ops.), Sh. M.A.Khan, ED
(Commercial), Sh. Sudhir Kumar ED (F&A), Sh. H.P.Dash
GM (Equipment) and Sh. Sunil Kumar Arora DGM (L&M).
This Committee while doing the financial analysis arrived at
the conclusion that though the proposal of M/s Aaren
appeared to be attractive it was totally unworkable and
financially untenable and therefore the offer of M/s TDI was
superior. In the technical evaluation, the Committee found
that the sample trolley of M/s TDI was of solid steel and
chrome plated and M/s TDI was offering to import the entire
plant and dyes to produce the same locally. On request of
the AAI the firm also clarified that it would endeavour to
supply stainless steel trolleys. This sample trolley of M/s TDI
was found to be superior to the sample trolley of M/s Aaren
and the Committee, therefore, recommended the proposal of
M/s TDI on both technical as well as financial evaluation.
This recommendation of the Committee was accepted
by the Chairman, AAI on 15.02.96 who recorded that
equitable opportunity was given to those who had shown
interest. Subsequently, separate agreements were executed
between the Airport Directors of the five International Airports
and M/s TDI on different dates.
Investigation has revealed that the trolleys supplied by
M/s TDI were also got inspected through the DGS&D who
opined that despite some minor variations, trolley design
matched with the sample trolleys approved by the committee
and the trolleys were acceptable in general. Investigation
has revealed that the proposals were examined technically
and financially by the Committee consisting of senior officers
of the AAI. Though by accepting the offer of M/s TDI as
against the proposal of M/s Aaren, AAI appears to have
incurred a loss but sufficient circumstantial or direct evidence
has not come forth that the officers of AAI were aware that
they were deliberately causing such as loss through their
acts of omission and commission while taking this
commercial decision in public interest.
Investigation has also not disclosed any evidence of
any pecuniary benefit to any officer of AAI. The acts of the
public servants were aimed at improving the quality of service
to the passengers and no mens rea could be established
through investigation. On account of want of sufficient
evidence, this Hon'ble Court be pleased to order the closure
of this case."
4. By order dated 7th November, 2006 the trial court declined to
accept the Closure Report and ordered further investigation on the
following grounds :
a. As per Clause 4.3 of the Commercial Manual (Revenue and
Contracts) of October, 1993 open tenders were required to be
floated for the supply of trolleys at the airport but the same was
not done in this case.
b. The consideration of offers by M/s TDI International and M/s
Aaren and non consideration of offers by M/s Deltrol as well as
M/s Sandeep Publicity have not been answered.
c. The technical evaluation of proposals of M/s Aaren and M/s TDI
International was done by a Committee whose report makes it
apparent that M/s TDI had not submitted any sample trolley
which was acceptable at that point of time but still the proposal
of M/s TDI International was preferred.
d. The contract was given to M/s TDI International on 15th
February, 1996 for a period of 7 years which is beyond the
powers of Chairperson, AAI.
e. The loss to AAI on account of awarding of contract to M/s TDI
was a sum of Rs. 21.5 crore which is not a small figure.
5. In compliance of order dated 7th November, 2006, further
investigation was carried out on the issues as directed by Special
Judge. However, the allegations remained un- substantiated. As such
again a closure report under Section 173(8) Cr.P.C. dated 30th June,
2008 was filed by CBI on 1st July, 2008.
Details of further investigation carried out in brief are as under:-
First Issue
Departure from clause 4.3 of the Commercial Manual - open
tender process was followed because of urgent need to retrieve
the situation of baggage trolleys as per direction of Secretary,
Ministry of Civil Aviation.
Second Issue
M/s Deltrol case not considered in tender as their offer was
limited to supply of 200 trolleys per month which failed to meet
demand.
Also they offered the design already existing which was under
criticism. M/s Sandeep Publicity not considered since proposal
was received on 6th February, 1996 when AAI had already fixed
date as 7th February, 1996 for evaluating sample trolley of M/s
Aaren and M/s TDI.
Third Issue :- M/s TDI not submitted sample:-
M/s TDI had presented trolley on 7th February, 1996 the date
fixed for evaluating the sample - evaluating committee reports
reveals & TDI sample superior and better functional to sample
of M/s Aaren.
Fourth Issue :- Period of contract
In case of award of contract through limited tender- no
restriction of time- Chairman has power to extend the contract
period.
Fifth Issue:- Loss of Rs 21.5 Cr. to AAI
No Loss- only hypothetical figure given by M/s Aaren.
6. In the conclusion of the report, it was disclosed that the
investigation does not disclose any evidence that accused had used
any corrupt or illegal means or accepted any gratification or that any
pecuniary benefit accrued to any officer of AAI. The acts of the public
servants were aimed at improving the quality of service to the
passengers and no mens rea could be established through
investigation. On account of want of sufficient evidence, this Court may
be pleased to order the closure of this case.
7. The Special Judge by order dated 24th July, 2008 again refused
to accept the Closure Report and directed further investigation to
pinpoint the role of officers of AAI and others. The following
observations were made by the Court while rejecting the closure
report :-
i. No open tender was invited.
ii. Contract was given to TDI for a period of 7 years which was
beyond the powers of Chairman.
iii. Letter dated 15th December, 1995 signed by Sh. Inderjeet
Singh, General Manager (Commercial) makes it clear that offer
of TDI for supply of free trolleys at five International Airports in
lieu of advertising rights for 7 years was accepted subject to
sharing of maintenance cost between TDI and AAI.
iv. M/s Aaren gave an offer of supply of free trolleys maintenance
and retrieval of cost, besides payment of license fee to the tune
of Rs. 3 crore which was declined on account that the proposal
of TDI was tenable, workable and superior to that of the former
company.
v. When it was decided on 15th December, 1995 that contract was
to be awarded to TDI, subsequent discussions on 12th January,
1996 and presentation of proposal as well as samples of
trolleys on 7th February, 1996 were farce activities.
8. In compliance with the above order dated 24th July, 2008 further
investigation was carried but no new facts or evidence emerged to
substantiate the allegation of any abuse of official position by public
servants or with any corrupt and oblique motive. Further investigation
also did not disclose any financial loss to AAI for awarding the said
contract. Hence, third closure report was filed on 1st June, 2009.
9. Details of further investigation carried out in brief on issuewise are
mentioned in the report, the same are read as under :
First Issue: - No open tender
:- Composite contract introduced first time for three purpose (a)
good quality & design trolley (b) Immaculate maintenance (c)
expeditious retrieval of trolley- covered under clause 4 giving
full power to member(finance) for creation of
commercial/revenue earning facility of any type contract for first
time.
- No corrupt method adopted.
Second Issue :- Contract beyond 5 Years term
:- No restriction on power of chairman.
:- contract separately executed by 5 Airports director.
Third Issue: - Contract accepted by letter 15th December, 1995
on sharing of maintenance cost basis
:- M/s Deltrol trolley not upto mark
:- No experience in advertisement business.
:- Revised proposal of M/s Aaren considered with M/s TDI
proposal on 7th February, 1996 by evaluating committee,
thereafter contract awarded to M/s TDI on 15th February, 1996.
Fourth Issue:- M/s Aaren proposed for supply of trolleys free
maintenance and retrieval cost beside payment of license fees
declined.
:- M/s Aaren trolley capable of carrying 100 kg load only against
200 kg of M/s TDI trolley.
:- M/s Aaren had produced trolley of same design as previous.
:- Proposal for supply of 12500 number of trolley in phase period
of 7 years
:- Technical & financial committee evaluated both trolley &
thereafter decision taken.
Fifth Issue :- Decision already taken on 15th February, 1995 hence
subsequently discussion on 12th January, 1995 and 7th February,
1996 farce activity
:- Revised proposal of M/s Deltrol & Aaren considered.
:- M/s Deltrol proposed to supply mild steel made 150 trolley per
month and no capacity to provide 12,500 trolleys at one time.
:- M/s TDI revised proposal considered by evaluating committee
on 7th February,1996 thereafter decision was taken.
:- Contract award to M/s TDI on 15th October,1996 on basis of
letter dated 15th February,1996.
Sixth Issue:- official position abused by officials in awarding contract
:- Tender committee fairly considered proposal of M/s TDI & M/s
Aaren.
:- Aaren proposal was rejected on various reasons such as:-
:- Carrying/load capacity - 100 Kg only.
:- Same design- as available - which were inviting complaints.
:- Phase wise provision for supply of trolley.
:- deployment of 200 persons for retrieval purpose which was not
adequate.
10. It is specifically mentioned in the closure report that investigation
does not disclose about any loss to the AAI. For the sake of clarity, the
calculations based on actuals for the pre- 1996 arrangements, if
continued for next seven years (1996-2003) vis-a-vis the actuals of
M/s TDI's composite contract (valid for the same period), have been
tabulated below:-
Sl. Actuals in pre Projections if pre Actual as per
No. 1996 period 1996 current
arrangement composite
would have contract (RDI) for
continued in next 1996-2003
7 years
(extrapolated to
7 years period
1996-2003)
1. Number of Trolleys 7392 12500 12500
2. Revenue from advertising 127 per trolley Rs.13.34 crores No revenue to
on trolleys (weighted p.m. AAI
average of - average rate
of Rs.115/- p.m. per trolley (Assigned to
at Delhi, Chennai, TDI)
Calcutta, TVN and
Average rate Rs.142/-
p.m. per trolley for 3400
trolleys at Mumbai)
3.(a) Capital cost of trolleys + 4120 per trolley Rs.5.15 crores No cost to AAI
taxed based on tender for (free supply by
2000 trolleys in 1995 TDI)
(b) Interest on capital cost Rs.3.04 crores .......
4. Maintenance cost paid as Rs.73/- per Rs.7.66 crores Rs.1.96 crores
per actual trolley p.m.
5. Net cost to AAI for Rs.251 crores Rs.1.96 crores
providing free baggage
trolley to passengers
The analysis of the above table indicates the following:
The number of trolleys that were in operation prior to 1996 were
7392. The numbers of trolleys for the period 1996-2003 were
enhanced to 12500.
Advertising Revenue:- Prior to 1996 the revenue from
advertising on 7392 trolleys at the rate of Rs. 127/- per trolley
was Rs. 9,38,784/- crores. If the same system would have
continued for the period 1996-2003, the revenue from
advertisement for the 12500 would have been
Rs.13,33,50,000/- crores for the 7 years. As per the composite
contract awarded to M/s TDI there will be no revenue from
advertisement. Thus the net loss to AAl on this count as per
new composite contract would be Rs.13,33,50,000/-.
The Capital cost of trolleys plus taxes based on tender for 2000
trolleys in 1995 was Rs. 4,120/- per trolley. At this rate, the
Capital cost of trolleys plus taxes for 12500 trolleys for the
period 1996-2003 i.e. 7 years comes to Rs. 5.15 crores.
However, this expenditure is zero as per the composite contract
awarded to M/s TDI. Thus the net gain to AAI on this count as
per new composite contract would be Rs. 5.15 crores.
The interest on capital cost for the period 1996-2003 at the
previous rates come to Rs. 3.04 crores where as expenditure
on this count as per the composite contract awarded to M/s TDI
is nil. Thus the net gain to AAI on this count as per new
composite contract would be Rs. 3.04 crores.
The maintenance cost at the previous rates for the period 1996-
2003 would have been Rs. 7.66 crores @ Rs. 73/- per trolley
per month where as the maintenance cost under the composite
contract awarded to M/s TDI would be only Rs. 1.96 crores.
Thus the net gain to AAI on this count as per new composite
contract would be Rs. 5.7 crores.
From the above, it is clearly established that as per the
composite contract AAI would have a gain of Rs. 13.89 crores
and a loss of Rs. 13,33,50,000/- crores resulting in a net gain of
Rs. 55,50,000/-.
Investigation does not disclose any undue pecuniary
advantage either to M/s TDI or the public servants. The
proposal of M/s TDI was found technically and financially viable.
Therefore, the tender evaluation committee unanimously
recommended acceptance of the proposal of M/s TDI.
As directed by this Court the name of the officers of AAI
and others who dealt with the matter are as under:-
(i) Sh. Inderjeet Singh, the then GM (Commercial) : He
processed the proposal received from M/s TDI for supply of
trolleys, issued a letter of intent on 15.12.1995 under his
own signature to M/s TDI stating that proposal dated
23.8.1995 of M/s TDI has been accepted for supply of free
trolleys.
(ii) Sh. M.A.Khan, the then ED (Commercial), Sh. Sunil Kumar
Arora, the then DGM (LM), Sh. K.Tekchandani, Sr. ED
(Operations), Sh. Sudhir Kumar, the then ED (Finance),
Sh. H.P.Dash, the then GM Equipment (Technical), Sh.
D.P.Gupta, the then DGM Equipment; They were the
members of Tender Evaluation Committee who rejected
the offer given by M/s Aarens, Mumbai on the ground as
discussed above and unanimously recommended to award
the contract to M/s TDI.
(iii) Sh. H.M.Sahul, the then Chairman. AAI: He accepted the
recommendations of the Tender Evaluation Committee and
gave final approval for award of contract to M/s TDI for
supply of 12500 trolleys against advertisement rights on
15.2.1996.
(iv) Sh. Prem Bajaj, Managing Director of M/s TDI, New Delhi:-
The contract was awarded to his firm i.e. M/s TDI by the
appropriate authority.
During the course of investigation, it is established that
the proposal for supply of trolleys was examined technically and
financially by the committee consisting of senior officers of
various concerned divisions and no mens rea is established on
the part of any public servant.
11. The Special Judge, by order dated 5th November, 2011 once
again declined to accept the third Closure Report and observed that
directions in order dated 24th July, 2008 have not been complied with.
Further investigation and compliance of previous directions given vide
order dated 24th July, 2008, was directed.
12. After further investigation, it was again concluded that no offence
was made out and hence fourth Closure Report dated 31st August,
2012 was filed for want of evidence. It was the case of CBI that the
observation of Court that CBI has not conducted investigation as
directed by his predecessor, is unjustified, as nothing remained to be
investigated, however, according to CBI again the matter was
investigated as per order of the Special Judge.
13. The details of further investigation carried out in brief are as
under :-
First Issue
:- Principle objective of contract was not revenue generation but
replacement of trolley- matching with international standard.
:- Supply to be made by M/s Aaron in phase manner.
:- Procurement of trolley would have incurred huge capital
expenditure of AAI hence in turn advertisement right were
offered to proposed tender.
:- Contract does not fall under - "Commercial manual" & not a
revenue contract.
:- Activities covered under- clause 4 of 'delegation of power'.
:- Combined activity (expenditure & revenue) - shortage of time -
lead to composite contract.
Second Issue
:- Reason for non consideration of other parties.
Third Issue
:- M/s TDI had submitted sample before evaluating committee.
:- Sample personally seen by Chairman, AAI.
Fourth Issue
:- Contract for 7 years because of involvement of huge investment
involved.
:- Covered under clause 4 of chapter 6.1 of Delegation of Power.
:- Chairman had full power ;no provision restricting his power.
Fifth Issue :- Financial loss
:- Not a revenue generation contract - so financial offer of M/s
Aaren could not have been determining factor.
:- Financial loss calculated only hypothetical figure.
:- Details of calculation : w.r.t. M/s Aaren.
:- Financial analysis - showing no loss of revenue to AAI.
:- TDI awarded contract for supply of trolley against advertisement
right along with repair maintenance, retrieval -by Chairman.
14. On issue No. 5 the loss to AAI on account of award of contract to
M/s TDI was a sum of Rs 21.5 crores. The detailed report was
submitted , the relevant extracts are reproduced here as under :
"As the investigation has disclosed, the object of the
tender was to procure trolley meeting world class standards.
This was not a revenue generation contract and consequently
the financial offer of M/s Aaren could not have been the primary
determining factor.
The Evaluation Committee had observed that the trolley
sample submitted by M/s Aaren was exactly the same trolley
which was already in use at International Airports and attracting
criticism, and that the presentation given by M/s Aaren was
sketchy and many issues were unclear including their idea
about engaging a design institute to help design the trolley, after
the award of the contract. AAI had no time for more
experimentation and M/s Aaren was intimated accordingly but
no further clarification forthcoming, their proposal as not
considered fit enough for AAI. The proposal of M/s Aaren would
not meet the principal objective which was to immediately
replace the existing MS Pipe trolleys at the International
airports. M/s Aaren had offered the same kind of trolleys as
were already available and in use at the said airports and that
too, in a phased manner over a period of time. If the same kind
of trolleys were to be retained, obviously no tender would be
required at all. Thus despite the financial offer of M/s Aaren, the
proposal was rejected in view of the fact that it would not fulfill
the object of the procurement tender.
Further investigation has also disclosed that alleged loss
of Rs. 21.5 crores to AAI on account of award of contract to M/s
TDI rather than M/s Aaren was only hypothetical and computed
based on comparison of the financial offer made by M/s Aaren.
It is not justified on the following grounds:-
I. The trolleys offered by M/s Aaren were of the same
specification which were in use at the international airports in
India and subject matter of prevailing criticism and thus
technically rejected.
II. In view of Aaren's letter No. 3234/1239 dated 28.2.1996, if
trolleys were to be inducted in one go, the economics of their
offer needed to be changed necessarily which they never did.
Thus their offer was considered inconclusive.
III. Aaren offered to induct trolleys in phased manner over a
period of seven years whereas the need was to immediately
replace the existing trolley which were found to be defective and
were facing severe criticism.
IV. During the discussion with AAI officials M/s Aaren
indicated the gross revenue to be Rs. 35.00 Crores, though this
figure, and other estimates used in summary proposal
submitted by Aaren, did not fully corroborate with detailed
calculations submitted alongwith the proposal.
V. Even if one goes with the computation made by M/s
Aaren, it was found unworkable as:-
A. It was assumed by Aaren that 100% trolleys will get
advertisement as against 40% in reality then.
B. The proposal of M/s Aaren projected generation
capabilities far in access (more than double) of possibilities
that existed. The projection contained in the proposal of
M/s Aaren were not borne out by even basic mathematical
evaluation and their representatives had little clue about
the intricacies of the requirements as indicated below :
a) Revenue generation projected was Rs. 35.00 crores
from the advertisements over a period of 7 years. This
calculation was based on 100% trolleys getting
advertisement, which was not possible, since as per AAI
officials the prevailing experience was only 40% of the
trolleys getting advertisements at that time and AAI
required only 12500 trolleys as against 19500 trolleys
offered by M/s Aaren. The revenue expected would have
been Rs. 14.7 cores as per AAI computation whereas M/s
Aaren's estimated expenditure on this project was around
Rs. 32.72 crores as below:-
I No. of trolleys to be supplied over a 19500
period of 7 years.
II Total cost of trolleys Rs.10.50 Cr.
III Cost of retrieval Rs.5.50 Cr.
IV Cost of maintenance Rs.6.25 Cr.
V Interest Rs.3.00 Cr.
VI Office expenses and promotion Rs.1.00 Cr.
VII Licence fee to AAI Rs.3.50 Cr.
VIII Addl. 10% contingency Rs.2.97 Cr.
Total Rs.32.72 Cr.
Also revenue generation possible as per their own
written contention in their presentation at Rs. 350/- per
trolley per month and 40% of trolleys getting
advertisements was no more than Rs 16.34 crores. The
committee of AAI had made the financial analysis of the
input collected from the parties during presentation comes
to conclusion that based on available/furnished parameters
the total revenue from advertisements even from 19500
trolleys will be:
Trolleys Additional Year for which Product (2x3)
proposed trolleys inducted the trolleys to be
to be during the year deployed
inducted
every
year
10300 10300 7 72100
10600 300 6 1800
10800 200 5 1000
12800 2000 4 8000
14800 2000 3 6000
17000 2200 2 4400
19500 2500 2 2500
Total 19500 99800
Note: 99800 (product) x 350 (Revenue per month per
trolley) x
0.40 (40% occupancy of advertisement)= Rs. 16.34 crores.
Hence, the financial projection which was made by
the party were not corroborated by the parameters
mentioned by the M/s Aaren in the proposal. Hence, the
AAI Committee observed that this against the projected
revenue of Rs. 35 crores stated verbally showing a
marginal profit of Rs. 2.28 crores in 7 years, was imaginary
and not found fit for consideration.
b) On expenditure side, the proposal provided for Rs.
5.50 crores for retrieval system with a manpower of 200
retrievers paid @ Rs. 2000 per month. This would actually
mean an expense of Rs. 200 x Rs. 2000 x 12 x 7 = Rs.
3.36 crores and with provision for bonus (8.33 %), PF
(11.61%), ESI (4.75%) and the service charge of the
contractor (15%) extra, the cost comes to Rs. 4.9 crores
and not Rs. 5.50 crores.
c) The committee had also observed that AAI was
facing litigation in various High Courts, on the demand of
employees involved in Trolley Retrieval for regularization
with AAI on its payroll (Subsequently concluded in favour of
regularization by Hon'ble Supreme Court). AAI were
required to regularize services of 536 persons (412
retrievers, 49 Supervisors, 50 guards, 20 Asst. Managers
and 5 Managers) employed for Trolley retrieval Services at
5 International Airports. M/s Aaren was unwilling to take
this manpower, as they have only provided for Rs. 5.50
crores as retrieval cost in the contract for seven years
period for all International Airports. Thus, AAI would have
saddled with this manpower and resulting staff cost as its
financial obligation, that too on a permanent basis if M/s
Aaren proposal would have been accepted.
d) M/s TDI accepted this manpower and absorbed the
services of all these persons without any additional cost to
AAI under this contract. Thus AAI saved a sum far
exceeding the alleged loss, on this account by awarding
the work of Trolley Retrieval to M/s TDI under this
contract."
It is alleged in the report that in view thereof M/s Aaren would
have incurred a loss of Rs. 17.78 crores in place of estimated profit of
Rs. 2.28 cores during the 7 years period. In such circumstances, there
was the inherent risk that M/s Aaren may have abandoned the contract
midway resulting in chaos and possibly considerable expenditure and
loss to AAI.
It is stated by CBI that further investigation does not disclose any
loss to AAI, even if the status quo would have been maintained and
this composite contract would have not been awarded at all. For all
sake of clarity, the calculation based on actuals for the pre 1996
arrangement, if continued for next 7 years for which this contract was
awarded, AAI would have spent Rs. 2.51 crores. As against it spent
Rs. 1.96 crores, thereby saving an amount of Rs.0.55 crores. Detailed
computation shown in the following table;-
AAI did not receive any advertisement revenue since it was
assigned to M/s TDI in lieu of capital cost and 65 % of maintenance
cost.
For the sake of clarity, the calculation based on the actuals for the
pre 1996 arrangement if continued for next 7 years (1996 to 2003) vis-
a-vis the actuals of M/s TDI composite contract (valid for the same
period) have been tabulated below:-
Sl. Actuals in pre Projections if pre Actual as per
No. 1996 period 1996 current
arrangement composite
would have contract (RDI) for
continued in next 1996-2003
7 years
(extrapolated to
7 years period
1996-2003)
1. Number of Trolleys 7392 12500 12500
2. Revenue from advertising 127 per trolley Rs.13.34 crores No revenue to
on trolleys (weighted p.m. AAI
average of - average rate
of Rs.115/- p.m. per trolley (Assigned to
at Delhi, Chennai, TDI)
Calcutta, TVN and
Average rate Rs.142/-
p.m. per trolley for 3400
trolleys at Mumbai)
3.(a) Capital cost of trolleys + 4120 per trolley Rs.5.15 crores No cost to AAI
taxed based on tender for (free supply by
2000 trolleys in 1995 TDI)
(b) Interest on capital cost Rs.3.04 crores ------
4. Maintenance cost paid as Rs.73/- per Rs.7.66 crores Rs.1.96 crores
per actual trolley p.m.
5. Net cost to AAI for Rs.251 crores Rs.1.96 crores
providing free baggage
trolley to passengers
15. The analysis of the above table as indicated in fourth report are
as follows :
i) The number of trolleys that were in operation prior to 1996
were 7392. The numbers of trolleys for the period 1996-2003
were enhanced to 12500.
ii) The Capital cost of trolleys plus taxes based on tender for
2000 trolleys in 1995 was Rs. 4120 per trolley. At this rate,
the capital cost of trolleys plus taxes for 12500 trolleys for the
period 1996-2003 i.e. 7 years comes to Rs. 5.15 crores.
However, this expenditure is zero as per the composite
contract awarded to M/s TDI. Thus the net gain to AAI on this
count as per new composite contract would be Rs. 5.15
crores.
iii) The interest on capital cost for the period 1996-2003 at the
previous comes to Rs. 3.04 crores whereas expenditure on
this count as per the composite contract awarded to M/s TDI
is nil. Thus the next gain to AAI on this count as per new
composite contract would be Rs. 3.04 crores.
iv) The maintenance cost at the previous rates for the period
1996-2003 would have been Rs. 7.66 crores @ RS. 73 per
trolley per month whereas the maintenance cost under the
composite contract awarded to TDI would be only Rs. 1.96
crores. Thus, the net gain to AAI on this count as per new
composite contract would be Rs. 5.7 crores.
v) Prior to 1996, the revenue from advertising on 7392 trolleys
at the rate of Rs. 127 per trolley was Rs. 938784/-. If the
same system would have continued for the period 1996-
2003, the revenue from advertisement for the 12500 trolleys
would have been Rs. 13,33,50,000/- for 7 years. As per the
composite contract awarded to M/s TDI, there will be no
revenue from advertisement. Thus the net loss to AAI on this
count as per new composite contract would be Rs.
13,33,50,000/-.
vi) From the above, it is clearly established that as per the
composite contract, AAI would have a gain of Rs. 13.89 cores
and a loss of Rs. 13,33,50,000/- crores resulting in a net gain
of Rs. 55,50,000/-.
As such, further investigation does not disclose any
pecuniary advantage either to TDI or to the public servants.
The proposal of TDI was found technically and
financially viable. Therefore, the tender evaluation committee
unanimously recommended acceptance of the proposal of
TDI.
The alleged loss of Rs. 21.5 crores to AAI on account of
award of contract to M/s TDI rather than M/s Aaren was only
hypothetical. The trolley offered by M/s Aaren was technically
rejected and were not acceptable and therefore the proposal
of M/s TDI was preferred by the officers of AAI.
16. On issue No.6, to pinpoint the officers of AAI and others, who
were privy to conspiracy, detailed report submitted by CBI is
reproduced here as under :
"The name of the officers of AAI and others who dealt with
the matter are as follows:-
i) Shri. H.M.Sahul, AVM, the then Chairman, AAI.
Further investigation revealed that Sh. H.M.Sahul
accepted the recommendations of the Tender Evaluation
Committee consisting of Sh. K.Tekchandani, Sr. ED
(Operations), Shri Sudhir Kumar, ED (F&A), Sh. M.A.Khan ED
(Commercial), Sh. H.P.Dash, General Manager (Equipment)
and Sh. Sunil Kumar Arora, Dy. General Manager (LM).
He gave final approval for award of contract to M/s TDI for
supply of 12500 trolleys against advertisement rights on 15th
February, 1996 along with repair, maintenance and retrieval in
lieu of grant of advertisement rights.
ii) Sh. Inderjeet Singh, the then GM (Commercial), AAI.
Further investigation revealed that the proposal of M/s
TDI was processed by him vide his note dated 3.10.1995. The
proposal was also discussed by Sh. K.Tekhandani, Sr. ED
(Ops) with the Chairman, AAI for further discussion between
operations, commercial and financial officials along with offers
received from two other agencies.
Thereafter, a letter dated 23rd August, 995 with the
approval of the Chairman was issued to TDI conveying in
principle acceptance of their proposal of providing 'free trolleys
in lieu of advertising rights' subject to terms, conditions and
operational mechanism to be worked out; primarily for the
vendor to liaise with the manufacturers of trolleys overseas to
ensure that the design of trolleys meet the specifications
projected in the proposal and prototype to be assessed and
evaluated on merit by AAI.
Thereafter Sh. Inderjeet Singh was transferred out to
another department in the NAD wing of AAI on the 20th
December, 1995.
iii) Sh. K. Tekchandani, Sr. ED (Operations)
iv) Sh. Sudhir Kumar, ED (F&A)
v) Sh. M.A.Khan, ED (Commercial)
vi) Sh. H.P.Dash, GM (Equipment)
vii) Sh. D.P.Gupta, DGM (Equipment)
The aforesaid officials were the members of the Technical
Evaluation Committee who was mandated to compare two
available proposal only by the then Chairman, AAI Sh. H. M.
Sahul. The AAI Committee submitted their findings to
Chairman, AAI who finally approved the proposal of M/s TDI on
15.2.1996.
viii) Sh. Prem Bajaj, MD, M/s TDI, New Delhi
The contract was awarded to his firm by the appropriate
authority of AAI on 15.02.1996.
17. FINDINGS OF THE FURTHER INVESTIGATION
Further investigation does not disclose any evidence that
accused had used any corrupt or illegal means or accepted any
gratification or any pecuniary benefit to any officer of AAI. The
acts of the public servants were aimed at improving the quality
of service to the passengers and no mensrea could be
established through further investigation. On account of want of
sufficient evidence, this Court may kindly pass the order of
closure of this case."
17. By impugned order dated 7th December, 2013 once again, while
rejecting the fourth closure report filed by petitioner, Special Judge has
directed to comply and investigate in terms of observation made by
Special Trial court by order dated 24th July, 2008. Aggrieved by the
said order passed by Special Judge, the present petition has been
filed seeking the following prayer :
"i) Set aside the order rejecting closure report dated
07.12.2013 passed by Ld. Special Judge Sh. V.K. Gupta,
Patiala House, New Delhi District Court, New Delhi."
18. It is argued by Ms. Sonia Mathur, learned counsel appearing for
petitioner by referring the grounds mentioned in the present petition
that nothing incriminating material has been found despite of thorough
investigation done by the CBI various times and specific reports have
been submitted before the Special Judge on all the issues and nothing
more is required for investigation, thus, the impugned order has been
challenged. She has relied upon all the reports and the details given
on issuewise. She has also referred various decisions.
19. The Supreme court in case of Vasanti Dubey vs. State of
Madhya Pradesh, 2012(2) SCC 731 has held that there is no power,
expressly or impliedly conferred under Cr.P.C. on a Magistrate to call
upon police to submit a charge-sheet, when they have sent a closure
report. The Magistrate may or may not accept the report and take
suitable action according to law, he could not impinge upon jurisdiction
of police, by compelling them to change their opinion so as to accord
with his view.
20. In the case of Harinder Pal Singh vs. State of Punjab, 2004 Crilj
2648 the Court has held that Magistrate is empowered to not accept
the closure report filed by the police agency but he cannot direct the
police for further investigation again and again to form a particular
opinion or to submit a challan.
21. It is settled law that if police report and the evidence/documents
filed therewith is sufficient to satisfy the magistrate that he should take
cognizance, his power is not fettered by the label which the
investigation agency chooses to give to the report submitted by it
under Section 173(2) Cr.P.C.
22. It is a well settled law that upon receipt of a police report under
Section 173(2) Cr.P.C., a Magistrate is empowered to take cognizance
of an offence under Section 190(1)(b) Cr.P.C. even if the police report
is to the effect that no case is made out against the accused. Section
190(1)(b) Cr.P.C. does not lay down that a Magistrate can take
cognizance of an offence only if the investigating officer gives an
opinion that the investigation has made out a case against the
accused. The Magistrate can ignore the conclusion arrived at by the
IO and independently apply his mind to the facts emerging from the
investigation and take cognizance of the case, if he thinks fit, in
exercise of his powers under Section 190(1)(b) Cr.P.C. and direct the
issue of process to the accused. The Magistrate is not bound in such
a situation to follow the procedure laid down in Sections 200 and 202
Cr.P.C. for taking cognizance of a case under Sec. 190(1)(a) Cr.P.C.
though it is open to him to act under Sections 200 or 202 Cr.P.C..
Reference is made to the case of M/s India Carat Pvt. Ltd. vs State
of Karnataka & Another, AIR 1989 SC 885.
23. Special Judge while issuing direction has disregarded the law laid
down in the case of State of Maharashtra vs. Sharadchandra
Vinayak Dongre, AIR 1995 SC 231 that Section 190(1)(b) Cr.P.C.
provides that a Magistrate has the power to take the cognizance upon
a police report of such facts as are provided therein on being satisfied
that the case is a fit one for taking cognizance of the offence.
Therefore, if the police report and the evidence and
material/documents filed therewith is sufficient to satisfy the Magistrate
that he should take cognizance, his power is not fettered by the label
which the investigating agency chooses to give to the report submitted
by it under Secion 173(2) Cr.P.C.
24. Having perused all the closure reports submitted by the CBI
before the Special Judge and argument of Ms. Sonia Mathur, it is very
clear that the matter was investigated from various angles as well as
from the suggestion of the Court from time to time and the allegations
could not be substantiated during investigation which went for more
than six years and no useful purpose would be served as on
investigation all the queries raised by the Special Court have been
answered. The arguments of Ms.Sonia Mathur have not been rebutted
by the other side. The impugned order passed by the trial court is
unreasonable and unwarranted as once the Court after reading of
report(s) has noticed that answer of all the queries have been
answered after investigation, the question of further investigation does
not arise unless the Court feels that proper investigation is not carried
out and the matter is to be investigated on left out issues.
25. In view of the facts and circumstances of present case impugned
order of the Special Judge dated 7th December, 2013 directing CBI to
further investigate the matter in view of observation/direction dated 24th
July, 2008 is quashed and set aside. The closure reports submitted
by CBI are accordingly accepted by allowing the present petition. The
FIR is accordingly quashed.
26. No costs.
(MANMOHAN SINGH)
JUDGE
APRIL 06, 2015
