Kerala High Court

K.T.Kuriakose vs State Of Kerala on 19 February, 2025

                                             2025:KER:14303



        IN THE HIGH COURT OF KERALA AT ERNAKULAM

                          PRESENT

        THE HONOURABLE MR.JUSTICE P.G. AJITHKUMAR

 WEDNESDAY, THE 19TH DAY OF FEBRUARY 2025 / 30TH MAGHA,

                            1946

               CRL.APPEAL NO. 2906 OF 2008

AGAINST THE JUDGMENT DATED 02.12.2008 IN CC NO.23 OF 2001

      OF THE ENQUIRY COMMISSIONER & SPECIAL JUDGE,

                     THIRUVANANTHAPURAM

APPELLANT/ACCUSED:

         K.T.KURIAKOSE
         S/O THOMAS, KARUTHEDATHU,
         THIRUVANIYOOR(VIA),PUTHENCRUZ,ERNAKULAM,
         (GOVT.CONTRACTOR).

         BY ADVS.
         SRI.VIVEK VARGHESE P.J.
         SRI.P.J.VINOD JOSEPH
         SRI.GEO PAUL
         SRI.C.R.PRAMOD
         SHRI.JACOB GEORGE PALLATH
         SHRI.NAVEEN T.U.
         SMT. JANE MARIA TOMY
                                                           2025:KER:14303
                                      2
Crl.Appeal No.2906 of 2008


RESPONDENT/COMPLAINANT:

              STATE OF KERALA
              REP.BY THE SUPERINTENDENT OF POLICE, VACB, SIT,
              KIP, KOLLAM.

              SMT REKHA S, SR PUBLIC PROSECUTOR
              SRI A RAJESH, SPL PUBLIC PROSECUTOR (VIG)



       THIS     CRIMINAL     APPEAL       HAVING   COME   UP   FOR   FINAL
HEARING ON 24.01.2025, THE COURT ON 19.02.2025 DELIVERED
THE FOLLOWING:
                                                        2025:KER:14303
                                      3
Crl.Appeal No.2906 of 2008


                    P.G. AJITHKUMAR, J.
   -----------------------------------------------------------
                 Crl.Appeal No.2906 of 2008
   -----------------------------------------------------------
         Dated this the 19th day of February, 2025

                                JUDGMENT

The 1st accused in C.C.No.23 of 2001 on the files of the

Court of Enquiry Commissioner and Special Judge,

Thiruvananthapuram is the appellant. He along with the 2 nd

accused was tried for offences punishable under Sections 13(1)

(d) read with Section 13(2) of the Prevention of Corruption Act,

1988 (PC Act) and Section 120B of the Indian Penal Code, 1860

(IPC). The Special Court as per the judgment dated 02.12.2008

convicted and sentenced the appellant for both the offences,

however, acquitted the 2nd accused. Challenging his conviction

and sentence, the appellant filed this appeal under Section

374(2) of the Code of Criminal Procedure, 1973 (Code).

2. Heard the learned counsel for the appellant and the

learned Special Public Prosecutor (Vigilance).

3. The case of the prosecution is the following:

The appellant was the contractor of the work "KIP RBC

Formation of Vallikunnam Distributory Package-I from Ch.40-M to 2025:KER:14303

2000-M including CD works", an agreement in regard to the work

was executed on 12.11.1987. Several additional works were to

be undertaken. Regarding each such work, separate

supplemental agreement was executed. One of such additional

work was construction of toe wall and drain regarding which

supplemental agreement No.5 dated 11.12.1990 was executed

between the appellant and the then Superintending Engineer. In

terms of that, additional work was undertaken.

4. The allegation is that the appellant, the 2nd accused

and the then Superintending Engineer hatched a conspiracy

and the said additional work, which was estimated at

Rs.13,57,688/- was allotted to the appellant after negotiation,

for an amount of Rs.21,07,050/-. Although the Chief Engineer

authorised the Superintending Engineer to get the work done

after negotiation through the appellant, fixing the price of

work at such an exorbitant amount was unauthorised. By

allotting the work at such a rate, the Government sustained a

loss of Rs.9,91,533.81. The then Superintending Engineer and

the 2nd accused misused their position as public servants in

allotting the work at such a higher rate and in consequence 2025:KER:14303

thereof, the appellant obtained pecuniary advantage of the

aforesaid amount. Thereby, they have committed the

aforementioned offences.

5. Based on the aforesaid allegations, a charge was

framed and read over to the appellant and the 2 nd accused.

They pleaded not guilty. Therefore, the prosecution has

examined PWs.1 to 9 and proved Exts.P1 to P28. After closing

the prosecution evidence, the appellant and the 2 nd accused

were examined under Section 313(1)(b) of the Code. They

denied the incriminating circumstances appeared against

them in evidence. In the statement submitted by the

appellant, he justified the supplemental agreement as lawful.

He maintained that he quoted a reasonable rate for the work

in the negotiation and the Superintending Engineer after

deliberations fixed the price even at a lower rate. He

contended that there was no element of mischief in the said

contract. He added that more than Rs.12 lakhs remained due

to him for the work in question and even if any amount is due

from him, the Government can well realise the same from

that sum. He, however, did not adduce any evidence.

2025:KER:14303

6. The Special Judge considered the entire evidence in

detail. After quantifying the amount paid in excess to the

appellant as Rs.9,89,913.81/-, it was concluded that the

appellant and the then Superintending Engineer hatched a

conspiracy resulting in execution of supplemental agreement

No.5, which is Ext.P3(e). It was also held that the said

conspiracy fructified in undertaking the work and resultant

loss of such an amount to the State amounting an offence

under Section 13(1)(d) of the PC Act. The 2 nd accused was,

however, found not guilty.

7. The learned counsel for the appellant would submit

that the view taken by the Special Court regarding financial

powers of the Superintending Engineer and application of

Ext.P26 Government Order to the work in question, which was

undertaken utilising the World Bank aid is incorrect. The Local

Competitive Bidding (LCB) guidelines appended to the

contract were alone applicable. As per Clauses 31 and 32 in it,

the Superintending Engineer had every authority to fix the

rate on negotiation. Therefore, the finding that the

Superintending Engineer exceeded his authority and therefore 2025:KER:14303

the contract underlying Ext.P3(e) is illegal, does not stand

scrutiny of law.

8. It is submitted that the original contract was

awarded to the appellant at a rate 53.20% in excess of the

estimated amount and as such no irregularity can be

attributed to Ext.P3(e) agreement. When the Chief Engineer,

PW1 empowered the Superintending Engineer as per

Ext.P4(d) to negotiate and award the work to the appellant,

the supplemental agreement No.5 did not suffer from any

vice. It is further submitted that the Special Court gave over-

emphasise to the evidence of PW5, a II Grade Draftsman and

PW6, a Financial Assistant in defining the powers of the

Superintending Engineer, which is palpably wrong. Non-

examination of Sri.Suredran Pillai, with whom the appellant

executed the original agreement, Ext.P3(a), is fatal to the

prosecution. PW1, the Chief Engineer and PW2, the Executive

Engineer did not state that the Superintending Engineer did

not have the authority to negotiate and fix the rate, which he

deemed appropriate. In the light of the said evidence, the

court below ought not have held that Ext.P3(e) agreement 2025:KER:14303

was unauthorised or illegal. It is further submitted that even if

the Superintending Engineer exceeded his authority, the

consequence is only an action for irregularity in the process

and not a criminal prosecution. Thus, it is maintained that the

conviction is incorrect and not based on any legal evidence.

9. The learned Public Prosecutor, on the other hand,

submitted that when Ext.P26 G.O. restricted powers of the

Superintending Engineer, the same applies to every decision

he takes and all agreements he enters into. When Ext. P3(e)

contract was awarded without obtaining sanction from the

Government, the dishonest intention to award the work at an

exorbitant rate and thereby to enable the appellant to obtain

pecuniary advantage is quite clear. The learned counsel for

the appellant urged that Ext.P26 was not duly proved and

therefore the same could not be acted upon. In answer, the

learned Special Public Prosecutor submitted that it being a

Government Order issued under due authority, no formal

proof is necessary to act it upon. Of course, it is a photocopy,

but when its existence is not disputed, it could be received in

evidence. In the above regard, the learned Special Public 2025:KER:14303

Prosecutor placed reliance on Union of India v. Nihar Kanta

Sen and others [(1987) 3 SCC 465] and Venture Global

Engineering LIC v. Tech Mahindra Ltd. and another

[(2018) 1 SCC 656].

10. Several facts forming the basis of the accusation

are not in dispute. The Superintending Engineer with whom

the appellant entered into Ext.P3(e) agreement, was a public

servant, such an agreement was executed in connection with

additional work of construction of toe wall and drain, the

contract price was Rs.21,07,050/-, the work was executed by

the appellant, he received an amount of Rs.27,92,180/-,

including for the additional quantity of work, and the contract

price was fixed as Rs.21,07,050/- on the basis of negotiation

are not disputed. Those facts are borne by records, which are

duly proved by the prosecution also.

11. PW1 was the Chief Engineer. PW2 was the

Superintending Engineer. PW5 was the II Grade Draftsman,

who was dealing with the file relating to the contract. She also

was a witness to the original agreement, Ext.P3(a) as well as

the 12 supplemental agreements including Ext.P3(e). PW6 2025:KER:14303

was the Financial Assistant in the office of the Superintending

Engineer, and he deposed about Ext.P4 file which contains

correspondences culminating in execution of Ext.P3(e).

Evidence of these witnesses proved the aforementioned facts.

12. PW7 was the Assistant Engineer of Karunagappally

KIP RB Circle No.38/25. It was he who submitted the proposal

for the additional work in question. He estimated the cost of

work at Rs.16,86,428/- and forwarded to the 2 nd accused, who

was then the Executive Engineer. He in turn forwarded it to

the Superintending Engineer, who modified the estimate and

refixed the value at Rs.16,76,738/-. The estimate was

computed based on the 1990 PWD schedule of rates. The

estimate was submitted to the Chief Engineer, PW1. He

reduced the estimate to Rs.13,57,688/- and the basis for the

same was PWD schedule of rates, 1996. Accordingly, the work

was sanctioned and the then Superintending Engineer was

empowered to have negotiation and get executed the work

through the same contractor-appellant.

13. The Superintending Engineer was thus having

sufficient authority to award the contract at the rate to be fixed 2025:KER:14303

after negotiation. The case of the prosecution is that the

Government delineated the powers of Engineers at every level for

granting escalation from the estimated rates. The power invested

on the Superintending Engineer was upto Rs.2,500/- or 25%

above the estimated amount. When that was the financial power

of the Superintending Engineer, any escalation above that limit

should have been with the permission of the Government only.

Work awarded as per Ext.P3(e) supplemental agreement to the

appellant was at a rate more than 50% of the estimate. But no

sanction from the Government was obtained.

14. The definite contention of the appellant is that

Ext.P26 was not duly proved and therefore the same could not

be used in evidence. It was also contended that it was not

Ext.P26, but the LCB specifications was applicable to the world

bank works. Going by clause 31 of the LCB specifications,

negotiation could be done and the revised rates could be fixed

by the Superintending Engineer, having he been authorised by

PW1. Clauses 31 and 32 in LCB specifications read:-

"31. Schedule of Quantities:- Variation in the quantities of work in the Bill of quantities shall not vitiate the contract. The 2025:KER:14303

rates quoted for the individual items shall apply for the quantities of work increased or decreased by not more than thirty percent for each of the items. Should quantities of work actually involved under any item exceed quantities provided in the tender by more than thirty percent the rate of such excess over thirty percent of quantity provided in the tender may be revised in accordance with the procedure indicated under clause "Extra items". However, the said revised item rate shall not exceed the item rate quoted, subject to adjustment in accordance with price adjustment clauses. Should the quantity of work actually involved under any item be reduced by more than thirty percent of quantity provided in the tender, the bid unit price for the affected item may be revised in accordance with the procedure indicated under "Extra Items". However the total cost of such items should not exceed the cost of seventy percent of the item quoted, subject to adjustment in accordance with price adjustment clauses. The payment for the item will continue to be made at the original rate until the revised rate is decided.

32. Extra Items: Extra items of work shall not vitiate the contract. The Contractor shall be bound to execute extra items of work as directed by the ........................ The rates for extra items are to be mutually agreed."

15. Going by the aforesaid clauses, the cost of an item

in the extra work should not exceed 70% of the item quoted,

subject to adjustments in accordance with price adjustment

clauses. The question was whether the Superintending 2025:KER:14303

Engineer could have given escalation in terms of the said

clause or he was obliged to confine to the limits in Ext.P26.

The question immediately arises is whether Ext.P26 could be

relied on for want of its formal proof.

16. The Apex Court in Nihar Kanta Sen (supra)

considered whether formal proof was required to rely on a

notification issued by the Government. That was a notification

published in the gazette. The Apex Court held that having

published in the gazette, the court should have taken judicial

notice of the notification. In Venture Global Engineering

(supra) the question was regarding the requirement of formal

proof of certain facts which acquired the character of

notorious facts. It was held that no court should insist on

formal proof, by evidence, of notorious facts of history, past or

present. The date of poll, the passing away of a man of

eminence, events that have rocked the nation, etc. need no

proof and are judicially noticeable. Judicial notice, in such

matters, takes the place of proof and is of equal force.

17. Ext.P26 is a Government Order issued, inter alia,

fixing the financial powers of the Engineers in the PWD.

2025:KER:14303

Although the Kallada Irrigation Project was financed by the

World Bank and the LCB specifications were issued regarding

implementation of the project, the Engineers who

implemented the work continued to be in the service of the

PWD. Their financial powers can certainly be restricted as per

the orders of the Government. Although Ext.P26 is a

photostat copy, PW5 and PW6, who are attached to PWD and

also other witnesses deposed about such financial powers. It

cannot be said that they have no direct knowledge about the

order fixing the financial powers. Similar is in the case of the

appellant who is a licensed PWD contractor.

18. PWs.5 and 6 spoke about contents of Ext.P26.

Production of Ext.P26, dehors it is only a photostat copy,

establishing its existence. Therefore, the contents of the said

document can certainly be acted upon and used to corroborate

what PW5 and PW6 deposed about the financial powers of the

Superintending Engineer. Engineers and the contractors of the

PWD cannot feign ignorance of the said Government Order, as

though it may not have the character of a notorious fact. In the

above circumstances the court can place reliance on Ext.P26.

2025:KER:14303

19. When Ext.P26 contains the general powers of the

Superintending Engineer, Clauses 31 and 32 in the LCB

specifications deal with specific instances concerning extra

items of work. The limitation imposed is that the cost should

not exceed 70% of the item quoted. It was, however, insisted

that unless the rate is revised, the payment of the item should

be at the original rate. The decision taken by the

Superintending Engineer after negotiation with the appellant

to fix the rate of additional work as Rs.21,07,050/- has to be

considered in the light of the aforesaid aspects.

20. As deposed by PW5 the contract excess for the

original contract covered by Ext.P3(a), excluding the cost of

articles supplied by the Government, was 53.20%. Whereas,

the overall excess quoted by the appellant for the original

work was 34.73%. As stated, PW1 revised the estimate for

the additional work and cost was reduced to Rs.13,57,688/-.

The total excess cost while awarding the work to the appellant

for Rs.21,07,050/- is therefore Rs.7,49,362/-. That is more

than 50% of the estimated cost. It may be noted that PW1

fixed the estimated amount taking into account the 1986 PWD 2025:KER:14303

schedule of rates. Whereas, the Superintending Engineer

adopted the 1990 PWD schedule of rates and estimated the

price of work at Rs.16,76,368/-.

21. The additional work was awarded to the appellant

as per Ext.P3(e) on 11.12.1990. So, following the 1990 PWD

schedule of rates was apposite. Of course, going by the LCB

specifications, the original rate should have been followed.

Whether there was a criminal conspiracy to allow excess cost

for the work in question has to be determined bearing in mind

the above aspects.

22. In the above context, the following observations of

the Special Court, while arriving at the conclusion that there

was criminal conspiracy, are relevant:

"A1 was fully aware of the amounts fixed in Ext.P3(a) the original agreement and also amount suggested by the then E.E., A2 herein, the S.E. and that approved by the C.E. So the execution of this supplemental agreement No.5 is sufficient evidence to prove the conspiracy entered between A1 and late Varghese Mathew. So the prosecution succeeded in proving that late Sri.Varghese Mathew and A1 conspired together and executed Ext.P3(e) supplemental agreement by which A1 by corrupt or illegal means obtained pecuniary advantage to the tune of Rs.9,89,913.81."

2025:KER:14303

23. The Special Court placed reliance on the law laid

down by the Apex Court in Bhagwan Swarup Lal Bishan

Lal v. State of Maharashtra [AIR 1965 SC 682] and

V.C.Shukla v. State (Delhi Administration) [(1982) 2

SCC 665] to conclude so. The view taken in Bhagwan

Swarup (supra) is that in the light of the provisions of

Section 10 of the Evidence Act, the things done or written by

any party to the alleged conspiracy in reference to their

common intention is relevant and can be used to prove the

existence of the conspiracy. As explained in V.C.Shukla

(supra), a meeting of mind resulting in ultimate decision

taken by the conspirators regarding the commission of the

offence has to be proved. The prosecution should show that

the circumstances give rise to a conclusive or irresistible

inference of the agreement between the persons to commit an

offence.

24. As stated, the additional work in question was

awarded to the appellant for an amount of Rs.21,07,050/- in

violation of Ext.P26 and to a certain extent the LCB

specifications. But when PW1 empowered the Superintending 2025:KER:14303

Engineer as per Ext.P4(e) to get the work executed through

the appellant after negotiation, it was not a case of lack of

empowerment. Even though there was no insistence in

Ext.P4(e), the Superintending Engineer should have obtained

sanction from the Government for awarding work at a cost

above 25% of the estimate, which was above his power. All

the same, when the original work contract covered by

Ext.P3(a) allowed contract excess, after deducting cost of

departmental material, of 53.20%, no dishonest intention in

fixing the price for the additional work covered by Ext.P3(e) at

Rs.21,07,050/- can readily be inferred. So, it cannot be said

that from the circumstances which culminated in execution of

Ext.P3(e) agreement and that appeared in evidence in this

case, a criminal conspiracy is proved.

25. It can be seen from Ext.P4 file that the appellant

was invited for a negotiation [Ext.P4(f)]. He offered his rate

and that after due deliberation in the negotiation with

reference to each item of work, the final amount was arrived

at. It was not a secret affair. Various correspondences

concerning execution of Ext.P3(e) contract are reflected from 2025:KER:14303

Ext.P4 file. All persons, who were dealing with the said file,

including PW5 and PW6, were in the know of those

correspondences and the incidents transpired. When that

much transparency was there, it is incorrect to say that

execution of Ext.P3(e) was the result of a criminal conspiracy.

26. A similar situation was considered by the Apex

Court in C.Chenga Reddy v. State of A.P. [(1996) 10 SCC

193]. In that case the contract was awarded in violation of

the regulations. It was considered whether in the absence of

circumstances sufficient to prove the guilt of criminal

misconduct could there be a conviction. The following

observations are relevant:

"22. On a careful consideration of the material on the record, we are of the opinion that though the prosecution has established that the appellants have committed not only codal violations but also irregularities by ignoring various circulars and departmental orders issued from time to time in the matter of allotment of work of jungle clearance on nomination basis and have committed departmental lapse yet. non of the circumstances relied upon by the prosecution are of any conclusive nature and all the circumstances put together do not lead to the irresistible conclusion that the said circumstances are compatible only with the hypothesis of the guilt of the appellant and wholly incompatible with 2025:KER:14303

their innocence. In Abdulla Mohammed Pagarkar v. State (Union Territory of Goa, Daman and Diu), [1980] 3 SCC 110, under somewhat similar circumstances this Court opined that mere disregard of relevant provisions of the Financial Code as well as ordinary norms of procedural behaviour of government officials and con-tractors, without conclusively establishing, beyond a reasonable doubt, the guilt of the concerned officials and contractors, may give rise to a strong suspicion but that cannot be held to establish the guilt of the accused. The established circumstances in this case also do not establish criminality of the appellants beyond the realm of suspicion and, in our opinion, the approach of the trial court and the High Court to the requirements of proof in relation to a criminal charge was not proper. xx xx" (underline added)

27. From the discussions made above, it can certainly

be said that the Superintending Engineer (who was arraigned

as an accused, but expired before filing of the final report),

violated Ext.P26 and to a limited extent of Clause 31 in the

LCB specifications. Therefore, there is violation of the

Government directions on his part. But the circumstances

brought on record are insufficient to conclude that Ext.P3(e)

was executed in consequence of a criminal conspiracy and an

offence of criminal misconduct was committed concerning

execution of Ext.P3(e) and undertaking of that work.

2025:KER:14303

Therefore, the conviction of the appellant for the offence