ORDER K. Jayachandra Reddy, J.
1. This criminal appeal is directed against the judgment and order of the Delhi High Court acquitting the respondent accused. These accused, five in number, alongwith one Gurbachan Singh were put up for trial before the Special Judge of Delhi for offences punishable under Sections 120-B, 5(2) read with Section 5(1)(d) of the Prevention of Corruption Act. Gurbachan Singh who was the brother of respondent Nos. 2, 3 and 4 herein was adjudged insane and his trial was scparated. The remaining accused were convicted and sentenced to one and a half years and six years respectively under these two counts and also sentenced to pay fines. On appeal, the High Court reversed the same and acquitted all of them. Hence the present appeal before this Court pursuant to the leave granted.
2. The first respondent N. S. Giani functioned as Asstt. Iron and Steel Controller, Calcutta, Incharge of Section for distribution of Stainless Steel, for the period from 27.6.60 to July, 1961. The accused Nos. 2 to 4 and Gurbachan Singh were brothers. Accused No. 5 was their friend and partner. It is alleged that first respondent was also known to the other accused, when he functioned as Deputy Asstt. Iron and Steel Controller. The accused Nos. 2 to 5 were manufacturing wire/fencing wire/wire nails/wire-drawing units in the names of M/s. Bihar Steel and Wire Industries, Patna, Bawa Screw and Wire Products, Delhi, Bharat Wire Nail Industry, Delhi, National Wire and Nail Industries, Delhi and Weldon Wire and Wire Nail Industries, during the period October, 1959 and November, 1959. When the first accused was promoted as Asstt. Iron and Steel Controller on 27.5.60 and was Incharge of Section dealing with distribution of stainless steel for utensil manufacturing he is said to have entered into a criminal conspiracy with the other accused and Gurbachan Singh to give pecuniary advantage by corrupt or illegal means and by abuse of his own powers, by releasing huge quantities of stainless steel, the import and distribution of which was done by the Iron and Steel Controller, Calcutta. During the period from 27.5.60 to 26.6.61 the first accused in pursuance of the criminal conspiracy between the accused, obtained advantage for himself and for the other co- conspirators by abuse of his powers and his position as a public servant and dishonestly, fradulently and unauthorisedly secured release orders of the quantities of stainless steel for the benefit of the other co-accused and Gurbachan Singh. The release orders are 15 in numbers:
1. Dated 26.9.60 for 9.92 tons to M/s. Bihar Steel and Wire Industries, Patna.
2. Dated 12.10.60 for 4 tons to the same unit as above.
3. Dated 2.11.60 for 24 tons to M/s. Weldon Wire and Wire Nail Industries, Faridabad,
4. Dated 5.11.60 for 25 tons to M/s. Central Commercial Corporation, Patna.
5. Dated 15.12.60 for 30 tons to M/s. Metro Engineering and Metal Works, Delhi.
6. Dated 15.12.60 for 25 tons to M/s. Swastic Metal Works, New Delhi.
7. Dated 13.1.61/6.2.61 for 25 tons to M/s. Junu Rubber & General Industries, Delhi.
8. Dated 16.1.61 for 25 tons to M/s. Indian Steel and Wire Industries, Dhekiajili, Assam.
9. Dated 31.3.61/17.5.61 for 30 tons to the unit at (5) above.
10. Dated 31.3.61/17.5.61 for 25 tons to the unit at (6) above.
11. Dated 31.3.61/17.5.61 for 25 tons to the unit at (7) above.
12. Dated 31.3.61 for 36 tons to the unit (3) above.
13. Dated 31.3.61 for 15 tons to the unit (8) above.
14. Dated 22.6.61 for 12 tons to the unit at (1) & (2) above.
15. Dated 22.6.61 for 15 tons to the unit at (4) above.
The units mentioned herein belong to the co-accused and it is alleged that the stainless steel was made over to them or their authorised agents. It is also alleged that release of these huge quantities of 325.92 tons were said to have been made despite the clear-cut policy and instructions of the Government to the contrary. It was also the declared policy of the Government that no new capacity for the manufacture of Stainless steel utensils was to be recognised and no new-comer to this industry was to be given any stainless steel during the first of these period and a pubic notice dated 1.4.60 of the Iron & Steel Controller and the Import Policy for this period was there to the effect that import of stainless steel was not to be allowed for manufacture of stainless steel utensils during the period. The units, to which releases were made were new-comer units and they were not entitled to any stainless steel release. It was also alleged that the releases mentioned at Serial Nos. 1 to 4 were made by securing applications of M/s. Bihar Steel and Wire Industries and Central Commercial Corporation by Mr. Giani, accused No. 1 from another Section in the office of Iron and Steel Controller, Calcutta, with which Section he was not the concerned officer and no other application of other units recommended by Director of Industries, Bihar was got by this accused. No sanction of stainless steel was given to any other unit in that manner. Likewise the releases mentioned at Serial Nos. 1 and 2, Serial Nos. 3 and 12, Serial Nos. 5, 6, 7 and Serial Nos. 8, 13, 14 and 15 and the rest were held to be irregular and accused No. 1 having conspired with the other accused acted dishonestly and fradulently and got those releases in favour of the other accused. The trial court, as mentioned above, convicted all the accused but the appellate Court reversed the same.
3. In this appeal by the State, the learned counsel submits that the High Court has not given cogent and compelling reasons for reversing the judgment of the trial court and that there is ample evidence to show that the first accused obtained pecuniary advantage by abusing has position as public servant and in conspiracy with other accused. It is also submitted that in respect of allotments to the Bihar Steel and Wire Industries, the judgment of the High Court suffers from a patent fallacy. It is also submitted that the very fact that so many irregularities have been committed by the first accused in getting these releases in favour of the other accused, by itself shows that the first accused acted dishonestly and the other accused conspired with him. The plea of the accused has been one of denial. Accused No. 1, in his elaborate statement, has given explanation in respect of each of these releases and the sum and substance of which is that whatever allotments were made were permissible under the policies and that he did not make the allotments on his own responsibility but they were made under the orders of the Iron & Steel Controller. He denied having shown any favour to the other accused. As mentioned above, the Government has set out a particular policy regarding the allotment of the stainless steel quota. It is a common case that prior to the imposition of the ban by the Government, licences were granted to manufacturers of stainless steel utensils for the import of stainless steel on the basis of their assessed capacity. However, a circular was issued by the Development Commissioner, Small Scale Industries to the Directors of all the States (Ex. P. 578) advising the Directors that the requirements of stainless steel for the manufacture of utensils may be .sponsored on a basis of 20% of the assessed capacity of the small scale industries and no new capacity should be recognised for this and the sponsoring authority should directly forward the applications to the Steel Control Organisation at Calcutta and that import applications of new units need not be routed through the office of the Development Commissioner but that import applications in respect of all small industrial units, whether new or old, may be sent direct to the respective Iron & Steel Controller Office at Calcutta, Bombay and Madras. This policy was further explained by another letter dated 7.12.59 (Ex. P. 732) where the Directors of Industries were advised that already enough capacity existing in the country for the production of stainless steel utensils and that further capacity for such items should not be set up and they were requested not to encourage any proposal from the small scale industries for the manufacture of these items. A public notice was subsequently issued on 1.4.60 by the Government of India, Ministry of Steel notifying the new import licensing policy that no imports were to be allowed to be made by manufacturers of stainless steel utensils. The policy under Ex. P. 578 has been revised by a subsequent note dated 4.6.60 marked as Ex. D. 123 which indicated the policy to be followed with regard to the supply of stainless steel to the manufacturers of utensils, both old and new, to whom import licences had been banned under the public notice Ex. P 678. It was stated therein that in addition to the stainless steel imported under licences to various parties, certain quantity of stainless steel had also been imported and that this stock of stainless steel would be distributed to the manufacturers of stainless steel utensils who could not be granted import licences by virtue of the ban dated 1.4.60. It is further stated that a small stock of about 50 tons would be reserved to meet the demands of new comers whose demands could not be sponsored in time for import licences during the period October 1959 to March, 1960. In pursuance of this policy, a circular was issued from the office of the Iron & Steel Controller to the Directors of Industries of all the States on 22.7.60 (Ex. P. 655) vide which the Directors were requested to forward a statement of all the applications from new units who had actually applied in time. After the receipt of the said statements, the Iron & Steel Controller indicated the guidelines for the distribution of the stainless steel to the various applicants whose applications had been sponsored by the Directors of Industries. These guidelines are contained in the Office note Ex. P. 713 wherein it was stated that no uniform basis of figures were available and it was also found that the Directors of Industries, Bombay had issued recommendations on the basis of 20% of the actual assessed capacity. It was, therefore, decided that in case of Bombay applicants, the licensed tonnage should be multiplied four times so that 80% of the recommended quantity may be taken into consideration. Similarly it was decided to make allotment at the rate of 62% to the established units and so far as the new comers were concerned, 100 tons out of the available quantity of the stainless steel was kept aside for meeting their demands which could not be sponsored in time for the licensing period from October 1959 to March, 1960. The Directors of Industries were also informed that the releases to new comers covered their requirements upto Sept., 1960 and that these releases should also be taken into account at the time of considering issue of recommendation for the next licensing period. By an office memorandum dated 1.12.60, the Deputy Iron & Steel Controller sought the advice of the Ministry of Steel with regard to the import licensing policy for stainless steel sheets to the utensils manufacturers and it was pointed out that the policy laid down by the Ministry banning the grant of import licences to utensils manufacturers did not debar new units of stainless steel utensils makers from applying for such releases from barter imports and that the demands from such units should also be considered. In the reply received from the Ministry (Ex. D-178) it is noted, Policy for the distribution/allocation of stainless steel sheets to the utensil manufacturers for the period October, 1960/March, 1961, that it would be difficult to indicate the percentage of release to be made for October, 1960 to March, 1961 and that in view of the fact that large quantities were reported to be in stock with the importers, it was decided that Iron & Steel Controller should immediately release to the extent of 50% of the quantity release depended previous period to all firms who had applied as advance allotment and that the balance quantum of release could be determined after knowing the full sponsored demands and the quantity available for distribution. It appears that this position was again reviewed and in view of the availability of the stock, certain decisions in respect of the old and the new units, are mentioned in the note (Ex. D/110). As per this note it was depended to release 90% of the recommended quantity to the old units and in respect of the new units, 400 tons approximately was set apart and the said policy was explained to the Directors of Industries. These policies were explained by some of the witnesses who were examined, P.W. 73 Shri A.S. Bam, Iron and Steel Controller, P.W. 62, Shri S.C. Mukherjee, Deputy Iron and Steel Controller, Calcutta and P.W. 68 Shri Parkash Kumar Ghosh, Assistant, Steel Import Branch, Office of the Iron and Steel Controller, Calcutta.
4. Keeping in view the policy mentioned above regarding the allotment, the case against the principal accused namely Mr. Giani, the Asstt. Iron & Steel Controller was considered in detail by the High Court. He was charged with having released 325.92 tonnes of stainless steel to the several units owned by the other respondents. The charges mention the details of allotment to several units. So far as the first charge of conspiracy is concerned, the circumstances taken into consideration by the trial court are the owners' relationship inter se all the other accused and accused No. 1's acquaintance with them and the evidence of P.Ws 54, 70, 72 and 79. The main circumstance of the basis of which the prosecution sought to establish the offence of conspiracy is that the first accused made all these allotments in favour of the said accused who own all these firms in different names. The High Court has pointed out that more relationship among the other accused cannot be a ground to conclude that there was a conspiracy between them and the first accused. So far as the previous acquaintance between the first accused and other accused, there is no material. This aspect of previous acquaintance has given an inference on the basis that all the other accused are brothers and the releases were made in their favour. The evidence of P.Ws 54, 70, 72 and 79 has also been .discussed at length by the appellate court. The trial court did not rely on the evidence of P.Ws 70 and 72. P.W. 54 is the Joint Director of Industries but he has merely proved a note made by him (Ex. P. 540). Para 8 of that note mentions that a representative of the party contacted him and told that if their case could be sponsored they would be able to get 60 tons of stainless steel. From that P.W. 54 drew an inference that the proprietor of the Concern is very influential. The evidence of P.W. 54 shows that he merely drew an inference. A number of circumstances are pointed out by the appellate court and it has rightly held that even the evidence of P.W. 54 and 79 hardly prove the charge of criminal conspiracy.
5. Now coming to the irregularities committed by the first respondent Mr. Giani, the relevant documents commence from Ex. P. 50. The High Court has considered the oral and the relevant documentary evidence in respect of each of the allotments and the corresponding release orders to all the firms mentioned in the various charges. Regarding the allotment to the firm M/s. Metro Engineering & Metal Works, Delhi which is a proprietary concern of Baldev Singh, one of the respondent, the prosecution relied on the evidence of P.Ws 57 and 62 and also the other documents. The prosecution contended that these allotments should not have been made to the new-commers. But in view of the above mentioned policy it cannot be said that it is an invariable rule precluding the Controller from entertaining the applications. The application (Ex. P.50) would indicate that the Director of Industries was approached in the first instance and when he declined, the applicant approached the Director of Small Scale Industries and that application was processed by the first accused. Having examined the entire material, the High Court rightly held that there was no deliberate departure by the first accused from the instructions given by P.W. 62 to the Director. The record also shows that the release was made only after obtaining the necessary instructions from his superior. Now coming to the second period from October, 1960 to March, 1961 the record shows the M/s. Metro Engineering & Metal Works, Delhi sent its indent to the Director of Industries and ultimately there was release of 30 tons to this unit for the second period. The attack of the prosecution is that this has been granted without obtaining the orders of the superiOrs. P. W. 73 is the relevant witness. However, P.W. 62 the Deputy Controller of Iron & Steel has stated that after the Director of Industries had recommended a larger quantity to M/s. Metro, Swastic and Junu, the first accused could release the additional quota. This clears the suspicion, if any, against the first accused. The High Court likewise has considered in respect of the release to M/s. Swastic and has rightly held that their case is similar to that of M/s. Metro Engineering and Metal Works. We have examined the material on record and we agree with the High Court that there is no irregularity committed by he first accused. Now coming to the release to M/s. Weldon Wire and Nail Industries, Faridabad. Ex. P. 915 is the application dated 10th August, 1960. The same was forwarded by the Director of Small Scale Industries with a covering letter that it was not possible for the Director of Industries to give the party a quota. On receipt of this application, the first accused wrote a letter Ex. P-1 to the Director of Industries, Delhi to ascertain whether the applicant had established any factory in Delhi. Then there was correspondence and ultimately allotment was made and quota was released. The criticism against the said release is that the application was not sponsored by the Director and that the first accused called for a report only from the District Industries, Officer, Gurgaon and accepted the said report without waiting for the recommendation of the Director of Industries, Punjab. So far as the first objection is concerned, it appears from the record that sponsoring of the application by the Director was not a condition precedent for consideration of the application and it is open to the Controller to consider the application when it was forwarded by the Director of the Small Scale Industries. So far as the. second objection is concerned, it is clear from Ex. P. 840, a letter addressed to Director of Industries, that only a copy was sent to the District Industries Officer and that the report of the District Industries Officer was not directly sent to the Controller. On the other hand it was sent to the Director of Industries, Punjab. Therefore it should naturally be presumed that the Director of Industries was fully aware of the application of M/s. Weldon. It is only after the receipt of the report of the District Industries Officer (Ex. P-874) the first accused waited for 10 days and then he put up a note on 29.10.66 and the Director of Industries was also aware of the report of the District Industries Officer did not correspond. Under these circumstances, it was quite reasonable for the first accused to assume that the Director had no objection for the release. With regard to the second, M/s. Weldon Wire and Nail Industries, Faridabad's indent (Ex. P. 760) and the letter written by Mr. Giani (Ex. P. 747) would go to show that a copy of the Indent Ex. P. 760 was sent by the District Industries Officer with his recommendations for the issue of 60 tons in favour of that unit. It is clear that thereafter the first accused acted. This is one of the irregularities which is mainly relied upon by the prosecution contending that the indent was not recommended by the Director and as a matter of fact, the Director rejected the indent. The first accused, in his statement, under Section 342 Cr.P.C., explained that the Director of Industries, Punjab did not care to send the indent of this unit inspite of his letter and after waiting for 15 days he issued the released. It must also be noted in this context that the District Industries Officer recommended and the same was accepted. The High Court also has noted that no question was put to the first accused with regard to the alleged orders passed by the Director of Industries, Punjab rejecting the indent. Under these circumstances, the High Court has rightly held that there is no irregularity seen in the action of the first respondent which brings him within the mischief under Section 5(1)(d). We have also considered the evidence regarding the allotments made in favour of M/s. Junu Rubber General Industries, Delhi, M/s. Bihar Steel & Wire Industries, Patna and M/s. Indian Steel and Wire Industries, It may not be necessary to consider these releases in detail. The two irregularities mainly relied upon by the prosecution, as already mentioned, are one in favour of M/s. Weldon Wire & Nail Industries for the second period and M/s. Bihar Steel & Wire Industries for the first period. It is contended that these two cases would bring the first accused within the mischief under Section 5(1)(d) and that the prosecution did not necessarily proved that there is pecuniary advantage and it is enough if it is proved that corrupt or illegal means were adopted or there is abuse of official position by the public servant. But in this case the evidence on which the prosecution seems to rely on, to prove the guilt of the first accused that he has employed corrupt or illegal means or had otherwise abused his position as a public servant is only in the nature of circumstantial evidence. These circumstances do not necessary lead to an inference or atleast a presumption that the irregularities committed by him amount to obtaining a benefit in favour of the friends by corrupt or illegal means. In the case of release to M/s. Weldon Wire & Nail Industries ,the copy of the indent had been received by the first accused with the recommendation of the District Industries Officer and the Director of Industries sent no order to the first accused rejecting the indent. As a matter of fact P.W. 77, Deputy Director of Industries, Punjab, in his evidence, stated that he did not raise any objection in respect of release in favour of M/s. Weldon Wire & Nail Industries and he prosecution could not show that the firm was not eligible for the release.The mere failure on the part of the first respondent to wait would amount to only a technical irregularity. Now coming to the release in favour of M/s. Bihar Steel and Wire Industries, it has not been proved that if the first accused had placed the application of the firm before the Controller, it would have been rejected by the latter and that a lesser tonnage would have been allotted. On the other hand, P.W. 73, one of the concerned officers, stated that if this application had been put before him, he would have sanctioned the release. Under these circumstances it is difficult to infer any dishonest intention on the part of the first accused. In any event this evidence does not necessarily lead to the only inference that the first accused acted dishonestly. The view taken by the appellate court appears to be quite reasonable and sound and there are no grounds to interfere. The appeal is therefore dismissed.