Acquittal In Absence of Proof of Corrupt Intent or Conspiracy in Public Procurement Procedures

The Appellants, Jaffer Sadik (Manager of Inspection, Bhilai Steel Plant [BSP]) and Mahendra Pratap Chandra Shah (Partner, M/s Mico Metal Industries), were convicted by the Special Judge (C.B.I.) for criminal conspiracy, cheating, and corruption.

The prosecution alleged that the BSP officials rejected seamless pipes from M/s Arvind Steel Corporation, which were priced lower (@ Rs. 3330/- per meter), to favor M/s Mico Metal Industries at a higher rate (@ Rs. 4495/- per meter), thereby causing financial loss to BSP.

The defense argued that Arvind Steel failed to meet quality standards and delivery schedules, and that the purchase from Mico Metal followed a fresh, valid tender process.

The trial court convicted Sadik under Sections 120-B, 420 IPC, and 13(1)(d) of the PC Act, and Shah under similar sections read with conspiracy.

Whether the rejection of the lower-priced bid and subsequent acceptance of a higher-priced bid constituted criminal misconduct and cheating under the PC Act and IPC.

Whether there was a meeting of minds/agreement between the public servants and the private supplier to establish a criminal conspiracy under Section 120-B IPC.

The Court applied Section 120-A and 120-B of the IPC regarding the definition and punishment of criminal conspiracy, emphasizing that an agreement to do an illegal act is the sine qua non.

It applied Section 420 IPC regarding cheating and dishonest inducement.

The Court also relied on Section 13(1)(d) of the Prevention of Corruption Act, 1988, which requires proof of a public servant abusing their position to obtain a pecuniary advantage.

It further cited C. Chenga Reddy v. State of A.P., establishing that administrative irregularities or breaches of departmental codes do not equate to criminal intent without proof of corruption.

The court cited State of M.P. v. Sheetla Sahai, noting that conspiracy cannot be inferred from thoughts alone but requires a concrete agreement.

The High Court found that the prosecution failed to provide evidence of a "meeting of minds" or illegal agreement between Jaffer Sadik and Mahendra Shah.

Testimony from PW-06 (Senior Manager) confirmed that the tender process for M/s Mico Metal was conducted as per standard office procedures and that the prior supplier (Arvind Steel) had failed quality inspections.

The Court noted that Sadik’s role was limited to inspection, and the final purchase authority rested with D.B. Bhaskar Rao (deceased).

Witness statements (PW-07, PW-08, PW-12) indicated that visual rejection of materials was a recognized procedure and that the supplier did not protest the rejection via official channels.

The Court reasoned that the mere fact that goods were purchased at a higher rate does not automatically imply a conspiracy if the procedural requirements of the tender were met and no corrupt motive or bribery was proven.

It held that the prosecution utterly failed to prove criminal misconduct or an active conspiratorial role by the appellants.

The Appellants were acquitted of all charges under Sections 120-B, 420 IPC, and 13(1)(d) of the PC Act.

The Court directed the release of the appellants from their bonds, subject to the requirements of Section 481 of the BNSS 2023.