Holding

The Supreme Court held that the electricity supply was a State‑to‑State arrangement not violative of Section 43/Rule 68, and that the prosecution failed to prove the appellants' mens rea or that they caused any pecuniary advantage to the company, so no offence under the Prevention of Corruption Act was established.

Summary

The appellants, R. Balakrishna Pillai (former Minister for Electricity, Kerala) and P. Kesava Pillai (Technical Member/Chairman of KSEB), were convicted under Section 5(2) read with Section 5(1)(d) of the Prevention of Corruption Act for allegedly selling 1,22,41,440 units of Kerala electricity to Mis. Graphite India Ltd. without State sanction, thereby causing the company a pecuniary advantage. The Supreme Court held that the electricity supply was part of an inter‑state arrangement negotiated at the level of the two State Governments, not a sale requiring consent under Section 43 of the Electricity (Supply) Act, 1948 or Rule 68 of the Kerala State Electricity Board Rules, 1957. The Court found no evidence that the appellants initiated or earmarked the supply for the company, nor that they obtained any benefit or intended to cause a benefit. Consequently, the prosecution failed to prove the essential elements of the offence, including mens rea. The convictions were set aside and the appeals allowed.

Issues considered

The applicability of Section 43 of the Electricity (Supply) Act, 1948 and Rule 68 of the Kerala State Electricity Board Rules, 1957 to the inter‑state supply of electricity.
Whether the lack of a written agreement or formal consent constitutes an offence under the Prevention of Corruption Act.
Whether the appellants, by abusing their official positions, caused Mis. Graphite India Ltd. to obtain a valuable thing and pecuniary advantage, satisfying Section 5(1)(d) read with Section 5(2) of the Prevention of Corruption Act.
Whether the requisite mens rea and intention to obtain a valuable thing for another person were present.
Whether the supply arrangement was a transaction between two State Governments, thereby exempting it from the consent requirements.

Legislation cited

Electricity (Supply) Act, 1948s. 43
Prevention of Corruption Act, 1947s. 5(1)(d), s. 5(2)

Subjects

Prevention of Corruption ActElectricity (Supply) Actinter‑state electricity supplymens reapublic servant abuse of positionSection 43Rule 68criminal liabilitycorruption conviction overturned

Judgment

A R. BALAKRISHNA PILLAI
v.
STATE OF KERALA

FEBRUARY 28, 2003

B [R.C. LAHOTI AND BRl.JCSH KUMAR, JJ. ]

Prevention of Corruption Act, 1947-Section 5(2) read with 5(J)(d)-
E/ectricity (Supply) Act, 19481 Kera/a State Electricity Board Rules, 1957-
C Section 43/Rule 68-Al/egation that- officials illegally selling electricity to a
company-Conviction-High Court upholding the same-Justification of-Held,
conviction not justified since sale negotiated between two State Governments
thus, Section 43 and Rule 68 not violated-Inference of criminal liability
could not be drawn for not executing an agreement in writing-Act not
amounting to 'causing to obtain' valuable thing to company resulting in
D pecuniary advantage as well to the company-Mens rea and intention totally
lacking, thus facts leading to charges not proved-Also sale during the period
of crisis not objected to and prosecution failing to prove sale of electricity by
·the State to the company or the State or officials having caused profit to the
company.

E According to the prosecution, appellant No.I-Minister for Electricity,
Government of Kerala and appellant No.2-Technical Member/Chairman
of the Kerala State Electricity Board (KSEB) illegally sold 1;22,41,440 units
of electricity to company G outside the State without sanction of the State
Government which amounted to causing to obtain valuable thing to
company G and also resulting in pecuniary advantage. Appellants were
F convicted and sentenced under Section 5(2) read with Section S(l)(d) of '•
the Prevention of Corruption Act, 1947. High Court upheld the order.
Hence the present appeals.
Appellants contended that the ingredient of the offence under section
G S(l)(d) of the Prevention of Corruption Act obtaining anycvaluable thing
or pecuniary advantage for himself or ·for any other person is not there;
and that if some profit has been caused to company G by lowering of the
price by State of Karnataka/KEB it is not proximate or .direct cause of
anything done by Al and A2.

Respondents contended that there is no document or formail order
H 436
R. BALAKRISHNA PILLAI v. STATE 437
of consent of State Government for arrangement of supply of electricity; A
that the supply of electricity was made without any agreement in writing
or any other record of supplies; and that by supply of electrical energy to
company G by KSEB in definite and earmarked quantity, Al and A2
caused company G to obtain valuable thing namely, electricity which also
resulted in an advantage to company G.
B
Allowing the appeals, the Court

HELD: I.I. The agreement of sale and supply of electricity from
Kerala to Karnataka has been negotiated at the higher level, at the level
of the two State Governments through thei~ respective Ministers. The
Minister for Power, State of Karnataka had approached the Power C
Minister of the State of Kerala for exploring possibility of supply of
electricity to the State of Karnataka which was then facing acute deficit
of electric energy. The Chairman of the Electricity Boards of the two States
have also been present during the negotiations along with Secretary,
Power, Kerala Government. It was a transaction between State of D
Karnataka/KEB and State of Kerala/KSEB. Thus there was no occasion
of any document being there showing consent of Government of Kerala
for supply of energy to company G. The statement of the Chairman of
KSEB that there was no sanction of the Government of Kerala to supply
power to company G has no material bearing or relevance. Therefore,
there is no violation of Section 43 of the Electricity (Supply) Act, 1948 E
and Rule 68 of Kerala State Electricity Board Rules, 1957. The supply of
electricity made under the arrangement arrived at on negotiations entered
into between two States does not need any prior constent and thus section
43 or under Rule 68 are not attracted. (457-H; 458-A-DI
F
1.2. The fact that arrangement entered into was not reduced into an
agreement in writing, lost relevance for the purposes of the instant case
since the same having been acted upon and the electricity having been
supplied to the State of Karnataka/KEB for which there is no complaint
that State of Kerala/KSEB has not received the agreed price. However,
the requirement or necessity to execute an agreement in writing for any G
contract entered into for and on behalf of State or such bodies like KSEB
is not undermined but such omission, in the facts and circumstances of
the instant case, would not lead to any inference of commission of any
offence. [464-C, D; 461-D)

1.3. In the instant case, the documentary as well as oral evidence H
438 SUPREME COURT REPORTS [2003] 2 S.C.R.

A establishes that the State of Karnataka/KEB contacted appellant No.I for
assistance in the matter of supply of electricity due to grim situation of
shortage of energy in their State. Time and again in different meetings
and otherwise the State of Karnataka/KEB had been emphasizing the
requirement of electricity and supply of more energy stressing upon the
B need for their industry some of which were named including company G
and other Plant, so much so that they had even advised company G also
to make effort and use their good offices with Kerala Authorities for
supply of more electricity. The appellants had only told that they would
look into their demands and would like to assist them maximum possible
which would also depend upon the ensuing monsoon situation. It is not to
C be found that the State of Kerala/KSEB, Al or A2 ever made efforts to
sell Kerala energy to KEB nothing to say of company G. Had that been
so there was no occasion for the State of Karnataka/KEB to advise
company G to use their good offices with Kerala Authorities for supply
of ener11y. It is !llso evident that despite assurance on the request of
Karnataka/KEB to assist it was not always possible for KSEB to make
D supply. Whatever energy was exported from Kera!a was taken in the
general pool' of electricity in the State of Karnataka/KEB and the
distribution thereof used to be made by the State of Karnataka/KEB and
the Chief Minister. Some stray utterances made in some letters or internal
documents of the KEB that KSEB had agreed for certain quantity of
E energy for company G would in no way lead to the inference that the State
of Kerala/KSEB, Al or A2 has earmarked any supply for company G.
Even according to them, KSEB had only "agreed" to spare electrical
energy for company G which definitely shows that initiative was on the
part of the State of Karnataka/KEB. There is no case of initiative or effort
on the part of KSEB for supply of energy, thus the reliance on such letters
F or non-reply of certain letters is misplaced. The primary requisite of
offence u/s 5(l)(d) of 'obtaining' any valuable thing or pecuniary
advantage for any other person, in absence of any effort, initiative or
request on the part of the appellants shatters the charge. With regard to
causing pecuniary advantage or profit to company G, it was purely a
G matter between the State of Karnataka/KEB and company G to decide
what price was to be charged by KEB from company G for supply of
imported energy. There is neither allegation nor evidence to show that the
State of Kerala/KSEB or Al and A2 had any say or hand in lowering of
the price for company G by the State of Karnataka/KEB. Earlier also there
have been instances of supply of imported energy at a lower. rate to
H company G and other Plant by KEB. In any case it was a matter between
R. BALAKRISHNA PILLAI v. STATE 439
the State of Karnataka/KEB and company G or other industries. A
Therefore, the appellants did not cause any profit to occur to company
G. 1467-B-H; 468-A-DI

Su bash Parbat Sonvane v. State of Gujarat, 1200215 SCC 86, referred
· to.
B
Ram Kishan v. State of Delhi, AIR (1956] SC 476; MW Mohiuddin v.
State of Maharashtra, [1995] 3 SCC 567 and C.K. Damodaran Nair v.
Government of India, (1997] 9 SCC 477, referred to.

Blackstone's Criminal Practice by Peter Murphy, 1992 p.64, referred C
to.·

1.4. Once the supplies were made to the State of Karnataka to help
out during the period of scarcity of energy, as requested, it is not
understandable how only a part of supply which the State of Karnataka/
KEB, amongst others allocated to company G that alone could be said to D
be illegal or that the appellants caused to be obtained valuable thing to
company G illegally by abuse of their official position. KSEB did not sell
energy to company G, all supplies were made to KEB. Therefore, the
charge that the appellants had illegally sold energy to company G or
caused it to be obtained by company G or they abused their position in
supplying energy of Karnataka/KEB is rejected. (468-E, Fl E
1.5. The act of the State of Karnataka/KEB intervenes between the
supplies made by the State of Kerala/KSEB to KEB who. in turn supplied
the same to its consumers including company G at a lower price. It is not
the direct effect or proximate cause to any benefit, if at all, accrued to F
company G. (469-B)

Kurban Hussein Mohammeda/i Rangwal/a v. State of Maharashtra,
[1965) 2 SCR 622, distinguished.

1.6. The accused must have the mental state or degree of fault at G
the relevant time. It may differ from crime to crime according to the
definition thereof. The mental state and the criminal act must coincide.
The criminal act may be one which may be intended by the wrong doer.
It is as well known mere intention is not punishable except when it is
accompanied by an act or conduct of commission or omission on the part
of the accused. Situation varies in respect of different kinds of crimes as H
440 SUPREME COURT REPORTS [2003] 2 S.C.R.

A in some of them even negligence or careless act may constitute an offence
or there may be cases of presumptions and putting the accused to proof
to the contrary. 1469-H; 470-A-CJ
f·

Blackstone's Criminal Practice by Peter Murphy, 1992 p.18; Criminal
Law, J.C. Smith, Brian Hogan, 6th Edition, p.31; Criminal Law by K.D. Gaur,
B 3rd Edition, p.23 and Criminal Law by Glanville Williams -The General
Part- Second Edition, p.1, referred to.

1.7. Under Section S(l)(d) of the Act it is necessary that the act must
have been done illegally abusing his position as public servant for obtaining
C benefit pecuniary or otherwise for himself or for someone else. This is an
offence which would require an intention to accompany the act. The
element of mental state would be necessary to do a conscious act to get
the required result of pecuniary advantage or to obtain any valuable thing,
even if it is for someone else, then too element of mental state must be
there at the relevant time. Facts leading to charges are not proved and
D the element of mens rea and intention is totally lacking. The electrical
energy was exported to Karnataka/KEB at the request of State of
Karnataka during the period of crisis of shortage of energy which is not
objected to, so as to be illegal but for a part of it which is allocated by the
State of Karnataka/KEB to company G constitutes no offence. The
prosecution failed to prove the case of sale of electricity by KSEB to
E company G or the KSEB or Al and A 2 having caused profit to company
G. Admittedly, appellants did not stand to gain in any manner nor they
had any say in price fixation for company G by KEB. Thus the order of
conviction and sentence passed against the appellants by the trial court
and upheld by the High Court under Sect:on 5(2) read with Section S(l)(d)
p of the Prevention of Corruption Act are set aside. [471-E-H; 472-A, BJ

CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No.
372 of2001.

From the Judgment and Order dated 2.3.2001 of the Kerala High Court
G in Cr!. A. No. 304 of 1996/S.

WITH

Crl. A. Nos. 373/01 and 725-727 of 2002.

U.R. Lalit, P.P. Rao, Fazlin Anam, E.M.S. Anam, Ashok Kr. Pandey,
H
R. BALAKRISHNA PILLAI v. STATE [BRIJESH KUMAR, J.] 441
G. Balaji, V.K. Beeran, Additional Advocate General for State, K.R. A
Sasiprabhu, K.I. Abdul Rashid, Sushil Tekriwal for the appearing parties.

The Judgment of the Court was delivered by

BRIJESH KUMAR, J. This is a case in which the appellants before
us in Criminal Appeal No.372 of2001 and Criminal Appeal No.373 of2001 B
have been convicted under Section 5(2) read with Section 5(1)(d) of the
Prevention of Corruption Act, 1947 (for short 'the Act') for having caused,
Mis. Graphite India Ltd. (for short 'Mis. GIL), Bangalore, to obtain valuable
thing namely, electricity by selling it to the said company illegally and by
abusing their official position as public servants which also resulted in C
pecuniary advantage to Mis. GIL to the tune of Rs.19 lakhs and odd. So far
the" said two appellants themselves are concerned, it is neither the case of the
prosecution nor the finding of any court that they gained or acquired any
kind of benefit, pecuniary or otherwise, out of the transaction in question.
The High Court, on the other hand, finds that there is nothing to show that
for obtaining Kerala electricity any illegal gratification was given to the D
appellants or any illegal means was employed by Mis. GIL.

The two appellants for the aforesaid conviction have been sen!t11ced to
simple imprisonment for a period of one year and a fine of Rs. I 0,000 each,
in default, to undergo simple imprisonment for a further period of two months.
The conviction and sentence. as recorded by the Trial Court has been E
maintained by. the High Court in appeal. The appellant in Criminal Appeal
No.372 of2001. Balakrishna Pillai is to be referred hereinafter as 'A-I' and
the appellant in Criminal Appeal No. 373 of2001 P. Kesava Pillai as 'A-2'.
So far the appellant in Criminal Appeals Nos. 725-727 of2002 Gopalakrishna
.... Pillai is concerned, he has been examined as PW 45 in the case and is F
aggrieved by adverse comments made against him in the judgment of the
High Court.

The main question which falls for our consideration in these app~als is
as to whether the appellants A I and A2 have illegally sold electricity to
Mis. GIL by abusing their official position which amounted to "causing to G
obtain" valuable thing to Mis. GIL resulting in pecuniary advantage as well .
to Mis. GIL.

During the relevant period namely, October 1984 to May, 1985, A-1
was Minister for Electricity, Government of Kerala and A-2 was Technical
Member/Chairman of the Kerala State Electricity Board (for short 'KSEB'). H
442 SUPREME COURT REPORTS [2003) 2 S.C.R.

A The two have been found to have illegally sold 1,22,41,440 units of Kerala
electricity to Mis. GIL without sanction of the State Government as per the
requirement under the law. It is also the prosecution case that no written
agreement was entered into between the KSEB and the Karanataka Electricity
Board (for short 'KEB') for supply of the electricity.

B Undisputedly KSEB supplied electricity to KEB at the rate of 42 paise
per unit. KEB charged for the said high cost energy used by the industries
in Karnataka at the rate of 80 paise per unit whereas for the electricity ·
supplied to Mis. GIL the KEB charged at the rate of 64 paise per unit i.e. to
say 16 paise less as compared to the rate charged by it from its other
C consumers. It resulted in pecuniary benefit to Mis. GIL. According to the
prosecution the KSEB earmarked a definite quantity of electricity and suppiied
the same to Mis. GIL without sanction of the State Government as required
under the law before selling electricity to any industry outside the state. It
could be possible only at the instance of the two appellants who are said to
have abused their official position for the benefit of Mis. GIL.
D
The appellants refuted the prosecution case and chose to contest.
According to the defence case, the electricity was supplied by the KSEB to
KEB on the basis of a decision taken at the State level by A- I who was the
Minister concerned and authorised t<J'.take such decisions according to the
rules of business. The electricity was· being supplied by the State of Kerala
E much prior to the relevant period to different neighbouring States including
Karnataka and Tamil Nadu. Such supplies have been made since prior to
I 978 as and when it was possible to do so. During the relevant period the
electricity was supplied to KEB at the rate of 42 paise per unit. Thereafter

p
it was for the KEB to fix its tariff for its consumers. No amount of electrical
energy out of the supplies made by K.S.E.B. to State of Kamataka/KEB was
earmarked or specifically provided for Mis. GIL. The request for supply of
electricity was made by the State Government of Kamataka. The State of
-
Kerala had assured it to help in the matter as much as possible. So far the
question of rate of electricity is concerned KEB fixed the rate of high cost
energy (Kerala electricity) @ 80 paise per unit and for Mis. GIL at 64 paise
G per unit. The State of Kerala or KSEB had no concern whatsoever with
fixation of rate of electricity supplied by KEB to its consumers including
Mis. GIL. KSEB supplied the electricity to KEB/State of Karnataka at the
rate of 42 paise per unit which was the highest rate ever charged before.
There is no charge, allegation much less any evidence or finding of any kind
H of pecuniary or other benefit accruing to the appellants. Rather it is not the
l
\

R. BALAKRISHNA PILLAI v. STATE [BRIJESH KUMAR, J.] 443
case of the prosecution that the appellants were benefitted by the transaction A
in any manner. It has also been the case of the appellants that no provision
of law has been violated in making the supplies of energy to the State of
Kamataka. As a matter of fact the supplies were being made since before and
they have only been continue::! at a revised price. The supplies were made to
the State of Kamataka/KEB and not to any particular industry or Mis. GIL.
It was for the KEB to distribute the energy to its consumers according to its B
own policy and priorities. Lastly the defence case is that in any case, if at-all,
there was any irregularity or technical violation of any law it would not mean
that the appellants are guilty of any criminal offence.

Coming to the charge as framed against the appellants for which they C
have been tried and convicted is as follows :

"Secondly, that you the accused 1 and 2 being Minister for Electricity
and Technical Member/Chairman of the K.S.E.B. during the period
from October 1984 and May 1985 abused your official position as
public servants and in pursuance of the above said conspiracy illegally D
sold 12241440 units of Kerala Electricity to Mis. Graphite India Ltd.,
Bangalore, Kamataka State and caused the said company r 'ltain
'valuable' thing viz. Electricity and pecuniary advantage to the tune
of Rs. 19,58,.630.40 and also resultant profit and thereby committed
an offence punishable under S.5(2) r/w 5(1)(d) of P.C. Act 1947 and
within my cognizance." E
As a matter of fact, initially two charges were framed. First of it read
· as follows :

"Firstly, that you Sri R. Balakrishnan Pillai (A 1) while functioning as
Minister for Electricity, Govt. of Kerala from May 1982 to 5.6.1985 F
and P. Kesava Pillai (A2) while functioning as Technical Member/
Chairman of the K.S.E.B., Thiruvananthapuram from 1.2.1984 to
31.11.1985 and as such being public servants during the period from
July 1984 to November 1985 entered into a criminal conspiracy to
sell electricity to the State ofKarnataka, to be supplied to Mis Graphite G
India Ltd., Bangalore, Kamataka State without the consent of the
Govt. of Kerala, which is an illegal act under the provisions of the
Electricity (Supply) Act, 1948 and Kerala Electricity Board Rules
and in pursuance of the conspiracy abused your official position and
illegally sold 1,22,41,440 units of Kerala Electricity to Mis. Graphite
India Ltd., Bangalore, Kamataka State during the months of October H
I
444 SUPREME COURT REPORTS [2003] 2 S.C.R.

A 1984 and May 1985 and caused the said private industry obtain undue
pecuniary advantage to the tune of Rs.19,58,630.40 and more by way
of resultant profit to the industry, since Electricity being a valuable
thing for the functioning of the State industries during the period of
acute shortage of energy in Karnataka State and you the accused I
and 2 thereby committed an offence punishable under S.120-B of
B 1.P.C. and within my cognizance."

But the first charge has been ultimately quashed by this Court due to
lack of sanction (Cr!. A. No.1742195 dt.5.12.1995, [1996] 1 SCC 478).

C Thus, it is only the second charge which remained against the appellants
and according to the same A-I and A-2 (i) abused their official position as
public servants (ii) they conspired and illegally sold 1,22,41,440 units of
Kerala Electricity to Mis. GIL (iii) caused the said company (Mis. GIL) to .
obtain valuable thing namely electricity and pecuniary advantage (iv) hence
committed offence punishable under Section 5(2) read with Section 5(1 )( d)
D of the Act. Thus, according to the charge also there is no accusation against
the appellants for having obtained any advantage pecuniary or otherwise for
themselves by causing the company (Mis. GIL) to obtain valuable thing
namely, electricity.

It may be relevant to mention here that amongst others Mis. GIL, ahd
E Wheel & Axle Plant (for short 'WAP'), an undertaking of the Indian Railways,
seem to be quite important industries from the point of view of Karnataka
State. It is said that Mis. GIL manufactures electrodes and such other items
which are used by other industries in Karnataka and other neighbouring
States including the State of Kerala. So far WAP is concerned there is evidence
F on the record to show that in connection with supply of electricity to it, the
Minister for Railways and Minister for Electricity, State of Kera la had been
holding negotiations on the earlier occasions and electricity was supplied to
WAP, before the pe~iod in question, at the rate of 35 paise per unit. The
goods manufactured by WAP are for the use of the Indian Railways. It is
only to indicate and emphasise the importance of the said industries running
G in the State of Karnataka.

The findings as recorded by the High Court are that there was scarcity
of electricity in Kerala itself during the relevant period of supplies namely,
October 1984 to May 1985. The documentary evidence including letter written
by the Chief Minister of Karnataka to A- I and the DO Letter sent by PW 22
H to A-2 proved that they agreed to supply Kerala Electricity to Mis. GIL, more
R. BALAKRISHNA PILLAI v. STATE [BRJJESH KUMAR. J.] 445

particularly in view of the fact that the said letters were not replied by AI and A
A2 to refute its contents. It was also found that by charging at a lower rate
for supply of Kerala Electricity to Mis. GIL there was a total saving of more
than Rs. 28 lacs to Mis. GIL. No sanction was given by Government of
Kerala to supply electricity to Mis. GIL. It is also held specifically ............ "from
the materials available on record it could be clearly seen that A 1 and A2 B
agreed to give specific quantity of electricity to Graphite India Ltd. If A I or
A2 had not agreed to give specific quantity of electricity by K.S.E.B. to
Graphite India Ltd. and electrical energy was not supplied to Graphite India
Ltd. by K.S.E.B. through KEB, KEB would have charged for the imported
energy supplied (Kerala energy) to Graphite India Ltd. at the rate payable for
high cost energy (80 paise per unit) and Graphite India Ltd. would not have C
saved Rs.19,58,630.40 during the relevant period. The sale of electrical energy
to Graphite India Ltd. without the sanction of the Government of Kerala was
illegal". (emphasis supplied by us)

The High Court has further found in paragraph 216 as follows :
D
"From the evidence available, it is also possible to conclude that
Graphite India Ltd. had also played an important role in getting the
electricity supplied to it. It is evident from the statement of A I under
Section 313 Cr.P.C. no request was made by the Power Minister of
Karnataka or any official KEB who had a meeting with him on E
28.9.1984 for supplying electricity to Graphite India Ltd. Then why
he had agreed to supply energy to Graphite India Ltd.? Inference is
irresistible that he had agreed to supply electricity to Graphite India
Ltd. at the instance of PW.47 who met him on the same day."

(emphasis supplied by us) F
The High Court has also found as follows :

" ........ From Section 43 it is crystal clear that the Board can enter into
an arrangement with any government or persons for the purchase or
sale of electricity to be generated or used outside the state only if the G
sanctioned scheme provides for such sale or purchase. The proviso to
Section 43 says that for entering into ·an arrangement for sale of
electricity to a person or Government outside the State, consent of the
State Government is necessary. It further provides that for entering
into an arrangement with any person other than any Government, the
sanction of the Government of the State within which the electricity H
446 SUPREME COURT REPORTS (2003] 2 S.C.R.

A is to be used is to be obtained."

It has also been held that A2 had no authority to agree or direct to supply
energy to Mis. GIL without sanction of Government of Kerala. In paragraph
224 in the end it is observed as follows :

B "As no records were maintained by the Power Department of Kerala
and K. S.E.B. regarding supply of electrical energy to Graphite India
Ltd., it is only legitimate to infer that the factum of supplying electrical
energy to Graphite India Ltd. was deliberately and intentionally
suppressed by A I and A2. A I and A2 agreed to supply specific
quantity of electrical energy to Graphite India Ltd. So, we have no
c hesitation in holding that there was dishonest intention for A I and A2
in agreeing to supply electrical energy to Graphite India Ltd."

We have heard Shri U.R. Lalit, learned senior counsel appearing for A I
and Shri P.P. Rao, learned senior counsel appearing for A2 at length. Shri
K.R. Sasiprabhu has also made his submissions in regard to the adverse
D observations made in the judgment against the appellant Shri G. Gopalakrishna
Pillai in that appeal. Shri V .K. Beeran, Addi. Advocate General, State of
Kerala made submissions on behalf of the respondents and has also furnished
a brief note of his arguments.

E So as to be clear about the nature of grievance against the appellants,
it is to be indicated that the learned counsel for the respondents has very
fairly stated that it is not the case of the prosecution that the appellants were
benefited in any manner financially or otherwise by supply of electricity to
Mis. GIL. He has also indicated that so far the rate at which supply of
electricity has been made to the State of Karnataka i.e. at the rate of 42 paise
F per unit is also not a cause of any grievance. But the grievance is that by
supply of electrical energy to Mis. GIL by K.S.E.B. in definite and earmarked
quantity, A I and A2 caused Mis. GIL to obtain valuable thing namely,
electricity which also resulted in an advantage to Mis. GIL to the tune of Rs.
19 lacs and odd. The supply of electricity was made without any agreement
G in writing or any other record of supplies, in violation of the relevant rules
which leads to the conclusion that the supply of electricity was made illegally
further leading t.J the inference of dishonest intention on the part of A I and
A 2. At this stage it would also be appropriate to indicate one of the findings
recorded in connection thereof by the High Court in its judgment:

H "We find nothing unJsual in PW 47 approaching A I or A2 for getting
R. BALAKR!SHNA PILLAI v. STATE [BRJJESH KUMAR, J.] 447

electricity and if he succeeded in getting energy for his employer, it A
only indicated that he had faithfully and diligently performed his
duty. There is no evidence to show that for obtaining Kerala energy
during the relevant period, any illegal gratification was given to A I
or A2 by Graphite India Ltd. through PW 47 or any illegal means
was employed by PW 47 or Graphite India Ltd. to obtain energy B
during the relevant period. It was for A I and A2 to protect the interest
of Kerala State and when there was scarcity of energy, they should
not have agreed to supply energy to Graphite India Ltd .. "

To a straight question put to the learned counsel for the respondent as to the
evidence indicating scarcity of electricity in the State of Kerala during the C
relevant period he categorically replied that virtually there was no such
evidence available on the record.

In the backgrounc;I of the prosecution case it may have to be seen as to
whether it was supply/sale of electricity by K.S.E.B. to 1,1/s. GIL or it was
supply of electricity by State of Kerala to State of Karnataka through their D
respective electricity boards, namely, K.S.E.!3. and K.E.B. It may also have
to be seen in what circumstances arrangement of supply of electricity came
about between KEB and K.S.E.B. It is not in dispute that the State of Kerala
has quite often been supplying electricity to the neighbouring States namely,
Karnataka, Tamil Nadu and Andhra Pradesh etc. A chart of supply of electricity
by Kerala has been shown by Shri P.P. Rao which shows that such supplies E
were being made since at least 1978 with some intermittent gaps here and
there. So it was not unusual indeed that such supplies were undertaken by
K.S.E.B. in 1984-85. It has been stated by PWs 4, 6 and 8 that supply of
electricity was being made by the State of Kerala to the State of Kamataka
as Karnataka has generally been a deficit State so far as the electricity is
concerned. Similarly, there is evidence on record which is not in dispute that F
supplies have been made to other States also; for example State of Tamil
Nadu. There have been periods of surplus of electricity in the State of Kerala.
Ext. P. 25(h) is a statement relating to supplies of electricity by the State of
Kerala to other States during the period from April, 1982 to March, 1987. It
also shows that at times the State of Kerala has also imported electricity from G
other States though significantly low in quantity during certain periods. It is
thus clear that this practice of supply of electricity by the State of Kerala to
the other States has been in vogue. There have been negotiations from time
to time in that connection, between ihe Minister, Power & Energy, State of
Kerala and Minister~ of other States including Railway Minister for supply
of electricity to Wheel and Axle plant. H
)
448 SUPREME COURT REPORTS [2003] 2 S.C.R.

A As it concerns the supply of electricity in question, we find that a
meeting took place between the Minister for Power, State of Karnataka and
the Minister for Power and Energy, State of Kerala on 28.9.1984 at the
instance of the former. It is evident from Exh.P-56(a) a letter dated 28.9.84 ....
written by the Chairman, K.E.B. (Karnataka Electricity Board) to the Secretary
to the Government, Public Works and Electricity Department, Bangalore,
B State of Karnataka informing that he alongwith Minister for Power, State of
Kamataka had been to Kerala to explore the possibility of getting some
assistance for supply of electricity and in that connection they had met the
Minister A 1 on 28.9.1984. We feel it would be appropriate to reproduce the
text of the letter since it has been heavily relied upon by the prosecution also
C to show that the appellant had agreed to supply electricity to Mis. GIL. The
text of the letter is quoted as below :

"As you are kindly aware of the fact that the Hon '~le Minister for
Power and myself had been to Kerala to explore the possibility of
getting some assistance. We met the Minister on the evening of 28th
D instant and the discussions were cordial. The Minister for Power in f
Kerala said that Kerala is still interested to assist Kamataka to the
maximum extent possible. He also mentioned that due to poor rain-
. fall in the recent weeks, the assistance to Tamil Nadu has been scaled
down considerably. He said that ifthe North East monsoon improves,
E it may be possible to give some assistance and this will be known
only by the end of October 1984. When we raised the issue of Kerala
share of 58 MWs from Ramagundam Thermal Project being passed
on to Karnataka, he said, he has an open mind on this subject. He
wanted the discussions to be continued at Bangalore with our Hon'ble
Chief Minister to discuss this issue as well as ofMananthvady project.
F He pointed out that if this project came through, the beneficiary would
be, Karnataka itself, as most of.this energy will have to be utilised in
Kamataka as Malabar area though an industrial area, has not been
fully developed. I do not know the merits and de-merits of this case
but I am convinced that the Hon'ble Minister is particular about this.

G Though he has agreed to spare some energy to Mis. Graphite
India, he expressed inability to give any power during the peak hours.
But, Mis. Graphite India needs power during peak hours also. This
problem will have to be sorted out after further examination ..... "

H It is clear from the above letter that the State of Karnataka was in need of
R. BALAKRISHNA PILLAI v. STATE [BRIJESH KUMAR, J.] 449

importing electricity and in that connection the Minister and the Chairman of A
the Electricity Board, Karnataka met A I. According to the said letter A I had
indicated that the State of Kerala would assist in the matter to the maximum
possible and also indicated the fact that assistance to State of Tamil Nadu has
been scaled down. It is also clear that it was given out that some assistance
was possible depending upon improvement in North East monsoon, which B
will be known only by the end of October, 1984. Agreeing to this kind of
assistance A I had also made a reference to the issue of Kerala share of 58
MWs from Ramagundam Thermal Project as well as issue relating to
Mananthvady project. It is significant to note that the Chairman, Electricity
Board, Kamataka writes though A I had agreed to spare some energy to
,_ Mis. GIL but he had expressed inability to giv~ any power during the peak C
hours. The Chairman, KEB then informed the Secretary to the Government,
Department of Power, Government ofKarnataka that Mis. GIL needed power
durihg peak hours also and this problem was to be sorted out. The above
.. letter clearly shows that the State of Kamataka had approached the State of
Kerala through A I for assistance in supply of electricity. It also emerges
from the above letter that emphasis was at the instance of the State of Kamataka D
for supply of energy to Mis. GIL in response whereof A I is said to have
agreed to spare some energy but expressed his inability to provide it durlng
peak hours. The Kamataka authorities do not seem to have given up and
decided to pursue with the State of Kerala to sort out the problem about the
supply of energy to Mis. GIL during the peak hours. It was a talk at the E
Ministerial level between the two States. The Ext. P.56(a) however, does not
indicate any assurance of supply of electricity to the State of Kamataka much
less for Mis. GIL particularly. This letter hardly shows any interest on the
part of A I or A2 to take into account the requirement of Mis. GIL. The
emphasis seems to be on the part of the State of Kamataka to stress upon the
requirement of Mis. GIL. There seem to be representatives of the two States F
and their Electricity Boards. No other party seems to be there in the meeting.

The other relevant document upon which great emphasis has been made is
Ext.P-22(a). It is a letter dated January 24, 1985 written by the Chief Minister
of State of Kamataka to A I. It will again be beneficial to quote the letter G
written by the Chief Minister. It is as follows:

"The power position in Karnataka is very acute due to several reasons
including the poor monsoons in Sharavathi basin. I am thankful to
you for having agreed to supply power for two specific industries
situated in Kamataka.
H
450 SUPREME COURT REPORTS [2003] 2 S. C.R.

A Three or four industries which are critical in importance and from
the State point of view are suffering from the crippling shortage of
power. These are Mls.Dandeli Ferro Alloys, Calcium Carbide at
Bellary (Mls.Panyam) and one or two others. 1 understand the Speaker
of Karnataka Legislature had a talk with you in this regard and the
Secretary, Public Works & Electricity Department had sent a telex
B message. May I request you to kindly supply from your grid energy
to an extent of only five million units per month for the next three
months. I am sure since the quantum we need is insignificant you will
. be able to help us out."

C The above letter also depicts the scenario of shortage of electricity
_,
power in the State of Karnataka and it was requested to extend some more
help. It is also evident that there was nothing which was kept secret in the
matter of supply of electricity to the State of Karnataka by the State of
Kerala. The negotiations were at the level of the Ministers concerned of the
respective States and the Chief Minister· of the State of Karnataka. There
D seems to be nothing which could be said to be a guarded secret. Rather it
appears that it was quite usual for such kind of import and export of electricity
during the times of crisis. The prosecution however, draws an inference that
A I had agreed to supply electricity to two specific industries situated in
Karnataka though none of the two are specifically named in the letter. Even
E if they are taken to be Mis. GIL and Wheel and Axle Plant, it was the Chief
Minister of Karnataka who expressed thanks for the same. The background
as to what transpired in the meeting of 28.9.84 cannot be overlooked. It
shows State of Karnatka was keen and interested in providing energy to its
heavy industries. But it does not mean that KEB was not giving supplies to
other industries out of imported Kerala energy viz. industries other than
F Mis. GIL and Wheel and Axle Plant. According to the .letter, A I is only said
to have agreed for supply which implies initiative and request from the other
end viz. Karnataka authorities. Non-reply to the letter of the Chief Minister
dated January 24, 1985 by A I is one of the main circumstance., the prosecution
banks upon to infer that supply was made by the Kerala Electricity Board to
Mis. GIL which inference we feel, cannot be drawn. Non-reply of letter is
G inconsequential, more particularly in view of the letter referred to earlier,
namely Ext.P-56(a). Agreement to supply electricity was to the State of
Karnataka/KEB on the request made and need emphasised by the Karnataka
Government and none else.

H On behalf of the prosecution Ext.P.44(m) is also referred to, which is
I
I

~

R. BALAKRISHNA PILLAI v. STATE OF KERALA [BRIJESH KUMAR, J.] 451

a letter dated 6.3 ..l 995 containing the statement of supply of electricity to A
Wheel and Axle plant and Mis. GIL, Bangalore during the period from
October, 1984 to January, 1985. From the said document it was sought to be
shown that major part ofihe electricity supplied by .Kerala State was consumed
by Wheel and Axle and Mis. GIL but it is to be noted that it is not the total
supply which has gone to Mis. GIL. A note contained on the foot of one of
the pages of the said exhibit indicates that only 34% of the energy supplied B
to Kamataka by Kerala was utilised by Mis. GIL and 66% was utilised by
other consumers. There is no dispute about the fact that electric energy was
imported by the State of Karnataka from the State of Kerala out of which the
State of Kamataka had made energy available ro Mis. GIL and Wheel and

·- Axle plant amongst its other consumers. Mis. GIL and Wheel and Axle plant C
seem to be heavy industries catering to the needs of the Indian Railways and
to other industries in general including industries in the ·neighbouring States.
·Their consumption of electricity and requirement may be heavy. Therefore,
the State .of Karnataka seemed to be quite anxious for supply of energy
keeping in view their requirement amongst other industries as indicated in
the letter of the Chief Minister. Whatever may be the view of some officers D
of Mis. GIL but the fact remains that there is nothing to indicate that electricity
was supplied by the State of Kerala to or exclusively for Mis. GIL. We feel
that, it is hardly material for this case that the State of Karnataka supplies
energy produced by itself to any particular industry or consumer and the
energy imported from other States to other industries or vice-versa or both E
in some proportion, it is a matter of their policy. The State can always
subsidize or fix the rates at which energy is to be supplied to its consumers.
The electrical energy was supplied by the State of Kerala to the pool of
Kamataka Electricity Board.

Next we find that so as to fasten the responsibility of quantifying the F
amount of energy to be supplied to Mis. GIL learned counsel for the respondent
has heavily placed reliance upon Ext.P-56(e). It is a letter sent by PW-22 Shri
Rudrappa, Chairman, Electricity Board, Kamataka dated 12.12.(sic.) to
Chainnan, KSEB i.e. A2 stating therein that KSEB had to supply about 25
MUs of energy per day to Karnataka towards energy assistance agreed for
Wheel and Axle plant and Mis. GIL. A grievance was made that short supplies G
were being made and it was requested that instructions might be issued to
increase the supplies to cover the assistance assured to the two industrie~ and
:!br further SJfPJy of eneigy 1D meet the requirement in Kasargod area. It is
again not a statement of or on behalf of KSEB, A 1 or A2 eannarking any
definite amount of electricity to Wheel and Axle plant and Mis. GIL. This H
452 SUPREME COURT REPORTS [2003] 2 S.C.R.

A letter also talks of supply of energy by Kerala for Kasargod area. Ir is though
mentioned in the letter "towards the energy assistance agreed to Wheel and
Axle plant and Mis. GIL" but there is no document, letter or statement or
material to indicate that any definite quantity was ever earmarked for supply
to any of the two plants, namely Wheel and Axle plant or Mis. GIL. Supplies
B to WAP is not subject matter of charge. The energy was to be supplied to the
State of Kamataka on its request made to A I. On their own showing as per
Ext. P.25(a) no assurance was given by Al and A2. All that was assured was
that the State of Kerala would try to help out as much as possible keeping
in view the monsoon situation. Non-reply to the letter Ext. P-56(e) is also
sheet-anchor of the prosecution case. We find that non-reply to the said letter
C is hardly of any consequence. On the contrary, the letter demonstrates that
the KSEBIState of Kerala was not supplying the alleged assured electrical
energy, how it can then be inferred that A I or KSEB was interested or keen
to supply energy to any one particular industry. Supply for Kasargod area is
also demanded. Non- reply to the letter only shows disinterestedness of the
KSEB, Al and A2 to any such kind of demand raised on behalf of KEB. It
D seems to be in conformity with the response of A 1 given in the meeting held
on 28.9.1984 with his counterpart of the State of Karnataka. The assistance
was assured only to the extent possible and it was not for any particular
industry. In our view Ext.P-56(e) also fails to lead to any inference that Al
or A2 had assured or promised or had earmarked any amount of quantity of
E electrical energy to be supplied to the State of Kamataka much less to Mis.
GIL.

We also find that in Exh.P-57 which contains the Minutes of the Meeting
and the Resolutions of the KEB, at one place it is indicated KSEB agreeing
to supply certain quantity of energy for Mis. GIL. Firstly, it is to be indicated
F that such mention of KSEB agreeing for certain quantity of energy for Mis.
GIL is based on their own discussion or deliberation in the meeting. Secondly,
all that it is said is that "KSEB has agreed" i.e. to say the demand for supply,
keeping in mind the needs of Mis. GIL, must have come from KEB. It is not
that KSEB had been earmarking definite quantities of supplies of energy for
G Mis. GIL. It is the way of writing which was completely an internal affair of
KEB itself on the basis of which no inference can be drawn that KSEB had
earmarked certain quantity of energy to be supplied to Mis. GIL. On the
other hand there· is a categorical denial that there was any commitment on the
part of KSEB to supply energy for Mis. GIL. This would be evident from
Exh.P-7(d), a letter written by the Chief Engineer (MMC), KSEB. It is also
H evident that Kerala/KSEB had not been supplying energy according to what
R. BALAKRISHNA PILLAI v. STATE OF KERALA [BRIJESH KUMAR, J.] 453
is indicated in the Minutes of the Meeting and correspondence of KEB. A
Further, Exh.P-43(a) which is a letter written by Mis. GIL to the Chairman,
KEB for fixing lower rate for imported energy and Exh.P-43(b) which is
summary of proceedings of meeting held in the chamber. of Minister for
Finance (Karnataka) on 17.9.1984 to review the power position, clearly indicate
that allocation of electrical energy as well as the price to be charged was a B
matter between the State of KarnatakalKEB and its consumers which included
Mis. GIL as well. The Kerala StatelKSEB has no say in the matter.

Coming to the oral evidence in support of prosecution case, a reference
has been made to the statements of PWs 22, ?.3 and 45. As indicated earlier,
it may be recalled that in his statement PW22 has stated about meeting C
between the Minister of Karnataka with the Power Minister of Kerala. He
was present in the meeting with Minister of Karnataka. The main purpose
was to request Kerala Government to help out Karnataka State in its crisis of
power shortage. Learned State counsel draws our attention to the part of his
statement where he said that he could not recollect definitely but some
additional energy was given for Mis. GIL by KEB. He further stated that D
energy was supplied on KSEB account, i.e. to say from the energy supplied
by Kerala to Karnataka. This statement of PW 22 does not lead to any
conclusion of supply of energy to Mis GIL by KSEB. There is nothing which
goes against A I and A2. During the discussion on hie question of supply of
energy by Kerala State to Kamataka it is quite possible and natural as well, E
that Karnataka Minister may have mentioned the names of its big consumers
of energy to emphasise the gravity of shortage situation and huge requirement
of electricity. On such stray reference during the talks it cannot be concluded
that the supply was made to Mis GIL. On such an analogy to whomsoever
imported energy was disbursed or allocated or supplied by KEB or State of
Karnataka, it could be said that electricity was supplied to each of them by F
Kerala StatelKSEB, A I or A2. Nothing has been indicated in the statements
of PWs 23 and 45 to reach to a conclusion that the supplies were not made
to ~he State of Karnataka on its request but to Mis GIL. On the other hand,
we find that PW-23 has stated that the total current received from Kerala was
taken to the general pool and was then allotted and distributed .according to G
the instructions of the Chief Minister. He further stated that Mis. GIL was
one amongst the eight industries to which Karanataka Government allotted
and earmarkJd energy. PW-14 who is an officer of Mis. GIL ·stated in his
statement "Kerala Government has never given any ·current to us. Kerala
Government has not entered into any agreement with any authority to supply
current to our industry''. H
454 SUPREME COURT REPORTS [2003) 2 S.C.R.

A A reference may also be made to Ext.P-44(c), a letter written by the
Chief Engineer, Electricity (General) KEB to Mis. GIL. Through this letter
it was intimated to Mis. GIL that during the months of October and November,
I 984 the import of energy from Kerala had been grossly inadequate. Cut in
electricity consumption had to be imposed and in case supply of energy from
Kerala was not resumed, Mis. GIL might have to restrict its consumption to
B the entitlement fixed. It further said that Mis. GIL might consider the possibility
of using its good offices. with Kerala authorities for resumption of supplies.
It is evident from this letter that it is not that Kerala was readily supplying
energy as required by the State of Karnataka or as may have been needed for
Mis. GIL, rather it goes to substantiate that Kerala authorities (A 1) had
C indicated that their help would only be to the extent maximum possible,
depending upon the ensuing monsoon etc. What is more importantly revealed
is that Karnataka authorities wanted Mis. GIL also to make efforts with
Kerala authorities for supply of energy to Karnataka. In this background even
if Mis. GIL is assumed to have made some efforts with the Kerala authorities
on the asking of Karnataka authorities for supply of energy to Karnataka, so
D that it may also be benefited, we feel it would not mean that the appellants
or other authorities in Kerala supplied energy to Mis. GIL. It is evident that
State of Karnataka was more keen and anxious about supply of energy from
Kerala and had very much in its mind requirement of Mis. GIL as well. PW
45 who was also present at the time of meeting held on 28.9.1984 between
E the Ministers of Power Karnataka and Kerala, stated that the Karnataka State
had requested for supply of energy looking to the needs of power intensive
industries including Wheel and Axle plant and Mis. GIL. The Minister Al
had only said to Karnataka Minister that he would look into the demand. In
regard to the meeting held on 16. l 0.84 in the chamber of the Chief Minister,
Kamataka and the Kerala authorities where PW 45 was present being Secretary,
F Power, State of Kerala, stated that the meeting was in relation to inter-state
waters. He further stated that specifically matter of supply of power to Mis.
GIL was not told. Again in regard to another meeting stated to be held on
9.2.85, the witness stated that main topic of discussion was Mananthavady
project and among other things discussed, Karnataka government had made
G a request for supply of electricity for some industries in Karnataka which
included Mis: GIL also , but no decision was taken. The witness also ·stated
that Minutes of the Meeting held on 28.9.84 were not prepared but he
specifically denied the suggestion that any instructions were given by A I not
to prepare the Minutes. The fact needs no mention that a Minister is not
supposed to prepare the minutes of the meetings. PW 45 also stated that
H Kamataka as deficit State had been taking power from Kerala based on
R. BALAKRISHNA PILLAI v. STATE OF KERALA [BRIJESHKUMAR, J.] 455
agreement entered into sometime in 1979-80. At yet another place the witness A
has stated that sometime in 1984 there was an agreement to s.upply power to
Wheel and Axle plant, Bangalore at the instance of the Minister for Railways.
PW 45 has also made a statement to the effect "it has not come to my notice
that any condition was attached with respect to the current that was supplied
by Kerala to Karnataka". He further stated that energy imported by Karnataka
from Kerala could be utilised by Karnataka in any manner they wished. But B
Kerala could make recommendations as was indicated in Ext.D-7 (document
marked subject to proof "it is a letter from Kerala Industries Department
written in the year 1980"). To yet another question "Has Kerala got anything
to do with the allotment made by Karnataka Govt. of the Kerala Power as
stated in Ext.P.22(b)?". PW 45 replied: "The allocation was a matter for the C
Karanataka Electricity Board and not Kerala Govt." The witness denied that
there was any undertaking by the Karnataka Govt. for supply of current to
Mis. GIL. The above facts have been stated only by a prosecution witness.

From the evidence of prosecution as indicated above, it does not emerge
that Kerala Govt./KSEB or A I and A2 made any commitment or gave any D
assurance or earmarked any quantity of electrical energy to Mis. GIL, strictly
spea~ing not even to the State of Karnataka. Once the supply is made by the
State of Kerala it is for the State of Karnataka/K.E.B. to make distribution of
the electricity received, in the manner it may deem fit and proper. It is for
the State of Kamataka to consider the requirement of energy for different E
purposes, different sectors and industries looking to its priorities and policies
.)
and the need of industrial and economic growth of the State. It is quite
evident from the material on the record that ·state of Karnataka had been
quite concerned to make electricity available to the industries in the State
particularly heavy industries like Mis. GIL and Wheel and Axle Plant etc.
F
Next we come to the question of fixation of price for supplies made
to Mis. GIL by the KEBIKarnataka Govt. So far the State of Kerala is
concerned it supplied electricity to the State of Karnataka at the flat rate of
42 paise per unit. Learned counsel for the respondents has at the outset
submitted that there is no grievance about the rate of electricity, as agreed for
supply of energy by Kerala to Karnataka. The supply of electricity imported G
from Kerala was called high cost energy. KEB had fixed its rate at 80 paise
per unit for its consumers. The lower rate as charged by KEB from Mis. GIL
is not even alleged to have been fixed at the instance of the Kerala authorities,
KSEB or the A I or A2. It appears that Mis. GIL wrote to the Chairman, KEB
for supply of high cost energy to it at a lower rate and in that connection it H
456 SUPREME COURT REPORTS [2003] 2 S.C.R.

A referred to the rate charged in the year 1980. That part of the letter may be
extracted as follows :

"During 1980 second quarter we have received 27 lakh units of power
per month from Kerala (Ref.TICOMIECl5515054 dt.7.6.80). We were
charged on no loss no profit basis .that is 37 paise per unit inclusive
B of taxes when .the Kerala rate was 28 paise on Kamataka. Due to two
tier system of pricing for our normal allocation of power at the normal
rate of 28 paise plus taxes and duties for 60% and 78 paise plus taxes
and duties for 40% our average energy cost at present is 48 paise plus
taxes and demand charges. Now. if we are charged 80 paise plus
c extras for the additional 40 lacs, our cost of energy will go up beyond
our capacity to pay which will cripple our unit to further sickness."

It has also been mentioned in the letter that Mis. GIL had also played some
role in negotiating earmarked power on barter basis from Kerala for their
industry as per the advise of the government and that fact should not be
D overlooked. It was also emphasised that being situated in Kamataka the
industry was contributing to the industrial infrastructure of the State and
providing employment and getting additional revenue to the State Government.
It appears· looking into the request made by M/s. GIL and the precedent in
the year 1980, the KEB calculated the rate at which electricity could be
E supplied to Mis. GIL. Ext.P-57 is the copy of the resolution of KEB fixing
the rate of energy for Mis. GIL. Wheeling charges were fixed by KEB at the
rate of 20% as against 10% charged from Wheel and Axle plant since .Mis.
GIL was also to draw energy during peak hours. In this manner after making
calculations a decision was taken by the KEB to supply the high cost energy
to Mis. GIL at the rate of 64 paise per unit instead of 80 paise. It was the
F decision of the KEB itself which made its own calculation on the basis of
w.hich it decided to supply the energy received from KSEB at the rate of 42
paise per unit, to Mis. GIL at the rate of 64 paise per unit. It was 22 paise
per unit more than, at which KEB was purchasing it from Kerala. In the
matter of fixation of the price chargeable in Kamataka the KSEB or A I and
G A2 had no role to play at all. It would also be evident from the representation
made by Mis. GIL that on earli~r occasions also concessional rate was charged
by KEB from Mis. GIL on the supplies of imported energy. KEB may levy
surcharge or subsidize any particular sector, it would be a matter relating to
their policy. KSEB has not charged the State of Kamataka at lower rate for
the energy made available by KEB to Mis. GIL out of the supplies of KSEB.
H The State of Kamataka does not seem to have made any grievance in any
i
~.

R. BALAKRISHNA PILLAI v. STATE OF KERALA [BR!JESH KUMAR, J.] 457
quarter at all, for supply of high cost energy by it to Mis. GIL at a lower rate. A
For the concession made by Karnataka StatelKEB, like on some earlier
occasions, giving some benefit to Mis. GIL, there is hardly any reason to
criminally prosecute the appellants for it. The charge as against Al and A2
regarding pecuniary benefit caused to Mis. GIL has nothing to do whatsoever
with Al and A2 in any manner, none suggested much less proved. The State B
of Karnataka/KEB appear to have provided such concession to Mis. GIL and
Wheel and Axle Plant and may be to others also on earlier occasions. It was
a matter for the State of KarnatakalKEB alone to be concerned about.

Next, in support of their case that the appellants acted illegally and in
violation of law in supplying the electricity to Mis. GIL, reliance has been C
placed on Section 43 of the Electricity (Supply) Act, 1948. Section 43 reads
as under:

"43. Power of Board to enter into arrangements for purchase or
sale of electricity under certain conditions.- (1) The Board may
enter into arrangements with any person producing electricity within D
the State for the purchase by the Board, on such terms as may be
agreed, of any surplus electricity which that person may r~ able to
dispose of. (2) Where a sanctioned scheme so provides, the Board
may, on such terms as may be agreed upon, enter into arrangements
with any Government or person for the purchase or sale of electricity
to be generated or used outside the State: Provided that the Board E
may not enter into such arrangements with any such Government or
person without the consent of the State Government, or into
arrangements with any such person without the consent of the
Government of the State within which the electricity is to be generated
or used."
F
The other provision which has been pressed into service, to make out
a case of violation of rules, Rule 68 of Kerala State Electricity Board Rules,
1957 has been referred to which provides "sale of electricity outside the State
shall be with the prior consent of the government". It would be relevant to
note that both the above noted provisions relate to the power of the Board to G
sell or purchase electricity. According to sub-section (2) of Section 43 the
Board is authorised to enter into an arrangement with any government or
person for sale or purchase of electricity for use outside the State provided
the consent of the state government is taken for any such arrangement. Rule
68 also puts similar bar while providing for sale of electricity outside the
H
!
·11-
458 SUPREME COURT REPORTS (2003] 2 S.C.R.

A State that it shall be with prior consent of the government. In the case in hand
it is amply clear that the arrangement of sale and supply of electricity from
· Kerala to Karnataka has been negotiated at a level higher than the Elec,tricity
Board, to. be specific at the level of the two state governments through their ....
respective Ministers. Secretary, Power, Kerala Government was also there. It
B is evident from the documents referred to earlier that the Minister for Power,
State of Karnataka had approached the Power Minister of the State of Kera la
for exploring possibility of supply of electricity to the State of Karnataka
which was then facing acute deficit of electric energy. The Chairman of the
KEB who was accompaqying the Minister of Power, State of Karnataka
apprised of whatever transpired in the meeting between the two, to the
C Secretary, Department of Power, State of Karnataka. So also it is on the
record that a subsequent meeting also took place between the Ministers as
well as with the Chief Minister of Karnataka. The supply of electricity from
Kerala to Karnataka was in pursuance of and under the arrangement arrived
at, as an outcome of the negotiations between the Ministers of the two States
and the Chief Minister of State of Karnataka. The Chairmen of the Electricity
D Boards of the two States have also been present during the negotiations along
with Secretary, Power, Kerala Government. In thesr circumstances, the
provisions of Section 43 of the Electricity (Supply) Act, 1948 and Rule 68
of Kerala State Electricity Board Rules, 1957 relating to consent of State
Government for any such arrangement would not be attracted. Learned counsel
E appearing for the appellants- have also drawn our attention to the Rules of
Business of the Government of Kerala. Rules 4, 5 and 9 of the Rules of
Business read as under :

"4. The Business of the Government· shall be transacted in the
Department specified in the First Schedule, and shall be classified
F and distributed between those departments as laid down therein.

5. The Governor shall, on the advice of the Chief Minister, allot the
business of the Government among the Ministers by assigning one or
more departments to the charge of a Minister :

G Provided that nothing in this rule shall prevent the assigning of
one department to the charge of more than one Minister.

9. Without prejudice to the provisions of Rule 7, the Minister in
charge of a Department shall be primarily responsible for the disposal
of the business appertaining to that Department."
H
R. BALAKRISHNA PILLAI v. STATE OFKERALA [BRIJESHKUMAR, J.] 459
First Schedule referrable to Rule 4 quoted above contains the Department of A
Power at Serial No.23 of the List. The Minister in charge of the Department
is primarily.responsible for disposal of business pertaining to that department
as provided under Rule 9 of the Rules ot Business. In this background it is
submitted that none else but A 1 as Minister, Power would be competent to
give consent of any such arrangement. Learned counsel for A 1 has referred B
to certain decisions on the point of Rules of Business, viz. Mis. Bijoya Lakshmi
Cotton Mills Ltd v. State of West Bengal and Ors., AIR (1967) SC 1145,
Samsher Singh v. State of Punjab and Anr., AIR (1974) SC 2192, in support
of the contention that ministerial decision according to Rules of Business
would be the decision of the Governor. We do not think it would be necessary
to go further into the detail as the position under Rules of Business is quite C
- clear. It has not been denied by the other side that Minister would be competent
to give consent according to the Rules of Business. But the submission is that
there is no document or formal order of consent for arrangement of supply
of electricity. A reference has been made to the statement of PW 17 the
Chairman, KSEB during the period 1987-88, who stated that to his knowledge D
there was no sanction of the Government of Kerala to supply Kerala energy
to Mis. GIL. At this stage it would also be necessary to point out that there
has not been any arrangement of supply of electricity between the State of
Kerala/KSEB and Mis. GIL. Like Mis. GIL, there would be many recipients
and consumers of Kerala Electricity supplied to KEB/Kamataka. The Minister
of Power, State of Karnataka had initiated the negotiations with Al, the E
Power Minister of State of Kerala for import of electrical energy. From the
documents referred to earlier, it is also clear that the State of Kamataka has
been emphasising about shortage of electricity keeping in view need of
Mis. GIL as well, apart from other industries in Kamataka. The price of 42
paise per unit was settled with the State ofKamataka/KEB and it is nobody's F
case that the same was not being paid accordingly by Karnataka to the Kerala.
On its part the State of Karnataka was selling high cost energy (imported
energy) at the rate of 80 paise to its consumers in Karnataka in place of 42
paise at which rate it had bought from Kerala and so far Mis. GIL is concerned
it was at the rate of 64 paise per unit. It was a transaction between State of
Karnataka/KEB and its consumers including Mis GIL. There was thus no G
occasion of any document being there showing consent of government of
Kerala for supply of energy to Mis. GIL. There would obviously be none. In
this light, the statement of PW 17 who was the Chairman of KSEB during
1987-88, to the effect that there was no sanction of the Government ofKerala
to supply power to Mis. GIL has no material bearing or relevance. The H
\

)-
460 SUPREME COURT REPORTS [2003] 2 S.C.R.

A supplies were to the State of Karnataka/KEB and the decision had been taken
at the higher level namely, at the level of the government itself. Therefore,
it is not correct to say that there was violation of Section 43(2) of the Electricity
(Supply) Act, ) 948 or Rule 68 of the Rules. The supply of electricity made
under the arrangement arrived at on negotiations entered into between two
B States' does not need any prior consent uls 43 of Electricity (Supply) Act,
1948 or under ·Rule 68 of the Rules. These provisions are not attracted.
Hypothetically even it is assumed that prior consent of Government was
required in the facts and circumstances of the case in hand, it would be
irresistably taken to be implied.

C The other aspect of the matter which has been emphasised on behalf of
the prosecution is that the appellants did not enter into any written agreement
and that no memo of meetings was prepared. There is no denial of the fact
on behalf of the appellants that no formal agreement was drawn or entered
into nor the fact that no minutes of the meetings were prepared. Undoubtedly,
it would have been only proper way to enter into such an arrangement and
D to act upon the same thereafter. But the fact is that no written agreement was
prepared. At the same time, it is also a fact that an arrangement was arrived
at and according to the same electricity was supplied to the State ofKamataka/
KEB at a price of 42 paise per unit. There is no denial or objection to the
rate fixed nor there is any grievance that State of Kamataka had not paid for
E the electricity supplied by State of Kerala/KSEB. Energy has been supplied
and agreed price has been paid. Out of the Kerala energy supplied to the
State ofKamataka/KEB, a part of it was consumed by Mis. GIL also amongst
its other consumers. KEB was paid for energy supplied by it to its consumers
including Mis. GIL. Once the energy is supplied to the State of Karnataka/
KEB it would be for them to disburse it in the manner they may think it best
F in their interest. It would also be evident from a letter of the Chief Minister
of Kamataka dated May 8, 1985 addressed to A 1 filed as Annexure P-9 to
the affidavit of Chairman, KSEB before the Enquiry Commission (Vol.II, P.
304 in Criminal Appeal No. 372 of 2001) that electricity was being earmarked
by the Kamataka authorities to Mis. GIL and other industries.
G
There is nothing to indicate that there was any restriction from any
comer limiting use of Kerala energy supplied to the State of Karnataka by
any particular industry or Mis. GIL. As indicated earlier, the State of Karnataka
itself was quite keen to have substantial supply of energy for its major
industries including Mis. GIL and Wheel and Axle Plant etc. Loss if any at
H all, though there is no grievance to that effect was that of the Karnataka
R. BALAKRISHNA PILLAI v. STATE OF KERALA [BRIJESH KUMAR, J.] 461

Government while it decided to supply energy to Mis. GIL at a lower rate as A
compared to its other consumers. So far the State of Kerala is concerned it
sold electricity to the State of Karnataka at the rate of 42 paise irrespective
of the fact that the same was utilised by Mis. GIL and Wheel and Axle plant
or any other sector or segment of the consumer and at whatever price.
Therefore, the fact that no formal written agreement was entered into will not B
be of any significance particularly so far the criminal case is concerned. Per
se it entails no criminal liability and in the set of facts of case in hand it does
not even constitute any incriminating circumstance to lend any support to the
prosecution case.

There is no occasion to draw any inference due to non-execution of a C
written agreement that the supplies have been illegally made with dishonest
intention. There is nothing to indicate that Karnataka State/KEB could not
make available electricity to Mis. GIL like it did to its other consumers. As
a matter of fact electrical energy was only continued to be supplied to
Karnataka/KEB during the relevant period as well with upward revised rates
to the advantage of the State of Kerala. D
We are not undermining the requirement or necessity to execute an
agreement in writing for any contract entered into for and on behalf of State
or such bodies like KSEB but such omission, in the facts and circumstances
of the case, would not lead to any inference of commission of any offence.
It is though always necessary that an act must be performed in a manner it E
ought to be under the law. The State Government may of course take steps
as may be necessary to see that such omissions may not occur and such
transactions may take place by means of a written agreement. Otherwise,
there always remains a risk of the other party resiting from the contract or
may raise disputes about the terms and conditions of the agreement. A written F
instrument avoids the scope ofuncertainty and leaves no room for speculation
about the terms and conditions of a contract.

Yet another circumstance which has been referred to and so found by
the High Court is that A 1 and A2 supplied electricity to the State of Karnataka
at a time when there was scarcity of energy in the State of Kerala. We have G
already indicated earlier that learned counsel appearing for the respondents
has very fairly submitted that virtually there was no evidence on the record
to show that there was scarcity of electricity in Kerala during that period. On
the other hand, it has been pointed out by the learned counsel for A 2 that
there was no scarcity in Kerala. It has been pointed out that sometime during
the period prior to the relevant period of supplies there had been some cut H
462 SUPREME COURT REPORTS (2003] 2 S.C.R:

A imposed on supply of electricity in Kerala but not during the relevant period.
Prosecution could show nothing to substantiate the finding of the High Court
regarding scarcity of electricity in Kerala during the relevant period. The
finding is thus vitiated due to Jack of evidence to substantiate the same.

A reference has been made to the statement of PW 37 Assistant Engineer,
B in sub-Division, Bangalore, regarding meter reading about supplies made to
Mis. GIL, out of the energy imported from Kerala as well as about the
preparation of the bills on the basis thereof. It is a matter for the State of
Kamataka or KEB to keep account of the energy supplied to Mis. GIL, since
they have obviously to realise the charges of electricity consumed by Mis.
C GIL It negatives the prosecution case that Kerala/KSEB sold energy to Mis.
GIL. It is an exercise in futility to show and establish that the Kerala energy
was being consumed by Mis. GIL as well. It is nobody's case that the imported
energy could not at all be consumed by Mis. GIL like others do. The Sta.te
of Kamataka/KEB ha<l to keep an account of imported energy viz. high cost
energy which was being supplied to its consumers so as to charge them for
D the same accordingly.

We also find that there is nothing to indicate that KSEB, A 1 and A2
had earmarked or fixed any quantity of electricity for Mis. GIL. One or two
letters (referred to and dealt with earlier) in which officials of KEB have
written that some particular quantity of electricity was to be supplied to
E Mis. GIL and non-reply of such letters would hardly lead to any such inference
or conclusion that any fixed quantity of electricity was earmarked for supply
to Mis. GIL by Kerala/KSEB. Learned counsel for the respondent has
particularly relied upon the statement of PW 22 which reads: "Whether any
energy was spared as agreed to by A 1 as stated in P.56(a) letter to be supplied
p to Mis. GIL (Q)?" "I cannot recollect definitely. But some additional energy
was given to Mis. GIL by KEB (A)''. That energy was supplied on KSEB
account. By KSEB account I mean from current supplied by Kerala to
Kamataka''. It only confirms the fact that Kerala/KSEB supplied energy to
KamatakalKEB alone. The above statement negatives the allegation of
earmarking of any definite quantity of electrical energy to Mis. GIL by
G KSEB, the additional energy was given to Mis. GIL by KEB. Right from the
very beginning as idicated earlier, the State of Kamataka was quite anxious·
to make available the electricity to its heavy industries including Mis. GIL
and Wheel and Axle plant. It is not understandable how it leads to inference
or to the conclusion that Kerala StatelKSEB sold energy to Mis. GIL.
H Therefore, to fasten the responsibility or• coming to any conclusion that any
'~
I
i
R. BALAKRISHNA PILLAI v. STATE OF KERALA [BRIJESH KUMAR. J.] 463
amount of energy was earmarked and sold in definite quantity to Mis. GIL A
I by KSEB or A I and A2 would only be conjectural and based on surmises.
Such a finding or inference cannot be sustained.

On the basis of the discussion held by us, our conclusions are as follows:

I. That Electricity was being supplied by the State of Kerala to B
State of Karnataka and other States since long before the relevant
period.
2. That the Minister for Power and Energy, State of Karnataka
along with Chairman ofKarnataka Electricity Board approached
the appellants seeking assistance to help out during the crisis of
scarcity of electricity in their State. They had a meeting in that
c
connection with Al and A2 on 29.9.1984 and laid emphasis
upon its dire need also keeping in view the need of its industries
and Mis. GIL as well as Wheel and Axle Plant
3: That the letter written by the Chairman, KEB to the Secretary,
Power, Government ofKarnataka dated 29.9.84 indicates that no
D
firm commitment was made by the State of Kerala/KSEB for
supply of electricity except some assurance for assistance to the
maximum possible. This letter also indicates that it was told that
during peak hours it was not possible to provide electricity for
Mis. GIL. E
4. That the supply of electricity was contmued in pursuance of the
talks initiated by the Minister of Power and Energy, Karnataka
but at a revised rate which was enhanced to 42 paise per unit.

. 5. That the imported Kerala energy was priced at 80 paise per unit
as high cost energy by the State of Karnataka/KEB at which rate F
it supplied to its consumers. But on representation of Mis. GIL
to the State of Karnataka/KEB after calculation, lowered the rate
of high cost energy to 64 paise per unit for Mis. GIL.
6. That it was concern of the State of Karnataka/KEB to fix any
rate of imported energy and its disbursement to its consumers as G
it would find fit and proper.
7. That no fixed quantity of electricity was earmarked or sold by
the State of KeralalKSEB to Mis. GIL. Mis. GIL was supplied
electricity by the State of Karnataka/KEB @ 64 paise per unit as

·- fixed by KEB. H
464 SUPREME COURT REPORTS (2003] 2 S.C.R.

A 8. That it is nobody's case that State of Karnataka or anybody felt
aggrieved by fixation of lesser rate of high cost energy by KEB
for M/s. GIL.
9. That since the arrangement was arrived at, in pursuance-.of
negotiations at the Ministerial level of the two States and the
B Minister of Power, State of Kerala as Minister in charge being
authorised to take decisions under the Rules of Business of the·
State of Kerala, there was no occasion for taking any consent
from the government. Provisions of Section 43 of the Electricity
(Supply) Act, 1948 or Rule 68 are not attracted. There is no
violation of the said provisions.
c 10. That the fact that arrangement entered into was not reduced into
an agreement in writing, lost relevance for the purposes of this
case since the same having been acted upon and the electricity
having been supplied to the State of Karnataka/KEB for which
there is no complaint that State of Kerala/KSEB has not received
D the agreed price. In any case, no inference of criminal liability
could be drawn.
11. There is no evidence to support the conclusion of the High Court
that dur\ng the relevant period there was scarcity of electricity in
the State of Kerala.
E 12. That according to the prosecution as well as the findings of the
Courts, the appellants h~ve not benefited monetarily or otherwise
as a result of arrangement or by M/s. GIL.
In the light of the above conclusions, it may ,now be .examined as to
what offence if at all, has been made out against the appellants. The charge
F and the conviction of the appellants is under Section 5(1)(d) read with Section
5(2) of the Prevention of Corruption Act, 1947. It reads as follows:

"5. Criminal misconduct in discharge of official duty - ( 1) A public
servant is said to commit the offence of criminal misconduct -

xxx xx xx xxxx
G
(d) if he, hv corrupt or illegal means or by otherwise ~busing his
position as public servant, obtains for himself or for another person
any valuable thing of pecuniary advantage.

(2) Any public servant who commits criminal misconduct shall be
H punishable with imprisonment for a term which shall not be less than
_J
R. BALAKRISHNA PILLAI v. STATE OFKERALA [BRIJESH KUMAR, J.) 465
one year but which may extend to seven years and shall also be liable A
to fine:

Provided that the court may, for any special reasons recorded in
-- writing, impose a sentence of imprisonment or less than one year."

The ingredients of the offence are (i) abuse of position as public servant; B
(ii) obtaining for himself or for another any valuable thing or pecuniary
advantage; (iii) by corrupt or illegal means. Keeping in view the above
ingredients of the provisi~n, the charge as levelled against the appellants is
that by abusing their official position as public servants they conspired and
illegally sold 12241440 units of Kerala electricity to Mis. GIL, Bangalore
~
and thus caused GIL to obtain a valuable thing, namely, electricity resulting c
in pecuniary advantage to the said company to the tune of Rs. 19,58,630.40
paise. At this stage it would be appropriate to indicate that the prosecution
has not pursued the charge of conspiracy against A I and A2. Nor it is their
case that A 1 and A2 obtained for themselves any valuable thing or pecuniary
advantage out of the whole transaction. As a matter of fact the finding of the
D
High Court is also to the same effect. The emphasis is only on illegal sale of
energy by KSEB to Mis GIL thereby causing valuable thing namely electricity
to be obtained by Mis. GIL which resulted in profit to Mis. GIL to the tune
of Rs. 19,58,630.40 paise.
'
~

One of the submissions advanced on behalf of the appellants is that the E
offence as provided under clause (d) of sub-section (I) of Section 5 of the
Prevention of Corruption Act is to obtain any valuable thing or pecuniary
advantage for himself or for any other person. There is no such ingredient
constituting an offence by "causing" to obtain a valuable thing for any other
person. In our view the argument is too technical to be appreciated. If a
person obtains any valuable thing or pecuniary advantage for any other person F
can well be said to be causing "to obtain" to any particular person any benefit
or advantage. Such an act may be covered by the concept of 'actus reus' that
is to say an act of accessory, aiding, abetting, counselling and procuring an
offence. But in comparison to mens rea, actus reus i.e. mental element is
considerably narrower and more demanding than that required for the principal G
offender. The distinction between mens rea and actus reus is indicated in
Blackstone's Criminal Practice'~ In the case in hand however, obtaining any
~ valuable thing or pecuniary advantage for any other person has also been
brought within the definition of the offence. Therefore, it will have to be

- I. Blackstone's Criminal Practice I992, edited by Peter Murphy, page 64, A-5.2. H
466 SUPREME COURT REPORTS [2003) 2 S.C.R.

A examined as to whether there has been "obtainment" of a valuable thing or
pecuniary advantage by the appellants for Mis. GIL. In this connection, learned
counsel for the appellants have placed reliance upon a decision of this Court
in the case of Subash Parbat Sonvane 2• The facts of the case were different.
as the court was considering a case of bribery under Section 13(1 )( d)(i) of
the Prevention of Corruption Act, 1988. The meaning of the word 'obtain'
B was considered and in that context referred to otservations made in the case
of Ram Kishan 3• The word 'obtains' on which much stress was laid does not
eliminate an idea of acceptance of what is given or offered to be given,
though it connotes also an element of effort on the part of the receiver. M.
W Mohiuddin 's case' was also referred to, which also related to a case of
C bribery and while dealing with the meaning of the word 'obtains', it was
observed : "whether there was an acceptance of what is given as a bribe and
whether there was an effort on the part of the receiver to obtain the pecuniary
advantage by way of acceptance of the bribe depends on the facts and
circumstances of each case." It was found true in that case that the accused
had made a demand for the money. In so far the cases covered under Section
D 5(1 )(d) of the Prevention of Corruption Act, 1947 we find a clearer picture
from the decision in the case of C.K. Damodaran Nair' as relied upon by the
learned counsel for the appellants and also considered in the case of Subash
Parbat Sonvane (supra). It is laid down as follows :

"12. The position, will, however, be different so far as an offence
E . under Section 5( I)( d) read with Section 5(2) of the Act is concerned.
For such an offence prosecution has to prove that the accused
'obtained' the valuable thing or pecuniary advantage by corrupt or
illegal means or by otherwise abusing his position as .a public servant
and that too without the aid of the statutory presumption under Section
F 4(1) of the Act as it is available only in respect of offences under
Section 5(1)(a) and (b) - and not under Sections 5(l)(c), (d) or (e) of
the Act. 'Obtain' means to secure or gain (something) as the result of
request or effort (Shorter Oxford Dictionary). In case of obtainment
the initiative vests in the person who receives and in that context a
demand or request from him will be a primary requisite for an offence
G
2. (2002) 5 SCC p. 86 Subash Parbat Sonvane v. State of Gujarat.

3. Ram Kishan v. State of Delhi, AIR 1956 SC 476.

4. M.W. Mohiuddin v. State of Maharashtra, (1995) 3 SCC 567.

H 5. C.K. Damodaran Nairv. Government of India, (1997) 9 sec 477.
--
.,.{
\

R. BALAKRISHNA PILLAI v. STATE OF KERALA [BRIJESH KUMAR, J.] 467

under Section 5(J)(d) of the Act unlike an offence under Section 161 A
IPC, which, as noticed above, can be, established by proof of either
'acceptance' or 'obtainment'." (emphasis supplied by us)

In the light of the meaning of the word 'obtains' it may have to be seen
as to whether there was any element of effort on the part of the appellants
by reason of which it could be said that electricity was caused to be obtained B
by them to Mis. GIL that too on a lower rate causing pecuniary advantage
to Mis. GIL. The position of the appellants has. fo be considered as that of
a receiver or one who illegally obtained valuable thing. The documentary
evidence as well as the oral evi,dence as referred to in the earlier part of this
judgment clearly establishes that the State of .Kamataka/KEB contacted the C
Minister of Power State of Kerala (A 1) for assistance in the matter of supply
of electricity due to grim situation of shortage of energy in their State. Time
and again in different meetings and otherwise the State of Kamataka/KEB
had been emphasising their requirement of electricity and supply of more
energy stressing upon the need for their industry some of which were named
including Mis. GIL and Wheel and Axle Plant, so much so that they had even D
advised Mis. GIL also to make effort and use their good offices with Kerala
Authorities for supply of more electricity. So far the response of the appellants
is concerned it is clear that they had only told that they would look into their
demands and would like to assist to the maximum possible which would also
depend upon the ensuing monsoon situation. The effort has throughout been E
on the part of the State of Kamataka/KEB to obtain more and more energy
stressing the pressing need of the State on various counts. It is not. to be
found that the State of Kerala/KSEB, A I or A2 ever made efforts to sell
Kerala energy to KEB nothing to say of Mis. GIL. Had that been so there was
no occasion for the State of Kamata~a/KEB to advise Mis.' GIL to use their
good offices with Kerala Authorities for supply of energy. It is also evident F
from documentary evidence that despite assurance on the request of Kamataka/
KEB to assist it was not always possible for KSEB to make supply. It is also
clear from the evidence that whatever energy was exported from Kerala was
taken in the general pool of electricify in the State of Kamataka/KEB and the
distribution thereof used to be made by the State of Kamataka/KEB and the G
Chief Minister. Some stray utterances made in some letters or internal
documents of the KEB that KSEB had agreed for certain quantity of energy
for Mis. GIL would in no way lead to the inference that the State ofKerala/
KSEB, Al or A2 had earmarked any supply for Mis. GIL. Even according
to·them, KSEB had only "agreed' to spare electrical energy for Mis. GIL
which definitely shows that initiative was on the part of the State ofKamataka/ H
468 SUPREME COURT REPORTS [2003] 2 S. C.R.

A KEB. There is no case of initiative or effort on the part of KSEB for supply
of energy. It is rather the other way round. The reliance placed by the
prosecution on such letters or non-reply of certain letters is misplaced. The
primary requisite of offence uls. 5 (1 )(d) of 'obtaining' any valuable thing or
pecuniary advantage for any other person, in absence of any effort, initiative
B or request on the part of the appellants shatters the charge in view of decision
in the case of Damodaran (supra). So far causing pecuniary advantage or
profit to Mis. GIL is concerned we have made a detailed discussion about the
same that it was purely a matter between the State of Karnataka/KEB and M/
s. GIL to decide what price was to be charged by KEB from Mis. GIL for
supply of imported energy. There is no allegation nor evidence to show that
C the State of KeralalKSEB or A 1 and A2 had any say or hand in lowering of
the price for Mis. GIL by tne State of Karnataka/KEB. It may be indicated
that earlier also there have been instances of supply of imported energy at a
lower rate to Mis. GIL and Wheel and Axle Plant by KEB. In any case it was
a matter between the State of Kamataka/KEB and Mis. GIL or other industries.'
Therefore, ·it is also incorrect to say that the appellants caused any profit to
D occur to Mis. GIL.

We have already recorded a finding that in the facts and circumstances
of the case the provisions of Section 43 of the Electricity (Supply) Act, 1948
or Rule 68 of the Rules were not attracted. It cannot be said factually, that
E electricity was sold by State of Kerala/KSEB, A 1 or A2 to Mis. GIL nothing
to say of illegally, nor it can be said that there was any abuse of their position
by Al ·and A2 in supply of energy to Kamataka/KEB. Once the supplies were
made to the State of Kamataka ·to help out during the period of scarcity of
energy, as requested, it is not understandable how only a part of supply
which the State of Kamataka/KEB, amongst others allocated to Mis. GIL that
F alone could be said to be illegal or that the appellants caused to be obtained
valuable thing to Mis GIL illegally by abuse of their official position. KSEB
did not sell energy to Mis GIL, all supplies were made to KEB. The charge
that the appellants had illegally sold energy to Mis GIL or caused it to be ~
·obtained by Mis. GIL is not all substantiated and miserably fails.

G On behalf of the appellants reliance has also been placed upon a decision
of this Court in the case of Kurban Hussein Mohammedali Rangwalh6 • The
case relates to Section 304A IPC i.e. in entirely different set of facts. The
conviction was set aside under Section 304A and converted to one under

H 6. Kurban Hussein Mohammedali Rangwalla v. State of Maharashtra, [1965] 2 SCR 622. ·-~
469
-
R. BALAKR!SHNA PILLAI v. STATE OF KERALA [BRIJESH KUMAR, J.]

Section 285 !PC. It is submitted that the limited purposes for which this A
decision is being relied upon is that an act which may" be punishable must be
proximate and direct cause of the injury caused. On this basis it is submitted
that if some profit has been caused to M/s. GIL by lowering of the price by
State of Kamataka/KEB it is not proximate or direct cause of anything done
by A I and A2. The act of the State of Karnataka/KEB intervenes between the
supplies made by the State of Kerala/KSEB to KEB who in turn supplied the B
same to its consumers including Mis. GIL at a lower price. It is not the direct
effect or proximate cause to any benefit, if at all, accrued to M/s. GIL. We
feel that it would not be necessary to go further into this aspect in view of
our findings recorded on the facts and relating to ingredients of the offence.

To consider yet another aspect, the general principle of criminal
c
jurisprudence is that element of mens rea and intention must accompany the
culpable act or conduct of the accused. In respect of this mental element
generally, the Blackstone's Criminal Practice7 describes it as under :

"In addition to proving that the accused satisfied the definition of the D
actus reus of the particular crime charged, the prosecution must also
prove mens rea, i.e., that the accused had the necessary mental state
or degree of fault at the relevant time. Lord Hailsham of St.
Marylebone said in Director of Public Prosecutions v. Morgan, [1976)
AC 182 at· p.213 : 'The beginning of wisdom in all the "mens rea"
cases is as was pointed out by Stephen J in Tolson (1889) 23 QBD E
168 at p.185, that 'mens rea' means a number of quite different
things in relation to different crimes'. Thus one must tum to the
definition of particular crimes to ascertain the precise mens rea required
for specific offences."

The author then comments : F

''Criminal offences vary in that some may require intention as the
mens rea, some require only recklessness or some other state of mind
and some are even satisfied by negligence. The variety in fact goes
considerably further than this in that not only do different offences G
make use of different types of mental element, but also they utilise
those elements in different ways."

It is clear thus that the accused must have the mental state or degree of fault

7. Ibid A2. l p.l.
H
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470 SUPREME COURT REPORTS [2003] 2 S.C.R.

A at the relevant time. It may of course differ from crime to crime according
to the definition thereof. The matter of degrees may also differ. That is to say
generally the mental state and the criminal act must coincide. The criminal
act .may be one which may be intended by the wrong doer. It is as well
known mere intention is not punishable except when .it is accomfJanied by an
act pr conduct of commission or omission on the part of the accused. As
B indicated earlier, situation varies in respect of different kinds of crimes as in
some of them even negligence or careless act may constitute an offence or
there may be cases of presumptions and putting the accused to proof to the
contrary. In the case in hand we have found that there is no sale of energy
to Mis GIL by KSEB nor the appellants had any say in price fixation for
C Mis GIL by KEB. In this light we may pass on to Criminal Law - J.C. Smith,
Brian 'Hogan', where proposition of law is put as follows :

"It is a general principle of criminal law that a person may be convicted
of a crime unless the prosecution have proved beyond reasonable
doubt both (a) that he caused a certain ~vent or that responsibility is
D to be attributed to him for the existence of a certain state of affairs,
which is forbidden by criminal law, and (b) that he had a defined
state of mind in relation to the causing of the event or the existence
of the state of affairs. The event, or state of affairs, is called the actus
reus ad the state of mind the mens rea of the crime."

E We further find the said principle of criminal jurisprudence stated in
Criminal Law by K.D. Gaur', wherein it is stated as follows :

"Criminal guilt would attach to a man for violations of criminal law.
However, the rule is not absolute and is subject to limitations indicated
in the Latin maxim, actus non facit reum, nisi mens sit rea. It signifies
F that there can be no crime without a guilty mind. To make a person
criminally accountable, it must be proved that an act, which is
forbidden by law, has been caused by his conduct, and that the conduct
was accompanied by a legally blameworthy attitude of mind. Thus,
there are two components of every crime, a physical element and a
G mental element, usually called actus reus and mens rea respectively."

8. Criminal Law, Smith, Hogan, 6th Edition, p.31.

9. Criminal Law - cases and materials, K.D.Gaur, Third edition, p.23.

H 10. Criminal Law - Glanville Williams - The General Part - Second Edition p. I.
R. BALAKRISHNA PiLLAl v. STATE OF KERALA [BRIJESH KUMAR, J.] 47\
Glanville Williams in Criminal Law 10 has also stated as follows in A
connection with the intention accompanying the act :

"The chief problems in the general part of criminal law pertain to the
requirement of a criminal state of mind, mens rea; but these cannot
be adequately discussed without a preliminary exploration of the nature
of an actus reus". B
It is further stated :

"Although thoughts are free, the uttering of them is another matter.
Speakjng or writing is an act, and ;s capable of being treason, sedition,
conspiracy or incitement; indeed , almost any crime can be committed C
by mere words, for it may be committed by the accused ordering an
innocent agent (e.g., a child under eight) to do the act. But to constitute
a criminal act there must be (as said already) something more than a
mere mental resolution. Apparent, but· not real, exceptions to this
~roposition are treason and conspiracy. It is treason to compass the D
King's death, but the law requires an overt act manifesting the
intention; and this act must be 1something more than a confession of
the intention. It must be an act intended to further the intention;
perhaps, too, it must actually do so"

,
•
Thus, looking to the definition of the crime in the case in hand namely,
clause (d) of sub-section (I) of Section 5 of the Act, according to the principle
E

indicated above it is necessary that the act must have been done illegally
abusing his position as public servant for obtaining benefit pecuniary or
otherwise for himself or for someone else. This is an offence which would
require an intention to accompany the act. The element of mental state would
be necessary to do a conscious act to get the required result of pecuniary F
advantage or to obtain any valuable thing, even if it is for someone else, then
too element of mental state must be there at the relevant time. In view of the
facts and circumstances indicated in the discussion held earlier in this judgment,
and findings recorded on facts, we firstly hold that facts leading to charges
are not proved and we also find that the element of mens rea and intention G
is totally lacking. The electrical energy was exported to Kamataka/KEB at
the request of State of Kamataka during the period of crisis of shortage of
energy which is not objected to, so as to be illegal but for a part of it which
is allocated by the State of Kamataka/KEB to Mis. GIL which constitutes no
offence. The prosecution failed to prove the case of sale of electricity by
KSEB to Mis. GIL or the KSEB or Al and A2 having caused profit to Mis. H
472 SUPREME COURT REPORTS (2003] 2 S.C.R. .
A GIL. Admittedly, appellants did not stand to gain in any manner. The
prosecution case thus fails.

In the result, the appeals No.372/01 and 373/01 are allowed and the
judgment and order of conviction and'\entence passed against the appellants
by the Trial Court and upheld by the High Court under Section 5(2) read with
B Section 5(1 )( d) of the Prevention of Corruption Act are set aside. The
appellants need not surrender and their surety bonds are discharged.

In view of the fact that the judgment of the High Court has been set
aside, no orders are required to be passed in Criminal Appeal Nos. 725-27/
C 02, having rendered infructuous, they stand finally disposed of as such.

N.J. Appeals allowed.

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I