Holding

Sanction for prosecution under Section 197 of the CrPC was required; the appeal is dismissed.

Summary

The Supreme Court examined the prosecution of several senior officials, including the former Water Resources Minister of Madhya Pradesh, for alleged criminal conspiracy and misconduct under the Prevention of Corruption Act in connection with the Hasdeo Bango dam project. The respondents were accused of sanctioning extra payments for stone quarrying beyond contract terms. The key issue was whether prosecution required prior sanction under Section 197 of the Code of Criminal Procedure, given that the officials acted in their official capacity or purport to do so. The Court held that Section 197 applies whenever a public servant acts or purports to act in discharge of official duties, irrespective of whether they were still in office, and that the material on record did not establish a criminal conspiracy. Consequently, the appeal seeking to set aside the High Court’s order was dismissed, confirming that sanction was required and that the case lacked sufficient basis for charges.

Issues considered

Whether sanction for prosecution under Section 197 of the Code of Criminal Procedure is required when the accused are public servants who acted or purport to act in official capacity.
Whether the alleged acts constitute criminal misconduct under Sections 13(1)(d)(ii-iii) and 13(2) of the Prevention of Corruption Act, 1988.
Whether there is sufficient evidence to establish a criminal conspiracy under Section 120A and 1208 of the Indian Penal Code.
Whether the respondents, some of whom had ceased to hold public office, are covered by Section 197.
Whether the High Court erred in its approach to framing charges and evaluating the material on record.

Legislation cited

Code of Criminal Procedure, 1973s. 173, s. 197, s. 397, s. 401
Indian Penal Code, 1860s. 1208, s. 120A
Mines and Minerals (Regulation and Development) Act, 1957
Prevention of Corruption Act, 1988s. 13(1)(d)(ii-iii), s. 13(2)

Subjects

criminal conspiracyprevention of corruption actsection 197 crpcpublic servantofficial dutysanction for prosecutionevidenceframing of chargedam projectextra lead payment

Judgment

[2009] 12 S.C.R. 1048

A STATE OF MADHYA PRADESH
v.
SHEETLA SAHAI & ORS.
(Criminal Appeal No. 1417 of 2009)
AUGUST 4, 2009
B
[S.B. SINHA AND CYRIAC JOSEPH, JJ.]

CODE OF CRIMINAL PROCEDURE, 1973:

c Section 197 - Sanction for prosecution - Whether public
servants act in their official capacity or purport to act in their
official capacity such action would attract the provisions of
Section 197 - Thus sanction for prosecution was required to
be obtained - Prevention of Corruption Act, 1988 - Sections
13, 19.
D
In this appeal on the basis of the facts of the case
and contentions raised on both sides, the main question
that arose for consideration was whether sanction for
prosecution in terms of Section 197 Cr.P.C. was required
E to be obtained.

Dismissing the appeal, the Court \' -
HELD: 1.1. Criminal conspiracy is an independent
offence. It is punishable separately. Prosecution,
F therefore, for the purpose of bringing the charge of
criminal conspiracy read with the relevant provisions of
the Prevention of Corruption Act was required to
establish the offence by applying the same legal
principles which are otherwise applicable for the purpose
G of bringing a criminal misconduct on the part of an
• -<
-
accused. A criminal conspiracy must be put to action
inasmuch as so long a crime is generated in the mind of
an accused, it does not become punishable. What is

H 1048
STATE OF MADHYA PRADESH v. SHEETLA SAHAI 1049
& ORS.

necessary is not thoughts, which may even be criminal A
--'-· in cli.aracter, often involuntary, but offence would be said
to have been committed thereunder only when that take
concrete shape of an agreement to do or cause to be
done an illegal act or an act which although not illegal by
illegal means and then if nothing further is done the B
agreement would give rise to a criminal conspiracy.
[Paras 50 and 51] [1078-C-F]

1.2. What is necessary is to show meeting of minds
..,, of two or more persons for doing or causing to be done
an illegal act or an act by illegal means. While saying so,
c
this Court is not oblivious of the fact that often
conspiracy is hatched in secrec~r and for proving the said
offence substantial direct evidence may not be possible
to be obtained. An offence of criminal conspiracy can also
be proved by circumstantial evidence. [Paras 51 and 52] D
,.1,- [1078-H; 1079-A-B]

1.3. Ex facie, there is no material to show that a
conspiracy had been hatched by the respondents. [Para
52] E
Soma Chakravarty v. State Through CBI (2007) 5 SCC
--"'-! 403; K.N. Sathyapalan (Dead) by LRs. v. State of Kera/a &
Anr. (2006) 12 SCALE 654; Kehar Singh and Ors. v. State
(Delhi Administration), 1988 (3) SCC 609; State (NCT) of
F
Delhi v. Navjot Sandhu @ Afsan Guru (2005) 11 SCC 600;
Ram Narayan Popli v. CBI (2003) 3 SCC 641 and Yogesh
@ Sachin Jagdish Joshi v. State of Maharashtra (2008) 6
SCALE 469, referred to.

2. The Minister in his note dated 4.11.1991 did not G
make any recommendation. He merely lamented the
'-1
manner in which the former Secretary acted as prior
thereto, the said authority himself for all intent and
purport had accepted the recommendations of the
authorities incharge of construction of the dam including H
1050 SUPREME COURT REPORTS [2009) 12 S.C.R.

A the Chief Engineer. He constituted a committee. He
obtained the opinion of the Financial Adviser. If upon
consideration of the entire materials on record,
independent opinion had been rendered and
recommendations were made, it is difficult to
B comprehend as to how that by itself would constitute a
criminal misconduct or leads to the conclusion of
hatching any criminal conspiracy. Recommendations
made by the Committee or the opinion rendered by an
independent officer like Financial Adviser need not be
c acted upon. It was for the State to take a decision. Such
a decision was required to be taken on the basis of the
materials available. [Para 53) [1080-H; 1081-A-C]

Inspector Prem Chand v. Govt. of N. C. T. of Delhi & Ors.
2007 AIR SCW 2532, referred to.
D
3. Even under the Prevention of Corruption Act, an
offence cannot be said to have been committed only
because the public servant has obtained either for
himself or for any other person any pecuniary advantage.
E He must do so by abusing his position as public servant
or holding office as a public servant. In the latter category
of cases, absence of any public interest is a sine qua non.
The materials brought on record do not suggest in any
manner whatsoever that the respondent Nos. 1 to 7
F either had abused their position or had obtained
pecuniary advantage for the respondent Nos. 8, 9 and 10,
which was without any public interest. [Para 54) (1082-
E-F]

4.1. There cannot be any doubt whatsoever that the
G tests for the purpose of framing of charge and the one
for recording a judgment of conviction are different. A
distinction must be borne in mind that whereas at the time
of framing of the charge, the court may take into
consideration the fact as to whether the accused might
H have committed the offence or not; at the time of
STATE OF MADHYA PRADESH v. SHEETLA SAHAI 1051
& ORS.

__..;... recording a judgment of conviction, the prosecution is A
required to prove beyond reasonable doubt that the
accused has committed the offence. [Para 58) [1084-B-C]

· 4.2. In this case, the probative value of the materials
on record has not been gone into. The materials brought B
on record have been accepted as true at this stage. It is
true that at this stage even a defence of an accused
cannot be considered. But, this Court is unable to agree
~"i· with the submission that where the entire materials
collected during investigation have been placed before
the court as part of the ch'argesheet, the court at the time
c
of framing. of the charge could only look to those
materials whereupon the prosecution intended to rely
upon and ignore the others which are in favour of the
accused. The question as to whether the court should
proceed on the basis as to whether the materials brought D
A·
on record even if given face value and taken to be correct
in their entirety disclose commission of an offence or not
must be determined having regard to the entirety of
materials brought on record by the prosecution and not
4 on a part of it. If such a construction is made, Sub-section E
(5) of Section 173 of the Code of Criminal Procedure shall
-- "'! become meaningless. [Para 59) [1084-D-G]

5. The prosecution, having regard to the right of an
accused to have a fair investigation, fair inquiry and fair F
trial as adumbrated under Article 21 of the Constitution
of India, cannot at any stage be deprived of taking
advantage of the materials which the prosecution itself
has placed on record. If upon perusal of the entire
materials on record, the court arrives at an opinion that
.. ..,, two views are possible, charges can be framed, but if only
G

one and one view is possible to be taken, the court shall
not put the accused to harassment by asking him to face
a trial. [Para 59] [1084-G-H; 1085-A-B]
H
1052 SUPREME COURT REPORTS (2009] 12 S.C.R.

A State of Maharashtra and Others v. Som Nath Thapa and
Others (1996) 4 SCC 659, relied on.
•-... .
Centre for Public Interest Litigation and Another v. Union
of India and Another (2005) 8 SCC 202, referred to.
B 6.1. Be he an Executive Engineer, Superintending
Engineer, Chief Engineer, Engineer-in-Chief, Secretary or
Deputy Secretary, matters were placed before them by
their subordinate officers. They were required to take
action thereupon. They were required to apply their own
C mind. A decision on their part was required to be taken
so as to enable them to oversee supervision and
completion of a government project. The Minister having
regard to the provisions of the Rules of Executive
Business was required to take a decision for and on
D behalf of the State. Some of the respondents were
required to render their individual opinion required by
their superiors. They were members of the Committee
constituted by the authorities, viz., the Minister or the
Secretary. At that stage, it was not possible for them to
E refuse to be a Member of the Committee and/ or not to
render any opinion at all when they were asked to
perform their duties. They were required to do the same
and, thus, there cannot be any doubt whatsoever that
each one of the respondent Nos. 1 to 7 was performing
F his official duties. [Para 62] [1087-D-H]

6.2. For the purpose of attracting the provisions of
Section 197 of the Code of Criminal Procedure, it is not
necessary that they must act in their official capacity but
even where a public servant purports to act in their
G official capacity, the same would attract the provisions of
Section 197 of the Code of Criminal Procedure. Thus, in
the instant case, sanction for prosecution in terms of
Section 197 of the Code of Criminal Procedure was

H
STATE OF MADHYA PRADESH v. SHEETLA SAHAl1053
& ORS.
required to be obtained. (Paras 63 and 66) (1088-A-B; A
_,.. 1092-F]

Sankaran Moitra v. Sadhna Das and Another (2006) 4
SCC 584; Matajog Dobey v. H. C. Bhari AIR 1956 SC 44 :
1955 (2) SCR 925; 8. Saha v. M.S. Kochar (1979) 4 SCC B
177; R. Balakrishna Pillai v. State of Kera/a and Another
(1996) 1 SCC 478; Rakesh Kumar Mishra v. State of Bihar
and Others (2006) 1 SCC 557; Parkash Singh Badal v. State
of Punjab and Others (2007) 1 SCC 1 and State of Karantaka
-~ v. Ameerjan (2007) 11 SCC 273, relied on.
c
Case Law Reference:
(2007) 5 sec 403 referred to Para 34

(2006) 12 SCALE 654 referred to Para 35
D
1988 (3) sec 609 referred to Para 52
~-

(2005) 11 sec 600 referred to Para 52
(2003) 3 sec 641 referred to Para 52
(2008) 6 SCALE 469 referred to Para 52 E

2001 AIR sew 2532 referred to Para 53
~
(1996) 4 sec 659 relied on Para 59
(2005) 8 sec 202 referred to Para 60 F
(2006) 4 sec 584 relied on Para 63
AIR 1956 SC 44 :
1955 (2) SCR 925 relied on Para 63
G
(1979) 4 sec 111 relied on Para 63
;1
(1996) 1 sec 478 relied on Para 63
(2006) 1 sec 557 relied on Para 63
H
1054 SUPREME COURT REPORTS [2009] 12 S.C.R.

A (2001) 1 sec 1 relied on Para 64
(2007) 11 sec 213 relied on Para 65

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
No. 1417 of 2009.
B
From the Judgment & Order dated 12.01.2006 of the High
Court of Madhya Pradesh, Jabalpur in Criminal Revision Nos.
75, 126, 127, 147, 161, 242 of 1999 and 734 of 1997.

K.T.S. Tulsi, Ravinder Singh, Puneet Jain, Sushi! Kumar
C Jain, Ashwin V. Kotemath for the Appellant.

Vivek K. Tankha, Ajay Mishra, Uday Umesh Lalit, B.K.
Satija, Siddharth Gupta, Mohit Nayak, Akshat Shrivastava, P.P.
Singh, lnderjeet Yadav for the Respondents.
D
The Judgment of the Court was delivered by

S.B. SINHA, J. 1. Leave granted.

2. Appellant is before us being aggrieved by and
E dissatisfied with a judgment and order dated 12.01.2006
passed by a learned Single Judge of the Madhya Pradesh High
Court allowing the criminal revision applications filed by the
respondents herein arising out of the orders dated 21.12.1998
and 13.05.1997 passed by the Special Judge, Bhopal in
F Special Case No. 6 of 1997.

• 3. The respondents herein were proceeded against for
commission of offences under Section 13(1)(d)(2)(ii-iii) read
with Section 13(2) of the Prevention of Corruption Act, 1988
(for short "the Act") and Section 1208 of the Indian Penal Code,
G 1860.
f •
4. Before proceeding further, we may notice the positions
held by the respondents herein. Respondent No. 1 Sheetla
Sahai was Minister for Water Resources of the State of Madhya
H
STATE OF MADHYA PRADESH v. SHEETLA SAHA! 1055
& ORS. [S.B. SINHA, J.]

.
__ Pradesh. Respondent No. 2 D.V.S.R. Sarma and the A
respondent No. 7 S.W. Mohgoankar were the Secretary to the
Government of Madhya Pradesh. Respondent No. 3 P.V.
Srinivasaiyah was the Engineer-in-Chief and the respondent
No. 4 A.S. Laxminarsimhaiya was\the Deputy Secretary in the
Government of Madhya Pradesh. Respondent No. 5 V.R.B. B
Gopal and the respondent No. 6 M.N. Nadkarni were the Chief
Engineers, Hasdeo Bango Project. Respondent No. 11 R.P.
Khare was the Secretary, Control Board for Major Projects.
-:l\
5. Appellant under the aegies of the World Bank
undertook construction of the Hasdeo Bango Masonry dam
c
project. For the aforementioned purpose, the respondent Nos.
8, 9 and 10 herein, viz.,M/s Progressive Constructions Pvt. Ltd.,
M/s Prasad & Company, M/s SEW Construction Co.
(hereinafter referred to as "the contractors") were awarded
contracts in terms whereof they were required to excavate D
£,;Jr stones etc. from Therma Pahar Quarry, which was situate at
only 12 kms. away from the site, for use of the stone to be
extracted therefrom for construction of masonry spillway.

6. One of the terms of the said contract is as under: E

" .. :The tenderer should satisfy himself regarding
,•v availability of the required quality and quantity of the
materials, if any quarry is changed for any reason
whatsoever, no claim shall be entertained on this account."
F
In addition to the guidelines, a plan was also supplied to
the contractors containing the following note:

"the contractor shall extract materials from the
approved sources and quarry areas to be designated by G
the engineer-in-charge for their particular contract group.
~·~'
They shall have no claim for any material collected
elsewhere without having obtained the prior approval in
writing of the engineer in charge. Such material shall
become the property of the department unless approval to
H
1056 SUPREME COURT REPORTS [2009] 12 S.C.R.

A use the same is subsequently accorded by the engineer-
in-charge, in which case, however, the contractor shall not
be entitled for any extra rate or lead."

7. However, on the premise that whereas eight lakh cubic
meters of stones of the requisite specification were required
8
for masonry work, only one lakh cubic meter stone was
available from the Therma Pahar Quarry, permission was
sought for by the contractors to excavate stones, rubbles and
other materials from a quarry known as Katghora Quarry which
was situated at a distance of 22 kms. from the dam. !--
C
8. The question was considered by the concerned
engineers. The District Mining Officer and the Additional
Collector Korba, having regard to the fact that the mining leases
in respect of the said quarries were to be granted, asked them
D not to do so as the stones in the hillocks of villages Katghora,
Hunkra and Maheshpur were found to be suitable for the
masonry work of the dam, as would appear from a letter dated
14.07.1983 issued by the Executive Engineer to the Additional
Collector, Korba.
E
9. The Superinteoding Engineer, respondent No. 7 herein
also by his letter dated 28.07.1983 addressed to Shri R.C.
Gupta, the then Executive Engineer stated:

"I am informed that Rampura quarry near Katghora on
F Kathora Ambikapur road, may also yield good masonary
stones. You may also explore this possibility and let me
know if the stones were got tested. If not, the samples from
this quarry may also be tested. Case could also be moved
to obtain lease for this quarry."
G
10. A request was also made to the Mining Officer of
Bilaspur to the same effect by Shri R.C. Gupta, the then
Executive Engineer by a letter dated 16.10.1983, stating:
' .
" ... Adequate quantity of rubble is not available from
H Therma quarries of Forest Department acquired for this
STATE OF MADHYA PRADESH v. SHEETLA SAHAI 1057
& ORS. [S.B. SINHA, J.]
purpose and Geologist, Geological Survey of India had A
intimated that about one lakh cum. of rubble can only be
extracted from Therma quarries. For completion of this
major dam about ten lakh cum. rubble & metal are needed.
Out of which 1 lakh cum. can be extracted from Therma
quarry, about three lakh cum. can be used out of the stone B
received from excavation of foundation of dam, remaining
6 (six) lakh cum. is required from adjacent stone quarries
like Katghora, Hukra & Maheshpur. Hence, I have
- ..\-
. requested in my letter cited above (copy enclosed) to
additional Collector, Korba, to reserve rubble quarries in c
the surroundings of the above villages so that rubble from
these quarries can be extracted for completion of the
Bango Dam in time.

Now I understand that you have proposed the above
quarries for auction on 20th & 21st Oct.'83. I request to D
delete the rubble quarries situated in the surrounding of
Katghora, Hukra & Maheshpur from the purview of auction
and transfer to Irrigation Department. Depending upon the
quantity of rubble required by each agency executed
masonry works at Bango Dam, allotment of individual E
quarries will be made by us after the agenCies deposit the
royalty charges which will be refundable to them after
awarding the certificate of utilizing the material in bonafide
Government works.
F
Till the formalities are over for transfer of the above
quarries to Irrigation Department, I request to delete the
following quarries from the purview of auction.

S.No. Name of PC No. Name of Khasra No. Area
Village material G

1. Hukra 47 Stone 347/1 17.396 Hee.

2. Maheshpur 31-A Stone 1/1-K 30.425Hec." '•
H
1058 SUPREME COURT REPORTS [2009) 12 S.C.R.

A 11. The Additional Collector (Mining Section), Korba in
response thereto by a letter dated 22.11.1983 addressed to
the Executive Engineer reserved the aforementioned quarries
for extraction of stones departmentally, subject to the conditions
mentioned therein.
B
12. Yet again, the Executive Engineer by a letter dated
05.12.1984 addressed to the Superintending Engineer brought
to his notice that alternative sites for quarrying operations for
extraction of stones were necessary, inter alia, stating:
c "2. The quarrying operations for extraction of stones was
started in the real sense during 82-83 working season, i.e.,
prior to the area was ready for starting the masonry. The
contractors after the start of quarry operations, repeatedly
wrote, regarding the non availability of sufficient stones of
D requisite quality. They had also brought out that the yield
of even this small quantity of stone was very much less. In
consultations with the department and the resident
geologist, they have opened more number of quarry faces,
but this did not result yields. This office has also carried
E out case studies which has established the yield of useful
stone to be very much less. The details enclosed at
Annexure A. Even the quantum of stone available is less, 'f •
when compared to the requirement.

3. It was reported that the quantum of useful rubble
F available in the entire Therma Pahad Hills is to the tune of
one lakh cum. against the total requirement of 8 lakh cum.
for the entire dam. This was based on the detailed
investigations and report of the Resident Geologist. Even
this quantity can be extracted with much difficulty. Therma
G Pahad Quarry on the visual appearance and the random
bore holes, initially appeared to be good. As such this was ' '
declared as quarry for masonry stone and accordingly
estimates prepared and designated as the specified
quarry in the quarry map enclosed along with the
H agreements. The contractors naturally could not have
STATE OF MADHYA PRADESH v. SHEETLA SAHA! 1059
& ORS. [S.B. SINHA, J.]

,-k investigated the quarry by actual opening/ operation, and A
have inspected the quarry with the data available to them.
Therefore neither department nor the contractor could have
foreseen the non availability of useful stone in the required
quantity from the designated quarry."
B
It was requested:

"It is therefore requested that the sanction may be obtained
·~
for payment of additional leads and communicated.
However, the payment towards additional wasteful
expenditure incurred in therma quarries as claimed by c
contractors is recommended for rejection."

13. The Superintending Engineer brought the same to the
... notice of the Chief Engineer by a letter dated 18.12.1984 stating
that there had always been a controversy regarding the use of D
~* those stones as rubble in masonry dam. A question was also
raised as to whether the department would permit additional
payment due to change in the quarry. If such a step is not taken,
the contractor may put an end to the contract and, thus, inter
alia requested that payment of additional leads from Katghora
E
quarry may be allowed.
<Y 14. It appears that even the Central Water Commission of
the Government of India by a letter dated 04.05.1984 informed
the Chief Engineer of the project to the following effect:
F
"Please refer to your letter on the above mentioned subject.
You have proposed to use stone from Therma Pahar
quarry for the construction of the dam. Though the stone
from this quarry has been approved as Granite, the

. '(
Compressive strength of the stone from this quarry varies
from 289 kg/cm to 373 kg/cm, which is very .low. It is
necessary that the reasons for such low strength for the
G

Granite are investigated before deciding to use the same
for the construction of the dam."
15. By a letter dated 7.06.1983, the Executive Engineer H
1060 SUPREME COURT REPORTS (2009] 12 S.C.R.

A of the Quality Control Division brought the following to the notice
of the Superintending Engineer of the Quality Control " .>

Department:

"Thus, it is noticed the mica existing in the rocks under
question varies from 7% to 11%. No mention of the
B
permissible percentage of mica is given in IS codes or
other books. Only Hand book on civil engineering by PN
Khanna, reveals that 2% of mica is permissible. In view of
the above it is submitted that the pigmetite band stones j •

are not fit for use in masonry dam from quality control unit
c Machadoli's point of view. This is, however, continuously
used in masonry on dam blocks 16, 17, 18, 19, 25, 26,
27, 28, 29, 35, 37 in which work continuously in progress.
If the higher authority deems it fit, that use of pigmetite is ....
to be continued by overruling the opinion of the
D undersigned clear written instructions may kindly be issued "I:
to this office for guiding the A.R.Os. Quality Control
deployed on Quality control work of masonry dam. Early
reply is solicited."

E 16. In view of the aforementioned development, the Chief
Engineer of the Project brought the same to the notice of the
Secretary of the Major, Medium and Minor Irrigation "( -
Department, Bhopal by a letter dated 11.01.1985 inter alia
making the following recommendations:
F "(i) Permitting the Chief Engineer for declaring Katghora
quarry as an additional quarry for balance quantity of
rubble quarry for rubble for masonry dam other than one
lakh cubic meter of rubble, as assessed by the geologist
to be extracted by the contractors from Therma Pahad
G quarry as far as possible in the contracts mentioned in this
letter.
; .
(ii) To allow payment of additional leads from Katghora
quarry for cum of masonry at the rates detailed in table at
H para 5.3 above."
STATE OF MADHYA PRADESH v. SHEETLA SAHAl1061
& ORS. [S.B. SINHA, J.]

·..---+ Along with the said letter, various other documents were A
enclosed as specified therein including a letter dated
4.05.1990, wherein it was inter alia stated:

- "10. In view of the above, the Chief Engineer submitted
proposals on 4.07.85 for Government Orders. According B
to the above proposals sanction to pay extra lead
amounting to Rs. 1,23,23,767/- has been sought. This
amount is about 3% of the total amount of contract of Rs.
-* 41. 77 crores. The Chief Engineer had also sought the
opinion of the World Bank, and the World Bank gave a
suggestion to deal the issue with in the contractual
c
provisions. Similar problem has been raised by th.e
contractors in Bansagar Project also, and the Executive
~.
Committee had recommended approval of lead payment.

-r 11. According to the Chief Engineer's report, the Executive D
Engineers had reported that only 30% to 35% useful
stones can be extracted which was not economical. This
project is under construction with the World Bank
assistance, will have to be completed on time, to supply
water to the National Thermal Power Corporation, and also E
to the M.P.E.B. Power Stgtion. In view of this stones have
~ v
been brought from Katghora quarry situated at 22 Km.
where sufficient quality of stones are available.

In case, due to above reasons had the Agreements drawn
F
been cancelled and new tenders recalled the cost would
have been more. Further, precious time would have been
lost in this process which would have affected the works
and it would not be possible to supply water to N.T.P.C.
and M.P.E.B."
G
;. ' 17. In a letter dated 14.02.1985 addressed to the Chief
Engineer, the World Bank stated:

"We note you have referred the matter to the Secretary,
Irrigation Department, Bhopal for decision. We suggest
H
1062 SUPREME COURT REPORTS [2009] 12 S.C.R.

A that the matter be resolved within contractual limits."

18. Pursuant thereto and in furtherance thereof, even the
Progress Review Committee observed in its note dated
14.05.1985 as follows:
B "27. Chief Engineer (HBP) explained his proposal
submitted through his memo No. 1916/HB/84 dated 29/3/
85. He gave the background of the change of quarry, in
view of unexpectedly low yield of useful stone from the
Therma Pahad quarry, approved in the technically
c sanctioned, sanctioned estimate and also on which basis
tenders had been invited and contractors' rates accepted.
He informed the Committee that the total extra
commitment for the various contracts worked out to Rs.
1.23 crores - approximately 3% of the total contract value.
D
28. Financial Adviser observed that he had no offered any
comments on the merit of the case, as then appeared to
him essentially a claim case. PRC does not deal such
claim cases.
E 29. The Committee observed that the World Bank too vide
their letter of 14/2/85 had suggested that'the matter be
resolved within contractual limits.

30. In view of the above, the Committee did not examine
F the proposal of Chief Engineer and refrained from giving
any comments in the matter at this stage."
19. However, the contractors invoked the arbitration
agreement contained in the said contract in the year 1987 and
an ad hoc settlement was proposed.
G
20. The matter was placed before the Financial Adviser.·
,.
The Financial Adviser in his note dated 4.01.1991 to the
Secretary, while stating that the Financial Adviser functions as
a consultant offering comments on cases referred to him in the
H light of his background, experience and expertise and going
1

---..
STATE OF MADHYA PRADESH v. SHEETLA SAHAI 1063
& ORS. [S.B. SINHA, J.]

-" by the facts placed before him which may not be treated as a A
substitute for vetting by the Finance Department wherever such
vetting is required under the rules of governmental business,
inter alia made the following comments:

"... However, since the whole contract action was based B
on the presumption that the required quantity of material
of required specification would be available from a quarry
with in 12 KM of the work site, it can be reasonable
-> assumed that the contractors have quoted their rates on
this assumption. The departmental estimates were also
based on this assumption. Since, later on, this assumption
c
was found to be invalid and majority of the material had to
be obtained from a quarry with an average lead of 22 KM
from the work site as against 12 KM in respect of the
contemplated quarry, the contractors have a reasonable
_.,.._ case for additional payment on account of extra lead of the D
material brought by them from this second quarry. Thus,
their claim is based on consideration of equity rather than
there of law."

In regard thereto, the Financial Adviser opined: E
..Ao ·y "4. Since the proposed settlement will amount to extra-
contractual payment, it has to be ensured that the proposed
settlement is acceptable to the contractors concerned. In
other words, the settlement has to be a negotiated
settlement and should not leave room for further disputes F
with the various contractors. Since the purpose of the
whole exercise is to avoid arbitration it could even be
ascertained if there are any other disputed issues in these

. ~
contracts. If an overall settlement of all the disputes could
be attempted and a sort of package deal is evolved in
respect of each contract so that the contracts are finalized
G

once for all leaving no scope for arbitration on the other
hand if the contractors intend to take resort to arbitration
for other issues, this issue could also go in for arbitration.
A package approach would allow negotiation in a spirit or H
1064 SUPREME COURT REPORTS [2009] 12 S.C.R.

A give and take for an over-all settlement of all disputes."

21. The then Secretary (Irrigation) Shri M.S. Billore
constituted a committee comprising of the Engineer-in-Chief
P.V. Srinivasaiyah, the Chief Engineer, the Financial Adviser,
Secretary (Control Board) and the Deputy Secretary, some of
8
whom are Accused Nos. 3, 4,5 and 11.

22. The said Committee submitted a report in respect
whereof the Secretary made a note that the same be critically ~ _
examined.
c
The Officer on Special Duty noticed the recommendations
of the Committee, which are as under:

"(i) As the quarry has been changed by the Department
due to Technical reasons the contractors cannot be held
D responsible.

(ii) When the Department itself did not know about the
quarry's unsuitability it will be unfair to expect the
contractors to bring stones from the changed quarry at the
E same rates.

(iii) Payment to the extent of actual quantity brought from .,.. ~
the quarries be made."

The proposals of the Chief Engineer, the quantities under
F each agreement, the rate and the amount were also noticed. It
was proposed:
"Therefore, it is proposed to approve payment for actual
quantity and the Chief Engineer may be informed to take
G undertakings from the contractors before making the
payment." ( .
The Financial Adviser was asked to examine the said
proposal in details. Some discussions apparently were held and
it was found necessary to obtain the following information
H
I
0

STATE OF MADHYA PRADESH v. SHEETLA SAHAI 1065
& ORS. [S.B. SINHA, J.]
_,..... before taking decision at the government level: A

"1. After the inspection of the Geologists how much quantity
has been brought from Therma Pahad by each contractor.

2. How much quantity has been brought from Katghora
quarry. B

3. How the records are kept by the Department about the
quantity of stones brought from different quarries."
- }.
A draft letter was also prepared. c
23. On or about 6.04.1991, one Shri Uday Shinde in his
note· stated that the Chief Engineer had not sent any detail in
regard to Block 31-38 as in the agreement only Therma Pahar
quarry had been shown for the balance work and as the original
file was sent to the Hon'ble Minister, it was not possible to deal D
-+-
with the case. The file was re-submitted and the amount payable
to the contractor for additional lead was again put up for
administrative approval. Yet again, the Engineering in-Chief
Committee was asked to examine the matter.
E
24. In a note to the Secretary dated 27.04.1991, the salient
... --r features in respect of the aforementioned matter were placed
again to which Shri M.S. Billore by his note dated 1.05.1991
opined :

"Since government decision has already been informed to F
the Chief Engineer, Hasdeo Bango Project through
government letter No: 9/CP/B/31/89/319, Bhopal dated
28.2.89. Hence, any action at government level is not
pending in this case and Chief Engineer to take action in
this case as per government order." G
• )j

25. Allegedly, the respondent No. 1 who was Minister at
the relevant point of time sat over the file for a period of about
six months. He on 4.11.1991 noted:
H
1066 SUPREME COURT REPORTS [2009] 12 S.C.R.

A "I have studied the case. Whenever any opinion has been
sought by the Secretary, from whichever authority, they
gave their opinion as per their wisdom. Every time the
Secretary has been seeking the opinion from one after
another officer. In this process he spent a period of one
B year between 3.5.90 to 1.5.91. In accepting the opinion or
recommending any action, it was expected from the
Secretary to take into consideration the fact that the
opinions had been given as per their wisdom. Therefore,
question does not arise to take any action against the
c subordinate officers.
No basis appears for the Secretary to take a totally
different view than the unanimous opinions. Therefore, it
is necessary to investigate the basis on which the
Secretary Shri Billore had rendered his opinion.
D
The new Secretary to study the case and give opinion."

26. Pursuant thereto or in furtherance thereof, the
respondent No. 2 Shri D.V.S.R. Sarma submitted a report upon
E constitution of a Committee, stating:

"(i) Due to technical reasons, the department has changed
the quarry. Therefore, its liability should not be upon the
contractors.

F (ii) When the Department had not any knowledge about the
quarry, and to expect this that even under the changed
quarry the contractor should fetch/ transport the stones at
the same rate, is also not proper.
(iii) Where &Where (sic) and for that much of the quantities,
G the materials have been brought from a quarry at more
distance, it is proper to make payment for that much
excess distance."

27. The respondent No.1 approved the said note of the
H respondent No. 2 on or about 20.01.1992 whereupon the
STATE OF MADHYA PRADESH v. SHEETLA SAHAI 1067
& ORS. [S.B. SINHA, J.]

amount in question was sanctioned. A
/~
28. Thereafter, the accounts were audited and one Shri
G.K. Shukla, Deputy Accountant General reported:

"(a) The clause of the agreement noted above and the
quarry chart clearly bring out that in the event of change of B
quarry on whatever reasons no claim will be entertained
and contractor should before quoting rates, visit the quarry
site and satisfy himself regarding quantity and quality of
-> the material available. Thus, the sanction appears a
negotiated settlement beyond the contractual provisions, c
for which concurrence of Finance Department ought to
have been obtained.

(b) The PRC considered this as a claim case which was
to be decided by Arbitrator under M. P. Adhikaran D
~~·
Adhiniyan, 1983.

(c) The Member, World Bank suggested to resolve the
matter within the contractual limits.

(d) The Secretary Irrigation had earlier rejected the case E
as it was not admissible.
> '-1
(e) The rates quoted by the contractors were inclusive of
all lead and lift, being item rate tender."

- The Auditor General of India also took note of the said F
report, stating:

"Therefore, in spite of the report of the Geologist that the
good quality of stone was available in sufficient quantities
in the upper portion of the quarry situated in the hill G
>. )' mentioned in the agreement and in spite of there being
specific provision in the agreements that no additional
payment would be acceptable in the event of change in
leads or change in quarry, the payments made to the
contractors were irregular and resultantly made additional H
1068 SUPREME COURT REPORTS [2009] 12 S.C.R.

A gains of Rs. 102.46 lacs to them."
~.

29. Pursuant thereto or in furtherance thereof, a complaint
was lodged. The matter was investigated by the Special Police
Establishment. They collected all the materials and filed a
chargesheet in the Court of learned Special Judge on
B
27.03.1997. The case was registered as Special Case No. 6
of 1997.

30. By an order dated 13.05.1997, the learned Special
Judge took cognizance of the case, opining: ~ -
c
(i) As none of the accused is a public servant, no
sanction was required to be obtained in terms of
Section 19 of the Act.

(ii) Criminal misconduct relating to corrupt practice
D under Section 13(1)(d)(ii-iii) of the Act has nothing
to do with normal activity and work under +-
government duty of any public servant at any time.

31. In the year 1997, the respondent Nos. 1and2 had filed
E a revision application before the High Court.
32. The Special Judge framed charges against the
y•
respondents on or about 29.07.1999; a sample copy whereof
reads as under:
F "You were working as Minister In-charge, Ministry of Water
Resources, Government of Madhya Pradesh from June
1990 to September 1992 .. On the recommendatory note
of Shri D.V.S.R. Sharma ignoring the letter dated 14.02.85
of the Finance Branch of World Bank and earlier decision
G dated 18.02.85 according to which the case of extra lead
was to be decided within the ambit of the contract in 1 4

respect of payment of extra lead to the concerned Tender
Contractors for transportation of stones used in
construction work of masonry non-flow dam upstream in
H Hasdeo Bango Project. You in conspiracy with the
STATE OF MADHYA PRADESH v. SHEETLA SAHAI 1069
& ORS. [S.B. SINHA, J.]
employees and Tender Contractors accorded A
administrative sanction and payment of one crore two lac
forty six thousand two hundred rupees was made to the
Contractors towards extra lead. Hence, you while holding
the post of public servant misusing the position of the post
provided financial benefit to the Tender Contractors without B
public interest.

Your above act being offence under Section
13(1)(D)(ii-iii), the Prevention of Corruption Act, 1988 is
punishable under Section 13(2) the Prevention of C
Corruption Act, 1988. In the alternative, you in criminal
conspiracy with Shri D.V.S.R. Sharma, Secretary! working
in the Ministry of Water Resources, Government of Madhya
Pradesh and other employees and contractors acted as
mentioned above, which is punishable under Section
13(1)(D)(ii and iii) read with Section 1208 iPC, which is D
within the jurisdiction of this Court.

Hence, I hereby direct that you will be tried for the
offence mentioned above by this Court."
E
33. Aggrieved by and dissatisfied therewith, the
respondents filed revision applications before the High Court,
which by reason of the impugned order have been allowed. The
State is, thus, before us.

34. Mr. K.T.S. Tulsi, learned senior counsel appearing on F
behalf of the appellant, in support of the appeal, inter alia would
submit:

(i) The High Court committed a serious error in opining
that an order of sanction in terms of Section 197 G
of the Code of Criminal Procedure was required to
~ "' be obtained despite the fact that the respondent
Nos. 1 to 7 were no longer holders of public
office(s).

(ii) While exercising its revisional jurisdiction, the High H
1070 SUPREME COURT REPORTS [2009] 12 S.C.R.

A Court could not enter into the question of
appreciation of evidence as also the probative
value of the materials brought on record, contrary
to the tests laid down by this Court in Soma
Chakravarty v. State Through CBI [(2007) 5 SCC
B 403] as the tests for framing of charge are different
from the tests for recording a judgment of acquittal
against an accused insofar as whereas in the
former, strong suspicion would be sufficient, in the
latter proof beyond any reasonable doubt is
c necessary.

(iii) The prosecution agency being a special agency
constituted under the Madhya Pradesh Special
Police Establishment Act, which functions under the
jurisdiction of the Lokayukata, only because all
D materials have been made part of the chargesheet,
the same could not have been relied upon by the
High Court as the only materials upon which the
prosecution would rely upon for proving its case
would be the terms of the contract, the note sheets,
E the letters dated 4.08.1983, 11.08.1983,
16.08.1983, 17.08.1983, 10.07.1984, 14.11.1984
and 2.03.1988, in terms whereof the contractors
were categorically informed that they would not be
entitled to any extra amount towards additional lead
F or otherwise.

(iv) The World Bank having opined that stones from
alternative sources may be obtained within the
budgeted amount, the extra amount could not have
been sanctioned by the respondents.
G
(v) By reason of the acts of the respondents, the State ., •
has suffered a loss to the extent of Rs. 1.02 crores
and in that view of the matter, the High Court should
not have passed the impugned order.
H
STATE OF MADHYA PRADESH v. SHEETLA SAHAI 1071
& ORS. [S.B. SINHA, J.]

(vi) As none of the accused is a public servant, the A
, .,;. question of obtaining sanction in terms of Section
19 of the Act did not arise.

(vii) Criminal misconduct relating to corrupt practices
under Section 13( 1)(d)(ii-iii) of the Act cannot be B
mingled with the normal activity and duties of the
public servant at any time, and, thus, no order of
sanction was required to be obtained even under
Section 197 of the Code of Criminal Procedure,
-~ 1973.
c
(viii) The Indian Institute of Technology having tested the
rocks excavated from Therma Pahar Quarry and
having opined that they can safely be used for
rubble masonry as well as for coarse and fine

.. aggregate, any opinion rendered contrary theret.o
or inconsistent therewith should have been ignored .

35. Mr. U.U. Lalit and Mr. Vivek Tankha, learned senior
D

counsel appearing on behalf of the respondents, on the other
hand, urged :
E
(i) The court at the stage of framing of charge and
> ·~
consequently the High Court in exercise of its
jurisdiction under Sections 397 and 401 of the
Code of Criminal Procedure were entitled to
consider the entire materials on record for the F
purpose of arriving at a finding as to whether the
contents thereof, even if taken to be correct in their
entirety, constituted a prima facie case against the
accused or not.
G
(ii) It would not be correct to contend that although all
~. the documents collected during investigation form
part of the final report submitted by the Special
Police Establishment in terms of Sub-section (5) of
Section 173 of the Code of Criminal Procedure, for
H
1072 SUPREME COURT REPORTS [2009] 12 S.C.R.
•

A the purpose of framing of charge or otherwise the
prosecution can rely only on a few of them so as to ;.. .
make a distinction between the documents which
are in favour of the prosecution and those which are
in favour of the accused.
8
(iii) The materials brought on record clearly show that
the concerned authorities found it necessary to
explore the possibility of procuring stones of
requisite quality from other sources as they had
proceeded on a wrong premise that stone of 1-
c requisite quality to the extent of 8 lakh cubic meters
would be available in the quarry in question.

(iv) Although the contract could be considered to show
that no claim for any material collected elsewhere,
D without obtaining the prior approval of the Engineer
lncharge, as was contended by the prosecution,
was admissible, on a close reading of the terms of
the contract it would appear that a contingency of
this nature, viz., that the parties entered into a
E contract on a mistaken fact was not contemplated
as the contractors cannot be asked to take upon
themselves the financial burden in respect of matter
for which they were not responsible. ~ ..
(v) A decision having been taken by the highest
F authority not only upon taking into consideration the
opinion of all concerned, viz., from Executive
Engineer to the Minister concerned but also in view
of the opinion of the Government of India and on the
basis of two reports of the Committee, viz., reports
G by respondent No. 2 D.V.S.R. Sarma Committee
and respondent No. 3 P.V. Srinivasaiyah
Committee, no interference with the impugned
,, ,.
judgment is warranted.

H (vi) The documents relied upon by the prosecution, even
STATE OF MADHYA PRADESH v. SHEETLA SAHAI 1073
& ORS. [S.B. SINHA, J.]
if given face value and tak~n to be correct in their A
~.A entirety, do not disclose commission of any offence
under the Prevention of Corruption Act as no
allegation had been made as regards misuse or
abuse of office.
-"'( B
(vii) The State having acted within its jurisdiction in
taking a decision in regard to making of extra
payment by way of novation of the original contract,
no exception thereto can be taken as the situation
- t- was unforeseen. Even the arbitral tribunal having
passed an award in favour of the contractor which
c
is in consonance with a decision of this Court in
K.N. Sathyapalan (Dead) by LRs. v. State of
Kera/a & Anr. [(2006) 12 SCALE 654], the
,. respondents cannot be said to have committed any
offence . D
. -t
(viii) In any view of the matter, no evidence has been
brought on record to show that any conspiracy was
entered into by the respondents inter se.
E
(ix) Assuming that the respondents have arrived at a
wrong conclusion, the same would only constitute
~ ~ an error of judgment and not a criminal misconduct.

(x) The malafide attitude on the part of the State would
be evident from the fact that the respondents herein F
who were members of the Committee have also
been roped in although they had made fair, proper
and impartial recommendations which could have
been accepted or rejected. Even the respondent
No. 1 in his note dated 4.11.1991 did not issue any G
direction to make payment but merely asked the
" 'f
respondent No. 2 to have a re-look at the entire
matter as prior to the purported opinion of Mr.
Billore, as contained in his note dated 1.05.1991
he had opined otherwise, viz., not in the tune of the H
1074 SUPREME COURT REPORTS [2009) 12 S.C.R.

A recommendations made by the Quality Control
Department: i.e., in favour of the contractors. c>--,

(xi) There is nothing on record to show that the
respondent Nos. 1 to 7 herein have done any act
B which was beyond their official duty and hence, the
impugned judgment is unassailable.

36. The question raised before us is required to be
determined on the backdrop of factual matrix involved herein.
We have taken into consideration in details the background ~ -
c materials only with a view to consider as to whether the High
Court was right in opining that no case for framing of charges
against the re$pondents was made out.

The fact that the State entered into contracts with the
D respondent Nos. 8, 9 and 10 is not in dispute. The basic terms
of the contract, which we have taken note of, are also not in
i' .
dispute. What is in dispute is the interpretation and application
thereof.

37. The contract contained an arbitration clause. The
E respondents herein invoked the said arbitration agreement, as
noticed hereinbefore, as far back in the year 1987. Indisputably,
an award had been made in their favour on the basis of a )> ..._
settlement arrived at by and between the parties. Such a
settlement was arrived at on the basis of the stand taken by
F the authorities of the State of Madhya Pradesh upon entering
into detailed deliberations.
38. The learned counsel for the parties took us through the
entire agreement to raise rival contentions as to whether
G despite the apparent rigours contained therein, the contractors
could have been paid any additional amount towards extra
f
lead. A,

39. We think a construction of the terms of contract in the
light of the factual matrix of the matter to which we have
H adverted to heretobefore, as has been argued by the
STATE OF MADHYA PRADESH v. SHEETLA SAHAl1075
& ORS. [S.B. SINHA, J.]

. ,.~ · respondents, is possible. It is, however, not necessary for us A
to delve deep into the matter inasmuch as we are concerned
only with the question as to whether the materials brought on
record form sufficient basis for framing of charges under
-~ Section 13(1)(d)(ii-iii) of the Act read with Section 13(2) thereof
read with Section 1208 of the Indian Penal Code or not. B
40. At the outset, however, we must place on record that
construction of the dam over river Hasdeo Bango became
-t necessary for the purpose of supply of water to the National
Thermal Power Corporation. It was a World Bank project. The
project was required to be completed within a time frame. c
Stones required to be used for the construction of the. dam, as
, of necessity, were required to be of sufficient strength. The
.. opinion of the Indian Institute of Technology, referred to by Mr.
Tulsi, is not on record. Correspondences as also the opinion
-·+ of the Central Water Commission, Government of India, D
however, point out that stones of requisite strength were not
available at Therma Pahar Quarry. The quantum of stone
required was eight lakh cubic meters and only one lakh cubic
metres was available thereat. The balance seven lakh cubic
meters of stone was, thus, required to be obtained from the E
quarries situated at villages villages Katghora, Hunkra and
f- -t-
Maheshpur.

41. Stone is a minor mineral within the meaning of the
provisions of the Mines and Minerals (Regulation and
F
Development) Act, 1957 and the Minor Mineral Concession
Rules framed by the State. Lease and/ or licence for extraction
thereof is to be granted by the Collector. Although the Mines
Department of the State intended to grant 'Quarry lease' in
favour of others having regard to the requirements of the State,
~ ... the said quarries were reserved, subject to certain conditions. G

42. The respondent Nos. 8 to 10, in view of the provisions
of the Mines and Mineral (Regulation and Development) Act,
1957 and the Madhya Pradesh Minor Mineral Concession
Rules could not have on their own undertaken mining operation H
1076 SUPREME COURT REPORTS [2009] 12 S.C.R.

A for the purpose of extracting the said minor mineral. They could
have done so only on a licence granted in their favour by the
Collector/State. However, as the hillocks of the villages in
question were reserved for departmental use, only by reason
thereof the contractors could carry on mining operation thereat
8 and not otherwise. It was, therefore, a conscious decision on
the part of the competent authorities of the State.

43. The contract itself suggests that there was a possibility
of dispute in regard to allocation of the parts of the quarries. A
dispute resolution mechanism by creating a forum viz. the Office
C of the Superintending Engineer was created.

44. The intra-departmental and inter-departmental
correspondences and notesheets to which we have adverted
to heretobefore clearly go to show that the authorities incharge
o of construction of the dam were aware of the difficulties which
were being faced by the contractors. Their apprehension was
that in the event the contractors were not permitted to mine
stones from Katghora Quarry and other Quarries, they may
leave the job as a result whereof the entire project might come
E to a stand-still.

45. The representations made by the contractors for the
aforementioned purpose, even if to be ignored, the intra-
departmental and inter-departmental correspondences cannot
be. They clearly point out a clear picture as regards necessity
F for explaining the possibilities of extracting stones from some
other mines for being used in the construction of dam.

46. We would proceed on the basis that two divergent
opinions on the construction of the contract in the light of the
G stand taken by the World Bank as also the earlier decision
taken by the State was possible. That, however, would not
mean that a fresh decision could not have been taken keeping
in view the exigencies of the situation. A decision to that effect
was not taken only by one officer or one authority. Each one of
H the authorities was ad idem in their view in the decision making
STATE OF MADHYA PRADESH v. SHEETLA SAHAI 1077
& ORS. [S.B. SINHA, J.]

.... ~
process. Even the Financial Adviser who was an independent A
person and who had nothing to do with the implementation of
the project made recommendations in favour of the contractors
stating that if not in law but in equity they were entitled to the
additional amount.
B
47. From the materials available on record, it is crystal
clear that the decision taken was a collective one. The decision
was required to be taken in the exigency of the situation. It may
~ ·' be an error of judgment but then no material has been brought
on record to show that they did so for causing any wrongful gain
to themselves or to a third party or for causing wrongful loss to
c
the State

. 48. Section 13 of the Act provides for criminal misconduct
by a public servant. Such an offence of criminal misconduct by
a public servant can be said to have been committed if in terms D
-t of Section 13(1)(d)(ii-iii) a public servant abuses its position
and obtains for himself or for any other person any valuable
thing or pecuniary advantage; or while holding office as a public
servant, obtains for any person any valuable thing or pecuniary
advantage without any public interest. Sub-section (2) of E
Section 13 provides that any public servant who commits ·
j, + criminal misconduct shall be punishable with imprisonment for
a term which shall be not less than one year but which may
extend to seven years and shall also be liable to fine.
F
49. Criminal conspiracy has been defined in Section 120A
of the Indian Penal Code, 1860 to mean:

"When two or more persons agree to do, or cause to be
done,--

. ... ( 1) an illegal act, or
G

(2) an act which is not illegal by illegal means, such an
agreement is designated a criminal conspiracy:

Provided that no agreement except an agreement to H
1078 SUPREME COURT REPORTS [2009] 12 S.C.R.

A commit an offence shall amount to a criminal conspiracy ·t--..... •
unless some act besides the agreement is done by one
or more parties to such agreement in pursuance thereof.

Explanation.--lt is immaterial whether the illegal act is the
ultimate object of such agreement, or is merely incidental
B
to that object."

Section 1208 of the Indian Penal Code provides for
punishment for criminal conspiracy. ~ '

c 50. Criminal conspiracy is an independent offence. It is
punishable separately. Prosecution, therefore, for the purpose
of bringing the charge of criminal conspiracy read with the
aforementioned provisions of the Prevention of Corruption Act
was required to establish the offence by applying the same legal
D principles which are otherwise applicable for the purpose of
bringing a criminal misconduct on the part of an accused. ~ -

51. A criminal conspiracy must be put to action inasmuch
as so long a crime is generated in the mind of an accused, it
does not become punishable. What is necessary is not
E thoughts, which may even be criminal in character, often
involuntary, but offence would be said to have been committed
:r- ~
thereunder only when that take concrete shape of an agreement
to do or cause to be done an illegal act or an act which although
not illegal by illegal means and then if nothing further is done
F the agreement would give rise to a criminal conspiracy.

Its ingredients are

(i) an agreement between two or more persons;
G (ii) an agreement must relate to doing or causing to be
done either (a) an illegal act; (b) an act which is not
..
illegal in itself but is done by illegal means.

What is, therefore, necessary is to show meeting of minds
H of two or more persons for doing or causing to be done an
STATE OF MADHYA PRADESH v. SHEETLA SAHAI 1079
& ORS. [S.B. SINHA, J.]

/ __.,,, illegal act or an act by illegal means. A

52. While saying so, we are not oblivious of the fact that
often conspiracy is hatched in secrecy and for proving the said
offence substantial direct evidence may not be possible to be
obtained. An offence of criminal conspiracy can also be proved B
by circumstantial evidence.

In Kehar Singh and Ors. v. State (Delhi Administration),
. .).. [1988 (3) SCC 609 at 731), this Court has quoted the following
passage from Russell on Crimes (12th Edn. Vol 1):
c
"The gist of the offence of conspiracy then lies, not in doing
the act, or effecting the purpose for which the conspiracy
is formed, nor in attempting to do them, nor in inciting
others to do them, but in the forming of the scheme or
agreement between the parties. Agreement is essential. D
--t- Mere knowledge, or even discussion, of the plan is not, per
se enough"
/

In State (NCT) of Delhi v. Navjot Sandhu @ Afsan Guru
[(2005) 11 SCC 600), this Court stated the law, thus:
E
"101. One more principle which deserves notice is that the
cumulative effect of the proved circumstances should be
taken into account in determining the guilt of the accused
rather than adopting an isolated approach to each of the
circumstances. Of course, each one of the circumstances F
should be proved beyond reasonable doubt. Lastly, in
regard to the appreciation of evidence relating to the
conspiracy, the Court must take care to see that the acts
or conduct of the parties must be conscious and clear
,
enough to infer their concurrence as to the common design G
• -~ and its execution."
We may also notice that in Ram Narayan Pop/i v. CBI
[(2003) 3 sec 641], it was held:
"... Law making conspiracy a crime is designed to curb H
1080 SUPREME COURT REPORTS [2009] 12 S.C.R.

A immoderate power to do mischief which is gained by a
'I- '
combination of the means. The encouragement and
support which co-conspirators give to one another
rendering enterprises possible which, if left to individual
effort, would have been impossible, furnish the ground for
B visiting conspirators and abettors with condign
punishment. .. "

In Yogesh @ Sachin Jagdish Joshi v. State of
Maharashtra [(2008) 6 SCALE 469], this Court opined: ~ ~

c "23. Thus, it is manifest that the meeting of minds of two
or more persons for doing an illegal act or an act by illegal
means is $ine qua non of the criminal conspiracy but it may
not be possible to prove the agreement between them by
direct proof. Nevertheless, existence of the conspiracy and
D its objective can be inferred from the surrounding
circumstances and the conduct of the accused. But the -t -

incriminating circumstances must form a chain of events
from which a conclusion about the guilt of the accused
could be drawn. It is well settled that an offence of
E conspiracy is a substantive offence and renders the mere
agreement to commit an offence punishable even if an
offence does not take place pursuant to the illegal
agreement."

Ex facie, there is no material to show that a conspiracy had
F been hatched by the respondents.

53. Mr. Tulsi would suggest that the very fact that the
respondent No. 1 being a Minister kept the file with him for a
period of six months so as to see that the then Secretary Mr.
G M.S. Billore retires so as to enable him to obtain opinion of
another officer would prima facie establish that he intended to r
•
cause pecuniary gain to the respondent Nos. 8, 9 and 10.

We have noticed hereinbefore that the Minister in his note
dated 4.11.1991 did not make any recommendation. He merely
H
STATE OF MADHYA PRADESH v. SHEETLA SAHAI 1081
& ORS. [S.B. SINHA, J.]

,.,Jr
lamente.d the manner in which the former Secretary Mr. M.S. A
Billore acted as prior thereto, the said authority himself for all
intent and purport had accepted the recommendations of the
authorities incharge of construction of the dam including the
Chief Engineer. He constituted a committee. He obtained the
opinion of the Financial Adviser. If upon consideration of the B
entire materials on record, independent opinion had been
rendered and recommendations were made, it is difficult to
comprehend as to how that by itself would constitute a criminal
,. ),
misconduct or leads to the conclusion of hatching any criminal
conspiracy. Recommendations made by the Committee or the c
opinion rendered by an independent officer like FinandaL
Adviser need not be acted upon. Jt was for the State toJakefa
decision. Such a decision was required to be takenon the
basis of the materials available.

In Inspector Prem Chand v. Govt. of N. C. T. of Delhi D
---- /

& Ors. [2007 AIR SCW/2532], this Court observed:

"In State of Punjab and Ors. vs. Ram Singh Ex.
Constable [1992 (4) SCC 54], it was stated:
E
"Misconduct has been defined in Black's Law
Dictionary, Sixth Edition at page 999, thus:

'A transgression of some established and definite
rule of action, a forbidden act, a dereliction from duty,
unlawful behaviour, wilful in character, improper or wrong F
behaviour, its synonyms are misdemeanor, misdeed,
misbehavior, delinquency, impropriety, mismanagement,
__...,... offense, but not negligence or carelessness.'

Misconduct in office has been defined as: G
"Any unlawful behaviour by a public officer in relation
to the duties of his office, willful in character. Term
embraces acts which the officer holder had no right to
perform, acts performed improperly, and failure to act in
the face of an affirmative duty to act." H
/
1082 SUPREME COURT REPORTS [2009] 12 S.C.R.

A In P. Ramanatha Aiya~s Law Lexicon, 3rd edition, at page Jo,~,

3027, the term 'misconduct' has been defined as under:

"The term 'misconduct' implies, a wrongful intention,
and not a mere error of judgment.
B Misconduct is not necessarily the same thing as
conduct involving moral turpitude.

The word 'misconduct' is a relative term, and has to
be construed with reference to the subject matter and the "' '
c context wherein the term occurs, having regard to the
scope of the Act or statute which is being construed.
Misconduct literally means wrong conduct or improper
conduct."

[See also Bharat Petroleum Corpn. Ltd. vs. T.K. Raju,
D
r2oos (3) sec 143]." <!- -

54. Even under the Act, an offence cannot be said to have
been committed only because the public servant has obtained
either for himself or for any other person any pecuniary
E advantage. He must do so by abusing his position as public
servant or holding office as a public servant. In the latter
category of cases, absence of any public interest is a sine qua 1"

non. The materials brought on record do not suggest in any
manner whatsoever that the respondent Nos. 1 to 7 either had
F abused their position or had obtained pecuniary advantage for
the respondent Nos. 8, 9 and 10, which was without any public
interest.

55. Whether, on the one hand, the dam should be
constructed within a time frame fixed by the World Bank is a
G public interest or whether sticking to the terms of the contract
which may lead to abandonment of work by the contractors
would be a public interest is a matter over which a decision
was required to be taken, particularly when the authorities
proceeded on the basis that they had made advertisements
H and called for the tender on a wrong premise, viz., the stones
STATE OF MADHYA PRADESH v. SHEETLA SAHAI 1083
& ORS. [S.B. SINHA, J.]
available in the quarry in question for supply of requisite quality A
,..~ of stone was not in requisite quantity.

56. It is also interesting to notice that the prosecution had
proceeded against the officials in a pick and choose manner.
We may notice the following statements made in the counter- B
affidavit which had not been denied or disputed to show that
not only those accused who were in office for a very short time
but also those who had retired long back before the file was
moved for the purpose of obtaining clearance for payment of
>- ),
additional amount from the government, viz., M.N. Nadkami who
worked as Chief Engineer till 24.03.1987 and S.W.
c
Mohogaonkar, Superintending Engineer who worked till
19.06.1989 have been made accused but, on the other hand,
those who were one way or the other connected with the
decision, viz., Shri J.R. Malhotra and Mr. R.D. Nanhoria have
not been proceeded at all. We fail to understand on what basis D
- -+- such a discrimination was made.

~
57. In Soma Chakravarty (supra), whereupon strong
reliance has been placed by Mr. Tulsi, this Court opined:
E
"23. In a case of this nature, the.learned Special Judge
also should have considered the question having regard
) + to the "doctrine of parity" in mind. An accused similarly
situated has not been proceeded against only because,
the departmental proceedings ended in his favour.
.._
Whether an accused before him although stands on a F
similar footing despite he having not been departmentally
proceeded against or had not been completely exonerated
also required to be considered. If exoneration in a
' ~· departmental proceeding is the basis for not framing a
charge against an accused person who is said to be G
~ similarly situated, the question which requires a further
' consideration was as to whether the applicant before it
was similarly situated or not and/or whether the exonerated
officer in the departmental proce.eding also faced same
charges including the charge of being a party to the larger H
1084 SUPREME COURT REPORTS [2009] 12 S.C.R.

A conspiracy."
;. .
58. There cannot be any doubt whatsoever that the tests
for the purpose of framing of charge and the one for recording
a judgment of conviction are different.
B A distinction must be borne in mind that whereas at the
time of framing of the charge, the court may take into
consideration the .fact as to whether the accused might have
committed the offence or not; at the time of recording a

c
judgment of conviction, the prosecution is required to prove
beyond reasonable doubt that the accused has committed the
".
offence.

59. In this case, the probative value of the materials on
record has not been gone into. The materials brought on record
D have been accepted as true at this stage. It is true that at this
stage even a defence of an accused cannot be considered.
-t •
But, we are unable to persuade ourselves to agree with the
submission of Mr. Tulsi that where the entire materials collected
during investigation have been placed before the court as part
of the chargesheet, the court at the time of framing of the
-
E
char.ge could only look to those materials whereupon the
prosecution intended to rely upon and ignore the others which
are in favour of the accused. The question as to whether the ~ •
court should proceed on the basis as to whether the materials
brought on record even if given face value and taken to be
F correct in their entirety disclose commission of an offence or
not must be determined having regard to the entirety of
materials brought on record by the prosecution and not on a
part of it. If such a construction is made, Sub-section (5) of

G
Section 173 of the Code of Criminal Procedure shall become
meaningless.
·-
; <
The prosecution, having regard to the right of an accused
to have a fair investigation, fair inquiry and fair tri.al as
adumbrated under Article 21 of the Constitution of India, cannot
H at any stage be deprivea of taking advantage of the materials
STATE OF MADHYA PRADESH v. SHEETLA SAHAI 1085
& ORS. [S.B. SINHA, J.]

which the prosecution itself has placed on record. If upon A
~--'I perusal of the entire materials on record, the court arrives at
an opinion that two views are possible, charges can be framed,
but if only one and one view is possible to be taken, the court
shall not put the accused to harassment by asking him to face
a trial. B

{See State of Maharashtra and Others v. Som Nath
Thapa and Others [(1996) 4 SCC 659]} .
..-,), 60. This leaves us with the question as to whether an order
of sanction was required to be obtained. There exists a c
distinction between a sanction for prosecution under Section
I
19 of the Act and Section 197 of the Code of Criminal
Procedure. Whereas in terms of Section 19, it would not be
necessary to obtain sanction in respect of those who had
ceased to be a public servant, Section 197 of the Code of D
. ~ Criminal Procedure requires sanction both for those who were
or are public servants.

61. Strong reliance has been placed by Mr. Tulsi on a
judgment of this Court in Centre for Public Interest Litigation
E
and Another v. Union of India .and Another [(2005) 8 SCC 202).
In that case, it was held:
,, -+

"9. The protection given under Section 197 is to protect
responsible public servants against the institution of
possibly vexatious criminal proceedings for offences F
alleged to have been committed by them while they are
acting or purporting to act as public servants. The policy
of the legislature is to afford adequate protection to public
>.. servants to ensure that they are not prosecuted for anything
done by them in,tb~ discharge of their official duties G
without reasonable cause, and if sanction is granted, to
• ~
confer on the Government, if they choose to exercise it,
complete control of the prosecution. This protection has
certain limits and is available only when the alleged act
done by the public servant is reasonably connected with H
1086 SUPREME COURT REPORTS [2009] 12 -S.C.R.

A the discharge of his official duty and is not merely a cloak
for doing the objectionable act. If in doing his official duty, "· ~
he acted in excess of his duty, but there is a reasonable
connection between the act and the performance of the
official duty, the excess will not be a sufficient ground to
B deprive the public servant from the protection. The
question is not as to the nature of the offence such as
whether the alleged offence contained an element
necessarily dependent upon the offender being a public
servant, but whether it was committed by a public servant
.A '
c acting or purporting to act as such in the discharge of his
official capacity. Before Section 197 can be invoked, it
must be shown that the official concerned was accused of
an offence alleged to have been committed by him while
acting or purporting to act in the discharge of his official
duties. It is not the duty which requires examination so
D
much as the act, because the official act can be performed
both in the discharge of the official duty as well as in "'" .
dereliction of it. The act must fall within the scope and
range of the official duties of the public servant concerned.
It is the quality of the act which is important and the
E protection of this section is available if the .act falls within
the scope and range of his official duty. There cannot be
any universal rule to determine whether there is a .- "-
reasonable connection between the act done and the
official duty, nor is it possible to lay down any such rule.
F One safe and sure test in this regard would be to consider
if the omission or neglect on the part of the public servant
to commit the act complained of could have made him
answerable for a charge of dereliction of his official duty.

G
If the answer to this question is in the affirmative, it may
be said that such act was committed by the public servant
while acting in the discharge of his official duty and there ,.
·-
•
was every connection with the act complained of and the
official duty of the public servant. This aspect makes it clear
that the concept of Section 197 does not get immediately
H attracted on institution of the complaint case.
STATE OF MADHYA PRADESH v. SHEETLA SAHAI 1087
& ORS. [S.B. SINHA, J.]
10. Use of the expression "official duty" implies that the act A
···"" or omission must have been done by the public servant in
the course of his service and that it should have been in
discharge of his duty. The section does not extend its
protective cover to every act or omission done by a public
servant in service but restricts its scope of operation to B
only those acts or omissions which are done by a public
servant in discharge of official duty.

11. If on facts, therefore, it is prima facie found that the act
1.- ~·
or omission for which the accused was charged had
reasonable connection with discharge of his duty then it
c
must be held to be official to which applicability of Section
197 of the Code cannot be disputed."

, 62. Were the respondent Nos. 1 to 7 required to act in the
matter as a part of official duty? D
> -+-
Indisputably, they were required to do so. Be he an
Executive Engineer, Superintending Engineer, Chief Engineer,
Engineer-in-Chief, Secretary or Deputy Secretary, matters were
placed before them by their subordinate officers. They were
E
required to take action thereupon. They were required to apply
,• their own mind. A decision on their part was required to be
~ --.. taken so as to enable them to oversee supervision and
completion of a government project. The Minister having regard
to the provisions of the Rules of Executive Business was
required to take a decision for and on behalf of the State. Some F
of the respondents, as noticed hereinbefore, were required to
render their individual opinion required by their superiors. They
were members of the Committee constituted by the authorities,
viz., the Minister or the Secretary. At that stage, it was not
possible for them to refuse to be a Member of the Committee G
~ .I. and/ or not to render any opinion at all when they were asked
to perform their duties. They were required to do the same and,
-~
thus, there cannot be any doubt whatsoever that each one of
the respondent Nos. 1 to 7 was performing his official duties.
H
1088 SUPREME COURT REPORTS [2009] 12 S.C.R.

A 63. For the purpose of attracting the provisions of Section ,.._
197 of the Code of Criminal Procedure, it is not necessary that
they must act in their official capacity but even where a public
servant purports to act in their official capacity, the same would
attract the provisions of Section 197 of the Code of Criminal
B Procedure. It was so held by this Court in Sankaran Moitra v.
Sadhna pas and Another [(2006) 4 SCC 584].

The question came up for consideration before this Court
in Matajog Dobey v. H.C. Bhari [AIR 1956 SC 44 : 1955 (2) ~ .
SCR 925] wherein it was held:
c
"17. Slightly differing tests have been laid down in the
decided cases to ascertain the scope and the meaning
of the relevant words occurring in Section 197 of the Code;
"any offence alleged to have been committed by him while
acting or purporting to act in the discharge of his official
D
duty". But the difference is only in language and not in ...
substance. The offence alleged to have been committed
must have something to do, or must be related in some
manner with the discharge of official duty. No question of
E sanction can arise under Section 197, unless the act
complained of is an offence; the only point to determine
is whether it was committed in the discharge of official ,, '-
duty. There must be a reasonable connection between the
act and the official duty. It does not matter even if the act
exceeds what is strictly necessary for the discharge of the
F
duty, as this question will arise only at a later stage when
the trial proceeds on the merits. What we must find out is
whether the act and the official duty are so inter-related that ,:s;-;
one can postulate reasonably that it was done by the
accused in the performance of the official duty, though
G possibly in excess of the needs and requirements of the
situation. In Hori Barn Singh v. Crown Sulaiman, J.
• •
observes:
r
"The section cannot be confined to only such acts as are
H done by a public servant directly in pursuance of his public
STATE OF MADHYA PRADESH v. SHEETLA SAHAI 1089
& ORS. [S.B. SINHA, J.]

r>< office, though in excess of the duty or under a mistaken A
belief as to the existence of such duty. Nor is it necessary
to go to the length of saying that the act constituting the
offence should be so inseparably connected with the
official duty as to form part and parcel of the same
transaction." B

The interpretation that found favour with Varadachariar, J.
in the same case is stated by him in these terms at p. 187:
r- Jr "There must be something in the nature of the act
complained of that attaches it to the official character of
the person doing it." In affirming this view, the Judicial
c
Committee of the Privy Council observe in Gill case: "A
public servant can only be said to act or purport to act in ·
.,. the discharge of his official duty, if his act is such as to lie
within the scope of his official duty ... The test may well
' -t be whether the public servant, if challenged, can D
'
reasonably claim that, what he does, he does in virtue of
his office." Hori Ram case is referred to with approval in
the later case of Lieutenant Hector Thomas Huntley v.
King-Emperor but the test laid down that it must be
established that the act complained of was an official act E
appears to us unduly to narrow down the scope of the
> ... protection afforded by Section 197 of the Criminal
Procedure Code as defined and understood in the earlier
case. The decision in Meads v. King does not carry us
any further; it adopts the reasoning in Gill's case." F

The said principle has been reiterated by this Court in ;:
Saha v. M.S. Kochar [(1979) 4 SCC 177] in the foilowi1,g
terms:

"17. The words "any offence alleged to have been G
I ~
committed by him while acting or purporting to act in the
discharge of his official duty" employed in Section 197(1)
of the Code, are capable of a narrow as well as a wide
interpretation. If these words are construed too narrowly,
the section will be rendered altogether sterile, for, "it is no H
1090 SUPREME COURT REPORTS [2009] 12 S.C.R.

A part of an official duty to commit an offence, and never can :.. -..
be". In the wider sense, these words will take under their
umbrella every act constituting an offence, committed in the
course of the same transaction in which the official duty is
performed or purports to be performed. The right approach
B to the import of these words lies between these two
extremes. While on the one hand, it is not every offence
committed by a public servant while engaged in the
performance of his official duty, which is entitled to the
protection of Section 197(1), an act constituting an offence, " '

c directly and reasonably connected with his official duty will
require sanction for prosecution under the said provision.
As pointed out by Ramaswami, J., in Baijnath v. State of
M.P., "it is the quality of the act that is important, and if it
falls within the scope and range of his official duties, the
protection contemplated by Section 197 of the Criminal
....
D
Procedure Code will be attracted". t .

18. In sum, the sine qua non for the applicability of this
section is that the offence charged, be it one of
commission or omission, must be one which has been
E committed by the public servant either in his official
capacity or under colour of fhe office held by him."
,.
[See also R. Balakrishna Pillai v. State of Kera/a and
"
Another [(1996) 1 SCC 478]
F In Rakesh Kumar Mishra v. State of Bihar and Others
[(2006) 1 SCC 557], this Court held:
"12. It has been widened further by extending protection
to even those acts or omissions which are done in
G purported exercise of official duty; that is under the colour
of office. Official duty, therefore, implies that the act or • •
omission must have been done by the public servant in the
course of his service and such act or omission must have
been performed as part of duty which further must have
H been official in nature. The section has, thus, to be
STATE OF MADHYA PRADESH v. SHEETLA SAHAI 1091
& ORS. [S.B. SINHA, J.]

construed strictly, while determining its applicability to any A
... ;(
act or omission in the course of service. Its operation has
to be limited to those duties which are discharged in the
course of duty. But once any act or omission has been
found to have been committed by a public servant in the
discharge of his duty then it must be given liberal and wide B
construction so far its official nature is concerned. For
instance a public servant is not entitled to indulge in
criminal activities. To that extent the section has to be
»·· ·t· construed narrowly and in a restricted manner. But once it
is established that an act or omission was done by the c
public servant while discharging his duty then the scope
of its being official should be construed so as to advance
the objective of the section in favour of the public servant.
Otherwise the entire purpose of affording protection to a
public servant without sanction shall stand frustrated. For
instance a police officer in the discharge of duty may have
p
~ -t
to use force which may be an offence for the prosecution
of which the sanction may be necessary. But if the same
officer commits an act in the course of service but rtot in
the discharge of his duty and without any justification
therefor then the bar under Section 197 of the Code is not E
. .
attracted ... "
...
64. Reliance has been placed by Mr. Tutsi on Parkash
Singh Badal v. State of Punjab and Others [(2007) 1 SCC 1]
wherein this Court held: F

"38. The question relating to the need of sanction under
Section 197 of the Code is not necessarily to be
considered as soon as the complaint is lodged and on the
allegations contained therein. This question may arise at
G
any stage of the proceeding. The question whether
+ ·~ sanction is necessary or not may have to be determined
from stage to stage."

In that case, the appellant therein was charged for
commission of an offence of cheating under Section 420 and H
1092 SUPREME COURT REPORTS [2009] 12 S.C.R.

A Sections 467, 468, 471 and 1208 of the Indian Penal Code.

In the factual matrix involved therein, it was held:
).. .
"29. The effect of sub-sections (3) and (4) of Section 19
of the Act are of considerable significance. In sub-section
B (3) the stress is on "failure of justice" and that too "in the
opinion of the court". In sub-section (4), the stress is on
raising the plea at the appropriate time. Significantly, the
"failure of justice" is relatable to error, omission or
irregularity in the sanction. Therefore, mere error, omission f '
c or irregularity in sanction is (sic not) considered fatal
unless it has resulted in failure of justice or has been
occasioned thereby. Section 19(1) is a matter of procedure
and does not go to the root of jurisdiction as observed in
para 95 of Narasimha Rao case. Sub-section (3)(c) of
D Section 19 reduces the rigour of prohibition. In Section
6(2) of the old Act [Section 19(2) of the Act] question
relates to doubt about authority to grant sanction and not +- '
whether sanction is necessary."

65. In State of Karantaka v. Ameerjan [(2007) 11 SCC
E
273], it was held that an. order of sanction is required to be
passed on due application of mind.
.,
66. Thus, in this case, sanction for prosecution in terms of
Section 197 of the Code of Criminal Procedure was required
F to be obtained.

67. For the reasons aforementioned, there is no merit in
this appeal which is dismissed accordingly.

G.N. Appeal dismissed.

• ~