' This is a petition for quashment of criminal proceedings arising out of F.I.R. No,16, dated 10-7-1986 titled State v. Sadiq Bhutta and others, under sections 201, 409, 420, 468, 471/109, P.P.C. And 5(2)47 of the Prevention of Corruption Act, Police Station Anti-Corruption Establishment, Lahore pending in the Court of Special Judge, Anti-Corruption against Muhammad Sadiq Bhutta, XEN, Muhammad Ashraf, S.D.O., Abdur Razzaq, Sub-Engineer, Store and Workshop Division, Sheikhupura, Khalid Masood, Former Assistant Director, Inspection Wing, Industries Department, Qayyum Aziz, Examiner Industries Department, Muhammad Youths Malik, Contractor and Muhammad Iqbal of New Star Traders.
2. The facts in brief are that the Industries Department; Government of the Punjab invited tenders for the purchase of tube-well parts of Allen Bradley & Co. About 10 Firms submitted the tenders. The tenders submitted by M.Y. Malik & Co. Were approved after negotiation . The final contracts were signed between the Department and the Contractor copies of which are Exh.P.W.14/3, Exh.P.W.17/5 and Exh.P.W.17/6. The Contractor had furnished a guarantee of Rs,3 lac undertaking to change the goods found not conforming to the prescribed standard. After inspection by the Industries Department and .Other concerned Officers the goods supplied by him were accepted.
3. After about a year or so of the supply of the goods in question Ikram Ullah Siddiqui, P.W.1 submitted application Exh.P.W.1 to the Director Anti-Corruption, Lahore that the goods supplied by the Contractor were not of requisite specifications and that he in connivance with the Officers of Irrigation Department and Supply Wing of the Industries Department had cheated the Government.
Consequently, a raid was conducted under the supervision of Ch. Imtiaz Ahmad, City Magistrate, Sheikhupura and the goods supplied by him were sealed. Ahmad Khan, XEN, Machinery Maintenance Division P.W.14 inspected the goods to find out whether they were as per specifications or not. He submitted his report Exh.P.W.14/2. According to him, some of the items were found defective or used or repaired but they were shown to be new at the time of supply.
According to him, the loss caused to the Government by the defective supply amounted to Rs,3,23,850. He stated that the defects in the goods supplied by the Contractor were noticed on dismantling their various parts.
4. The accused were charge-sheeted for preparing false and forged reports and thereby cheating the Government and dishonestly inducing it to pay Rs,31,01,593 to the Contractor.
5. At the trial, the prosecution examined Ikram Ullah Siddiqui P.W.1 who had submitted application Exh.P.W.1/1 to the Director Anti-Corruption, Lahore disclosing that a fraud had been played upon the Government by the supply of defective material. Mr. Noor-ud-Din of Jublee Corporation, Karachi appeared as P.W.3 and stated that they had never imported any part of Allen Bradley Products nor did they sell the same to anybody. Abdur Razzaq Fitter P.W.5 stated that he had made an application to the Anti-Corruption Establishment, Lahore disclosing that though the spare parts of equipment supplied by the Contractor were shown to be imported but in fact they were not imported. Muhammad Amin Butt, P.W.11, Proprietor of Almcon Firm deposed that they had approached Allen Bradley and Co. For the supply of circuit breakers but they told that they had stopped manufacturing it. Ahmad Khan XEN P.W.14 stated that his team had inspected the goods in question and found some parts either defective or used or iepaired. He proved his report Exh.P.W.14/1. Mahmood Ajmal, Assistant Director Supplies, P.W.17 proved the contract entered into between the Department and Mr. M.Y. Malik. The rest of the evidence was in respect of the inspection of goods by the Inspection Team and the terms and conditions of the contracts.
6. The accused petitioners denied the prosecution allegations and stated that the goods supplied by the Contractor were genuine and on visual inspection were found confirming to the terms of the contract and as such the Inspection Team of the Industries Department had accepted them.
Muhammad Sadiq Bhutta stated that the purchase and negotiations were conducted and supervised by a Board of 10 to 15 Senior Officers of the Government of Grades 18 to 20. The rates were decided in the meeting chaired by the Superintending Engineer and other competent Members of the Committe. Mr. M.Y. Malik & Co. Was awarded contract on the decision of the Competent Purchase Committee headed by Secretary, Industries. According to him, the agreement did not contain clause (h) which seemed to have been incorporated at a later stage to strengthen the prosecution case. Certificate about the receipt of goods was issued to the Contractor after obtaining inspection reports from the technical hands. He stated that the goods supplied by the Contractor were positively of Allen Bradley & Co. The goods were duly inspected by the officers of the D.I.S. Department. The alleged defect was detected on dismantling the same and that the possibility of damage to the material during dismantling and reassembling by non- technical hands could not be ruled out. The Inspecting Officers had made it clear in their inspection reports that it was not possible to determine the quality of the goods through visual inspection as a result of which the guarantee in writing was obtained from the Contractor to replace any item found defective or unsatisfactory during operation. The Contractor is bound by that undertaking and his security to the extent of about Rs,3 lac is still lying with the Department.
7. Abdur Rehman D.W.1 stated that only visual inspection of the goods supplied by the Contractor is made any dismantling of parts is never done because assembly becomes nearly impossible after dismantling and that the Contractor is bound to replace any defective item which may be detected at a subsequent stage and 10% of the value of store is retained as security till such time that consignee finally settles that the goods were of the requisite standard.
8. It is contended on behalf of the petitioner that three inspections on different occasions were carried out of the goods supplied by the Contractor and they were found to be in order. The case was registered on the report of rival Contractors, on frivolous allegations. The matter is of civil nature because an undertaking had been given by the Contractor that in case, the goods supplied by him were found to be defective or not conforming to the specifications he would replace them free of cost, and out of the goods worth Rs,33 lac supplied by him only goods worth Rs,3,23,850 were allegedly declared defective. Even if, it was so, the Contractor's security is still available for making good the said loss. No show-cause notice was served on the accused-petitioner or the Contractor regarding the defects pointed out by the last Inspection Team nor was the Contractor asked to replace the goods prior to the registration of case as per terms of the contract. An interpolation was made in the original contract. Clause (h) requiring the Contractor to produce the imported documents at the time of inspection was inserted later on, it is added.
9. The main allegation against the accused is that he cheated the Government by accepting substandard goods from the Contractor. The Contractor was required to supply imported goods manufactured by Allen Bradley & Co. But instead of that he supplied reconditioned or repaired goods. This allegation falls to the ground by the evidence of Muhammad Sharif P.W.15 who stated that the goods mentioned in the receipts Exh.P.W.15/1-4 were manufactured by Allen Bradley and he had issued those receipts. Although he was declared hostile but nothing useful could come out of his cross-examination giving an indication that he was intentionally making a false statement. A reference may also be made to the report Exh.P.W.7/3 jointly prepared by Mr. Muhammad Imtiaz Ahmad Khan, M.I.C. Sheikhupura, Syed Akhtar Ali Shah, A.D./A.C.E., Lahore and Officers of Store and Workshop Division, Sheikhupura that the cartons containing the goods supplied by the Contractor bore the words and Monogram of "Allen Bradley". It is also in evidence that a thorough visual inspection of the goods supplied by the Contractor was made before taking their delivery. The alleged defects were noticed on dismantling various components of the Machinery. It is an admitted position that in routine only visual inspection is carried out and dismantling of sophisticated and expensive components is not permitted. It is for this reason that a clause is generally incorporated in the terms and conditions of the contract that the Contractor shall replace defective goods. In the present case also the Contractor was required to furnish cash security of more than 3 lac of rupees to meet any such eventuality. The Contractor was never asked to replace the defective goods. His security is still available with the Industries Department. A serious doubt exists about the existence of a clause in the contract regarding the production of import documents by the Contractor. In this context reference may be made to the evidence of Muhammad Ajmal P.W.17 who stated that clause (h) is not incorporated in all the purchase proposals. He admitted that he did not obtain approval of the competent authority for the incorporation of the said clause in the contract. According to Muhammad Ajmal P.W.17 this clause is absent from the original file of the Industries Department and was present only in the copy endorsed to Accountant-General, Punjab. The prosecution has failed to show that the Contractor/Supplier was to personally import the goods in question and could not procure them from the local market. The goods were supplied in June, July and August, 1985 whereas the case was registered on 10-7-1986 after a delay of more than one year. The Department was bound to issue notice to the Contractor for the replacement of the parts found defective on operation but no such notice was issued to him. As already stated above, security/earnest money of the Contractor amounting to more than 3 lac rupees is still with the Department and he is ready and willing to make good the loss, if any, suffered by the Department for the alleged defective supplies.
10. No complaint was made by the Department or by the recipients of the goods that they were defective or did not conform to the specifications till such time that the matter was reported to the Anti-Corruption Establishment by the rival Contractor. There is no material whatsoever on record to show that Muhammad Sadiq Bhuttta Executive Engineer had knowingly accepted defective goods for any ulterior motive or had received any illegal gratification in this behalf.
11. In the above circumstances, the prosecution of Muhammad Sadiq Bhutta, Executive Engineer, Stores and Workshop Division, Irrigation and Power Department on criminal charge does not appear to be legally justified. In consequence, the proceedings arising out of F.I.R. No,16 dated 10-7- 1986 under section 201/409/420/468/471/109, P.P.C. And 5(2)47 of the Prevention of Corruption Act, Police Station Anti-Corruption Establishment, Lahore pending in the Court of Special Judge, Anti- Corruption qua him and others are quashed.