CLOUGH ENGINEERING LTD Vs. STATE OF A P

JUDGEMENT

(1.) This criminal petition is filed under Section 482 of Cr.P.C, by A4 and A5 to quash the proceedings in Crime No.RC.8/E/2005/CBI/EOW/CNI of SPE: CBI: EOW Chennai Police Station, registered for the offences punishable under Section 120-B read with Sections 420, 467, 468 and 471 of the Indian Penal Code and Section 13(2) read with Section 13(l)(d) of the Prevention of Corruption Act, 1988.

(2.) The first petitioner, who is A4-M/s. Clough Engineering Limited, was entrusted with a turnkey contract for integrated development of G-1 and GS-15 oil fields project by the Oil and Natural Gas Commission (ONGC) at a cost of 216.86 American million Dollars, which is equivalent to Rs. 1,280 crores approximately, through an agreement dated 6-1-2005. As per the contract, the first petitioner is supposed to obtain 4 insurance policies and such insurance will be effected with an Insurance Company registered and incorporated in India. For the entire contract, the payment has to be released by ONGC to the first petitioner in the form of milestone payment based on the performance of the work as stipulated in the contract agreement. As per the contract, the first milestone payment is to be released upon submission of policies of insurance specific for this project with the certificate of insurance and proof of 100% premium paid. As per the terms of the contract, the first milestone payment is described for 'insurance 100% upon submission of policy/policies of insurance specific for the project and certificate of insurance for other policies and proof of 100% premium paid and accepted by the company for 32,882,100 Australian Dollars'. After completion of these conditions, the ONGC is supposed to release 38,882,100 Australian Dollars in favour of first petitioner. The first petitioner has failed to obtain the above said insurance policies as stipulated in the contract of agreement, instead they obtained only one insurance policy from National Insurance Company Limited, Mumbai. The first petitioner submitted an invoice for the first milestone payment for an amount of Rs.32,882, 100 Australian Dollars, which is equivalent to Rs.112.19 crores. Along with the proforma invoice, they have submitted a forged insurance policy schedule in which the actual premium amount paid has been dishonestly removed by altering the same. The invoice along with the forged insurance policy schedule has been submitted by A5, who is the Project Manager of the first petitioner- company. On 14-1-2005 A5 also signed the first milestone completion certificate on behalf of first petitioner-company and the same was signed by A1 on behalf of ONGC. After obtaining the completion certificate and the invoice along with the forged insurance policy schedule, A5 has claimed the first milestone payment on behalf of first petitioner-company from ONGC.

(3.) The other accused, who are ONGC officials deliberately failed to verify the authenticity of the claims made by the first petitioner and falsely certified the bona fides of the expenditure and have recommended for release of the payment. They have also dishonestly accepted the certificate submitted by the first petitioner for workmen compensation policy and insurance for their vessels not specific to this project and which was taken from foreign insurance companies prior to the date of award of this contract by committing the breach of contract conditions to cheat the ONGC. A1 to A3 dishonestly and fraudulently abused their official positions to cause pecuniary advantage to the first petitioner and corresponding wrongful loss to ONGC Limited to a tune of Rs.94 crores. They have also wrongfully accepted the certificate of insurance policy from foreign insurance companies not specific to this project, which were taken prior to the date of award of this contract.