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2003 (11) TMI 615

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..... e Government of Tamil Nadu so far as they relate to such units'. Article 72 of Articles of Association empowers the Government to appoint all the Directors with the power to remove any Director from time to time. Article 79 empowers the Government to appoint and remove the Managing Director. Similarly Government can also appoint a Chairman and Vice-Chairman of the Board. The Chairman can reserve for the approval of the Government any proposals or decisions of the Board in respect of any of the matters regarding (a) increase or reduction of the capital of the Company; (b) loan granted by the Company or giving of a guarantee or any other financial assistance to any person or concern; (c) winding up of the Company; and (d) any other matter which in the opinion of the Chairman be of such importance as to be reserved for the approval of the Government. In respect of any proposal or decision of the Board reserved for the approval of the Government no action shall be taken by the Company until approval to the same has been obtained. The Government also exercises the power to issue directives or instructions as it may deem fit in regard to finances and the conduct of the business and a .....

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..... extent of land and building and four offers were received. The offers of Ashwini Plastic and ENCOFED were recommended to the Government after the approval of the Board, but the Government did not give approval on the ground that it will be more advantageous to TANSI to call for fresh tenders after parcelling out the land into industrial plots in accordance with the Madras Metropolitan Development Authority rules and regulations. On 30.4.1990 Jaya Publications, an unregistered partnership firm in which J.Jayalalitha, Accused No. 1, and Sasikala, Accused No. 2, were partners, purchased land adjacent to the TANSI property in dispute from Hitex Equipment company vide sale deed, Ex.P.-57, at the assessed market value of ₹ 6 lakhs per ground which is at par with the guideline value of Registration Department. In the general elections held on 13.5.1991 for the Tamil Nadu Legislative Assembly AIADMK party came to power and J.Jayalalitha, accused No. 1, became the Chief Minister. On 29.9.1991 Jaya Publications again purchased another adjacent land from Idhayam Publications vide sale deed (Ex.P-8) at the assessed market value of ₹ 7.32 lakhs per ground [270 sq. yards]. On 10.10.1 .....

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..... -Committee appointed by the Board were Chairman-cum-Managing Director of TANSI, who is also the Director of TANSI, Abdul Hasan, the Director of TANSI and Joint Secretary, Industries Department, and C.Madakkannu, Chief Engineer (Buildings),PWD, who is also the Director of TANSI. Advertisements were caused to be published in leading newspapers on 21.11.1991 calling for offers through tenders for the purchase of the property of TANSI Foundry. A letter was addressed by the Managing Director (A-3) to the Sub-Registrar, Adayar (P.W. 1) intimating that they want to dispose of land in Thiru.Vi.Ka.Industrial Estate and requesting to furnish the guidelines price of the lands situate in Block No. 5 at Alandur. Sub-Registrar, Adayar replied (Ex.D-39) that there was no guideline value for survey numbers 86, 87, 88, 90, 91 Part, 92 Part and 93 Part, in Block No. 5 of Adayar Village which are the properties in dispute. He further stated that in the adjoining property in Block No. 6 of Thiru.Vi.Ka.Industrial Estate, the value of one sq.feet was ₹ 305/-, which worked out to ₹ 7.32 lakhs per ground. It is important to note that Block Nos. 1 to 6 of Adayar village are situated in Thiru.vi .....

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..... dustrial Estate, it was marginally higher than the value fixed by the Collector under Ex.D-20 as the Collector had fixed the price per ground for the property at ₹ 3 lakhs. The note further indicated that TANSI had already decided to sell 2.52 acres of land of the same unit to Tamil Nadu Sugar Federation at ₹ 3 lakhs per ground and, therefore, the price of ₹ 3.01 lakhs offered by Jaya Publications could be considered reasonable. It was also taken into consideration that ₹ 19.20 lakhs was offered by the highest bidder for the building and that heavy structures available at TANSI Foundry may be useful for a heavy engineering workshop and for a buyer who does not intend to put up a heavy engineering workshop, the value is only notional and at best is only a scrap value. Therefore, members of the Board recommended to the Government selling a portion of the land of about 2.98 acres at the rate of ₹ 1,350/- per sq.mt., that is, ₹ 3.01 lakhs per ground, and that the exact extent of the land to be sold could be measured at the time of handing over and the exact amount could be collected and the building measuring 2698 sq. mts. could be sold at a cost of .....

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..... l complaints and on the basis of media reports, the Government referred the matter to C.B.C.I.D. on which a crime came to be registered in crime No. 17 of 1996 Ex. P-75 is the First Information Report in the said crime. Investigation was taken up by P.W.27 and two cases were registered as Special C.C. No. 4 of 1997 and Special C.C. No. 13 of 1997 against the respondents. A-1 was charged under Section 120-B IPC, Section 13(2) read with Section 13(1)(c) 13(1)(d) of the Prevention of Corruption Act, and Sections 409, 169 and 420 read with Section 34 IPC. A-2 was charged under Section 120-B IPC, Sections 13(2) read with Section 13(1)(c) and (d) of the Prevention of Corruption Act read with Section 109 IPC, under Sections 409 read with 109 IPC, 169 read with 109 IPC and 420 read with 34 IPC. A-3 was charged under Section 120-B IPC, Section 13(2) read with 13(1)(d) of the Prevention of Corruption Act, Section 119 IPC read with Section 13(2) read with 13(1)(d) of the Prevention of Corruption Act, and under Sections 169 read with 109, 420 and 409 IPC. A- 4 and A-5 were charged under Section 120-B IPC, under Section 13(2) read with 13(1)(d) of the Prevention of Corruption Act, under Se .....

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..... of Corruption Act and under Sections 169 read with 109 IPC, 420 IPC and 409 IPC. A-4 and A-5 were acquitted of the charges framed under Sections 119 IPC read with 13(2) read with 13(1)(d) of the Prevention of Corruption Act and Sections 169 read with 109 IPC. A-4 is stated to have died subsequent to the disposal of the appeal in the High Court and before these proceedings were filed in this Court. A-6 was acquitted of the charges under Sections 119 IPC read with 13(2) read with 13(1)(d) of the Prevention of Corruption Act and under Sections 13(2) read with 13(1)(d) of the Prevention of Corruption Act and 109 IPC. The charge under Section 420 IPC was dropped in view of the concession made on behalf of the State of Tamil Nadu in Criminal Appeal Nos. 395-397 of 2000 decided by this Court on 25.4.2002 and reported in 2000(4) SCC 444. The accused preferred Crl. Appeal Nos. 972, 973, 974, 977, 981 and 987 of 2000 before the High Court. The High Court by a judgment pronounced on 4.12.2001 allowed Criminal Appeals by acquitting all the accused and dismissing the State appeal. Summary of the Findings of the High Court are as follows: 1. There is no evidence to indicate that the Gu .....

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..... r market value nor is there any independent material to conclude that there is any conspiracy to commit offences charged herein. 9. There is no link established to show that there is a conspiracy to sell the properties at a lesser price so as to cause wrongful loss and wrongful gain to enable A-1 and A-2 to obtain the same. 10. In view of the finding recorded that there was no Guideline Value and by reason of the properties sold at ₹ 3 lakhs per ground there was no pecuniary advantage to M/s Jaya Publications, the charges under Section 13(2) read with Sections 13(1)(c) and 13(1)(d) of the PA Act were not established. 11. In regard to A-3, the High Court held that the decision to offer the land in question was that of the Board and not his individual decision and he followed the decision of the Sub-Committee and, therefore, in view of the collective decision taken by the Board or the Sub-Committee he cannot be held to be guilty of any charge. 12. In regard to charge against A-4, none of the persons who endorsed the file had been attributed with corrupt motive and, therefore, there was no evidence worthy of consideration. 13. A-5, who was the Special Deputy Colle .....

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..... ted case of the prosecution that Jaya Publications offered ₹ 3.01 lakhs per ground for the entire land and it offered to purchase the superstructure and machinery at ₹ 19.20 lakhs and other bidders quoted less. On an earlier occasion when TANSI Foundry unit wanted to sell 3.26 acres of land to Tamil Nadu Co-operative Sugar Federation, the value of a ground was fixed at ₹ 3 lakhs by the Collector, Madras. It could be seen from Ex.D-20 which is a letter written by the Collector to the Commissioner of Land Administration to the effect that the maximum sale value in the village in Block No.5 of Thiru.vi.ka.Industrial Estate was ₹ 3,12,613 per ground based on the sale of a vacant land in S.No. 16/7 of Alandur village. He recommended that the rate of ₹ 3 lakhs per ground could be fixed as the value for the TANSI Foundry land. That assessment of the Collector was accepted by the Commissioner of Land Administration as per Ex.P-61 who also fixed ₹ 3 lakhs as value per ground for the TANSI Foundry land. The trial Judge rejected the value of land indicated in Ex.D-20 and Ex. P-61 on the ground that TANSI agreed to sell the land to Tamil Nadu Co-operative Su .....

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..... ht out through Ex. D-20 and P-61 that the value of the land of TANSI Foundry unit could be about ₹ 3 lakhs per ground particularly when the sale was by way of open tender, it cannot be said beyond reasonable doubt that the property in question had been under-sold and thus there was loss to TANSI. The view taken by the High Court appears to us to be a reasonably possible view. Now we shall examine whether Ex. P-8, P-57, P-70 and P-71could be considered to assess the market value of the disputed property as ₹ 7.32 lakhs per ground. Each of these documents was accompanied by Form 1-A wherein the parties acquiesced in the claim for payment of excess stamp duty. The land comprised in Exs. P-70 and P-71 are small in extent and they could not be taken into consideration to be safe guide to find value of the land sold by TANSI to Jaya Publications because it will be 53 times higher than the extent of land conveyed under those documents. In fact, PW.1 admitted that they are not comparable sales. The sale deed executed on 22.9.1991 [Ex.P.8] by Idayam Publications in favour of Jaya Publications had shown the value of the land at ₹ 4,78,488/- per ground. It was in respect .....

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..... d investment and interest was being paid by TANSI on loans borrowed from the banks. At the time of the present transaction, the borrowings extended to ₹ 1.87 crores and had to pay ₹ 18 lakhs of interest per annum and, therefore, it was not possible to contend that bringing the properties in question for sale was imprudent nor it could be demonstrated that the advertisement did not give sufficient particulars or that the tender forms were not made freely available or that anyone of the bidders was pressurized into not bidding or bidding for a lower amount or that a cartel had been formed or that the bidding in open tender was vitiated in any manner whatsoever. In such cases the courts have always held that the best price obtained through open tender is an index of the market value of the property. The Collector of Madras and the Commissioner of Land Reforms looked into the matter and held that an amount of ₹ 3 lakhs per ground is the market value of the land in question. Contrary to what is stated by the prosecution, the valuation in Ex.D-20 was not made on the basis of sale being to a Government Corporation but on the basis of the independent data relating to sale .....

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..... verting to the evidence of PW-19, the Design Engineer, and Ex.P-59 approved by the Chief Engineer wanted to contend that the value of the building is ₹ 53,12,354/-. PW-19, the Design Engineer, assessed it at ₹ 4,64,75,036/- as could be seen from Ex.P-58. Subsequently, the same was modified by the Chief Engineer by bringing it down to ₹ 53,12,354/-. There is a big difference of amount of more than 4 crores between the value assessed by the PW-19, the Design Engineer and the value fixed by the Chief Engineer. They did not contain any details as to how the value had been finally arrived at ₹ 53,12,354/- of the building. In Ex.P- 58, the value of the structural columns were shown at ₹ 54,32,130/- but in Ex. P-59, it was shown as 39 lakhs, and no evidence was adduced before the Court to show that how these figures were arrived at, although, it is stated that the witnesses had taken about 40-50 pages of note. If that was so, the same should have been produced by the prosecution and in the absence of production of those notes, forming part of evidence is difficult to accept that the value mentioned in Exs. P-58 and P-59 was the correct value for the building. .....

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..... ting in which it is to be viewed will obscure the issue for consideration. It is clear, therefore, that guideline value is not sacrosanct as urged on behalf of the appellants, but only a factor to be taken note of if at all available in respect of an area in which the property transferred lies. In any event, therefore, if for the purpose of Stamp Act guideline value alone is not a factor to determine the value of property, its worth will not be any higher in the context of assessing the true market value of properties in question to ascertain whether the transaction has resulted in any offence so as to give a pecuniary advantage to one party or the other. In ascertaining the true value, the High Court has taken note of several features. Firstly, the price has been offered by the firm of A-1 and A-2 in a tender process pursuant to an advertisement issued in a newspaper. A tender process by the TANSI not being shown to be or demonstrated to be vitiated is a transparent and good piece of evidence to indicate the real price of the properties in question. That line adopted by the High Court cannot be faulted with at all. Secondly, the adoption of ₹ 7.32 lakhs per ground as Guid .....

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..... and 2 are partners. That fact in the case not being in dispute, it is unnecessary to dilate on this aspect any more. Insofar as the offence under Section 120B is concerned, it is not clear from the arguments made by the learned counsel on behalf of the appellants in what manner the conspiracy is sought to be established. How there have been meeting of the minds of different accused at different stages and what the common design has been, is not clear. Even if we assume for the purpose of argument that some of the officers of the Government were circumspect in their attitude having come to the conclusion that A-1 was interested in purchase of the properties and have put their seal to such act either tacitly or over zealously by being too expressive of the same, we cannot hold that there was a conspiracy amongst various persons. In the present case, conspiracy was sought to be inferred from the conduct of several accused. The contention on behalf of the State was that while putting a note on 13.1.1992 A-4 had stated that he verified with A-3 and came to know that the market value of the property was ₹ 3 lakhs per ground for larger extent and that A-4 could not have verifi .....

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..... is fact. In fact, PW-14 admitted that when she put up her note, she only stated that it had to be circulated to A-4 and PW 11 wanted the file to be circulated to Minister (Rural Industries), Minister (Finance) and Chief Minister and PW 14 did not make such a note and, therefore, by merely finding the letters M(RI) , M(F) and CM and their scoring off, we cannot come to the conclusion that they were first entered and later scored off at the instance of A-4. It was, therefore, not possible to hold that there was conspiracy among the accused on that account. An argument was put forth that A-5 did not follow the procedure contemplated under the Tamil Nadu Stamp (Prevention of Under-valuation of Instruments) Rules, 1968 since he did not wait for 21 days for the parties to submit their representations before he passed the final order under Rule 7 of the said Rules and A-5 ought to have waited for 21 days as contemplated under Rule 4 of the said Rules and thereafter he should have passed a provisional order under Rule 6 and then final order under Rule 7. The objections of Jaya Publications were received on 3.12.1992. There is no rule that A-5 should wait for 21 days since the perio .....

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..... discarding public interest. The purchase was effected through open sales held by TANSI. The right to sell the properties in question was available with the Corporation which chose to do so in favour of M/s Jaya Publications and M/s Sasi Enterprises. It is not established that A-1 or any other person obtained for herself any valuable thing or pecuniary advantage by abusing her position as public servant. On the other hand, as stated earlier, the properties in question were sought to be sold from time to time and pursuant to such steps taken the properties had been sold to two firms in question. The sale has been held pursuant to various resolutions of the Government since 1985 and that the putting up of the properties in question for sale itself was not against any public interest. When the two firms of which A-1 is a partner offered appropriate price the same having been accepted, it cannot be said that it has resulted in obtaining any pecuniary advantage or valuable thing by abuse of the official position. If the properties in question were sold by TANSI in public interest, the obtaining of the same through purchase in such a transaction for valuation consideration which does not .....

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..... Therefore, there was no evidence to show that A-3 acted against the decision to favour Jaya Publications. The sale of land to Jaya Publications is a collective decision of the Board and not of any individual, the price on which the land was to be sold and the price on which the buildings were to be sold were decided by the Board of Directors to which the Government gave approval and thus there was no independent assignment to A-3 in deciding the matter nor did he suppress any document by not placing them before the Board of Directors. A-5, Special Deputy Collector (Stamps), only performed statutory duty in fixing the value of the property in question at ₹ 3 lakhs per ground after notice to the concerned parties. The matter was statutorily referred to A-5 for fixing the market value of the property and thereafter A-5 fixed the market value of the property after taking into consideration the relevant factors. A-5 took into account the fact that in the vast extent of about 2 to 3 sq.kms. the land purchased by Jaya Publications was 3/4 km. away from Grand South Trunk road and King Institute was at the eastern boundary of the land in the industrial estate and the land value was .....

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..... t the lands comprised in these documents were not comparable and did not reflect the true value of the property in dispute. By letter - Ex. D-20, the Collector had fixed the value of the property, Ex. P-61 - the Commissioner of Land Administration fixed the value of the disputed land at ₹ 3 lakhs per ground. In Ex. D-21, PW 1 himself admitted that Exs. P-70, 71 and 8 were not the comparable sales and further it was seen from the evidence that the land conveyed under Ex. P-8 was close to 100 feet road and the extent was also smaller as is in the case of Ex. P-57. Ex. P-4 is a letter addressed by way of answer to his subordinate setting out the guidelines. A-5 fixed the market value of the property covered under Ex. P-68 at ₹ 2,78,184/- per ground and not at ₹ 6 lakhs though the property was situate within Block No. 6 of Adayar village. Ex. P-68 was referred under Section 47-A of the Stamp Act and A-5 was not bound by the guidelines while assessing the value of the property and that he need not even accept the value mentioned in Ex. P-8, P-57, P-70 and P-71 as the properties conveyed under the said sale deeds were smaller in extent. The trial Judge proceeded on t .....

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..... on would result in a loss to public or not. In this context, the provisions of Section 52 of the Indian Trust Act, 1882, Section 136 of the Transfer of Property Act, 1882 and Order XXI, Rule 73 CPC are brought to our notice and reliance was also placed on the decision of the Privy Council in (Seth) Kanhaya Lal, since deceased (Now represented by Seth Hanuman Prasad Ors.) Vs. National Bank of India Ltd. New Delhi, AIR 1923 PC 114, wherein it was observed that there should not be merging of two positions, namely, that the interest of the seller to get the highest price and the buyer to get the lowest price in the same person. In such an event, there will definitely be a conflict. Applying the same principles, even in relation to the position of Ministers, Ministers ought not to enter into any transaction whereby their private pecuniary interest might even conceivably come into conflict with their public duty. It is urged that the expression legally bound not to purchase' in Section 169 IPC must, therefore, be understood in the context of a fiduciary duty or obligation of a public servant not to purchase or bid for property from the Government or in respect of which he or she i .....

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..... uction or guidance to be observed or not observed as the Minister deems fit or not and it was meant to be a binding rule of action and in this context, reference was made to the decision in Vidadala Harinadhababu etc. Vs. N.T. Ramarao, Chief Minister, State of Andhra Pradesh, Hyderabad Ors. AIR 1990 AP 20, the Full Bench of the Andhra Pradesh High Court observed that no minister would claim or would have the temerity to claim that he is not bound by restrictions contained in the Code of Conduct and the mere fact that the Government order is not statutory is irrelevant and even executive orders have a binding force in law and it could not be spelt out that sanction is not logically essential for a law and, therefore, the Chief Minister was also bound and was within the scope of the order. For this purpose, it was also submitted that the question is not whether TANSI Foundry land was technically the property of the Government but of a Government company, but whether A-1 was purchasing it from Government within the prohibition of Rule 2(b) of the GO and whether A-1 was purchasing property which was completely under the charge and control of the Government. In this case, A-1 was th .....

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..... the property in question which is owned by the Government Corporation, namely, Tamil Nadu Small Scale Industries Corporation. A distinction is maintained in the Code itself between the property of the Government and the property of the Government undertakings. The property of a Government Company, which has a distinct legal identity, cannot be equated to the property of the Government though the Government may have control over the Corporation. The prohibition must be clear and unambiguous to give rise to the offence. The theory of lifting the veil of the Company cannot be invoked while dealing with the criminal offences alleged to have been committed by a third party. While elaborating the point that the definition of legally bound to do cannot be imported, attention is drawn to Sections 175, 176, 177, 179, 181, 191, 202, 221, 222, 223 and 225 A IPC wherein that expression occurs. The learned counsel, therefore, submits that the said definition is relevant only while construing those Sections and what is contemplated in the above Sections is that the act which a person is legally bound to do but if he omits to do that particular act, an offence is made out, but, Section 169 only .....

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..... y him as stated above. Thus, in these circumstances where a law has prohibited purchase of property or to bid at an auction, the prohibition contained therein will be attracted and will become an offence under Section 169 IPC. On a plain reading of the Section and seeking the assurance from the marginal heading as well, it is fairly clear that prohibition should flow from a law. Such law in the context of Section 169 IPC should mean that the law as ordinarily understood, that is to say, an enacted law or a rule or regulation framed under such law but not an executive order which confers no rights on anybody nor sets down legally enforceable obligations. The rules and administrative instructions governing the public servants holding the civil post have undisputedly no application in this case. The law, which is pointed out, is the Code of Conduct for Ministers issued in G.O.Ms.No. 1350, dated 26.7.1968 by the Government of Tamilnadu in the name of Governor. Para 2(b) thereof enjoins that a Minister, so long as he remains in office, shall refrain from buying from or selling to the Government, any immovable property except where such property is compulsorily acquired by the Govern .....

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..... s no provision in the Constitution, nor is there any provision of law which regulates the conduct of a Minister-which expression includes Chief Minister and Prime Minister. There is also no constitutional or statutory provision prohibiting a Minister from engaging himself in any profession, occupation, or business, whether actively for gain or otherwise. (ii) The Code of Conduct issued by the Union Government-and by the State Government-is of great significance and sanctity, though it is not statutory. It fills a great void. The Code is evolved with an eye upon good Government and clean administration, not only in action but also in appearance. It is binding upon all Ministers. It prescribes the authority who shall ensure observance thereof. The procedure to be followed by him and the action to be taken thereon is also left to him. Similar rules have also been evolved in United kingdom. However, for the reasons given hereinbefore, the petitioners cannot seek to enforce the Code through the Court. Even if the Government order is traced to have been issued under executive power of the State under Article 162, such a Code will not be enforceable when the language used is not .....

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..... ch she was a partner, would be insufficient to establish a charge under Section 169 against her as the main ingredient of the aforesaid provision is not established. The High Court is justified in holding that the first respondent is not guilty of the offence under Section 169 IPC and the other respondents not guilty of abetment. The next charge we have to deal with is one arising under Section 409 IPC. Criminal breach of trust has been defined under Section 405 IPC. For the offence of criminal breach of trust by a public servant the punishment is provided under Section 409 IPC. The properties in question belongs to TANSI, a corporation which is a separate and distinct entity from the Government and the properties are held by it as owner and has complete control over the same except when the said properties are to be alienated, approval of the Government has to be obtained as provided under the Articles of Association of the said Corporation. In a case of this nature, where there is no dominion over the properties by a Chief Minister or a Minister it cannot be treated as entrustment of the properties creating a trust which is an obligation annexed to the ownership of the propert .....

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..... tion of the individual to society. The authors of the Indian Penal Code stated that :- ....We cannot admit that a Penal Code is by any means to be considered as a body of ethics, that the legislature ought to punish acts merely because those acts are immoral, or that, because an act is not punished at all, it follows that the legislature considers that act as innocent. Many things which are not punishable are morally worse than many things which are punishable. The man who treats a generous benefactor with gross ingratitude and insolence deserves more severe reprehension than the man who aims a blow in passion, or breaks a window in a frolic; yet we have punishment for assault and mischief, and none for ingratitude. The rich man who refuses a mouthful of rice to save a fellow-creature from death may be a far worse man than the starving wretch who snatches and devours the rice; yet we punish the latter for theft, and we do not punish the former for hard-heartedness. Though we have come to the conclusion that A-1 is not guilty of the offences with which she was charged, it is clear that the property belonging to public sector undertakings was sold to firms of which A-1 is .....

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..... standards of behaviour, while in public life, those who hold high offices should not take shelter under the umbrella of criminal law but stand by high probity. Further, criminal law is meant to deal with criminals ordinarily, while Code of Conduct is observed as gentlemen's agreement. Persons in public life, who are gentlemen, follow such Code instead of taking escape routes by resorting to technical pleas as arise in criminal cases. Persons in public life are expected to maintain very high standards of probity and, particularly, when there is likely to be even least bit of conflict of interest between the office one holds and the acts to be done by such person, ought to desist himself from indulging in the same. Such standards of behaviour were scrupulously observed in the earlier days after independence, but those values how now dwindled and instances of persons holding high elective offices indulging in self- aggrandisement by utilising Government property or in distribution of the largesse of the Government to their own favourties or for certain quid pro quo are on the increase. We have to strongly condemn such actions. Good ethical behaviour on the part of those who are i .....

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