Fraudulent Tender Allotment: Supreme Court Orders Criminal Trial in Jharkhand Contract Scam

The Supreme Court of India has delivered a significant ruling in the case of Dharambeer Kumar Singh vs. The State of Jharkhand & Anr., dealing with fraud in government contract allotments. This case involves allegations of forged documents used to secure a multi-crore tender and a dispute over unpaid subcontractor dues. The ruling reaffirms the necessity of a fair trial in cases of financial fraud and criminal conspiracy.

The apex court set aside the Jharkhand High Court’s decision to quash the criminal proceedings, ordering the accused to face trial for their alleged role in submitting fraudulent documents to obtain a government contract. The case highlights the misuse of public funds and the manipulation of tendering processes.

Background of the Case

The case arose from allegations that M/s SS Infrastructure Co. and its partners, including Santosh Kumar Choudha, had fraudulently secured a government tender by submitting forged experience certificates. The project, known as the Namna Ankiat Project, involved extension, restoration, and modernization of the Jinjoyi Irrigation Scheme in Palamau, Jharkhand, with an estimated cost of Rs. 35.18 crore.

The petitioner, Dharambeer Kumar Singh, worked as a subcontractor on the project and accused the main contractor of:

Failing to pay the dues owed for work completed.
Fraudulently securing the tender by submitting forged documents.

Legal Issues Considered

The Supreme Court examined the following legal questions:

Whether the High Court erred in quashing the summoning order and criminal proceedings against the accused.
Whether the accused knowingly used forged experience certificates to win the government tender.
Whether the subcontractor was attempting to misuse criminal proceedings for financial gain.

Arguments by the Appellant (Dharambeer Kumar Singh)

The appellant contended that:

The accused had submitted forged and fabricated experience certificates to falsely claim eligibility for the tender.
The tender conditions required past experience in projects worth Rs. 18.40 crore, but the accused’s only relevant project was valued at Rs. 3.40 crore.
Despite the fraudulent nature of their bid, the accused were awarded the contract.
The Jharkhand High Court wrongly quashed the summoning order and dismissed the criminal case at a premature stage.

Arguments by the Respondents (SS Infrastructure Co. & Others)

The respondents countered:

The subcontractor, Dharambeer Kumar Singh, had criminal antecedents and was attempting to use the legal system for personal financial gain.
The project was successfully completed without any objections from the government.
The High Court correctly quashed the proceedings based on lack of evidence in the final police report.

Supreme Court’s Observations

The Supreme Court found that:

1. Forgery and Fraudulent Bidding Must Be Investigated

The court noted:

“The accused was successful in obtaining the tender on the basis of fabricated documents. Though he was not fulfilling the requisite conditions, he used forged and fabricated documents to claim eligibility.”

Read also: https://judgmentlibrary.com/supreme-court-acquits-man-in-attempted-murder-case-due-to-lack-of-evidence/

2. High Court Exceeded Its Jurisdiction

The court ruled that the Jharkhand High Court overstepped its authority by quashing the criminal case at an early stage:

“At the stage of summoning, the Trial Court is only supposed to examine whether a prima facie case is made out, not conduct a detailed inquiry into the evidence.”

3. Criminal Proceedings Cannot Be Quashed Based on Disputed Facts

The Supreme Court emphasized that:

“Complicity in forgery must be established through trial, and such cases cannot be dismissed prematurely by the High Court.”

4. Beneficiaries of Fraudulent Tenders Must Face Trial

The Court noted that the accused were the primary beneficiaries of the fraudulent tender process and should be held accountable.

Final Judgment

The Supreme Court:

Allowed the appeals.
Quashed the Jharkhand High Court’s order dismissing the criminal case.
Ordered the Judicial Magistrate to proceed with the trial against the accused.
Directed that all accused persons must face trial for forgery, fraud, and conspiracy.

Implications of the Judgment

This ruling has far-reaching implications for government contract allocations and criminal jurisprudence:

Prevents Fraud in Public Contracts: Ensures that companies submitting forged documents to secure contracts are prosecuted.
Reaffirms Limited Scope of High Court’s Intervention: High Courts cannot quash criminal cases involving serious allegations at a preliminary stage.
Encourages Transparency in Public Procurement: Reinforces the need for strict scrutiny in awarding government contracts.
Protects Whistleblowers: Ensures that genuine complaints about fraud in tenders are investigated thoroughly.

The Supreme Court’s decision in Dharambeer Kumar Singh vs. The State of Jharkhand reinforces the principle that criminal misconduct in government tenders cannot be dismissed lightly. It sets a strong precedent for holding individuals accountable for financial fraud and protecting the integrity of public contracts.

Petitioner Name: Dharambeer Kumar Singh.
Respondent Name: The State of Jharkhand & Anr..
Judgment By: Justice Vikram Nath, Justice Prasanna B. Varale.
Place Of Incident: Palamau, Jharkhand.
Judgment Date: 05-08-2024.

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