Kochi, Oct 31 (PTI) A court here on Saturday sentenced two former officials of SIFL to three years’ RI each and imposed fines of Rs 20 lakh each in a corruption case involving the procurement of components for battle tanks by the Ordnance Factory, Medak, in Telangana.
CBI court Judge P K Mohandas found S Shanavas, former Managing Director of Steel and Industrial Forgings Ltd, and A Valsan, former Senior Manager (Marketing) of the company, guilty of criminal conspiracy, cheating and offences under the Prevention of Corruption Act.
The court also convicted AMW-MGM Forgings Pvt Ltd, the sixth accused in the case, of criminal conspiracy and cheating and imposed a fine of Rs 10 lakh on the company. The fine is to be recovered from its assets.
Three other accused — V K Panda, former General Manager of Ordnance Factory, Medak; T Muralidhar Bhagavat, former Managing Director of AMW-MGM Forgings Pvt Ltd; and K R Mugilan, former Manager (Marketing) of the company — were acquitted of all charges.
SIFL is a public sector undertaking of the Keralam government that manufactures components for defence equipment.
According to the prosecution, the accused entered into a criminal conspiracy between August 2011 and December 2012 to manipulate a tender floated by the Ordnance Factory for the procurement of Road Wheel Arm Forgings used in the manufacture of BMP-II battle tanks.
The tender, issued in January 2012, sought the supply of 527 Road Wheel Arm Forgings of one specification and 1,233 of another.
The factory had invited limited tenders from SIFL and AMW-MGM Forgings, while the remaining requirement was to be met through an open tender.
The prosecution alleged that the two companies formed a cartel and quoted prices more than 50 per cent higher than those in the previous tender, causing a wrongful loss of around Rs 78 lakh to the government.
SIFL quoted Rs 13,950 per unit against its internal cost estimate of Rs 8,224.49, while AMW-MGM quoted Rs 14,523 per unit, the prosecution said.
As part of the alleged conspiracy, Panda, then General Manager of the Ordnance Factory, demanded and received Rs 3 lakh as illegal gratification from Subi Mally, Managing Director of Mumbai-based Subshi Impex Pvt Ltd, on March 9, 2012, the prosecution alleged.
Panda subsequently directed the immediate dispatch of supply orders to the two companies, following which the factory received the components and released payment.
SIFL later paid Mally a commission of Rs 20.80 lakh. Mally allegedly transferred Rs 8 lakh to Valsan in November 2012, and the amount was subsequently shared equally between Shanavas and Valsan, according to the prosecution.
The CBI registered the case on January 12, 2013, based on source information, and filed its final report against six accused, including the company, on July 23, 2014.
Mally was made an approver in the case. The court sentenced Shanavas and Valsan to three years’ rigorous imprisonment each under the relevant provisions of the Prevention of Corruption Act and the IPC. Each was also fined Rs 20 lakh, with an additional one-year term of rigorous imprisonment in default of payment.
The company was fined Rs 10 lakh for cheating. The court did not award a separate sentence for criminal conspiracy, holding that the punishment for cheating was sufficient.
Advocate Remya Prasad appeared for the CBI. Senior Advocate B Raman Pillai and Advocate Thomas Abraham Nilackappillil appeared for Panda. PTI TBA SSK
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