Report No. 29
Category 4.-Delivery of Goods not in Accordance with Contract
126. Delivery, etc. of goods not in accordance with contract. (Category 4).-The fourth category of the offences listed by the Santhanam Committee is the following:-
"Delivery by individuals and industrial and commercial undertakings of goods not in accordance with agreed specifications in fulfilment of contracts entered into with public authorities".
At another place in the Report1, the Committee observed, that frequently it was the dishonest contractors and suppliers who, having obtained the contract by undercutting, wanted to deliver inferior goods or get approval for sub-standard work, and, for this purpose, were prepared to spend a portion of their ill-earned profit. In an Annexure to the Report2, the Committee discussed in detail how favours could be shown by passing and accepting goods which were not strictly in accordance with the specifications laid down in the accepted tenders, or by not applying the penalty clause in respect of rejected goods, or by not strictly applying all the terms of the contract, or by giving wrong certificates about completion of inspection or actual despatch of goods.
1. Report of the Santhanam Committee, p. 10, Para 2.11.
2. Report of the Santhanam Committee, Annexure VII, p. 236, item (i).
127. Existing provisions analysed.-We have listed separately1 some of the existing provisions which have a bearing on the malpractice in question. The most important of these are sections 415 and 420, Indian Penal Code, which run as follows:-
'415. Cheating.-Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to "cheat".
Explanation.-A dishonest concealment of facts is a deception within the meaning of this section.'.
"420. Cheating and dishonestly inducing delivery of property.-Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine."
1. See Appendix 4.
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