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                                                      CASE STUDIES


1.    Unauthorised extension of Contract


During a preventive check, it was found that a few AMC contracts in favour of a particular firm were entered in the period between 2002-05.  These contracts were under execution & bill payment till Sept’2014.  Detailed scrutiny revealed that these contracts do not have a firm agreemental value.  Rather agreemental value was on per annum basis.  These contracts were initially valid for one to five years with an unusual provision that these contracts could be further extended for similar period on the same terms & conditions.  Utilizing these provisions, the contracts were extended and are in operation till date.  Since, the contract rate is on per annum/month basis, extension of the contract validity will also come under quantity variation.  Thus, these contracts have been operated in far excess of permitted +50% quantity variation.  Thus in these cases, rules of limitation for quantity variations w.r.t. agreemental value as prescribed in GCC has not been adhered to.  Executive has been advised either to regularize or short close the contracts.  Case has also been taken up for detailed investigation and responsibility fixation.


2.    Violation of Competencies in finalisation of contract

            A contract has been awarded to a firm on single tender basis for (a) Day to day maintenance of 03 nos. Heat Treatment Furnaces round the clock @ Rs. 1,80,000/- per month + taxes and (b) Day to day operation and maintenance of complete LPG system and networking of above 03 Heat Treatment Furnaces round the clock @ Rs. 2,25,000/- per month + taxes.   The combined value of the contract is Rs. 54,60,696/- per annum including Service Tax.  The validity of the contract was for 5 years.  Thus, the total value of the contract was Rs. 54,60,696/- x 5= Rs. 2,73,03,480/-.  The proposal for single tender had been initiated treating the firm as OEM.  This is not considered reasonable because asset was acquired through a works contract and there are other sources available. Further, as per Rly Board’s policy circulated vide L/no. 94/CEI/CT/4 dtd. 17.09.1997, in case of single tender, tender committee and accepting shall be one level higher than in case of open tenders/ limited tenders.  As per extant delegation on the date of acceptance of tender committee recommendation, for a contract value of Rs. 2,73,03,480/- finalized on single tender basis, the tender committee should have been of SAG level and tender accepting authority should have been an HAG officer.   However in this case, the tender committee was of SG/JAG level and tender accepting authority was of SAG level. Thus, in finalization of the tender, competency has been violated. Case has also been taken up for detailed investigation and responsibility fixation.

3.    Fake authorisation for Stores Contract and supply of Spurious materials

During a preventive check, it was found that M/s. SFT Engineering, Kolkata had participated in the tender no. 34/20141/2795 opened on 06/11/2013 by submitting authorization certificate from M/s Vacuumschmelze GmbH & Co. KG, Germany (OEM & Part-I approved supplier of CLW) stating that M/s Macro Vertribes GmbH, Germany (intermediary in Germany) is authorized by M/s Vacuumschmelze GmbH & Co. KG, Germany.  Further, M/s. SFT Engineering. Submitted authorization from M/s Macro Vertribes GmbH, Germany, the intermediary, in their favour.  On the basis of this authorization, a Purchase Order was placed on M/s. SFT Engineering, Kolkata.   However, the authorization in favour of intermediary by the OEM has been found fake. During inspection of the material by RA/Berlin, the firm submitted a Work test certificate supposedly issued by M/s Vacuumschmelze GmbH & Co. KG, Germany based on which RA/Berlin issued the IC.  This Work Test certificate was also found to be fake.  The material was sent to M/s Vacuumschmelze GmbH & Co. KG, Germany for the check of genuineness.  M/s Vacuumschmelze GmbH & Co. KG, Germany, the OEM indicated that the supplied material is counterfeit and was not produced by them.  Thus, M/s. SFT Engineering, Kolkata have indulged in fraudulent activity by submitting fake authorization certificate and fake material.  Executive has been advised to Process for recovery of amount paid to the firm for this material against the said PO.  It has also been recommended to process for banning of M/s SFT Engineering from doing business with railway.  Further, the case has been taken up for responsibility fixation.


4.    Fake authorisation for Works Contract and supply of Spurious materials

A Preventive Check was carried out in a works contract for the provision of Electro Hydraulic Thruster operated Brake of EOT crane at Steel Foundry.  The approximate cost of the work was Rs. 30,90,732/-. As per tender condition Electro Hydraulic Thruster Brake of Brand/Make “Unique/Speed-O-Control/ Elector Mech or Rolex only” was to be accepted and offers with Brand of brakes other than specified aforesaid to be summarily rejected. The tenderers were required to submit authorization for the brands quoted. The work was awarded to L1 firm on the basis of authorization from M/s. Rolex Industries/Mumbai. The genuineness of authorization has been checked from M/s Rolex, who have confirmed that the said authorization is fake. M/s Rolex Industries, Mumbai has also confirmed that the said contractor never purchased Thruster Brakes from them. Further the invoice submitted by the contractor was issued from M/S Rolex Engineering/Kolkata rather than M/s Rolex Industries, Mumbai. As a result payment to the firm against this contract has been withheld and the case has been taken for detailed investigation and responsibility fixation.

5.    Malpractice in written examination for selection

During investigation of a complaint regarding malpractices committed in a written examination for a selection post it was seen that the answers of many candidates had a striking resemblance with respect to the language, grammar and sentence formation and even for the grammatical/spelling mistakes, although they were seated in different rooms. Also the identical answers were not of the candidates seated nearby. This implied that cheating/copying was widespread and took place through a common chit which got circulated in both the rooms.

The similarity in the descriptive answers with respect to language, sentence formation and even common grammatical/spelling mistakes in the answer sheets of candidates spread across two rooms confirmed copying/cheating from a common chit which was going around in the examination hall. It was therefore recommended to cancel the panel and responsibility has been fixed on the invigilators and the candidates involved in the malpractice.


6.    False declaration for the purpose of Family Pension

During a preventive check of pension records, it was noticed that a Gr-C workshop staff superannuated from the Rly service in the year 2014.  His wife had expired in the year 2006 and death certificate submitted by the said staff is available on records. At the time of retirement, the said staff included another name as his wife in the Pension papers.  Since there was no intimation by the staff of his re-marriage, the identity of the beneficiary declared as his wife was checked from voter list and EPIC (voter I-card) and has been found that the said beneficiary is in fact his daughter-in-law.   The same has been admitted by the employee also.  Major penalty DAR action under Pension rule against the said NG staff has been advised.  Minor penalty action against one NG official and recorded warning against two NG officials has also been recommended.


7.    Dual accommodation and unauthorised occupation of quarters

During a preventive check, it has been revealed that an employee occupied the allotted railway quarters.  However the employee was removed from service in the year 1997, but did not vacate the said railway quarters.  Subsequently the staff got fresh appointment and again applied for a railway quarters, concealing the fact of possession of a railway quarters from the previous appointment.  A second railway quarters was allotted and occupied by the staff.  For this major penalty DAR action has been recommended against the said railway employee. 


  1. Erroneous interpretation of MACP guidelines

Board’s guideline vide L/no. PC-V/2009/ACP/2 dtd. 29/12/2011 and 27/6/2014, has clarified that 3rd financial upgradation is admissible either after completion of 30 years from date of joining or 10 years after 2nd financial upgradation whichever is earlier.  However, it was observed that in certain cases, 2nd and 3rd financial upgradation under MACP was given on the same day i.e. 01/09/2008, the effective date of MACP, on completion of 20 years of service from the 1st promotion, even though the employee had not completed 30 years from that date of joining. The executives were advised for corrective accordingly.  Suitable instruction has been issued by the executives and the pay of such employees has been re-fixed. Recovery of approximately 25 lakhs has been effected.


  1. Suppression of material facts during appointment

During investigation of a case, it has been established that one Gr-D employee suppressed material information regarding his arrest, detention and prosecution in the attestation forms submitted by him prior to his appointment in CLW. For this, major penalty D&AR action has been recommended.


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