A. Sreenivasa Reddy v. Rakesh Sharma and Anr.

JUDGMENT J. B. PARDIWALA, J.: 1. Leave granted. 2. This appeal arises from the judgment and order passed by a learned Single Judge of the High Court for the State of Telangana dated 20.06.2022 in the Criminal Petition No. 6782 of 2019 fi led by the appellant herein by which the High Court rejected the petition and thereby decline d to quash the criminal proceedings instituted against the appellant for the off ence punishable under Sections 120-B r/w 420, 468 and 471 respectively of the Indian Penal Code, 1860 (for short, ‘the IPC’). FACTUAL MATRIX 3. The appellant herein (Original Accused No. 2) at the relevant point of time was serving as an Assistant General Manager, State Bank of India, Overseas Bank (Bank), Hyderabad. He is alleged to have conspired wit h other co-accused to cheat the Bank by sanctioning a corporate loan of Rs. 22.50 crore in favour of M/s Sven Genetech Limited, Secunderabad (Original Accused No. 1). 4. It appears from the materials on record that the company referred to above had applied for loan for the purpose of purchase of new equipments/ implementation of the expansion programme. The company had also applied with the Bank for loan credit limit of Rs. 5 crore for the purpose of purchase of raw material from the domestic market and cash credit limit of Rs. 20 crore for using as working capital. It is the case of the prosecution that the facilities sanctioned by the Bank were not utilised by the company for the purposes for which it was sanctioned and the company diverted the funds for its personal benefi ts and to clear its old debts. 5. The case against the appellant herein is that he was inst rumental in approving the release of corporate loan without compliance of all the principle/disbursement conditions. He is also alleged to have approved the release of cash credit limit of Rs. 10 crore on the recommendation of one Shri Kuppa Srinivas (Original Accused No. 3 Regional Manager), despite having knowledge of non-instalment of machinery proposed to be purchased A. SREENIVASA REDDY v. RAKESH SHARMA AND ANR. out of the corporate loan amounts. It is also alleged that the appellant herein hastily approved the release of Rs. 10 crore out of the sanctioned cash credit limit of Rs. 20 crore with the fraudulent intention to cause wrongful gain to the Original Accused Nos. 1-4 and others. 6. In the aforesaid context, the Central Bureau Investigation (C BI) registered a First Information Report dated 30.10.2013 bearing Crime No. RC 6(E)/2013 against the appellant herein and other co-accused for the off ences punishable under Sections 120-B r/w 420, 468 and 471 respectively of the IPC and Section 13(2) r/w Section 13(1) of the Prevention of Corruption Act, 1988 (for short, ‘the PC Act, 1988’). 7. Upon conclusion of the investigation by the CBI, chargesheet was fi led in the Court of the Principal Special Judge (CBI Cases) at Hyderabad on 30.12.2014 against in all six persons including the appellant herein. 8. It appears that by an order dated 13.02.2015, the Chief General Manager (MCG-I), SBI declined to accord sanction under Section 19 of the PC Act, 1988 to prosecute the appellant herein for the off ences punishable under the PC Act, 1988. 9. The very same authority referred to above, who had earlier declined to accord sanction, later reviewed its earlier order dated 13.02.2015 referred to above and by an order dated 11.04.2015 accorded sanction to prosecute the appellant herein for the off ences punishable under PC Act, 1988. Such sanction was accorded under the provisions of Section 19 of the P C Act, 1988. No sooner, the order according sanction referred to above came on record, then the Special Court at Hyderabad took cognizance of the off ence enumerated above against the appellant herein and 13 other co-accused. It appears that the appellant herein questioned the legality and validity of the order of grant of sanction before the High Court of Telangana by fi ling the Writ Petition No. 33297 of 2016. 10. A learned Single Judge of the High Court allowed the writ petition fi led by the appellant herein holding that the sanctioning authority once having declined to accord sanction could not have taken its earli er order in review and granted fresh sanction to prosecute the appellant. The High Court ultimately by order dated 30.10.2018 allowed the writ petition and quashed the order of grant of sanction. 937 11. It appears that the CBI being aggrieved with the above r eferred order passed by the learned Single Judge of High Court preferred the Writ Appeal No. 119 of 2019 and questioned the legality and validity of the judgment and order passed by the learned Single Judge. 12. The Intra-Court appeal fi led by the CBI failed vide order dated 15.07.2019 and thereby the order passed by the learned Single Judge came to be affi rmed. 13. The CBI accepted the order passed by the High Court and thought fi t not to carry it further. 14. Pursuant to the orders dated 30.10.2018 and 15.07.2019 respectively, referred to above, the appellant preferred a discharge application before the Special Court under Section 239 of the Code of Criminal Procedure (for short, ‘the CrPC’). 15. The Special Court at Hyderabad by its order dated 30.08.201 9 discharged the appellant herein from the prosecution under the PC Act, 1988 for want of sanction. The Special Court, however, declined to discharge the appellant for the off ences under the IPC. The Special Court relied on the decision of this Court in the case of Parkash Singh Badal and Another v. State of Punjab and Others reported in (2007) 1 SCC 1. 16. The relevant part of the order passed by the Special Judge reads thus: “Considering the facts and circumstances of the case and in view of the orders of the Hon’ble High Court of Judicature at Hyderabad in W.P. No. 33279/16 dated:30.10.2018, the sanction proceedings issued against A2 for the off ences under Section 13(2) r/w 13(1)(d) of PC Act are set aside and as such A2 is liable to be discharged for the said off ence under 13(2) r/w 13(1)(d) of Prevention of Corruption Act, 1988. As far as the off ences alleged against A2 under the provisions of IPC, the same are to be continued and the accused No. 2 is to be tried for the said off ence along with other accused since the sanction under Section 197 is not required to prosecute the accused No. 2 for the alleged off ences, in view of the above referred judgment of Hon’ble Apex Court in Prakash Singh Badal’s case. A. SREENIVASA REDDY v. RAKESH SHARMA AND ANR. [J. B. PARDIWALA, J.] Therefore, the accused No.2 is discharged for the off ence under Section 13(2) r/w 13(1)(d) of the P.C. Act, in view of the orders of the Hon’ble High Court of Judicature at Hyderabad in W.P. No. 33297/16 dt.30.10.2018 and as far as the off ences under Section 120-B, 420, 468 and 471 of IPC are concerned the accused No.2 is liable to be prosecuted along with other accused.” 17. Feeling aggrieved with the aforesaid, the appellant herein we nt before the High Court by fi ling the Criminal Petition No. 6782 of 2019 with a prayer that he should be discharged from the entire prose cution or to put in other words, he should also be discharged for the off ences under the IPC as there is no sanction accorded by sanctioning authority u nder Section 197 of the CrPC. 18. The High Court adjudicated the Criminal Petition No. 6782 of 2019, fi led by the appellant herein and by its impugned order dated 20.06.2022 rejected the same. 19. The relevant fi ndings recorded by the High Court, while rejecting the petition fi led by the appellant herein reads thus: “23. It is relevant to note that in the order dated 30.08.201 9 in C.C.No.17 of 2015, the trial Court has specifi cally mentioned that the discharge application vide Crl.M.P.No.519/2015 fi le d by the petitioner herein for the IPC off ences is pending. During the course of arguments, the said facts were admitted by the learned counsel for the petitioner herein. Therefore, the petitioner herein cannot pursue parallel remedies. As discussed supra, the Investigating Offi cer has recorded the statements of 65 witnesses under Section 161 of Cr.P.C. and collected 545 documents. On consideration of the same only, he has laid charge sheet against the petitioner and other accused. T he contents of the charge sheet constitutes the off ences alleged against the petitioner herein. The defences taken by the petitioner herein cannot be considered in a petition fi led under Section 482 of Cr.P.C. The petitioner herein has to face trial and prove his innocence. 24. In this regard, it is apt to refer to the decision render ed by the Hon'ble Supreme Court in Kamal Shivaji Pokarnekar v. The State of Maharashtra (AIR 2019 SC 847), wherein the Apex Court has 939 categorically held that quashing criminal proceedings was call ed for only in a case where complaint did not disclose any off e nce, or was frivolous, vexatious, or oppressive. If allegations set out in complaint did not constitute off ence of which cognizance had been taken by Magistrate, it was open to High Court to quash same. It was not necessary that, a meticulous analysis of case should be done before trial to fi nd out whether case would end in conviction or acquittal. If it appeared on a reading of complaint and consideration of allegations therein, in light of the statement made on oath that the ingredients of the off ence are disclosed, there would be no justifi cation for High Court to interfere. The defences that might be available, or facts/aspects which when established during trial, might lead to acquittal, were not grounds for quashing complaint at threshold. At that stage, only question relevant was whether averments in complaint spell out ingredients of a criminal off ence or not. The Court has to consider whether complaint discloses that prima facie, off ences that were alleged against Respondents. Correctness or otherwise of said allegations had to be decided only in trial. At initial stage of issuance of process, it was not open to Courts to stifl e proceedings by entering into merits of the contentions made on behalf of Accused. Crim inal complaints could not be quashed only on ground that, allegations made therein appear to be of a civil nature. If ingredients of off ence alleged against Accused were prima facie made out in complaint, crim inal proceeding shall not be interdicted. ××× ××× ××× 26. In view of law laid down by the Hon'ble Apex Court and in view of the above said discussion, coming to the present crime as there are serious and specifi c allegations, this Court is not inclined to quash the proceedings against the petitioner herein, A.2 in C.C.No.17 of 2015 pending on the fi le of the Special Judge for CBI Cases at Hyderabad. 27. In the result, the Criminal Petition is dismissed. However, as the subject Calendar Case is of the year 2015, the Special Judge for CBI Cases at Hyderabad, is directed to dispose of the said case (C.C.No.17 of 2015) in accordance with law within a period of three (3) months from the date of receipt of a copy of this order.” A. SREENIVASA REDDY v. RAKESH SHARMA AND ANR. [J. B. PARDIWALA, J.] 20. In such circumstances referred to above, the appellant is here before this Court with the present appeal. SUBMISSIONS ON BEHALF OF THE APPELLANT 21. Mr. D. Ramakrishna Reddy, the learned counsel appearing for the appellant vehemently submitted that the sanction under Section 197 of the CrPC is mandatory to prosecute the appellant for the off ences under Sections 120-B, 420, 468 and 471 respectively of the IPC. He would submit that as sanction to prosecute the appellant under the provisions of the PC Act, 1988 came to be declined, the appellant cannot now be prosecuted for the off ences under IPC without valid sanction under Section 197 of the CrPC. 22. The learned counsel further submitted that the appellant was also subjected to a departmental inquiry. The departmental inquiry was by and large on the very same charges on which the appellant is now sought to be prosecuted in the Court of the Special Judge at Hyderabad. He pointed out that the appellant came to be exonerated of all the charges in the departmental inquiry as evident from the report of the inquiry offi cer dated 09.06.2014. 23. Mr. Reddy in support of his aforesaid submissions has pla ced reliance on three decisions of this Court (i) Parkash Singh Badal (supra), (ii) A. Srinivasulu v. The State rep. by the Inspector of Police, Criminal Appeal No. 2417 of 2010 decided on 15.06.2023 and (iii) Station House Offi cer,CBI/ACB/Bangalore v. B.A. Srinivasanand Another, reported in (2020) 2 SCC 153. 24. In such circumstances referred to above, the learne d counsel appearing for the appellant prayed that continuatio n of the criminal prosecution for the off ences under the IPC would be nothing but a gross abuse of the process of law and would lead to serious miscarriage of justice. He prayed that the impugned order passed by the High Court be set aside and the appellant may be discharged from the criminal prosecution. SUBMISSIONS ON BEHALF OF THE CBI (RESPONDENT NO. 2) 25. Ms. Aishwarya Bhati, the learned Additional Solicitor General (ASG) appearing for the CBI submitted that although t he sanctioning authority declined to accord sanction under Section 19 of the PC Act, 1988 to prosecute the appellant for the off ences punishable under the provisions of 941 the PC Act, 1988 yet, that by itself is not suffi cient to discharge the appellant even from the off ences punishable under the IPC. 26. The learned ASG further submitted that the sanction requir ed under Section 197 of the CrPC and the sanction required under the PC Act, 1988 stand on diff erent footings whereas, sanction under the IPC in terms of the CrPC is required to be granted by the State or Central Government as the case may be; under the PC Act, 1988, it can be granted also by the authorities specifi ed in Section 19 thereof. 27. She submitted that the CBI at no point of time had prayed for sanction under Section 197 of the CrPC to prosecute the appellant for the off ence under the IPC. All that was prayed for, was for sancti on under Section 19 of the PC Act, 1988, which once was declined and thereafter, was accorded but ultimately the issue in regard to sanction under Section 19 of the PC Act, 1988 came to be set at rest by the High Court. According to Ms. Bhati, the entire submission canvassed on behalf of the appellant that the sanction under Section 197 of the CrPC was also prayed for and was declined, proceeds on an erroneous impression or footing. 28. In this regard, Ms. Bhati placed on record the letter dated 21.12.2014 addressed by the CBI to the Chief Vigilance Offi cer, State Bank of India, requesting for sanction under Section 19 of the PC Act, 1988. The letter referred to above reads thus: “To The Chief Vigilance Offi cer State Bank of India Vigilance Department, Corporate Centre, P.B.No.12, Mumbai-400 021. Sub : CBI Report in RC.6(E)/2013 of CBI, BS&FC, Bangalore Sir, I am forwarding herewith the CBI Report in the criminal case registered vide RC.6(E)/2013-BLR incorporating therein the allegations, facts disclosed during investigation, and the result of the investigation. A. SREENIVASA REDDY v. RAKESH SHARMA AND ANR. [J. B. PARDIWALA, J.] 2. The investigation has revealed that there is suffi cient material evidence on record to initiate action against the following persons: (i) Prosecution of Shri Venkata Ramana Kalavakolanu (A-1), Managing Director, M/s. Sven Genetech Ltd., and M/s Jupiter Bioscience Ltd., Secunderabad; Shri A. Srinivasa Reddy (A-2), Assistant G eneral Manager, State Bank of India, Ananthpur Regional Offi ce, Ananthpur, Andhra Pradesh; Shri Kuppa Srinivas (A-3), Chief Mana ger & Relationship Manager, State Bank of India, Andhra Pradesh, M/s Sven Genetech Ltd. (A-4), No.10-2-71 & 72/1, Road No.3 , West Marredpally, Secunderabad, Shri M.V. Ravi (A-5), Former Asst. Vice President, Marketing, M/s Jupiter Bioscience Ltd., Secunderabad, Shri E. Narasimha Reddy (A-6), Managing Director, M/s Roots Medicare Pvt. Ltd., No.182, MIGH, Bharath Nagar Colony, Hyderabad, Shri P.V. Rama Rao (A-10), formerly worked as Senior Executive Accounts, M/s Jupiter Biosciences Ltd., Secunderabad, Shri P. Giridhar Goud (A- 11), formerly worked as Executive-Accounts, M/s Jupiter Biosciences Ltd., Secunderabad, Shri Sunder Hari Prasad (A-12), formerly worked as Executive-Accounts, M/s Jupiter Biosciences Ltd, Secunderabad, Shri M. Tulsi Ram (A-13), formerly worked as Manager, M/s Jupiter Biosciences Ltd., Secunderabad, Shri V.A.R. Chandra Murthy (A-14), formerly worked as Accounts Supervisor, M/s Jupiter Bioscience ltd., Hyderabad, Shri Shyam Sunder Suri (A-15), Proprietor, M/s V .R. Associates, No.10-3-315, Street No.6, East Marredpally, Hyderabad, Shri D.V.S. Suryanarayana (A-16), formerly Proprietor, M/s Themis Enterprises, Hyderabad, Shri Rajendra Raju (A-17), formerly Proprietor, M/s Suraj Industries, Hyderabad u/s. 120-B r/w 420, 468 & 471 IPC and U/s 13(2) r/w 13(1)(d) of PC Act, 1988 and substantive off ences thereof. (ii) Regular Departmental Action for imposition of major penalty against Shri G. Suresh, Deputy Manager, State Bank of India, Yerraguntla (M), Kadappa District, Andhra Pradesh. (iii) Such Action against Shri U. Sudesh Kumar (A-7), Chief Manager, SBI, Commercial Branch, Koti, Hyderabad and Shri K.D. Menon, DGM, SBI, SAM, Corporate Centre, Mumbai. 943 3. You are requested to obtain the sanction for prosecution of Shri A. Srinivasa Reddy (A-2), Assistant General Manager, State Bank of India, Ananthpur Regional Offi ce, Ananthpur, Andhra Pradesh and Shri Kuppa Srinivas (A-3), Chief Manager & Relationship Manager, State Bank of India, Anaparthi East, Godavari Distri ct, Andhra Pradesh, from the competent authority as mandated u/s 19(1)(c) of the Prevention of Corruption Act, 1988. 4. The draft Articles of Charges and draft statements of im putation together with list of witnesses, list of documents, copies of statements of witnesses and copies of documents, for initiating departm ental proceedings for imposition of major penalty against the accused person mentioned at Para No.2 (ii); are enclosed herewith. It is also requested to intimate the outcome of the RDA instituted again st the above said offi cers on quarterly basis and immediately after fi nal disposal of the RDA proceedings along with copy of the order of the Disciplinary Authority. 5. The CBI Report may please, be treated as a Confi dential Document, and no reference of the same may be made in the charges, statement of imputations, or order for initiating departmental proceeding s, if any, on the above said delinquent offi cials. Since the CBI is exempted under RTI Act,2005, vide Notifi cation No. F. No.1/3/2011-IR dated 09.06.11 of the Govt. of India, in case, any applicant seek copy of the CBI Report or part thereof under the RTI Act, 2005, the same may be refused. 6 . A copy of the CBI Report alongwith its enclosures has also been forwarded to the Joint Secretary, Banking Division, Department of Economic Aff airs, Ministry of Finance, Government of India, Jeevandeep Building, Sansad Marg, New Delhi and to the Director, Central Vigilance Commission, Satarkta Bhavan, GPO Comp lex, Block-A, INA, New Delhi, for information and necessary action. 7. The sanctioning authority, if required, may call for the Investigating Offi cer to explain the evidence, as that would help the sanctioning authority in appreciating the evidence properly and al so to give evidence before the jurisdictional court during the trial, at a later stage. A. SREENIVASA REDDY v. RAKESH SHARMA AND ANR. [J. B. PARDIWALA, J.] 8. In order to prove the sanction for prosecution, it is requested that the name of the offi cer working under the sanctioning authority who is conversant with the case and can prove the signatures and application of mind by the sanctioning authority may be intimated to this offi ce, to cite him as a witness. You are requested to provide certifi ed copies of relevant extract of the delegation of powers to establish the competence of the issuing authority to accord sanction for prosecution. 9 . The receipt of the CBI Report may kindly be acknowledged. Yours faithfully, (Dr. Surya Thankappan Head of Branch CBI, BS&FC, Bangalore)” 29. The aforesaid letter has been incorporated by us in our judgment only to indicate that there is no reference of Section 197 of the CrPC in it. 30.. In such circumstances referred to above, the learned ASG prayed that there being no merit in this appeal, the same may be dismissed. SUBMISSIONS ON BEHALF OF THE BANK (RESPONDENT NO. 1) 31. Mr. Sidharth Sangal, the learned counsel appearing for the Bank vehemently submitted that the application of the appellant, seeking discharge from the off ences under the PC Act, 1988 has already been allowed, however, his application, seeking discharge from the off ences under the IPC has been dismissed by order dated 26.07.2022 of the Ld. CBI Court and the said order is not under challenge before this Court. 32. He further submitted that the High Court in its impugne d order dated 20.06.2022 clearly records that by proceedings dated 13.02.2015, the sanction to prosecute was refused under the provisions of PC Act, 1988 and vide proceedings dated 11.04.2015 the sanction to prosecute was accorded under the provisions PC Act, 1988, thus, it is clear that no sa nction was sought for or accorded or refused, specifi cally, under Section 197 of the CrPC with regard to the off ences punishable under the IPC. 945 33. The learned counsel further submitted that the consistent stand of the CBI before the CBI Court and the High Court has been that no p rior sanction under Section 197 of the CrPC is required to prosecute the appellant for off ences punishable under the IPC, as there is no legal obligation for seeking such a sanction. 34. It was submitted that it is incorrect on the part of t he appellant to state that he has been exonerated in the departmental proceedings. The appellant, was ultimately, given ‘Administrative Warning’ in res pect of the charges against him which were levied for the appellant’ s failure to discharge his duties with utmost devotion and diligence and acting in a manner unbecoming of a Bank Offi cial and highly prejudicial to the Bank’s interest – the said charges were neither of Sections 420, 468, 471 or 120-B of the IPC. 35. It was also argued that in any case, the charges not being identical, the fate of the departmental proceedings cannot weigh at all in respect of criminal proceedings based on trial. Thus, the appellant cannot rely on the outcome of the departmental proceedings to seek quashing of the criminal case against him. 36. In the last, the learned counsel argued something very important. It was submitted that a bare reading of Section 197 of the CrP C clearly indicates that the Section 197 of the CrPC is only applicable to those ‘public servants’ who are removable with the sanction of the Government and to no other ‘public servants’. Relying on the decision of this Court in the case of S.K. Miglani v. State (NCT of Delhi), reported in (2019) 6 SCC 111, it was submitted that the Manager of a Nationalised Bank though a public servant yet not removable from his offi ce save by or with the sanction of the Government and hence cannot claim protection under Section 197 of the CrPC. In such circumstances referred to above, the learned counsel prayed that there being no merit in the present appeal, the same may be dismissed. ANALYSIS 37. Having heard the learned counsel appearing for the parties a nd having gone through the materials placed on record the following questions of law fall for our consideration: A. SREENIVASA REDDY v. RAKESH SHARMA AND ANR. [J. B. PARDIWALA, J.] (i) Whether the appellant, serving in his capacity as an Assi stant General Manager, State Bank of India, Overseas Bank , is removable from his offi ce save by or with the sanction of the Government so as to make Section 197 of the CrPC applicable? (ii) Is it permissible for the Special Court (CBI) to proce ed against the appellant for the off ences punishable under the IPC despite the fact that the sanction under Section 19 of the PC Act, 1988 to prosecute the appellant for the off ences under the PC Act, 1988, is not on record as the same came to be declined? SECTION 197 OF THE CRPC 38. Section 197 of the CrPC reads as under: “197. Prosecution of Judges and public servants.— (1) When any person who is or was a Judge or Magistrate or a public servant not removable from his offi ce save by or with the sanction of the Government is accused of any off ence alleged to have been committed by him while acting or purporting to act in the discharge of his offi cial duty, no Court shall take cognizance of such off ence except with the previous sanction save as otherwise provided in the Lokpal and Lokayuktas Act, 2013 (1 of 2014)-- (a) in the case of a person who is employed or, as the ca se may be, was at the time of commission of the alleged off ence employed, in connection with the aff airs of the Union, of th e Central Government; (b) in the case of a person who is employed or, as the case may be, was at the time of commission of the alleged off ence employed, in connection with the aff airs of a State, of the State Government: Provided that where the alleged off ence was committed by a person referred to in clause (b) during the period while a Proc lamation issued under clause (1) of article 356 of the Constitution was in force in a State, clause (b) will apply as if for the expr ession "State Government" occurring therein, the expression "Central Government" were substituted. 947 Explanation.--For the removal of doubts it is hereby declared that no sanction shall be required in case of a public servant accused of any off ence alleged to have been committed under section 166A, section 166B, section 354, section 354A, section 354B, section 354C, section 354D, section 370, section 375, section 376A, section 376AB, section 376C, section 376D, section 376DA, section 376DB or section 509 of the Indian Penal Code (45 of 1860). (2) No Court shall take cognizance of any off ence alleged to have been committed by any member of the Armed Forces of the Union whi le acting or purporting to act in the discharge of his offi cial duty, except with the previous sanction of the Central Government. (3) The State Government may, by notification, dire ct that the provisions of sub-section (2) shall apply to such class or category of the members of the Forces charged with the maintenance of publ ic order as may be specifi ed therein, wherever they may be serving, and thereupon the provisions of that sub-section will apply as i f for the expression "Central Government" occurring therein, the expre ssion "State Government" were substituted. (3A) Notwithstanding anything contained in sub-section (3), no court shall take cognizance of any off ence, alleged to have been committed by any member of the Forces charged with the maintenance of public order in a State while acting or purporting to act in the discharge of his offi cial duty during the period while a Proclamation issued under clause (1) of article 356 of the Constitution was in force therein, except with the previous sanction of the Central Government. (3B) Notwithstanding anything to the contrary contained in this Code or any other law, it is hereby declared that any sanction accorded by the State Government or any cognizance taken by a court upon such sanction, during the period commencing on the 20th day of August, 1991 and ending with the date immediately preceding the date on which the Code of Criminal Procedure (Amendment) Act, 1991 (43 of 1991), receives the assent of the President, with respect to an off ence alleged to have been committed during the period while a Proclamation issued under clause (1) of article 356 of the Constitution was in force in the State, shall be invalid and it shall be competent for the Central A. SREENIVASA REDDY v. RAKESH SHARMA AND ANR. [J. B. PARDIWALA, J.] Government in such matter to accord sanction and for the court to take cognizance thereon. (4) The Central Government or the State Government, as the c ase may be, may determine the person by whom, the manner in which , and the off ence or off ences for which, the prosecution of such Judge, Magistrate or public servant is to be conducted, and may specify the Court before which the trial is to be held.” 39. The Law Commission in its 41st Report has observed: “15.123. Section 197, as it now stands, applies to a public servant of the specifi ed category only when he is holding offi ce as such public servant. It does not apply to him after he has retired, resigned or ot herwise left the service……………….It appears to us that protection under the Section is needed as much after retirement of the public se rvant as before retirement. The protection aff orded by the Section would be rendered illusory if it were open to a private person harbouring a grievance to wait until the public servant ceased to hold his o ffi cial position, and then to lodge a complaint. The ultimate justifi cation for the protection conferred by Section 197 is the public interest in seeing that offi cial acts do not lead to needless or vexatious prosecutions. It should be left to the Government to determine from that point of view the question of expediency of prosecuting any public servant.” 40. Section 197 of the Cr PC provides that when any person who i s or was a public servant, not removable from his offi ce save by or with the sanction of the Central Government or State Government is accused of any off ence alleged to have been committed by him while acting or purporting to act in the discharge of his offi cial duties, no Court shall take cognizance of such off ence, except with the previous sanction of t he appropriate Government. 41. Sub-section (1) of Section 197 of the CrPC shows that sanctio n for prosecution is required where any person who is or was a Judge or Magistrate or a public servant not removable from his offi ce save by or with the sanction of the Government is accused of any off ence alleged to have been committed by him while acting or purporting to act in discharge of his offi cial duty. Article 311 of the Constitution lays down that no person, who is 949 a member of a civil service of the Union or State or holds a civil post under the Union or State, shall be removed by an authority subordinate to that by which he was appointed. It, therefore, follows that protection of sub-section (1) of Section 197 of CrPC is available only to such public servants whose appointing authority is the Central Government or the State Gove rnment and not to every public servant. 42. The word ‘sanction’ has not been defi ned in the CrPC. The dictionary meaning of the word ‘sanction’ is as under:— “Webster's Third New Internal Dictionary: Explicit permis sion or recognition by one in Authority that gives validity to the act of another person or body; something that authorizes, confi rms, or countenances. The New Lexicon Webster's Dictionary: Explicit permission given by someone in Authority. The Concise Oxford Dictionary. Encouragement given to an action etc., by custom or tradition; express permission, confi rmation or ratifi cation of a law etc; authorize, countenance, or agree to (an action etc.) Stroud's Judicial Dictionary: Sanction not only means prior approval; generally it also means ratifi cation. Words and Phrases: The verb ‘sanction’ has a distinct shade of meaning from ‘authorize’ and means to assent, concur, confi rm or ratify. The word conveys the idea of sacredness or of Authority. The Law Lexicon by Ramanath Iyer: Prior approval or ratifi cation.” 43. In 78 Corpus Juris Secundum at Page 579 diff erent meanings have been given to the word as a noun and as a verb. As a noun it means penalty or punishment provided as a means of enforcing obedience to a law and in a wider sense an authorisation of any thing and it may convey t he idea of authority. As a verb ‘sanction’ is defi ned as meaning to assent, concur, confi rm or ratify. In U.S. v. Tillinghast D.G., reported in 55 F.2d 279, it was held that where legal rights are involved it is doubtful whether it should be construed as requiring less than an unmistakable expression of approval. In Section 197 of the CrPC, the word ‘sanction’ has been used as a verb and, therefore, it will mean to assent, to concur or approval. A. SREENIVASA REDDY v. RAKESH SHARMA AND ANR. [J. B. PARDIWALA, J.] 44. The legislature has given great importance to sanction as is evident from the Scheme of the CrPC. Section 216 of the CrPC gives power to the Court to alter or add to any charge at any time before judgment is pronounced but sub-section (5) thereof provides that if the off ence stated in the altered or added charge is one for the prosecution of which previous s anction is necessary, the case shall not be proceeded with until such sanction is obtained, unless sanction has been already obtained for a prosecution on the same facts as those on which the altered or added charge is founded. This was also emphasised by the Privy Council in the leading case of Gokulchand Dwarka Das Morarka v. King, reported in AIR 1948 PC 82, where in para 9 it was observed as follows at Page 85:— “… The sanction to prosecute is an important matter; it const itutes a condition precedent to the institution of the prosecution and the Government have an absolute discretion to grant or withhold their sanction. They are not, as the High Court seem to have t hought, concerned merely to see that the evidence discloses a prima facie case against the person sought to be prosecuted. …” 45. The appellant was serving as an Assistant General Manager, State Bank of India, Overseas Bank at Hyderabad. State Bank of I ndia is a Nationalised Bank. Although a person working in a Nationalised Ban k is a public servant, yet the provisions of Section 197 of the CrPC would not be attracted at all as Section 197 is attracted only in cases where the public servant is such who is not removable from his service save by or with the sanction of the Government. It is not disputed that the appellant is not holding a post where he could not be removed from service except by or with the sanction of the Government. In this view of the matter, even if it is alleged that the appellant herein is a public servant, still the provisions of Section 197 of the CrPC are not attracted at all. 46. The question as to whether a Manager of Nationalised Bank can claim benefi t of Section 197 of the CrPC is not resintegra. This Court in K. Ch. Prasad v. Smt. J. Vanalatha Devi and Others reported in (1987) 2 SCC 52, had the occasion to consider the very same question in reference to one who claimed to be a public servant working in a Nationalised Bank. The application fi led by the appellant therein questioned the maintainability of the prosecution for want of sanction under Section 197 of the CrPC, was 951 rejected by the Metropolitan Magistrate and revision to the High Court also met the same fate. This Court, while dismissing the appeal held that though a person working in a Nationalised Bank is a public servant, the provisions of Section 197 are not attracted at all. In para 6 of the judgment, following has been held : (SCC p. 54) “6. It is very clear from this provision that this section is attracted only in cases where the public servant is such who is not removable from his offi ce save by or with the sanction of the Government. It is not disputed that the appellant is not holding a post where he could not be removed from service except by or with the sanction of the government. In this view of the matter even if it is held that the appellant is a public servant still provisions of Section 197 are not attracted at all.” (Emphasis supplied) 47. The aforesaid decision of this Court in K. Ch. Prasad (supra) has been quoted with approval in a later decision in the case of S.K. Miglani (supra). In this case, the appellant was working as a Manager in the Bank of Baroda, Faridabad Branch. A complaint in writing was lodged by the Director, Housing against the appellant. On the strength of the said complai nt, the Kotla Mubarakpur Police Station registered a First Information Report for the off ences under Sections 201, 409, 419, 420, 467, 468, 471 and 120-B respectively of the IPC. It was the case of the prosecution that the appellant therein and another co-accused in collusion with each other acted on a fake request of original allottee for cost reduction of a fl at from Rs. 10.66 lakh to Rs. 7.77 lakh with the approval of the competent authorit y. Many other allegations were levelled in the said FIR. Upon complet ion of the investigation, chargesheet was submitted. The appellant fi led an application before the ACMM, Saket Court, New Delhi in the FIR referred to above, stating that he being a public servant employed with the Nationlised Bank as a Manager, it was mandatory to seek sanction against him i n terms of Section 197 of the CrPC. 48. It was argued before the Court that he may be discharged on account of non-compliance under Section 197 of the CrPC. The Chief Metropolitan Magistrate (South), Saket Court rejected the application fi led by the appellant therein, seeking discharge for want of sanction. The matter reached up to this Court. This Court held in paras 10 and 12 respectively as under: A. SREENIVASA REDDY v. RAKESH SHARMA AND ANR. [J. B. PARDIWALA, J.] “10. The appellant being a Manager in a nationalised bank whether can claim that before prosecuting him sanction is required under Section 197. The CMM having come to the opinion that the appellant having not satisfi ed that he was a public servant not removable from his offi ce save by or with the sanction of the Government, Section 197 CrPC was not attracted with regard to the appellant. After comi ng to the above conclusions, it was not necessary for the CMM to enter into the question as to whether the acts alleged against the appellant were discharged in performance of offi cial duty. ××× ××× ××× 12. The High Court in its impugned judgment has not adverted to the above aspect and has only confi ned to the discussion as to whether the acts alleged of the appellant were in discharge of offi cial duty. The High Court also had relied on the judgment of this Court in Parkash Singh Badal [Parkash Singh Badal v. State of Punjab, (2007) 1 SCC 1 : (2007) 1 SCC (Cri) 193] . We, having come to the conclusion that the appellant being not a public servant removable from his offi ce save by or with the sanction of the Government, sanction under Sectio n 197 CrPC was not applicable. The appellant cannot claim protection under Section 197 CrPC. We are of the view that examination of further question as to whether the appellant was acting or purporting to act in the discharge of his offi cial duty was not required to be gone into, when he did not fulfi l conditions for applicability of Section 197(1) CrPC.” (Emphasis supplied) 49. It is pertinent to note that the banking sector being governed by the Reserve Bank of India and considered as a limb of the State under Article 12 of the Constitution and also by virtue of Section 46A of the Ba nking Regulation Act, 1949, the appellant herein is deemed to be a “public servant’ for the purpose of provisions under the PC Act, 1988. However, the same cannot be extended to the IPC. Assuming for a moment that the appellant herein should be considered as a “public servant” for the IPC sanction also, the protection available under Section 197 of the CrPC is not available to the appellant herein since, the conditions in built under Section 197 of the CrPC are not fulfi lled. 953 50. Unfortunately, in the case on hand, the High Court also missed or overlooked the aforesaid aspect and confi ned its adjudication as to whether the acts alleged of the appellant were in discharge of the offi cial duty. Question No. 1 is answered accordingly. QUESTION NO. 2 51. It was vociferously argued by the learned counsel appearing f or the appellant that as sanction under Section 19 of the PC Act, 1988 has not been granted, the appellant cannot not be prosecuted for the off ences under the IPC alone and he should be discharged from the criminal proceedings.. 52. Section 19 of the PC Act, 1988 reads thus: “19. Previous sanction necessary for prosecution.— (1) No court shall take cognizance of an off ence punishable under sections 7, 11, 13 and 15 alleged to have been committed by a public servant, except with the previous sanction save as otherwise provided in the Lokpal and Lokayuktas Act, 2013 (1 of 2014)— (a) in the case of a person who is employed, or as the cas e may be, was at the time of commission of the alleged off ence employ ed in connection with the aff airs of the Union and is not removable from his offi ce save by or with the sanction of the Central Government, of that Government; (b) in the case of a person who is employed, or as the case may be, was at the time of commission of the alleged off ence employed in connection with the aff airs of a State and is not removable from his offi ce save by or with the sanction of the State Government, of that Government; (c) in the case of any other person, of the authority competent to remove him from his offi ce: Provided that no request can be made, by a person other than a police offi cer or an offi cer of an investigation agency or other law enforcement authority, to the appropriate Government or competent authority, as the case may be, for the previous sanct ion of such Government or authority for taking cognizance by the court of any of the off ences specifi ed in this sub-section, unless— A. SREENIVASA REDDY v. RAKESH SHARMA AND ANR. [J. B. PARDIWALA, J.] (i) such person has fi led a complaint in a competent court about the alleged off ences for which the public servant is sought to be prosecuted; and (ii) the court has not dismissed the complaint under section 203 of the Code of Criminal Procedure, 1973 (2 of 1974) and directed the complainant to obtain the sanction for prosecution against the public servant for further proceeding: Provided further that in the case of request from the person othe r than a police offi cer or an offi cer of an investigation agency or other law enforcement authority, the appropriate Government or competent authority shall not accord sanction to prosecute a public se rvant without providing an opportunity of being heard to the concerned public servant: Provided also that the appropriate Government or any competent authority shall, after the receipt of the proposal requiring sanction for prosecution of a public servant under this sub-section, endeavour to convey the decision on such proposal within a period of three months from the date of its receipt: Provided also that in case where, for the purpose of grant of sanction for prosecution, legal consultation is required, such period may, for the reasons to be recorded in writing, be extended by a further period of one month: Provided also that the Central Government may, for the purpose of sanction for prosecution of a public servant, prescribe such guidelines as it considers necessary. Explanation.--For the purposes of sub-section (1), the expr ession "public servant" includes such person-- (a) who has ceased to hold the offi ce during which the off ence is alleged to have been committed; or (b) who has ceased to hold the offi ce during which the off ence is alleged to have been committed and is holding an offi ce other than the offi ce during which the off ence is alleged to have been committed. 955 (2) Where for any reason whatsoever any doubt arises as to whether the previous sanction as required under sub-section (1) should be given by the Central Government or the State Government or any other authority, such sanction shall be given by that Government or authority which would have been competent to remove the public servant from his offi ce at the time when the off ence was alleged to have been committed. (3) Notwithstanding anything contained in the Code of C riminal Procedure, 1973 (2 of 1974),— (a) no fi nding, sentence or order passed by a special Judge shall be reversed or altered by a Court in appeal, confi rmation or revision on the ground of the absence of, or any error, omission or irreg ularity in, the sanction required under sub-section (1), unless in the opinion of that court, a failure of justice has in fact been occasioned thereby; (b) no court shall stay the proceedings under this Act on the ground of any error, omission or irregularity in the sanction granted by the authority, unless it is satisfi ed that such error, omission or irregularity has resulted in a failure of justice; (c) no court shall stay the proceedings under this Act on any other ground and no court shall exercise the powers of revision in relation to any interlocutory order passed in any inquiry, trial, appeal or other proceedings. (4) In determining under sub-section (3) whether the absence of, or any error, omission or irregularity in, such sanction has occasioned or resulted in a failure of justice the court shall have re gard to the fact whether the objection could and should have been raised at any earlier stage in the proceedings. Explanation.— For the purposes of this section,— (a) error includes competency of the authority to grant sanction; (b) a sanction required for prosecution includes reference to any requirement that the prosecution shall be at the instance of a specifi ed authority or with the sanction of a specifi ed person or any requirement of a similar nature.” A. SREENIVASA REDDY v. RAKESH SHARMA AND ANR. [J. B. PARDIWALA, J.] 53. Sanction contemplated under Section 197 of the CrPC concerns a public servant who “ is accused of any off ence alleged to have been committed by him while acting or purporting to act in the discharge of his offi cial duty” whereas, the off ences contemplated in the PC Act, 1988 are those which cannot be treated as acts either directly or even purportedly done in the discharge of his offi cial duties. 54. The off ences under the IPC and off ences under the PC Act, 1988 are diff erent and distinct. What is important to consider is whether the off ences for one reason or the other punishable under the IPC are also required to be approved in relation to the off ences punishable under the PC Act, 1988. 55. It is important to draw a distinction between an order of sanction required for prosecuting a person for commission of an off ence under the IPC and an order of sanction required for commission of an off ence under the PC Act, 1988. 56. In Kalicharan Mahapatra v. State of Orissa, reported in (1998) 6 SCC 411, this Court noted: “…The sanction contemplated in Section 197 of the Code concerns a public servant who ‘is accused of any off ence alleged to have been committed by him while acting or purporting to act in the discharge of his offi cial duty’, whereas the off ences contemplated in the PC Act are those which cannot be treated as acts either directly or even purportedly done in the discharge of his offi cial duties. Parliament must have desired to maintain the distinction and hence the wording in the corresponding provision in the former PC Act was materially imported in the new PC Act, 1988 without any change in spite of the change made in Section 197 of the Code…” (Emphasis supplied) 57. In Lalu Prasad alias Lalu Prasad Yadav v. State of Bihar reported in (2007) 1 SCC 4, this Court observed as under: “10. It may be noted that Section 197 of the CrPC and Section 19 of the PC Act, 1988 operate in conceptually diff erent fi elds. In cases covered under the Act, in respect of public servants the sanction is of automatic nature and thus factual aspects are of little or no 957 consequence. Conversely, in a case relatable to Section 197 of the CrPC, the substratum and basic features of the case hav e to be considered to fi nd out whether the alleged act has any nexus with the discharge of duties. Position is not so in case of Section 19 of the Act.” (Emphasis supplied) 58. Thus, although in the present case, the appella nt has been discharged from the off ences punishable under the PC Act, 1988 yet for the IPC off ences, he can be proceeded further in accordance with law. 59. From the aforesaid, it can be said that there can be no thumb rule that in a prosecution before the court of Special Judge, the previous sanction under Section 19 of the PC Act, 1988 would invariably be the only pre-requisite. If the off ences on the charge of which, the public servant is expected to be put on trial include the off ences other than those punishable under the PC Act, 1988 that is to say under the general law (i.e. IPC), t he court is bound to examine, at the time of cognizance and also, if necessary, at subsequent stages (as the case progresses) as to whether there is a necessity of sanction under Section 197 of the CrPC. There is a material diff erence between the statutory requirements of Section 19 of the PC A ct, 1988 on one hand, and Section 197 of the CrPC, on the other. In the prosecut ion for the off ences exclusively under the PC Act, 1988, sanction is mandatory qua the public servant. In cases under the general penal l aw against the public servant, the necessity (or otherwise) of sanction under Section 197 of the CrPC depends on the factual aspects. The test in the latter case is of the “nexus” between the act of commission or omission and the offi cial duty of the public servant. To commit an off ence punishable under law can never be a part of the offi cial duty of a public servant. It is too simplistic an approach to adopt and to reject the necessity of sanction under Section 197 of the CrPC on such reasoning. The “safe and sure test”, is to ascertain if the omission or neglect to commit the act complained of would have made the public servant answerable for the charge of dereli ction of his offi cial duty. He may have acted “in excess of his duty”, but if there is a “reasonable connection” between the impugned act and the perf ormance of the offi cial duty, the protective umbrella of Section 197 of the CrPC cannot be denied, so long as the discharge of offi cial duty is not used as a cloak for illicit acts. A. SREENIVASA REDDY v. RAKESH SHARMA AND ANR. [J. B. PARDIWALA, J.] 60. Before, we close this matter, we would like to observe something which, this Court may have to consider sooner or later. The object behind the enactment of Section 19 of the PC Act, 1988 is to protect the public servants from frivolous prosecutions. Take a case wherein, the sanctioning authority at the time of declining to accord sanction under Secti on 19 of the PC Act, 1988 observes that sanction is being declined b ecause the prosecution against the accused could be termed as frivolous or vexatious. Then, in such circumstances what would be its eff ect on the trial so far as the IPC off ences are concerned? Could it be said that the prosecution for the off ences under the PC Act, 1988 is frivolous but the same would not be for the off ences under the IPC? We are not going into this question in the present matter as sanction initially was not declined on the ground that the prosecution against the appellant herein is frivolous or vexatious but the same was declined essentially on the ground that what has been alleged is mere procedural irregularities in discharge of essential duties. Whether such procedural irregularities constitute any off ence under the IPC or not will be looked into by the trial court. What we have highlighted may be examined by this Court in some other litigation at an appropriate time. 61. In overall view of the matter, we have reached to the conclusion that the appeal deserves to be dismissed and is hereby dismissed.