2014 (2) TMI 1394 - SC - Indian Laws

Sanction for prosecution - Irregularities in the award of the contract and construction of administrative building for the Corporation of Ujjain during the period 1991-1993 - valid sanction by the competent authority or not - proceedings for prosecution against superior officers - Section 13(1)(d) and 13(2) of the Prevention of Corruption Act 1988 - HELD THAT - The grant of sanction is only an administrative function. It is intended to protect public servants against frivolous and vexatious litigation. It also ensures that a dishonest officer is brought before law and is tried in accordance with law. Thus it is a serious exercise of power by the competent authority. It has to be apprised of all the relevant materials and on such materials the authority has to take a conscious decision as to whether the facts would reveal the commission of an offence under the relevant provisions. No doubt an elaborate discussion in that regard in the order is not necessary. But decision making on relevant materials should be reflected in the order and if not it should be capable of proof before the court. The trial court should conduct a proper inquiry as to whether all the relevant materials were placed before the competent authority and whether the competent authority has referred to the same so as to form an opinion as to whether the same constituted an offence requiring sanction for prosecution. Appeal allowed.

Summary

Issues Involved:
1. Competency of the authority to grant sanction for prosecution.
2. Validity and propriety of the sanction granted.
3. Impact of quashing of proceedings against superior officers on the appellant's case.

Issue-wise Detailed Analysis:

1. Competency of the Authority to Grant Sanction for Prosecution:
The appellant contended that since he was appointed by the Administrator, only the Administrator or, in their absence, the State Government could grant sanction for prosecution. However, the court clarified that under Section 19(1) of the Prevention of Corruption Act (PC Act), the authority competent to remove an officer from service is the authority to give sanction for prosecution. The appellant, being an employee with a salary of more than Rs. 400/- per month, fell under Section 19(1)(c) of the PC Act, making the Standing Committee the competent authority. The court referenced Section 58 of the Municipal Corporation Act, 1956, which empowers the Standing Committee to make appointments for posts with salaries exceeding Rs. 400/- per month. The court concluded that the Standing Committee was the competent authority to grant sanction for prosecution, as it had the authority to remove the appellant from service.

2. Validity and Propriety of the Sanction Granted:
The appellant argued that there was no proper and valid sanction for his prosecution, asserting that the authority had not applied its mind and had merely accepted the recommendations of the Commissioner without referring to relevant materials. The court examined the Resolution of the Standing Committee dated 27.08.1996, which granted sanction based on the Commissioner's recommendation. The court emphasized that the grant of sanction is an administrative function intended to protect public servants from frivolous litigation while ensuring that dishonest officers are prosecuted. The court cited the case of State of Maharashtra through Central Bureau of Investigation v. Mahesh G. Jain (2013) 8 SCC 119, which outlined the principles for proving a valid sanction, including the necessity for the sanctioning authority to be satisfied based on relevant materials. The court found that neither the trial court nor the High Court had adequately inquired into whether the competent authority had considered all relevant materials before granting sanction. Consequently, the court remitted the matter to the Special Judge (P.C. Act, 1988), Ujjain, Madhya Pradesh, for a proper inquiry into the validity of the sanction.

3. Impact of Quashing of Proceedings Against Superior Officers on the Appellant's Case:
The appellant argued that since the prosecution against his superior officers, the Commissioner and Administrator, had been quashed by the Supreme Court, continuing the trial against him would be futile. The court noted that this subsequent development should be brought to the notice of the Special Judge and considered during the charge consideration stage, should the court find the sanction valid and decide to proceed with the case. The court also mentioned that the absence of sanction for prosecution in the cases of the Superintendent Engineer and the City Engineer, who were the appellant's superior officers, should be taken into account by the Special Judge.

Conclusion:
The appeal was allowed to the extent of remitting the matter to the Special Judge (P.C. Act, 1988), Ujjain, Madhya Pradesh, for a proper inquiry into the validity of the sanction for prosecution. The parties were directed to appear before the Special Judge on 05.04.2014.