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2023 (8) TMI 650 - SC - Indian LawsRemoval from Office/duty - Bank officer - Scope of public servant - conspired with 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 - appellant serving in his capacity as an Assistant General Manager, State Bank of India, Overseas Bank - applicability of Section 197 of the CrPC - permissible for the Special Court (CBI) to proceed against the appellant for the offences punishable under the IPC despite the fact that the sanction under Section 19 of the PC Act, 1988 to prosecute the appellant for the offences under the PC Act, 1988, is not on record as the same came to be declined. Whether the appellant, serving in his capacity as an Assistant General Manager, State Bank of India, Overseas Bank, is removable from his office save by or with the sanction of the Government so as to make Section 197 of the CrPC applicable? - HELD THAT - Section 197 of the Cr PC provides that when any person who is or was a public servant, not removable from his office save by or with the sanction of the Central Government or State Government is accused of any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duties, no Court shall take cognizance of such offence, except with the previous sanction of the appropriate Government - 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 Government and not to every public servant. 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 offence stated in the altered or added charge is one for the prosecution of which previous sanction 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. The appellant was serving as an Assistant General Manager, State Bank of India, Overseas Bank at Hyderabad. State Bank of India is a Nationalised Bank. Although a person working in a Nationalised Bank 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. The question as to whether a Manager of Nationalised Bank can claim benefit of Section 197 of the CrPC is not res integra. This Court in K. Ch. Prasad v. Smt. J. Vanalatha Devi and Others 1987 (2) TMI 532 - SUPREME COURT , 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 filed by the appellant therein questioned the maintainability of the prosecution for want of sanction under Section 197 of the CrPC, was 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. 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 Banking 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 fulfilled. Is it permissible for the Special Court (CBI) to proceed against the appellant for the offences punishable under the IPC despite the fact that the sanction under Section 19 of the PC Act, 1988 to prosecute the appellant for the offences under the PC Act, 1988, is not on record as the same came to be declined? - HELD THAT - The offences under the IPC and offences under the PC Act, 1988 are different and distinct. What is important to consider is whether the offences for one reason or the other punishable under the IPC are also required to be approved in relation to the offences punishable under the PC Act, 1988 - It is important to draw a distinction between an order of sanction required for prosecuting a person for commission of an offence under the IPC and an order of sanction required for commission of an offence under the PC Act, 1988. Although in the present case, the appellant has been discharged from the offences punishable under the PC Act, 1988 yet for the IPC offences, he can be proceeded further in accordance with law - 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 prerequisite. If the offences on the charge of which, the public servant is expected to be put on trial include the offences other than those punishable under the PC Act, 1988 that is to say under the general law (i.e. IPC), the 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 difference between the statutory requirements of Section 19 of the PC Act, 1988 on one hand, and Section 197 of the CrPC, on the other. 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 Section 19 of the PC Act, 1988 observes that sanction is being declined because the prosecution against the accused could be termed as frivolous or vexatious. Then, in such circumstances what would be its effect on the trial so far as the IPC offences are concerned? Could it be said that the prosecution for the offences under the PC Act, 1988 is frivolous but the same would not be for the offences 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 offence under the IPC or not will be looked into by the trial court. The appeal deserves to be dismissed and is hereby dismissed.
Issues Involved:
1. Whether the appellant, serving as an Assistant General Manager, State Bank of India, Overseas Bank, is removable from his office save by or with the sanction of the Government so as to make Section 197 of the CrPC applicable. 2. Is it permissible for the Special Court (CBI) to proceed against the appellant for the offences punishable under the IPC despite the fact that the sanction under Section 19 of the PC Act, 1988 to prosecute the appellant for the offences under the PC Act, 1988, is not on record as the same came to be declined. Summary of Judgment: Issue 1: Applicability of Section 197 of the CrPC The Court examined whether the appellant, as an Assistant General Manager at State Bank of India (SBI), is a public servant not removable from his office save by or with the sanction of the Government, thereby making Section 197 of the CrPC applicable. It was determined that although the appellant is a public servant, he does not hold a position where he can only be removed from service with the sanction of the Government. The Court referred to the precedent set in K. Ch. Prasad v. Smt. J. Vanalatha Devi and Others and S.K. Miglani v. State (NCT of Delhi), concluding that Section 197 of the CrPC does not apply to the appellant. Therefore, the appellant cannot claim protection under Section 197 of the CrPC. Issue 2: Prosecution under IPC Despite Lack of Sanction under PC Act, 1988 The Court considered whether the appellant could be prosecuted for offences under the IPC despite the lack of sanction under Section 19 of the PC Act, 1988. It was emphasized that the requirements for sanction under Section 197 of the CrPC and Section 19 of the PC Act, 1988, operate in different fields. The Court noted that the appellant was discharged from offences under the PC Act, 1988, but could still be prosecuted for IPC offences. The distinction between sanctions required for IPC and PC Act offences was highlighted, with the Court referring to Kalicharan Mahapatra v. State of Orissa and Lalu Prasad alias Lalu Prasad Yadav v. State of Bihar. The Court concluded that the appellant could be prosecuted for IPC offences as they are distinct from those under the PC Act, 1988. Conclusion: The appeal was dismissed. The Court held that Section 197 of the CrPC does not apply to the appellant, and he can be prosecuted for IPC offences despite the lack of sanction under Section 19 of the PC Act, 1988.
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