# CASE DETAILS A. SREENIVASA REDDY v. RAKESH SHARMA AND ANR

- **Citation:** 2023 INSC 682
- **Court:** Supreme Court of India
- **Decided:** 2023-08-08
- **Case number:** Criminal appeal No. 2339 of 2023
- **Bench:** B. R. Gavai, J.B. Pardiwala
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/case-details-a-sreenivasa-reddy-v-rakesh-sharma-and-anr-36603
- **Pages:** 27

## Headnote

Issue for consideration: Whether the appellant, an Assistant General
Manager of a Nationalised Bank is removable from his offi ce save by or
with the sanction of the Government so as to make s.197, CrPC applicable;
and if he can be proceeded against for off ences punishable under the IPC
despite the sanction u/s.19, PC Act, 1988 to prosecute him for the off ences
thereunder was declined.
Code of Criminal Procedure, 1973 - s.197 - When not attracted:
Held: Although a person working in a Nationalised Bank is a public
servant, yet the provisions of s.197 would not be attracted at all as s.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 - Appellant,
an Assistant General Manager, State Bank of India, Overseas Bank is not
holding a post where he could not be removed from service except by or
with the sanction of the Government - Thus, even if it is alleged that he is
a public servant, still the provisions of s.197 are not attracted - Protection
of s.197(1) is available only to such public servants whose appointing
authority is the Central Government or the State Government and not to
every public servant - Banking sector being governed by the RBI and
considered as a limb of the State u/Art.12 and also by virtue of s.46A,
Banking Regulation Act, 1949, the appellant is deemed to be a "public
servant" under the PCAct, 1988 however, the same cannot be extended to
the IPC - Further,sanction contemplated u/s.197, 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
933
duty" whereas, the off ences contemplated in the PC Act, 1988 cannot be
treated as acts either directly or even purportedly done in the discharge
of his offi cial duties - Off ences under the IPC and the PC Act, 1988 are
diff erent and distinct - A distinction is to be drawn between an order of
sanction required for prosecuting a person for commission of an off ence
under the IPC and the PC Act, 1988 - Thus, although, the appellant was
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. [Paras
41, 45, 49, 53-55 and 58]
Prevention of Corruption Act, 1988 - s.19 - Code of Criminal
Procedure, 1973 - s.197 - Statutory requirements - Diff erence between:
Held: In the prosecution for the off ences exclusively under the PC
Act, 1988, sanction is mandatory qua the public servant - In cases under
the general penal law against the public servant, the necessity (or otherwise)
of sanction u/s.197, 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. [Para 59]
Code of Criminal Procedure, 1973 - s.216 - Importance given to
sanction - Discussed. [Para 44]
Prevention of Corruption Act, 1988 - s.19 - Sanction under, if
declined on the ground that prosecution against the accused could be
frivolous or vexatious, its eff ect on the trial of the IPC off ences:
Held: This question is not being gone into in the present matter as
sanction initially was not declined on the ground that the prosecution against
the appellant was frivolous or vexatious but on the ground that what was
alleged were 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 - The issue highlighted may
be examined by Supreme Court in some other litigation at an appropriate
time. [Para 60]
Words and Phrases - 'sanction' in s.197, CrPC - Meaning:
Held: In s.197, CrPC, the word 'sanction' has been used as a verb and,
therefore, it will mean to assent, to concur or approval. [Para 43]
A. SREENIVASA REDDY v. RAKESH SHARMA AND ANR.
934
SUPREME COURT REPORTS
[2023] 12 S.C.R.
LIS

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[2023] 12 S.C.R. 932 : 2023 INSC 682
932
CASE DETAILS
A. SREENIVASA REDDY
v.
RAKESH SHARMA AND ANR.
(Criminal appeal No. 2339 of 2023)
AUGUST 08, 2023
[B. R. GAVAI AND J.B. PARDIWALA, JJ.]
HEADNOTES
Issue for consideration: Whether the appellant, an Assistant General
Manager of a Nationalised Bank is removable from his offi ce save by or
with the sanction of the Government so as to make s.197, CrPC applicable;
and if he can be proceeded against for off ences punishable under the IPC
despite the sanction u/s.19, PC Act, 1988 to prosecute him for the off ences
thereunder was declined.
Code of Criminal Procedure, 1973 - s.197 - When not attracted:
Held: Although a person working in a Nationalised Bank is a public
servant, yet the provisions of s.197 would not be attracted at all as s.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 - Appellant,
an Assistant General Manager, State Bank of India, Overseas Bank is not
holding a post where he could not be removed from service except by or
with the sanction of the Government - Thus, even if it is alleged that he is
a public servant, still the provisions of s.197 are not attracted - Protection
of s.197(1) is available only to such public servants whose appointing
authority is the Central Government or the State Government and not to
every public servant - Banking sector being governed by the RBI and
considered as a limb of the State u/Art.12 and also by virtue of s.46A,
Banking Regulation Act, 1949, the appellant is deemed to be a "public
servant" under the PCAct, 1988 however, the same cannot be extended to
the IPC - Further,sanction contemplated u/s.197, 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
933
duty" whereas, the off ences contemplated in the PC Act, 1988 cannot be
treated as acts either directly or even purportedly done in the discharge
of his offi cial duties - Off ences under the IPC and the PC Act, 1988 are
diff erent and distinct - A distinction is to be drawn between an order of
sanction required for prosecuting a person for commission of an off ence
under the IPC and the PC Act, 1988 - Thus, although, the appellant was
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. [Paras
41, 45, 49, 53-55 and 58]
Prevention of Corruption Act, 1988 - s.19 - Code of Criminal
Procedure, 1973 - s.197 - Statutory requirements - Diff erence between:
Held: In the prosecution for the off ences exclusively under the PC
Act, 1988, sanction is mandatory qua the public servant - In cases under
the general penal law against the public servant, the necessity (or otherwise)
of sanction u/s.197, 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. [Para 59]
Code of Criminal Procedure, 1973 - s.216 - Importance given to
sanction - Discussed. [Para 44]
Prevention of Corruption Act, 1988 - s.19 - Sanction under, if
declined on the ground that prosecution against the accused could be
frivolous or vexatious, its eff ect on the trial of the IPC off ences:
Held: This question is not being gone into in the present matter as
sanction initially was not declined on the ground that the prosecution against
the appellant was frivolous or vexatious but on the ground that what was
alleged were 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 - The issue highlighted may
be examined by Supreme Court in some other litigation at an appropriate
time. [Para 60]
Words and Phrases - 'sanction' in s.197, CrPC - Meaning:
Held: In s.197, CrPC, the word 'sanction' has been used as a verb and,
therefore, it will mean to assent, to concur or approval. [Para 43]
A. SREENIVASA REDDY v. RAKESH SHARMA AND ANR.
934
SUPREME COURT REPORTS
[2023] 12 S.C.R.
LIST OF CITATIONS AND OTHER REFERENCES
K. Ch. Prasad v. Smt. J. Vanalatha Devi and Others (1987) 2 SCC
52: [1987] 2 SCR 216; S.K. Miglani v. State (NCT of Delhi) (2019) 6 SCC
111: [2019] 6 SCR 1158; Kalicharan Mahapatra v. State of Orissa, (1998)
6 SCC 411: [1998] 3 SCR 961; Lalu Prasad alias Lalu Prasad Yadav v.
State of Bihar (2007) 1 SCC 4 - relied on.
Parkash Singh Badaland Another v. State of Punjab and Others (2007)
1 SCC 1: [2006] 10 Suppl. SCR 197; A. Srinivasulu v. The State rep. by
the Inspector of Police, Criminal Appeal No. 2417 of 2010 decided on
15.06.2023 Station House Offi cer, CBI/ACB/Bangalore v. B.A. Srinivasan
and Another (2020) 2 SCC 153: [2019] 14 SCR 513 - referred to.
U.S. v. Tillinghast D.G., 55 F.2d 279; Gokulchand Dwarka Das
Morarka v. King AIR 1948 PC 82; Gokulchand Dwarka Das Morarka v.
King AIR 1948 PC 82 - referred to.
OTHER CASE DETAILS INCLUDING IMPUGNED
ORDER AND APPEARANCES
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
2339 of 2023.
From the Judgment and Order dated 20.06.2022 of the High Court for
the State of Telangana at Hyderabad in CRLP No. 6782 of 2019.
Appearances:
D. Ramakrishna Reddy, Ms. D. Tejaswi Reddy, Hrithik Manchanda,
Mrs. D. Bharathi Reddy, Advs. for the Appellant.
Ms. Aishwarya Bhati, A.S.G., Ms. Chitrangda Rastravara, Madhav
Sinhal, Ms. Megha Karnawal, Sabarish Subramanayam, Anil Hooda, Arvind
Kumar Sharma, Ajay Sharma, Shafi k Ahmad, Ms. Anju, Varun Mishra,
Siddharth Sangal, Ms. Nilanjani Tandon, Chirag Sharma, Lalit Allawadhi,
Ms. Richa Mishra, Advs. for the Respondents.
935
JUDGMENT / ORDER OF THE SUPREME COURT
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 declined 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 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 (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 instrumental
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.
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SUPREME COURT REPORTS
[2023] 12 S.C.R.
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 (CBI)
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 PC 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 earlier 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 referred
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 30.08.2019
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.]
938
SUPREME COURT REPORTS
[2023] 12 S.C.R.
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 went
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 prosecution 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 under
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 30.08.2019 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 led 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. The
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 rendered 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 called
for only in a case where complaint did not disclose any off ence,
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. Criminal
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, criminal
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.]
940
SUPREME COURT REPORTS
[2023] 12 S.C.R.
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 placed
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 learned counsel
appearing for the appellant prayed that continuation 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 the 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 required
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 sanction 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.]
942
SUPREME COURT REPORTS
[2023] 12 S.C.R.
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 General
Manager, State Bank of India, Ananthpur Regional Offi ce, Ananthpur,
Andhra Pradesh; Shri Kuppa Srinivas (A-3), Chief Manager &
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 (A11), 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 District, 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 imputation
together with list of witnesses, list of documents, copies of statements
of witnesses and copies of documents, for initiating departmental
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 against 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 proceedings, 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 Complex,
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 also 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.]
944
SUPREME COURT REPORTS
[2023] 12 S.C.R.
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 impugned 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 sanction 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 prior
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 the appellant
to state that he has been exonerated in the departmental proceedings. The
appellant, was ultimately, given 'Administrative Warning' in respect 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 CrPC 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 and
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.]
946
SUPREME COURT REPORTS
[2023] 12 S.C.R.
(i)
Whether the appellant, serving in his capacity as an Assistant
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 proceed 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 case
may be, was at the time of commission of the alleged off ence
employed, in connection with the aff airs of the Union, of the
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 Proclamation
issued under clause (1) of article 356 of the Constitution was in
force in a State, clause (b) will apply as if for the expression "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 while
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, direct 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 public
order as may be specifi ed therein, wherever they may be serving, and
thereupon the provisions of that sub-section will apply as if for the
expression "Central Government" occurring therein, the expression
"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.]
948
SUPREME COURT REPORTS
[2023] 12 S.C.R.
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 case
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 otherwise
left the service...................It appears to us that protection under
the Section is needed as much after retirement of the public servant
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 offi 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 is
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 the appropriate
Government.
41. Sub-section (1) of Section 197 of the CrPC shows that sanction
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 Government
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 permission 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 the 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.]
950
SUPREME COURT REPORTS
[2023] 12 S.C.R.
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 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. 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 constitutes
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 thought,
concerned merely to see that the evidence discloses a prima facie case
against the person sought to be prosecuted. ..."
45.