The Dilemma:
If an investigating authority intends to investigate a public servant[1], the authority has to mandatorily secure appropriate sanction from a competent authority[2] to even begin the investigation. Particularly, when the allegations pertain to offences punishable under the Indian Penal Code, 1860 (“IPC”), the investigating authority must secure the sanction under Section 197 of Code of Criminal Procedure, 1973 (“CrPC”), from the competent authority and when the allegations pertain to offences punishable under the Prevention of Corruption Act, 1988 (“PC Act”), sanction must be secured under Section 19 of the PC Act. Often, the alleged act under investigation attracts punishment or penalty under both IPC and PC Act.
In the recent past, there have been instances wherein, the investigating authority has only applied for a sanction under the PC Act and not separately under the CrPC. There have also been instances of the investigating authority failing to secure a sanction under the PC Act, but continuing with the investigation under the CrPC, without securing appropriate sanction, by simply dropping allegations accruing from the PC Act. This has presented the criminal courts with a unique dilemma – whether it is permissible for the special court[3] to proceed against the accused for offences punishable under the IPC without an appropriate sanction or better yet, having been denied a sanction under the PC Act on the very same set of facts.
In the present article we aim to, non-exhaustively, analyse the mechanism for investigating a public servant, from the purview of a bank official of a nationalised bank, when the allegations pertain to offences punishable both under IPC and PC Act.
The conditions stipulated under Section 197of CrPC.
Section 197 of CrPC provides that 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 by the appropriate government.
The above definition clearly stipulates a two pronged test, upon satisfaction of which, the concerned investigating authority must procure a sanction from the appropriate government, i.e: i) the bank official must be removable only by the sanction of the central government or state government and; ii) the alleged act must have been committed during the course of his official duty or purporting to act in the discharge of his official duties. If, on any one of these counts the bank official fails to meet the test, sanction under 197 of CrPC is not required.
In the same vein, if the conditions are met, then the investigating authority must procure a sanction to even begin the investigation against the bank official.
Can a bank official of a national bank take benefit of Section 197 of CrPC?
The question of whether a nationalised bank official can claim benefit of Section 197 of CrPC is not res integra. The Supreme Court by way of several pronouncements has established that protection under Section 197 will only accrue to an officer who “is not removable from his office save by or with the sanction of the Government.”[4]
However, for the purpose of the PC Act, the banking sector being governed by the Reserve Bank of India is considered as a limb of the State under Article 12 of the Constitution of India and by virtue of Section 46-A of the Banking Regulation Act, 1949, the bank official is deemed to be a “public servant”[5]. Therefore, an accused may argue that by virtue of Article 12, protection under Section 19 of the PC Act will accrue to him.
Sanction contemplated under Section 197 of CrPC concerns a public servant who “is accused of any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty” whereas, the offences contemplated in the PC Act, 1988, are those that cannot be treated as acts either directly or even purportedly done in the discharge of his official duties.
Against this background, the Supreme Court of India in A. Srinivasulu v. The State has held that employees of a PSU are entitled to protection both under Section 197 of CrPC and Section 19 of the PC Act[6]. Hence, one may argue that a nationalised bank would also meet the threshold of a PSU, by extension of which, bank officials are also protected under Section 197 of the CrPC, provided the conditions stipulated under Section 197 of CrPC are underscored.
Do offences committed under IPC and PC constitute to be the same? If so, does a decline of sanction under PC Act also extend to IPC allegations?
Offences under the IPC and the PC Act are often different and distinct, save the interplay. What is important to consider is whether offences punishable under the IPC are also required to be demonstrated and established in relation to offences punishable under the PC Act.
It is important to draw 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. As previously demonstrated, the sanction contemplated under Section 197 of the Code concerns a public servant who ‘is accused of any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty’[7], whereas the offences contemplated in the PC Act are those which cannot be treated as acts either directly or even purportedly done in the discharge of his official duties.
Further, Section 197 of the CrPC and Section 19 of the PC Act operate in conceptually different fields. In cases covered under the PC Act, in respect of public servants, the sanction is automatic, here, one may argue that there may well not be any requirement to establish a nexus between the alleged act with the discharge of the official duty of the accused. Conversely, in a case relatable to Section 197 of the CrPC, the substratum and basic features of the case must be considered to find out whether the alleged act has any nexus with the discharge of duties.
Notably, whilst there are two conditions to be satisfied for securing a sanction under the CrPC, as has been discussed hereinabove, per contra there is but only one condition required to be met while seeking a sanction under the PC Act, which is for the accused to be a public servant. This crystallises that the PC Act, places a threshold for indicting a ‘public servant’[8], which is distinct from CrPC, whereunder the factual matrix must be closely examined to determine if protection under Section 197 will be extended to the accused.
From the above discussion, it can be said that there can be no thumb rule that in a prosecution before a special court, the previous sanction under Section 19 of the PC Act would be the only prerequisite. If the offences on the charge of which the public servant is expected to be put on trial includes offences other than those punishable under the PC Act, 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 if the muster of prior sanction under Section 197 of CrPC[9] has been complied with.
Conclusion
The object behind the enactment of Section 19 of the PC Act and Section 197 of CrPC is to protect public servants from frivolous prosecutions. Illustratively, as a case in point, if the competent authority at the time of declining to accord sanction under Section 19 of the PC Act observes that sanction is being declined because prosecution against the accused could be termed as frivolous or vexatious, then, in such a scenario, what would be its bearing on the indictment under the standalone IPC offences? Could it be said that prosecution for the offences under the PC Act is frivolous but the same would not be for offences under IPC? This particular question is not res integra,to the extent that the Hon’ble Supreme Court of India in A. Sreenivasa Reddy v. Rakesh Sharma has left the issue open to be decided subsequently:
“62. 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 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 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 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 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. “
This, perhaps, is the silver lining wherein even when sanction under the PC Act is denied, appropriate sanction for launching an investigation under allegations pertaining to IPC will have to be procured to maintain the sanctity of a criminal trial and make out a case independently under the IPC sections, such that, investigation is not rendered as a residual trial, which has failed the threshold of a PC Act trial.
For further information, please contact:
Juvraj Singh, Partner, Cyril Amarchand Mangaldas
[1] Definition of a “Public Servant” as per IPC is defined in Section 21, and Section 2(c) under PC Act.
[2] ‘Competent Authority’ or ‘Appropriate Government’ would mean the the appointing authority, please refer to Section 19 of the PC Act and 197 of CrPC.
[3] For the purpose of the present article, the special court established under the Delhi Special Police Establishment Act, 1946 for the adjudication of cases being investigated by the Central Bureau of Investigation (“CBI”).
[4] K. Ch. Prasad v. Vanalatha Devi [K. Ch. Prasad v. Vanalatha Devi, (1987) 2 SCC 52: 1987 SCC (Cri) 297] (Para 06)
[5] A. Sreenivasa Reddy v. Rakesh Sharma, (2023) 8 SCC 711
[6] A. Srinivasulu v. The State (2023 SCC OnLine SC 900)
[7] Kalicharan Mahapatra v. State of Orissa [Kalicharan Mahapatra v. State of Orissa, (1998) 6 SCC 411 : 1998 SCC (Cri) 1455]
[8] Lalu Prasad v. State of Bihar [Lalu Prasad v. State of Bihar, (2007) 1 SCC 49 : (2007) 1 SCC (Cri) 241]
[9] A. Sreenivasa Reddy v. Rakesh Sharma, (2023) 8 SCC 711
