State of Madhya Pradesh & Ors Vs Anand Mohan & Anr

Supreme Court of India (Division Bench (DB)- Two Judge)

Appeal (Civil), 1971 of 2015, Judgment Date: Jul 09, 2015

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1971 OF 2015
(Arising out of S.L.P. (Civil) 18758 of 2014)

State of Madhya Pradesh & Ors . … Appellants

Versus

Anand Mohan & Anr … Respondents

J U D G M E N T

Prafulla C. Pant, J.

This Appeal is directed against judgment and order dated 03.09.2013
passed by the High Court of Madhya Pradesh at Jabalpur whereby said Court
has allowed Writ Petition No. 21246 of 2012 challenging the order of
sanction for prosecution, passed by Secretary, Law and Legislative Affairs,
Government of Madhya Pradesh, Bhopal.
2. Brief facts of the case are that respondent No.1 was an Executive
Engineer, and respondent No.2 was an Assistant Engineer with Bhopal
Development Authority (for short “BDA”). Said authority got constructed
33/11 KV Sub-Station at Raksha Vihar Colony, Bhopal, for which tenders were
invited on 25.07.1995, and work order was given in favour of one A.R.K.
Electricals, Bhopal. The construction was completed on 25.09.1997, and
ownership of the sub-station was transferred to Madhya Pradesh State
Electricity Board (for short “MPSEB”). It is alleged that the respondents,
in connivance with other accused, entered into a criminal conspiracy in
connection with above construction work, and got prepared a forged note-
sheet, pursuant to which excess payment of Rs. 9,51,657/- was paid to a
contractor (Ashok Johri). On this information, Economic Offences Wing (for
short “EOW”) of the State Government registered Crime No. 28 of 2004 in
respect of offences punishable under Sections 420, 467, 468, 471, 120B and
201 IPC, and under Section 13 (1) (d) read with Section 13 (2) of
Prevention of Corruption Act, 1988 (for Short “the Act”) against the
respondents and other accused. After investigation, the Wing sought
previous sanction necessary for prosecution of the respondents from the
Administrative Department of the State Government. The Administrative
Department of the State Government, after examining the papers declined the
sanction vide its order dated 08.03.2011. However, on completion of
investigation, when charge sheet was filed against the accused before the
Court of Special Judge (Prevention of Corruption Act), Bhopal, the court,
vide its order dated 15.02.2012, directed that necessary sanction for the
prosecution of respondents be obtained from appellant No. 2, Secretary,
Department of Law and Legislative Affairs, Government of Madhya Pradesh,
which is the Competent Authority. Said Authority after examining the papers
vide order dated 20.11.2012, (Annexure P-8) granted necessary sanction to
prosecute the respondents.

3. The respondents challenged the order dated 20.11.2012, passed by
present appellant No.2 before the High Court through Writ Petition No.
21246 of 2012. The High Court allowed the Writ Petition holding that
appellant No. 2, i.e. Secretary, Department of Law and Legislative Affairs
was not the Competent Authority to grant the sanction.

4. Learned counsel for the appellants argued before us that the High
Court has erred in law in holding that the Law Department was not the
Competent Authority to grant sanction for the prosecution. In this
connection reference was made to the Order/Notification dated 03.02.1988
(Annexure P-1) issued by the State Government regarding amendment in the
relevant rules delegating the power relating to sanction of prosecution to
the Department of Law and Legislative Affairs passed by the State
Government.

5. On the other hand, learned counsel for the respondents contended that
the Competent Authority to grant sanction for prosecution against the
present respondents was appellant No. 1, Secretary, Housing and Environment
of Government of Madhya Pradesh, and said authority had declined to grant
the sanction vide its Order dated 08.03.2011. It is further submitted that
appellant No. 2 was conferred power to grant the sanction vide circular
dated 28.02.1998, as such it was not competent to grant sanction in respect
of offence alleged to have been committed by the respondents in the year
1997.

6. We have considered the rival submissions of the parties. Section 19
(1) of the Prevention of Corruption Act requires previous sanction for
prosecution of a public servant in respect of offence punishable under
Section 13 of the Act, Section 19 of the Act reads as under:
“19. Previous sanction necessary for prosecution.— (1) No court shall take
cognizance of an offence punishable under sections 7, 10, 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 Loakayuktas
Act, 2013 -

(a) in the case of a person who is employed in connection with the affairs
of the Union and is not removable from his office save by or with the
sanction of the Central Government, of that Government;

(b) in the case of a person who is employed in connection with the affairs
of a State and is not removable from his office save by or with the
sanction of the State Government, of that Government;

(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 office at the time
when the offence was alleged to have been committed.

(3) Notwithstanding anything contained in the Code of Criminal Procedure,
1973 (2 of 1974),—

(a) no finding, sentence or order passed by a special Judge shall be
reversed or altered by a court in appeal, confirmation or revision on the
ground of the absence of, or any error, omission or irregularity 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 satisfied 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 regard 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 specified
authority or with the sanction of a specified person or any requirement of
a similar nature.”

{In sub-section (1) words “save as otherwise provided in the Lokpal and
Lokayuktas Act, 2013” are added vide Act (1) of 2014 with effect from
16.01.2014 before clause (a) of the sub section (1) from clause (b) of sub
section (1).}

7. From the Section quoted above, it is clear that the sanction for
prosecution in respect of the public servant employed in connection with
affairs of the State, who is not removable from his office save by or with
the sanction of the State Government, such Government shall be, authority
to grant sanction for prosecution. It is not disputed that the previous
sanction was sought by the EOW for prosecution of the respondents. The only
issue is as to which of the department of the State was competent to grant
the sanction. Order dated 03.02.1988 (Annexure P-1), published in the
Official Gazette, whereby the Madhya Pradesh Works (Allotment) Rules (for
Short “MPWAR) were amended, reads as under:
“Madhya Pradesh Gazette
(Extraordinary)
Published by Authority

No. 35, Bhopal Wednesday, 3rd February, 1988
Personnel Administrative Reforms & Training Department
Bhopal, dated 3rd February, 1988

No. F A-1-1-88-49 (1)-225: In exercise of powers conferred by clauses (2)
and (3) of Article 166 of the Constitution of India the Hon’ble Governor of
Madhya Pradesh makes more amendments in Madhya Pradesh Works (Allotment)
Rules, namely:-

Amendment

In the aforesaid rules: -

(1) The para 4 is replaced with the following para in the policy made in
the para 21 in the Schedule-in (A) Department under Law & Legislative
Affairs Department, namely:-

4 (One) Criminal Procedure includes all subjects coming under Criminal
Procedure Code save the probation of the Criminals, and
(2) Sanction of prosecution under Section 6 of the Prevention of Corruption
Act, 1947.

(2) The following term added by the Notification No. 2980-3632-A(1),
dated 18th November, 1983 irrespective of any serial number to which it was
added, and which has been amended from time to time in respect of the
policy made in part (A) Department under the heads of all the departments,
be deleted.

Sanction of the prosecution under Section 173 of the Criminal
Procedure Code, 1973 and Section 6 of the Prevention of Corruption Act,
1947 in respect of services related to those departments.

By order & in the name of the Governor of MP
A.D. Mohile, Special Secretary”

8. Consequent to above amendment, Chief Minister of Madhya Pradesh vide
order dated 08.02.1988 (Annexure P-2) delegated the power to grant sanction
for prosecution of the public servants to the Law Secretary of Madhya
Pradesh Law Department. Said document is reproduced below:
“Madhya Pradesh Government
Personnel, Administrative Reforms and Training Department

ORDER

Bhopal, dated 8th February, 1988

According to the para (1) of Directive No.2 of Supplementary Directive Part-
5 under Rule-1 of Works Rules of the Madhya Pradesh Government made by the
Hon’ble Governor in exercise of powers conferred by Clause (2) and (3) of
Article 166 of Constitution of India, No. F A 1-1/88/49/1, pursuant to the
authority invested to me and superseding the order dated 4th November of
the General Administrative Department, I Motilal Vora, Chief Minister,
hereby direct that the Secretary, Madhya Pradesh Government, Law Department
shall dispose of the cases related to the prosecution sanction of the
Government servants.

Sd/-
Motilal Vora
Chief Minister”

9. By the Order dated 21.04.1997 (Annexure P-3), it is provided that the
Department of Law and Legislative Affairs shall obtain opinion of the
concern Administrative Department before granting the sanction. It is
further provided that in case of conflict between the two departments, the
matter shall be referred to Sub-Committee of the Cabinet. However, the
order dated 21.04.1997 (Annexure P-3) was withdrawn vide letter dated
10.07.1997 (Annexure P-4) to the extent that in case of conflict the matter
would be required to be referred to Sub-Committee of the Cabinet. Letter
dated 10.07.1997 (Annexure P-4) is reads as follows:

“State of Madhya Pradesh
General Administrative Department

No.F-15(6)/96/1-10 Bhopal dated 10.07.1997

To
All member Secretary/Secretaries of the
Government
State of Madhya Pradesh
Bhopal

Sub. Sanction for prosecution against the Government Employees/Officers.

Ref.: Circular No. F-15(6)96/1-10 dated 21.04.1997 issued by this
Department

Vide reference circular of this department, the procedure for according
sanction for prosecution was determined.

As per order following part is deleted from the prescribed procedure in
Para 2 of the said circular.

“In case of conflict between the Law Department and the Administrative
Department, the case shall be presented before the Sub-Committee of the
Cabinet by the Administrative Department.”

Remaining procedure of the reference circular shall remain as it is. Please
ensure action in the cases of sanction for prosecution in future
accordingly.

Sd/-
A.V. Gwaliorkar
Deputy Secretary
State of MP
General Administrative Department

No.F-15(6)/96/1-10 Bhopal dated 10.07.1997

Copy to

Officer on Special duty, Lokayukta Office, Madhya Pradesh Bhopal for
information

Sd/-
A.V. Gwaliorkar
Deputy Secretary
State of MP
General Administrative Department”

10. By the Order dated 28.02.1998, the State Government further clarified
that in the matters of sanction for prosecution, the papers shall be sent
by the Department of Law and Legislative Affairs along the record to the
Administrative Department for its opinion and the Administrative Department
shall give the same within a period of one month, whereafter Department of
Law and Legislative Affairs shall take a decision.

11. It is not disputed that State of Madhya Pradesh Economic Offence Wing
registered Crime No. 28 of 2004 in respect of offences under Sections 420,
467, 468, 471 and 120B IPC and under Section 13 (1) (d) read with Section
13 (2) Prevention of Corruption Act, 1988 against the respondents on the
allegation that the respondents in connivance with others prepared forged
note sheet, and made payment of Rs. 9,51,657/- to a contractor abusing
their position. It is also not disputed that when the EOW sought sanction
for prosecution from Department of Housing and Environment, it declined the
sanction vide order dated 08.03.2011 (Annexure P-6). Question before us is
that whether the Department of Law and Legislative Affairs which granted
the sanction vide its order dated 20.11.2012 (Annexure P-8) was competent
to do so or not.

12. The High Court in the impugned order observed that the (EOW) did not
challenge legality and validity of order dated 08.03.2011, and submitted
the charge sheet. It further held that since the appellant No. 2 was
conferred power to grant the sanction only vide circular dated 28.02.1998,
as such it was not competent to grant the sanction relating offences
alleged to have been committed in the year 1997.

13. We are unable to accept the view taken by the High Court for the
reason that from annexure P-1 and annexure P-2, it is evident that the
power to grant the sanction for prosecution, already existed with the
Department of Law and Legislative Affairs, since February, 1988. The
circular letter dated 28.02.1998 (Annexure P-5) does not confer any new
power and it only clarifies that Department of Law and Justice is a
competent authority not only in respect of investigations made by Lokayukta
Organization, but also the State Economic Offences Investigation Wing. The
power with the appellant No.2 to grant the sanction is, in fact, conferred
by the rule as amended vide notification dated 03.02.1988 published in the
Official Gazette. After such amendment in the rule whereby power to grant
sanction was delegated to Department of Law and Justice, it cannot said
that Administrative Department had power to decline sanction as it has done
vide its order dated 10.07.1997.

14. In DDA and others vs. Joginder S. Monga and others[1] discussing
the situation of conflict between statutory rule and executive instruction,
this Court has clarified as under:
“30. It is not a case where a conflict has arisen between a statute or a
statutory rule on the one hand and an executive instruction, on the other.
Only in a case where a conflict arises between a statute and an executive
instruction, indisputably, the former will prevail over the latter. The
lessor under the deed of lease is to fix the market value. It could do it
areawise or plotwise. Once it does it areawise which being final and
binding, it cannot resile therefrom at a later stage and take a stand that
in a particular case it will fix the market value on the basis of the price
disclosed in the agreement of sale.”

15. On behalf of the respondents, reliance is placed in the case of
Sanjaysinh Ramrao Chavan Vs. Dattatray Gulabrao Phalke[2], but on going
through said case law we find that in said case investigation agency itself
filed closure report as against the appellant Sanjaysinh Ramrao Chavan, and
the same was accepted by the Magistrate, as such there was no question of
sanction to be obtained from the Department concerned. In the
circumstances, we find that the case of Sanjaysinh Ramrao Chavan (supra,)
is of little help to the present respondents.

16. Recently in State of Bihar and others v. Rajmangal Ram[3], this Court
has held as under: -
“9. In the instant cases the High Court had interdicted the criminal
proceedings on the ground that the Law Department was not the competent
authority to accord sanction for the prosecution of the respondents. Even
assuming that the Law Department was not competent, it was still necessary
for the High Court to reach the conclusion that a failure of justice has
been occasioned. …………..”

17. From the sanction granted by the Law Department, copy of which is
annexed as Annexure P-8, it is evident that the authority has examined the
material on record before granting the sanction.

18. Therefore, we are of the view that the High Court has erred in law in
allowing the Writ Petition filed by the respondents seeking quashing of
sanction dated 20.11.2012 granted by appellant No.2, Secretary, Department
of Law and Legislative Affairs, Government of Madhya Pradesh. We do not
find any infirmity as to the competence of appellant No.2 to grant the
sanction in the matter for the reasons discussed above. Accordingly, the
appeal is allowed. The impugned order dated 03.09.2013, passed by the High
Court, is set aside.

……………….....…………J.
[Dipak Misra]

.……………….……………J.
New Delhi; [Prafulla C. Pant]
July 09, 2015.

-----------------------
[1] (2004) 2 SCC 297

[2] 2015 (1) SCALE 457

[3] (2014) 11 SCC 388

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