Approver Need Not Be Examined As Witness By Magistrate When Cognizance Is Taken By Special Court Under PC Act : Supreme Court

Section 306(4) CrPC contemplates that every person accepting a tender of pardon be examined as a witness both in the Court of the Magistrate taking cognizance and in the subsequent trial. The requirement of Section 306(4)(a) CrPC is relaxed in cases falling under Section 307 CrPC, which empowers the Court to which the case is committed for trial, itself to grant pardon. The Apex Court reiterated that where the Special Judge takes cognizance of offence directly, Section 306 of the Code would get by-passed it is Section 307 of the Code which would become applicable.

A Bench comprising Justice V. Ramasubramanian and Justice Pankaj Mithal passed the judgment in a case pertaining to allegations of criminal conspiracy to cheat BHEL. The Apex Court acquitted the accused persons who were convicted by the Special Court for CBI and whose appeals were dismissed by the Madras High Court.

Factual Background

Seven persons were charged for offences punishable under Section 120B read with Sections 420, 468, Section 471 read with Section 468 and Section 193 of the Indian Penal Code and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act. Four of the accused persons were officers of BHEL, Trichy and three others were employed in private enterprises.

The prosecution's case was that the accused persons entered into a criminal conspiracy to cheat BHEL in ward of contract for construction of desalination plants. Pursuant to the conspiracy, the then Executive Director of BHEL (ED), one of the accused, instructed the DGM to go for limited tenders flouting the procedure of pre-qualification of prospective tenderers before inviting bids. The ED dictated name of four bogus firms along with M/s. Entoma Hydro Systems for inviting limited tenders. Accordingly, the DGM proposed the names of five firms, which included the four bogus firms along with two companies. Eventually, the tender committee consisting of the DGM and two of the accused persons processed the name of the firms and recommended the award of contract to Entoma though the said firm did not have requisite expertise. The Committee also recommended sanction of interest free mobilisation in violation of existing practice. An interest free mobilisation advance of INR 4.32 crores was paid to the firm. A certain portion of the advance was diverted to a sister concern.

The Special Court acquitted one and convicted four; two of the accused persons died during the pendency of trial. Four appeals were filed by the convicted persons before the Madras High Court. These appeals were eventually dismissed. The convicted persons approached the Supreme Court in four criminal appeals. During the pendency of the appeal one of the convicted persons passed away.

Analysis by the Supreme Court

Grant of pardon

The FIR was filed against four persons. One of them (DGM) had turned Approver. He gave a confession statement under Section 164 of the CrPC before the Magistrate on the basis of which prosecution filed a petition under Section 306 CrPC for the grant of pardon before the Chief Judicial Magistrate. The Approver was summoned before the Additional Chief Judicial Magistrate, who informed him of the consequences of his action and adjourned the matter. On the next date of hearing the confession statement was read out to him and the Approver was asked if the statement was made by him voluntarily. Once he responded in the affirmative, the Additional Chief Judicial Magistrate granted pardon to the Approver and thereafter he was treated as a prosecution witness before the Special Court. One of the accused assailed before the Apex Court the procedure of grant of pardon followed in the present case. It was contended that the Approver should be examined twice, once as a court witness before committal and then as a prosecution witness at the time of trial, which is a mandatory requirement under Section 306(4)(a) CrPC. It was further argued that if the Magistrate, who grants pardon fails to examine him as a witness as soon as pardon is accepted by the approver, the evidence of the approver is liable to be shunned. It was also submitted that the requirement of Section 306(4)(a) CrPC is relaxed in cases falling under Section 307 CrPC, which empowers the Court to which the case is committed for trial, itself to grant pardon. However, in the present case Section 307 CrPC would not be applicable since the case was not committed by the Additional Chief Judicial Magistrate to the Special Court.

The Court examined Section 306, 307 of the CrPC and Section 5 of the Prevention of Corruption Act in this regard. It noted that Section 306(1) divides a criminal case into three stages - a. investigation; b. inquiry and c. trial of the offence. A Chief Judicial Magistrate or Metropolitan Magistrate is empowered to grant pardon to any person at any of these three stages. However, the Magistrate of the first class can pardon in two stages - inquiry or trial of offence. It noted that Section 306(4) makes it mandatory that every person accepting a tender of pardon be examined as a witness both in the Court of the Magistrate taking cognizance and in the subsequent trial. Moreover, it requires the person accepting a tender of pardon to be detained in custody till the termination of the trial, except when they are already on bail.

Section 307 CrPC empowers the Court to which the case is committed for trial to tender pardon. The power has to be exercised at any time after the commitment of the case but before judgment is passed.

Section 5 of the Prevention of Corruption Act empowers the Special Judge to take cognizance of offence without the accused person being committed to them for trial. The Court noted that while trying the accused person the Court is also obligated to follow the procedure prescribed by the CrPC for the trial of warrant cases by the Magistrates. It further took note of the fact that the provision does not speak about the stage at which the Special Judge can grant pardon.

Referring to the judgment of the Apex Court in State through CBI v. V. Arul Kumar, the Court noted that it had recognised that in cases where cognizance is taken directly by the Special Judge under Section 5(1) of the Prevention of Corruption Act, Section 306 CrPC would get by-passed. It stated that the object to examine the approver twice is to ensure that the accused is made aware of the evidence against him even at the preliminary stage so that they can cross examine the approver during trial. The Court noted that in the present case, the said object was met as the confession statement of the approver before the Metropolitan Magistrate was enclosed to the charge sheet; the approver was examined and cross-examined; the Metropolitan Magistrate as well as the Additional Chief Judicial Magistrate were examined as prosecution witnesses. Therefore, the Court concluded that there was no violation of Section 306(4) of CrPC.

Prior Sanction

The Court noted that since four of the accused persons were public servants, under Section 197(1) of the CrPC and Section 19(1) of the Prevention of Corruption Act, prior sanction ought to have been taken to prosecute them. Until the 2018 Amendment to the Prevention of Corruption Act, the requirement of seeking previous sanction was limited to a person ‘who is employed’. Post amendment, previous sanction became necessary even for persons who ‘were employed at the time of the commission of the offence’. Since one of the accused had retired in 1997, previous sanction was not required to prosecute him. However, Section 197 of the CrPC makes previous sanction necessary for ‘any person who is’ and also ‘any person who was’ employed. In order to prosecute the accused persons who were in the employment of BHEL at the time the Special Court took cognisance of the offence, the investigating agency ought to have taken prior sanction even under the Prevention of Corruption Act. Though the agency sought sanction, the management of BHEL refused to grant the same twice.

The Court noted that the investigating agency did not seek previous sanction under Section 197(1) of the Code for the ED. The prosecution argued that under Section 197(1), prevision sanction is necessary only when the offence is allegedly committed “while acting or purporting to act in the discharge of his official duty”. Considering a catena of judgments, the Court opined that in order to find out whether the ED was acting in discharge of his official duty, it was sufficient to see what he could take cover under existing policy. Even if the act allegedly lacks bona fides but is covered under existing policy it would be an act in discharge of his official duty. Therefore, Section 197(1) of the CrPC ought to be invoked. Considering that there existed the Works Policy which covers the ED’s act, the Special Court and the High Court ought to have applied their mind and ruled in favour of the ED with respect to the issue of prior sanction. The Apex Court observed, “If according to the Management of the Company, the very same act of the co-conspirators fell in the realm of commercial wisdom, it is inconceivable that the act of A-1 (ED), as part of the criminal conspiracy, fell outside the discharge of his public duty, so as to disentitle him for protection under Section 197(1) of the Code.”

Case details

A. Srinivasulu v. State of Rep. by the Inspector of Police| 2023 LiveLaw SC 485    | Criminal Appeal No. 2417 of 2010| 15th June, 2023| Justice V. Ramasubramanian and Justice Pankaj Mithal

Citation : 2023 LiveLaw (SC) 485

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