Though Nationalised Bank Employee Is 'Public Servant', Protection Under Section 197 CrPC Not Available : Supreme Court

The Supreme Court has observed that the protection of Section 197 CrPC is not available to a person working in a Nationalised Bank.

Section 197 CrPC 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, the bench of Justices B R Gavai and J B Pardiwala said.

In this case, the accused 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. An FIR was lodged against him under Sections 120-B r/w 420, 468 and 471 respectively of the Indian Penal Code, 1860. His petition seeking quashing of FIR was dismissed by the Telangana High Court.

In appeal before the Apex Court, he raised the following issues: (i) 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? (ii) 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 14 prosecute the appellant for the offences under the PC Act, 1988, is not on record as the same came to be declined?

To answer the first issue, the court noted the provisions of Section 197 CrPC and observed:

"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.."

Another contention raised was that since sanction under Section 19 of the PC Act, 1988 has not been granted, the appellant cannot not be prosecuted for the offences under the IPC alone and he should be discharged from the criminal proceedings. In this regard, the court said:

"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. In the prosecution for the offences 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 under Section 197 of the 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 official duty of the public servant. To commit an offence punishable under law can never be a part of the official duty of a public servant. It is too simplistic an approach to adopt and to reject the necessity of sanction under Section 197 of the CrPC on such reasoning. The “safe and sure test”, is to ascertain if the omission or neglect to commit the act complained of would have made the public servant answerable for the charge of dereliction of his official duty. He may have acted “in excess of his duty”, but if there is a “reasonable connection” between the impugned act and the performance of the official duty, the protective umbrella of Section 197 of the CrPC cannot be denied, so long as the discharge of official duty is not used as a cloak for illicit acts."

Case Title : A. Sreenivasa Reddy vs Rakesh Sharma | 2023 LiveLaw (SC) 614 | 2023 INSC 682

Headnotes

Code of Criminal Procedure, 1973 ; Section 197 - 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. (Para 45)

Code of Criminal Procedure, 1973 ; Section 197 - Prevention of Corruption Act, 1988 ; Section 19 - In the prosecution for the offences 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 under Section 197 of the 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 official 27 duty of the public servant. To commit an offence punishable under law can never be a part of the official duty of a public servant. It is too simplistic an approach to adopt and to reject the necessity of sanction under Section 197 of the CrPC on such reasoning. The “safe and sure test”, is to ascertain if the omission or neglect to commit the act complained of would have made the public servant answerable for the charge of dereliction of his official duty. He may have acted “in excess of his duty”, but if there is a “reasonable connection” between the impugned act and the performance of the official duty, the protective umbrella of Section 197 of the CrPC cannot be denied, so long as the discharge of official duty is not used as a cloak for illicit acts. (Para 49)

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