Discharge Of Public Servant Due To Invalid Sanction Under PC Act Does Not Absolve Private Accused From Offence Under IPC: Delhi High Court

The Delhi High Court has said that merely because sanction to prosecute a public servant under Prevention of Corruption Act is not granted, does not mean that the allegations of conspiracy or cheating by private accused persons under Indian Penal Code cannot stand trial.

“The matter of sanction qua public servant would have no effect upon allegations of conspiracy and alleged cheating by private accused and the only effect would be Section 120B IPC would now not be used to prosecute private individuals for the offences under the Prevention of Corruption Act. Merely because the sanction is not granted does not mean the findings qua conspiracy/cheating cannot stand trial,” Justice Yogesh Khanna observed.

The court made the observations while refusing to quash an FIR registered by Central Bureau of Investigation (CBI) against three private entities namely Ambuj Hotels & Real Estate Private Limited, Sharan Agrawal and M/S Brandavan Products.

The FIR was registered by CBI in 2015 for the offences under Sections 120 B and 420 of Indian Penal Code and Sections 13(2) and 13(1)(d) of the Prevention of Corruption Act.

It has been alleged during 2013-14, the petitioners, who were private caterers and licensees engaged for providing only Rail Neer Packaged Drinking Water (PDW) in Rajdhani or Shatabdi trains, supplied some other packaged water despite huge availability of PDW.

It has also been alleged that by not picking up Rail Neer, the licensees had caused loss of Rs.19.55 crores to the government exchequer and undue pecuniary gain to themselves as they claimed reimbursement for Rail Neer PDW which they allegedly did not supply. Upon conclusion of investigation, CBI filed chargesheet against two public servants and the private licensees.

In March 2017, the sanction to prosecute the two public servants was accorded. However, a co-ordinate bench of High Court later quashed the sanction order and a challenge against the same was dismissed by the Supreme Court. While the CBI again applied for sanction in September 2020, the competent authority refused to accord the same.

It was thus the petitioners’ case that despite all the authorities having declined to accord sanction for prosecution qua the two public servants, the CBI was instating to prosecute private licensees or caterers.

The petitioners contended that once sanction qua the government officials was declined, the CBI could not pursue its case against private persons since the case was initially based upon conspiracy of private licencees with the Government servants.

Dismissing the pleas, Justice Khanna said that the discharge of public servants on account of invalid sanction will not absolve the petitioners from the offence allegedly committed under the IPC.

The court also observed that the averments made in chargesheet qua the petitioners along with other material on record could not be ignored at this stage. It said the discharge of public servant on account of invalid sanction will not absolve the petitioners from the offence allegedly committed under the IPC.

“In view of overall submissions and case laws stated above, no case is made out for quashing of FIR at this stage. Accordingly, the petitions stand dismissed. Pending applications also stand disposed of,” the court said.

Title: AMBUJ HOTELS & REAL ESTATE PVT. LTD. v. CENTRAL BUREAU OF INVESTIGATION and other connected matters

Citation: 2023 LiveLaw (Del) 567

Click Here To Read Order