Sanction U/S 137 Customs Act Not Required For Prosecution On Charges Under Prevention Of Corruption Act: Karnataka High Court

The Karnataka High Court has held that sanction under Section 137 of the Customs Act, to prosecute an officer of the Customs Department, charged under the offences punishable under the Prevention of Corruption Act, is not required.

It observed that sanction accorded under Section 19 of the Prevention of Corruption Act was sufficient.

A single judge bench of Justice Dr. HB Prabhakara Sastry rejected the petition filed by one George Varghese challenging the order of the Special CBI Court rejecting his discharge application.

The petitioner has been accused for the offences punishable under Section 120B read with Sections 420, 467, 468 and 471 of the Indian Penal Code, 1860 and under Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988.

It is alleged by the CBI that the Petitioner, while functioning as a public servant, in the capacity of the Superintendent of Customs, entered into a criminal conspiracy with the Inspector of Customs and the CEO of M/s. Amisha International (also arraigned as an accused) during January 2003 and in furtherance thereof, cleared a container carrying goods meant for export by the firm, without physically verifying the same, which caused wrongful loss to the Government of India, to the tune of Rs.26,94,251/- and corresponding wrongful gain to themselves.

The Petitioner contended that on the date of the alleged offences, he was serving in the Customs Department and thus, a sanction order under Section 137 of the Customs Act was mandatory for taking cognizance.

Findings:

The bench referred to Section 137 of the Customs Act and said,

"The reading of the above Section would go to show that, it is the Principal Commissioner of Customs or the Commissioner of Customs, who is the authority to accord sanction. However, the said sanction under Section 137(1) of the Customs Act is required only with respect to those offences under Section 132, Section 133, Section 134, Section 135 or Section 135-A of the Customs Act."

It added,

"In the case on hand, admittedly, the offences alleged against the present petitioner are punishable under Sections 120B, 420, 467, 468 and 471 of the IPC and under Section 13 (2) read with Section 13 (1)(d) of the Prevention of Corruption Act. Thus, none of the offences under Sections 132, 133, 134, 135 or 135-A of the Customs Act have been alleged against the present petitioner in the instant case. Therefore, the sanction need not be given under Section 137 of the Customs Act."

Then referring to Section 19 (1) ( c) of the Prevention of Corruption Act, the bench said ,

"The sanction given under Section 19(1)(c) for the offence punishable under Section 13 (2) read with Section 13 (1)(d) of the Prevention of Corruption Act, cannot be called as an invalid sanction in the eye of law."

The Petitioner had also argued that the sanctioning authority (Commissioner of Excise) was not the competent authority to accord sanction, since the petitioner was serving as on the date of the offences in the Department of Customs. It was submitted that the two Departments have separate Commissionerate and the services of the Officers and the officials in those two Departments cannot be interchanged. Thus, the sanction accorded by the Commissioner of Excise is an invalid sanction.

The bench took into account the service records of the petitioner as relied on by the prosecution to indicate that the petitioner was initially appointed in the Department of Excise, but as on the date of the alleged offences, he was serving as a Superintendent in the Department of Customs. However, as on the date of sanction, he was sent back to the Department of Excise, as such, it was the Excise Commissioner who had the power/authority to remove the petitioner, thus the sanction has been accorded by the Commissioner of Central Excise.

It said,

"The fact remains that the petitioner had joined the services in the year 1974 in the Department of Central Excise and retired from the Department of Central Excise in the year 2011, though in between, he was transferred or made to work as Superintendent of Customs, but he did not challenge the said assignment or deputation or transfer by whatever name that may be called. It is only when the question of sanction to prosecute him under the provisions of the Prevention of Corruption Act has arisen, he cannot forward the said contention that the Customs Department has got a separate Commissionerate."

Finally relying on the Supreme Court judgment in the case of CBI & Ors. Vs. Pramila Virendra Kumar Agarwal, the Court said, "The absence of sanction no doubt can be agitated at the threshold but the invalidity of the sanction is to be raised during the trial."

Case Title: George Varghese v Superintendent of Police

Case No: CRIMINAL REVISION PETITION No.1193 OF 2012

Citation: 2022 LiveLaw (Kar) 301

Date of Order: 15TH DAY OF JULY, 2022 Appearance: Senior Advocate Kiran S. Javali, for Advocate Chandrashekara K for petitioner; Special Public Prosecutor P. Prasanna Kumar for respondent

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