No Criminal Action Merely On Allegation Of Wrong Order Passed By Public Servant: Kerala HC Quashes Corruption Case Against Deputy Collector, Others

The Kerala High Court has made it clear that criminal proceeding cannot be initiated against a public servant merely on the ground that a wrong or incorrect order was passed by him/her.

Stating thus, it quashed the FIR and proceedings initiated against Taluk Land Board Chairman, Deputy Collector (LR) and Tahsildar of Thrissur, other Board members under the Prevention of Corruption Act.

Justice Kauser Edappagath found the prosecution case unsustainable, no allegation of any illegal gratification was made. It observed,

"If a public servant acting as a quasi-judicial authority under a statute passes an order and if such order is in favour of a person other than the Government, any pecuniary advantage obtained by such person by virtue of such order, cannot be the basis for prosecution of the public servant under the PC Act, unless there is an allegation that he was actuated by extraneous considerations or oblique motives in passing the order."

The prosecution case was that the Managing Director and other Directors of M/s.Thomson Granites Pvt. Ltd had conspired since 2003 to undertake illegal mining activity in over 19 hectares assigned forest land. For this purpose, sanction was wrongfully obtained in collusion with Thrissur local authorities, it was alleged.

Counsels for the Taluk Land Board authorities denied the allegations and argued that the FIR was registered without obtaining sanction under Section 17-A of the PC Act. 

The counsels representing the Directors of the Company argued that criminal prosecution cannot be maintained against them without the Company also being included in the array as an accused. 

The Special Public Prosecutor for VACB A. Rajesh, and Senior Public Prosecutor S. Rekha argued that the Court ought not to exercise its inherent power under Section 482 CrPC and interfere with the investigation, particularly when the FIR discloses the commission of a cognizable offence.

The Court in this case embarked on an extensive analysis of the scope and ambit of the power of the Court under Section 482 Cr.P.C. and/or under Article 226 of the Constitution of India to quash an FIR or investigation. The Court perused the decisions in Kurukshetra University v. State of Haryana (1977), State of West Bengal & Ors v. Swapan Kumar Guha & Ors. (1982), Madhavrao Jiwajirao Scindia & Ors. v. Sambhajirao Chandrojirao Angre & Ors. (1988), State of Haryana v. Bhajan Lal (1992), M/S Neeharika Infrastucture Pvt. Ltd v. State of Maharashtra & Ors. (2021), and several other such cases. 

It noted that although it has to be extremely cautious and slow to interfere with the investigation and trial of criminal cases on the one hand, it noted that when it is convinced beyond any doubt that of the following namely - (i) where the FIR does not disclose the commission of any offence; or (ii) the allegations contained in the FIR do not constitute any cognizable offence; or (iii) the prosecution is barred by law; or (iv) where a criminal proceeding is manifestly attended with malafides; or (v) where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance; or (vi) where it is necessary to interfere to prevent abuse of the process of the Court - it would be entitled to quash the FIR or investigation. 

The Court in this case noted that the FIR that was registered contained two parts - firstly, that the directors of the Company had conspired with the public servants in various departments from 2003 onwards to illegally perform mining activities in the land, paid land tax and generated other certificates to produce before the Mining and Geology Department for getting mining sanction wrongfully; and secondly, that the public servants on their part had conspired with the directors of the Company and by misusing their official capacity and by violating certain provisions and suppressing the report of the Tahsildar, had issued an order favourable to the Company. 

The Court noted that the offences alleged in the first part were those punishable under Sections 13(2) r/w 13(1)(d) (i, ii iii) of the PC Act, 1988 and Section 120B of IPC. It noted that in order for Section 13(d) (i), (ii) & (iii) to apply, there ought to be an allegation that the public servant by corrupt or illegal means or by abusing his official position as a public servant or without any public interest, obtained for himself or for any other person any valuable thing or pecuniary advantage. Noting the facts of the present case, it discerned that the only allegation against the accused directors of the Company in the present case was that they had conspired with public servants of various departments for performing the illegal activities. 

"The said allegation is so vague. The allegation does not speak about any illegal gratification, nor does it say that any specified public servant obtained any pecuniary advantage or valuable thing either for himself or for the company by abusing their official position. There is also no allegation that the accused Nos.5 to 10 [Directors] bribed any of the public servants for obtaining various certificates for performing mining activities in the land in question. In the investigation conducted so far, the investigating agency could not locate or pinpoint the so-called public servants who were allegedly involved in the offences that fall within the first part," the Court observed while holding that t Section 13(1) (d) (i), (ii) & (iii) of the PC Act, 1988 would not apply in this case. 

As regards the second part of the FIR, the Court observed that the allegations therein were also vague. The Court noted that the impugned order exempting the company had been passed by the Taluk Land Board after conducting an enquiry, and perusing all the records and also after hearing the parties. The Court noted that the said order was appealable, and that an appeal filed by the Government was still pending.

The Court observed that in this case, there had not been any specific allegation that any payment had been made by the directors of the Company towards the public servants. 

Additionally, the Court found that the impugned order had been passed by the Chairman and Member of the Taluk Land Board in their official capacity, and that they would fall within the ambit of the definition of ‘Judge’ in Section 2 of the Judges (Protection) Act, 1985 which refers to every person who is empowered by law to give a definitive judgment in a legal proceeding.

"The criminal prosecution against the accused Nos.1 and 2 is, thus, barred under law and not maintainable," it held. 

Lastly, the Court went on to observe that the allegations in the FIR pertained to acts done in the official capacity. "It is settled that in the absence of a specific allegation against the managing director or directors of vicarious liability, no criminal proceedings can be initiated against them in the absence of Company being arrayed as a party. When a complainant intends to rope in a managing director or any officer of a Company, it is essential to make requisite allegations to constitute vicarious liability," the Court found. It thus held that the prosecution against the directors would not sustain. 

It proceeded to quash the proceedings against the petitioners on these grounds. 

Advocates Paul Jacob, Sheru Joseph, Mathew Thomas, and Anand Krishna appeared on behalf of the petitioner directors of the Company. The public servants were represented by Advocates Johnson Gomez, S. Biju, Sanjay Johnson, John Gomez, Arun Johny, Deebu R., and Abin Jacob Mathew. 

Case Title: P.T. Jose & Ors. v. State of Kerala & Anr. and other connected matters

Citation: 2023 LiveLaw (Ker) 154

Click Here To Read/Download The Order