PC Act | Special Court Can Proceed Against Accused For IPC Offences Though Sanction Under S.19 PC Act Is Not Granted : Supreme Court

The Supreme Court recently held that a Special Court under the Prevention of Corruption Act 1988 (PC Act) can proceed against an accused for offences under the Indian Penal Code 1860 even if sanction for prosecution has not been granted in respect of PC Act offences as per Section 19 of the said Act.

In this case, the appellant, a bank manager, was facing trial for offences punishable under Sections 120-B read with Sections 420, 468 and 471 of the IPC and Section 13(2) read with Section 13(1) of the PC Act, 1988 in respect of allegations of a loan scam. The Special Court discharged the appellant for the offences under the PC Act for want of sanction under Section 19 PC Act. However, the Special Court decided to proceed with the trial for the IPC offences observing that sanction under Section 197 CrPC was not applicable for a bank employee. After the High Court also approved the Special Court's decision, the appellant approached the Supreme Court.

The appellant contended that it is not permissible for the Special Court to proceed against him for the offences punishable under the IPC as the sanction under Section 19 of the PC Act was declined.

The Supreme Court rejected this argument on the ground that the sanction under Section 197 CrPC for IPC offences and sanction under Section 19 of the PC Act operate on different levels.

"Sanction contemplated under Section 197 of the CrPC concerns a public servant who “is accused of any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty” whereas, the offences contemplated in the PC Act, 1988 are those which cannot be treated as acts either directly or even purportedly done in the discharge of his official duties", the Court explained.

Referring to the precedents in n Kalicharan Mahapatra v. State of Orissa, reported in (1998) 6 SCC 41 and Lalu Prasad alias Lalu Prasad Yadav v. State of Bihar reported in (2007) 1 SCC 4, the Court said :

"Thus, although in the present case, the appellant has been discharged from the offences punishable under the PC Act, 1988 yet for the IPC offences, he can be proceeded further in accordance with law"

The bench of Justices BR Gavai and JB Pardiwala further observed : 

“..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 pre-requisite. 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. “

The offences under the IPC and offences under the PC Act, 1988 are different and distinct, the Court pointed out. It is important to distinct between the sanction required for prosecuting a person under the IPC and the sanction required for prosecuting a person under the PC Act, 1988, the Court stated.

“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.”  

A question for the future 

The Court also highlighted a question which may need to be examined at a later time:

If in a case where the sanctioning authority declines sanction under the PC Act, due to the allegations being ‘frivolous or vexatious’, what would the effect of this be on the IPC offences?

"Before, we close this matter, we would like to observe something which, this Court may have to consider sooner or later. The object behind the enactment of Section 19 of the PC Act, 1988 is to protect the public servants from frivolous prosecutions. Take a case wherein, the sanctioning authority at the time of declining to accord sanction under Section 19 of the PC Act, 1988 observes that sanction is being declined because the prosecution against the accused could be termed as frivolous or vexatious. Then, in such circumstances what would be its effect on the trial so far as the IPC offences are concerned? Could it be said that the prosecution for the offences under the PC Act, 1988 is frivolous but the same would not be for the offences under the IPC? We are not going into this question in the present matter as sanction initially was not declined on the ground that the prosecution against the appellant herein is frivolous or vexatious but the same was declined essentially on the ground that what has been alleged is mere procedural irregularities in discharge of essential duties. Whether such procedural irregularities constitute any offence under the IPC or not will be looked into by the trial court. What we have highlighted may be examined by this Court in some other litigation at an appropriate time".

Also from the judgment - Though Nationalised Bank Employee Is 'Public Servant', Protection Under Section 197 CrPC Not Available : Supreme Court

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

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