Supreme Court Delivers Split Verdict On Chandrababu Naidu's Plea , Judges Disagree On Applicability Of S.17A PC Act

The verdict today was delivered by Justice Aniruddha Bose and Justice Bela M Trivedi, who heard Naidu's special leave petition challenging a September 22 order passed by the high court declining to quash a first information report (FIR) arraigning the ex-chief minister as one of the accused in the scam.

The judges delivered two separate judgments. Justice Bose held that previous sanction within the meaning of Section 17A of the Prevention of Corruption Act, 1988 (added by 2018 amendment) will have to be obtained after the provision became operational, failing which, an inquiry, enquiry, or investigation against a public servant under the PC Act shall be illegal. Accordingly, he held that Naidu could not have been proceeded against for offences under Section 13(1)(c) and 13(1)(d) read with 13(2) of the 1988 act on grounds of non-procurement of prior approval from the concerned authority. However, the State could now apply and obtain an approval order, he clarified. He also ruled that the trial court had jurisdiction to pass the remand order and refused to quash it. "The special judge had the jurisdiction to pass such an order even though the offences under the PC Act could not have been invoked at that stage. A lack of approval in terms of Section 17A of the act would not make the entire remand order non-est," Justice Bose said, adding that Naidu could be proceeded against before the Special Judge for offences under the Indian Penal Code partly allowing Naidu's appeal. 

Justice Trivedi disagreed with her colleague on the interpretation of Section 17A. She held that this provision could not be made applicable retrospectively. Her conclusion that Section 17A would only apply to amended and newly-inserted offences under the PC Act, which underwent significant amendments in 2018, marked the major point of departure from Justice Bose's ruling. The prior sanction requirement under Section 17A was required to be treated as substantive, and not merely procedural in nature, the judge insisted, before adding that such a substantive amendment could not be made applicable retrospectively to offences contained in provisions like Section 13(1)(c) and 13(1)(d) which were deleted in 2018.

She also pointed to the legislative intent behind the provision and said, "The cardinal principle of construction is that any statute would have prospective operation unless it is expressly or by necessary implication made to have retrospective operation. In the instant case, the 2018 amendment act by which Section 17A was inserted, was specifically made applicable from July 2018 by the central government. Thus, the intention of the legislature was to make the amendments applicable prospectively from a particular date, and not retrospectively or retroactively. It is required to be presumed that the legislature intended to make Section 17A applicable only to the new offences as amended in 2018, and not to the offences existing prior to this. Any other interpretation may lead to an anomalous situation resulting in absurdity inasmuch as there could not be prior approval for the deleted offences. If the submission of Senior Advocate Harish Salve that Section 17A is retroactive is accepted, then all the pending proceedings of inquiry, enquiry, and investigation, as on July 2018, carried out in respect of offences existing prior to the 2018 amendment would become infructuous, frustrating the very object of the act, which is to combat corruption. The object of Section 17A is to protect honest and innocent public servants from undergoing harassment by the police for recommendations made or decisions taken in discharge of their official functions. It cannot be the objective of Section 17A to give benefit to dishonest or corrupt public servants. If any inquiry, enquiry, or investigation carried out by the police officer in respect of an offence committed by a public servant is held to be non-est or infructuous by making Section 17A retrospectively or retroactively applicable, the same would not only frustrate the object of the PC Act, but also would be counterproductive."

The absence of prior approval before conducting an inquiry, enquiry, or investigation into an alleged offence of corruption by a public servant could never be a ground for quashing an FIR registered against the public servant or the proceedings against them, the judge further said, before adding, "More so, when the public servant is also charged with other offences under the Indian Penal Code in respect of the same set of allegations."

On the question of extension of the protection conferred by Section 17A to acts not within the ambit of official functions, Justice Trivedi said, "This protection cannot be extended to acts that are prima facie not in discharge of the public servant's official functions and duties. Any other interpretation would certainly tantamount to scuttling the investigation at a very nascent stage. This can neither be the intention of the legislature, nor can such provision be interpreted in a manner which would be counterproductive or which would frustrate the very objective of the act."

Dismissing the TDP president's appeal, she said -

"Unless a different intention is disclosed, the repeal of an act would not affect the right of an investigating agency to investigate an offence covered under the repealed act. If the offences were committed when the repealed act was in force, then the repeal of such an act would neither affect the right of an investigating agency to investigate the offences, nor would it vitiate or invalidate any proceedings instituted against the accused. The deletion of Sections 13(1)(c) and 13(1)(d), therefore, would not affect the right of the investigating agency to investigate, neither would it vitiate the proceedings. Section 17A would be applicable to offences under the PC Act as amended in 2018, and not to any offence existing prior to this. Even otherwise, the absence of prior approval under this section would neither vitiate the proceedings, nor would it be a ground to quash the FIR or the proceedings against the accused. In this case, the appellant having been accused of other offences under the IPC, the special court was completely within its jurisdiction to pass the remand order. There is no jurisdictional error by the special court. The high court judgment also does not suffer from any infirmity or illegality that would call for interference from this court."

In view of the split in the bench's interpretation of Section 17A of the Prevention of Corruption Act, the matter will now be referred to a larger bench. Justice Bose said after both judges pronounced the operative portions of their judgments in court today, "As we have taken different opinions on the interpretation of this section, as also applicability on the appellant, we refer the matter to the Chief Justice of India for appropriate directions."

The top court reserved its judgment on October 17 last year. The thrust of the argument advanced by Naidu's lawyers, senior advocates Harish Salve and Siddharth Luthra, was that the police could not have made Naidu an accused in the case without obtaining the sanction under Section 17A of the Prevention of Corruption Act. The State, represented by Senior Advocate Mukul Rohatgi, countered this argument by contending that since the offence occurred before the insertion of Section 17A in the PC Act through the 2018 amendment, the mandate of prior sanction was not applicable in the case.

After the hearing in this case was concluded, despite fervent appeals on behalf of the Telugu Desam Party president, the top court declined to grant interim bail. Naidu was however, granted relief by the high court later in the same month.

In related news, the Supreme Court is also hearing Naidu's plea against the high court declining his request for anticipatory bail in the FiberNet scam case. The hearing in this case was adjourned to await the decision in the TDP supremo's quash petition in the skill development case.

In November, while issuing notice in the state government's plea challenging an order passed by the Andhra Pradesh High Court granting Naidu regular bail in the skill development scam case, the top court had also directed the continuation of a bail condition enjoining the senior politician from speaking about sub judice matters arising out of the case in the public domain. However, it refused to impose the other bail condition prohibiting him from organising or participating in political rallies or meetings. These conditions were initially imposed by the high court in an interim order, but later not extended when Naidu was granted regular bail. 

Last month, on Andhra Pradesh government's request, Justice Bose orally asked Naidu to not make any statement in the public domain about the pendency of his plea in the FiberNet scam case as well.

Nara Chandrababu Naidu, Telugu Desam Party president and erstwhile Andhra Pradesh chief minister, has been arrested in connection with a skill development scam in the state, with the state crime investigation department claiming to have prime facie evidence of the former chief minister's key role in the alleged embezzlement of around Rs 371 crore from the Andhra Pradesh Skill Development Corporation through fictitious companies during the TDP's rule between 2014 and 2019. He is the 37th accused in a 2021 FIR related to the multi-crore scam involving the state skill development corporation.

The opposition Telugu Desam Party leader was arrested by the Andhra Pradesh CID on September 9 and has remained in custody since. Subsequently, a Vijayawada court remanded Naidu to police custody for September 23 and 24. On Sunday, Naidu's judicial remand was extended till October 5.

In September 2023, the Andhra Pradesh High Court dismissed Naidu's plea for quashing of the FIR. In his petition, he argued that the trial court's order remanding him to custody did not consider that the CID had failed to obtain prior approval from the governor, as required by Section 17A of the Prevention of Corruption Act. However, a bench of Justice K Sreenivas Reddy ruled that prior sanction from the competent authority was unnecessary for the investigation since the use of public funds, allegedly for personal gain, did not constitute an act in the discharge of official duties. The court also agreed that given the seriousness of economic offences, the investigation should not be hindered, especially at this early stage.

Challenging this ruling, the TDP leader has approached the Supreme Court in a special leave petition.