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Issues: (i) Whether sanction was necessary for prosecuting the public servant, and if so whether the sanction granted covered the altered charges; (ii) whether the diary and cheque counterfoils of one accused were admissible against the other on the conspiracy charge; (iii) whether the convictions for conspiracy under Section 120B read with Section 165 of the Penal Code could be sustained.
Issue (i): Whether sanction was necessary for prosecuting the public servant, and if so whether the sanction granted covered the altered charges.
Analysis: The protection under Section 270 of the Government of India Act, 1935 and Section 197 of the Code of Criminal Procedure was treated as turning on whether the acts complained of were done in the discharge of official duty. The relevant test was whether the public servant could reasonably claim that what he did was done by virtue of his office. Receiving a bribe could not answer that description. The sanction already obtained was also treated as sufficient to support the subsequent proceedings on the altered charge structure.
Conclusion: No sanction was necessary under Section 197 of the Code of Criminal Procedure, and the sanction given was in any event sufficient.
Issue (ii): Whether the diary and cheque counterfoils of one accused were admissible against the other on the conspiracy charge.
Analysis: The writings could be used against the co-accused only if Section 10 of the Indian Evidence Act, 1872 applied, that is, only if there was reasonable ground to believe that a conspiracy had been established. Once the appellate court rejected the explanation on the specific charge and found no independent material to support that belief, the foundation for treating the writings as evidence against the co-accused disappeared. Evidence admissible only on the footing of an existing conspiratorial belief could not remain admissible when that footing was displaced.
Conclusion: The writings were not admissible against the co-accused once the requisite foundation under Section 10 failed.
Issue (iii): Whether the convictions for conspiracy under Section 120B read with Section 165 of the Penal Code could be sustained.
Analysis: Without the inadmissible writings, there was no material sufficient to sustain the inference of conspiracy. The separate findings on the individual charge did not supply the necessary basis for maintaining the conspiracy conviction on appeal.
Conclusion: The conspiracy convictions could not be sustained.
Final Conclusion: The appeals succeeded and the convictions were set aside because the public servant immunity objection failed, but the conspiracy conviction ultimately lacked admissible supporting evidence.
Ratio Decidendi: A public servant is acting in discharge of official duty only where the act falls within the scope of that duty, and evidence under Section 10 of the Indian Evidence Act, 1872 becomes unavailable once the foundational belief in conspiracy is displaced.