Prima facie corruption allegations and limited statutory immunity kept prosecution alive under the Kerala Co-operative Societies Act.

Prima facie materials alleging criminal breach of trust, misappropriation and corruption were stated to be sufficient at the threshold, and the extraordinary jurisdiction under Section 482 CrPC or Article 226 was said not to be used to stifle a prosecution where a judicious prima facie view is possible. The text also notes that the sanction bar in Section 95(4) of the Kerala Co-operative Societies Act applies only to offences under Section 94(2) to (7), so it does not cover an offence under Section 94(8). It further states that Section 106 protects only acts done in good faith under the Act and does not create immunity for corruption or override prosecution under the Prevention of Corruption Act.

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Issues: (i) Whether the prosecution could be quashed on the ground that the materials disclosed only a factual dispute and no prima facie case; (ii) Whether prosecution for an offence under Section 94(8) of the Kerala Co-operative Societies Act was barred by the sanction requirement in Section 95(4) of that Act; (iii) Whether Section 106 of the Kerala Co-operative Societies Act granted immunity from prosecution, including prosecution under the Prevention of Corruption Act.

Issue (i): Whether the prosecution could be quashed on the ground that the materials disclosed only a factual dispute and no prima facie case.

Analysis: The materials produced by the prosecution were found sufficient at the threshold to disclose prima facie allegations of criminal breach of trust, misappropriation, and corruption. The Court held that reliability, admissibility, and proof beyond reasonable doubt are matters for trial, and that the extraordinary jurisdiction under Section 482 of the Code of Criminal Procedure, 1973, or Article 226 of the Constitution of India, cannot be used to stifle a prosecution where a judicious prima facie view against the accused is possible.

Conclusion: The prosecution could not be quashed on factual grounds.

Issue (ii): Whether prosecution for an offence under Section 94(8) of the Kerala Co-operative Societies Act was barred by the sanction requirement in Section 95(4) of that Act.

Analysis: Section 95(4) was held to bar institution of prosecution only for offences under sub-sections (2) to (7) of Section 94. Since Section 94(8) is specifically outside that sweep, the statutory bar on prosecution with prior sanction of the Registrar did not apply to the offence alleged under Section 94(8). The Court therefore treated the challenge as one unsupported by the statutory scheme.

Conclusion: The prosecution under Section 94(8) was not barred by Section 95(4).

Issue (iii): Whether Section 106 of the Kerala Co-operative Societies Act granted immunity from prosecution, including prosecution under the Prevention of Corruption Act.

Analysis: The protection under Section 106 extends only to acts done or purported to be done in good faith under the Act, rules, or bye-laws. The allegations concerned corruption, criminal misconduct, and misappropriation, which could not be treated as acts done in good faith in the discharge of statutory functions. The Court further held that a State statute cannot override the Prevention of Corruption Act, which is a Central law governing corruption by public servants, and that any immunity under the State Act cannot defeat prosecution under the Central enactment.

Conclusion: Section 106 did not confer immunity from the prosecutions in question.

Final Conclusion: The petitions failed both on facts and on law, because prima facie materials existed and the statutory defences relied on were inapplicable. The prosecutions were allowed to proceed to trial.

Ratio Decidendi: A prosecution cannot be quashed at the threshold where prima facie materials disclose an offence, Section 95(4) does not extend to offences outside Section 94(2) to (7), and immunity under Section 106 of the Kerala Co-operative Societies Act does not override prosecution for corruption or misconduct under the Prevention of Corruption Act.

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