2023 (8) TMI 650 - SC - Indian Laws

Court rules Assistant General Manager at State Bank of India can be prosecuted for IPC offenses without PC Act sanction

The Court dismissed the appeal, holding that Section 197 of the CrPC does not apply to the appellant, an Assistant General Manager at State Bank of India, ... Applicability of Section 197 CrPC - Previous sanction for prosecution under the Prevention of Corruption Act - Distinction between Section 19 of the PC Act and Section 197 of the CrPC - Nexus test for sanction under Section 197 - Quashing of criminal proceedings under Section 482 CrPCApplicability of Section 197 CrPC - Public servant removable only with sanction of Government - Section 197 CrPC is not attracted in respect of the appellant who is an Assistant General Manager of a nationalised bank. - HELD THAT: - The Court held that Section 197 applies only to a judge, magistrate or a public servant who is not removable from office save by or with the sanction of the appropriate Government. A manager/official of a nationalised bank, though a 'public servant' for some purposes, does not occupy a post removable only with Government sanction; earlier decisions of this Court (K. Ch. Prasad and S.K. Miglani) confirm that managers in nationalised banks cannot claim protection under Section 197. Accordingly, even assuming the appellant is a public servant, the pre-condition for applicability of Section 197 is not fulfilled and therefore no prior sanction under Section 197 was required before proceeding on the IPC charges. [Paras 46, 47, 48, 49, 50]The appellant cannot claim protection under Section 197 CrPC and the provision is not attracted in his case.Distinction between Section 19 of the PC Act and Section 197 of the CrPC - Nexus test for sanction under Section 197 - Previous sanction for prosecution under the Prevention of Corruption Act - Prosecution for offences under the IPC may continue notwithstanding refusal of sanction under Section 19 PC Act; Section 19 and Section 197 operate in different fields and the need for sanction under Section 197 depends on factual nexus with official duty. - HELD THAT: - The Court explained that sanctions under the PC Act (Section 19) and under the CrPC (Section 197) serve different statutory schemes and are not interchangeable. Offences punishable under the PC Act are conceptually distinct from general penal offences under the IPC; sanction under Section 19 is mandatory for offences under the PC Act, but that does not automatically preclude prosecution under the IPC. Where IPC offences are alleged, the necessity of sanction under Section 197 turns on whether the alleged acts bear a sufficient nexus to the discharge of official duty; if the statutory conditions for Section 197 are absent, the IPC prosecution can proceed. The Court rejected the appellant's submission that decline of Section 19 sanction necessarily disentitles the trial court from continuing IPC proceedings and observed that quashing under Section 482 CrPC is only appropriate where the complaint discloses no offence or is frivolous, vexatious or oppressive; merits and defences are ordinarily to be tested at trial. [Paras 56, 57, 58, 59, 60]Proceedings on the IPC charges can be continued; decline of sanction under Section 19 PC Act does not ipso facto bar prosecution for distinct IPC offences, and the need for Section 197 sanction depends on the nexus with official duty (which is absent here as a matter of law).Final Conclusion: The appeal is dismissed. The Court held that Section 197 CrPC does not apply to the appellant (a bank manager) and that refusal of sanction under Section 19 of the PC Act does not preclude continuation of prosecution for distinct offences under the IPC; the matter will proceed to trial on the IPC charges. Issues Involved:1. Whether the appellant, serving as an Assistant General Manager, State Bank of India, Overseas Bank, is removable from his office save by or with the sanction of the Government so as to make Section 197 of the CrPC applicable.2. Is it permissible for the Special Court (CBI) to proceed against the appellant for the offences punishable under the IPC despite the fact that the sanction under Section 19 of the PC Act, 1988 to prosecute the appellant for the offences under the PC Act, 1988, is not on record as the same came to be declined.Summary of Judgment:Issue 1: Applicability of Section 197 of the CrPCThe Court examined whether the appellant, as an Assistant General Manager at State Bank of India (SBI), is a public servant not removable from his office save by or with the sanction of the Government, thereby making Section 197 of the CrPC applicable. It was determined that although the appellant is a public servant, he does not hold a position where he can only be removed from service with the sanction of the Government. The Court referred to the precedent set in K. Ch. Prasad v. Smt. J. Vanalatha Devi and Others and S.K. Miglani v. State (NCT of Delhi), concluding that Section 197 of the CrPC does not apply to the appellant. Therefore, the appellant cannot claim protection under Section 197 of the CrPC.Issue 2: Prosecution under IPC Despite Lack of Sanction under PC Act, 1988The Court considered whether the appellant could be prosecuted for offences under the IPC despite the lack of sanction under Section 19 of the PC Act, 1988. It was emphasized that the requirements for sanction under Section 197 of the CrPC and Section 19 of the PC Act, 1988, operate in different fields. The Court noted that the appellant was discharged from offences under the PC Act, 1988, but could still be prosecuted for IPC offences. The distinction between sanctions required for IPC and PC Act offences was highlighted, with the Court referring to Kalicharan Mahapatra v. State of Orissa and Lalu Prasad alias Lalu Prasad Yadav v. State of Bihar. The Court concluded that the appellant could be prosecuted for IPC offences as they are distinct from those under the PC Act, 1988.Conclusion:The appeal was dismissed. The Court held that Section 197 of the CrPC does not apply to the appellant, and he can be prosecuted for IPC offences despite the lack of sanction under Section 19 of the PC Act, 1988.