TaxTMI 
TaxTMI 
2023 (8) TMI 650
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....re in favour of M/s Sven Genetech Limited, Secunderabad (Original Accused No. 1). 4. It appears from the materials on record that the company referred to above had applied for loan for the purpose of purchase of new equipments/implementation of the expansion programme. The company had also applied with the Bank for loan credit limit of Rs. 5 crore for the purpose of purchase of raw material from the domestic market and cash credit limit of Rs. 20 crore for using as working capital. It is the case of the prosecution that the facilities sanctioned by the Bank were not utilised by the company for the purposes for which it was sanctioned and the company diverted the funds for its personal benefits and to clear its old debts. 5. The case against the appellant herein is that he was instrumental in approving the release of corporate loan without compliance of all the principle/disbursement conditions. He is also alleged to have approved the release of cash credit limit of Rs. 10 crore on the recommendation of one Shri Kuppa Srinivas (Original Accused No. 3 Regional Manager), despite having knowledge of non-instalment of machinery proposed to be purchased out of the corporate loan am....
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....the learned Single Judge of High Court preferred the Writ Appeal No. 119 of 2019 and questioned the legality and validity of the judgment and order passed by the learned Single Judge. 12. The Intra-Court appeal filed by the CBI failed vide order dated 15.07.2019 and thereby the order passed by the learned Single Judge came to be affirmed. 13. The CBI accepted the order passed by the High Court and thought fit not to carry it further. 14. Pursuant to the orders dated 30.10.2018 and 15.07.2019 respectively, referred to above, the appellant preferred a discharge application before the Special Court under Section 239 of the Code of Criminal Procedure (for short, 'the CrPC'). 15. The Special Court at Hyderabad by its order dated 30.08.2019 discharged the appellant herein from the prosecution under the PC Act, 1988 for want of sanction. The Special Court, however, declined to discharge the appellant for the offences under the IPC. The Special Court relied on the decision of this Court in the case of Parkash Singh Badal and Another v. State of Punjab and Others reported in (2007) 1 SCC 1. 16. The relevant part of the order passed by the Special Judge reads thus: "C....
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....n 161 of Cr.P.C. and collected 545 documents. On consideration of the same only, he has laid charge sheet against the petitioner and other accused. The contents of the charge sheet constitutes the offences alleged against the petitioner herein. The defences taken by the petitioner herein cannot be considered in a petition filed under Section 482 of Cr.P.C. The petitioner herein has to face trial and prove his innocence. 24. In this regard, it is apt to refer to the decision rendered by the Hon'ble Supreme Court in Kamal Shivaji Pokarnekar v. The State of Maharashtra (AIR 2019 SC 847), wherein the Apex Court has categorically held that quashing criminal proceedings was called for only in a case where complaint did not disclose any offence, or was frivolous, vexatious, or oppressive. If allegations set out in complaint did not constitute offence of which cognizance had been taken by Magistrate, it was open to High Court to quash same. It was not necessary that, a meticulous analysis of case should be done before trial to find out whether case would end in conviction or acquittal. If it appeared on a reading of complaint and consideration of allegations therein, in light ....
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....sanction under Section 197 of the CrPC. 22. The learned counsel further submitted that the appellant was also subjected to a departmental inquiry. The departmental inquiry was by and large on the very same charges on which the appellant is now sought to be prosecuted in the Court of the Special Judge at Hyderabad. He pointed out that the appellant came to be exonerated of all the charges in the departmental inquiry as evident from the report of the inquiry officer dated 09.06.2014. 23. Mr. Reddy in support of his aforesaid submissions has placed reliance on three decisions of this Court (i) Parkash Singh Badal (supra), (ii) A. Srinivasulu v. The State rep. by the Inspector of Police, Criminal Appeal No. 2417 of 2010 decided on 15.06.2023 and (iii) Station House Officer, CBI/ACB/Bangalore v. B.A. Srinivasan and Another, reported in (2020) 2 SCC 153. 24. In such circumstances referred to above, the learned counsel appearing for the appellant prayed that continuation of the criminal prosecution for the offences under the IPC would be nothing but a gross abuse of the process of law and would lead to serious miscarriage of justice. He prayed that the impugned order passed by th....
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....is sufficient material evidence on record to initiate action against the following persons: (i) Prosecution of Shri Venkata Ramana Kalavakolanu (A-1), Managing Director, M/s. Sven Genetech Ltd., and M/s Jupiter Bioscience Ltd., Secunderabad; Shri A. Srinivasa Reddy (A-2), Assistant General Manager, State Bank of India, Ananthpur Regional Office, Ananthpur, Andhra Pradesh; Shri Kuppa Srinivas (A-3), Chief Manager & Relationship Manager, State Bank of India, Andhra Pradesh, M/s Sven Genetech Ltd. (A-4), No.10-2-71 & 72/1, Road No.3, West Marredpally, Secunderabad, Shri M.V. Ravi (A-5), Former Asst. Vice President, Marketing, M/s Jupiter Bioscience Ltd., Secunderabad, Shri E. Narasimha Reddy (A- 6), Managing Director, M/s Roots Medicare Pvt. Ltd., No.182, MIGH, Bharath Nagar Colony, Hyderabad, Shri P.V. Rama Rao (A-10), formerly worked as Senior Executive Accounts, M/s Jupiter Biosciences Ltd., Secunderabad, Shri P. Giridhar Goud (A-11), formerly worked as Executive- Accounts, M/s Jupiter Biosciences Ltd., Secunderabad, Shri Sunder Hari Prasad (A-12), formerly worked as Executive- Accounts, M/s Jupiter Biosciences Ltd, Secunderabad, Shri M. Tulsi Ram (A-13), formerly worked a....
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....reof under the RTI Act, 2005, the same may be refused. 6. A copy of the CBI Report alongwith its enclosures has also been forwarded to the Joint Secretary, Banking Division, Department of Economic Affairs, Ministry of Finance, Government of India, Jeevandeep Building, Sansad Marg, New Delhi and to the Director, Central Vigilance Commission, Satarkta Bhavan, GPO Complex, Block-A, INA, New Delhi, for information and necessary action. 7. The sanctioning authority, if required, may call for the Investigating Officer to explain the evidence, as that would help the sanctioning authority in appreciating the evidence properly and also to give evidence before the jurisdictional court during the trial, at a later stage. 8. In order to prove the sanction for prosecution, it is requested that the name of the officer working under the sanctioning authority who is conversant with the case and can prove the signatures and application of mind by the sanctioning authority may be intimated to this office, to cite him as a witness. You are requested to provide certified copies of relevant extract of the delegation of powers to establish the competence of the issuing authori....
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....ntical, the fate of the departmental proceedings cannot weigh at all in respect of criminal proceedings based on trial. Thus, the appellant cannot rely on the outcome of the departmental proceedings to seek quashing of the criminal case against him. 36. In the last, the learned counsel argued something very important. It was submitted that a bare reading of Section 197 of the CrPC clearly indicates that the Section 197 of the CrPC is only applicable to those 'public servants' who are removable with the sanction of the Government and to no other 'public servants'. Relying on the decision of this Court in the case of S.K. Miglani v. State (NCT of Delhi), reported in (2019) 6 SCC 111, it was submitted that the Manager of a Nationalised Bank though a public servant yet not removable from his office save by or with the sanction of the Government and hence cannot claim protection under Section 197 of the CrPC. In such circumstances referred to above, the learned counsel prayed that there being no merit in the present appeal, the same may be dismissed. ANALYSIS 37. Having heard the learned counsel appearing for the parties and having gone through the materials placed on record....
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....76DA, section 376DB or section 509 of the Indian Penal Code (45 of 1860). (2) No Court shall take cognizance of any offence alleged to have been committed by any member of the Armed Forces of the Union while acting or purporting to act in the discharge of his official duty, except with the previous sanction of the Central Government. (3) The State Government may, by notification, direct that the provisions of sub-section (2) shall apply to such class or category of the members of the Forces charged with the maintenance of public order as may be specified therein, wherever they may be serving, and thereupon the provisions of that sub-section will apply as if for the expression "Central Government" occurring therein, the expression "State Government" were substituted. (3A) Notwithstanding anything contained in sub-section (3), no court shall take cognizance of any offence, alleged to have been committed by any member of the Forces charged with the maintenance of public order in a State while acting or purporting to act in the discharge of his official duty during the period while a Proclamation issued under clause (1) of article 356 of the Constitution was ....
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....alleged to have been committed by him while acting or purporting to act in the discharge of his official duties, no Court shall take cognizance of such offence, except with the previous sanction of the appropriate Government. 41. Sub-section (1) of Section 197 of the CrPC shows that sanction for prosecution is required where any person who is or was a Judge or Magistrate or a public servant not removable from his office save by or with the sanction of the Government is accused of any offence alleged to have been committed by him while acting or purporting to act in discharge of his official duty. Article 311 of the Constitution lays down that no person, who is a member of a civil service of the Union or State or holds a civil post under the Union or State, shall be removed by an authority subordinate to that by which he was appointed. It, therefore, follows that protection of sub-section (1) of Section 197 of CrPC is available only to such public servants whose appointing authority is the Central Government or the State Government and not to every public servant. 42. The word 'sanction' has not been defined in the CrPC. The dictionary meaning of the word 'sanction' is as unde....
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....8 PC 82, where in para 9 it was observed as follows at Page 85: - "... The sanction to prosecute is an important matter; it constitutes a condition precedent to the institution of the prosecution and the Government have an absolute discretion to grant or withhold their sanction. They are not, as the High Court seem to have thought, concerned merely to see that the evidence discloses a prima facie case against the person sought to be prosecuted. ..." 45. The appellant was serving as an Assistant General Manager, State Bank of India, Overseas Bank at Hyderabad. State Bank of India is a Nationalised Bank. Although a person working in a Nationalised Bank is a public servant, yet the provisions of Section 197 of the CrPC would not be attracted at all as Section 197 is attracted only in cases where the public servant is such who is not removable from his service save by or with the sanction of the Government. It is not disputed that the appellant is not holding a post where he could not be removed from service except by or with the sanction of the Government. In this view of the matter, even if it is alleged that the appellant herein is a public servant, still the provisions ....
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.... application before the ACMM, Saket Court, New Delhi in the FIR referred to above, stating that he being a public servant employed with the Nationlised Bank as a Manager, it was mandatory to seek sanction against him in terms of Section 197 of the CrPC. 48. It was argued before the Court that he may be discharged on account of non-compliance under Section 197 of the CrPC. The Chief Metropolitan Magistrate (South), Saket Court rejected the application filed by the appellant therein, seeking discharge for want of sanction. The matter reached up to this Court. This Court held in paras 10 and 12 respectively as under: "10. The appellant being a Manager in a nationalised bank whether can claim that before prosecuting him sanction is required under Section 197. The CMM having come to the opinion that the appellant having not satisfied that he was a public servant not removable from his office save by or with the sanction of the Government, Section 197 CrPC was not attracted with regard to the appellant. After coming to the above conclusions, it was not necessary for the CMM to enter into the question as to whether the acts alleged against the appellant were discharged in perf....
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....ourt shall take cognizance of an offence punishable under sections 7, 11, 13 and 15 alleged to have been committed by a public servant, except with the previous sanction save as otherwise provided in the Lokpal and Lokayuktas Act, 2013 (1 of 2014)- (a) in the case of a person who is employed, or as the case may be, was at the time of commission of the alleged offence employed in connection with the affairs of the Union and is not removable from his office save by or with the sanction of the Central Government, of that Government; (b) in the case of a person who is employed, or as the case may be, was at the time of commission of the alleged offence employed in connection with the affairs of a State and is not removable from his office save by or with the sanction of the State Government, of that Government; (c) in the case of any other person, of the authority competent to remove him from his office: Provided that no request can be made, by a person other than a police officer or an officer of an investigation agency or other law enforcement authority, to the appropriate Government or competent authority, as the case may be, for the previous sanc....
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.... from his office at the time when the offence was alleged to have been committed. (3) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),- (a) no finding, sentence or order passed by a special Judge shall be reversed or altered by a Court in appeal, confirmation or revision on the ground of the absence of, or any error, omission or irregularity in, the sanction required under subsection (1), unless in the opinion of that court, a failure of justice has in fact been occasioned thereby; (b) no court shall stay the proceedings under this Act on the ground of any error, omission or irregularity in the sanction granted by the authority, unless it is satisfied that such error, omission or irregularity has resulted in a failure of justice; (c) no court shall stay the proceedings under this Act on any other ground and no court shall exercise the powers of revision in relation to any interlocutory order passed in any inquiry, trial, appeal or other proceedings. (4) In determining under sub-section (3) whether the absence of, or any error, omission or irregularity in, such sanction has occasioned or resulted in ....
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.... "10. It may be noted that Section 197 of the CrPC and Section 19 of the PC Act, 1988 operate in conceptually different fields. In cases covered under the Act, in respect of public servants the sanction is of automatic nature and thus factual aspects are of little or no consequence. Conversely, in a case relatable to Section 197 of the CrPC, the substratum and basic features of the case have to be considered to find out whether the alleged act has any nexus with the discharge of duties. Position is not so in case of Section 19 of the Act." ( Emphasis supplied ) 58. 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. 59. From the aforesaid, it can be said that 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 prerequisite. 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 unde....