LI Network
Published on: 14 August 2023 at 15:00 IST
If There Is a Reasonable Connection Between the Impugned Act and the Performance of the Official Duty, the Protective Umbrella of Section 197 of the CrPC Cannot Be Denied.
The Supreme Court has underscored that if a rational link exists between the challenged action and the execution of official duties, the protective shield provided by Section 197 of the Criminal Procedure Code (CrPC) cannot be withheld.
The bench, composed of Justices B.R. Gavai and J.B. Pardiwala, examined an appeal contesting a Telangana High Court judgment. The High Court had dismissed the petition and declined to quash criminal proceedings against the appellant, who faced charges under Sections 120-B r/w 420, 468, and 471 of the Indian Penal Code (IPC).
The case revolves around the appellant, who held the position of Assistant General Manager at the State Bank of India, Overseas Bank, Hyderabad.
The appellant is accused of conspiring with co-accused to defraud the bank by approving a corporate loan for M/s Sven Genetech Limited, Secunderabad, without adhering to stipulated conditions.
The charges also include rapidly sanctioning a cash credit limit of Rs. 10 crores, disregarding the absence of machinery installment payments proposed from the corporate loan.
The appellant faced allegations of hastily releasing Rs. 10 crores from a sanctioned cash credit limit of Rs. 20 crores with the intention to benefit Accused Nos. 1-4 and others.
The Central Bureau of Investigation (CBI) lodged an FIR against the appellant and co-accused under Sections 120-B r/w 420, 468, and 471 of the IPC and Section 13(2) r/w Section 13(1) of the Prevention of Corruption Act, 1988.
The key issues before the bench were:
Whether the appellant, serving as Assistant General Manager at the State Bank of India, Overseas Bank, is removable from office only with government sanction, rendering Section 197 of the CrPC applicable?
Is it lawful for the Special Court (CBI) to proceed against the appellant under the IPC despite the absence of record of sanction under Section 19 of the PC Act, 1988, for prosecuting the appellant under the PC Act, 1988?
Drawing on U.S. v. Tillinghast D.G., the bench noted that where legal rights are implicated, an unambiguous expression of approval is likely required. Section 197 of the CrPC employs “sanction” as a verb, denoting assent or concurrence.
Citing K. Ch. Prasad v. Smt. J. Vanalatha Devi and Others, the court emphasized that Section 197 is pertinent only when the public servant is not removable from office without government sanction. Even if the appellant is deemed a public servant under the PC Act, 1988, Section 197 does not apply.
The bench highlighted that the banking sector, governed by the Reserve Bank of India, is considered a state entity under Article 12 of the Constitution. However, this status does not extend to the IPC. Even if the appellant is regarded as a “public servant” under the IPC, the conditions stipulated in Section 197 of the CrPC are not met.
Considering Lalu Prasad alias Lalu Prasad Yadav v. State of Bihar, the court pointed out that Sections 197 of the CrPC and 19 of the PC Act, 1988 operate differently. While the PC Act, 1988 mandates automatic sanction for public servants, Section 197 necessitates examining whether the alleged act is connected to the discharge of duties.
The bench noted that in cases involving public servants, prosecution before the Special Judge necessitates analyzing whether Section 197 of the CrPC applies, considering both PC Act, 1988 and general law charges.
The court concluded that committing an offense under law cannot be considered an official duty. A “reasonable connection” between the act and official duty, where the latter isn’t used to cloak illicit deeds, dictates whether Section 197 of the CrPC applies.