Supreme Court rules Special Court are Empowered to Proceed with IPC Offences Without Sanction of PC Act

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Published on: 14 August 2023 at 14:00 IST

The Supreme Court has recently clarified that a Special Court established under the Prevention of Corruption Act 1988 (PC Act) can continue proceedings against an accused for violations of the Indian Penal Code 1860 (IPC), even if the requisite sanction for prosecution under Section 19 of the PC Act has not been granted.

In a particular case, a bank manager, the appellant, was facing trial for charges under Sections 120-B read with Sections 420, 468, and 471 of the IPC, along with Section 13(2) read with Section 13(1) of the PC Act, 1988.

The charges were related to allegations involving a loan scam.

While the Special Court dismissed the PC Act offences due to the absence of sanction under Section 19 of the PC Act, it decided to proceed with the trial for the IPC offences, noting that Section 197 of the Criminal Procedure Code (CrPC) was not applicable to bank employees.

The appellant contested this decision before the Supreme Court after it was upheld by the High Court.

The appellant’s argument centered on the contention that the Special Court couldn’t pursue the IPC offences due to the absence of sanction under Section 19 of the PC Act.

The Supreme Court, however, rejected this argument on the basis that the mandates of sanction under Section 197 of the CrPC for IPC offences and Section 19 of the PC Act were distinct and operated on different legal levels.

Explaining this distinction, the Court clarified, “Sanction contemplated under Section 197 of the CrPC concerns a public servant who ‘is accused of any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty’. On the other hand, the offences contemplated in the PC Act, 1988 are those which cannot be treated as acts either directly or even purportedly done in the discharge of his official duties.

Drawing from previous cases such as Kalicharan Mahapatra v. State of Orissa (1998) and Lalu Prasad alias Lalu Prasad Yadav v. State of Bihar (2007) , the Court emphasized, “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 the law.”

The bench, comprising Justices BR Gavai and JB Pardiwala, added, “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 pre-requisite. 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 under the general law (i.e., IPC), the court is bound to examine, at the time of cognizance and also, if necessary, at subsequent stages (as the case progresses) as to whether there is a necessity of sanction under Section 197 of the CrPC.”

The Court underlined the distinctive nature of offences under the IPC and the PC Act, 1988, underscoring the need to differentiate between the required sanctions for prosecuting under the two acts.

It highlighted the importance of considering whether an act was part of official duties when determining the necessity of sanctions.

Moreover, the Court raised a pertinent question for future consideration: In instances where the sanctioning authority declines sanction under the PC Act due to allegations being “frivolous or vexatious,” what implications would this have for IPC offences?

The Court concluded by suggesting that this matter could be revisited in the future when faced with such circumstances, while emphasizing the purpose of Section 19 of the PC Act to safeguard public servants from baseless prosecutions.

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