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Saturday, September 21, 2013

Sanction to prosecution when necessary = whether sanction before prosecution is required from each of the competent authorities entitled to remove an accused from the offices held by him, in situations wherein the accused holds a plurality of offices. The second determination was in respect of the requirement of sanction, in situations where the accused no longer holds the office, which he is alleged to have abused/misused, for committing the offence (s) for which he is being blamed. In answer to the first query, it has unambiguously been concluded, that if an accused holds a plurality of offices, each one of which makes him a public servant, sanction is essential only at the hands of the competent authority (entitled to remove him from service) of the office which he had allegedly misused. This leads to the clear inference, that other public offices held by the accused wherein an accused holds a plurality of offices, are irrelevant for purposes of obtaining sanction prior to prosecution. On the second issue it was concluded, that sanction was essential only if, at the time of taking cognizance, the accused was still holding the public office which he had allegedly abused. If the legal position determined in the above judgments is taken into consideration, there is certainly no doubt, that in the facts and circumstances of this case, sanction if required, ought to have been obtained from the Governor of the State of Madhya Pradesh. The instant determination is premised on the fact, that the appellant is stated to have misused his position while discharging his responsibilities as a nominee Director of the MPSIDC. It is clear to us, specially from the deliberation recorded hereinabove, that the appellant’s participation in the Cabinet Review Meeting dated 28.1.1994, and in the relevant meetings of the Board of Directors (of the MPSIDC) had no nexus to the post of Industries Commissioner, Government of Madhya Pradesh, or the subsequent office held by him as Joint Secretary, Department of Heavy Industries, Government of India. Accordingly, in our considered view, sanction of the authorities with reference to the post of Industries Commissioner, Government of Madhya Pradesh and Joint Secretary, Department of Heavy Industries, Government of India held by the appellant, was certainly not required. We therefore, hereby reject the submission advanced at the hands of the learned counsel for the appellant, that since the appellant continued to hold the above-mentioned public office(s) in his capacity as a member of the IAS cadre, at the time the first charge sheet was filed on 24.9.2007, prosecution could be proceeded with, and cognizance taken, only upon sanction by the competent authority(ies) of the said two offices (Industries Commissioner, Government of Madhya Pradesh and Joint Secretary, Department of Heavy Industries, Government of India), as wholly misconceived.= We are of the view, that the last contention advanced at the hands of the learned counsel for the appellant is a mixed question of fact and law.- whether the accused is guilty of the accusation levelled against him. Therefore, it is neither proper nor possible for us to deal with the last contention advanced at the hands of the learned counsel for the appellant, at the present juncture.= we find no merit in the instant appeals. The same are accordingly hereby dismissed.

             published in http://judis.nic.in/supremecourt/imgst.aspx?filename=40781
                                                   “REPORTABLE”
                        IN THE SUPREME COURT OF INDIA
                       CRIMINAL APPELLATE JURISDICTION
                      CRIMINAL APPEAL NO.1454  OF 2013
                  (Arising out of SLP (Crl.) No.61 of 2012)

Ajoy Acharya                                             … Appellant
                                   Versus
State Bureau of Inv. against Eco. Offence                … Respondent
                                    With
                      CRIMINAL APPEAL NO.1455  OF 2013
                 (Arising out of SLP (Crl.) No. 400 of 2012)


                               J U D G M E N T

Jagdish Singh Khehar, J.

1.    Investigation into  the  affairs  of  the  Madhya  Pradesh  Industrial
Development  Corporation  (renamed  as  Madhya  Pradesh   State   Industrial
Development Corporation,  hereinafter  referred  to  as  the  ‘MPSIDC’)  was
ordered with effect from 3.1.1996, by the State  Government.   Thereupon,  a
first information report  bearing  no.  25  of  2004  was  registered  under
Sections 409, 406, 467,  468  and  120B  of  the  Indian  Penal  Code,  1860
(hereinafter referred to as  the  ‘IPC’)  and  Section  13(1)(d)  read  with
Section 13(2)  of  the  Prevention  of  Corruption  Act,  1988  (hereinafter
referred to as the  ‘PC  Act’).  
The  allegations  levelled  in  the  first
information report generally were, that the functionaries of the MPSIDC  had
permitted  investment  by  way  of  inter  corporate  deposits  (hereinafter
referred to as the ‘ICD’s’) through a resolution of the Board  of  Directors
(of the MPSIDC) dated 19.4.1995.
By the instant resolution, the  Board  (of
the MPSIDC) authorized its Managing Director, to  extend  short  term  loans
(including ICD’s) out of the surplus funds  with  the  MPSIDC,  on  suitable
terms and conditions.
The gravamen of the accusation was,  that  the  Board
of Directors’ resolution dated 19.4.1995  was  passed  in  disregard  of  an
earlier decision taken in the Cabinet  Review  Meeting  held  on  28.1.1994,
wherein a decision was taken that the  MPSIDC  would  not  extend  financial
assistance to industries.  
The petitioner  herein  had  admittedly  attended
the said meeting held  on  28.1.1994.   The  accusation  also  included  the
insinuation, that after the decision of the Cabinet Review  Committee  dated
28.1.1994, the Board of Directors (of the MPSIDC) had  passed  an  endorsing
resolution dated 31.1.1994, wherein it was resolved by the  MPSIDC  to  stop
financing industries, from out of its surplus funds.
The petitioner  herein
had even participated in the instant proceedings held on  31.1.1994.   Based
on the aforesaid factual position, it  was  sought  to  be  suggested,  that
undeterred  by  the  decision  during  the  Cabinet  Review  Meeting   dated
28.1.1994, and the resolution  of  the  Board  dated  31.1.1994  (which  had
prohibited extension of financial assistance to industries),  the  Board  of
Directors’ resolution dated 19.4.1995, authorized its Managing  Director  to
extend short term loans (including ICD’s)  to  industries,  out  of  surplus
funds with the MPSIDC, on  suitable  terms  and  conditions.  
It  was  also
alleged, that the above controversial Board resolution dated  19.4.1995  was
passed in complete disregard to the mandate contained in Section 292 of  the
Companies Act, 1965.  After the aforesaid Board resolution dated  19.4.1995,
it was alleged, that the MPSIDC had extended ICD’s  to  a  large  number  of
companies, out of which 42 companies had committed  default  in  repayments.
In the abovementioned first information report, it was  also  alleged,  that
the abovementioned transactions executed by the MPSIDC were illegal  and  in
violation of law.

2.    The ICD’s referred to in the foregoing paragraph were executed  during
the period between  1995  and  2004.   It  was  alleged,  that  four  senior
functionaries of the MPSIDC who were then members of the Board of  Directors
of the MPSIDC had deliberately supported the  resolution  of  the  Board  of
Directors dated 19.4.1995, despite the fact that  they  were  aware  of  the
Cabinet Review Meeting decision dated 28.1.1994, as  well  as,  the  earlier
resolution of  the  Board  of  Directors  of  the  MPSIDC  dated  31.1.1994.
Without  their  participation  and  support,  it  was  alleged,   that   the
controversial Board resolution dated 19.4.1995 could not have been passed.

3.    It would also be relevant  to  mention,  that  allegations  were  also
levelled against 42 defaulting companies in  the  first  information  report
dated 24.7.2004.   The  said  42  companies  had  defaulted  by  not  making
repayments of the ICD’s released to them,  in  terms  of  their  contractual
obligations.  The said first information report, however, did not  make  any
reference to a large number of other companies in whose  favour  the  MPSIDC
had likewise extended ICD’s, simply because the companies had  returned  the
loaned  amount  to  the  MPSIDC,  in  consonance  with   their   contractual
obligations.

4.    A brief description of the four senior functionaries  of  the  MPSIDC,
against whom allegations were levelled, is being delineated below:

(I) Rajender Kumar Singh     :  He  was  the  then  State  Minister  in  the
                                  Commerce and  Industries  Department.   He
                                  was also the then Chairman of the  MPSIDC,
                                  having been appointed as such on 7.4.1994.

(ii) Ajoy Acharya      : He was a member of the IAS cadre, belonging to  the
                                  1976 batch.  While holding the  charge  of
                                  the  office  of  Industries  Commissioner,
                                  Government  of  Madhya  Pradesh,  he   was
                                  nominated as a Director of the  MPSIDC  in
                                  1993.  He continued as such till 1998.  In
                                  June 1998, he  was  transferred  as  Joint
                                  Secretary, Department of Heavy Industries,
                                  Government of India, whereupon, he  ceased
                                  to be on the Board  of  Directors  of  the
                                  MPSIDC.

(iii) J.M. Ramamurthy  : He was also a member of  the  IAS  cadre.   He  was
                                  appointed  as  Special  Director,  on  the
                                  Board of the MPSIDC in 1993.   He  retired
                                  from the IAS on 30.6.1998.  Thereupon,  he
                                  ceased to be on the Board of Directors  of
                                  the MPSIDC.

(iv) Munadutt Pillai Rajan   :He was also a member of  the  IAS  cadre.   He
                                  was appointed as the Managing Director  of
                                  the MPSIDC.  He retired from  the  IAS  on
                                  7.5.2000.  Thereupon, he ceased to be  the
                                  Managing Director of the MPSIDC.

5.    The first charge  sheet  was  filed  on  24.9.2007.   
The  allegations
against the petitioner herein, Ajoy Acharya, were as follows:

      “a)   The petitioner was present at the Cabinet Review  Meeting  dated
           28.01.1994  and  Board  Meeting  dated  31.01.1994,  where   the
           decision    relating    to     discontinuance     of     project
           financing/providing financial assistance was  taken,  and  thus,
           the instant factual position was  within  petitioner’s  personal
           knowledge.”

      b)    The petitioner was present in the Board Meeting dated 19.04.1995
           in which the Board Resolution was passed  to  engage  itself  in
           Investments by way of ICD, and also in other Board Meeting after
           28.01.1994 where decision relating to equity  participation  was
           taken.  The petitioner did not object to the  passing  of  these
           resolutions despite of his having been  aware  of  the  contrary
           decision taken at the Cabinet Review Meeting which was  endorsed
           at the Board Meeting dated 31.1.1994.

      c)    The petitioner did not act  bonafidely  as  the  Cabinet  Review
           Meeting  had  specifically  stopped  giving  of  any   financial
           assistance to industries out of the surplus funds available with
           the MPSIDC.

      d)    The Board Resolution dated 19.04.1995  empowering  the  Managing
           Director to invest in ICD was in violation of Section 292 of the
           Companies  Act,  and  also,  in  violation  of   Memorandum   of
           Association and Articles of Association.

      e)     The  petitioner  facilitated  the  passing  of  the   aforesaid
           allegedly illegal Board Resolution, which became the  foundation
           for all illegal ICD’s.

      f)    The  petitioner  facilitated  the  passing  of  the  resolutions
           referred to above, by attending the said Board Meetings, wherein
           he did not object to  the  proposed  resolutions  in  the  Board
           Meetings.”




6.    The first charge sheet dated 22.9.2007 was filed in Special  Case  no.
7 of 2007, and the Special Judge, Bhopal, took cognizance  thereof.   It  is
the contention of the petitioner Ajoy Acharya, that upon his having  perused
the charge sheet dated 22.9.2007 (and the documents enclosed therewith),  he
learnt that no sanction was applied for or obtained,  before  initiation  of
the above prosecution against him.
Under the belief,  that  prior  sanction
was a pre-requisite under Section 19 of  the  PC  Act,  as  well  as,  under
Section 197 of the Code of Criminal Procedure,  1973  (hereinafter  referred
to as the ‘CrPC’),
the petitioner filed a petition under Section 239 of  the
CrPC (as well as, Section 19  of  the  PC  Act)  seeking  discharge  on  the
ground, that prosecution had been  initiated  against  him without  seeking sanction of the competent authority.  
The petition filed under  Section  239
of the CrPC was dismissed by the Special Judge, Bhopal, on 11.4.2008.
7.    Dissatisfied with the aforesaid order dated 11.4.2008, the  petitioner
preferred Criminal Revision Petition no. 1422 of 2008, in the High Court  of
Madhya Pradesh (before its principal seat at Jabalpur, hereinafter  referred
to as the ‘High Court’).   The  aforesaid  Criminal  Revision  Petition  was
dismissed by a Division Bench of the High Court on 29.8.2011.  Aggrieved  by
the order passed by the Special Judge, Bhopal  (dated  11.4.2008),  and  the
order passed by the High Court (dated 29.8.2011), the  petitioner  preferred
Petition for Special Leave to Appeal (Criminal) no. 61 of 2012.  This  Court
issued notice in the above matter (as  also  in  a  connected  matter  i.e.,
Special Leave to Appeal (Criminal) no. 400  of  2012)  on  6.1.2012.   While
issuing notice, an interim order came to  be  passed  on  6.1.2012,  staying
proceedings before the Special Judge, Bhopal  (in  Special  Case  no.  7  of
2007).
8.    We have concluded hearing in the matter.  Leave is granted.
9.    We shall  endeavour  to  first  adjudicate  the  principal  contention
advanced at the hands of the  appellant,  namely,  that
the  initiation  of
prosecution  against  the  appellant  was  not  sustainable  in  law,  since
sanction of the competent authority was not obtained  before  cognizance  in
the matter was taken.
The particulars of the allegations  levelled  against
the appellant in the  charge  sheet  filed  against  him  (and  others)  are
irrelevant for the  determination  of  the  present  controversy.  
We  have
already recorded hereinabove briefly, an outline of  the  controversy  which
resulted in the filing of the charge sheet (dated 22.9.2007)  involving  the
appellant.  Despite our above determination, it is imperative  at  the  cost
of repetition to notice, that the  pointed  allegation  in  respect  of  the
appellant’s culpability is  drawn  from  the  resolution  of  the  Board  of
Directors of the MPSIDC dated 19.4.1995.
 For  all  intents  and  purposes,
therefore, our determination on the  merits  of  the  controversy,  will  be
based on the culpability of the appellant on account  of  his  participation
in the meeting of the Board  of  Directors,  wherein  the  resolution  dated
19.4.1995 was passed, without his having objected to the same.

10.   Having recorded the cause for his being arrayed  as  an  accused,  the
next step in the  process  of  the  present  adjudication  is  to  determine
whether the participation of the appellant in the meetings in  question  was
based on his position as a nominee Director on the  Board  of  Directors  of
the MPSIDC, and/or in his capacity as a member of the  IAS  cadre  allocated
to the State of Madhya Pradesh.
The above  determination,  would  make  all
the difference to the outcome on the principal issue canvassed on behalf  of
the appellant.  If the appellant’s  position  as  nominee  director  of  the
MPSIDC was abused, then the holding of the said  position  itself  would  be
relevant for deciding the present controversy.  If however,  the  office  of
Industries Commissioner,  Government  of  Madhya  Pradesh  was  abused,  the
consideration would be different.  In the latter  situation,  the  appellant
being a member of the IAS cadre, his said position would necessarily have  a
relevant nexus to the issue in  hand.   It  is  essential  to  notice,  that
besides being a nominee Director of the Board of Directors  of  the  MPSIDC,
the appellant was simultaneously  nominated  as  a  Director  of  six  other
companies.  The nomination  of  the  appellant  as  Director  in  the  other
companies (besides the MPSIDC), has no nexus  to  the  allegations  levelled
against him in the charge sheet dated 22.9.2007.   However,  there  is  some
doubt  about  the  fact,  whether  the   appellant   participated   in   the
controversial meeting of  the  Board  of  Directors  (of  the  MPSIDC)  only
because of  his  holding  the  office  of  Industries  Commissioner  of  the
Government of Madhya Pradesh, which position he occupied as a member of  the
IAS cadre of the State of Madhya Pradesh.

11.   The case set up by the appellant was, that it was  mandatory  for  the
prosecution to obtain sanction before initiating  prosecution  against  him,
as he held a government post, namely, the post of  Industries  Commissioner,
Government of Madhya Pradesh. 
It was  also  submitted  on  the  appellant’s
behalf, that he was a public servant, and the President  of  India  was  his
appointing authority, as also his dismissing authority.  Even while  he  was
discharging his duties as  Industries  Commissioner,  Government  of  Madhya
Pradesh, and thereafter, when he had proceeded  on  appointment  by  way  of
deputation  to  the  Central  Government,  his  appointing  and   dismissing
authorities remained  the  same.  
Insofar  as  his  being  nominated  as  a
Director on the Board of the MPSIDC is concerned, the case  set  up  by  the
appellant was, that  his  nomination  co-existed  with  his  appointment  as
Industries Commissioner, Government of Madhya Pradesh.
 In  this  behalf  it
was asserted, that his being nominated as a Director (with the  MPSIDC)  was
the outcome/consequence/result of  his  holding  the  office  of  Industries
Commissioner, Government of Madhya Pradesh.  It was submitted, that  had  he
not held the office of Industries  Commissioner,  he  would  not  have  been
nominated as a Director (with the MPSIDC).
It was  further  asserted,  that
consequent upon  his  appointment  by  way  of  deputation  to  the  Central
Government, his successor on the post of Industries  Commissioner,  came  to
be nominated as a Director on the Board of the MPSIDC.  
It  was  therefore,
sought to be canvassed, that the appellant’s nomination as Director  of  the
Board of the MPSIDC, was a fallout/sequel of his appointment  as  Industries
Commissioner,  Government  of  Madhya  Pradesh.   It  was  accordingly   his
contention, that he  continued  to  occupy  the  same  position  as  he  had
occupied while holding the office of Industries Commissioner, Government  of
Madhya Pradesh, even after  cognizance  was  taken  by  the  Special  Judge,
Bhopal.  The submission projected was premised on the foundation,  that  the
offices held by the appellant were the outcome of  his  appointment  to  the
IAS cadre.  As such, according to the appellant, his  participation  in  the
proceedings of the Board of Directors culminating in  its  resolution  dated
19.4.1995, must be deemed to have been taken in his capacity as a member  of
the IAS cadre.

12.   On the pleas canvassed at the hands of the  learned  counsel  for  the
appellant, as have been noticed in the foregoing paragraph, there can be  no
doubt that merely  the  position  held  by  the  appellant  as  Commissioner
Industries, Government of Madhya Pradesh, would not have vested in  him  the
right to participate in the affairs of the MPSIDC.  It was only  on  account
of the nomination of the appellant as director of the  MPSIDC,  that  vested
in him the authority to participate in the controversial meeting  where  the
MPSIDC passed its resolution dated 19.4.1995.  Likewise, his  nomination  as
a Director in six other companies did not vest in him any right  whatsoever,
to deal with the affairs of the MPSIDC.  It is only on account of his  being
a nominee Director of the MPSIDC, that he  assumed  the  responsibility  and
the power, to deal with the affairs of the  MPSIDC.   His  participation  in
the proceedings of the Board of Directors which passed its resolution  dated
19.4.1995 was therefore exclusively on account of his having been  nominated
as a Director on  the  Board  of  the  MPSIDC.   We  must  therefore,  first
endeavour, to deal with the  credibility  of  the  submission  canvassed  on
behalf of the appellant, that the appellant’s nomination as  Director  (with
the MPSIDC) was  the  outcome  of  his  holding  the  office  of  Industries
Commissioner, Government of Madhya Pradesh.  It was not disputed during  the
course of hearing, that the appellant’s nomination  as  Director  (with  the
MPSIDC) emerges  from  clause  89(2)  of  the  Memorandum  and  Articles  of
Association of the MPSIDC.  Clause  89  aforementioned  is  being  extracted
hereunder:

      “89   (1)   The number of Directors shall not be less than  three  and
           more than twelve but the number can be increased or decreased by
           the Governor subject to the provisions of the Act.

            (2)   Unless otherwise determined by the Governor from  time  to
           time not more than five Directors  shall  be  nominated  by  the
           Governor so long as the Government’s share does not exceed Rs.26
           lakhs.  In  the  event  of  Government’s  share  exceeding  this
           amount, the number of Directors to be nominated by the  Governor
           will increase.  The number of Directors so increased will be  in
           proportion to the Government’s share in excess  of  Rs.26  lakhs
           and the shares held  by  persons  other  than  Government.   The
           Directors other than those nominated by the  Governor  shall  be
           appointed by the Company in the general meeting.

           (3)    The  tenure  of  all  Directors  including  Chairman  and
           excluding Managing Director shall be for the period as fixed  or
           determined by the State  Government  from  time  to  time.   The
           Managing Director shall retire on his ceasing to hold the office
           of the Managing Director.  A retiring Director shall be eligible
           for reappointment.

           (4)   The Governor shall have the power to remove  any  Director
           appointed and nominated by him including the  Chairman  and  the
           Managing Director from  Office  at  any  time  in  his  absolute
           discretion.

           (5)   The Governor shall have the right to fill any  vacancy  in
           the  Office  of  a  Director  caused  by  retirement,   removal,
           resignation,   death   or    otherwise    of    the    Directors
           nominated/appointed by him.



A perusal of sub-clause (2) of clause 89 reveals, that nominee Directors  to
the MPSIDC are appointed by the Governor.  The  Governor  (under  sub-clause
(4) extracted above) is also vested with the absolute discretion  to  remove
a nominee Director.  But what needs emphasis  is,  that  clause  89  of  the
Memorandum and Articles of Association of the MPSIDC, does  not  contemplate
that  the  Industries  Commissioner,  Government  of  Madhya  Pradesh  would
necessarily, or automatically, or as a matter of course, must  be  nominated
as Director of the MPSIDC.  Likewise, clause  89  aforementioned,  does  not
require a nominee director to be drawn out of members of the IAS cadre.   In
fact, in our view, the Governor under clause 89 has the absolute  discretion
to nominate anyone suitable as per his wisdom, as nominee  Director  to  the
MPSIDC.  In the above view of the matter, it  is  not  possible  to  accept,
that the appellant’s nomination as Director of the MPSIDC, was  the  outcome
of his holding the office of Industries Commissioner, Government  of  Madhya
Pradesh, or on account of his being a member  of  the  IAS  cadre.   In  the
above view of the matter it is natural to conclude, that  the  participation
of the appellant in the meeting of the Board of Directors of the  MPSIDC  on
19.4.1995 was not on  account  of  his  holding  the  office  of  Industries
Commissioner, Government of Madhya Pradesh, or on account  of  his  being  a
member of the IAS cadre.  Having so concluded, we  shall  now  endeavour  to
determine, on the basis of the law declared by this Court, the  veracity  of
the assertion made by the appellant, that prior sanction was mandatory,  and
in its absence, the prosecution initiated against the  appellant  should  be
considered to be without jurisdiction.

13.   We shall first endeavour to deal with the law declared by  this  Court
on the proposition being canvassed before us.   In  this  behalf,  reference
may first of all be made to R.S. Naik vs. A.R. Antulay, (1984)  2  SCC  183.
Observations made  by  this  Court,  as  are  relevant  to  the  proposition
canvassed on behalf of the appellant, are being extracted hereunder :

      “21.  Re: (b) and (c):  It  was  strenuously  contended  that  if  the
      accused has held or holds a plurality of offices occupying each one of
      which makes him  a  public  servant,  sanction  of  each  one  of  the
      competent authorities entitled to remove him  from  each  one  of  the
      offices held by him, would be necessary and if anyone of the competent
      authorities  fails  or  declines  to  grant  sanction,  the  court  is
      precluded or prohibited from taking cognizance  of  the  offence  with
      which the public servant is charged.
This submission was sought to  be
      repelled urging that it is implicit in Section 6 that sanction of that
      authority alone is necessary which is competent to remove  the  public
      servant from the office which he is alleged to have misused or  abused
      for corrupt motives.
Section 6(1)(c) is the only provision relied upon
      on behalf of the accused to contend that as M.L.A.  he  was  a  public
      servant on  the  date  of  taking  cognizance  of  the  offences,  and
      therefore, sanction of that authority competent  to  remove  him  from
      that office is a sine qua  non  for  taking  cognizance  of  offences.
      Section 6 (1)(c) bars taking cognizance of an offence alleged to  have
      been committed by public servant except with the previous sanction  of
      the authority competent to remove him from his office.

           xxx              xxx              xxx              xxx


      23.   Offences prescribed in Sections 161, 164 and 165 IPC and Section
      5 of the 1947 Act have an intimate and inseparable relation  with  the
      office of a public servant. A public  servant  occupies  office  which
      renders him a public servant and occupying the office carries with  it
      the powers conferred on the office. Power generally is  not  conferred
      on an individual person. In a society governed by rule of law power is
      conferred on office or acquired by statutory status and the individual
      occupying the office or on whom status is conferred enjoys  the  power
      of office or power flowing from the status. The holder of  the  office
      alone would have opportunity to abuse  or  misuse  the  office.  These
      sections codify a well-recognised truism that power has  the  tendency
      to corrupt. It is the holding of the office which gives an opportunity
      to use it for corrupt  motives.  Therefore,  the  corrupt  conduct  is
      directly attributable and  flows  from  the  power  conferred  on  the
      office. This interrelation and interdependence between individual  and
      the office he holds is substantial and  not  severable.  Each  of  the
      three clauses of sub-section (1) of  Section  6  uses  the  expression
      'office' and the power to grant sanction is conferred on the authority
      competent to remove the public servant from his office and  Section  6
      requires a sanction before taking cognizance of offences committed  by
      public servant. The offence would be committed by the  public  servant
      by misusing or abusing the power of office and it is from that office,
      the authority must be competent to remove him so as to be entitled  to
      grant  sanction.  The  removal  would   bring   about   cessation   of
      interrelation between the office  and  abuse  by  the  holder  of  the
      office. The link between power  with  opportunity  to  abuse  and  the
      holder of office would be severed by removal from  office.  Therefore,
      when a public servant is accused of an offence of taking gratification
      other than legal  remuneration  for  doing  or  forbearing  to  do  an
      official act (Section 161 IPC) or as a public servant  abets  offences
      punishable under Sections 161 and 163 (Section 164 IPC) or  as  public
      servant obtains a valuable thing  without  consideration  from  person
      concerned in any proceeding or  business  transacted  by  such  public
      servant (Section 165 IPC) or commits criminal misconduct as defined in
      Section 5 of the 1947 Act, it is implicit in the various offences that
      the public servant has misused or abused the power of office  held  by
      him as public servant. The  expression  'office'  in  the  three  sub-
      clauses of Section 6(1) would clearly denote  that  office  which  the
      public servant misused or abused for corrupt motives for which  he  is
      to be prosecuted and in respect of which a sanction to  prosecute  him
      is necessary by the competent authority entitled to  remove  him  from
      that office which he  has  abused.  
This  interrelation  between  the
      office and its abuse if severed would render Section 6 devoid  of  any
      meaning. And  this  interrelation  clearly  provides  a  clue  to  the
      understanding of the provision in Section 6 providing for sanction  by
      a competent authority who would be able to judge  the  action  of  the
      public servant before removing the bar, by granting sanction,  to  the
      taking of the cognizance of offences by the court against  the  public
      servant.
Therefore, it unquestionably follows  that  the  sanction  to
      prosecute can be given by an authority competent to remove the  public
      servant from the office which he has misused or  abused  because  that
      authority alone would be able to know whether there has been a  misuse
      or abuse of the office  by  the  public  servant  and  not  some  rank
      outsider. By a  catena  of  decisions,  it  has  been  held  that  the
      authority entitled to grant sanction must apply its mind to the  facts
      of the case, evidence collected  and  other  incidental  facts  before
      according sanction. 
A grant of sanction is not an idle formality but a
      solemn and sacrosanct act which removes the umbrella of protection  of
      government servants against frivolous prosecutions and  the  aforesaid
      requirements must therefore, be  strictly  complied  with  before  any
      prosecution could be launched  against  public  servants.  (See  Mohd.
      Iqbal Ahmad v. State of Andhra Pradesh, [1979]  2  S.C.R.  1007).  The
      Legislature advisedly conferred power on the  authority  competent  to
      remove the public servant from the office to grant  sanction  for  the
      obvious reason that that authority alone would be able, when facts and
      evidence are placed before him, to judge whether a serious offence  is
      committed or the prosecution is either frivolous or speculative.
That
      authority alone would be competent  to  judge  whether  on  the  facts
      alleged, there has been an abuse or  misuse  of  office  held  by  the
      public servant.
That authority would be in a position to know what was
      the power conferred on the office which the public servant holds,  how
      that power could be abused for corrupt motive and whether prima  facie
      it has been so done.
That competent authority  alone  would  know  the
      nature and functions discharged by  the  public  servant  holding  the
      office and whether the same has been abused  or  misused.  It  is  the
      vertical hierarchy between  the  authority  competent  to  remove  the
      public servant from that office and the nature of the office  held  by
      the public  servant  against  whom  sanction  is  sought  which  would
      indicate a hierarchy and which would therefore,  permit  inference  of
      knowledge about the functions and duties of the office and its  misuse
      or abuse by the public servant.
  That is why  the  legislature  clearly
      provided that  that  authority  alone  would  be  competent  to  grant
      sanction which is entitled to remove the public servant  against  whom
      sanction is sought from the office.


      24.   Now if the public servant holds two offices and he is accused of
      having abused one and from which he is removed but continues  to  hold
      the other which is neither alleged to have been used nor abused, is  a
      sanction of the authority competent to  remove  him  from  the  office
      which is neither alleged or shown  to  have  been  abused  or  misused
      necessary?
The submission is that if  the  harassment  of  the  public
      servant by a frivolous prosecution and criminal waste of his  time  in
      law courts keeping him away from  discharging  public  duty,  are  the
      objects underlying Section 6, the same would be defeated if it is held
      that the sanction of  the  latter  authority  is  not  necessary.
The
      submission does not commend to us.
We fail to see  how  the  competent
      authority entitled to remove the public servant from an  office  which
      is neither alleged to have been used or abused would be able to decide
     
whether the prosecution is frivolous or tendentious.
An  illustration
      was posed to the learned counsel that a Minister who is indisputably a
      public servant greased his palms by abusing his  office  as  Minister,
      and then ceased to hold the office before the court was called upon to
      take cognizance of the offence against him and therefore, sanction  as
      contemplated by Section  6  would  not  be  necessary;  but  if  after
      committing the offence and before the date of taking of cognizance  of
      the offence, he was elected as a Municipal President in which capacity
      he was a public servant under the  relevant  Municipal  law,  and  was
      holding that office on the date  on  which  court  proceeded  to  take
      cognizance of the offence committed by him  as  a  Minister,  would  a
      sanction be necessary and that too  of  that  authority  competent  to
      remove him from the office of the Municipal President. The answer  was
      in affirmative. But the very illustration would show that such  cannot
      be the law. Such an interpretation of Section 6 would render it  as  a
      shield to  an  unscrupulous  public  servant.  Someone  interested  in
      protecting may shift him from one office of public servant to  another
      and thereby defeat the process of law. One can legitimately envisage a
      situation wherein a person may hold a dozen  different  offices,  each
      one clothing him with the status of a public servant under Section  21
      IPC and even if he has abused only one office for which  either  there
      is a valid sanction to prosecute him or he has  ceased  to  hold  that
      office by the time court was called upon to take  cognizance,  yet  on
      this assumption, sanction of 11 different competent  authorities  each
      of which was entitled to remove him from 11 different  public  offices
      would be necessary before the court can take cognizance of the offence
      committed by such public servant, while abusing one  office  which  he
      may have ceased to hold.
Such an interpretation  is  contrary  to  all
      canons of construction and leads to an absurd  and  product  which  of
      necessity  must  be  avoided.
Legislation  must  at  all   costs   be
      interpreted in such a way that it would  not  operate  as  a  rougue's
      charter. (See Davis & Sons Ltd. v. Atkins)


           xxx              xxx              xxx              xxx


      26.   Therefore, upon a true construction of Section 6, it is implicit
      therein that sanction of  that  competent  authority  alone  would  be
      necessary which is competent to remove the  public  servant  from  the
      office which he is alleged to  have  misused  or  abused  for  corrupt
      motive and for which a prosecution is intended to be launched  against
      him.


      27.    In  the  complaint  filed  against  the  accused  it  has  been
      repeatedly alleged that the accused as Chief Minister  of  Maharashtra
      State  accepted  gratification  other  than  legal  remuneration  from
      various sources and thus committed various offences  set  out  in  the
      complaint. Nowhere, not even by a whisper,  it  is  alleged  that  the
      accused has misused or abused for corrupt motives his office as M.L.A.
      Therefore, it is crystal clear that the complaint  filed  against  the
      accused charged him with criminal abuse or misuse of only  his  office
      as Chief Minister. By the time, the court  was  called  upon  to  take
      cognizance of the offences, so alleged in the complaint,  the  accused
      had ceased to hold the office of the Chief  Minister.  On  this  short
      ground, it can be held that no sanction to prosecute him was necessary
      as former Chief Minister of Maharashtra State.
The appeal can  succeed
      on this short ground. However, as the real bone of contention  between
      the parties was
whether as M.L.A. the accused was a public servant and
      the contention was canvassed at some length, we propose to  deal  with
      the same.


           xxx              xxx              xxx              xxx


      68.   Re. (f) & (g): The learned Judge after recording a finding  that
      M.L.A. is a public servant within the comprehension of clause  (12)(a)
      and further recording the finding that as on the  date  on  which  the
      Court was invited to take cognizance, the accused was  thus  a  public
      servant proceeded to examine whether sanction under Section 6  of  the
      1947  Act  is  a  pre-requisite  to  taking  cognizance  of   offences
      enumerated in Section 6 alleged to have  been  committed  by  him.  He
      reached the conclusion that a sanction is necessary before  cognizance
      can be taken.
As a corollary he proceeded to investigate and identify,
      which is the sanctioning authority who would be able to give  a  valid
      sanction as required by Section 6 for the prosecution of  the  accused
      in his capacity as M.L.A.? 
We have expressed our conclusion that where
      offences as set out in Section 6 are alleged to have been committed by
      a public servant, sanction of only that authority would  be  necessary
      who would be entitled to remove him from that office which is  alleged
      to have been misused or abused for corrupt motives.
If the accused has
      ceased to hold that office by the date, the court is  called  upon  to
      take cognizance of the offences alleged to have been committed by such
      public servant, no sanction under Section 6 would be necessary despite
      the fact that he may be holding any other office on the relevant  date
      which may make him a public servant as understood in Sec 21, if  there
      is no allegation that office has been abused or  misused  for  corrupt
      motives.
The allegations in the complaint are all to the effect  that
      the accused misused or abused his office as Chief Minister for corrupt
      motives.
By the time the Court was called upon to take  cognizance  of
      those offences, the accused had ceased to hold  the  office  of  Chief
      Minister.
The sanction to prosecute him was granted by the Governor of
      Maharashtra but this aspect we consider irrelevant for concluding that
      no sanction was necessary to prosecute him under Section 6 on the date
      on which the court took cognizance of the  offences  alleged  to  have
      been committed by the accused.
Assuming that as MLA the accused  would
      be a public servant under Section 21, in the absence of any allegation
      that he misused or abused  his  office  as  MLA  that  aspect  becomes
      immaterial. Further Section 6 postulates existence of a valid sanction
      for prosecution of a public  servant  for  offences  punishable  under
      Sections 161, 164, 165 IPC and Section 5 of the 1947 Act, if they  are
      alleged to have been committed by a public servant.
In  view  of  our
      further finding that M.L.A. is not a public servant within the meaning
      of the expression in Section  21  IPC  no  sanction  is  necessary  to
      prosecute him for the offences alleged to have been committed by him.


                                                          (emphasis is ours)


The conclusions drawn by  this  Court  in  R.S.  Naik’s  case  (supra)  were
affirmed by this Court in Prakash Singh Badal vs. State of Punjab, (2007)  1
SCC 1, wherein this Court held as under:

      “23.  Offences prescribed in Sections 161, 164 and 165 IPC and Section
           5 of the 1947 Act have an intimate and inseparable relation with
           the office of a public servant. A public servant occupies office
           which renders him a public  servant  and  occupying  the  office
           carries with it  the  powers  conferred  on  the  office.  Power
           generally is not conferred on an individual person. In a society
           governed by the rule of law power  is  conferred  on  office  or
           acquired by statutory status and the  individual  occupying  the
           office or on whom status is conferred enjoys the power of office
           or power flowing from the status. The holder of the office alone
           would have opportunity to abuse  or  misuse  the  office.  These
           sections codify a well-recognised  truism  that  power  has  the
           tendency to corrupt. It is the holding of the office which gives
           an opportunity to use it for  corrupt  motives.  Therefore,  the
           corrupt conduct is directly  attributable  and  flows  from  the
           power  conferred  on  the   office.   This   interrelation   and
           interdependence between individual and the office  he  holds  is
           substantial and not severable. Each of the three clauses of Sub-
           section (1) of Section 6 uses the expression  ‘office'  and  the
           power to grant sanction is conferred on the authority  competent
           to remove the public servant  from  his  office  and  Section  6
           requires  a  sanction  before  taking  cognizance  of   offences
           committed by public servant. The offence would be  committed  by
           the public servant by misusing or abusing the  power  of  office
           and it is from that office, the authority must be  competent  to
           remove him so as to be entitled to grant sanction.  The  removal
           would bring about cessation of interrelation between the  office
           and abuse by the holder of the office. The  link  between  power
           with opportunity to abuse and the  holder  of  office  would  be
           severed by removal from office. Therefore, when a public servant
           is accused of an offence  of  taking  gratification  other  than
           legal remuneration for doing or forbearing to do an official act
           (Section  161  IPC)  or  as  a  public  servant  abets  offences
           punishable under Sections 161 and 163 (Section 164  IPC)  or  as
           public servant obtains a valuable  thing  without  consideration
           from person concerned in any proceeding or  business  transacted
           by such public servant (Section 165  IPC)  or  commits  criminal
           misconduct as defined in Section  5  of  the  1947  Act,  it  is
           implicit in the various offences that  the  public  servant  has
           misused or abused the power of office  held  by  him  as  public
           servant. The expression 'office' in  the  three  Sub-clauses  of
           Section 6(1) would clearly denote that office which  the  public
           servant misused or abused for corrupt motives for which he is to
           be prosecuted and in respect of which a  sanction  to  prosecute
           him is necessary by the competent authority entitled  to  remove
           him from that office which he  has  abused.  This  interrelation
           between the office and its abuse if severed would render Section
           6 devoid of any meaning. And this interrelation clearly provides
           a clue to the  understanding  of  the  provision  in  Section  6
           providing for sanction by a competent  authority  who  would  he
           able to judge the action of the public servant  before  removing
           the bar, by granting sanction, to the taking of  the  cognizance
           of offences by the court against the public servant.  Therefore,
           it unquestionably follows that the sanction to prosecute can  he
           given by an authority competent to  remove  the  public  servant
           from the office which he has  misused  or  abused  because  that
           authority alone would be able to know whether there has  been  a
           misuse or abuse of the office by the public servant and not some
           rank outsider. By a catena of decisions, it has been  held  that
           the authority entitled to grant sanction must apply its mind  to
           the facts of the case, evidence collected and  other  incidental
           facts before according sanction. A grant of sanction is  not  an
           idle formality but a solemn and sacrosanct act which removes the
           umbrella of protection of Government servants against  frivolous
           prosecutions and the aforesaid requirements must  therefore,  be
           strictly complied with before any prosecution could be  launched
           against public servants. (See Mohd.  Iqbal  Ahmad  v.  State  of
           A.P., (1979) 4 SCC 172).  The  Legislature  advisedly  conferred
           power on the authority competent to remove  the  public  servant
           from the office to grant sanction for the  obvious  reason  that
           that authority alone would be able, when facts and evidence  are
           placed before  him,  to  judge  whether  a  serious  offence  is
           committed or the prosecution is either frivolous or speculative.
           That authority alone would be competent to judge whether on  the
           facts alleged, there has been an abuse or misuse of office  held
           by the public servant. That authority would be in a position  to
           know what was the power conferred on the office which the public
           servant holds, how that power could he abused for corrupt motive
           and whether prima facie it has  been  so  done.  That  competent
           authority alone would know the nature and  functions  discharged
           by the public servant holding the office and  whether  the  same
           has been abused or misused. It is the vertical hierarchy between
           the authority competent to remove the public servant  from  that
           office and the nature of the office held by the  public  servant
           against whom sanction is sought which would indicate a hierarchy
           and which would therefore, permit inference of  knowledge  about
           the functions and duties of the office and its misuse  or  abuse
           by the public servant.  That  is  why  the  Legislature  clearly
           provided that that authority alone would be competent  to  grant
           sanction which is entitled to remove the public servant  against
           whom sanction is sought from the office.


      24.   Now if the public servant holds two offices and he is accused of
           having abused one and from which he is removed but continues  to
           hold the other which is neither alleged to have been used  (sic)
           nor abused, is a sanction of the authority competent  to  remove
           him from the office which is neither alleged or  shown  to  have
           been abused or misused necessary? The submission is that if  the
           harassment of the public servant by a frivolous prosecution  and
           criminal waste of his time in law courts keeping him  away  from
           discharging public duty, are the objects underlying  Section  6,
           the same would be defeated if it is held that  the  sanction  of
           the latter authority is not necessary. The submission  does  not
           commend to us. We  fail  to  see  how  the  competent  authority
           entitled to remove the public servant from an  office  which  is
           neither alleged to have been used (sic) or abused would be  able
           to decide whether the prosecution is frivolous  or  tendentious.
           An illustration was posed to the Learned Counsel that a Minister
           who is indisputably  a  public  servant  greased  his  palms  by
           abusing his office as Minister, and  then  ceased  to  hold  the
           office before the court was called upon to  take  cognizance  of
           the offence against him and therefore, sanction as  contemplated
           by Section 6 would not be necessary; but if after committing the
           offence and before the date  of  taking  of  cognizance  of  the
           offence, he was  elected  as  a  Municipal  President  in  which
           capacity he was a public servant under  the  relevant  Municipal
           law, and was holding that office on  the  date  on  which  court
           proceeded to take cognizance of the offence committed by him  as
           a Minister, would a sanction be necessary and that too  of  that
           authority competent  to  remove  him  from  the  office  of  the
           Municipal President. The answer was in affirmative. But the very
           illustration would show that such cannot be  the  law.  Such  an
           interpretation of Section 6 would render it as a  shield  to  an
           unscrupulous public servant. Someone  interested  in  protecting
           may shift him from one office of public servant to  another  and
           thereby defeat the process of law. One can legitimately envisage
           a situation wherein a person may hold a dozen different offices,
           each one clothing him with the status of a public servant  under
           Section 21 IPC and even if he has abused  only  one  office  for
           which either there is a valid sanction to prosecute  him  or  he
           has ceased to hold that office by the time court was called upon
           to take cognizance, yet  on  this  assumption,  sanction  of  11
           different competent authorities each of which  was  entitled  to
           remove him from 11 different public offices would  be  necessary
           before the court can take cognizance of the offence committed by
           such public servant, while abusing one office which he may  have
           ceased to hold.  Such  an  interpretation  is  contrary  to  all
           canons of construction and leads to an absurd and product  which
           of necessity must be avoided. Legislation must at all  costs  be
           interpreted in such a  way  that  it  would  not  operate  as  a
           rougue's charter. (See W. Davis & Sons Ltd. v. Atkins, (1977)  3
           All ER 40.


      50.   The offence of cheating under Section 420  or  for  that  matter
           offences relatable to Sections 467, 468, 471 and 120B can by  no
           stretch of imagination by  their  very  nature  be  regarded  as
           having been committed by any  public  servant  while  acting  or
           purporting to act in discharge of official duty. In such  cases,
           official status only provides an opportunity for  commission  of
           the offence.”
                                                          (emphasis is ours)

14.   The judgments referred to in paragraph 13 above, were relied  upon  by
the Courts below to reject the contention  advanced  at  the  hands  of  the
appellant, that  sanction  was  essential  before  the  appellant  could  be
prosecuted.  It would be  pertinent  to  mention,  that  extracts  from  the
judgments referred to in  paragraph  13  reproduced  above,  deal  with  two
pointed  situations.   Firstly,
whether  sanction  before  prosecution   is
required from each of  the  competent  authorities  entitled  to  remove  an
accused from the offices held by him,  in  situations  wherein  the  accused
holds a plurality of offices.  
The second determination was  in  respect  of
the requirement of sanction, in  situations  where  the  accused  no  longer
holds  the  office,  which  he  is  alleged  to  have  abused/misused,   for
committing the offence (s) for which he is being blamed.  
In answer  to  the
first query, it has unambiguously been concluded, that if an  accused  holds
a plurality of offices, each one  of  which  makes  him  a  public  servant,
sanction  is  essential  only  at  the  hands  of  the  competent  authority
(entitled to remove him from service) of the office which he  had  allegedly
misused.  This leads to the clear inference, that other public offices  held
by the accused  wherein  an  accused  holds  a  plurality  of  offices,  are
irrelevant for purposes of obtaining sanction prior to prosecution.  On  the
second issue it was concluded, that sanction was essential only if,  at  the
time of taking cognizance, the accused was still holding the  public  office
which he had allegedly abused.  If the  legal  position  determined  in  the
above judgments is taken into consideration, there is  certainly  no  doubt,
that in the facts and circumstances of  this  case,  sanction  if  required,
ought to have been obtained  from  the  Governor  of  the  State  of  Madhya
Pradesh.  The instant determination  is  premised  on  the  fact,  that  the
appellant is stated to have  misused  his  position  while  discharging  his
responsibilities as a nominee Director of the MPSIDC.  It is  clear  to  us,
specially from the deliberation recorded hereinabove, that  the  appellant’s
participation in the Cabinet Review Meeting  dated  28.1.1994,  and  in  the
relevant meetings of the Board of Directors (of the MPSIDC) had no nexus  to
the post of Industries Commissioner, Government of Madhya  Pradesh,  or  the
subsequent office held by  him  as  Joint  Secretary,  Department  of  Heavy
Industries, Government of  India.   Accordingly,  in  our  considered  view,
sanction of the  authorities  with  reference  to  the  post  of  Industries
Commissioner, Government of Madhya Pradesh and Joint  Secretary,  Department
of Heavy  Industries,  Government  of  India  held  by  the  appellant,  was
certainly  not  required.   
We  therefore,  hereby  reject  the   submission
advanced at the hands of the learned counsel for the appellant,  that  since
the appellant continued to hold the above-mentioned public office(s) in  his
capacity as a member of the IAS cadre, at the time the  first  charge  sheet
was filed on 24.9.2007, prosecution could be proceeded with, and  cognizance
taken, only upon sanction by the competent authority(ies) of  the  said  two
offices (Industries Commissioner, Government of  Madhya  Pradesh  and  Joint
Secretary, Department of Heavy Industries, Government of India),  as  wholly
misconceived.

15.   The abuse/misuse of authority, alleged against the appellant  pertains
to the discharge of his responsibilities  as  a  nominee  Director  (on  the
Board of the MPSIDC).  Therefore, the further question which arises for  our
consideration is, whether sanction at the  hands  of  the  Governor  of  the
State of  Madhya  Pradesh,  (who  had  the  power  to  remove  any  Director
appointed or nominated  by  him  under  clause  89  of  the  Memorandum  and
Articles of Association of the MPSIDC), was  a  prerequisite  before  taking
cognizance in the matter.  In the facts and circumstances of this  case,  we
are of the view, that answer to the instant question has also to be  in  the
negative.  Our aforesaid  determination  is  based  on  the  fact  that  the
appellant remained a nominee Director of the MPSIDC from 1993 to 1998.   The
first charge sheet in the matter was filed on 24.9.2007.   Well  before  the
filing of the first charge sheet, the appellant had relinquished  charge  of
the office which he is alleged to have abused/misused (i.e.  the  office  of
nominee Director of the MPSIDC).  In the above view  of  the  matter,  since
the appellant was not holding the public office which he is alleged to  have
abused, when the first charge sheet was filed, in terms of the law  declared
by this Court (referred to  in  the  judgments  extracted  in  paragraph  13
above), there was no need  to  obtain  any  sanction  before  proceeding  to
prosecute the appellant, for the offences alleged against him.

16.   It would be relevant to mention, that during  the  course  of  hearing
learned counsel for the appellant placed emphatic reliance on  the  judgment
rendered by this Court in State of Madhya Pradesh vs. Sheetla Sahai &  Ors.,
(2009) 8 SCC 617.  It is not  necessary  for  us  to  refer  either  to  the
factual position in the  judgment  relied  upon,  or  even  the  conclusions
recorded thereon.  We say so because, the issues  canvassed  and  determined
in the aforesaid judgments were not the ones on the basis  whereof  we  have
recorded our conclusions, in the foregoing  paragraphs.   It  is  sufficient
for us to note, that the judgment rendered by this Court in State of  Madhya
Pradesh vs. Sheetla Sahai & Ors. (supra), does not carve out any  exception,
to the two propositions relied upon for the conclusions drawn  by  us,  from
the judgments referred to in paragraph 13 above.

17.   The second contention advanced at the hands  of  the  learned  counsel
for the appellant, was based on the determination rendered by this Court  in
Soma Chakravarty vs. State through CBI, (2007) 5 SCC 403.  Pointed  reliance
was placed by the learned counsel for the appellant on  paragraph  23  which
is being extracted hereunder:-
      “23.  In a case of this nature, the learned Special Judge also  should
           have considered the question having regard to the  'doctrine  of
           parity' in mind. An accused  similarly  situated  has  not  been
           proceeded against only  because,  the  departmental  proceedings
           ended in his favour. Whether  an  accused  before  him  although
           stands  on  a  similar  footing  despite  he  having  not   been
           departmentally proceeded  against  or  had  not  been  completed
           exonerated also required to be considered. If exoneration  in  a
           departmental proceeding is the basis for not  framing  a  charge
           against an accused person who is said to be similarly  situated,
           the question which requires a further consideration  was  as  to
           whether the applicant before it was similarly  situated  or  not
           and/or  whether  the  exonerated  officer  in  the  departmental
           proceeding also faced same charges including the charge of being
           a party to the larger conspiracy.”
                                                          (emphasis is ours)

It was the vehement contention of the learned  counsel  for  the  appellant,
that sanction to prosecute another  co-accused  similarly  situated  as  the
appellant, having been  obtained,  it  was  not  permissible  to  treat  the
appellant differently.  We  find  no  substance  in  the  second  contention
advanced at the hands of the learned  counsel  for  the  appellant.   Having
concluded on the basis of  the  law  declared  by  this  Court,  that  prior
sanction for prosecuting the appellant was  unessential,  it  is  futile  to
suggest that sanction ought  to  have  been  obtained  all  the  same.   The
instant  submission  needs  no  further  consideration  in   view   of   the
deliberations recorded by us hereinabove.  Parity  in  law  can  be  claimed
only in respect of action rightfully executed.  And not  otherwise.   Having
concluded that sanction was not required in the case of  the  appellant,  it
is not possible for us to accept on the analogy of the  submission  advanced
at the hands of the learned counsel for the appellant, that  merely  because
sanction was obtained in respect of another co-accused, it  needed  to  have
been obtained in the appellant’s case as well.

18.   The next contention advanced at the hands of the learned  counsel  for
the appellant was based on Section 141 of the  Negotiable  Instruments  Act,
1881 (hereinafter referred to as the ‘NI Act’).  Section 141  aforementioned
is being extracted hereunder:-

      “141. Offences by companies.- (1) If the person committing an  offence
           under section 138 is a company, every person who,  at  the  time
           the offence was committed, was in charge of, and was responsible
           to the company for the conduct of the business of  the  company,
           as well as the company, shall be deemed  to  be  guilty  of  the
           offence and shall be liable to be proceeded against and punished
           accordingly:


                 Provided that nothing contained in this  sub-section  shall
           render any person liable to punishment if  he  proves  that  the
           offence was committed without his  knowledge,  or  that  he  had
           exercised all due diligence to prevent the  commission  of  such
           offence:


              Provided further that  where  a  person  is  nominated  as  a
           Director of a company by virtue of his  holding  any  office  or
           employment in the Central Government or State  Government  or  a
           financial  corporation  owned  or  controlled  by  the   Central
           Government or the State Government, as the case may be, he shall
           not be liable for prosecution under this Chapter.


           (2)   Notwithstanding anything  contained  in  sub-section  (1),
           where any offence under this Act has been committed by a company
           and it is proved that the offence has been  committed  with  the
           consent or connivance of, or is attributable to, any neglect  on
           the part of, any director, manager, secretary or  other  officer
           of the company,  such  director,  manager,  secretary  or  other
           officer shall also be deemed to be guilty of  that  offence  and
           shall  be  liable  to  be   proceeded   against   and   punished
           accordingly.


      Explanation.--For the purposes of this section,--


      (a)   "company" means any body corporate and includes a firm or  other
      association of individuals; and


      (b)   "director", in relation to a firm, means a partner in the firm.”

Relying on sub-Section (1) of  Section  141  extracted  above,  it  was  the
vehement contention of the learned  counsel  for  the  appellant,  that  the
appellant was not in charge of the conduct of the business  of  the  MPSIDC.
It was also his submission, that the appellant was not  responsible  to  the
MPSIDC for the conduct of its day to day activities.  In this behalf it  was
sought to be asserted, that the appellant was not aware of  the  fact,  that
the functionaries of the MPSIDC were extending short term  loans  (including
ICD’s) out of the surplus funds of the MPSIDC to industrial  establishments.
 It was also pointed out,  that  the  appellant  had  neither  examined  nor
approved any  financial  assistance  extended  to  industries,  out  of  the
surplus funds of the MPSIDC, on the basis of the resolution of the Board  of
Directors dated 19.4.1995.  As such it was asserted,  that  the  accusations
levelled against the appellant were misconceived.  Insofar  as  the  instant
aspect of the matter is concerned, learned counsel for the appellant  relied
on the  decision  rendered  by  this  Court  in  National  Small  Industries
Corporation Ltd. vs. Harmeet  Singh  Paintal  &  Anr.,  (2010)  3  SCC  330.
Learned counsel invited our pointed attention to the following  observations
recorded therein:-

      “6.   In the connected appeal, the appellant - DCM Financial  Services
           Ltd., entered into a hire purchase agreement on  25.2.1996  with
           M/s International Agro Allied Products  Ltd.   At  the  time  of
           entering into  contract,  the  Company  handed  over  post-dated
           cheques to the appellant towards payment of monthly  hire/rental
           charges. Respondent No. 1, Dev Sarin was one of the Directors of
           the said Company. The cheque issued by  International  Agro  and
           Allied Products  Ltd.  in  favour  of  the  appellant  was  duly
           presented for payment on 28.10.1998 and the  same  was  returned
           unpaid for the reason that the Company had  issued  instructions
           to the bankers stopping payment of the cheque.

      12.   It is very clear from the above provision that what is  required
           is that the persons who are sought to be made vicariously liable
           for a criminal offence under Section 141 should be, at the  time
           the offence was committed, was in-charge of, and was responsible
           to the company for the conduct of the business of  the  company.
           Every person connected with the company shall  not  fall  within
           the ambit of the provision. Only  those  persons  who  were  in-
           charge of and responsible for the conduct of the business of the
           company at the time of commission of an offence will  be  liable
           for criminal action. It follows from the fact that if a Director
           of a Company who was not in charge of and  was  not  responsible
           for the conduct of the business of the company at  the  relevant
           time, will not be  liable  for  a  criminal  offence  under  the
           provisions. The liability arises from being  in  charge  of  and
           responsible for the conduct of the business of  the  company  at
           the relevant time when the offence was committed and not on  the
           basis of merely holding a designation or office in a company.”
                                                          (emphasis is ours)




19.   We have given our thoughtful consideration to the contention  advanced
at the hands of the learned counsel for the appellant, as has  been  noticed
in the foregoing paragraph.  We  are  of  the  view,  that  the  appellant’s
reliance on Section 141 of the NI Act, as also,  the  judgment  rendered  by
this Court  in  National  Small  Industries  Corporation  Ltd.  (supra),  is
misconceived.  The appellant is not being blamed for the  implementation  of
the resolution of the Board of Directors  of  the  MPSIDC  dated  19.4.1995.
The appellant is being blamed for having allowed  the  aforesaid  resolution
dated 19.4.1995 to be passed despite  the  earlier  decision  taken  in  the
Cabinet Review Meeting held on 28.1.1994, as also,  the  earlier  resolution
of the Board of Directors of the  MPSIDC  dated  31.1.1994.   It  is  not  a
matter of dispute before us, that the  appellant  had  participated  in  the
decision making process in the  meeting  of  the  Cabinet  Review  Committee
dated 28.1.1994, as also, the resolution of the Board of  Directors  of  the
MPSIDC dated 31.1.1994. The charge against the appellant  is  based  on  the
fact, that the appellant allowed the Board of Directors  of  the  MPSIDC  to
pass the resolution dated 19.4.1995, inspite of  the  earlier  decisions  at
the hands of the Cabinet Review Committee (in meeting dated  18.1.1994)  and
the consequential resolution of the Board of  Directors  (dated  31.1.1994).
We, therefore, reject the submission advanced at the hands  of  the  learned
counsel for the appellant based on Section 141  of  the  NI  Act.   All  the
same, it would be relevant to notice, that the second proviso under  Section
141(1) of the N.I. Act is inapplicable to the facts of  this  case,  because
the appellant was not nominated as a Director of the MPSIDC  on  account  of
holding  the  office  of  Industries  Commissioner,  Government  of   Madhya
Pradesh.  The appellant’s appointment as nominee Director of the MPSIDC  was
based on the determination of the Governor of Madhya  Pradesh  under  clause
89 of the Memorandum and Articles of Association  of  the  MPSIDC.   If  the
factual position alleged against the appellant is correct,  the  culpability
of the appellant would emerge from sub-Section (2) of  Section  141  of  the
N.I. Act.  The instant inference is inevitable, because it is  not  disputed
on behalf of the  appellant,  that  he  had  actually  participated  in  the
Cabinet Review Meeting dated 28.1.1984, as well as, in the meetings  of  the
Board  of  Directors  leading  to  the  passing  of  the  resolutions  dated
31.1.1994 and 19.4.1995.  In the facts of the present case,  the  accusation
implicating the appellant, is directly attributable  to  the  appellant,  as
nominee Director of the MPSIDC.  The aforesaid inference has been  drawn  by
us, to negate the submission of the learned counsel for the appellant  based
on Section 141 of the N.I. Act.  In our view, the  instant  issue  does  not
arise  for  adjudication  in  the  present  controversy  in  view   of   the
conclusions  already  drawn  hereinabove,  that  the  culpability   of   the
appellant, lies in the mischief of passing the resolution  dated  19.4.1995.
The implementation of the said resolution is  the  consequential  effect  of
the said mischief.

20.   For the last contention advanced on behalf of the  appellant,  learned
counsel placed reliance on a decision rendered by this Court in C.K.  Jaffer
Sharief vs. State (through CBI), (2013) 1 SCC 205.  
Our  pointed  attention
was drawn to the following observations recorded therein:-
      “17.  It has already been noticed that the appellant  besides  working
           as the Minister of Railways was  the  Head  of  the  two  public
           sector undertakings in question at the relevant  time.  It  also
           appears from the materials on record that the four persons while
           in London had assisted the appellant in performing certain tasks
           connected with the discharge of duties as  a  Minister.   It  is
           difficult to visualise as to how  in  the  light  of  the  above
           facts, demonstrated by the materials revealed in the  course  of
           investigation, the appellant can be construed  to  have  adopted
           corrupt or illegal means or to have abused  his  position  as  a
           public  servant  to  obtain  any  valuable  thing  or  pecuniary
           advantage either for himself or for any of  the  aforesaid  four
           persons. If the  statements  of  the  witnesses  examined  under
           Section 161 Cr.P.C. show that the  aforesaid  four  persons  had
           performed certain tasks to assist the Minister in the  discharge
           of his public duties, however insignificant such tasks may  have
           been, no question of obtaining any pecuniary  advantage  by  any
           corrupt or illegal means or by abuse  of  the  position  of  the
           appellant as a public servant can arise.  As a Minister  it  was
           for the appellant to decide on the number and  identity  of  the
           officials and supporting  staff  who  should  accompany  him  to
           London if it was  anticipated  that  he  would  be  required  to
           perform his official duties while in London. If in the  process,
           the rules or norms applicable  were  violated  or  the  decision
           taken shows an extravagant  display  of  redundance  it  is  the
           conduct and action of the appellant which may have been improper
           or contrary to departmental norms. But to say that the same  was
           actuated by a dishonest intention to obtain an  undue  pecuniary
           advantage will not be correct. That dishonest intention  is  the
           gist of the offence under Section 13(1)(d) is  implicit  in  the
           words used i.e. corrupt or illegal means and abuse  of  position
           as a public servant. A similar view has also been  expressed  by
           this Court in M. Narayanan Nambiar v. State of Kerala, AIR  1963
           SC 1116 while considering the provisions of Section 5 of Act  of
           1947.”
                                                          (emphasis is ours)

Based on the aforesaid determination, it was the contention of  the  learned
counsel for  the  appellant,  that  the  allegations  levelled  against  the
appellant do not lead to the  inference,  that  the  appellant  had  adopted
corrupt or illegal means, or had abused his position as a public servant  to
obtain any valuable thing or pecuniary advantage, either for himself or  for
the industries to whom the  MPSIDC  extended  short  term  loans  (including
ICD’s).
We are of the view, that the last contention advanced at the  hands
of the learned counsel for the appellant is a mixed  question  of  fact  and
law.
Determination of the instant issue would be possible  only  after  the
rival parties have adduced evidence to establish  their  respective  claims.
At the said juncture, it would be possible to  record  factual  conclusions.
It would then be possible for the concerned Court(s) to draw  inferences  on
the basis of the  established  factual  position,
whether  the  accused  is
guilty of the accusation levelled against him.   Therefore,  it  is  neither
proper nor possible for us to deal with the last contention advanced at  the
hands of the learned counsel for the appellant, at the present juncture.

21.   No further contention  was  advanced  at  the  hands  of  the  learned
counsel for the appellant.

22.   For the reasons recorded hereinabove, we find no merit in the  instant
appeals.  The same are accordingly hereby  dismissed.   While  disposing  of
the instant appeals, we consider it  just  and  appropriate  to  direct  the
trial Court to expedite the trial, keeping in mind, that  the  charge  sheet
in the matter was filed  as  far  back  as  in  2007.   On  account  of  the
proceedings initiated at the hands of the appellant, no further  proceedings
were taken by the Special Judge, Bhopal.  In the above view of  the  matter,
we consider it appropriate to direct the trial  Court  to  hold  proceedings
for the disposal of Special Case No. 7 of 2007 on a weekly basis.


                                       …………………………….CJI.
                                        (P. Sathasivam)



                                        ……………………………….J.
                                        (Jagdish Singh Khehar)

New Delhi;
September 17, 2013.




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