SINGLE WITNESS IS ENOUGH TO CONVICT THE ACCUSED IF FOUND RELIABLE = it has been held that if the testimony of a singular witness is found by the court to be entirely reliable, there is no legal impediment in recording the conviction of the accused on such proof. In the said pronouncement it has been further ruled that the law of evidence does not require any particular number of witnesses to be examined in proof of a given fact. However, faced with the testimony of a single witness, the court may classify the oral testimony into three categories, namely, (i) wholly reliable, (ii) wholly unreliable, and (iii) neither wholly reliable nor wholly unreliable. In the first two categories there may be no difficulty in accepting or discarding the testimony of the single witness. The difficulty arises in the third category of cases. The court has to be circumspect and has to look for corroboration in material particulars by reliable testimony, direct or circumstantial, before acting upon the testimony of a single witness.- On the analysis of evidence of PW-6 we find that his evidence is cogent and trustworthy and further gets corroboration from the medical evidence and also for the factum of recovery of gold and silver ornaments which has been clearly proven by PW-9. 20. In view of the aforesaid analysis, we do not perceive any error in the judgment of conviction and order of sentence passed by the learned trial Judge that has been affirmed by the High Court and, accordingly, the appeal, being devoid of merit, stands dismissed.

Page 1
Reportable
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 642 OF 2008
Kusti Mallaiah ...Appellant
Versus
The State of Andhra Pradesh ...Respondent
J U D G M E N T
Dipak Misra, J.
Calling in question the legal propriety of the
judgment of conviction and order of sentence passed in
Criminal Appeal No. 990 of 2005 by the High Court of
Judicature, Andhra Pradesh whereby the Division Bench
has concurred with the conviction and the imposition of
sentence by the learned Principal Sessions Judge, Medak
at Sangareddy in S.C. No. 79 of 1998 wherein the learnedPage 2
trial Judge, after finding the appellant along with one
Koninti @ Yerrolla Veeraiah, A-1, guilty of the offences
punishable under Sections 302 and 404 read with 34 of
the Indian Penal Code (for short “IPC”), had sentenced
each of them to undergo rigorous imprisonment for life on
the first count and three years on the second score.
2. Shorn of unnecessary details, the case of the
prosecution as unfolded is that on 9.2.1997 in the
morning hours Koninti @ Yerrolla Veeraiah, A-1, and
Kusti Malliah, A-2, took the deceased, Neelagiri
Parvamma, with them Shiver in the Thimmaiapally
hillocks. Kusti Yellaiah, PW-6, eye witness to the
occurrence, had accompanied them. The accused
persons and the deceased consumed liquor and,
thereafter, both the accused removed her clothes,
ravished her and assaulted her. The said action of
the A-1 and A-2 was objected to by PW-6, but he was
pushed away and being scared he went and stood at
a distance of approximately 300 yards. Thereafter,
both the accused persons stole the gold and silver
ornaments and brutally assaulted with stones, as a
2Page 3
consequence of which she sustained injuries and
succumbed to the same. PW-6, being panickystricken, ran away from the spot. On the next day,
i.e., 11.2.1997 about 8.00 a.m. PW-1, P. Vittal Reddy,
the Village Administrative Officer, Thammaiahapally,
coming to know about the dead body of a woman
lying in the forest, from a village shepherd, rushed
there and found the dead body of the deceased lying
half naked. He returned from the forest and about
11.30 a.m. and gave the information at Papannapet
Police Station. On the basis of said information the
investigating agency proceeded to the spot, prepared
the inquest report, registered an FIR under Section
302, IPC, sent the dead body for post mortem and
after PW-4, Neelagiri Bhoomiah, husband of the
deceased and PW-5, Neelagiri Mogulamma, daughter
of the deceased, identified the photograph and small
cloth purse to be that of the deceased, recorded their
statements. On 7.5.1997, the accused persons were
arrested and 30 gold gundlu weighing about half tula
was seized from the custody of A-1 and two silver
3Page 4
anklets and one hand bolukada weighing about 22
tulas from the possession of A-2. On that day itself
the statement of PW-6, who was an eye witness to
the incident, was recorded. After completion of
investigation charge-sheet was laid before the
competent Magistrate who, in turn, committed the
case to the Court of Session. The accused persons
denied the charges, pleaded innocence and claimed
to be tried.
3. The prosecution, in order to bring home the charges,
examined as many as 14 witnesses and got marked
exhibits P-1 to P-11 and also MO-1 to MO-9. On
behalf of the accused Ext. D-1 to D-3, the
contradictions in the statements of PWs-4 and 5 were
marked.
4. The learned trial Judge, after considering the
evidence on record, came to the conclusion that the
prosecution had been able to establish the guilt of
the accused persons for the offences punishable
under Sections 302 and 404 read with 34 IPC and
4Page 5
convicted them to suffer imprisonment as has been
referred to hereinbefore.
5. Challenging the judgment of conviction and order of
sentence, A-1 preferred Criminal Appeal No. 909 of
2002 wherein the High Court, analyzing and
appreciating the ocular and documentary evidence
on record, came to hold that the finding of guilt
recorded by the learned trial Judge on the basis of
the sole testimony of PW-6 could not be faulted.
Being of this view the High Court dismissed the
appeal and confirmed the conviction and sentence.
It is worthy to note that the said appeal was disposed
of on 21.9.2004. Thereafter, A-2, the present
appellant, preferred Criminal Appeal No. 990 of 2005
which has been dismissed relying on the earlier
judgment on 10.7.2006.
6. We have heard Mrs. Rachana Joshi Issar, learned
counsel for the appellant, and Mr. D. Mahesh Babu,
learned counsel for the respondent-State.
5Page 6
7. It is urged by the learned counsel for the appellant
that there are material contradictions in the evidence
of PWs-4 and 5, namely, the husband and daughter
of the deceased, and further their statements under
Section 161 of the Code of Criminal Procedure and
the depositions in court being irreconcilable, their
version should be treated as totally untrustworthy
and unreliable. It is canvassed by her that the
learned trial Judge as well as the High Court has
completely erred in relying on the ocular testimony of
PW-6 as his evidence is not beyond reproach. The
learned counsel would emphatically submitt that
there is delay in lodging the FIR which would clearly
reflect that the appellant has been roped in as the
husband of the deceased had harboured some kind
of suspicion relating to his relationship with the
deceased and, therefore, the prosecution story
deserves to be thrown overboard.
8. Resisting the aforesaid submissions it is urged by
Mr. Babu that there are no contradictions which
would make the prosecution version unreliable and
6Page 7
further there is no reason to discard the evidence of
husband and daughter. That apart, contends the
learned counsel for the respondent, the evidence of
PW-6 being absolutely credible the High Court, after
analyzing it, given due acceptation and hence,
judgment of conviction does not call for any
interference.
9. First, we shall deal with the submission pertaining to
the delay in lodging of the FIR. The occurrence, as
has been stated, took place on 10.2.1997. The FIR
was lodged by Vittal Reddy, PW-1, and it contained
that dead body of a woman was lying naked in the
forest and it had been noticed by a shepherd who
was grazing the cattle and on the basis of the same a
report under Section 174 of the Code of Criminal
Procedure was registered and, accordingly, the body
was sent for post mortem. The post mortem report
revealed the following external and internal injuries: -
“External injuries:
1. Lacerated injury fore head left side 2½” x ½”
communicating into the cavity of skull.
7Page 8
2. Lacerated injury right temple 1½” x ¼” x
1/8”
3. Incised wound right cheek ½” x ¼” x ¼”
4. Contusion front of chest right side 2” x ½”
5. Contusion right thigh upper 1/3” x 2” x 1”
6. Lacerated injury dorsum of the left foot 2½” x
½” x ½”
7. Incised wound Labinamejorce left ½” x ¼” x
¼”
8. Incised wound left inguinal region in 2” x ½”
x ¼”.
Internal Injuries:
1. Fracture frontal bone
2. Clotted blond was found over the frontal
area of brain.
3. Fracture 1st metatarsal bone.
All the above injuries were ante mortem in
nature.”
10. Be it noted, the autopsy was done and photograph of
the deceased, Ext. P-8, was taken by PW-14, the
photographer. It is clear from the evidence on record
that when the wife of PW-4 and mother of PW-5 did
not come back from her parental home after two
days as per schedule, the husband requested one of
the villagers to go to his father-in-law’s house and
ask his wife to return to her matrimonial home. After
8Page 9
the information was sent, on the next day his
mother-in-law and sister-in-law came to the house
and informed that the deceased had not come to
their house. Thereafter, his brother, Lingaiah, and he
searched for her and on 18.2.1997 they came to
know that some woman was found dead in
Thammaiahapally and the police had been informed.
Thereafter, he along with his daughter went to the
police station where they were shown the
photograph of the deceased and a small cloth purse
which they identified to be that of the deceased and,
thereafter, the investigation commenced for offences
punishable under Sections 302 and 404 read with 34
IPC was registered. Thus, the chronology of events
clearly shows that the police, on the basis of the
report recorded under Section 174 CrPC, conducted
the inquest and after the PW-4 and his daughter, PW-
5, identified the photograph, commenced the
investigation. During this time the husband and his
brother was searching for the deceased. Regard
being had to the totality of the circumstances, the
9Page 10
submission that there has been delay in lodging of
the FIR and for that reason the entire prosecution
story should be thrown overboard does not deserve
acceptance.
11. The next ground of assail pertains to material
contradictions in the statement recorded under
Section 161 of CrPC and the depositions in court and
further in the evidence of PW-4 and PW-5. It is urged
that the said contradictions destroy the very marrow
of the prosecution case. To appreciate the said
submission, we have scrutinized the statement
recorded under Section 161 CrPC of PW-4 and
noticed that he has said everything in detail about
whatever he has stated in his deposition in court
except that his wife and he had a quarrel on the date
of Ramjan festival. We do not really perceive any
contradiction which can be called material
contradiction. We say so as the omission in the
statement of PW-4 recorded under Section 161 CrPC
is not a significant omission so that it can be
regarded as a contradiction so significant and glaring
10Page 11
that the prosecution case should be disbelieved. As
far the contradiction in the evidence of PWs-4 and 5
is concerned, on a studied scrutiny of the same we
find that there are minor discrepancies. For the
aforesaid purpose, we proceed to analyse the
evidence of PWs-4 and 5. The husband of the
deceased, PW-4, has deposed that A-1 had wanted
to marry his daughter and A-1 had illicit relationship
with his wife. He had clearly stated that he had
identified the gold and silver ornaments. He had also
identified the small cloth purse and the photograph in
court. The version of the daughter, PW-5, is that
prior to the day of death when her mother left the
house there was a quarrel between her parents. She
has also identified the ornaments of her mother.
Thus, there is no material contradiction which would
make their version untrustworthy. True it is, there
are certain minor discrepancies regarding the timing,
the factum of meeting of A-1 and the deceased in the
market by the daughter, the quarrel between the
husband and the wife but they are absolutely minor.
11Page 12
They even cannot earn the status of minor
contradictions.
12. In Ousu Varghese v. State of Kerala1
, it has been
opined that the minor variations in the accounts of
witnesses are often the hallmark of the truth of the
testimony. In State of Rajasthan v. Smt. Kalki
and another2
, it has been observed that material
discrepancies are those which are not normal, and
not expected of a normal person.
13. At this juncture, it is also apt to reproduce a passage
from State of U.P. v. M.K. Anthony3
, wherein it
has been laid down as follows: -
“10. While appreciating the evidence of a
witness, the approach must be whether the
evidence of the witness read as a whole
appears to have a ring of truth. Once that
impression is formed, it is undoubtedly
necessary for the court to scrutinise the
evidence more particularly keeping in view the
deficiencies, drawbacks and infirmities pointed
out in the evidence as a whole and evaluate
them to find out whether it is against the
general tenor of the evidence given by the
witness and whether the earlier evaluation of
the evidence is shaken as to render it unworthy
of belief. Minor discrepancies on trivial matters
1
 (1974) 3 SCC 767
2
 (1981) 2 SCC 752
3
 (1985) 1 SCC 505
12Page 13
not touching the core of the case, hypertechnical approach by taking sentences torn out
of context here or there from the evidence,
attaching importance to some technical error
committed by the investigating officer not going
to the root of the matter would not ordinarily
permit rejection of the evidence as a whole.”
14. Similar view has been reiterated in State Rep. by
Inspector of Police v. Saravanan & Anr.4
15. In the case at hand neither PW 4 nor PW 5 has made
any endeavor to make any attempt to materially
improve their earlier statement in their deposition
before the court to make their evidence acceptable.
It is also not a case where it can be said that they
had withheld something material during investigation
and embellished certain aspects during their
deposition in court. That being the position we are
unable to agree with the submission of the learned
counsel for appellant that there are such material
contradictions which discredit the testimony of said
witnesses and accordingly the said submission is
rejected.
4
 AIR 2009 SC 152
13Page 14
16. The last limb of submission pertains to the credibility
of the testimony of PW-6. The learned counsel has
seriously criticized the evidence of the said witness
on the ground that he had not told anyone about the
incident and only revealed it when the dead body
was identified. Criticism is also advanced against the
investigating agency that it recorded his statement
after ten days. As is manifest from the evidence
brought on record, he had accompanied the accused
on the fateful night. He has deposed that A-1 and A-
2 consumed liquor along with the deceased and after
ravishing her hit her with a big stone. The scare
compelled him to run away from the scene but he
witnessed the occurrence from a distance of
approximately 300 yards. The principal attack is that
it is quite unnatural that he would not reveal the
incident to anyone. It is worth noting that he had
accompanied the accused persons and the deceased.
The illicit relationship between the deceased and A-1
has been unequivocally stated by PWs-4 and 5. As
per the evidence of PW-6, the three consumed liquor
14Page 15
and thereafter the whole episode took place. This
witness has deposed about the stealing of ornaments
from the deceased. There has been recovery of the
ornaments from the accused persons and the same
have been recovered from their custody in presence
of PW-9. The seizure memo, Ext. P-6, has been duly
proven and there is nothing on record to disbelieve
the testimony of PW-9 or to discard Ext.P-6. Proper
procedure has been followed as per the deposition of
the Investigating Officer, PW-13. The post mortem
report, Ext.P-7, clearly mentions that the deceased
died on account of head injury. Thus, the testimony
of PW-6 gets corroboration from the medical
evidence and also from the factum of recovery. That
apart, nothing was suggested to him that he had any
animosity with the accused persons. Thus, the
cumulative nature and character of the evidence of
this witness is difficult to ignore solely on the ground
that he did not tell the incident to any one and only
revealed after the police examined him. It is
common knowledge that people react to situations in
15Page 16
different manner. As is evincible, he had
accompanied the accused persons along with the
deceased. As deposed by the husband and daughter,
the deceased had an illicit relationship with A-1.
Three of them consumed liquor and she was ravished
by the accused persons and, eventually, there was
assault. Having accompanied them and witnessing
the incident it is natural that a sense of fear would
creep in. In such circumstances the delay in
recording of his statement by the Investigating
officer would not corrode the version of the
prosecution. That apart, nothing has been put to him
in the cross-examination that he was not present at
the spot or he was involved in the crime along with
the accused persons. The roving cross-examination
only concentrated on his seeing the occurrence from
300 yards away because of darkness, which we think
is absolutely immaterial, for they belonged to the
same village, he had accompanied them and there
was no one else except the accused persons and the
deceased at that distance. That apart he has
16Page 17
categorically stated that he was able to see the
assault by the accused persons and removing the
gold and silver ornaments. Thus, there is no
impediment to place reliance on his evidence as it is
trustworthy and unimpeachable.
17. It has been held in catena of decisions of this Court
that there is no legal hurdle in convicting a person on
the sole testimony of a single witness if his version is
clear and reliable, for the principle is that the
evidence has to be weighed and not counted. In
Vadivelu Thevar v. The State of Madras5
, it has
been held that if the testimony of a singular witness
is found by the court to be entirely reliable, there is
no legal impediment in recording the conviction of
the accused on such proof. 
In the said
pronouncement it has been further ruled that the law
of evidence does not require any particular number
of witnesses to be examined in proof of a given fact.
However, faced with the testimony of a single
witness, the court may classify the oral testimony
5
 AIR 1957 SC 614
17Page 18
into three categories, namely, 
(i) wholly reliable, 
(ii) wholly unreliable, and 
(iii) neither wholly reliable nor wholly unreliable. 
In the first two categories there
may be no difficulty in accepting or discarding the
testimony of the single witness. 
The difficulty arises
in the third category of cases. The court has to be
circumspect and has to look for corroboration in
material particulars by reliable testimony, direct or
circumstantial, before acting upon the testimony of a
single witness.
18. Similar view has been expressed in Lallu Manjhi
and another v. State of Jharkhand6
, Prithipal
Singh and others v. State of Punjab and
another7
 and Jhapsa Kabari and others v. State
of Bihar8
.
19. On the analysis of evidence of PW-6 we find that his
evidence is cogent and trustworthy and further gets
corroboration from the medical evidence and also for
6
 (2003) 2 SCC 401
7
 (2012) 1 SCC 10
8
 (2001) 10 SCC 94
18Page 19
the factum of recovery of gold and silver ornaments
which has been clearly proven by PW-9.
20. In view of the aforesaid analysis, we do not perceive
any error in the judgment of conviction and order of
sentence passed by the learned trial Judge that has
been affirmed by the High Court and, accordingly,
the appeal, being devoid of merit, stands dismissed.
…………………………….J.
[Dr. B.S. Chauhan]
….………………………….J.
[Dipak Misra]
New Delhi;
May 28, 2013.
19

SANCTION FOR PROSECUTION NECESSARY OR NOT/ VALID OR NOT, APPELLANT COURT CAN DECIDED IT =whether the High Court of Judicature at Bombay in Criminal Application No. 2648 of 2007 is justified in refusing to grant leave to file an appeal by the Central Bureau of Investigation, Anti Corruption Branch, Mumbai (for short “the CBI”) against the learned Special Judge had acquitted the respondent No. 1 under Sections 7, 13 (1) (d) read with 2 of the Prevention of Corruption Act, 1988 (For brevity “the Act”) principally on the foundation that the sanction granted by the competent authority was defective and illegal as there was non-application of mind which would show lack of satisfaction.- It is well settled that any case instituted without a proper sanction must fail because this being a manifest defect in the prosecution, the entire proceedings are rendered void ab initio. - (a) It is incumbent on the prosecution to prove that the valid sanction has been granted by the sanctioning authority after being satisfied that a case for sanction has been made out. (b) The sanction order may expressly show that the sanctioning authority has perused the material placed before him and, after consideration of the circumstances, has granted sanction for prosecution. (c) The prosecution may prove by adducing the evidence that the material was placed before the sanctioning authority and his satisfaction was arrived at upon perusal of the material placed before him. (d) Grant of sanction is only an administrative function and the sanctioning authority is required to prima facie reach the satisfaction that relevant facts would constitute the offence. (e) The adequacy of material placed before the sanctioning authority cannot be gone into by the court as it does not sit in appeal over the sanction order. (f)If the sanctioning authority has perused all the materials placed before him and some of them have not been proved that would not vitiate the order of sanction. (g) The order of sanction is a pre-requisite as it is intended to provide a safeguard to public servant against frivolous and vexatious litigants, but simultaneously an order of sanction should not be construed in a pedantic manner and there should not be a hyper-technical approach to test its validity.= It is well settled in law that it is obligatory on the part of the appellate court to scrutinize the evidence and further its power is coextensive with the trial court. It has power to consider all the matters which weighed with the trial court and the reasons ascribed by it for disbelieving or accepting the witnesses. It is incumbent on the High Court to analyse the evidence, deal with the legal issues and deliver a judgment. Thus, there is no merit in the submission that it should be remanded to the learned trial Judge. Apart from the aforesaid reason, we are also not inclined to remit the matter to the learned trial Judge as there would be another round of hearing before the learned trial Judge which is avoidable. It has to be kept uppermost in mind that remit to the trial court has to be done in very rare circumstances, for it brings in procrastination in the criminal justice dispensation system which is not appreciated. 20. Consequently, the appeal is allowed, the judgment of the High Court and the conclusion of the learned trial Judge pertaining to the validity of sanction are set aside and the matter is remitted to the High Court. As we have not dealt with any other finding recorded by the learned trial Judge, it has to be construed that there has been no expression of opinion on the merits of the case on those counts. The High Court shall be well advised to consider all the aspects barring what has been dealt with in this appeal while dealing with the application for grant of leave.

Page 1
Reportable
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 2345 OF 2009
State of Maharashtra Through C.B.I.
...Appellant
Versus
Mahesh G. Jain ...Respondent
J U D G M E N T
Dipak Misra, J.
The singular question that emanates for
consideration in this appeal is 
whether the High Court of
Judicature at Bombay in Criminal Application No. 2648 of
2007 is justified in refusing to grant leave to file an appeal
by the Central Bureau of Investigation, Anti Corruption
Branch, Mumbai (for short “the CBI”) to assail the
judgment and order dated 8th September, 2006 in Special
Page 2
Case No. 62 of 2000 by the Court of Special Judge for
Greater Bombay whereby the learned Special Judge had
acquitted the respondent No. 1 under Sections 7, 13 (1)
(d) read with 2 of the Prevention of Corruption Act, 1988
(For brevity “the Act”) principally on the foundation that
the sanction granted by the competent authority was
defective and illegal as there was non-application of mind
which would show lack of satisfaction.
2. At the very outset, it is condign to state that as we
are only dealing with a singular issue it is not
necessary to state the facts in detail. Suffice it to
state one Satish P. Doshi, proprietor of Shree Travels,
the complainant, had given his vehicles to State Bank
of India on contract basis and was entitled to receive
hire charges for his vehicles periodically. The
complainant experienced certain difficulties in
getting his cheques and Tax Deducted at Source
certificates. When he approached the accused respondent, he demanded illegal gratification which
was not acceded to by the complainant. Despite
consistent refusal by the complainant, the demand of
2Page 3
the accused was persistent which constrained the
complainant to approach the CBI with a written
complaint. The CBI took up the investigation and the
raiding party carried out a trap operation, seized the
bribe amount of Rs.1000/-, sent the seized article to
the CFSL, obtained the sanction order and ultimately
on 5.10.2000 filed the charge-sheet before the
learned Special Judge. After the trial was over the
learned Special Judge adverted to all the issues and
answered all of them in the affirmative against the
accused but acquitted him solely on the base that
the sanction order was defective and illegal and that
went to the very root of jurisdiction of the court.
3. Grieved by the aforesaid judgment of acquittal, the
CBI filed an application for grant of leave and the
learned single Judge of the High Court of Bombay
declined to grant leave on the ground that it was
doubtful whether the sanctioning authority had, in
fact, actually applied its mind while granting
sanction. The High Court further opined that the
view taken by the learned Special Judge in that
3Page 4
regard was a plausible one being not contrary to
material on record and hence, it did not require any
interference.
4. We have heard Mr. Sidharth Luthra, learned
Additional Solicitor General appearing for the
appellant, and Mr. V.N. Bachawat, learned senior
counsel appearing for the respondent.
5. Section 19(1) of the Act postulates that no court shall
take cognizance of an offence punishable under
Sections 7, 10, 11, 13 and 15 alleged to have been
committed by a public servant except with the
previous sanction. The said provision enumerates
about the competent authorities. In the case at
hand, the competence of the authority who has
granted sanction is not in question. The only aspect
that is required to be scrutinized whether the order
granting sanction is valid in law.
6. Grant of sanction is irrefragably a sacrosanct act and
is intended to provide safeguard to public servant
against frivolous and vexatious litigations.
4Page 5
Satisfaction of the sanctioning authority is essential
to validate an order granting sanction. This Court in
Jaswant Singh v. State of Punjab1
 was
considering the validity and effect of the sanction
given under Section 6(1) of the Prevention of
Corruption Act, 1947. After referring to the decisions
in Basdeo Agarwala v. Emperor2
 and
Gokulchand Dwarkadas Morarka v. The King3
,
the Court opined as follows: -
“It should be clear from the form of the sanction
that the sanctioning authority considered the
evidence before it and after a consideration of
all the circumstances of the case sanctioned the
prosecution, and therefore unless the matter
can be proved by other evidence, in the
sanction itself the facts should be referred to
indicate that the sanctioning authority had
applied its mind to the facts and circumstances
of the case.”
In the said case, the two-Judge Bench had
reproduced the order of sanction and opined that if the
same, strictly construed, indicated the consideration by
the sanctioning authority of the facts relating to the
receiving of the illegal gratification by the accused. We
1
 AIR 1958 SC 124
2
 AIR 1945 FC 18
3
 AIR 1948 PC 84
5Page 6
think it apt to reproduce the order of sanction in that case:
-
“Whereas I am satisfied that Jaswant Singh
Patwari son of Gurdial Singh Kamboh of village
Ajaibwali had accepted an illegal gratification of
Rs.50 in 5 currency notes of Rs.10
denomination each from one Pal Singh son of S.
Santa Singh of village Fatehpur Rajputan, Tehsil
Amritsar for making a favourable report on an
application for allotment of an ahata to S. Santa
Singh father of the said S. Pal Singh.
And whereas the evidence available in this
case clearly discloses that the said S. Jaswant
Singh Patwari had committed an offence under
S. 5 of the Prevention of Corruption Act.
Now therefore, I, N.N. Kashyap, Esquire
I.C.S. Deputy Commissioner, Asr, as required by
S. 6 of the Prevention of Corruption Act of 1947,
hereby sanction the prosecution of the said S.
Jaswant Singh Patwari under S. 5 of the said
Act.”
We have quoted the aforesaid order only to highlight
the approach of this Court pertaining to application of
mind that is reflected in the order.
7. In Mohd. Iqbal Ahmed v. State of Andhra
Pradesh4
 this Court lucidly registered the view that
it is incumbent on the prosecution to prove that a
valid sanction has been granted by the sanctioning
authority after being satisfied that a case for sanction
4
 AIR 1979 SC 677
6Page 7
has been made out constituting an offence and the
same should be done in two ways; either (i) by
producing the original sanction which itself contains
the facts constituting the offence and the grounds of
satisfaction and (ii) by adducing evidence aliunde to
show the facts placed before the Sanctioning
Authority and the satisfaction arrived at by it.
It is
well settled that any case instituted without a proper
sanction must fail because this being a manifest
defect in the prosecution, the entire proceedings are
rendered void ab initio. 
8. In Superintendent of Police (C.B.I.) v. Deepak
Chowdhary and others5
 it has been ruled that the
grant of sanction is only an administrative function,
though it is true that the accused may be saddled
with the liability to be prosecuted in a court of law.
What is material at that time is that the necessary
facts collected during investigation constituting the
offence have to be placed before the sanctioning
authority and it has to consider the material. Prima
5
 (1995) 6 SCC 225
7Page 8
facie, the authority is required to reach the
satisfaction that the relevant facts would constitute
the offence and then either grant or refuse to grant
sanction.
9. In C.S. Krishnamurthy v. State of Karnataka6
 it
has been held as follows: -
“...sanction order should speak for itself and in
case the facts do not so appear, it should be
proved by leading evidence that all the
particulars were placed before the sanctioning
authority for due application of mind. In case
the sanction speaks for itself then the
satisfaction of the sanctioning authority is
apparent by reading the order.”
10. In R. Sundararajan v. State by DSP, SPE, CBI,
Chennai7
, while dealing with the validity of the order
of sanction, the two learned Judges have expressed
thus: -
“it may be mentioned that we cannot look into
the adequacy or inadequacy of the material
before the sanctioning authority and we cannot
sit as a court of appeal over the sanction order.
The order granting sanction shows that all the
available materials were placed before the
sanctioning authority who considered the same
in great detail. Only because some of the said
materials could not be proved, the same by
itself, in our opinion, would not vitiate the order
6
 (2005) 4 SCC 81
7
 (2006) 12 SCC 749
8Page 9
of sanction. In fact in this case there was
abundant material before the sanctioning
authority, and hence we do not agree that the
sanction order was in any way vitiated.”
11. In State of Karnata v. Ameerjan8
 it has been
opined that an order of sanction should not be
construed in a pedantic manner. But, it is also well
settled that the purpose for which an order of
sanction is required to be passed should always be
borne in mind. Ordinarily, the sanctioning authority is
the best person to judge as to whether the public
servant concerned should receive the protection
under the Act by refusing to accord sanction for his
prosecution or not.
12. In Kootha Perumal v. State through Inspector
of Police, Vigilance and Anti-Corruption9
, it has
been opined that the sanctioning authority when
grants sanction on an examination of the statements
of the witnesses as also the material on record, it can
safely be concluded that the sanctioning authority
has duly recorded its satisfaction and, therefore, the
sanction order is valid.
8
 (2007) 11 SCC 273
9
 (2011) 1 SCC 491
9Page 10
13. From the aforesaid authorities the following
principles can be culled out: -
(a) It is incumbent on the prosecution to prove that
the valid sanction has been granted by the sanctioning
authority after being satisfied that a case for sanction
has been made out.
(b) The sanction order may expressly show that the
sanctioning authority has perused the material placed
before him and, after consideration of the
circumstances, has granted sanction for prosecution.
(c) The prosecution may prove by adducing the
evidence that the material was placed before the
sanctioning authority and his satisfaction was arrived at
upon perusal of the material placed before him.
(d) Grant of sanction is only an administrative
function and the sanctioning authority is required to
prima facie reach the satisfaction that relevant facts
would constitute the offence.
10Page 11
(e) The adequacy of material placed before the
sanctioning authority cannot be gone into by the court
as it does not sit in appeal over the sanction order.
(f)If the sanctioning authority has perused all the
materials placed before him and some of them have not
been proved that would not vitiate the order of
sanction.
(g) The order of sanction is a pre-requisite as it is
intended to provide a safeguard to public servant
against frivolous and vexatious litigants, but
simultaneously an order of sanction should not be
construed in a pedantic manner and there should not be
a hyper-technical approach to test its validity.
14. Keeping in view the aforesaid principles it is to be
seen whether the order of sanction granted by the
sanctioning authority withstands scrutiny or not. For
the aforesaid purpose it is necessitous to reproduce
the order of sanction in entirety: -
“WHEREAS, it is alleged that Shri Mahesh
Gandmal Jain, Accounts Clerk working in Office
Administration Department, State Bank of India,
11Page 12
Corporate Centre, Mumbai while working as
such on 03.04.2000, abused his official position,
in as much as demanded and accepted illegal
gratification from Satish P. Doshi, Proprietor of
Shree Travels, Matunga, Mumbai for handling
over TDS Certificates in the form of 16A of
Income Tax Act, in respect of Shree Travels.
WHEREAS, it is alleged that in pursuance
of aforesaid demand, Shri Mahes Gandmal Jain,
Accourt Clerk, on 03.04.2000 accepted the
illegal gratification of Rs. 1000/- from Shri Satish
P. Doshi for the aforesaid purpose at the office
of Shree Travels situated at 445, Mahilashram
Road, Somaya Building No. 2, Matunga Central
Railway, Mumbai-19, before the panch witness
when Mahesh Gandmal Jain was caught red
handed by the officers of CBI, ACB, Mumbai.
AND WHEREAS, the said acts on the part of
Shre Mahesh Gandmal Jain constitute offences
punishable under Section 7, 13 (2) r/w. 13(1)(d)
of Prevention of Corruption Act, 1988.
AND WHEREAS, I, Shri Yeshwant Balkrishna
Kelkar, Asst. General Manager, Office
Administration Dept., State Bank of India,
Corporate Centre, Mumbai, being the authority
competent to remove the said Shri Mahesh
Gandmal Jain, Accounts Clerk, Office
Administration Dept., State Bank of India,
Corporate Centre, Mumbai from office after fully
examining the material, documents i.e.
Statement of witnesses under the provisions of
Section 161 of Criminal Procedure Code 1973,
FIR, CFSL Opinion and other relevant documents
placed before me in regard to the said above
allegations and the facts and circumstances of
the case, consider that the said Shri Mahesh
Gandmal Jain has committed the offences and
he should be prosecuted in the court of law for
the said offences.
12Page 13
NOW, therefore, I, Shri Yeshwant
Balkrishna Kelakar, Asst. General Manager,
Office Administration Dept., State of Bank of
India, Corporate Centre, Mumbai, do hereby
accord sanction under Section 19(1)(c) of the
Prevention of Corruption Act, 1988 for the
prosecution of the said Shri Mahesh Gandmal
Jain for the said offences and any other offences
punishable under the provisions of any law in
respect of the acts aforesaid and for taking
cognizance of the said offences by the court of
competent jurisdiction.
Date : 04.10.2000 (Illegible)
(SHRI Y.B. KELKAR)
ASST. GENERAL MANAGER (OAD)
& APPOINTING AUTHORITY”
15. Reserving our opinion on the same for the present we
shall proceed to deal with the reasons for treating the
said order of sanction as invalid and improper by the
learned trial Judge. The learned trial Judge has
referred to the sanction order Ext.13 and the
forwarding letter Ext. 14 and, thereafter, proceeded
to observe that the order of sanction is completely
bereft of elementary details; that though the date is
not mentioned in the FIR, the authority has
mentioned the date in the sanction order; that the
order of sanction is delightfully vague; that the
13Page 14
amount of bribe that finds place in the sanction order
was told to him and he had no personal knowledge
about it; that the minimum discussion is absent in
the order of sanction; that grant of sanction being not
an idle formality it was incumbent on the competent
authority to ascribe proper reasons on perusal of the
materials; that there is no material to show the
existence of objective material to formulate the
subjective satisfaction; that the authority has granted
sanction in an absolute mechanical manner; and that
the order of sanction does not reflect sincerity of
approach. The High Court, while dealing with the
said reason, has really not discussed anything except
stating that a possible view has been taken by the
learned trial Judge and in appeal it cannot substitute
the findings merely because any other contrary
opinion can be rendered in the facts of the case.
16. Presently, we shall proceed to deal with the contents
of the sanction order. The sanctioning authority has
referred to the demand of the gratification for
handing over TDS certificate in Form 16A of the
14Page 15
Income-tax Act, the acceptance of illegal gratification
by the accused before the panch witnesses and how
the accused was caught red handed. That apart, as
the order would reveal, he has fully examined the
material documents, namely, the FIR, CFSL report
and other relevant documents placed in regard to the
allegations and the statements of witnesses recorded
under Section 161 of the Code and, thereafter, being
satisfied he has passed the order of sanction. The
learned trial Judge, as it seems, apart from other
reasons has found that the sanctioning authority has
not referred to the elementary facts and there is no
objective material to justify a subjective satisfaction.
The reasonings, in our considered opinion, are
absolutely hyper-technical and, in fact, can always be
used by an accused as a magic trick to pave the
escape route. The reasons ascribed by the learned
trial Judge appear as if he is sitting in appeal over the
order of sanction. True it is, grant of sanction is a
sacrosanct and sacred act and is intended to provide
a safeguard to the public servant against vexatious
15Page 16
litigation but simultaneously when there is an order
of sanction by the competent authority indicating
application of mind, the same should not be lightly
dealt with. The flimsy technicalities cannot be
allowed to become tools in the hands of an accused.
In the obtaining factual matrix, we must say without
any iota of hesitation that the approach of the
learned trial Judge as well as that of the learned
single Judge is wholly incorrect and does not deserve
acceptance.
17. At this stage, we think it apposite to state that while
sanctity attached to an order of sanction should
never be forgotten but simultaneously the rampant
corruption in society has to be kept in view. It has
come to the notice of this Court how adjournments
are sought in a maladroit manner to linger the trial
and how at every stage ingenious efforts are made to
assail every interim order. It is the duty of the court
that the matters are appropriately dealt with on
proper understanding of law of the land. Minor
irregularities or technicalities are not to be given
16Page 17
Everestine status. It should be borne in mind that
historically corruption is a disquiet disease for
healthy governance. It has the potentiality to stifle
the progress of a civilized society. It ushers in an
atmosphere of distrust. Corruption fundamentally is
perversion and infectious and an individual perversity
can become a social evil. We have said so as we are
of the convinced view that in these kind of matters
there has to be reflection of promptitude, abhorrence
for procrastination, real understanding of the law and
to further remain alive to differentiate between
hyper-technical contentions and the acceptable legal
proponements.
18. We shall presently deal with the course of action that
is required to be undertaken in the case at hand.
Had the High Court dealt with the appeal on merits,
we would have proceeded to deal with justifiability of
the same. The High Court has declined to grant
leave solely on the ground that the conclusion
reached by the learned trial Judge pertaining to
validity of sanction being justified, the judgment of
17Page 18
acquittal did not warrant interference. There has
been no deliberation on the merits of the case.
19. At this juncture, we may note that Mr. Luthra
submitted that the matter should be remitted to the
High Court to deal with the application for grant of
leave as per law. Per contra, Mr. Bachawat, learned
senior counsel, submitted that if this Court would
think of remitting the entire matter it should be
remanded to the learned trial Judge as he has not
appropriately dealt with the real issues, for he has
been guided by the impropriety and validity of
sanction. On a perusal of the judgment of the
learned trial Judge we find that he had recorded his
conclusions on every aspect. He has not rested his
conclusion exclusively on sanction. True it is, he has
acquitted the accused on the ground that the order
of sanction is invalid in law but simultaneously he has
dealt with other facets. Thus, remitting the matter to
the trial court is not warranted. If the High Court
thinks it apt to grant leave, it has ample power to
deal with the appeal from all the spectrums. It is well
18Page 19
settled in law that it is obligatory on the part of the
appellate court to scrutinize the evidence and further
its power is coextensive with the trial court. It has
power to consider all the matters which weighed with
the trial court and the reasons ascribed by it for
disbelieving or accepting the witnesses. This has
been so held in Laxman Kalu v. State of
Maharashtra10 and Keshav Ganga Ram Navge v.
The State of Maharashtra11
. Needless to
emphasise that the High Court, while hearing an
appeal against conviction, can scan the evidence and
weigh the probabilities. 
It is incumbent on the High
Court to analyse the evidence, deal with the legal
issues and deliver a judgment. Thus, there is no
merit in the submission that it should be remanded
to the learned trial Judge. Apart from the aforesaid
reason, we are also not inclined to remit the matter
to the learned trial Judge as there would be another
round of hearing before the learned trial Judge which
is avoidable. It has to be kept uppermost in mind
that remit to the trial court has to be done in very
10 AIR 1968 SC 1390
11 AIR 1971 SC 953
19Page 20
rare circumstances, for it brings in procrastination in
the criminal justice dispensation system which is not
appreciated.
20. Consequently, the appeal is allowed, the judgment of
the High Court and the conclusion of the learned trial
Judge pertaining to the validity of sanction are set
aside and the matter is remitted to the High Court.
As we have not dealt with any other finding recorded
by the learned trial Judge, it has to be construed that
there has been no expression of opinion on the
merits of the case on those counts. The High Court
shall be well advised to consider all the aspects
barring what has been dealt with in this appeal while
dealing with the application for grant of leave.
…………………………….J.
[Dr. B.S. Chauhan]
….………………………….J.
[Dipak Misra]
New Delhi;
May 28, 2013.
20

SARFAESI Act, verses Official liquidator under companies Act = any sale conducted defraud other secured creditor within one year after the commencement of company petition is void = There cannot be any doubt of the fact from the dates given earlier that the transfer was within a period of six months from the date of presentation of the liquidation proceedings and consequently it is statutorily invalid and the law does not recognize it. In fact, an attempt was sought to be made that there is no reference to sale in either of the Sections and it only refers to transfer and consequently these provisions can have no application. It has to be held that the transfer of interest in immovable property is in consequence of a sale and therefore the word transfer takes in its fold the very act of sale. Therefore, by applying Section 531 it is quite clear that the transfer shall be deemed to be invalid. 12. Even under Section 531-A it is quite clear if the sale was within a period of one year from the date of presentation of the liquidation proceedings as against the Official Receiver who represents the body of the creditors on his appointment after the winding up proceedings, the sale is void. Therefore, by applying Section 531 or 531-A it is quite clear from any angle the sale in this case is hit by the above provisions and when the sale is statutorily invalid or void there is no need for a relief to be asked by the Official Receiver to set aside the sale or approach the Debt Recovery Tribunal, since these two provisions are to be exclusively dealt by the Company Court alone, which is rightly contended by the Official Liquidator. I hold that this Court alone can decide the binding nature of the transactions under Section 531 or 531(A) of the Companies Act. It is to be noted that the powers conferred under the SARFAESI Act for the Bank or the Authorized Officer is only in order to avoid the delay of legal proceedings and it does not give any right or advantage to misuse the power of quasi judicial nature in order to convert a Non Performing Asset and realize the money by adopting improper mode. Therefore, for all the above reasons, I hold that the sale as held by the Authorized Officer on behalf of the Creditor Bank is void and the right of the Official Receiver in the liquidation proceedings cannot be defeated and as the sale is void, it goes to the root of the obligations between the auction purchaser and the Authorized Officer and when once the sale is set aside as void, it is needless to say that the Creditor Bank cannot take advantage of the void sale and the auction purchaser shall be restored to the same position prior to the sale and any amount realized by the Creditor Bank cannot be retained by it. Accordingly, W.P.No.19297 of 2012 is allowed granting the reliefs claimed thereunder. W.P.No.33655 of 2011 and Company Application No.1972 of 2011 are dismissed. Consequent on the orders holding that the sale as void as it comes within the purview of this Court, Company Application No.421 of 2013 is also allowed as a consequence of the sale being held as void under Section 531 and 531 (A) of the Companies Act. No costs.

HON'BLE SRI JUSTICE N.R.L. NAGESWARA RAO        

WRIT PETITION Nos.19297 of 2012 & 33655 of 2011 & COMP.A.Nos.1972 of 2011 & 421    
of 2013 in C.P.No.215 of 2010

22.04.2013.

M/s. United Steel Allied Industries Private Limited             ....Petitioner

M/s. Indian Bank, Corporate Office, and others            ...Respondents

Counsel for the Petitioner:

Counsel for the Respondents:

<Gist :

>Head Note:

?Cases referred:
1. (2004) 4 SCC 311
2. 2013 LawSuit(SC) 205
3. 2012 (2) D.R.T.C. 47 (M.P.)
4. (2006) 134 Comp Cases 267 (Madras)
5. (2005) 127 Comp Cases 85 (Madras)
6. 2004 Comp Cases 27
7. (2007) 139 Comp Cases 191 (Madras)
8. 2012 (6) ALD 345 (DB)
9. (2010) 1 SCC 655
10. 2011 (1) L.S. 196

COMMON ORDER:    

1.      All these matters arise out of a common issue.
M/s. Laran Sponge & Minerals Private Limited (hereinafter called as borrower)
has availed a loan with Indian Bank by hypothecation of the agricultural land
and also machinery belonging to the company and also the guarantors,
Smt. P. Latha and Sri P. Vara Prasada Raju, who are the Directors of the
Company.  A loan facility of Rs.12,00,00,000/- as M.T.L. loan and O.C.C. Limit
of Rs.5,00,00,000/- and L.C. of Rs.5,00,00,000/- and B.G. Limit of
Rs.40,00,000/- was availed in the year, 2008 and ad hoc Limit of
Rs.3,50,00,000/- in the year, 2009.
As there was default in repayment of the
loan and the loan was classified as Non Performing Asset (N.P.A.) Account and
the Indian Bank being a secured creditor under the provisions of SARFAESI Act,
2002, has taken possession of the property. 
A publication was given on
28.08.2010 for auction of the same.  
M/s. United Steel Allied Industries Private
Limited (Auction Purchaser) participated in the auction on 29.09.2010 and 25% of
sale price was deposited.  
Subsequently, on 01.01.2010 S.B.I. Global Factors
Limited has filed company petition for winding up as it is also a secured creditor and the petition was allowed on 18.07.2011 and the Official Liquidator was appointed to take possession of the property.  
After the auction 
a letter
dated 18.10.2010 was addressed by the auction purchaser to the effect that their
participation in the auction is subject to the following conditions:-
1) "Satisfactory legal due diligence and clear marketable title over land, plant
and machinery free from any lien, charge, encumbrances etc.,
2) Indemnity guarantee from the Indian Bank with respect to future litigation,
what so ever in nature, if any,
3) Indian Bank shall put us in the peaceful possession and handling over the
land, plant and machinery and smooth functioning without any obstructions, what
so ever in nature, from any quarter.
In this connection, we would also like to mention that in your above referred
letter you have mentioned that the total available land is about 20 acres,
whereas the land available is only 16 acres.  Further, the land available is not
sufficient to meet the technical requirements of plant.
In view of the above, we have no option, except to reserve our right to with
draw.  We request the Bank to refund the initial bid amount (inclusive of EMD)
of Rs.9.0 Crores deposited with the Bank at the earliest."


2.      It is also to be noted here that after the sale on 29.09.2010 after
deposit of 25% of the sale price, the balance of 75% was not deposited within
fifteenth day.  
Thereafter, on 24.11.2010 a letter is said to have been
addressed by the auction purchaser for grant of loan and accordingly loan was
granted on 07.01.2011 and the balance of sale consideration was adjusted from
that loan and a sale certificate was issued on 18.01.2011. 
Thereafter, as
contemplated under the tender agreement, the documents were sent for 
registration. 
At that stage, the Official Liquidator has addressed a letter on
20.09.2011 to the Sub Registrar, Hakundi Village, Ballari District, informing that the borrower company was wound up in C.P.No.215 of 2010 and he was   appointed as Liquidator and the Sub Registrar was requested not to register any
document with regard to the properties of the borrower.
Subsequently,
W.P.No.33655 of 2011 was filed on 14.12.2011 by the Indian Bank for a direction
to the Sub Registrar to register the sale certificate with regard to the
auctioned property.
While, the Writ Petition was pending, the Bank also filed
the COMP.A.No.1972 of 2011 on 27.12.2011 for a direction to the Official
Receiver to clarify his letter, dated 20.09.2011 addressed to the Sub Registrar.
While the matter stood thus as the auction purchaser claimed that the possession
was not given as there was further claims with regard to the auctioned property
and there were dues claimed by the authorities and as the property is not free
from encumbrances and as the Bank threatened to recover the amounts as a  
defaulter and to treat the loan account as Non Performing Asset.  W.P.No.19297
of 2012 was filed by the auction purchaser on 26.06.2012 and interim orders were
passed in W.P.M.P.No.24720 of 2012 in favour of the auction purchaser
restraining the Bank from proceeding and later it was varied in W.P.M.P.No.2850
of 2012 giving the Bank liberty to proceed against the auction purchaser in
accordance with law for recovery of the over due amounts and installments to the
extent of default by the auction purchaser.
As against that W.A.No.17 of 2013
was filed and by order dated 09.01.2013 the modification ordered in
W.P.M.P.No.2850 of 2012 was deleted and the matter was directed to be dealt by
this Court along with W.P.No.33655 of 2011. That is how both the Writ Petitions
were transferred to this Court.
While these matters are pending the auction
purchaser has filed COMP.A.No.421 of 2013 to set aside the sale alleging several
irregularities, suppression of facts and not following due process. It was also
further pleaded that the properties are not properly valued and the encumbrances
were not disclosed and possession was not delivered effectively.  It was also
pleaded that there were several claims of taxes etc., to a large sum of more
than 1 Crore and as such the sale is liable to set aside.
3.      The Indian Bank has denied all the allegations and supported the action
taken under SARFAESI Act. The Official Liquidator claims that this sale is void
under Section 446 as the leave was not obtained and also under Sections 531 and
531 (A) of Companies Act, 1956.  The transfer being void as it was done within
one year from the date of presentation of the winding up petition and the sale
certificate having been issued after the winding up order under Section 531(A).
The sale being fraudulent and undue preference to the one of the creditors,
since it is within six months is not valid under Section 531 and consequently he
has got every right to oppose the registration even without asking for setting
aside the sale as it is void. It is the contention of the S.B.I. Global that it
is also a secured creditor and there was no proper and valid notification or
valuation of the property and since the winding up process has been initiated by
it, the Indian Bank cannot claim any priority.

4.      In view of the above circumstances, the points that arise for
consideration are:-
1) Whether a valid sale has been conducted on behalf of the Indian Bank by the Authorized Officer under SARFAESI Act?  
2)  Whether the sale is void and fraudulent as contended by the Official Receiver?
3) Whether the sale is vitiated for several of the irregularities raised by the auction purchaser and if so it is liable to be set aside?
POINTS:
5.      The contention of Sri S. Ravi, Senior Advocate appearing for the Indian
Bank is that under the statutory provisions of SARFAESI Act, the sale has been
conducted and it is a special enactment and if any party is aggrieved, the
remedy is only to approach the Debt Recovery Tribunal (DRT) as contemplated
under Section 17 of the Act.  According to him, the Company Court does not have
any jurisdiction since SARFAESI Act is later enactment and as held by the
Supreme Court in several decisions.  He relied upon a decision reported in
Mardia Chemicals Limited and others Vs. Union Of India and others1,
whereunder
the constitutional validity of the SARFAESI Act was considered and the remedy
was found before the Debt Recovery Tribunal.  He also relied upon a decision
reported in Official Liquidator, U.P. and Uttarakhand Vs. Allahabad Bank and
others2, 
whereunder the same principle has been reiterated the above decision
shows that if the matter is pending before the Debt Recovery Tribunal then the
Official Receiver should be associated with the actions, if the matter is not
before the Debt Recovery Tribunal it is the Company Court that has to deal with
the validities. He also relied on a decision reported in
Saroj Shivhare and Others Vs. Gaurav Enterprises and others3, 
whereunder it was
held that the issue of the sale certificate itself is a completion of a sale and
no registration is necessary. 
According to him, the correspondence and the
admissions of the auction purchaser clearly goes to show that the possession was
delivered.  According to him, when once the possession was delivered, the
subsequent interference is not the duty of the Bank to protect.  He also
contends that it is for the buyer to verify whether there are any encumbrances
or not and if there are arrears of taxes etc., it shall be paid by the auction
purchaser only in substance.  According to him, neither the Official Liquidator
nor the auction purchaser can question the sale before the Company Court and
therefore their claims have to be rejected as the sale having been confirmed.
The Registrar shall be directed to register the property.
6.      On the other hand, the Official Liquidator contends that his attack on the
sales is under Section 531 and 531 (A) of the Companies Act and it is the
exclusive jurisdiction of the Company Court alone and the Debt Recovery Tribunal
has no jurisdiction.
According to him, in the decision relied on by the senior
counsel, the matters were pending before the Debt Recovery Tribunal and before
the sale the part of the Official Liquidator was dealt with.  
But in this case,
the sale was completed and, therefore, the facts are quite different.
According
to him, the question of fraudulent preference cannot be considered by the Debt
Recovery Tribunal.  Further more, if a sale is not void under the Statute, the
remedy is only to approach the forum, which has got jurisdiction to decide the
issue and the later Act does not apply as under Section 37 of the SARFAESI Act,
the provisions of the Company Act are not made inapplicable and they are held to
be only additional.  According to him, if a valid sale is conducted by the
Authorized Officer, even if the contention of the senior counsel is to be
accepted then only the Debt Recovery Tribunal has to be approached, but when the
sale itself is void there being no necessity to be set aside the question of
approaching the Debt Recovery Tribunal does not arise.
7.      The Official Liquidator has relied upon a Division Bench decision of the
Madras High Court reported in
Asset Reconstruction Company (India) Limited Vs. Official Liquidator, High
Court4,
whereunder even under the SARFAESI Act for the sale of the property and
the distribution of the assets, the association of the Official Liquidator is
stressed.  He also relied upon a decision of the Madras High Court reported in
Administrator, MCC Finance Limited Vs. Ramesh Gandhi5,
whereunder the provisions
of 531, 531-A and 537 of the Companies Act were considered.  He also relied upon
a decision of the Gujarat High Court reported in Official Liquidator of Piramal
Financial Services Limited Vs. Reserve Bank of India6,
 whereunder the instances
of fraudulent preference or transfer have been considered.  He also relied upon
another decision reported in Archean Granites Private Limited Vs. R.P.S. Benefit
Fund Limited and others7,
whereunder the instances of fraudulent preference and
sale of the property for lesser price etc., were considered.
8.      The learned counsel appearing for the auction purchaser has also relied
upon a decision of this Court reported in
India Finlease Securities Limited, Chennai Vs. Indian Overseas Bank, Vijayawada,
Krishna District and Others8,
whereunder the provisions of SARFAESI Act, the
notion of sale and transfer have been considered and opined that the sale is not
complete unless the property for which the price was paid is transferred to the
buyer by a written proceedings.  It was also considering the provisions of
Rule 9 (2) and 9 (4) and found that the confirmation shall be by the secured
creditor and not by the Authorized Officer.  Incidentally, it was held that a
sale certificate is not required to be registered and no registered sale deed is
to be executed after the sale was confirmed by the Banks.  He also relied upon a
decision of the Supreme Court reported in
Haryana Financial Corporation and another Vs. Rajesh Gupta9, whereunder the
defects in the formation of a contract can be agitated by the auction purchaser.
9.      Therefore, in view of the above contentions, it is necessary now to see
the provisions under Section 531, 531A and 537 of the Companies Act:-
531:Fraudulent Preference:- .
1) Any transfer of property, movable or immovable,
delivery of goods, payment, execution or other act relating to property made,
taken or done by or against a company within six months before the commencement   
of its winding up which, had it been made, taken or done by or against an
individual within three months before the presentation of an insolvency petition
on which he is adjudged insolvent, would be deemed in his insolvency a
fraudulent preference, shall in the even of the company being wound up, be
deemed a fraudulent preference of its creditors and be invalid accordingly;
Provided that, in relation to things made, taken or done before the commencement
of this Act, this sub-section shall have effect with the substitution, for the reference to six
months, of a reference to three months.
2) For the purposes of sub-section (1), the presentation of a petition for
winding up in the case of a winding up by [the Tribunal], and the passing of a
resolution for winding up in the case of a voluntary winding up, shall be deemed
to correspond to the act of insolvency in the case of an individual.
531A: Avoidance of voluntary transfer:-  
Any transfer of property, movable or
immovable, or any delivery of goods, made by a company, not being a transfer or
delivery made in the ordinary course of its business or in favour of a purchaser
or encumbrancer in good faith and for valuable consideration, if made within a
period of one year before the presentation of a petition for winding up by [the
Tribunal] or the passing of a resolution for voluntary winding up of the
company, shall be void against the liquidator.
537: Avoidance of certain attachments, executions, etc., in winding up by
Tribunal:- .
1) Where any company is being wound up by the Tribunal- 
(a) any attachment, distress or execution put in force, without leave of the
Tribunal against the estate or effects of the company, after the commencement of
the winding up; or
(b) any sale held, without leave of the Tribunal of any of the properties or
effects of the company after such commencement,  shall be void.
2) Nothing in this section applies to any proceedings for the recovery of any
tax or impost or any dues payable to the Government."
10.     Section 531 deals with the case of fraudulent preference and in such a
circumstance the sale is held to be invalid.
In fact, though several complaints
were made about the nature of the publication and the contents therein, there is no material before the Court as to whether proper publication was given. 
 It
cannot be disputed that the S.B.I. Global is also a secured creditor, if the interest of the other creditors is not taken care of and if it is only for the benefit of single creditor even applying the principles under the Insolvency
Law, the sale is a fraudulent one.
The argument that the Indian Bank is
prepared to place before the Court the amount realized by the sale for
distribution of all the creditors does not hold good, for the reason that if at
the time of the sale, if the auction purchaser is to know that there are other
encumbrances on the property then the price to be quoted will be definitely
different. 
 In fact, there is no material on record as to what was the sale
price quoted by the Authorized Officer and as to whether it was less or more
than the price quoted by the auction purchaser.
11.     There cannot be any doubt of the fact from the dates given earlier that
the transfer was within a period of six months from the date of presentation of
the liquidation proceedings and consequently it is statutorily invalid and the
law does not recognize it.  In fact, an attempt was sought to be made that there
is no reference to sale in either of the Sections and it only refers to transfer
and consequently these provisions can have no application.  It has to be held
that the transfer of interest in immovable property is in consequence of a sale
and therefore the word transfer takes in its fold the very act of sale.
Therefore, by applying Section 531 it is quite clear that the transfer shall be
deemed to be invalid.
12.     Even under Section 531-A it is quite clear if the sale was within a period
of one year from the date of presentation of the liquidation proceedings as
against the Official Receiver who represents the body of the creditors on his
appointment after the winding up proceedings, the sale is void.  Therefore, by
applying Section 531 or 531-A it is quite clear from any angle the sale in this
case is hit by the above provisions and when the sale is statutorily invalid or
void there is no need for a relief to be asked by the Official Receiver to set
aside the sale or approach the Debt Recovery Tribunal, since these two
provisions are to be exclusively dealt by the Company Court alone, which is
rightly contended by the Official Liquidator.             I hold that this Court
alone can decide the binding nature of the transactions under Section 531 or
531(A) of the Companies Act. 
13.     In fact, the amendments made to SARFAESI Act in 2004 deletes the word   
Appeal under Section 17 and only provides for an application to be made to the
Debt Recovery Tribunal.  The right of Appeal is quite different from an
application to be presented before the Debt Recovery Tribunal. The Legislative
intent is not very clear for deleting word "Appeal".  Therefore, it cannot be
said that this Court cannot entertain this application and consider the
objections of the Official Receiver to consider the sale as not binding and his
consequential request for not registering the properties as being without
jurisdiction.
14.     Though no specific pleadings are made by the parties challenging the
procedure of the sale, since the Court is considering the validity of the sale
under the statute, it is the question of law and the Court has to deal with it.
If the provisions of SARFAESI Act have been violated in conducting sale, the
sale cannot be said to be a valid sale.
It is to be noted that the powers
conferred under the SARFAESI Act for the Bank or the Authorized Officer is only in order to avoid the delay of legal proceedings and it does not give any right or advantage to misuse the power of quasi judicial nature in order to convert a
Non Performing Asset and realize the money by adopting improper mode.
Any  
Authorized Officer who is conducting the sale is discharging the quasi-judicial
functions and he has to follow the rules and conduct the sale according to law.
There cannot be an understanding or agreement between the borrower, auction 
purchaser or the creditor by violating mandatory provisions, in order to get
undue benefit to the Creditor Bank.
15.     In this connection, it is useful to refer to Rule 9 (1) (2) (3) (4) and
(5) of SARFAESI Act:- 
Rule 9: Time of Sale, issues of sale certificate and delivery of possession,
etc.:-
1) "No sale of immovable property under these rules shall take place before the
expiry of thirty days from the date on which the public notice of sale is
published in newspapers as referred to in the proviso to sub-rule (6) or notice
of sale has been served to the borrower.
2) The sale shall be confirmed in favour of the purchaser who has offered the
highest sale price in his bid or tender or quotation or offer to the authorised
officer and shall be subject to confirmation by the secured creditor:
Provided that no sale under this rule shall be confirmed, if the amount offered
by sale price is less than the reserve price, specified under sub-rule (5) of
rule 9:
Provided further that if the authorised officer fails to obtain a price higher
than the reserve price, he may, with the consent of the borrower and the secured
creditor effect the sale at such price.
3) On every sale of immovable property, the purchaser shall immediately pay a
deposit of twenty-five
per cent. of the amount of the sale price, to the authorised officer conducting
the sale and in default of such deposit, the property shall be forthwith be sold
again.
4) The balance amount of purchase price payable shall be paid by the purchaser
to the authorised officer on or before the fifteenth day of confirmation of sale
of the immovable property or such extended period as may be agreed upon in
writing between the parties.
5) In default of payment within the period mentioned in sub-rule (4), the
deposit shall be forfeited and the property shall be resold and the defaulting
purchaser shall forfeit all claim to the property or to any part of the sum for
which it may be subsequently sold."
16.     The provisions are akin to the provisions of the Court sale to be
conducted under Order XXI Rule 85 and 86 of Civil Procedure Code. Order XXI,
Rules.85 and 86 reads as under:-

Order XXI, Rules.85 and 86:-
85. Time for payment in full of purchase-money:- The full amount of purchase-
money payable shall be paid by the purchaser into Court before the Court closes
on the fifteenth day from the sale of the property:
Provided the in calculating the amount to be so paid into Court, the purchaser
shall have the advantage of any set-off to which he may be entitled under
Rule.72.
86. Procedure in default of payment:- In default of payment within the period
mentioned in the last proceeding rule, the deposit may, if the Court thinks fit,
after defraying the expenses of the sale, be forfeited to the Government and the
property shall be re-sold and the defaulting purchaser shall forfeit all claim
to the property or to any part of the sum for which it may subsequently be sold.
17.     Under the provisions of Rules 85 and 86, if the full purchase money is not
paid within fifteen days, further steps have to be taken.  But the only
difference under Rule 9 (4) is that the time can be extended by agreement in
writing between both the parties, it evidently means that such an extension
shall be within 15 days period stipulated under Clause 4.  But, in this case no
such thing has happened.
18.     The tender cum bid agreement also stipulates the same, which reads as
under:-
33. Sale is subject to confirmation by the Bank.  Bank will confirm the sale
only after ensuring that initial payment of 25% of sale price is paid/deposited
(on the same date) by way of DD/BPO.
34. The EMD deposited by the successful tenderer shall be held as Security
Deposit for due performance of the contract.  Successful tenderer shall deposit
the balance amount within 15 days of confirmation of the sale by the Bank or
within the extended period as agreed between the parties. Such deposit will be
made in the form of Demand Draft/ Bankers' Pay Order on a Bank, payable at
Hyderabad.
35. No time extension for making the payment after the stipulated period will be
granted nor shall the successful tenderer be allowed to make part payments.
However, the Seller may, in his discretion, entertain and consider request for
extension of time for making payment provided the request has been made in
writing and duly signed by the successful tenderer/representative himself.
Evidently, the above stipulations are keeping in view the provisions under Rule
9 of SARFAESI Act.
19.     To be more clear, the auction was held on 29.09.2010 and the amount has to
be deposited by fifteenth day that comes by 14.10.2010, if both the parties have
agreed between themselves in writing, the extension of the time should have been
given by the Authorized Officer. But, in this case, it did not happen and on the
other hand on 18.10.2010 the auction purchaser has written a letter repudiating
the sale and for refund of the money, which clearly goes to show that no
extension is sought within a period of 15 days.  Therefore, if the rigor under
Rule 9 is to be followed, there is no occasion for the Authorized Officer except
to go for re-auction.  In fact, this is the principle of law even under the
Court sale which has been repeatedly held and in this connection it will be
useful to refer to a decision of this Court reported in V. Vedanda Vyasulu and
Others Vs. K. Purushotam and another10.  The Authorized Officer has no option or
discretion rather than to cancel the sale.
20.     Further, the manner in which the further steps were taken are also
objectionable and it cannot be said to be fair play either by the creditor or
the Authorized Officer, when the sale consideration was not paid.  An
application for loan was given on 24.11.2010, evidently, it is not an
application for loan for purchase of the property. A loan of nearly Rs.19 to 20
Crores was granted on 07.01.2012 and from this loan amount the sale price was
adjusted and the balance was treated as a separate loan account.  It is crystal
clear that the Authorized Officer has violated the mandatory provisions in
conducting a sale, which a civil Court itself cannot violate and, therefore,
facilitated the creditor to grant a loan and thereafter appropriated the same
towards the sale consideration and thereafter the sale certificate was issued on
17.01.2011 without there being a request in writing for extension of the time
within the fifteenth day for payment of balance consideration and an order in
writing granting such extension, as claimed, which are mandatory under Rule 9
and Tender-cum-Bid agreement. The above facts are telltale about the failure of
the Authorized Officer to proceed according to law and the consequential
advantage the creditor bank has got.  It is abundantly fraudulent. When once the
sale fails to have any legal effect by application of Rule 9 it cannot be said
to be a valid sale and neither the auction purchaser nor the creditor can derive
any benefits and such sales are to be ignored.
21.     Therefore, taking any view of the matter, it is quite clear the sale in
this case is statutorily void under Section 531, 531-A and 537 of the Companies
Act and also under Rule 9 of the SARFAESI Act, that being so the creditor cannot
claim any benefits.
22.     It is sought to be contended that there was no need for registration and the sale certificate itself is sufficient probably under the SARFAESI Act it appears to be so. 
But if the parties have contracted to the contrary, the same
cannot be avoided.  In this connection, it is useful to refer to Clause 42, 43
and 44 of the tender given bid documents for sale.
" 42) On confirmation of sale by the Bank and upon payment of the full amount of
price, the Authorised Officer will execute the Sale Certificate in favour of the
Purchaser. The registration charges, payment and stamp duty etc., shall be borne
by the Purchaser.
43) It will be the responsibility of the Purchaser to take all steps necessary
for registration of the Sale Certificate.
44) The cost towards registration if, expenses incurred towards stamp duty,
etc., and any other expenses will be borne by the purchaser.  The seller will
not bear any expenses what so ever."

It clearly goes to show that the parties contemplated registration, but however,
it shall be at the expenses of the purchaser consequently, it cannot be argued
by the creditor.
23.     Therefore, when the auction purchaser wants the sale deed to be executed,
the Authorized Officer or the creditor cannot deny the same.
24.     There is a question about the maintainability of the application by the auction purchaser about the validity of the sale. 
 It is true that on the basis
of the decisions relied on by the learned senior counsel Sri S. Ravi, it may be
correct that the auction purchaser has to approach the Debt Recovery Tribunal.
But, however, it has been fairly well settled that when the proceedings before
the lower authorities are not properly conducted, the Writ jurisdiction of the
High Court is not denied.  The substance of the writ is about the several
irregularities in conducting the sale, which were found to be valid by this
Court and the sale having been held to be void, the right of the auction
purchaser to quick redressal in the writ is sustainable. Though in ordinary
circumstances, if the application is singularly filed by the auction purchaser,
then it may be that he has to approach the Debt Recovery Tribunal, but, however
in this case the other applications challenging the action of the Official
Liquidator and the exclusive jurisdiction of the Company Court under Section 531
and 531(A) of the Companies Act are being considered and the benefit of such
proceedings cannot be denied to the auction purchaser and consequently I hold
that in the particular circumstances of this case, the application filed by the
auction purchaser can be held to be maintainable.
25.     Therefore, I hold that as the sales are statutorily void and the Official
Liquidator has got every right to take possession of the property by ignoring
them, the letter written by him for restraining the registration itself is an
action of assertion that the sale is void.  In fact, such action is being
questioned in the Writ Petition and also Comp.A.No.1927 of 2011. The point in
these cases is the binding nature of the sale on the Official Liquidator and
when once the sales are void and when the decision rests on this aspect, there
need not be any separate application to be filed by the Official Liquidator for
setting aside the sale. If once his letter seeking for stopping of registration
is held to be valid, consequently, it has to be held that as the void sale need
not be set aside, they have to be ignored and challenge made by the Creditor
Bank is not valid.
26.     So far as the auction purchaser is concerned, evidently, he is challenging
the letter written by the Creditor Bank about the pressure for realization of
the amount due under a void sale and the reasons given above clearly goes to
show that the Creditor Bank cannot take advantage of the void sale and
therefore, the necessary relief has to be granted to the auction purchaser
restraining the Creditor Bank enforcing the liability.  So far as it relates to
the auction sale proceedings and the adjustment or payment, which has been 
realized by it, since substantial relief is granted in the Writ filed by the
auction purchaser, the benefit of it cannot be denied in the application to set
aside the sale.
27.     Therefore, for all the above reasons, I hold that the sale as held by the
Authorized Officer on behalf of the Creditor Bank is void and the right of the
Official Receiver in the liquidation proceedings cannot be defeated and as the
sale is void, it goes to the root of the obligations between the auction
purchaser and the Authorized Officer and when once the sale is set aside as
void, it is needless to say that the Creditor Bank cannot take advantage of the
void sale and the auction purchaser shall be restored to the same position prior
to the sale and any amount realized by the Creditor Bank cannot be retained by
it.
28.     Accordingly, W.P.No.19297 of 2012 is allowed granting the reliefs claimed
thereunder.  W.P.No.33655 of 2011 and Company Application No.1972 of 2011 are  
dismissed.  Consequent on the orders holding that the sale as void as it comes
within the purview of this Court, Company Application No.421 of 2013 is also
allowed as a consequence of the sale being held as void under Section 531 and
531 (A) of the Companies Act. No costs.
_____________________________  
N.R.L. NAGESWARA RAO, J    
Dated: 29.04.2013