Apex court upholds NTPC's rejection of Ansaldo gear supply bid

The Supreme Court set aside a Delhi High Court order which had allowed Ansaldo Caldaie Boilers India Pvt. to bid for a tender for equipment supply to NTPC Ltd.

The verdict has gone in favour of NTPC, which had earlier rejected Ansaldo Caldaie’s bid to supply equipments worth for its power plants’ expansion after finding that the latter did not meet the minimum qualifying requirements set out in the Bid documents.

Ansaldo Caldaie then challenged this decision.

Last March, the High Court had directed NTPC to permit Ansaldo Caldaie to go to the subsequent stage of price bids and to take part in the technical discussions for the contract. NTPC then moved the apex court against this decision.

The case pertained to NTPC’s bids for the supply and installation of Steam Generator package for captive coal-based Thermal Power Projects in different areas in the country.

However, it found that the ‘Qualified Steam Generator Manufacturer’, Ansaldo Caldaie, Italy, proposed by Ansaldo Caldaie did not have the necessary minimum qualification, as was required in terms of the Bid documents.

The main issue for consideration before the apex court was whether Ansaldo Caldaie, Italy, can be said to be a Qualified Steam Generator Manufacturer within the definition set out in the detailed Invitation for Bids.

The apex court order pointed out that from the terms and conditions of NTPC’s MoU, “It appears that it was (NTPC’s) intention that the Qualified Steam Generator Manufacturer would have to be the manufacturer of the evaporator itself and could not have outsourced the manufacture to a third party, since the evaporator controlling the pressure of the steam generated is a vital and crucial component of the Steam Generator itself.”

The court then found that the evaporator offered by Ansaldo Caldaie was one which had been manufactured not by the Qualified Steam Generator Manufacturer, but by a third party, which was not contemplated in the condition of the Tender Documents.

It said the process for bids will continue.

Ansaldo Caldaie is a joint venture between Gammon India Ltd and Italy’s Ansaldo Caldaie SpA.

NTPC’s power expansion plans included giving an order for 11 units of steam generators of 660 MW each for its projects at Meja, Nabinagar, Raghunathpur, Solapur and Mouda.

2G Spectrum License: CIVIL APPEAL NO. 1193 OF 2012

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1193 OF 2012

(Arising out of SLP(C) No. 27535 of 2010)

Dr. Subramanian Swamy … Appellant

versus

Dr. Manmohan Singh and another … Respondents

J U D G M E N T

G. S. Singhvi, J.

1. Leave granted.

2. Whether a complaint can be filed by a citizen for prosecuting

a public servant for an offence under the Prevention of Corruption

Act, 1988 (for short, ‘the 1988 Act’) and whether the authority

competent to sanction prosecution of a public servant for offences

under the 1988 Act is required to take an appropriate decision

within the time specified in clause I(15) of the directions contained

in paragraph 58 of the judgment of this Court in Vineet Narain v.

Union of India (1998) 1 SCC 226 and the guidelines issued by the

1

Central Government, Department of Personnel and Training and

the Central Vigilance Commission (CVC) are the question which

require consideration in this appeal.

3. For the last more than three years, the appellant has been

vigorously pursuing, in public interest, the cases allegedly

involving loss of thousands of crores of rupees to the Public

Exchequer due to arbitrary and illegal grant of licences at the

behest of Mr. A. Raja (respondent No. 2) who was appointed as

Minister for Communication and Information Technology on

16.5.2007 by the President on the advice of Dr. Manmohan Singh

(respondent No. 1). After collecting information about the grant of

licences, the appellant made detailed representation dated

29.11.2008 to respondent No. 1 to accord sanction for

prosecution of respondent No. 2 for offences under the 1988 Act.

In his representation, the appellant pointed out that respondent

No. 2 had allotted new licences in 2G mobile services on ‘first

come, first served’ basis to novice telecom companies, viz., Swan

Telecom and Unitech, which was in clear violation of Clause 8 of

the Guidelines for United Access Services Licence issued by the

Ministry of Communication and Information Technology vide

letter No.10-21/2005-BS.I(Vol.II)/49 dated 14.12.2005 and,

2

thereby, caused loss of over Rs. 50,000 crores to the Government.

The appellant gave details of the violation of Clause 8 and pointed

out that the two officers, viz., R.J.S. Kushwaha and D. Jha of the

Department of Telecom, who had opposed the showing of undue

favour to Swan Telecom, were transferred just before the grant of

licences and Bharat Sanchar Nigam Limited (BSNL) which had

never entered into a roaming agreement with any operator, was

forced to enter into such an agreement with Swan Telecom. The

appellant further pointed out that immediately after acquiring 2G

spectrum licences, Swan Telecom and Unitech sold their stakes to

foreign companies, i.e., Etisalat, a telecom operator from UAE and

Telenor of Norway respectively and, thereby, made huge profits at

the expense of public revenue. He claimed that by 2G spectrum

allocation under respondent No. 2, the Government received only

one-sixth of what it would have received if it had opted for an

auction. The appellant pointed out how respondent No. 2 ignored

the recommendations of the Telecom Regulatory Authority of India

(TRAI) and gave totally unwarranted benefits to the two companies

and thereby caused loss to the Public Exchequer. Some of the

portions of the appellant’s representation are extracted below:

3

“Clause 8 has been violated as follows: While Anil

Dhirubhai Ambani Group (ADAG), the promoters of

Reliance Communications (R Com), had more than 10

per cent stake in Swan Telecom, the figures were

manipulated and showed as 9.99 per cent holding to

beat the said Clause. The documents available disclose

that on March 2, 2007, when Swan Telecom applied for

United Access Services Licences, it was owned 100 per

cent by Reliance Communications and its associates

viz. Reliance Telecom, and by Tiger Trustees Limited,

Swan Infonet Services Private Limited, and Swan

Advisory Services Private Limited (see Annexure I). At

one or the other point of time, employees of ADAG

(Himanshu Agarwal, Ashish Karyekar, Paresh Rathod)

or its associate companies have been acquiring the

shares of Swan Telecom itself. But still the ADAG

manipulated the holdings in Swan to reduce it to only

9.99 per cent. Ambani has now quietly sold his shares

in Swan to Delphi Investments, a Mauritius based

company owned by Ahmed O. Alfi, specializing in

automobile spare parts. In turn, Swan has sold 45%

of its shares to UAE’s Emirates Telecom Corporation

(Etisalat) for Rs.9000 crores! All this is highly

suspicious and not normal business transactions.

Swan company got 60% of the 22 Telecom licenced

areas at a throw away price of Rs.1650 crores, when it

was worth Rs.60,000 crores total.

Room has operations in the same circles where

the application for Swan Telecom was filed. Therefore,

under Clause 8 of the Guidelines, Swan should not

have been allotted spectrum by the Telecommunication

Ministry. But the company did get it on Minister’s

direction, which is an undue favour from him (Raja).

There was obviously a quid pro quo which only a CBI

enquiry can reveal, after an FIR is registered. There is

no need for a P/E, because the CVC has already done

the preliminary enquiry.

Quite surprisingly, the 2G spectrum licences were

priced at 2001 levels to benefit these private players.

That was when there were only 4 million cellphone

4

subscribers; now it is 350 million. Hence 2001 price is

not applicable today.

Immediately after acquiring 2G spectrum licences both

Swan and Unitech sold their stakes to foreign

companies at a huge profits. While Swan Telecom sold

its stakes to UAE telecom operator Etisalat, Unitech

signed a deal with Telenor of Norway for selling its

share at huge premiums.

In the process of this 2G spectrum allocation, the

government received only one-sixth of what it would

have got had it gone through a fresh auction route.

The total loss to the exchequer of giving away 2G GSM

spectrum in this way – including to the CDMA

operators – is over Rs.50,000 crores and is said to be

one of the biggest financial scams of all times in the

country.

While approving the 2G licences, Minister Raja

turned a blind eye to the fact that these two companies

do not have any infrastructure to launch their services.

Falsely claiming that the Telecom Regulatory Authority

of India had approved the first-cum-first served rule,

Raja went ahead with the 2G spectrum allocation to

two debutants in the Telecom sector. In fact earlier

TRAI had discussed the spectrum allocation issue with

existing services providers and suggested to the

Telecom Ministry that spectrum allocation be made

through a transparent tender and auction process.

This is confirmed by what the TRAI Chairman N. Misra

told the CII organized conference on November 28,

2008 (Annexure 2). But Raja did not bother to listen to

the TRAI either and pursued the process on ‘first come,

first served’ basis, benefiting those who had inside

information, causing a loss of Rs.50,000 crores to the

Government. His dubious move has been to ensure

benefit to others at the cost of the national exchequer.”

The request made in the representation, which was relied

upon by the learned Attorney General for showing that the

5

appellant had himself asked for an investigation, is also extracted

below:

“According to an uncontradicted report in CNN-IBN

news channel of November 26, 2008, you are said to be

“very upset with A. Raja over the spectrum allocation

issue”. This confirms that an investigation is

necessary, for which I may be given sanction so that

the process of law can be initiated.

I, therefore, writ to demand the grant of sanction to

prosecute Mr. A. Raja, Minister for Telecom of the

Union of India for offences under the Prevention of

Corruption Act. The charges in brief are annexed

herewith (Annexure 3).”

4. Since the appellant did not receive any response from

respondent No.1, he sent letters dated 30.5.2009, 23.10.2009,

31.10.2009, 8.3.2010 and 13.3.2010 and reiterated his

request/demand for grant of sanction to prosecute respondent

No.2. In his letter dated 31.10.2009, the appellant referred to the

fact that on being directed by the CVC, the Central Bureau of

Investigation (CBI) had registered a first information report, and

claimed that

prima facie case is established against respondent

No. 2 for his prosecution under Sections 11 and 13(1)(d) of the

1988 Act. The appellant also claimed that according to various

Supreme Court judgments it was not necessary to carry out a

detailed inquiry, and he had produced sufficient evidence for

6

grant of sanction to initiate criminal prosecution against

respondent No. 2 for the misuse of authority and pecuniary gains

from corrupt practices. In his subsequent letters, the appellant

again asserted that the nation had suffered loss of nearly

Rs.65,000 crores due to arbitrary, unreasonable and mala fide

action of respondent No.2. In letter dated 13.3.2010, the

appellant referred to the proceedings of the case in which this

Court refused to interfere with the order of the Delhi High Court

declaring that the decision of respondent No.2 to change the cut

off date fixed for consideration of applications made for grant of

licences was arbitrary and mala fide.

5. After 1 year and 4-1/2 months of the first letter written by

him, Secretary, Department of Personnel and Training, Ministry of

Personnel sent letter dated 19.3.2010 to the appellant mentioning

therein that the CBI had registered a case on 21.10.2009 against

unknown officers of the Department of Telecommunications (DoT),

unknown private persons/companies and others and that the

issue of grant of sanction for prosecution would arise only after

perusal of the evidence collected by the investigating agency and

other material provided to the Competent Authority and that it

7

would be premature to consider sanction for prosecution at that

stage.

6. On receipt of the aforesaid communication, the appellant

filed Civil Writ Petition No. 2442/2010 in the Delhi High Court

and prayed for issue of a mandamus to respondent No.1 to pass

an order for grant of sanction for prosecution of respondent No. 2.

The Division Bench of the Delhi High Court referred to the

submission of the learned Solicitor General that when respondent

No. 1 has directed investigation by the CBI and the investigation

is in progress, it is not permissible to take a decision on the

application of the appellant either to grant or refuse the sanction

because that may affect the investigation, and dismissed the writ

petition by recording the following observations:

“The question that emanates for consideration is

whether, at this stage, when the investigation by the

CBI is in progress and this Court had earlier declined

to monitor the same by order dated 25

th May, 2010,

which has been pressed into service by the learned

Solicitor General of India, it would be appropriate to

direct the respondent no. 1 to take a decision as

regards the application submitted by the petitioner

seeking sanction to prosecute.

In our considered opinion, when the matter is being

investigated by the CBI, and the investigation is in

progress, it would not be in fitness of things to issue a

mandamus to the first respondent to take a decision on

the application of the petitioner.”

8

7. The special leave petition filed by the appellant, out of which

this appeal arises, was initially taken up for consideration along

with SLP(C) No. 24873/2010 filed by the Center for Public Interest

Litigation against order dated 25.5.2010 passed by the Division

Bench of the High Court in Writ Petition (Civil) No. 3522/2010 to

which reference had been made in the impugned order. During

the course of hearing of the special leave petition filed by the

appellant, the learned Solicitor General, who had appeared on

behalf of respondent No. 1, made a statement that he has got the

record and is prepared to place the same before the Court.

However, keeping in view the fact that the record sought to be

produced by the learned Solicitor General may not be readily

available to the appellant, the Court passed order dated

18.11.2010 requiring the filing of an affidavit on behalf of

respondent No. 1. Thereafter, Shri V. Vidyavati, Director in the

PMO filed affidavit dated 20.11.2010, which reveals the following

facts:

“(i) On 1.12.2008, the Prime Minister perused the letter

and noted “Please examine and let me know the facts of

this case”. This was marked to the Principal Secretary

to the Prime Minister who in turn marked it to the

Secretary. The Secretary marked it to me as Director in

the PMO. I prepared a note dated 5.12.2008 factually

9

summarizing the allegations and seeking approval to

obtain the factual position from the sectoral side (in the

PMO dealing with Telecommunications).

(ii) On 11.12.2008, a copy of appellant’s letter dated

29.11.2008 was sent to the Secretary, Department of

Telecommunication for submitting a factual report.

The Department of Telecommunication sent reply dated

13.02.2009 incorporating his comments.

(iii) In the meanwhile, letters dated 10.11.2008 and

22.11.2008 were received from Shri Gurudas Gupta

and Shri Suravaran Sudhakar Reddy respectively

(copies of these letters have not been produced before

the Court). The same were forwarded to the Department

of Telecommunication on 25.03.2009 for sending an

appropriate reply to the appellant.

(iv) On 01.06.2009, letter dated 30.05.2009 received

from the appellant was placed before respondent No.1,

who recorded the following endorsement “please

examine and discuss”.

(v) On 19.06.2009, the Director of the concerned Sector

in the PMO recorded that the Minister of

Telecommunications and Information Technology has

sent D.O. letter dated 18.06.2009 to the appellant.

When letter dated 23.10.2009 of the appellant was

placed before respondent No.1, he recorded an

endorsement on 27.10.2009 “please discuss”.

(vi) In response to letter dated 31.10.2009 of the

appellant, respondent No.1 made an endorsement

“please examine”.

(vii) On 18.11.2009, respondent No.1 stated that

Ministry of Law and Justice should examine and

advice. The advice of Ministry of Law and Justice was

received on 8.2.2010. Para 7 thereof was as follows:

“From the perusal of letter dated 23.10.2009 and

31.10.2009, it is noticed that Shri Swamy wants

to rely upon the action and investigation of the

CBI to collaborate and strengthen the said

10

allegation leveled by him against Shri A. Raja,

Minister for Communication and Information

Technology. It is specifically mentioned in Para 2

of the letter dated 31.10.2009 of Shri Swamy that

the FIR was registered by the CBI and “the

substance of the allegation made by me in the

above cited letters to you are already under

investigation”. If it is so, then it may be stated that

decision to accord of sanction of prosecution may

be determined only after the perusal of the

evidence (oral or documentary) collected by the

investigation agency, i.e., CBI and other materials

to be provided to the competent authority.”

(viii) On 05.03.2010, the deponent prepared a note that

an appropriate reply be sent to the appellant in the

light of the advice given by the Law Department and

final reply was sent to the appellant after respondent

No.1 had approved note dated 17.03.2010.”

8. The appellant filed rejoinder affidavit on 22.11.2010 along

with a copy of letter dated 18.6.2009 written to him by respondent

No. 2 in the context of representation dated 29.11.2008 submitted

by him to respondent No.1.

9. Although, respondent No.2 resigned from the Council of

Ministers on 14.11.2010, the appellant submitted that the issues

relating to his right to file a complaint for prosecution of

respondent No.2 and grant of sanction within the time specified in

the judgment in Vineet Narain’s case should be decided.

11

10. During the course of hearing, the learned Attorney General

filed written submissions. After the hearing concluded, the

learned Attorney General filed supplementary written submissions

along with a compilation of 126 cases in which the sanction for

prosecution is awaited for periods ranging from more than one

year to few months

11. Final order in this case was deferred because it was felt that

the directions given by this Court in Vineet Narain’s case may

require further elaboration in the light of the order passed in Civil

Appeal No. 10660/2010 (arising out of SLP(C) No. 24873/2010)

and the fact that decision on the question of grant of sanction

under the 1988 Act and other statutes is pending for a sufficiently

long time in 126 cases. However, as the investigation with regard

to some of the facets of what has come to be termed as 2G case is

yet to be completed, we have considered it appropriate to pass

final order in the matter.

12. Appellant Dr. Subramanian Swamy argued that the embargo

contained in Section 19(1) of the 1988 Act operates only against

the taking of cognizance by the Court in respect of offences

punishable under Sections 7, 10, 11, 13 and 15 committed by a

public servant, but there is no bar to the filing of a private

12

complaint for prosecution of the concerned public servant and

grant of sanction by the Competent Authority, and that

respondent No. 1 was duty bound to take appropriate decision on

his representation within the time specified in clause I(15) of the

directions contained in paragraph 58 of Vineet Narain’s case,

more so because he had placed sufficient evidence to show that

respondent No.2 had committed offences under the 1988 Act.

13. The learned Attorney General argued that the question of

grant of sanction for prosecution of a public servant charged with

any of the offences enumerated in Section 19(1) arises only at the

stage when the Court decides to take cognizance and any request

made prior to that is premature. He submitted that the embargo

contained in Section 19(1) of the Act is applicable to the Court

which is competent to take cognizance of an offence punishable

under Sections 7, 10, 11, 13 and 15 alleged to have been

committed by a public servant and there is no provision for grant

of sanction at a stage before the competent Court applies its mind

to the issue of taking cognizance. Learned Attorney General relied

upon the judgment of the Calcutta High Court in Superintendent

and Remembrancer of Legal Affairs v. Abani Kumar Banerjee AIR

1950 Cal. 437 as also the judgments of this Court in R.R. Chari v.

13

State of Uttar Pradesh 1951 SCR 312, Devarapalli

Lakshminarayana Reddy v. V. Narayana Reddy (1976) 3 SCC 252,

Ram Kumar v. State of Haryana (1987) 1 SCC 476, Krishna Pillai

v. T.A. Rajendran, 1990 (Supp) SCC 121, State of West Bengal v.

Mohd. Khalid (1995) 1 SCC 684, State through C.B.I. v. Raj

Kumar Jain (1998) 6 SCC 551, K. Kalimuthu v. State (2005) 4

SCC 512, Centre for Public Interest Litigation v. Union of India

(2005) 8 SCC 202 and State of Karnataka v. Pastor P. Raju (2006)

6 SCC 728 and argued that letter dated 29.11.2008 sent by the

appellant for grant of sanction to prosecute respondent No.2 for

the alleged offences under the 1988 Act was wholly misconceived

and respondent No.1 did not commit any illegality or

constitutional impropriety by not entertaining his prayer, more so

because the appellant had himself asked for an investigation into

the alleged illegal grant of licences at the behest of respondent

No.2. Learned Attorney General further argued that the appellant

does not have the

locus standi to file a complaint for prosecuting

respondent No.2 because the CBI is already investigating the

allegations of irregularity committed in the grant of licences for 2G

spectrum and the loss, if any, suffered by the Public Exchequer.

14

14. We have considered the respective submissions. Section 19

of the 1988 Act reads as under:

“19. Previous sanction necessary for prosecution. – (1)

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, –

(a) in the case of a person who is employed in

connection with the affairs of the Union and is not

removable from his office save by or with the

sanction of the Central Government, of that

Government;

(b) in the case of a person who is employed in

connection with the affairs of a State and is not

removable from his office save by or with the

sanction of the State Government, of that

Government;

(c) in the case of any other person, of the authority

competent to remove him from his office.

(2) Where for any reason whatsoever any doubt arises

as to whether the previous sanction as required under

sub-section (1) should be given by the Central

Government or the State Government or any other

authority, such sanction shall be given by that

Government or authority which would have been

competent to remove the public servant from his office

at the time when the offence was alleged to have been

committed.

(3) Notwithstanding anything contained in the Code of

Criminal Procedure, 1973 (2 of 1974),-

(a) no finding, sentence or order passed by a

special Judge shall be reversed or altered by a

court in appeal, confirmation or revision on the

ground of the absence of, or any error, omission or

irregularity in, the sanction required under sub-

15

section (1), unless in the opinion of that court, a

failure of justice has in fact been occasioned

thereby;

(b) no court shall stay the proceedings under this

Act on the ground of any error, omission or

irregularity in the sanction granted by the

authority, unless it is satisfied that such error,

omission or irregularity has resulted in a failure of

justice;

(c) no court shall stay the proceedings under

this Act on any other ground and no court shall

exercise the powers of revision in relation to any

interlocutory order passed in any inquiry, trial,

appeal or other proceedings.

(4) In determining under sub-section (3) whether the

absence of, or any error, omission or irregularity in,

such sanction has occasioned or resulted in a failure of

justice the court shall have regard to the fact whether

the objection could and should have been raised at any

earlier stage in the proceedings.

Explanation. – For the purposes of this section,

(a) error includes competency of the authority to

grant sanction;

(b) a sanction required for prosecution includes

reference to any requirement that the prosecution

shall be at the instance of a specified authority or

with the sanction of a specified person or any

requirement of a similar nature.”

15. The question whether sanction for prosecution of respondent

No.2 for the offences allegedly committed by him under the 1988

Act is required even after he resigned from the Council of

Ministers, though he continues to be a Member of Parliament,

16

need not detain us because the same has already been answered

by the Constitution Bench in R. S. Nayak v. A. R. Antulay (1984) 2

SCC 183 the relevant portions of which are extracted below:

“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 misused) 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 misused) 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

17

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 end 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

rogue's charter.

We would however, like to make it abundantly clear

that if the two decisions purport to lay down that even

if a public servant has ceased to hold that office as

public servant which he is alleged to have abused or

misused for corrupt motives, but on the date of taking

cognizance of an offence alleged to have been

committed by him as a public servant which he ceased

to be and holds an entirely different public office which

he is neither alleged to have misused or abused for

corrupt motives, yet the sanction of authority

competent to remove him from such latter office would

be necessary before taking cognizance of the offence

alleged to have been committed by the public servant

while holding an office which he is alleged to have

abused or misused and which he has ceased to hold,

the decision in our opinion, do not lay down the correct

law and cannot be accepted as making a correct

interpretation of Section 6.”

18

16. The same view has been taken in Habibullsa Khan v. State of

Orissa (1995) 2 SCC 437 (para 12), State of H.P. v. M. P. Gupta

(2004) 2 SCC 349 (paras 17 and 19), Parkash Singh Badal v.

State of Punjab (2007) 1 SCC 1 and Balakrishnan Ravi Menon v.

Union of India (2007) 1 SCC 45. In Balakrishnan Ravi Menon’s

case, it was argued that the observations made in para 25 of the

judgment in Antulay’s case are obiter. While negating this

submission, the Court observed :

“Hence, it is difficult to accept the contention raised by

Mr. U.R. Lalit, the learned Senior Counsel for the

petitioner that the aforesaid finding given by this Court

in Antulay case is obiter.

Further, under Section 19 of the PC Act, sanction is to

be given by the Government or the authority which

would have been competent to remove the public

servant from his office at the time when the offence was

alleged to have been committed. The question of

obtaining sanction would arise in a case where the

offence has been committed by a public servant who is

holding the office and by misusing or abusing the

powers of the office, he has committed the offence. The

word “office” repeatedly used in Section 19 would mean

the “office” which the public servant misuses or abuses

by corrupt motive for which he is to be prosecuted.

Sub-sections (1) and (2) of Section 19 are as under:

“19. Previous sanction necessary for prosecution.

—(1) 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,—

(a) in the case of a person who is employed in

connection with the affairs of the Union and is not

19

removable from his office save by or with the

sanction of the Central Government, of that

Government;

(b) in the case of a person who is employed in

connection with the affairs of a State and is not

removable from his office save by or with the

sanction of the State Government, of that

Government;

(c) in the case of any other person, of the authority

competent to remove him from his office.

(2) Where for any reason whatsoever any doubt

arises as to whether the previous sanction as

required under sub-section (1) should be given by

the Central Government or the State Government

or any other authority, such sanction shall be

given by that Government or authority which

would have been competent to remove the public

servant from his office at the time when the

offence was alleged to have been committed.”

Clauses ( a ) and ( b ) of sub-section (1) specifically provide

that in case of a person who is employed and is not

removable from his office by the Central Government or

the State Government, as the case may be, sanction to

prosecute is required to be obtained either from the

Central Government or the State Government. The

emphasis is on the words “who is employed” in

connection with the affairs of the Union or the State

Government. If he is not employed then Section 19

nowhere provides for obtaining such sanction. Further,

under sub-section (2), the question of obtaining

sanction is relatable to the time of holding the office

when the offence was alleged to have been committed.

In case where the person is not holding the said office

as he might have retired, superannuated, be discharged

or dismissed then the question of removing would not

arise. Admittedly, when the alleged offence was

committed, the petitioner was appointed by the Central

Government. He demitted his office after completion of

20

five years' tenure. Therefore, at the relevant time when

the charge-sheet was filed, the petitioner was not

holding the office of the Chairman of Goa Shipyard Ltd.

Hence, there is no question of obtaining any previous

sanction of the Central Government.”

(emphasis supplied)

17. The same view was reiterated in Parkash Singh Badal’s case

and the argument that even though some of the accused persons

had ceased to be Ministers, they continued to be the Members of

the Legislative Assembly and one of them was a Member of

Parliament and as such cognizance could not be taken against

them without prior sanction, was rejected.

18. The next question which requires consideration is whether

the appellant has the

locus standi to file a complaint for

prosecution of respondent No.2 for the offences allegedly

committed by him under the 1988 Act. There is no provision

either in the 1988 Act or the Code of Criminal Procedure, 1973

(CrPC) which bars a citizen from filing a complaint for prosecution

of a public servant who is alleged to have committed an offence.

Therefore, the argument of the learned Attorney General that the

appellant cannot file a complaint for prosecuting respondent No.2

merits rejection. A similar argument was negatived by the

Constitution Bench in A.R. Antulay v. Ramdas Sriniwas Nayak

21

(1984) 2 SCC 500. The facts of that case show that on a private

complaint filed by the respondent, the Special Judge took

cognizance of the offences allegedly committed by the appellant.

The latter objected to the jurisdiction of the Special Judge on two

counts, including the one that the Court set up under Section 6 of

the Criminal Law Amendment Act, 1952 (for short, ‘the 1952 Act’)

was not competent to take cognizance of any of the offences

enumerated in Section 6(1)(a) and (b) upon a private complaint.

His objections were rejected by the Special Judge. The revision

filed by the appellant was heard by the Division Bench of the High

Court which ruled that a Special Judge is competent and is

entitled to take cognizance of offences under Section 6(1)(a) and

(b) on a private complaint of the facts constituting the offence.

The High Court was of the opinion that a prior investigation under

Section 5A of the Prevention of Corruption Act, 1947 (for short,

‘the 1947 Act’) by a police officer of the designated rank is not

sine

qua non

for taking cognizance of an offence under Section 8(1) of

the 1952 Act. Before the Supreme Court, the argument against

the

locus standi of the respondent was reiterated and it was

submitted that Section 5A of the 1947 Act is mandatory and an

investigation by the designated officer is a condition precedent to

22

the taking of cognizance by the Special Judge of an offence or

offences committed by a public servant. While dealing with the

issue relating to maintainability of a private complaint, the

Constitution Bench observed:

“It is a well recognised principle of criminal

jurisprudence that anyone can set or put the criminal

law into motion except where the statute enacting or

creating an offence indicates to the contrary. The

scheme of the Code of Criminal Procedure envisages

two parallel and independent agencies for taking

criminal offences to court. Even for the most serious

offence of murder, it was not disputed that a private

complaint can, not only be filed but can be entertained

and proceeded with according to law. Locus standi of

the complainant is a concept foreign to criminal

jurisprudence save and except that where the statute

creating an offence provides for the eligibility of the

complainant, by necessary implication the general

principle gets excluded by such statutory provision.

Numerous statutory provisions, can be referred to in

support of this legal position such as (i) Section 187-A

of Sea Customs Act, 1878 (ii) Section 97 of Gold Control

Act, 1968 (iii) Section 6 of Import and Export Control

Act, 1947 (iv) Section 271 and Section 279 of the

Income Tax Act, 1961 (v) Section 61 of the Foreign

Exchange Regulation Act, 1973, (vi) Section 621 of the

Companies Act, 1956 and (vii) Section 77 of the

Electricity Supply Act. This list is only illustrative and

not exhaustive. While Section 190 of the Code of

Criminal Procedure permits anyone to approach the

Magistrate with a complaint, it does not prescribe any

qualification the complainant is required to fulfil to be

eligible to file a complaint. But where an eligibility

criterion for a complainant is contemplated specific

provisions have been made such as to be found in

Sections 195 to 199 of the CrPC. These specific

provisions clearly indicate that in the absence of any

such statutory provision, a locus standi of a

23

complainant is a concept foreign to criminal

jurisprudence. In other words, the principle that

anyone can set or put the criminal law in motion

remains intact unless contra-indicated by a statutory

provision. This general principle of nearly universal

application is founded on a policy that an offence i.e.

an act or omission made punishable by any law for the

time being in force is not merely an offence committed

relation to the person who suffers harm but is also an

offence against society. The society for its orderly and

peaceful development is interested in the punishment

of the offender. Therefore, prosecution for serious

offences is undertaken in the name of the State

representing the people which would exclude any

element of private vendetta or vengeance. If such is the

public policy underlying penal statutes, who brings an

act or omission made punishable by law to the notice of

the authority competent to deal with it, is immaterial

and irrelevant unless the statute indicates to the

contrary. Punishment of the offender in the interest of

the society being one of the objects behind penal

statutes enacted for larger good of the society, right to

initiate proceedings cannot be whittled down,

circumscribed or fettered by putting it into a straitjacket

formula of locus standi unknown to criminal

jurisprudence, save and except specific statutory

exception. To hold that such an exception exists that a

private complaint for offences of corruption committed

by public servant is not maintainable, the court would

require an unambiguous statutory provision and a

tangled web of argument for drawing a far fetched

implication, cannot be a substitute for an express

statutory provision.”

(emphasis supplied)

The Constitution Bench then considered whether the Special

Judge can take cognizance only on the basis of a police report and

answered the same in negative in the following words:

24

“In the matter of initiation of proceeding before a

Special Judge under Section 8(1), the Legislature while

conferring power to take cognizance had three

opportunities to unambiguously state its mind whether

the cognizance can be taken on a private complaint or

not. The first one was an opportunity to provide in

Section 8(1) itself by merely stating that the Special

Judge may take cognizance of an offence on a police

report submitted to it by an investigating officer

conducting investigation as contemplated by Section 5-

A. While providing for investigation by designated police

officers of superior rank, the Legislature did not fetter

the power of Special Judge to take cognizance in a

manner otherwise than on police report. The second

opportunity was when by Section 8(3) a status of a

deemed public prosecutor was conferred on a private

complainant if he chooses to conduct the prosecution.

The Legislature being aware of a provision like the one

contained in Section 225 of the CrPC, could have as

well provided that in every trial before a Special Judge

the prosecution shall be conducted by a Public

Prosecutor, though that itself would not have been

decisive of the matter. And the third opportunity was

when the Legislature while prescribing the procedure

prescribed for warrant cases to be followed by Special

Judge did not exclude by a specific provision that the

only procedure which the Special Judge can follow is

the one prescribed for trial of warrant cases on a police

report. The disinclination of the Legislature to so

provide points to the contrary and no canon of

construction permits the court to go in search of a

hidden or implied limitation on the power of the Special

Judge to take cognizance unfettered by such

requirement of its being done on a police report alone.

In our opinion, it is no answer to this fairly wellestablished

legal position that for the last 32 years no

case has come to the notice of the court in which

cognizance was taken by a Special Judge on a private

complaint for offences punishable under the 1947 Act.”

(emphasis supplied)

25

The Court then referred to Section 5A of the 1947 Act, the

provisions of the 1952 Act, the judgments in H.N. Rishbud and

Inder Singh v. State of Delhi (1955) 1 SCR 1150, State of M.P. v.

Mubarak Ali 1959 Supp. (2) SCR 201, Union of India v. Mahesh

Chandra AIR 1957 M.B. 43 and held:

“Having carefully examined these judgments in the light

of the submissions made, the only conclusion that

unquestionably emerges is that Section 5-A is a

safeguard against investigation of offences committed

by public servants, by petty or lower rank police officer.

It has nothing to do directly or indirectly with the mode

and method of taking cognizance of offences by the

Court of Special Judge. It also follows as a necessary

corollary that provision of Section 5-A is not a condition

precedent to initiation of proceedings before the Special

Judge who acquires power under Section 8(1) to take

cognizance of offences enumerated in Section 6(1)( a )

and ( b ), with this limitation alone that it shall not be

upon commitment to him by the Magistrate.

Once the contention on behalf of the appellant that

investigation under Section 5-A is a condition

precedent to the initiation of proceedings before a

Special Judge and therefore cognizance of an offence

cannot be taken except upon a police report, does not

commend to us and has no foundation in law, it is

unnecessary to refer to the long line of decisions

commencing from Taylor v. Taylor ; Nazir Ahmad v .

King-Emperor and ending with Chettiam Veetti l

Ammad v. Taluk Land Board , laying down hitherto

uncontroverted legal principle that where a statute

requires to do a certain thing in a certain way, the

thing must be done in that way or not at all. Other

methods of performance are necessarily forbidden.

Once Section 5-A is out of the way in the matter of

taking cognizance of offences committed by public

servants by a Special Judge, the power of the Special

26

Judge to take cognizance of such offences conferred by

Section 8(1) with only one limitation, in any one of the

known methods of taking cognizance of offences by

courts of original jurisdiction remains undented. One

such statutorily recognised well-known method of

taking cognizance of offences by a court competent to

take cognizance is upon receiving a complaint of facts

which constitutes the offence. And Section 8(1) says

that the Special Judge has the power to take

cognizance of offences enumerated in Section 6(1)(a)

and (b) and the only mode of taking cognizance

excluded by the provision is upon commitment. It

therefore, follows that the Special Judge can take

cognizance of offences committed by public servants

upon receiving a complaint of facts constituting such

offences.

It was, however, submitted that even if it be held that

the Special Judge is entitled to entertain a private

complaint, no further steps can be taken by him

without directing an investigation under Section 5-A so

that the safeguard of Section 5-A is not whittled down.

This is the selfsame argument under a different

apparel. Accepting such a submission would

tantamount to saying that on receipt of the complaint

the Special Judge must direct an investigation under

Section 5-A, There is no warrant for such an approach.

Astounding as it appeared to us, in all solemnity it was

submitted that investigation of an offence by a superior

police officer affords a more solid safeguard compared

to a court. Myopic as this is, it would topsy turvy the

fundamental belief that to a person accused of an

offence there is no better safeguard than a court. And

this is constitutionally epitomised in Article 22 that

upon arrest by police, the arrested person must be

produced before the nearest Magistrate within twentyfour

hours of the arrest. Further, numerous provisions

of the Code of Criminal Procedure such as Section 161,

Section 164, and Section 25 of the Indian Evidence Act

would show the Legislature's hesitation in placing

confidence on police officers away from court's gaze.

And the very fact that power is conferred on a

Presidency Magistrate or Magistrate of the first class to

27

permit police officers of lower rank to investigate these

offences would speak for the mind of the Legislature

that the court is a more reliable safeguard than even

superior police officers.”

(emphasis supplied)

19. In view of the aforesaid judgment of the Constitution Bench,

it must be held that the appellant has the right to file a complaint

for prosecution of respondent No.2 in respect of the offences

allegedly committed by him under the 1988 Act.

20. The argument of the learned Attorney General that the

question of granting sanction for prosecution of a public servant

charged with an offence under the 1988 Act arises only at the

stage of taking cognizance and not before that is neither

supported by the plain language of the section nor the judicial

precedents relied upon by him. Though, the term ‘cognizance’ has

not been defined either in the 1988 Act or the CrPC, the same has

acquired a definite meaning and connotation from various judicial

precedents. In legal parlance cognizance is “taking judicial notice

by the court of law, possessing jurisdiction, on a cause or matter

presented before it so as to decide whether there is any basis for

initiating proceedings and determination of the cause or matter

judicially”. In R. R. Chari v. State of U.P. (1951) SCR 312, the

28

three Judge Bench approved the following observations made by

the Calcutta High Court in Superintendent and Remembrancer of

Legal Affairs, West Bengal v. Abni Kumar Banerjee (supra):

"What is taking cognizance has not been defined in the

Criminal Procedure Code and I have no desire to

attempt to define it. It seems to me clear however that

before it can be said that any magistrate has taken

cognizance of any offence under section 190(1)(a),

Criminal Procedure Code, he must not only have

applied his mind to the contents of the petition but he

must have done so for the purpose of proceeding in a

particular way as indicated in the subsequent

provisions of this Chapter - proceeding under section

200 and thereafter sending it for inquiry and report

under section 202. When the magistrate applies his

mind not for the purpose of proceeding under the

subsequent sections of this Chapter, but for taking

action of some other kind, e.g. ordering investigation

under section 156(3), or issuing a search warrant for

the purpose of the investigation, he cannot be said to

have taken cognizance of the offence.”

21. In Mohd. Khalid’s case, the Court referred to Section 190 of

the CrPC and observed

:

“In its broad and literal sense, it means taking notice of

an offence. This would include the intention of

initiating judicial proceedings against the offender in

respect of that offence or taking steps to see whether

there is any basis for initiating judicial proceedings or

for other purposes. The word ‘cognizance’ indicates the

point when a Magistrate or a Judge first takes judicial

notice of an offence. It is entirely a different thing from

initiation of proceedings; rather it is the condition

precedent to the initiation of proceedings by the

29

Magistrate or the Judge. Cognizance is taken of cases

and not of persons.”

22. In Pastor P. Raju’s case, this Court referred to the provisions

of Chapter XIV and Sections 190 and 196 (1-A) of the CrPC and

observed :

“There is no bar against registration of a criminal case

or investigation by the police agency or submission of a

report by the police on completion of investigation, as

contemplated by Section 173 CrPC. If a criminal case is

registered, investigation of the offence is done and the

police submits a report as a result of such investigation

before a Magistrate without the previous sanction of the

Central Government or of the State Government or of

the District Magistrate, there will be no violation of

Section 196(1-A) CrPC and no illegality of any kind

would be committed.”

The Court then referred to some of the precedents including

the judgment in Mohd. Khalid’s case and observed :

“

It is necessary to mention here that taking cognizance

of an offence is not the same thing as issuance of

process. Cognizance is taken at the initial stage when

the Magistrate applies his judicial mind to the facts

mentioned in a complaint or to a police report or upon

information received from any other person that an

offence has been committed. The issuance of process is

at a subsequent stage when after considering the

material placed before it the court decides to proceed

against the offenders against whom a prima facie case

is made out.”

30

23. In Kalimuthu’s case, the only question considered by this

Court was whether in the absence of requisite sanction under

Section 197 CrPC, the Special Judge for CBI cases, Chennai did

not have the jurisdiction to take cognizance of the alleged

offences. The High Court had taken the view that Section 197

was not applicable to the appellant’s case. Affirming the view

taken by the High Court, this Court observed :

“The question relating to the need of sanction under

Section 197 of the Code is not necessarily to be

considered as soon as the complaint is lodged and on

the allegations contained therein. This question may

arise at any stage of the proceeding. The question

whether sanction is necessary or not may have to be

determined from stage to stage. Further, in cases where

offences under the Act are concerned, the effect of

Section 197, dealing with the question of prejudice has

also to be noted.”

24. In Raj Kumar Jain’s case, this Court considered the question

whether the CBI was required to obtain sanction from the

prosecuting authority before approaching the Court for accepting

the report under Section 173(2) of the CrPC. This question was

considered in the backdrop of the fact that the CBI, which had

investigated the case registered against the respondent under

Section 5(2) read with Section 5(1)(e) of the 1947 Act found that

the allegation made against the respondent could not be

31

substantiated. The Special Judge declined to accept the report

submitted under Section 173(2) CrPC by observing that the CBI

was required to place materials collected during investigation

before the sanctioning authority and it was for the concerned

authority to grant or refuse sanction. The Special Judge opined

that only after the decision of the sanctioning authority, the CBI

could submit the report under Section 173(2). The High Court

dismissed the petition filed by the CBI and confirmed the order of

the Special Judge. This Court referred to Section 6(1) of the 1947

Act and observed:

“From a plain reading of the above section it is

evidently clear that a court cannot take cognizance of

the offences mentioned therein without sanction of the

appropriate authority. In enacting the above section,

the legislature thought of providing a reasonable

protection to public servants in the discharge of their

official functions so that they may perform their duties

and obligations undeterred by vexatious and

unnecessary prosecutions. Viewed in that context, the

CBI was under no obligation to place the materials

collected during investigation before the sanctioning

authority, when they found that no case was made out

against the respondent. To put it differently, if the CBI

had found on investigation that a prima facie case was

made out against the respondent to place him on trial

and accordingly prepared a charge-sheet (challan)

against him, then only the question of obtaining

sanction of the authority under Section 6(1) of the Act

would have arisen for without that the Court would not

be competent to take cognizance of the charge-sheet. It

must, therefore, be said that both the Special Judge

and the High Court were patently wrong in observing

32

that the CBI was required to obtain sanction from the

prosecuting authority before approaching the Court for

accepting the report under Section 173(2) CrPC.”

25. In our view, the decisions relied upon by the learned

Attorney General do not have any bearing on the moot question

whether respondent No.1, being the Competent Authority to

sanction prosecution of respondent No.2, was required to take

appropriate decision in the light of the direction contained in

Vineet Narain’s case.

26. Before proceeding further, we would like to add that at the

time of taking cognizance of the offence, the Court is required to

consider the averments made in the complaint or the charge sheet

filed under Section 173. It is not open for the Court to analyse

the evidence produced at that stage and come to the conclusion

that no

prima facie case is made out for proceeding further in the

matter. However, before issuing the process, it that it is open to

the Court to record the evidence and on consideration of the

averments made in the complaint and the evidence thus adduced,

find out whether an offence has been made out. On finding that

such an offence has been made out the Court may direct the issue

of process to the respondent and take further steps in the matter.

33

If it is a charge-sheet filed under Section 173 CrPC, the facts

stated by the prosecution in the charge-sheet, on the basis of the

evidence collected during investigation, would disclose the offence

for which cognizance would be taken by the Court. Thus, it is not

the province of the Court at that stage to embark upon and shift

the evidence to come to the conclusion whether or not an offence

has been made out.

27. We may also observe that grant or refusal of sanction is not

a quasi judicial function and the person for whose prosecution the

sanction is sought is not required to be heard by the Competent

Authority before it takes a decision in the matter. What is

required to be seen by the Competent Authority is whether the

facts placed before it which, in a given case, may include the

material collected by the complainant or the investigating agency

prima facie

disclose commission of an offence by a public servant.

If the Competent Authority is satisfied that the material placed

before it is sufficient for prosecution of the public servant, then it

is required to grant sanction. If the satisfaction of the Competent

Authority is otherwise, then it can refuse sanction. In either case,

the decision taken on the complaint made by a citizen is required

34

to be communicated to him and if he feels aggrieved by such

decision, then he can avail appropriate legal remedy.

28. In Vineet Narain’s case, the Court entertained the writ

petitions filed in public interest for ensuring investigation into

what came to be known as ‘Hawala case’. The writ petition

remained pending for almost four years. During that period,

several interim orders were passed which are reported as Vineet

Narain v. Union of India 1996 (1) SCALE (SP) 42, Vineet Narain v.

Union of India (1996) 2 SCC 199, Vineet Narain v. Union of India

(1997) 4 SCC 778 and Vineet Narain v. Union of India (1997) 5

SCALE 254. The final order was passed in Vineet Narain v. Union

of India (1998) 1 SCC 226. In (1996) 2 SCC 199, the Court

referred to the allegations made in the writ petition that

Government agencies like the CBI and the revenue authorities

have failed to perform their duties and legal obligations inasmuch

as they did not investigate into the matters arising out of seizure

of the so-called “Jain Diaries” in certain raids conducted by the

CBI. The Court took note of the allegation that the arrest of some

terrorists led to the discovery of financial support to them by

clandestine and illegal means and a nexus between several

important politicians, bureaucrats and criminals, who were

35

recipients of money from unlawful sources, and proceeded to

observe:

“The facts and circumstances of the present case do

indicate that it is of utmost public importance that this

matter is examined thoroughly by this Court to ensure

that all government agencies, entrusted with the duty

to discharge their functions and obligations in

accordance with law, do so, bearing in mind constantly

the concept of equality enshrined in the Constitution

and the basic tenet of rule of law: “Be you ever so high,

the law is above you.” Investigation into every

accusation made against each and every person on a

reasonable basis, irrespective of the position and status

of that person, must be conducted and completed

expeditiously. This is imperative to retain public

confidence in the impartial working of the government

agencies.”

29. After examining various facets of the matter in detail, the

three Judge Bench in its final order reported in (1998) 1 SCC 226

observed :

“These principles of public life are of general application

in every democracy and one is expected to bear them in

mind while scrutinising the conduct of every holder of a

public office. It is trite that the holders of public offices

are entrusted with certain powers to be exercised in

public interest alone and, therefore, the office is held by

them in trust for the people. Any deviation from the

path of rectitude by any of them amounts to a breach of

trust and must be severely dealt with instead of being

pushed under the carpet. If the conduct amounts to an

offence, it must be promptly investigated and the

offender against whom a prima facie case is made out

should be prosecuted expeditiously so that the majesty

of law is upheld and the rule of law vindicated. It is the

36

duty of the judiciary to enforce the rule of law and,

therefore, to guard against erosion of the rule of law.

The adverse impact of lack of probity in public life

leading to a high degree of corruption is manifold. It

also has adverse effect on foreign investment and

funding from the International Monetary Fund and the

World Bank who have warned that future aid to

underdeveloped countries may be subject to the

requisite steps being taken to eradicate corruption,

which prevents international aid from reaching those

for whom it is meant. Increasing corruption has led to

investigative journalism which is of value to a free

society. The need to highlight corruption in public life

through the medium of public interest litigation

invoking judicial review may be frequent in India but is

not unknown in other countries: R. v. Secy. of State for

Foreign and Commonwealth Affairs.”

In paragraph 58 of the judgment, the Court gave several

directions in relation to the CBI, the CVC and the Enforcement

Directorate. In para 58 (I)(15), the Court gave the following

direction:

“Time-limit of three months for grant of sanction for

prosecution must be strictly adhered to. However,

additional time of one month may be allowed where

consultation is required with the Attorney General (AG)

or any other law officer in the AG's office.”

30. The CVC, after taking note of the judgment of the Punjab

and Haryana High Court in Jagjit Singh v. State of Punjab (1996)

Crl. Law Journal 2962, State of Bihar v. P. P. Sharma 1991 Supp.

1 SCC 222, Superintendent of Police (CBI) v. Deepak Chowdhary,

37

(1995) 6 SC 225, framed guidelines which were circulated vide

office order No.31/5/05 dated 12.5.2005. The relevant clauses of

the guidelines are extracted below:

“2(i) Grant of sanction is an administrative act. The

purpose is to protect the public servant from

harassment by frivolous or vexatious prosecution and

not to shield the corrupt. The question of giving

opportunity to the public servant at that stage does not

arise. The sanctioning authority has only to see

whether the facts would prima-facie constitutes the

offence.

(ii) The competent authority cannot embark upon an

inquiry to judge the truth of the allegations on the basis

of representation which may be filed by the accused

person before the Sanctioning Authority, by asking the

I.O. to offer his comments or to further investigate the

matter in the light of representation made by the

accused person or by otherwise holding a parallel

investigation/enquiry by calling for the record/report of

his department.

(vii) However, if in any case, the Sanctioning Authority

after consideration of the entire material placed before

it, entertains any doubt on any point the competent

authority may specify the doubt with sufficient

particulars and may request the Authority who has

sought sanction to clear the doubt. But that would be

only to clear the doubt in order that the authority may

apply its mind proper, and not for the purpose of

considering the representations of the accused which

may be filed while the matter is pending sanction.

38

(viii) If the Sanctioning Authority seeks the comments

of the IO while the matter is pending before it for

sanction, it will almost be impossible for the

Sanctioning Authority to adhere to the time limit

allowed by the Supreme Court in Vineet Narain’s case.”

31. The aforementioned guidelines are in conformity with the law

laid down by this Court that while considering the issue regarding

grant or refusal of sanction, the only thing which the Competent

Authority is required to see is whether the material placed by the

complainant or the investigating agency

prima facie discloses

commission of an offence. The Competent Authority cannot

undertake a detailed inquiry to decide whether or not the

allegations made against the public servant are true.

32. In the light of the above discussion, we shall now consider

whether the High Court was justified in refusing to entertain the

writ petition filed by the appellant. In this context, it is apposite

to observe that the High Court had proceeded under a wholly

erroneous assumption that respondent No.1 had directed

investigation by the CBI into the allegations of grave irregularities

in the grant of licences. As a matter of fact, on receipt of

representation dated 4.5.2009 that the grant of licences by

respondent No.2 had resulted in huge loss to the Public

39

Exchequer, the CVC got conducted an inquiry under Section 8(d)

of the Central Vigilance Commission Act, 2003 and forwarded a

copy of the report to the Director, CBI for making an investigation

into the matter to establish the criminal conspiracy in the

allocation of 2G spectrum under the UASL policy of the DoT and

to bring to book all the wrongdoers. Thereupon, the CBI registered

FIR No.RC-DI-2009-A-0045 dated 21.10.2009 against unknown

officials of the DoT, unknown private persons/companies and

others for offences under Section 120-B IPC read with Sections

13(2) and 13(1)(d) of the 1988 Act. For the next about one year,

the matter remained dormant and the CBI took steps for vigorous

investigation only when this Court intervened in the matter. The

material placed on record does not show that the CBI had

registered a case or started investigation at the instance of

respondent No.1.

33. On his part, the appellant had submitted representation to

respondent No. 1 almost one year to the registration of the first

information report by the CBI and highlighted the grave

irregularities committed in the grant of licences resulting in the

loss of thousands of crores of rupees to the Public Exchequer. He

continuously pursued the matter by sending letters to respondent

40

No.1 at regular intervals. The affidavit filed by Shri V. Vidyawati,

Director in the PMO shows that the matter was placed before

respondent No.1 on 1.12.2008, who directed the concerned officer

to examine and apprise him with the facts of the case.

Surprisingly, instead of complying with the direction given by

respondent No.1 the concerned officer sent the appellant’s

representation to the DoT which was headed by none other than

respondent No.2 against whom the appellant had made serious

allegations of irregularities in the grant of licences. It was natural

for respondent No.2 to have seized this opportunity, and he

promptly sent letter dated 18.6.2009 to the appellant justifying

the grant of licences. The concerned officer in the PMO then

referred the matter to the Ministry of Law and Justice for advice.

It is not possible to appreciate that even though the appellant

repeatedly wrote letters to respondent No.1 highlighting the

seriousness of the allegations made in his first representation and

the fact that he had already supplied the facts and documents

which could be made basis for grant of sanction to prosecute

respondent No.2 and also pointed out that as per the judgments

of this Court, detailed inquiry was not required to be made into

the allegations, the concerned officers in the PMO kept the matter

41

pending and then took the shelter of the fact that the CBI had

registered the case and the investigation was pending. In our

view, the officers in the PMO and the Ministry of Law and Justice,

were duty bound to apprise respondent No.1 about seriousness of

allegations made by the appellant and the judgments of this Court

including the directions contained in paragraph 58(I) of the

judgment in Vineet Narain’s case as also the guidelines framed by

the CVC so as to enable him to take appropriate decision in the

matter. By the very nature of the office held by him, respondent

No. 1 is not expected to personally look into the minute details of

each and every case placed before him and has to depend on his

advisers and other officers. Unfortunately, those who were

expected to give proper advice to respondent No. 1 and place full

facts and legal position before him failed to do so. We have no

doubt that if respondent No.1 had been apprised of the true

factual and legal position regarding the representation made by

the appellant, he would have surely taken appropriate decision

and would not have allowed the matter to linger for a period of

more than one year.

34. In the result, the appeal is allowed. The impugned order is

set aside. It is declared that the appellant had the right to file a

42

complaint for prosecuting respondent No.2. However, keeping in

view the fact that the Court of Special Judge, CBI has already

taken cognizance of the offences allegedly committed by

respondent No.2 under the 1988 Act, we do not consider it

necessary to give any other direction in the matter. At the same

time, we deem it proper to observe that in future every Competent

Authority shall take appropriate action on the representation

made by a citizen for sanction of the prosecution of a public

servant strictly in accordance with the direction contained in

Vineet Narain v. Union of India (1998) 1 SCC 226 and the

guidelines framed by the CVC.

…..…..…….………………….…J.

[G.S. Singhvi]

…..…..……..…..………………..J.

[Asok Kumar Ganguly]

New Delhi,

January 31, 2012.

43

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.1193 OF 2012

(Arising out of SLP (C) No.27535/2010)

Dr. Subramanian Swamy ....Appellant(s)

- Versus -

Dr. Manmohan Singh & another ....Respondent(s)

J U D G M E N T

GANGULY, J.

1. After going through the judgment rendered by my

learned brother G.S. Singhvi, J., I am in

agreement with the various conclusions reached by

His Lordship. However, I have added my own views

on certain important facts of the questions raised

in this case.

2. Brother Singhvi, J., has come to a finding that

having regard to the very nature of the office

held by respondent No.1, it may not be expected of

respondent No.1 to personally look into the minute

44

details of each and every matter and the

respondent No.1, having regard to the burden of

his very onerous office, has to depend on the

officers advising him. At the same time it may be

noted that in the course of submission, the

appellant, who argued in person, did not ever

allege any malafide or lack of good faith against

the respondent No.1. The delay which had taken

place in the office of the respondent No.1 is

unfortunate but it has not even been alleged by

the appellant that there was any deliberate action

on the part of the respondent No.1 in causing the

delay. The position of respondent No.1 in our

democratic polity seems to have been summed up in

the words of Shakespeare “Uneasy lies the head

that wears a crown” (Henry, The Fourth, Part 2 Act

3, scene 1).

3.

I also agree with the conclusions of bother

Singhvi, J., that the appellant has the locus to

file the complaint for prosecution of the

respondent No.2 in respect of the offences alleged

to have been committed by him under the 1988 Act.

45

Therefore, I agree with the finding of brother

Singhvi, J., that the argument of the learned

Attorney General to the contrary cannot be

accepted. Apart from that the learned Attorney

General in the course of his submission proceeded

on the basis that the question of sanction has to

be considered with reference to Section 19 of the

Prevention of Corruption Act (hereinafter “the

P.C. Act”) or with reference to Section 197 of the

Code of Criminal Procedure, 1973 (hereinafter “the

Code”), and the scheme of both the sections being

similar (Vide paragraph 3 of the supplementary

written submission filed by the learned Attorney

General). In fact, the entire submission of the

learned Attorney General is structured on the

aforesaid assumption. I fail to appreciate the

aforesaid argument as the same is contrary to the

scheme of Section 19 of the P.C. Act and also

Section 197 of the Code. In

Kalicharan Mahapatra

vs.

State of Orissa reported in (1998) 6 SCC 411,

this Court compared Section 19 of P.C. Act with

Section 197 of the Code. After considering several

46

decisions on the point and also considering

Section 6 of the old P.C. Act, 1947 which is

almost identical with Section 19 of the P.C. Act,

1988 and also noting Law Commission’s Report, this

Court in paragraph 13 of

Kalicharan (supra) came

to the following conclusions:

“13. The sanction contemplated in

Section 197 of the Code concerns a

public servant who “is accused of any

offence alleged to have been committed

by him while acting or purporting to act

in the discharge of his official duty”,

whereas the offences contemplated in the

PC Act are those which cannot be treated

as acts either directly or even

purportedly done in the discharge of his

official duties. Parliament must have

desired to maintain the distinction and

hence the wording in the corresponding

provision in the former PC Act was

materially imported in the new PC Act,

1988 without any change in spite of the

change made in Section 197 of the Code.”

4.

The above passage in Kalicharan (supra) has been

quoted with approval subsequently by this Court in

Lalu Prasad

vs. State of Bihar reported in 2007

(1) SCC 49 at paragraph 9, page 54. In paragraph

10, (page 54 of the report) this Court held in

47

Lalu Prasad

(supra) that “Section 197 of the Code

and Section 19 of the Act operate in conceptually

different fields”.

5. In view of such consistent view by this Court the

basic submission of the learned Attorney General

to the contrary is, with respect, untenable.

6. I also entirely agree with the conclusion of

learned brother Singhvi, J., that the argument of

the learned Attorney General that question for

granting sanction for prosecution of a public

servant charged with offences under the 1988 Act

arises only at the stage of cognizance is also not

acceptable.

7.

In formulating this submission, the learned

Attorney General substantially advanced two

contentions. The first contention is that an order

granting sanction is not required to be filed

48

along with a complaint in connection with a

prosecution under Section 19 of the P.C. Act. The

aforesaid submission is contrary to the settled

law laid down by this Court in various judgments.

Recently a unanimous three-judge Bench decision of

this Court in the case of

State of Uttar Pradesh

vs.

Paras Nath Singh, [(2009) 6 SCC 372], speaking

through Justice Pasayat and construing the

requirement of sanction, held that without

sanction:

“……The very cognizance is barred. That

is, the complaint cannot be taken notice

of. According to Black's Law Dictionary

the word ‘cognizance’ means

‘jurisdiction’ or ‘the exercise of

jurisdiction’ or ‘power to try and

determine causes’. In common parlance,

it means taking notice of. A court,

therefore, is precluded from

entertaining a complaint or taking

notice of it or exercising jurisdiction

if it is in respect of a public servant

who is accused of an offence alleged to

have been committed during discharge of

his official duty.”

(Para 6, page 375 of the report)

8.

The other contention of the learned Attorney

General is that in taking cognizance under the

49

P.C. Act the Court is guided by the provisions

under Section 190 of the Code and in support of

that contention the learned Attorney General

relied on several judgments. However, the

aforesaid submissions were made without noticing

the judgment of this Court in the case of

Dilawar

Singh

vs. Parvinder Singh alias Iqbal Singh and

Another

(2005) 12 SCC 709. Dealing with Section 19

of P.C. Act and Section 190 of the Code, this

Court held in paragraph 8 at page 713 of the

report as follows:

“……The Prevention of Corruption Act is a

special statute and as the preamble

shows, this Act has been enacted to

consolidate and amend the law relating

to the prevention of corruption and for

matters connected therewith. Here, the

principle expressed in the maxim

generalia specialibus non derogant

would

apply which means that if a special

provision has been made on a certain

matter, that matter is excluded from the

general provisions. (See

Godde

Venkateswara Rao

v. Govt. of A.P., State

of Bihar

v. Dr. Yogendra Singh and

Maharashtra State Board of Secondary and

Higher Secondary Education

v. Paritosh

Bhupeshkumar Sheth

.) Therefore, the

provisions of Section 19 of the Act will

have an overriding effect over the

50

general provisions contained in Section

190……”

9. Therefore, concurring with brother Singhvi, J., I

am unable to uphold the submission of the learned

Attorney General.

10. As I am of the humble opinion that the questions

raised and argued in this case are of considerable

constitutional and legal importance, I wish to add

my own reasoning on the same.

11. Today, corruption in our country not only poses a

grave danger to the concept of constitutional

governance, it also threatens the very foundation

of Indian democracy and the Rule of Law. The

magnitude of corruption in our public life is

incompatible with the concept of a socialist,

secular democratic republic. It cannot be disputed

that where corruption begins all rights end.

Corruption devalues human rights, chokes

51

development and undermines justice, liberty,

equality, fraternity which are the core values in

our preambular vision. Therefore, the duty of the

Court is that any anti-corruption law has to be

interpreted and worked out in such a fashion as to

strengthen the fight against corruption. That is

to say in a situation where two constructions are

eminently reasonable, the Court has to accept the

one that seeks to eradicate corruption to the one

which seeks to perpetuate it.

12.

Time and again this Court has expressed its

dismay and shock at the ever growing tentacles of

corruption in our society but even then situations

have not improved much. [See

Sanjiv Kumar v. State

of Haryana & ors.

, (2005) 5 SCC 517; State of A.P.

v.

V. Vasudeva Rao, (2004) 9 SCC 319; Shobha

Suresh Jumani

v. Appellate Tribunal Forfeited

Property & another

, (2001) 5 SCC 755; State of

M.P. & ors.

v. Ram Singh, (2000) 5 SCC 88; J.

Jayalalitha

v. Union of India & another, (1999) 5

52

SCC 138;

Major S.K. Kale v. State of Maharashtra,

(1977) 2 SCC 394.]

13.

Learned Attorney General in the course of his

submission fairly admitted before us that out of

total 319 requests for sanction, in respect of 126

of such requests, sanction is awaited. Therefore,

in more than 1/3

rd cases of request for prosecution

in corruption cases against public servants,

sanctions have not been accorded. The aforesaid

scenario raises very important constitutional

issues as well as some questions relating to

interpretation of such sanctioning provision and

also the role that an independent judiciary has to

play in maintaining rule of law and common man’s

faith in the justice delivering system.

14. Both rule of law and equality before law are

cardinal questions in our Constitutional Laws as

also in International law and in this context the

role of the judiciary is very vital. In his famous

53

treatise on Administrative Law, Professor Wade

while elaborating the concept of rule of law

referred to the opinion of Lord Griffith’s which

runs as follows:

“the judiciary accept a responsibility for

the maintenance of the rule of law that

embraces a willingness to oversee

executive action and to refuse to

countenance behaviour that threatens

either basic human rights or the rule of

law.”

[See R. v. Horseferry Road Magistrates’

Court ex p. Bennett {1994) 1 AC 42 at 62]

15. I am in respectful agreement with the aforesaid

principle.

16. In this connection we might remind ourselves that

courts while maintaining rule of law must

structure its jurisprudence on the famous

formulation of Lord Coke where the learned Law

Lord made a comparison between “the golden and

straight metwand of law” as opposed to “the

uncertain and crooked cord of discretion”.

54

17.

The right of private citizen to file a complaint

against a corrupt public servant must be equated

with his right to access the Court in order to set

the criminal law in motion against a corrupt

public official. This right of access, a

Constitutional right should not be burdened with

unreasonable fetters. When a private citizen

approaches a court of law against a corrupt public

servant who is highly placed, what is at stake is

not only a vindication of personal grievance of

that citizen but also the question of bringing

orderliness in society and maintaining equal

balance in the rule of law. It was pointed out by

the Constitution Bench of this Court in

Sheonandan

Paswan

vs. State of Bihar and Others, (1987) 1 SCC

288 at page 315:

“……It is now settled law that a criminal

proceeding is not a proceeding for

vindication of a private grievance but

it is a proceeding initiated for the

purpose of punishment to the offender in

the interest of the society. It is for

maintaining stability and orderliness in

55

the society that certain acts are

constituted offences and the right is

given to any citizen to set the

machinery of the criminal law in motion

for the purpose of bringing the offender

to book. It is for this reason that in

A.R. Antulay

v. R.S. Nayak this Court

pointed out that (SCC p. 509, para 6)

“punishment of the offender in the

interest of the society being one of the

objects behind penal statutes enacted

for larger good of the society, right to

initiate proceedings cannot be whittled

down, circumscribed or fettered by

putting it into a strait jacket formula

of locus standi……”

18. Keeping those principles in mind, as we must, if

we look at Section 19 of the P.C. Act which bars a

Court from taking cognizance of cases of

corruption against a public servant under Sections

7, 10, 11, 13 and 15 of the Act, unless the

Central or the State Government, as the case may

be, has accorded sanction, virtually imposes

fetters on private citizens and also on

prosecutors from approaching Court against corrupt

public servants. These protections are not

available to other citizens. Public servants are

treated as a special class of persons enjoying the

56

said protection so that they can perform their

duties without fear and favour and without threats

of malicious prosecution. However, the said

protection against malicious prosecution which was

extended in public interest cannot become a shield

to protect corrupt officials. These provisions

being exceptions to the equality provision of

Article 14 are analogous to provisions of

protective discrimination and these protections

must be construed very narrowly. These procedural

provisions relating to sanction must be construed

in such a manner as to advance the causes of

honesty and justice and good governance as opposed

to escalation of corruption. Therefore, in every

case where an application is made to an

appropriate authority for grant of prosecution in

connection with an offence under P.C. Act it is

the bounden duty of such authority to apply its

mind urgently to the situation and decide the

issue without being influenced by any extraneous

consideration. In doing so, the authority must

make a conscious effort to ensure the rule of law

57

and cause of justice is advanced. In considering

the question of granting or refusing such

sanction, the authority is answerable to law and

law alone. Therefore, the requirement to take the

decision with a reasonable dispatch is of the

essence in such a situation. Delay in granting

sanction proposal thwarts a very valid social

purpose, namely, the purpose of a speedy trial

with the requirement to bring the culprit to book.

Therefore, in this case the right of the

sanctioning authority, while either sanctioning or

refusing to grant sanction, is coupled with a

duty. The sanctioning authority must bear in mind

that what is at stake is the public confidence in

the maintenance of rule of law which is

fundamental in the administration of justice.

Delay in granting such sanction has spoilt many

valid prosecution and is adversely viewed in

public mind that in the name of considering a

prayer for sanction, a protection is given to a

corrupt public official as a quid pro quo for

services rendered by the public official in the

58

past or may be in the future and the sanctioning

authority and the corrupt officials were or are

partners in the same misdeeds. I may hasten to add

that this may not be factual position in this but

the general demoralizing effect of such a popular

perception is profound and pernicious. By causing

delay in considering the request for sanction, the

sanctioning authority stultifies judicial scrutiny

and determination of the allegations against

corrupt official and thus the legitimacy of the

judicial institutions is eroded. It, thus,

deprives a citizen of his legitimate and

fundamental right to get justice by setting the

criminal law in motion and thereby frustrates his

right to access judicial remedy which is a

constitutionally protected right. In this

connection, if we look at Section 19 of the P.C.

Act, we find that no time limit is mentioned

therein. This has virtually armed the sanctioning

authority with unbridled power which has often

resulted in protecting the guilty and perpetuating

criminality and injustice in society.

59

19.

There are instances where as a result of delayed

grant of sanction prosecutions under the P.C. Act

against a public servant has been quashed. See

Mahendra Lal Das

vs. State of Bihar and Others,

(2002) 1 SCC 149, wherein this Court quashed the

prosecution as the sanctioning authority granted

sanction after 13 years. Similarly, in the case of

Santosh De

vs. Archna Guha and Others, (1994)

Supp.3 SCC 735, this Court quashed prosecution in

a case where grant of sanction was unduly delayed.

There are several such cases. The aforesaid

instances show a blatant subversion of the rule of

law. Thus, in many cases public servants whose

sanction proposals are pending before authorities

for long periods of time are being allowed to

escape criminal prosecution.

20.

Article 14 must be construed as a guarantee

against uncanalized and arbitrary power.

Therefore, the absence of any time limit in

60

granting sanction in Section 19 of the P.C. Act is

not in consonance with the requirement of the due

process of law which has been read into our

Constitution by the Constitution Bench decision of

this Court in

Maneka Gandhi vs. Union of India and

Another,

(1978) 1 SCC 248.

21. I may not be understood to have expressed any

doubt about the constitutional validity of Section

19 of the P.C. Act, but in my judgment the power

under Section 19 of the P.C. Act must be

reasonably exercised. In my judgment the

Parliament and the appropriate authority must

consider restructuring Section 19 of the P.C. Act

in such a manner as to make it consonant with

reason, justice and fair play.

22. In my view, the Parliament should consider the

Constitutional imperative of Article 14 enshrining

the rule of law wherein ‘due process of law’ has

been read into by introducing a time limit in

61

Section 19 of the P.C. Act 1988 for its working in

a reasonable manner. The Parliament may, in my

opinion, consider the following guidelines:

a)All proposals for sanction placed before any

Sanctioning Authority, empowered to grant

sanction for the prosecution of a public servant

under section 19 of the P.C. Act must be decided

within a period of three months of the receipt

of the proposal by the concerned authority.

b)Where consultation is required with the Attorney

General or the Solicitor General or the Advocate

General of the State, as the case may be, and

the same is not possible within the three months

mentioned in clause (a) above, an extension of

one month period may be allowed, but the request

for consultation is to be sent in writing within

the three months mentioned in (a) above. A copy

of the said request will be sent to the

prosecuting agency or the private complainant to

62

intimate them about the extension of the time

limit.

c)At the end of the extended period of time limit,

if no decision is taken, sanction will be deemed

to have been granted to the proposal for

prosecution, and the prosecuting agency or the

private complainant will proceed to file the

chargesheet/complaint in the court to commence

prosecution within 15 days of the expiry of the

aforementioned time limit.

23. With these additional reasons, as indicated, I

agree with Brother Singhvi, J., and allow the

appeal and the judgment of the High Court is set

aside. No costs.

.......................J.

(ASOK KUMAR GANGULY)

New Delhi

63

January 31, 2012

64