Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(SC) 684

SUPREME COURT OF INDIA
DIPANKAR DATTA, MANMOHAN, JJ.
Central Bureau of Investigation – Appellant
Versus
Ramesh Chander Diwan – Respondent
Criminal Appeal No. 1527 of 2025
With
Ashok Kumar Manuja – Appellant
Versus
Central Bureau of Investigation and Another – Respondents
Criminal Appeal No. 1528 OF 2025
Decided On : 22-04-2025

Advocates appeared:
For the Appellant(s) : Mr. Suryaprakash V Raju, A.S.G. Mr. Mukesh Kumar Maroria, AOR Mr. Mukul Singh, Adv. Mr. Zoheb Hussain, Adv. Mr. Annam Venkatesh, Adv. Mr. Vivek Gurnani, Adv. Mr. Aditya Grover, Adv. Mr. Harshit Khanduja, Adv. Ms. Sujal Gupta, Adv. Mr. Pulkit Khanduja, Adv. Ms. Neha Mehta Satija, AOR
For the Respondent(s): Ms. Astha Sharma, AOR Mr. D.P.Singh, Sr. Adv. Ms. Tarannum Cheema, Adv. Mr. Aman Prasad, Adv. Mr. Akash Singh, Adv. Mr. Manu Mishra, Adv. Mr. Akashy. N, Adv. Ms. Garima Saxena, Adv. Mr. Imaan Khera, Adv. Mr. Sanjay Jain, AOR

The court affirmed that a public servant on deputation remains a public servant for the purposes of sanction under Section 197, Cr. PC, requiring such sanction for prosecution.

Headnote:(A) Indian Penal Code, 1860 - Sections 120B and 420 - Code of Criminal Procedure, 1973 - Section 197 - Prevention of Corruption Act, 1988 - Section 19 - Discharge application - High Court discharged respondent for IPC offences due to lack of sanction under Section 197, but denied discharge for PC Act offences - The amended Section 19 does not apply retrospectively to retired public servants. (Paras 1, 4, 28)

(B) Public Servant Definition - The court held that the respondent remained a public servant despite being on deputation, as he was removable by the Government of Punjab, thus requiring sanction for prosecution under Section 197. (Paras 26, 28)

Facts of the case:
The respondent, a retired Executive Engineer, was accused of causing wrongful loss to the Government while in service. The High Court's order was challenged after the Special Court dismissed his discharge application.

Findings of Court:
The High Court's decision to discharge the respondent for IPC offences was upheld, while the denial for PC Act offences was maintained.

Issues: The main issue was whether the respondent required sanction under Section 197, Cr. PC for prosecution.

Ratio Decidendi: The court reasoned that the respondent remained a public servant under Section 21, IPC, thus requiring sanction for prosecution under Section 197, Cr. PC.

Result: Appeals dismissed.

JUDGMENT :

DIPANKAR DATTA, J.

1. These two appeals, by special leave, are directed against a common judgment and order dated 29th January, 2024,¹[impugned order] passed by the High Court of Punjab and Haryana at Chandigarh. The impugned order of the High Court partly allowed a revision petition,²[Crl. Revision Petition No.1388 of 2021] of the respondent, wherein an order of the Special Court (CBI) dated 29th October, 2021 dismissing the respondent’s application for discharge was under challenge. While the High Court discharged the respondent in respect of offences punishable under the Indian Penal Code, 1860,³[IPC] on the ground that no sanction had been obtained as per the statutory mandate contained in Section 197, Code of Criminal Procedure, 1973,⁴[Cr. PC], the prayer of the respondent for discharge qua offences alleged against him under the Prevention of Corruption Act, 1988,⁵[PC Act] was spurned. The High Court held that even though the respondent had retired from service, the amended provisions of Section 19 of the PC Act would have no retrospective application and, therefore, he was not entitled to derive any benefit of such amendment.

2. Central Bureau of Investigation (CBI) is the appellant in the lead appeal whereas the appellant in the connected appeal is the first informant/complainant.

3. An FIR was registered on 9th December, 2014 at Police Station ACB, CBI Chandigarh, under Sections 120B and 420 of the IPC and under Section 13(2) read with Section 13(1)(d) of the PC Act against the respondent. It was alleged in the FIR that while the respondent was functioning as the Executive Engineer, Public Health, Municipal Corporation, Chandigarh, in connivance and collusion with the co-accused, M/s Selvel Media Services Pvt. Ltd., he caused wrongful loss in excess of Rs.13.66 crore to the Government exchequer by changing the terms and conditions of the Detailed Notice Inviting Tender. A detailed investigation followed and on completion thereof, a charge-sheet dated 10th October, 2016 under Section 173(2), Cr. PC was filed in the Court of the Special Judge, CBI, Chandigarh,⁶[Special Court]. Bare reading of the charge-sheet reveals that the respondent, along with the co-accused, had committed offences of the nature alleged in the FIR. The Special Judge vide order dated 23rd November, 2021 was pleased to frame charges against the accused persons.

4. The respondent had retired from service, having attained the age of superannuation on 30th September, 2016. Sanction under Section 197 of the Cr. PC was not obtained by CBI. The respondent applied for discharge on the ground of absence of sanction at any stage. He also sought protection under the amended provisions of Section 19(1) of the PC Act too, effective from 26th July, 2018, which mandated sanction to be obtained even in respect of retired public servants. As noted above, the Special Court dismissed the application for discharge whereafter the High Court, on the respondent’s application under Section 401 read with Section 482 of the Cr. PC, passed the impugned order.

5. Appearing in support of the appeal, Mr. Suryaprakash V. Raju, learned Additional Solicitor General contended that the respondent though was a public servant removable from office by the Governor of Punjab but upon being sent to join his new assignment in the Municipal Corporation, Chandigarh, on usual terms and conditions, he ceased to be a public servant and the provisions of Section 197, Cr. PC had no application to him. According to Mr. Raju, the High Court fell in error in holding that without sanction under Section 197, Cr. PC, cognizance of the offence could not have been taken. Reliance was placed by Mr. Raju on several decisions of this Court in support of his prayer for interference with the impugned order. The same are:

(i) S.S. Dhanoa v. Municipal Corporation Delhi and Others, (1981) 3 SCC 431,

(ii) Mohd. Hadi Raja v. State of Bihar and Another, (1998) 5 SCC 91

(iii) N.K. Sharma v. Abhimanyu, (2005) 13 SCC