Mandatory requirement of previous sanction for prosecution under the Prevention of Corruption Act and the effect of retirement on prosecution when sanction is refused during the public servant's service.

ORDER :

R. Narayana Pisharadi, J.

1. The petitioners are the second and the fourth accused in the case C.C. No. 28/2016 pending in the Court of the Enquiry Commissioner and Special Judge, Thalassery.

2. The offences alleged against the accused in the case are punishable under Sections 13(1)(d) read with 13(2) of the Prevention of Corruption Act, 1988 (for short 'the Act') and also under Sections 468, 471 and 120B of the Indian Penal Code.

3. There are altogether eleven accused in the case. At the time of commission of the alleged offences, accused 1 to 4 were the President, Secretary, Assistant Secretary and the Chief Accountant of the Thadikkadavu Service Co-operative Bank (hereinafter referred to as 'the Bank'). Accused 5 to 8 were Agricultural Officers. Accused 9 to 11 were copra traders.

4. The prosecution case, as stated in the final report filed against the accused by the Deputy Superintendent, Vigilance and Anti-Corruption Bureau (VACB), Kannur Unit, is as follows:

"The charge against the accused is that A2 to A4 while working as Secretary, Assistant Secretary and Chief Accountant of Thadikkadavu Service Cooperative Bank, respectively, being public servants abused their official position with the connivance of A1, the then President of the above bank and committed criminal misconduct by making false records, connived and criminally conspired together with A5 to A8 Agricultural Officers of Kanichar, Chapparappadavu, Nadavil and Alakode Krishibhavan and A9 to A11 copra merchants and in furtherance of their criminal conspiracy, dishonestly and fraudulently cheated the Government and farmers, for obtaining undue pecuniary advantage of Rs. 42,16,273/- (Rupees Forty two Lakhs Sixteen Thousand Two Hundred and Seventy Three only) to themselves by procuring copra from source other than farmers during the period 2000-2001 and thereby A1 to A11 committed offences punishable under Section 13(1)(d) read with 13(2) of P.C. Act, 1988 and Sections 468, 471 and 120B IPC".

5. The trial court took cognizance of the offences on the basis of the final report. It has also framed charge against the accused on 31.08.2017.

6. The petitioners have filed this application under Section 482 of the Code of Criminal Procedure, 1973 (for short 'the Code') to quash the final report (Annexure-A2) and all proceedings taken against them on the basis of the final report.

7. Heard the learned counsel for the petitioners and also the learned Public Prosecutor.

8. Learned counsel for the petitioner has raised the following contentions: The trial court has taken cognizance of the offences against the petitioners without the previous sanction of the authority competent under Section 19(1)(c) of the Act. The trial court has taken cognizance of the offences against the petitioners with the previous sanction of the State Government which is not the authority competent to grant it. The petitioners were employees of the Bank, which is a co-operative society registered under the Kerala Cooperative Societies Act, 1969. The authority competent to remove them from service is the Board of Directors of the Bank and therefore, it is the authority which is competent under Section 19(1)(c) of the Act to grant sanction for prosecution against them. The Board of Directors of the Bank had declined to grant sanction for prosecution against the petitioners. Cognizance of the offences taken against the petitioners, with the previous sanction of the State Government, which is incompetent to grant it, is bad in law and a nullity.

9. Learned Public Prosecutor has submitted that the State Government is competent to grant sanction for prosecution against the petitioners who were public servants and that the validity of the sanction granted can be examined only during the course of the trial of the case.

10. The petitioners were the Secretary and the Chief Accountant of the Bank. The Bank is a co-operative society registered under the Kerala Co-operative Societies Act, 1969.

11. The petitioners we