2023 Supreme(Mad) 2257

IN THE HIGH COURT OF JUDICATURE AT MADRAS
G. JAYACHANDRAN, J.
K.B. Sampath & Others – Appellants
Versus
The Inspector of Police, CBI/ACB, Chennai – Respondent
Crl.A. Nos. 811 & 831 of 2013 & Crl.A. No. 481 of 2014
Decided On : 31-07-2023

Prior sanction for prosecution under Section 19 of Prevention of Corruption Act or Section 197 of Cr.P.C. is not required for prosecuting a Manager of a Nationalised Bank for offences committed while acting or purporting to act in the discharge of his official duty, as such Manager is not a 'public servant' within the meaning of Section 2(c) of Prevention of Corruption Act, 1988 and is not employed in connection with the affairs of the Union or State.

Headnote:

CRIMINAL APPEAL - PREVENTION OF CORRUPTION ACT, 1988 - SECTION 13(2) R/W 13(1)(D) - INDIAN PENAL CODE, 1860 - SECTIONS 120-B R/W 420, 471 R/W 468, 467 - CHARGE - CONSPIRACY - CHEATING - FABRICATION OF DOCUMENTS - USE OF FALSE DOCUMENTS AS GENUINE - SANCTION FOR PROSECUTION - PUBLIC SERVANT - MANAGER OF A NATIONALISED BANK - WHETHER PRIOR SANCTION UNDER SECTION 19 OF PREVENTION OF CORRUPTION ACT OR SECTION 197 OF CR.P.C. IS REQUIRED - INTERPRETATION OF SECTIONS 19 AND 197 OF CR.P.C. - SCOPE AND APPLICABILITY - DISTINCTION BETWEEN PUBLIC SERVANT AND EMPLOYEE OF A NATIONALISED BANK - HELD, PRIOR SANCTION NOT REQUIRED.

Fact of the Case:

The appellant, a Manager of a Nationalised Bank, was convicted for offences under Sections 120-B r/w 420, 471 r/w 468 of IPC and Sec.13(2) r/w 13(1)(d) of PC Act, 1988 for entering into a criminal conspiracy with other accused persons to cheat the bank by sanctioning and releasing a trade well loan/open cash credit of Rs.15 lakhs in favour of a fictitious firm, M/s Best Computers, owned by accused A-2, by accepting fabricated sale deed, fabricated encumbrance certificate, etc. and thereby causing a loss of Rs.17,37,914/- to the bank.

Finding of the Court:

The Court held that prior sanction for prosecution under Section 19 of IPC or under Section 197 of Cr.P.C. is not required in the instant case as the appellant, though a public servant, does not fall under the definition of 'public servant' under Section 2(c) of Prevention of Corruption Act, 1988 and is not employed in connection with the affairs of the Union or State. The Court further held that the appellant had abused his official position as Manager of the bank by sanctioning the loan without verifying the genuineness of the documents and ignoring the instructions of the panel lawyer, and that the prosecution had established the dishonest intention shared between the appellant and the borrower to cheat the bank.

Issues: 1. Whether prior sanction for prosecution under Section 19 of Prevention of Corruption Act or Section 197 of Cr.P.C. is required for prosecuting a Manager of a Nationalised Bank for offences committed while acting or purporting to act in the discharge of his official duty? 2. Whether the appellant had abused his official position as Manager of the bank by sanctioning the loan without verifying the genuineness of the documents and ignoring the instructions of the panel lawyer?

Ratio Decidendi: 1. Prior sanction for prosecution under Section 19 of Prevention of Corruption Act or Section 197 of Cr.P.C. is not required for prosecuting a Manager of a Nationalised Bank for offences committed while acting or purporting to act in the discharge of his official duty, as such Manager is not a 'public servant' within the meaning of Section 2(c) of Prevention of Corruption Act, 1988 and is not employed in connection with the affairs of the Union or State. 2. The appellant had abused his official position as Manager of the bank by sanctioning the loan without verifying the genuineness of the documents and ignoring the instructions of the panel lawyer, as evidenced by the fact that he had failed to obtain the original documents of the mortgage deed, loan discharge receipt from the Co-operative Society, building plan permission and permit, and had accepted a fabricated sale deed and fabricated encumbrance certificate.

Final Decision: The Court allowed the appeal filed by the appellant, set aside the judgment of conviction passed by the trial court, and acquitted the appellant of all charges.