The main legal point established in the judgment is that offences of cheating and criminal conspiracy, not committed in discharge of official duty, do not require sanction for prosecution under the Prevention of Corruption Act and the Code of Criminal Procedure.

JUDGMENT

Per: Rakesh Saksena, J.

Petitioner has filed this revision against the order dated 11.4.2008, passed by Special Judge (Prevention of Corruption Act), Bhopal, in Special Case No.07/2007, rejecting the application filed by him under Section 239 of the Code of Criminal Procedure seeking discharge from the offences punishable under Sections 420, 120B of the Indian Penal Code and Section 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988.

2. The State Economic Offence Investigation Bureau, Bhopal, on 24.7.2004 registered a case at Crime No.25/2004 in respect of the offences punishable under Sections 409, 420, 467, 468 and 120B of the Indian Penal Code against the following office bearers of Madhya Pradesh State Industrial Development Corporation (for brevity 'MPSIDC'), a Government Company registered under the Companies Act, 1956:-

(i) Rajendra Kumar Singh, the then Chairman

(ii) Ajay Acharya, the then Director

(iii) J.S. Ramamurthy, the then Director

(iv) M.P. Rajan, the then Managing Director

(v) Narendra Nahta, the then Chairman

(vi) S.R. Mohanty, the then Managing Director and against the beneficiary Chairmen/Directors of 42 other companies. On 6.8.2004, prosecution added Section 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988 (for brevity 'Act') also.

3. In short, the accusations against the Chairpersons and the Directors of MPSIDC are that they were involved in a conspiracy to defraud MPSIDC to the tune of crores of rupees and to misappropriate the surplus fund and in pursuance thereof, they passed resolution on 19.4.1995 knowing fully well that it was illegal and unauthorized act and, thereafter, continued to act upon it and in the process, also misappropriated additional sum of Rs.517 crores, secured as debt, by disbursing the entire money of MPSIDC, to various companies as loans in the name of Inter Corporate Deposits (ICDs), even without obtaining reasonably sufficient collateral security for repayment thereof.

4. As per charge sheet, M.P. Adyogik Vikas Nigam (MPAVN), which was renamed as MPSIDC was constituted to promote industrialization in the State of Madhya Pradesh and to provide financial assistance to Industrial Units in the State. The State Cabinet in a meeting held on 28.1.1994 appraised the activities of the Corporation as well as its financial status. A decision was taken to stop MPSIDC from financing the industries any further. For the sake of convenience resolution of the Cabinet Meeting is reproduced as under:-

"Audyogik Vikas Nigam bhavishya me vittiya sahayata band kare tatha vrahad avam madhyam udyogon ko protsahan aur pradesh me udyogon ko buniyadi suvidhaon ke vikas ka karya prabalta se karen."

In accordance with the Cabinet decision the Board of Directors of MPSIDC at its 225th meeting held on 31.1.1994 passed a resolution to stop the financial assistance forthwith. The corresponding agenda-note prepared by the Company Secretary Pankaj Dubey is reproduced as under:-

"That, after the review of performance, the Cabinet took the decision that in view of the recent liberalization on measures taken by the Government of India in respect of the economy and the Industry, the RBI approval to the All India Financial Institutions/Banks to sanction projects up to Rs.50 crores, the lowering of interest rate by the Banks, the comfortable CRR and SLR of the Banks and consequent enhanced liquidity, the considerably enhanced degree of professional and commercial orientation requiring financing under the changed economic scenario, there is no justification for MPSIDC to engage in financing and it should be stopped forthwith. The Cabinet also noted that the performance of MPSIDC in respect of its financial operations had been rather unsatisfactory and has resulted in an adverse portfolio situation and evidenced by the asset classification as on 31.03.1993 whereby approx 6