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IN THE HIGH COURT OF MADHYA PRADESH
Vivek Agarwal and Devnarayan Mishra, JJ.
Govind Singh Lodhi v. Union of India & Others
Writ Petition No. 26941 of 2021, 25928 of 2021, 25931 of 2021, 25941 of 2021, 26050 of 2021, 26051 of 2021, 26053 of 2021 and 26942 of 2021 (Jabalpur); Decided on 18.9.2024
Prevention of Corruption Act, 1988 -- S. 19 -- sanction for prosecution -- disciplinary authority did not propose to accord sanction, but passed order denying sanction -- file was not referred to CVC through CVO of Bank, but order was communicated through CVO to CBI -- held -- it is not a case of difference of opinion with CBI, but a clear case of denial of sanction by competent authority -- once prosecution sanction was denied, there was no occasion for CVC or DoPT to thrust their will upon disciplinary authority -- in subsequent order of sanction, no mention of changed circumstances or new material which was not available when sanction was declined earlier -- no order of refusal or note-sheet produced in Court to show that order refusing to grant sanction was not an order but only an opinion -- once order refusing to grant sanction has been passed then, except for two contingencies, that is, new material being brought on record and omission to consider some relevant fact, there could not have been any review, therefore, opinion of CVC or DoPT will not bind Bank -- held further -- it may be necessary for appointing authority to call for and seek opinion of CVC before it takes any decision on request of sanction -- statutory scheme under which appointing authority would call for, seek and consider advice of CVC can neither be termed as “acting under dictation”, nor a factor which could be referred to as irrelevant consideration -- it may be a valuable input, but final decision of appointing authority must be of its own by application of independent mind -- impugned orders granting sanction for prosecution passed without application of mind and without existence of twin conditions of some new material or some fact being not considered by disciplinary authority -- cannot be sustained in eyes of law -- especially when Ministry of Finance itself had directed public sector banks to ensure that newly recruited officers under probation or having service of less than two years are not to be asked to recommend and process loans unless it forms part of their learning process -- no independent assessment could have been made by probationer having less than two years’ service -- even if it was part of his learning process, that should have been under guidance of an experienced hand -- person to be blamed for any lapse is the person under whom petitioners were under probation, not petitioners themselves -- impugned orders of sanction quashed. (1991) 3 SCC 219, (1997) 11 SCC 444, (2008) 8 SCC 92, (2000) 9 SCC 53, AIR 1979 SC 677, (2010) 14 SCC 527 and (1996) 6 SCC 634 followed. 2016 SCC Online MP 8968, 2010 SCC Online Mad. 6237, (2018) SCC Online Ker. 14261, 2012 (2) MWN (Cr.) 141, 2009 SCC Online HP 956, Case No. 3274 of 2018 decided on 17.12.2021 (All.), Criminal Revision Application No. 297 of 2023 and Criminal Application No. 246 of 2019 decided on 9.1.2024 (Bom.), 2017 SCC Online Bom. 9552 and Principles of Statutory Interpretation by Jus. G. P. Singh (13th Edition 2012) relied on. 2009 (67) ACC 350 (SC) = JT 2009 (13) SC 180, (2009) 15 SCC 533, 2022(4) JLJ 267 = 2022 SCC Online SC 1377, 2017 SCC Online Bom. 9552, S. B. Civil Writ Petition No. 7156 of 2007 decided on 10.3.2010 (Raj.), Criminal Appeal No. 502 of 1993 decided on 3.9.1997, 1991 CrLJ 1438 (SC) and AIR 1958 SC 12 referred to. (2020) 17 SCC 664, (2014) 11 SCC 388, P.L. 2014 (??) JLJ – (SC) = AIR 2014 SC 2369, W.P. (Cr.) No. 355 of 2017 decided on 6.4.2018 (CG) and 2024 (1) JLJ 532 (March) distinguished. [Paras 37, 40 & 52 to 54]
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ORDER
Agarwal -- 1. This bunch of petitions is filed by set of banking officers belonging to the Punjab National Bank. It is submitted that these cases are similar in nature, whereby the competent authority after refusing to grant sanction, under the pressure of Chief Vigilance Commissioner and the Department of Personnel & Training (DoPT) has granted sanction without there being any change in the circumstances or without there being any new material brought on record.
2. For the purposes of reference, facts in the case of W.P. No.26941/2021 (Govind Singh Lodhi v. Union of India and others) are taken for consideration.
3. Petitioner’s contention is that petitioner was working as Manager (Credit) in MMG Scale-II, for which selection was conducted by the respondent-Punjab National Bank. He was declared successful and vide order dated 21.1.2013, he was offered appointment on the said post of Manager (Credit) in MMG Scale-II, where he gave his joining on 18.4.2013. Petitioner upon giving his joining, was posted at Kanthal (Ujjain). Petitioner was initially appointed on probation for a period of two years, as is evident from his appointment order (Annexure P-1).
4. It is submitted that as an employee of the Punjab National Bank, provisions of the Punjab National Bank Officers (Conduct) Regulations, 1977, Punjab National Bank Officer Employees’ (Discipline and Appeal) Regulations, 1977 and Punjab National Bank (Officers) Service Regulations, 1979 and other rules and conditions of service laid down by the Bank from time to time for its officers, were applicable to the petitioner.
5. It is submitted that a complaint was made on 16.1.2018 by one Shri Vijay Kumar Harit, Chief Manager, Punjab National Bank, Assets Recovery Management Branch, Indore, and an FIR was registered against certain persons. It was alleged that the accused officers in connivance with the borrower and the guarantors, sanctioned a Cash Credit Limit (CCL) of Rs.400 Lacs on 19.7.2013 in favor of one Sohanlal Kothari, who was proprietor of M/s Jai Jinendra Industries. That cash credit limit was to be used in the business of coal trading. Against the said cash credit limit, borrower along with the guarantors had mortgaged land and building of more than 100%.
6. The allegation is that the sanction of cash credit limit was in blatant violation of the Bank norms and without verifying the required stocks/securities. It was further alleged that the collateral security was overvalued and false, forged and fictitious documents were procured by the borrower for grant of the cash credit limit.
7. The Central Bureau of Investigation (CBI), ACB, Bhopal, lodged FIR under sections 120-B read with sections 420, 471, IPC and sections 13(1)(d) read with section 13(2) of the Prevention of Corruption Act, 1988 (for brevity “PC Act”) against the accused persons. The allegation against the petitioner Shri Govind Singh Lodhi is that when he was posted as Manager (Credit) at Branch Kanthal (Ujjain) of the Punjab National Bank, then without verifying and analyzing documents and financial details, forwarded the application of the borrower. Another interesting fact is that initially name of the petitioner was not mentioned in the FIR, but was included in the array of accused in the charge-sheet. Thereafter, the prosecution approached the competent authority of the respondent Bank for the purpose of sanction for prosecution against the petitioner under section 19 of the PC Act.
8. It is submitted that since petitioner was a probationer, therefore, in terms of the rules and regulations of the Punjab National Bank, he being the junior-most officer and on probation, still learning the tricks of the trade, was not aware of the intricacies of the cash credit limit and, therefore, he being only a recommending authority and not the sanctioning authority of cash credit limit, he could not have been arrayed as an accused in violation of the provisions contained in the service regulations, especially, t
A public servant cannot be prosecuted under the Prevention of Corruption Act without a valid sanction from the competent authority, and such authority cannot delegate its power to grant or refuse san....
The Competent Authority cannot review its earlier decision to refuse sanction without fresh materials, and there is a distinction between absence of sanction and alleged invalidity on account of non-....
Sanction for prosecution of public servants must reflect independent assessment; repeated refusals by the authority, absent new evidence, undermine legitimacy of prosecution.
The main legal point established in the judgment is that the competent authority must consider fresh materials and apply independent mind in granting sanctions for prosecution, in accordance with sta....
The disciplinary authority must independently assess penalties without undue influence from external advice, ensuring adherence to principles of natural justice.
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