P.L. TATWALversusSTATE OF MADHYA PRADESH

                        (2014] 2 S.C.R. 1116


A                           P.L. TATWAL
                                  v.
                  STATE OF MADHYA PRADESH
                 (Criminal Appeal No. 456 of 2014)
                        FEBRUARY 19, 2014
B
          [SUDHANSU JYOTI MUKHOPADHAYA AND
                  KURIAN JOSEPH, JJ.]

        PREVENTION OF CORRUPTION ACT, 1988:
c
       s. 19 (1) (c) rlw 13 (1) (d) and 13 (2) - Previous sanction
  -- Competent Authority - Assistant Engineer appointed when
  Corporation was ruled by Administrator - Sanction accorded
  by Standing Committee of Corporation - Held: Administrator
D is only an ad hoc arrangement made by Government u/s 424
  of Municipal Corporation Act when an elected committee is
  superseded or dissolved -- Standing Committee being
  appointing authority of appellant, was the competent aut/1ority
  to accord sanction - Madhya Pradesh Municipal Corporation
E Act, 1956 - SS. 58 and 424.

        s. 19 - Previous sanction for prosecution -Application of
  mind by competent authority - Held: The authority has to be
  apprised of all the relevant materials, and on such materials,
  it has to take a conscious decision as to whether the facts
F would reveal the commission of an offence -- The decision
  making on relevant materials should be reflected in the order
  and if not, it should be capable of proof before the court -- In
  the instant case, though appellant made a specific objection
  before Special Judge, the order does not indicate any inquiry
G by the court in this regard -- Orders passed by High Court and
  trial court are· set aside and matter is remitted to trial court to
  record a finding as to valid sanction - It may also consider
  the effect of quashing of the prosecution as regards superior
  officers and there being no sanction for prosecution of others.
H                                1116
  P.L. TATWAL v. STATE OF MADHYA PRADESH               1117


    The appellant, an Assistant Engineer, along with           A
others, was sought to be prosecuted for offences
punishable u/ss 13(1)(d) and 13(2) of the Prevention of
Corruption Act, 1988 on the allegations of irregularities
in the award of the contract and construction of
administrative building for the Corporation. At the            B
relevant time, the Corporation was ruled by an
Administrator. However, the sanction was granted by the
Standing Committee of the Corporation.

    In the instant appeal, it was mainly contended for the
appellant that since he was appointed in service by the        C
Administrator, sanction for prosecution could be given
only by the Administrator and in his absence by the State
Government; that there was no proper and valid sanction
by the competent authority; and that since the
proceedings for prosecution against his superior officers      D
had been quashed, proceedings in his case also be
quashed as it was not likely in such a situation to have a
successful prosecution.

    Allowing the appeal in part, the Court                     E-
     HELD: 1.1 In view of s. 19 (1) (c) of the Prevention of
Corruption Act, 1988, the competent authority to give
previous sanction in the case of the appellant is the
authority competent to- remove him from service. No
doubt the appointing authority is the authority competent      F
to remove him from service. Under s. 58 of the Municipal
Corporation Act, 1956, the Standing Committee is the
competent authority for appointment of the appellant. The
Administrator is only an ad hoc arrangement made by the
Government u/s 424 of the Municipal Corporation Act            G
when an elected committee is superseded or dissolved.
It so happened that the appointment of the appellant was
at a time when the Municipal Corporation was ruled by
the Administrator. It is the Standing Committee which
gave the sanction by its order dated 27 .08.1996.              H
    1118   SUPREME COURT REPORTS              [2014] 2 S.C.R.


A Therefore, the trial court and the High Court cannot be
  faulted in taking the view that there was an order of
  sanction for prosecution from the competent authority.
  [para 7-9] [1122-C-D; 1123-A-B, D]

       1.2 The grant of sanction is only an administrative
8
  function. It is intended to protect public servants against
  frivolous and vexatious litigation. It also ensures that a
  dishonest officer is brought before law and is tried in
  accordance with law. Thus, it is a serious exercise of
C power by the competent authority. The authority has to
  be apprised of all the relevant materials, and on such
  materials, it has to take a conscious decision as to
  whether the facts would reveal the commission of an
  offence under the relevant provisions. The decision
  making on relevant materials should be reflected in the
D order and if not, it should be capable of proof before the
  court. Though the appellant made a specific objection in
  this regard before the Special Judge, in the order dated
  27.12.2004, there is no inquiry by the court in this regard.
  There is no reference at all to the recommendation made
E by the Municipal Commissioner. [para 12 and 15] [1125-
   E-G; 1126-E]

      1.3 In the circumstances, the trial court should
  conduct a proper inquiry as to whether all the relevant
F materials were placed before the competent authority
  and whether it has referred to the same so as to form an
  opinion as to whether the same constituted an offence
  requiring sanction for prosecution. Accordingly, the
  orders passed by the High Court and the trial court are
G set aside and the matter is remitted to the trial court to
  conduct a proper inquiry as to according of the sanction.
  [para 16] [1128-B-C]

      1.4 The fact that the ptoceedings for prosecution in
  the case of the Commissioner and Administrator, who
H were the controllin_g officers of the appellant, have been ·
   P.L. TATWAL v. STATE OF MADHYA PRADESH             1119


quashed, may also be brought to the notice of the Special      A
Judge which would be considered at the time of
consideration of charge, in case the court enters a
finding on valid sanction and decides to proceed with the
case. The court may also consider the fact that there is
no sanction for prosecution in the case of the                 B
Superintending Engineer and the City Engineer, who
were the superior officers of the appellant at the relevant
time and in whose case, the Standing Committee decided
not to give sanction on the ground that they were not in
service when the decision on sanction was taken. [para         c
17] [1128-D-F]

    State of Maharashtra through Central Bureau of
                                                  =
Investigation v. Mahesh G. Jain, 2013 (3) SCR 850 (2013)
8 sec 119 - relied on.
                                                               D
    Chittaranjan Das v. State of Orissa 2011 (7) SCR 836   =
(2011) 7 sec 167 - cited.
                    Case Law Reference:
    2011 (7) SCR 836        cited                para 2        E
    2013 (3) SCR 850         relied on           para 3
    CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
No. 456 of 2014.
                                                               F
    From the Judgment and Order dated 25.08.2011 of the
High Court of M.P. at Indore in CRR No. 96 of 2005.

    Rekha Pandey, Shiv Prakash Pandey for the Appellant.

     C.D. Singh, Sakshi Kakkar, Bhupender Pratap Singh for     G
the Respondent,

    The Judgment of the Court was delivered by

    KURIAN, J. 1. Leave granted.
                                                               H
    1120     SUPREME COURT REPORTS                 [2014] 2 S.C.R.


A      2. The appellant along with two others were sought to be
  prosecuted under Section 13(1 )(d) and 13(2) of the Prevention
  of Corruption Act, 1988 (hereinafter referred to as the 'PC Act').
  The allegations pertain to the irregularities in the award of the
  contract and construction of administrative building for the
B Corporation of Ujjain during the period 1991-1993. At the
  relevant time, the appellant was working as the Assistant
  Engineer in the Corporation and the Corporation was ruled by
  an Administrator. In the case of the co-accused Shri D.L.
  Rangotha, the then Commissioner of the Municipal Corporation
c and Shri D. P. Tiwari, the then Administrator of the Corporation,
  the State Government and the Central Government respectively
  had declined to grant sanction, while they were in service.
  Since the prosecution was sought to be launched after their
  retirement, the same was challenged before the trial court and
  the High Court unsuccessfully. However, by order dated
0
  21.08.2013, in Criminal Appeal No. 1213 of 2013 and Criminal
  Appeal No. 1214 of 2013, this Court quashed the proceedings
  for prosecution against Shri D. L. Rangotha and Shri D. P.
  Tiwari on the ground that once sanction for prosecution is
E refused by the competent authority while the officer is in service,
  he cannot be prosecuted after retirement notwithstanding the
  fact that no sanction for prosecution under the PC Act is
  necessary after the retirement of a public servant. The order
  was passed following the decision in Chittaranjan Das v. State
  of Orissa 1 .
F
        3. However, in the case of the appellant herein, sanction
  was granted by the Standing Committee of the Corporation
  while he was in service. Though the same was subsequently
  withdrawn, that order was set aside by the High Court holding
G that the order on withdrawal was passed without proper
  application of mind.

         4. The appellant has three main contentions:

H   1.   c2011) 7 sec 167.
   P.L. TATWAL v. STATE OF MADHYA PRADESH                     1121
                   [KURIAN, J.]
      (i)    Since he was appointed in service by the                  A
             Administrator, sanction for prosecution can be
             given only by the Administrator and in case, the
             Administrator is not in position, then the sanction
             is to be given by the State Government who
             appoints the Administrator.                               B

      (ii)   At any rate, there is no proper and valid sanction
             by the competent authority ..

      (ii)   Since the proceedings for prosecution against his
             superior officers have been quashed by this Court,        C
             proceedings in his case also be quashed since it
             is not likely in such a situation to have a successful
             prosecution.                         ··

     5. It is not in dispute that the appellant was appointed by       0
the Administrator when the Corporation was ruled by the
Administrator. Therefore, it is the contention of the appellant that
the competent authority to give sanction for prosecution under
Section 19 of the PC Act is theAdministrator and in case the
Administrator is not available, the sanction is to be given by         E
the State Government.

     6. We are afraid, the contentions cannot be appreciated
as the same do not found any basis in law or logic. Section
19( 1) of the PC Act reads as follows:
                                                                       F
     "19. Previous sanction necessary for prosecution.-
     (1) No court shall take cognizance of an offence punishable
     under sections 7, 10, 11, 13 and 15 alleged to have been
     committed by a public servant, except with the previous
     sanction,-                                                        G
      (a)    in the case of a person who is employed in
             connection with the affairs of the Union and is not
             removable from his office save by or with the
             sanction of the Central Government, of that
                                                                       H
    1122         SUPREME COURT REPORTS              (2014] 2 S.C.R.


A                  Government;

           (b)     in the case of a person who is employed in
                   connection with the affairs of a State and is not
                   removable from his office save by or with the
                   sanction of the State Government, of that
B
                   Government;

           (c)     in the case of any other person, of the authority
                   competent to remove him from his office."

c                                              (Emphasis supplied)

       7. The appellant comes under Section 19(1 )(c). The
  competent authority to give previous sanction is the authority
  competent to remove one from service. No doubt the appointing
  authority is the authority competent to remove him from service.
D Under Section 58 of the Municipal Corporation Act, 1956, the
  Standing Committee is the competent authority for appointment
  in any post in the municipality having a salary for more than
  Rs.400/- per month. For easy reference, we may extract the
  relevant portion from the statement made on behalf of the State
E Government on a specific query from the court:

        "The Respondent most respectfully submits that (sic)
        Section 45 and 48 of the Municipal Corporation Act 1956
        empowers the Municipal Corporation to establish the
F       committees and through Gazette Notification 1977 dated
        21.03.1977 whereby Section 58 of the Municipal
        Corporation Act was amended, power was vested in the
        Standing committee to appoint any persons on the post
        of any such municipal post, which has maximum salary of
G       more than Rs.400/-....

        xxx       xxxxxx                                xxx
        The Respondent most respectfully submits that the above
        mentioned amendment was made in 1977 and the
H       Petitioner was initially appointed in the Municipal
     P.L. TATWAL v. STATE OF MADHYA PRADESH                      1123
                     [KURIAN, J.]
      Corporation on 17.12.79 by the Standing committee ... "             A

      8. The Administrator is only an ad ho.c arrangement made
 by the Government under Section 424 of the Madhya Pradesh
 Municipal Corporation Act, 1956 when an elected committee
 is superseded or dissolved. It so happened that the
                                                                          8
 appointment of the appellant was at a time when the Municipal
 Corporation was ruled by the Administrator. That does not mean
 that there should be an Administrator to take any decision with
 regard to the sanction for prosecution of the appellant under
 the PC Act.
                                                                          c
        9. The Statute is very clear that the authority competent to
 · remove an officer from service is the authority to give sanction
   for prosecution. In the case of the appellant, being an employee
   having a salary of more than Rs.400/- per month, the authority
   competent to remove him from service is the Standing                   D
   Committee. It is the Standing Committee which gave the
   sanction by its order dated 27.08.1996. Therefore, the trial court
   and the High Court cannot be faulted in taking the view that
   there was an order of sanction for prosecution from the
·· competent authority.                                                   E
      10. It is vehemently contented by the learned counsel for
 the appellant that there is no proper and valid sanction for
 prosecuting the appellant. The authority has not applied its mind
 and has not taken a conscious decision by referring to any of
 the relevant materials. It is pointed out that the authority has only    F
 accepted the recommendations of the Commissioner. But there
 is nothing to show that the recommendation was before the
 authority. Still further, it is pointed out that the order of sanction
 does not indicate reference to any material; however, the
 enclosures give an indication that the inquiry report of the             G
 Special Police Establishment and government letter were
 before the competent authority. In order to appreciate the
 contention properly, we shall extract the Resolution of the
 Standing Committee, which reads as follows:
                                                                          H
    1124   SUPREME COURT REPORTS                [2014] 2 S.C.R.


A      "RESOLUTION N0.309 DATED 27-08-1996 OF
       STANDING COMMITTEE MEETING. UJJAIN
       MUNICIPAL CORPORATION

             With regard (sic) to sanction of prosecution in Crime
       No. 54/93 against Administrator of Municipal Corporation
B
       and others, letter of Commissioner Municipal Corporation
       No.310 dated 22.06.1996 stating that "the Government
       has sought sanction for prosecution of Shree R.K. Sharma,
       the then Superintending Engineer, Shree R.K. Bhagat the
       then City Engineer, Shree P.L. Tatwal, the then Assistant
c      Engineer, who were posted with Municipal Corporation
       Ujjain. Under section 19(1 )(c) (sic) of Prevention of
       Corruption Act, sanction for prosecution can be accorded
       by the authority which is competent to remove such public
       servant from the office. The Standing Committee is the
D      Appointing Authority of the above three officers. That way
       Corporation is competent to accord sanction for
       prosecution against them. The factual position about the
       three officers is as below. Shree R.K. Sharma the then
       Superintending Engineer was not from this department
E      and was sent on deputation by the government and is now
       at presently retired. Shree R.K. Bhagat the then City
       Engineer has since retired and Shree P.L. Tatwal the then
       Assistant Engineer is presently posted with Municipal
       Corporation Ujjain. So please intimate Honourable Mayor
F      about the above factual position and decision about grant
       of sanction be intimated so that the government may be
       intimated of the decision.

              After discussion. unanimously resolved that as per
       the recommendation of Municipal Commissioner. sanction
G      is granted to take action to prosecute the concerned
       officers. Action be taken according to law.

                                       Sd/- (Smt. Anju Bhargav)
                                 Chairman, Standing Committee
H                                  Municiipal Corporation Ujjain
     P.L. TATWAL v. STATE OF MADHYA PRADESH                  1125
                     [KURIAN, J.]
      Copy:-                                                          A

      Sr. No.:- 1334               Date :- 11-9-96

      Commissioner, Ujjain Municipal Corporation to take
      necessary action.
                                                                      B
      Enclosed:- Government letter and photocopy
                 of enquiry report of Special Police
                 Establishment.

                                                           Sd/-       C
                                            Municipal Secretary
                                   Ullain Municipal Corporation"

                                            (Emphasis supplied)

    11. It may be seen that only the second paragraph of the          0
Resolution speaks about the sanction and that is following the
recommendation of the Municipal Commissioner. Whether that
formed part of the government letter, it is not clear. The contents
otherwise of the government letter are also not clear.

      12. The grant of sanction is only an administrative function.   E
It is intended to protect public servants against frivolous and
vexatious litigation. It also ensures that a dishonest officer is
brought before law and is tried in accordance with law. Thus, it
is a serious exercise of power by the competent authority. It has
to be apprised .of all the relevant materials, and on such            F
materials, the authority has to take a conscious decision as to
whether the facts would reveal the commission of an offence
under the relevant provisions. No doubt, an elaborate discussion
in that regard in the order is not necessary. But decision
making. on relevant materials should be reflected in the order        G
and if not, it should be capable ~f proof before the court.

    13. In a recent decision in State of Maharashtra through
Central Bureau of Investigation v. Mahesh G.Jain2 , the court
2.   (2013)8SCC119.                                                   H
    1126    SUPREME COURT REPORTS                      [2014] 2 S.C.R.


A   has referred to the \(ari0us decisions on this aspect from
    paragraph 8 onwards. ~ has been held at paragraph 8 as
    follows:

        "8. In Mohd. Iqbal Ahmed v. State of A.P.§. this Court
        lucidly registered the view that (SCC p. 174, para 3) it is
B       incumbent on the prosecution to prove that a valid sanction
        has been granted by the sanctioning authority after being
        satisfied that a case for sanction has been made out
        constituting an offence and the same should be done in
        two ways; either (i) by producing the original sanction which
c       itself contains the facts constituting the offence and the
        grounds of satisfaction, and (ii) by adducing evidence
        aliunde to show the facts· placed before the sanctioning
        authority and the satisfaction arrived at by it. It is well settled
        that any case instituted without a proper sanction must fail
D       because this being a manifest defect in the prosecution,
        the entire proceedings are rendered void ab initio."

      14. After referring to subsequent decisions, the main
  principles governing the issue have been culled out at
E paragraph 14 which reads as follows:

             "14.1. It is incumbent on the prosecution to prove that
        the valid sanction has been granted by the sanctioning
        authority after being satisfied that a case {or sanction has
        been made out.
F
              14.2. The sanction order may expressly show that the
        sanctioning authority has perused the material placed
        before it and, after consideration of the circumstances, has
        granted sanction for prosecution.
G
              14.3. The prosecution may prove by adducing the
        evidence that the material was placed before the
        sanctioning authority and its satisfaction was arrived at
        upon perusal of the material placed before it.

H
   P.L. TATWAL v. STATE OF MADHYA PRADESH                   1127
                   [KURIAN, J.]
           14.4. Grant of sanction is only an administrative         A
    function and the sanctioning authority is required to prima
    facie reach the satisfaction that relevant facts would
    constitute the offence.

          14.5. The adequacy of material placed before the           8
    sanctioning authority cannot be gone into by the court as
    it does not sit in appeal over the sanction order.

          14.6. If the sanctioning authority has perused all the
    materials placed before it and some of them have not been
    proved that would not vitiate the order of sanction.             C

           14.7. The order of sanction is a prerequisite as it is
    intended to provide a safeguard to a public servant against
    frivolous and vexatious litigants, but simultaneously an order
    of sanction should not be construed in a pedantic manner         D
    and there should not be a hypertechnical approach to test
    its validity."

     15. Though the appellants made a specific objection in this
regard before the Special Judge, unfortunately in the order
dated 27.12.2004, it is seen that there is no inquiry by the court   E
in this regard. There is no reference at all to the
recommendation made by the Municipal Commissioner.
Before the High Court also, though the submissions were
reiterated, the only consideration in that regard is available at
paragraph 21 of the impugned order which reads as follows:           F
         •'

      "21. It is not a case of the applicant that standing
           committee of the Municipal Corporation was not
           competent to grant sanction under section 19 of the
           Prevention of Corruption Act, 1988. Undisputedly,         G
           the competent authority had passed the orders of
           sanction against all the accused persons
           concerned. The order of the sanction was passed
           after considering the whole record of the case and
           proper application of mind. The applicant failed to       H
    1128    SUPREME COURT REPORTS                  [2014] 2 S.C.R.

A              demonstrate the order of sanction is suffering from
               non application of mind."

       16. In such circumstances, we are of the view that the trial
  court should conduct a proper inquiry as to whether all the
  relevant materials were placed before the competent authority
8
  and whether the competent authority has referred to the same
  so as to form an opinion as to whether the same constituted
  an offence requiring sanction for prosecution. In that view of the
  matter, we set aside the impugned order passed by the High
  Court and also order dated 27.12.2004 passed in Special
C Case No. 12 of 2004 by the trial court and remit the matter to
  the Special Judge (P.C. Act, 1988), Ujjain, Madhya Pradesh.

       17. Incidentally, we may also refer to the third point raised
  by the appellant. It is the submission that the proceedings for
D prosecution in the case of the Commissioner and Administrator,
  who were the controlling officers of the appellant, having been
  quashed, there is no point in continuing the trial in the case of
  the appellant and it would only be an attempt in futility. This
  subsequent development may also be brought to the notice of
E the Special Judge which would be considered at the time of
  consideration of charge, in case the court enters a finding on
  valid sanction and decide to proceed with the case. The court
  may also consider the fact that there is no sanction for
  prosecution in the case of the Superintendent Engineer and the
F City Engineer, who were the superior officers of the appellant
  at the relevant time and in whose case, the Standing
  Committee decided not to give sanction on the ground that they
  were not in service when the decision on sanction was taken.

      18. The appeal is allowed to that extent. Parties to appear
G before the Special Judge (P.C. Act, 1988), Ujjain, Madhya
  Pradesh on 05.04.2014.

    R.P.                                    Appeal partly allowed.