of Goa Vs. Babu Thomas  Insc 517 (29 September 2005)
Sema & G.P.Mathur H.K.Sema, J
challenge in this appeal, filed by the State of Goa, by special leave is to the
order of the High Court of Bombay at Goa, Panaji dated 19.9.2002 in Crl. Misc.
application No. 99 of 2002. Briefly stated, the facts are as follows:
respondent, herein, was employed as Joint Manager in Goa Shipyard Limited, a
Govt. of India Undertaking under the Ministry of Defence in 1994. At the
relevant time, he was officiating as Manager (Personnel & Administration).
He was arrested by CID, Anti Corruption Bureau of Goa Police on the charge that
he demanded and accepted illegal gratification from one Mr. M. Channaiah - the
complainant, an Attorney of M/s. Tirumala Services in order to show favour for
settlement of wages, bills/arrears, certification of pending bills and to show favour
in the day-to- day affairs concerning the said contractor. It was further
alleged that the respondent, on various occasions, demanded and accepted from
the complainant a sum of Rs. 3,68,000/- as illegal gratification/reward for
showing favour to the complainant in exercise of his official functions
concerning the said contract. On the basis of the aforesaid allegations, an
investigation was conducted. After completion of the investigation, the
charge-sheet was filed under Sections 7 and 13 of the Prevention of Corruption
Act, 1988 (hereinafter as `the Act') and Sections 161 and 165 of the I.P.C.
before the court of the Special Judge, N.A. Britto, appointed under Section 3
of the Act.
charges framed by the Special Judge against the respondent are as follows:
you on or about the 14th day of September, 1994, you being a public servant,
namely Manager (Personnel and Administration) in Goa Shipyard Ltd., Vasco-da-Gama,
which is a Public Sector Undertaking, demanded and accepted illegal
gratification, other than legal remuneration of Rs. 20,000/- from the
complainant Shri M. Channaih, Attorney of M/s. Tirumalla Services, who were
given a contract of sweeping, labour supply and security etc. in Goa Shipyard,
in order to show favours for the settlement of wage bills/arrears, to certify
pending bills as well as to show favours in various day to day affairs
concerning the said contract, and thereby, you committed an offence punishable
under Section 7 of the Prevention of Corruption Act, 1988.
prior to the said date and place, you abused your position as a public servant
and obtained for yourself large sums of money from the said M. Channaih to
certify that the contract work was completed/performed satisfactorily, and
thereby, you committed an offence punishable under Section 13(1)(d)(ii) of the
said Prevention of Corruption Act, 1988 and within the cognizance of this
Court." Alongwith the charge-sheet, the prosecution had also filed a
sanction order dated 2.1.95 issued under the signatures of the Company
Secretary. In the said sanction order itself, it is noticed in paragraph 1 that
the Chairman and the Managing Director of the Company is the appointing
authority of the respondent. It is also noticed in paragraph 2 of the said
sanction order that under the Goa Shipyard Officer's Conduct, Disciplines and
Appeal Rules, 1979 (hereinafter `the Rules'), the services of the respondent
could be terminated after obtaining the approval of the Board of
paragraph 3 of the said sanction order it is noticed that the sanction required
under Section 19 of the Act was granted.
undisputed that the sanction for prosecution of the respondent was granted by
the Company Secretary under Section 19 of the Act. It is also undisputed that
the authority competent to remove the respondent from the post, he was holding,
was the Board of Directors. It is also undisputed that the sanction order does
not refer to any order/resolution of the Board of Directors of the Company
pursuant to which Company Secretary was authorized by the Board of Directors to
convey the sanction order having passed by the Board of Directors. Pursuant to
the sanction order dated 2.1.95, cognizance was taken on 29.5.95.
interregnum, the respondent was dismissed from service w.e.f. 21.1.97. We are
told, at the Bar, that the termination order was set aside by the High Court
and an S.L.P. is pending before this Court. Another sanction order dated 7.9.97
came to be issued by the Chairman and Managing Director of Goa Shipyard Company
Ltd. (the sanction order referred to in various documents submitted alongwith
the charge). The sanction order further states that the order was passed in
exercise of the powers vested and on behalf of the Board of Directors, sanction
was accorded to prosecute the respondent under the Act. The sanction order also
states that the sanction was accorded retrospectively w.e.f. 14.9.94.
the second sanction order dated 7.9.97 was granted retrospectively w.e.f.
14.9.94 after the cognizance was taken on 29.5.95. It is also undisputed that
though the sanction order was issued under the signatures of the Chairman and
Managing Director, the same has not referred to any resolution of the Board of
Directors passed in this regard pursuant to which the Chairman and Managing
Director issued sanction order.
19 of the Act of 1988 reads:
Previous sanction necessary for prosecution.
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, -
the case of any other person, of the authority competent to remove him from his
Shipyard Officer's Conduct, Disciplines and Appeal Rules 1979 provide that the
authority competent to appoint and to remove the respondent from his office is
the Board of Directors. Learned counsel for the appellant does not dispute any
of the aforesaid mentioned facts, as adumbrated above.
present case, the appellant does not dispute that the sanction order dated
2.1.95 was issued under the signatures of the Company Secretary. There was no
reference to the decision/resolution being passed by the Board of Directors
pursuant to which the sanction order was issued under the signatures of the
Company Secretary. It is also not disputed that the second sanction order dated
7.9.97 issued by the Chairman and Managing Director of the Company also did not
refer to any resolution/decision taken by the Board collectively pursuant to
which the second sanction order was issued. In the facts and circumstances, as
adumbrated above, the view taken by the High Court cannot be said to be
counsel for the appellant, however referred to sub-section 3 of Section 19 of
the Act. Sub-section 3 of Section 19 reads as under:
Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2
of 1974), -
finding, sentence or order passed by a special Judge shall be reversed or
altered by a Court in appeal, confirmation or revision on the ground of the
absence of, or any error, omission or irregularity in, the sanction required
under sub-section (1), unless in the opinion of that Court, a failure of
justice has in fact been occasioned thereby;
Court shall stay the proceedings under this Act on the ground of any error,
omission or irregularity in the sanction granted by the authority, unless it is
satisfied that such error, omission or irregularity has resulted in a failure
Court shall stay the proceedings under this Act on any other ground and no
Court shall exercise the powers of revision in relation to any interlocutory
order passed in any inquiry, trial, appeal or other proceedings."
Referring to the aforesaid provisions, it is contended by learned counsel for
the appellant that the Court should not, in appeal, reverse or alter any finding,
sentence or order passed by a special Judge on the ground of the absence of any
error, omission or irregularity in, the sanction required under sub-section
(1), unless the Court finds a failure of justice has in fact been occasioned
thereby. In this connection, a reference was made to the decision of this Court
rendered in the case of State By Police Inspector v. T. Venkatesh Murthy (2004)
7 SCC 763. Reference was also made to the decision of this Court in the case of
Shri Durga Dass v. State of Himachal Pradesh (1973) 2 SCC 213 where this Court
has taken the view that the Court should not interfere in the finding or
sentence or order passed by a special Judge and reverse or alter the same on
the ground of the absence of, or any error, omission or irregularity in, the
sanction required under sub- section (1), unless the Court finds that a failure
of justice has in fact been occasioned thereby.
to the counsel for the appellant no failure of justice has occasioned merely
because there was an error, omission or irregularity in the sanction required
because evidence is yet to start and in that view the High Court has not
considered this aspect of the matter and it is a fit case to intervene by this
Court. We are unable to accept this contention of the counsel. The present is
not the case where there has been mere irregularity, error or omission in the
order of sanction as required under sub- section (1) of Section 19 of the Act.
It goes to the root of the prosecution case. Sub-section (1) of Section 19 clearly
prohibits that the Court shall not 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 as stated in clauses (a), (b) and
already noticed, the sanction order is not a mere irregularity, error or
omission. The first sanction order dated 2.1.95 was issued by an authority that
was not a competent authority to have issued such order under the Rules. The
second sanction order dated 7.9.97 was also issued by an authority, which was
not competent to issue the same under the relevant rules, apart from the fact
that the same was issued retrospectively w.e.f. 14.9.94, which is bad. The
cognizance was taken by the Special Judge on 29.5.95. Therefore, when the
Special Judge took cognizance on 29.5.95, there was no sanction order under the
law authorising him to take cognizance. This is a fundamental error which
invalidates the cognizance as without jurisdiction.
being the law, we are unable to sustain the submission of learned counsel for
regard to the gravity of the allegations levelled against the respondent, we
permit the competent authority to issue a fresh sanction order by an authority
competent under the Rules and proceed afresh against the respondent from the
stage of taking cognizance of the offence and in accordance with law.
appeal stands disposed of in the above terms.