M. Gopalakrishnan Vs.
State by Addl. S.P. CBI, Bs & Fc Bangalore  INSC 276 (11 February
IN THE SUPREME COURT
OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO. 505 OF 2006 M.
Gopalakrishnan ....Appellant Versus State by Addl. S.P. CBI, B.S. & F.C.,
Bangalore ....Respondent WITH
Criminal Appeal No.274/2009 @ SLP(Crl.) No. 2687 of 2007 Criminal Appeal No.
277/2009 @ SLP(Crl.) No. 2848 of 2007 Criminal Appeal No.278/2009 @ SLP(Crl.)
No. 2912 of 2007 Criminal Appeal No.279/2009 @ SLP(Crl.) No. 2913 of 2007
Criminal Appeal No.280/2009 @ SLP(Crl.) No. 2923 of 2007
Dr. ARIJIT PASAYAT,
granted in Special Leave Petitions.
in all these appeals is to the order passed by a learned Single Judge of the
Madras High Court in each case dismissing the application under Section 482 of
the Code of Criminal Procedure, 1973 (in short the `Code'). Stand of the
appellant is that there was no sanction for prosecution as contemplated under
facts in a nutshell are as follows:
respondent/complainant on credible information registered a case against the appellant
and others for the alleged commission of offences punishable under Section 120B
of the Indian Penal Code, 1860 (in short the `IPC') read with Section 420 IPC
and Sections 11, 12, and 13(2) read with section 13(1)((d) of the Prevention of
Corruption Act, 1988 (in short the `PC Act'). On the basis of the First
Information Report when investigation proceeded it disclosed the commission of
the offences, as aforementioned, resulting in filing of a final report followed
by taking cognizance of the case by the court concerned.
The respective stands
of the parties before the High Court were as follows:
The appellant filed a
petition under Section 482 of the Code to quash the proceedings since in the
absence of any sanction under Section 197(1) (a) of the Code, the cognizance
taken by the Court is illegal and invalid since he is a public servant. It is
the further case of the appellant that though he was the Chairman and Managing
Director of the Company with over all control, the sanction of credit facility
was not directly connected with him and in this view he should be absolved from
all the charges. It was further submitted that there is no allegation that the
appellant as public servant obtained pecuniary advantage while holding office
as public servant and in this view the charges against him are untenable. On
the above basis, it was claimed that proceedings against him should be quashed.
opposed the application contending that sanction to prosecute the appellant is
not necessary under the facts and circumstances of the case and the same also
could be decided even at the time of the trial.
The final report
3 "That accused
M. Gopalakrishnan (A1) while functioning as the Executive Director and Chairman
and Managing Director, Indian Bank connived to commit criminal misconduct by
public servants by corrupt or illegal means or by abuse of their official
position as public servants or they while holding office as public servants
without any public interest obtained for themselves or for any other person any
valuable thing or pecuniary advantage by recommending/sanctioning credit limits
without proper appraisal, ignoring banking norms, RBI guidelines, exceeding
delegated powers, violating board directions despite glaring adverse features
in the conduct of the account, without ensuring proper end use of funds and
safeguarding the interest of the Bank by A1 to A4 the public servants, viz.
(A1) and N. Kumaraswamy (A2) named above to accept or obtain for themselves or
for their close relatives viz. A18 to A20 named above valuable thing without
consideration from persons whom they knew to have been concerned in business
transacted by them or having any connection with the official functions of
themselves or from any person whom they knew to be interested in or related to
the person so concerned and the accused R. Ramesh (A18), T.S. Jayakumar (A19)
and Kala Kumaraswamy (A20) to abet the aforesaid offences of public servants
obtaining valuable thing without consideration from persons concerned in business
transaction by them by accepting Rs.15 lacs and Rs.5 lacs in demand drafts and
an Ambassador Nova Car, respectively. Thus the accused A1 to A20 committed
offence punishable under Sections 120B read with Section 420 IPC and Sections
11, 12, 13(2) read with Section 13(1)(d) of PC Act.
it is seen the capacity or the position of the appellant as that of public
servant is an admitted position. In the ordinary course in order to take
cognizance of a case against a public servant subject to certain other
conditions as said in Section 197 of Code a sanction is a must as held by this
Court in Mohd. Hadi Raja v. State of Bihar (AIR 1998 SC 1945). In the above
decision it is observed as follows:
"For the purpose
of requirement of sanction under Section 197 of the Code the accused will be
such public servant who cannot be removed from his office except by or with the
sanction of the Government. Further, the accused will not only be a public
servant of above description but the offence alleged to have been committed by
such officer must have been committed while such public servant had been acting
or purporting to act in the discharge of his official duties."
far as the second part is concerned in this petition we are not very much
concerned since on that ground discharge or quashing of the proceedings was not
urged. In this view, High Court held that though the appellant is described as
a public servant it has to be seen whether he comes within the meaning of
"such public servant who cannot be removed from his office except by or
with the sanction of the Government".
revealed by the records the appellant was appointed as per the Notification
dated 8.12.1988 as Managing Director of the Indian Bank from the date of his
taking the charge to be the Chairman of the Board of Directors of the Indian
Bank with effect from the same date. This notification says that the Central
Government after consultation with the Reserve Bank of India had appointed the
appellant. On this basis learned counsel for the appellant submitted that the
appointment of the appellant as Managing Director-cum-the Chairman of the Board
of Directors was only by the Central Government and the Central Government
alone should have power to remove him from the service thereby taking the
accused within the ambit of Section 197 of Code.
Banks (Management and Miscellaneous Provisions) Scheme 1970 defines
"Chairman" under Rule 5(1) as follows:
6 "Chairman (1)
the Central Government shall, after consultation with the Reserve Bank appoint
one of the Directors to be the Chairman of the Board."
to Rule 7 of the Scheme:- "The Central Government may, after consultation
with the Reserve Bank appoint the same person to hold, at the same time both
the office of the Chairman and the Managing Director".
it comes to terms of office and remuneration etc. Rule 8(1)(a) reads:
anything contained in sub-clause (1), the Central Government shall have the
right to terminate the term of office of a whole time Director, including the
Managing Director, at any time before the expiry of the term specified under
that sub-clause by giving to him a notice of not less than three months' in
writing or three months' salary and allowances in lieu of notice and the whole
time Director, including the Managing Director shall also have the right to
relinquish his office at any time before the expiry of the term specified under
that sub-clause by giving to the Central Government notice of not less than
three months in writing."
the same manner, Section 8(4) reads:- "The Central Government may, if it
is satisfied that it is expedient in the interests of the nationalized bank so
to 7 do, remove a whole time Director including the Managing Director from
above provisions are relied on to say that appellant is a public servant
removable only by the Central Government.
above provisions as well as the notification relied on by the appellant would
indicate as if he was appointed by the Central Government, thereby impliedly
saying that he could be removed only by the Central Government. If this
position is correct then the sanction contemplated under Section 197 of Code
should come to the aid of the appellant and if there is no sanction, taking
cognizance of the case may be against the provisions of the law.
learned counsel for the respondent submitted that under the Banking Regulation
Act, 1949 the Chairman of a Banking Company is appointed only by the Reserve
Bank of India and the Reserve Bank of India alone is the competent authority to
remove the Chairman and in this view though the appellant is described as a
public servant he will not come within the phrasing contemplated under Section
197 of Code requiring sanction since the Central Government is not concerned
for his removal.
10(bb) of the Banking Regulation Act says:
office of the Chairman of the Board of Directors appointed on a whole time
basis or a Managing Director of a Banking Company is vacant, the Reserve Bank
may, if it is of opinion that the continuation of such vacancy is likely to
adversely affect the interests of the Banking Company, appoint a person
eligible under sub- section (4) of Section 10-B to be so appointed to be the
Chairman of the Board of Directors appointed on a whole time basis or a
Managing Director of the Banking Company, he shall so long as the person so
appointed is not a Director of such Banking Company, he shall so long as he
holds the office of the Chairman of the Board of Directors appointed on a whole
time basis or a Managing Director, be deemed to be a Director of the Banking
36(AA) empowers the Reserve Bank to remove Managerial and other persons from
office including any Chairman and Director which reads as follows:
Reserve Bank is satisfied that in the public interest or for preventing the
affairs of a Banking Company being conducted in a manner detrimental to the
interests of the depositors or for securing the proper management of any
Banking Company, it is necessary so to do, the Reserve Bank may for reasons to
be recorded in writing by order remove from office within effect from such date
as may be specified in the order any Chairman, Director, Chief Executive
Officer by whatever name called or other officer or employee of the Banking
Regulation Act, 1949 shall prevail over the Scheme which was formulated under
Section 9 of the Banking Companies (Acquisition and Transfer of Undertakings)
Act, 1970. This Scheme cannot have the over riding effect against the Banking
Regulation Act. In this view the appellant cannot claim that he is a public
servant coming within the meaning of a `public servant' not removable from his
office, save by or with the sanction of the Government. In view of the specific
provisions available for the removable of the Chairman under the Banking
Regulation Act it is prima facie clear that the appellant will not come within
the scope of Section 197 of Code. It was submitted by learned counsel for the
respondent before the High Court the question of requirement of sanction for
prosecution can be left open to be examined during the trial by giving an
opportunity to the defence to prove the same.
counsel for the respondent relied on a decision of this Court in P.K. Pradhan
v. State of Sikkim (2001 SCC (Crl.) 1234) wherein it is observed as follows:
requirement of sanction for prosecution could be raised at any time after
cognizance of the offence is taken, may be even at the time of conclusion of
trial or after conviction."
It is also observed
"The claim of
the accused that the act alleged was done reasonably and not in pretended
course of his official duty can be examined during the trial by giving an
opportunity to the defence to prove it. In such cases, the question of sanction
can be left open to be decided in the main judgment after conclusion of
the basis of the above conclusions the claim of the accused that he should be
discharged for want of sanction is not acceptable at present and the matter
should be left open to be decided later on.
High Court held that the question whether the appellant is removable from
service by the Reserve Bank or the Central Government is really an academic
interest because it is yet to be established that the impugned acts were done
by the appellant in position of his official duty.
Parkash Singh Badal v. State of Punjab (2007 (1) SCC 1) it was noted as
11 "The offence
of cheating under Section 420 or for that matter offences relatable to Sections
467, 468, 471 and 120B can by no stretch of imagination by their very nature be
regarded as having been committed by any public servant while acting or
purporting to act in discharge of official duty. In such cases, official status
only provides an opportunity for commission of the offence."
being the position, the High Court's view does not suffer from infirmity to
warrant interference. The appeals fail and are dismissed.
(Dr. ARIJIT PASAYAT)