Brief Facts
- The prosecution alleges that A-1 to A-7 were engaged in a criminal conspiracy to defraud BHEL in awarding a contract for constructing desalination plants. A-1, then Executive Director of BHEL, directed Bhaskar Rao (the DGM and Approver) to issue limited tenders without proper pre-qualification. A-1 specified four fictitious firms and M/s Entoma Hydro Systems (represented by A-5) for the tender process. A-2, aware of the bogus firms, processed the proposal.
- During the tender process, A-5 submitted bids for both his firm and the fictitious entities. A-7 (brother of A-5), obtained demand drafts for these fictitious firms, using multiple bank branches. The Tender Committee, including the Approver, A-3, and A-4, recommended awarding the contract to A-5’s firm, despite its lack of necessary qualifications. The Committee also approved an interest-free advance of Rs. 4.32 crores to A-5’s firm. A portion of this amount was diverted to a sister concern involving A-5, A-6 (his father), and A-7.
- The prosecution claims that A-1 to A-7 committed various offenses through this scheme, resulting in wrongful financial gain for A-5 and his associates.
- A-1 and A-4 were convicted for the offences under IPC and the PC Act. Whereas, A-3 and A-4 were convicted for the offence under the IPC. Conviction was upheld by the High Court.
Issues
- Whether existence of reasonable nexus between an alleged offence by a public servant and their official duties is necessary to seek protection u/s 197(1) Cr.P.C?
- Whether Approver need to be examined as a witness before a magistrate when cognizance is taken by Special Court under PC Act?
Held
- The appeals were allowed and all the accused persons were acquitted.
Sanction under section 197 IPC was necessary - The Apex Court relied on the judgment in the case of Matajog Dobey vs. H.C. Bhari, (1955) 2 SCR 925 in which it was observed that there must be a reasonable connection between the act and the discharge of official duty; the act must bear such relation to the duty that the accused could lay a reasonable, but not a pretended or fanciful claim, that he did it in the course of the performance of his duty.
- The Court further relied on D. Devaraja vs. Owais Sabeer Hussain, (2020) 7 SCC 695 in which this Court explained that sanction is required not only for acts done in the discharge of official duty but also required for any act purported to be done in the discharge of official duty and/or act done under colour of or in excess of such duty or authority. This Court also held that to decide whether sanction is necessary, the test is whether the act is totally unconnected with official duty or whether there is a reasonable connection with the official duty.
- If according to the Management of the Company, the very same act of the co-conspirators fell in the realm of commercial wisdom, it is inconceivable that the act of accused, as part of the criminal conspiracy, fell outside the discharge of his public duty, so as to disentitle him for protection under Section 197(1) of the Code.
Observations in Parkash Singh Badal ((2007) 1 SCC 1) case distinguished - No public servant is appointed with a mandate or authority to commit an offence. Therefore, if the observations contained in paragraph 50 of the decision in Parkash Singh Badal are applied, any act which constitutes an offence under any statute will go out of the purview of an act in the discharge of official duty. The requirement of a previous sanction will thus be rendered redundant by such an interpretation.
No need to examine Approver twice in case when Special Court takes the cognizance. - It is clear that when the Special Court chooses to take cognizance, the question of the approver being examined as a witness in the Court of the Magistrate as required by Section 306 (4)(a) does not arise.
- The Apex Court held that the object and purpose of examining an approver twice u/s 306 CrPC, is to ensure that the accused is made aware of the evidence against him even at the preliminary stage, so as to enable him to effectively cross examine the approver during trial in order to bring out contradictions. The said object stands fulfilled in this case, since the confession statement of the approver before the Metropolitan Magistrate was enclosed with the Charge Sheet. Thus, there was no violation of the procedure prescribed by Section 306(4)(a) of the Code. Moreover, the accused persons had examined all the relevant witnesses.
Relevant Para No.
- 38, 42, 51, 52, 78, 79