1 IN THE HIGH COURT OF JUDICATURE AT PATNA CR. WJC No.425 of 2008 LALAN PRASAD SINGH( L.P.SINGH) son of late Bangali Singh, resident of village + P.O. Purabi Pakari, P.S.Dumariaghat, District East Champaran, posted as Superintendent, Central Excise, Headquarder Office, Patna and at present residing at Flat No.402-A Akshay Tower,White House Apartment,Budha Marg, P.S. Kotwali,District Patna … … Petitioner Versus 1. THE UNION OF INDIA through the Commissioner, Central Excise, Patna 2. Sri Premanand Das, the then Commissioner, Central Excise, Patna at present posted as Commissioner, Central Excise, Thane II Mumbai, 3rd Floor, Navprabhat Chambers, Ranade Road, Dadar( West), Mumbai, 400028 3. The Central Bureau of Investigation, Patna Branch, Patna … … Respondents For the petitioner: Shri Rana Pratap Singh, Sr.Adv. For C.B.I.: Shri Bipin Kumar Sinha, Adv. For Central Excise: Smt.Archana Meenakshi, Jr. S.C. ----------- P R E S E N T The Hon‟ble Justice Smt. Mridula Mishra The Hon‟ble Shri Justice Dharnidhar Jha - - - - O R D E R Mridula Mishra,J.- Petitioner Lalan Prasad Singh has preferred the present petition for quashing the order sanctioning his prosecution which is dated 12.2.2007, contained in Annexure-10, in respect of R.C.-09(A)/2001-PAT, pending in the court of the learned Special Judge, C.B.I., North Bihar, Patna. 2. The petition was heard by a learned Single Judge of the Court and while passing the order dated 18.11.2008, the learned Judge, after noticing the facts of the case and some of the laws governing the field of sanctioning 2 prosecution under the Prevention of Corruption Act, directed placing of the present petition before a Division Bench of the Court, for deciding as to:- (i) Whether refusal to grant sanction, as contained in Annexures-7,8 and 9, were mere opinions and thus, were covered by an earlier decision of the Court in Om Prakash Vs. Union of India reported in 2007(4) P.L.J.R. 243, or (ii) whether they formed „decisions‟ and thus could not come within the ambit of Om Prakash case. This is on account of the above reference made by the learned Single Judge that the petition has been heard by us and the same is being disposed of by the present order. 3. Annexures-7,is the letter C-No. Vig- 3/26/2003/5177 dated 12.12.2003 from the Commissioner, Central Excise, Patna, which was addressed to the Additional Director General, Directorate General of Vigilance, Customs and Central Excise, Kautilya Marg, New Delhi, in response to their letter F.No.557/16/2001/2930 dated 27.10.2003. Annexure-8 is letter of Commissioner, Central Excise, Patna being no. C.No.-VIG-3/26/2003/3030 dated 26.10.2004 in response to letter F.No.577/16/2001/3627 dated 14.10.2004 also of the Director General of 3 Vigilance. Annexure 9 is also a letter of Commissioner, Central Excise, Patna in response to letter F.No.V.557/16/2001/3336 dated 9.6.2005 again of the Additional Director General (Vigilance),Customs and Central Excise, New Delhi. Annexure 10, which is sought to be quashed through the present petition, is an order dated 12.2.2007 passed by the Commissioner, Central Excise, Patna, sanctioning prosecution of the petitioner in R.C.- o9(A)/2001 Pat while he was posted as Superintendent of Excise, Begusarai, and on the date of passing the sanction order was acting in the same capacity at Central Excise Division, Patna. 4. The facts of the case may briefly be noticed. It was alleged against the petitioner that within a period ranging from 1.1.1984 to 16.7.2001, he acquired movable and immovable properties to the tune of Rs. 21,50,447/- as against his total known earnings of Rs. 12,28,280/-. After making necessary deductions to the tune of 1/3rd of Rs. 12,28,80/- the savings of the petitioner would come to about Rs. 6,72,3999/- which was disproportionate to his known sources of income and for which he did not furnish satisfactory explanation. 4 5. The petitioner during the course of investigation as also after the close of it, besides, at the stage of consideration of the issue of granting sanction for prosecuting, made several representations, as may appear from Annexurs-7,8,9 and 10 for consideration of the C.B.I. which was investigating the case as also to the authority competent to sanction his prosecution and submitted that the calculations made by the C.B.I. on disproportionate assets which was allegedly acquired by the petitioner, was all wrong and motivated inasmuch as they added up the assets of the petitioner‟s relatives, such as, his mother-in-law, father-in- law, his wife and others who all had acquired their own personal properties by different means and, as such, his assets never exceeded his known source of income and the allegation of acquiring disproportionate assets through foul means was motivated and false. The petitioner pleaded many facts including the fact that the Inspector of C.B.I., namely, Pravin Kumar was investigating the case and wanted illegal gratification from the petitioner which was not paid to him and, as such, he created non-existent evidences so as to bolstering up the case of the C.B.I. The said 5 Pravin Kumar Inspector was later on trapped in a case of bribery by the C.B.I. itself in Delhi. 6. It appears that the defence statement of the petitioner was not accepted by the C.B.I and they noted that the income of his wife allegedly earned out of embroidery, etc. was fake. Likewise, the recovery of Rs. 1,00,000/-from his house which was claimed by his two relatives, namely, Shri Raj Kumar Singh and Shri Amarnath Singh. The ornaments of Rs. 1,99,176/-, which as per petitioner belonged to his other relative, Smt. Subhadra Devi, and further several investments in the names of various persons which was explained by the petitioner, as may appear mentioned in Annexure-7 in items nos. (i) to (v), as per the C.B.I, were assets of the petitioner and, as such, the Superintendent of C.B.I. presented the facts before the Director General of Central Vigilance Commission ( CVC)for seeking the order of sanction for prosecuting the petitioner, undisputedly, a Public servant. 7. Annexure-7 indicates that the Director General of Central Vigilance Commission sought comments of the Commissioner, Central Excise, Patna, by his letter F.No.557/16/2001/2930 dated 27.10.2003 and those comments were furnished by 6 the then Commissioner of Central Excise, Patna, by Annexure- 7 which is his letter bearing C.No.Vig.3/26/2003/5177 dated 12.12.2003. While submitting his comments, the Commissioner, Central Excise, Patna indicated that in making calculations on different properties allegedly amassed by the petitioner by foul means, it appears that the petitioner had not shown in his income tax returns some income from landed properties measuring about 2.75 acres belonging to his Hindu undivided family and for that the explanation was submitted by the petitioner. The Commissioner, Central Excise, Patna reported to the Additional Director General of Vigilance, Customs and Central Excise that since the disproportionate income was below 10 per cent, as such, it was not a fit case for sanctioning prosecution. While expressing the above opinion, the Commissioner, Central Excise, Patna, at the same time, sought for the guidance from the Directorate General, Vigilance of Customs and Central Excise, New Delhi, and requested him for seeking the views of the C.B.I. on the representation of the charged Officer. Thus, what is found after perusal of annexure-7, that whole processing of the request of the C.B.I., in the 7 opinion of the Commissioner, Central Excise, Patna, it was not a fit case for sanctioning the prosecution of the petitioner. 8. As regards Aannexure-8, on perusal of the same, I find that it was yet another reply to letter F.No.557/16/2001/3647/dated 14.10.2004 received by the Commissioner, Central Excise, with reference to the office memorandum from Shri Ashok Lakhanpal, Director, Central Vigilance Commission vide their letter No. 003/CEX/052/7110 which was also seeking some comments on some factual and legal aspects of the matter contained in different paragraphs of the letter of the Director General of Vigilance. It appears that the Commissioner of Central Excise while responding to the queries contained in the above noted letter of the Director General of Vigilance replied to different paragraphs and contents thereof by making factual and legal submissions, as regards the question of sanction. He also expressed some personal opinion about the reputation of the petitioner as an Officer of the Excise department. While so clarifying the points raised by the Director General of Vigilance and the Central Vigilance Commission, the Excise Commissioner discussed the reported decisions of the Federal 8 Court, Supreme Court and different High Courts and, thereafter, pointed out that the power to sanction prosecution was vested in the departmental heads and that was never to be an automatic formality, but a solemn and sacrosanct act, which afforded protection to Government servant against frivolous prosecution and must, therefore, be strictly complied with before any sanction for prosecution is granted. Thereafter, the Commissioner in paragraph 3 of annexure-8 went on to discuss the facts of the case as propounded by the C.B.I. and pointed out the loopholes in presentation of those facts. In that very course, the Commissioner in para 3(b) of his order held that claim of Central Bureau of Investigation for prosecution, considering the materials collected during investigation is unfounded and nothing but an after thought unsupported by any legal provisions, documentary evidence as well as judicial provisions. There is no adverse report of Income tax Department on the return submitted by Smt. Bharti Singh wife of petitioner; rather the Bar Council has also acknowledged the stand of Smt.Singh as regards declaration made by the Income Tax Department. 9 9. The Commissioner, Central Excise, has also discussed the role of sanctioning authority while considering the proposal for sanctioning of prosecution. Dealing with allegation in paragraphs 4 and 5 of the order he also enumerated the legal provisions relevant for consideration in such matters, placing reliance on decision reported in AIR 1997 SC 3400 Mansukhlal Vithaldas Chauhan Vs. State of Gujarat. He also discussed the opinion of his predecessor Sri S.S.Rana contained in Annexure-7, who also held similar opinion that there is nothing to make out a case for sanctioning prosecution. However, the respondent No.2 while expressing his opinion against sanctioning for prosecution, left the matter to be examined by D.G. Vigilance, Central Board of C.B.E.C. The representation of the petitioner was forwarded to D.G. Vigilance along with Annexure-8. The final opinion of the Commissioner, Central Excise was contained in paragraph 16 of Annexure- 8, simply indicating that he was fully in agreement with the findings of Shri Rana that it was not a fit case for sanctioning prosecution of the petitioner. 10. So far as Annexure-9 is concerned, it was yet another letter under the signature of 10 the Commissioner, Central Excise, Patna in response to letter No. V557/16/2001/3336 dated 9.6.2005 in which it was submitted that it was true that the petitioner had not shown his agricultural income in his income tax returns, but unfortunately, the C.B.I. failed to appreciate that the petitioner had already disclosed the details before the department about his agricultural land through IPR returns. However, taking into account the issue in its totality, the Commissioner, Central Excise, Patna once again reiterated that the above lapse could be enough for initiating minor penalty proceedings under the Rules of the Central Civil Services( CCA) Rules, 1965 and the same will match with the gravity of misconduct of the petitioner. However, while making a short point through Annexure-9, the Commissioner, Central Excise, Patna did not touch upon the ground/opinion of granting sanction persecution to prosecute the petitioner, though she was of the opinion that there was no disproportionate assets case under the facts and evidence available on record. 11. Annexure 10, the document which is sought to be quashed through the present petition, 11 in form and substance, is the order sanctioning prosecution of the petitioner in R.C.-09(A)/2001/ Pat. 12. It appears that while passing the order the Commissioner, Central Excise, Patna observed in it- (i) that on three different earlier occasions, his predecessors did not find it fit for granting sanction, and (ii) that the matter regarding the sanction of prosecution was reconsidered by him in the light of letter dated 18.1.2007 of the Director General of Vigilance, Customs and Central Excise, New Delhi, contained therein in the Department of Personnel and Training‟s advice dated 30.10.2006. 13. However, in spite of having noticed the above two aspects the Commissioner, Central Excise, Patna, sanctioned the prosecution of the petitioner byAnnexure-10 as he was of the opinion that it required to be recorded that the acts of the petitioner constituted offences punishable under the relevant sections of law, i.e., Section 5(2) read with Section 5(1)(c) of Prevention of Corruption Act,1947 corresponding to the Sections 13(2) and 13(1) (c ) of the said Act, 1988. 12 14. The petitioner‟s whole attempt before us was that on account of the finding recorded in the sanctioning order Annexure-10 itself to the effect that on three earlier occasions the same sanctioning authority had refused to grant sanction for the prosecution of the petitioner and there being no power of review vested in such sanctioning authority, the order contained in Annexure-10, sanctioning prosecution of the petitioner was bad in law. In support of the contention, a decision of the Supreme Court in Mansukhlal Vithaldas Chauhan(Supra) was placed before us in addition to another decision of the Supreme Court in State of Punjab & Anr. Vs. Mohammed Iqbal Bhatti reported in AI.R. 2010 SCW 1186. It was contended that Annexures-7 and 8 were definitely the orders passed on serious application of mind by the sanctioning authority and on such application to the facts of the case and law governing the field of sanctioning prosecution, two successive Commissioners refused to sanction prosecution of the petitioner. As regards annexure-9 it may be that there was no mention in clear terms that sanction was being refused, but the implied inference of the Commissioner recorded in Annexure-9 appears on the 13 same line as if there were no requirements of sanctioning the prosecution which in terms was refusing to sanction the prosecution of the petitioner. It was contended that Annexures-7,8 and 9 were orders repeatedly refusing granting sanction to prosecute the petitioner and were not covered by Om Prakash(Supra) and, as such, Anexure-10, the order granting sanction to prosecute the petitioner was falling foul of the Supreme Curt decision cited above.. 15. The counsel appearing for the C.B.I. and the Central Excise Commissioner were unanimous in submitting that Annexures-7,8 and 9 were opinions and comments which were exchanged between the Central Vigilance Commissioner and the competent authorities of the Customs and Central Excise and they were simply containing expression of opinion as regards the merits of the matter in the light of the procedure set down for granting sanction to prosecute and, as such, they could not be said to be orders refusing to sanction for prosecution of the petitioner. It was contended that annexure-10, as such, could be said to be containing a wrong record of fact that at three different earlier occasions, three different predecessors of the Commissioner of Customs and 14 Central Excise, Patna, had refused to sanction prosecution. But, the order contained in Annexure- 10 could not be quashed as it may be found that Annexures-7, 8 and 9 could never be equated to orders refusing sanction for prosecution of the petitioner, when one considers a huge change in the policy of sanctioning prosecution of a public servant under the Prevention of Corruption Act. 16. The question of sanctioning the prosecution of an Officer or employee of any department for committing offences under the Prevention of Corruption Act or under allied provisions of the Indian Penal Code has been considered from time to time by various courts including the Apex Court and the law which has been laid down has succinctly been reiterated by the Supreme Court in Mansukhlal Vithaldas Chauahan(Supra). Besides, the same question was also considered by the Supreme Court in Mohammed Iqbal Bhatti‟s case (Supra) and the same view was expressed in that judgment also. In fact, Md. Iqbal Bhatti case was placing reliance upon Mansukhlal Vithaldas Chauhan. It has been held by the Supreme Court in Mansukhlal Vithaldas Chahan( Supra) as follows: “Since the validity of “sanction” depends on the applicability of mind by the sanctioning authority to the facts of the case as also the material and evidence collected during 15 investigation, it necessarily follows that the sanctioning authority has to apply its own independent mind for the generation of genuine satisfaction whether prosecution has to be sanctioned or not. The mind of the sanctioning authority should not be under pressure from any quarter nor should any external force be acting upon it to take a decision one way or the other. Sine the discretion to grant or not to grant sanction vests absolutely in the sanctioning authority, its discretion should be shown to have not been affected by any extraneous consideration. If it is shown that the sanctioning authority was unable to apply its independent mind for any reason whatsoever or was under an obligation or compulsion or constraint to grant the sanction, the order will be bad for the reason that the discretion of the authority “not to sanction” was taken away and it was compelled to act mechanically to sanction the prosecution.” In State of Punjab & Anr. Vs. Mohammed Iqbal Bhatti( Supra), the Supreme Court in paragraph 7 was pointing out as follows: “Although the State in the matter of grant or refusal to grant sanction exercises statutory jurisdiction, the same, however, would not mean that power once exercised cannot be exercised once again. For exercising its jurisdiction at a subsequent stage, express power of review in the state may not be necessary as even such a power is administrative in character. It is, however, beyond any cavil that while passing an order for grant of sanction, serious application of mind on the part of the concerned authority is imperative. The legality and/or validity of the order granting sanction would be subject to review by the criminal courts. An order refusing to grant sanction may attract judicial review by the Superior Courts. Validity of an order of sanction would depend upon application of mind on the part of the authority concerned and the material placed before it. All such material facts and material evidences must be considered by it. The sanctioning authority must apply its mind on such material facts and evidences collected during the investigation. Even such application of mind does 16 not appear from the order of sanction, extrinsic evidences may be placed before the court in that behalf. While granting sanction, the authority cannot take into consideration an irrelevant fact nor can it pass an order on extraneous consideration not germane for passing a statutory order. It is also well settled that the Superior Courts cannot direct the sanctioning authority either to grant sanction or not to do so. The source of power of an authority passing an order of sanction must also be considered.” In Mohammed Iqbal Bhatti as also in Mansukhlal Vithaldas Chauhan, the sanctioning authority had refused to sanction the prosecution of the accused persons. In Mansukhlal Vithaldas Chauhan the sanctioning authority had earlier refused to grant sanction to prosecute the accused-appellant before the Supreme Court while in the case of Mohammed Iqbal Bhatti, the State Government which had earlier refused to grant sanction, revised its order and sanctioned the prosecution of Md. Iqbal Bhatti who was the Block Development Officer and Panchayat Officer and was sought to be prosecuted under Sections 7 and 13(2) of the Prevention of Corruption Act. In Md. Iqbal Bhatti, the Supreme Court was of the view, as may appear from the above extracted paragraph, that exercise of power subsequently, after having earlier refused to grant sanction to prosecute was, as a matter of fact, a review and in spite of there not being any express power of review in the State Government, 17 it was not necessary to be there inasmuch as the power to grant or refuse sanction was administrative in character. Thus, what was pointed out in Md.Iqbal Bhatti was that the State Government or the sanctioning authority may at some later stage review its own order. But, what was necessary for exercising such power of review at a later stage after having earlier refused to sanction the prosecution was that there must be production of fresh materials and evidences requiring the earlier rejection order to be reviewed. The fresh materials and evidences should not be extraneous to the fact of the case. It must be relevant to it. What follows from above cited decisions is that while considering the question of according or not according sanction for prosecution of any public servant, if the competent authority was applying its mind to the facts of the case, it has to do it by confining such serious application of mind only to the relevant facts and evidences of the case and has not to be influenced by any extraneous evidence or material. Considering any extraneous evidence or material may vitiate the order sanctioning prosecution. In my considered view, the competent authority if passes an order refusing to grant 18 sanction to prosecute a pubic servant and if it is found that he considered any extraneous, irrelevant evidence or material then the order refusing to sanction prosecution may not be upheld and an appropriate writ in the form of mandamus may be issued directing the authority to pass the order of sanctioning prosecution. 17. If one goes by the above judgment of the Supreme Court in Md. Iqbal Bhatti so as to deciding the present petition then one has always to accede to the prayer of the petitioner that the competent authority having refused to grant sanction for prosecution of the petitioner on three earlier occasions on same facts and evidence, could never have passed the order contained in Annexure-10 and could very well quash it, but for the reasons just following. 18. The very history of establishing the C.B.I. may indicate that during the World War II, the Britishers who were ruling India found instances of corruption in supply of different articles to the Indian Army and those supply and corrupt practices found by them were relatable to the railways also. As such, they, in the year 1941 issued an executive order establishing the Special Police Establishment with a D.I.G. as its head, to 19 investigate the cases of corruption in transactions with which the War and supply department was concerned. By another executive order issued in 1942, the activities of the Special Police Establishment were extended to the cases of corruption in railways because they were vitally found indulging in supply of the above materials. In 1942 itself, an Ordinance was issued by the Government of India creating the Special Police Force vesting powers in it to investigate offences in connection with corruption in the Government departments throughout India. Need was also felt of a Central Government agency to investigate cases of bribery and corruption even after war, hence another ordinance was promulgated in 1943 which was to expire on the 30th September, 1946 for investigating into the instances of corruption and before expiry of the ordinance the Delhi Special Police Establishment Ordinance was issued on the 30th September, 1946. In the same year, the Delhi Special Police Establishment Act was enacted under Sections 5(2) and 6 of which the Central Bureau of Investigation (C.B.I.for short) derive powers to investigate certain class of offences. By the passage of time and eruption of intricate nature of offences involving important 20 public servants in corruption as also eruption of offences of economic nature, the powers to investigate under the Delhi Special Police Establishment Act was extended to the C.B.I. to those class of cases too. Besides, some special nature of crimes under the Indian Penal Code were included, by the passage of time and the requirement of the society, as a topic on which the C.B.I. could be investigating the allegations. But those class of cases could be investigated only when the Central Government had consented investigation by the C.B.I., even in a case which was falling within the subject