Crl. Misc. No. M-3201 of 2010 (O&M) -1- IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH Crl. Misc. No. M-3201 of 2010 (O&M) Date of decision : 24.09.2012 Avtar Singh ......Petitioner versus State of Punjab and another ...Respondents CORAM: HON'BLE MS. JUSTICE RITU BAHRI Present: Mr. D.V. Sharma, Sr. Advocate with Ms. Shivani Sharma, Advocate for the petitioner Mr. Ankur Jain, AAG, Punjab Mr. B.S. Nehra, Advocate for respondent No. 2 1. To be referred to the Reporters or not? 2. Whether the judgment should be reported in the Digest? **** RITU BAHRI , J. The present petition under Section 482 of the Code of Criminal Procedure (for brevity 'the Code') is for quashing of F.I.R No. 31 dated 17.06.2005 registered under Sections 7/13(2) of the Prevention of Corruption Act, 1988 (for short “the Corruption Act”) , at Police Station Vigilance Bureau, Ludhiana, sanction order dated 06.11.2008 passed by the Chairman of the Ludhiana District Co-operative Union Ltd., Ludhiana (P-16) and the order dated 22.05.2009 passed by the Special Judge, Ludhiana (P-19) and further proceedings arising therefrom. Brief facts of the case reads as under:- Crl. Misc. No. M-3201 of 2010 (O&M) -2- The Ludhiana District Co-operative Union Ltd, Ludhiana (herein after referred to as “the Union”) is a co-operative society registered under the provisions of the Punjab Co-operative Societies Act, 1961 (for short 'the Act'). The Union is engaged in the work of printing press. The management of the Union vests in an elected Board of Directors, which is by the members of the Union. There is absolutely no share money of the Government in the Union. The Government does not contribute anything to the said Union. The petitioner has been working in the Union for the last 35 years as an Accountant and has been officiating as Manager of the Union. The premises in which the Union was running its printing press was purchased by one Avtar Singh son of Sohan Singh, by way of registered sale deed dated 05.11.2003. He was pressing the Union for vacating the said premises but the Union did not vacate. Avtar Singh filed an application under Section 13 of the East Punjab (Urban Rent Restriction) Act, 1949 for eviction of the Union from the demised premises. As per the allegations contained in the F.I.R, the complainant alleged that the petitioner had demanded Rs. 8 lacs for vacating the said building and after making the payment of Rs. 2 lacs , Rs. 3 lacs were to be paid to paid on 17.06.2005. Thereafter, the complainant approached the Vigilance department. Thereafter, F.I.R No. 31 dated 17.06.2006 was registered against the petitioner under Sections 7/13(2) of the Corruption Act at Police Station, Vigilance Bureau, Ludhiana. (P-1). Phenyl Pathelene powder was applied on the currency Crl. Misc. No. M-3201 of 2010 (O&M) -3- notes and the complainant was handed over the bag containing the currency notes to be given to the petitioner. As per the prosecution version, the said bag was handed over to the petitioner on his demand in the building of a property dealer in Salem Tabri, Ludhiana in the presence of a shadow witness and after he gave the signal with his hand, when the petitioner was going to sit in the car, he was caught along with the bag. His hands were dipped in the water applying sodium carbonate and the water turned pink. After investigation, the police prepared a report under Section 173 of the Code (R-2/1). The Vigilance Bureau applied to the Board of Directors of the Union for grant of sanction and the draft order of the sanction along with the document was sent to the Board of Directors of the Union. The Board of Directors considered the matter in the meeting held on 05.06.2006 and the Board refused to grant sanction for prosecution of the petitioner. The Union being a private organization in which there was no control of the Government. The petitioner was not a public servant within the meaning of the Corruption Act and also under Section 21 of the Indian Penal Code. Subsequently, on a memo dated 09.07.2007 written by Senior Superintendent of Police, Vigilance Bureau to the Board of Directors of the Union, a meeting was convened on 30.07.2007 and the Board again resolved that the petitioner was not a public servant and there is no money of the Government in the Union, which is a private body. Avtar Singh is not being paid out of the Government Treasury. No aid has Crl. Misc. No. M-3201 of 2010 (O&M) -4- been received from the Government. The sanction was refused second time by the Board and the intimation was duly given to the Vigilance Bureau vide letter dated 06.08.2007 (P-7). Thereafter, the Deputy Registrar, Co-operative Societies, Ludhiana wrote to the Assistant Registrar, Co-operative Societies, Ludhiana vide letter dated 08.04.2008 that sanction should be got done from the Union (P-8). After receipt of the letter, the Assistant Registrar was again informed that the matter had already been considered twice by the Board of Directors of the Union and the Board of Directors has refused to grant the sanction for the prosecution of the petitioner and the file was returned to the Assistant Registrar, Co-operative Societies, Ludhiana. Copy of letter dated 22.04.2008 written by the Union to the Registrar, Co-operative Societies, Ludhiana is P-9. Assistant Registrar, Co-operative Societies, Ludhiana again wrote a letter dated 28.07.2008 to the Inspector, Co- operative Societies, P.A.D.B Ludhiana directing him that the sanction should be got done for the prosecution of the petitioner from the Board of Directors of the Union otherwise action should be taken against the Board of the Directors of the Union (P-10). On this, the concerned Inspector wrote a letter dated 29.07.2008 (P-11) to the Chairman of the Union for taking action, as desired by the Assistant Registrar. The Assistant Registrar was again informed by the Union that once the sanction has been refused to prosecute the petitioner, the same cannot be reviewed unless there is new matter available with the Union. The Assistant Registrar again Crl. Misc. No. M-3201 of 2010 (O&M) -5- threatened the President of the Union vide letter dated 19.08.2008 (P-12) that in case the sanction for prosecuting the petitioner is not given without any delay then action shall be taken against the Board of Directors of the Union for removing it under Section 27 of the Act. Thereafter, the Joint Registrar, Co-operative Societies, Patiala placed the Board of Directors of the Union under suspension vide letter dated 01.09.2008 under Section 27(2) of the Act (P-13). All attempts were made again to get the sanction from the Union. A letter dated 06.10.2008 (P-14) was again written by S.S.P, Vigilance Bureau Ludhiana to the Chairman of the Union for grant of sanction. The Assistant Registar again directed the In- charge of the Society vide letter dated 23.10.2008 (P-15) for grant of sanction. In the meantime, Board of Directors of the Union were reinstated on the ground that sanction will be granted. Thereafter, sanction to prosecute the petitioner was granted, vide P-16. Learned counsel for the petitioner has sought quashing of the F.I.R on two grounds, which reads as under:- (i) That the Union is a Co-operative Society registered under the provisions of the Act. The Government does not give any aid to the said society and the employees working there are not public servants. The provisions of prevention of Corruption Act will not be applicable to them and the petitioner is not a public servant as per Section 2(ix) of the Act (ii) On two occasions, the Union had considered the case for Crl. Misc. No. M-3201 of 2010 (O&M) -6- grant of sanction of prosecuting the petitioner and had refused to grant the same, vide resolution dated 05.06.2006 and 30.07.2007 and the sanction granted vide P-16 is liable to be quashed as there was no new material before the Union to grant the sanction 3rd time after refusing it twice earlier. On notice, a reply has been filed by D.S.P Vigilance Bureau Range, Ludhiana taking the plea that the District Co- operative Union Limited, Ludhiana is a Central Co-operative Society registered under the Punjab Co-operative Societies Act, 1961. All the co-operative Societies registered in District Ludhiana are members of the District Co-operative Union Limited Ludhiana. The object of D.C.U is to spread the principles of Co-operation and imparting education, training and undertaking other promotional activities to raise awareness about co-operative movements for which it receives aid and financial assistance from the Central government, State Government and other financial institutions owned, controlled and governed by the State Government or by the Central Government. The D.C.U is governed by the bye-laws of the D.C.U Limited. The bye-laws provides for the contributions made by way of grants, donations and other financial assistance from the government etc. Even the credit limit has to be approved by the Registrar, Co-operative Societies, Punjab. In the general body, the Government is fully competent to make nominations of all persons in the management in assisting of Board of Directors. The D.C.U is bound by distribution of profits, which are to be approved by Assistant Registrar, Co-operative Societies by perusal of the bye-laws. The petitioner is working as a Manager in Crl. Misc. No. M-3201 of 2010 (O&M) -7- DCU and therefore discharging the public duties as defined under Sub Clause (b) of Para No. 2 of the Act. The petitioner was caught red handed on 17.06.2005 while accepting installment of bribe of Rs. 3 lacs from the complainant in lieu of vacating the building. Challan has been presented in the Court on 14.11.2008. Petitioner moved an application on 10.02.2009 for discharge or whether charge can be framed in the Court, which was dismissed by the Court on 22.05.2009. After framing of the charges, the case is fixed for evidence of the prosecution. The petitioner has a remedy to challenge the order framing charges by way of filing a revision. Without going into the question that whether the petitioner is a government servant or not, this Court is deciding point No. 2 i.e once on two occasions, the Union had considered the case for grant of sanction of prosecuting the petitioner and had refused to grant the same, vide resolution dated 05.06.2006 and 30.07.2007 and thereafter, the sanction granted vide P-16 is liable to be quashed as there was no new material before the Union to grant the sanction 3rd time after refusing it twice earlier On this reference has been made to a judgment passed by Supreme Court in a case of State of H.P vs. Nishant Sareen, AIR 2011 SC 404, that once a sanction has been refused to prosecute the public servant, there is no provision under Section 19 of the Act to review that order. Sanction is a weapon to ensure discouragement of frivolous and vexatious prosecution and is a safeguard for the innocent but not a shield for the guilty. In the judgment of Nishant Sareen's case (supra) reference has been made to a case of Gopikant Chaudhary vs. Crl. Misc. No. M-3201 of 2010 (O&M) -8- State of Bihar and others, (2000) 9 SCC 53 where the Minister refused to accord sanction to prosecute the public servant therein and an order was passed to that effect. Subsequently, after retirement Subsequently, after retirement of the public servant, the matter was taken up by the Chief Minister and he granted sanction for prosecution of the concerned public servant. The question that arose for consideration before this Court was the correctness of the order passed by the Chief Minister. This Court set aside the order of the Chief Minister granting sanction to prosecute the public servant, inter alia, on the ground that the Chief Minister did not have any occasion to reconsider the matter and pass fresh order sanctioning the prosecution. An order granting or refusing sanction must be preceded by application of mind on the part of the appropriate authority. If the complainant or accused can demonstrate such an order granting or refusing sanction to be suffering from non-application of mind, the same may be called in question before the competent court of law. The above ratio has been laid down by Hon'ble the Supreme Court in a case of Romesh Lal Jain vs. Naginder Singh Rana and others (2006) 1 SCC 294. Hon'ble the Supreme Court in a case of State of Punjab and another vs. Mohammed Iqbal Bhatti, JT 2009(13) SC 180 has observed as under:- "Once the Govegzrnment passes the order under Section 19 of the Act or under Section 197 of the Code of Criminal Procedure, declining the sanction to prosecute the concerned official, reviewing such an Crl. Misc. No. M-3201 of 2010 (O&M) -9- order on the basis of the same material, which already stood considered, would not be appropriate or permissible.” After examining the case for grant of sanction in the case of Nishan Sareen (supra), Hon'ble the Suprme Court after going through the order dated 15.03.2008 came to a conclusion that on the same materials which were available earlier, the Sanctioning authority has changed its opinion and ordered the sanction to prosecute the respondents which was not permissible, it was observed as under:- It is true that the Government in the matter of grant or refusal to grant sanction exercises statutory power and that would not mean that power once exercised cannot be exercised again or at subsequent stage in the absence of express power of review in no circumstance whatsoever. The power of review, however, is not unbridled or unrestricted. It seems to us sound principle to follow that once the statutory power under Section 19 of the 1988 Act or Section 197 of the Code has been exercised by the Government or the competent authority, as the case may be, it is not permissible for the sanctioning authority to review or reconsider the matter on the same materials again. It is so because unrestricted power of review may not bring finality to such exercise and on change of the Government or change of the person authorised to exercise power of Crl. Misc. No. M-3201 of 2010 (O&M) -10- sanction, the matter concerning sanction may be reopened by such authority for the reasons best known to it and a different order may be passed. The opinion on the same materials, thus, may keep onchanging and there may not be any end to such statutory exercise. In our opinion, a change of opinion per se on the same materials cannot be a ground for reviewing or reconsidering the earlier order refusing to grant sanction. However, in a case where fresh materials have been collected by the investigating agency subsequent to the earlier order and placed before the sanctioning authority and on that basis, the matter is reconsidered by the sanctioning authority and in light of the fresh materials an opinion is formed that sanction to prosecute the public servant may be granted, there may not be any impediment to adopt such course. 13. Insofar as the present case is concerned, it is not even the case of the appellant that fresh materials were collected by the investigating agency and placed before the sanctioning authority for reconsideration and/or for review of the earlier order refusing to grant sanction. As a matter of fact, from the perusal of the subsequent order dated March 15, 2008 it is clear that on the same materials, the sanctioning authority has changed its opinion and ordered sanction to prosecute the respondent which, in our opinion, is clearly impermissible.” Crl. Misc. No. M-3201 of 2010 (O&M) -11- Even if the investigating agency might have had legitimate grievance, the power of the sanctioning authority being not of continuing character could have been exercised only once on the same materials. In the present case, it is not disputed that on two occasions, the Union had considered the case for grant of sanction of prosecuting the petitioner and had refused to grant the same, vide resolution dated 05.06.2006 (P-3) and dated 30.07.2007 (P-6) and thereafter, the sanction was granted on 06.11.2008 (P-16). The Government does not contribute anything to the said Union. After going through Annexure P-16 dated 06.11.2008, one thing is clear that there were no new material with the Union to review its earlier order refusing to grant sanction. Applying the ratio of the above said judgments, order dated 06.11.2008 (P-16) is set aside with all consequential proceedings. Accordingly, the present petition is allowed. (RITU BAHRI) JUDGE 24.09.2012 G.Arora